Attached files
file | filename |
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S-1 - SMG Industries Inc. | v179920_s-1.htm |
EX-3.2 - SMG Industries Inc. | v179920_ex3-2.htm |
EX-3.5 - SMG Industries Inc. | v179920_ex3-5.htm |
EX-3.3 - SMG Industries Inc. | v179920_ex3-3.htm |
EX-3.1 - SMG Industries Inc. | v179920_ex3-1.htm |
EX-14.1 - SMG Industries Inc. | v179920_ex14-1.htm |
EX-99.2 - SMG Industries Inc. | v179920_ex99-2.htm |
EX-10.1 - SMG Industries Inc. | v179920_ex10-1.htm |
EX-23.1 - SMG Industries Inc. | v179920_ex23-1.htm |
EX-99.1 - SMG Industries Inc. | v179920_ex99-1.htm |
Exhibit
4.6
SMG
INDIUM RESOURCES, LTD.
2008
LONG-TERM INCENTIVE COMPENSATION PLAN
ARTICLE
I
PURPOSE
Section 1.1 Purpose. This
2008 Long-Term Incentive Compensation Plan (the “Plan”) is established by SMG
Indium Resources, Ltd., a Delaware corporation (the “Company”), to create
incentives which are designed to motivate Participants to put forth maximum
effort toward the success and growth of the Company and to enable the Company to
attract and retain experienced individuals who by their position, ability and
diligence are able to make important contributions to the Company’s success.
Toward these objectives, the Plan provides for the grant of Options, Restricted
Stock Awards, Stock Appreciation Rights (“SARs”), Performance Units and
Performance Bonuses to Eligible Employees and the grant of Nonqualified Stock
Options, Restricted Stock Awards, SARs and Performance Units to Consultants and
Eligible Directors, subject to the conditions set forth in the
Plan.
Section 1.2 Establishment.
The Plan is effective as of January 31, 2008 and for a period of ten years
thereafter. The Plan shall continue in effect until all matters relating to the
payment of Awards and administration of the Plan have been settled. The Plan is
subject to approval by the Company’s stockholders in accordance with applicable
law which approval must occur within the period ending twelve months after the
date the Plan is adopted by the Board. Pending such approval by the
stockholders, Awards under the Plan may be granted, but no such Awards may be
exercised prior to receipt of stockholder approval. In the event stockholder
approval is not obtained within a twelve-month period, all Awards granted shall
be void.
Section 1.3 Shares Subject to the
Plan. Subject to the limitations set forth in the Plan, Awards may be
made under this Plan for a total of 330,000 shares of the Company’s common
stock, par value $.001 per share (the “Common Stock”).
ARTICLE
II
DEFINITIONS
Section 2.1 “Account” means
the recordkeeping account established by the Company to which will be credited
an Award of Performance Units to a Participant.
Section 2.2 “Affiliated
Entity” means any corporation, partnership, limited liability company or
other form of legal entity in which a majority of the partnership or other
similar interest thereof is owned or controlled, directly or indirectly, by the
Company or one or more of its Subsidiaries or Affiliated Entities or a
combination thereof. For purposes hereof, the Company, a Subsidiary or an
Affiliated Entity shall be deemed to have a majority ownership interest in a
partnership or limited liability company if the Company, such Subsidiary or
Affiliated Entity shall be allocated a majority of partnership or limited
liability company gains or losses or shall be or control a managing director or
a general partner of such partnership or limited liability company.
Section 2.3 “Award” means,
individually or collectively, any Option, Restricted Stock Award, SAR,
Performance Unit or Performance Bonus granted under the Plan to an Eligible
Employee by the Board or any Nonqualified Stock Option, Performance Unit SAR or
Restricted Stock Award granted under the Plan to a Consultant or an Eligible
Director by the Board pursuant to such terms, conditions, restrictions, and/or
limitations, if any, as the Board may establish by the Award Agreement or
otherwise.
Section 2.4 “Award Agreement”
means any written instrument that establishes the terms, conditions,
restrictions, and/or limitations applicable to an Award in addition to those
established by this Plan and by the Board’s exercise of its administrative
powers.
Section 2.5 “Board” means the
Board of Directors of the Company and, if the Board has appointed a Committee as
provided in Section 3.1, the term “Board” shall include such
Committee.
Section 2.6 “Change of Control
Event” means each of the following:
(i)
Any transaction in which shares of voting securities of the Company representing
more than 50% of the total combined voting power of all outstanding voting
securities of the Company are issued by the Company, or sold or transferred by
the stockholders of the Company as a result of which those persons and entities
who beneficially owned voting securities of the Company representing more than
50% of the total combined voting power of all outstanding voting securities of
the Company immediately prior to such transaction cease to beneficially own
voting securities of the Company representing more than 50% of the total
combined voting power of all outstanding voting securities of the Company
immediately after such transaction;
(ii) The
merger or consolidation of the Company with or into another entity as a result
of which those persons and entities who beneficially owned voting securities of
the Company representing more than 50% of the total combined voting power of all
outstanding voting securities of the Company immediately prior to such merger or
consolidation cease to beneficially own voting securities of the Company
representing more than 50% of the total combined voting power of all outstanding
voting securities of the surviving corporation or resulting entity immediately
after such merger of consolidation; or
(iii) The
sale of all or substantially all of the Company’s assets to an entity of which
those persons and entities who beneficially owned voting securities of the
Company representing more than 50% of the total combined voting power of all
outstanding voting securities of the Company immediately prior to such asset
sale do not beneficially own voting securities of the purchasing entity
representing more than 50% of the total combined voting power of all outstanding
voting securities of the purchasing entity immediately after such asset
sale.
Section 2.7 “Code” means the
Internal Revenue Code of 1986, as amended. References in the Plan to any section
of the Code shall be deemed to include any amendments or successor provisions to
such section and any regulations under such section.
Section 2.8 “Committee” means
the Committee appointed by the Board as provided in Section 3.1.
Section 2.9 “Common Stock”
means the common stock, par value $.001 per share, of the Company, and after
substitution, such other stock as shall be substituted therefore as provided in
Article X.
Section 2.10 “Consultant”
means any person who is engaged by the Company, a Subsidiary or an Affiliated
Entity to render consulting or advisory services.
Section 2.11 “Date of Grant”
means the date on which the grant of an Award is authorized by the Board or such
later date as may be specified by the Board in such authorization.
Section 2.12 “Disability”
means the Participant is unable to continue employment by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months. For purposes of this Plan, the determination of Disability shall
be made in the sole and absolute discretion of the Board.
Section 2.13 “Eligible
Employee” means any employee of the Company, a Subsidiary, or an
Affiliated Entity as approved by the Board.
Section 2.14 “Eligible
Director” means any member of the Board who is not an employee of the
Company, a Subsidiary or an Affiliated Entity.
Section 2.15 “Exchange Act”
means the Securities Exchange Act of 1934, as amended.
Section 2.16 “Fair Market
Value” means (A) during such time as the Common Stock is registered under
Section 12 of the Exchange Act, the closing price of the Common Stock as
reported by an established stock exchange or automated quotation system on the
day for which such value is to be determined, or, if no sale of the Common Stock
shall have been made on any such stock exchange or automated quotation system
that day, on the next preceding day on which there was a sale of such Common
Stock, or (B) during any such time as the Common Stock is not listed upon an
established stock exchange or automated quotation system, the mean between
dealer “bid” and “ask” prices of the Common Stock in the over-the-counter market
on the day for which such value is to be determined, as reported by the National
Association of Securities Dealers, Inc., or (C) during any such time as the
Common Stock cannot be valued pursuant to (A) or (B) above, the fair market
value shall be as determined by the Board considering all relevant information
including, by example and not by limitation, the services of an independent
appraiser.
Section 2.17 “Incentive Stock
Option” means an Option within the meaning of Section 422 of the
Code.
Section 2.18 “Nonqualified Stock
Option” means an Option which is not an Incentive Stock
Option.
Section 2.19 “Option” means
an Award granted under Article V of the Plan and includes both Nonqualified
Stock Options and Incentive Stock Options to purchase shares of Common
Stock.
Section 2.20 “Participant”
means an Eligible Employee, a Consultant or an Eligible Director to whom an
Award has been granted by the Board under the Plan.
Section 2.21 “Performance
Bonus” means the cash bonus which may be granted to Eligible Employees
under Article IX of the Plan.
Section 2.22 “Performance
Units” means those monetary units that may be granted to Eligible
Employees, Consultants or Eligible Directors pursuant to Article VIII
hereof.
Section 2.23 “Plan” means
this SMG Indium Resources, Ltd. 2008 Long-Term Incentive Compensation
Plan.
Section 2.24 “Restricted Stock
Award” means an Award granted to an Eligible Employee, Consultant or
Eligible Director under Article VI of the Plan.
Section 2.25 “Retirement”
means the termination of an Eligible Employee’s employment with the Company, a
Subsidiary or an Affiliated Entity on or after attaining the retirement age as
determined by the Board of Directors.
Section 2.26 “SAR” means a
stock appreciation right granted to an Eligible Employee, Consultant or Eligible
Director under Article VII of the Plan.
Section 2.27 “Subsidiary”
shall have the same meaning set forth in Section 424 of the
Code.
ARTICLE
III
ADMINISTRATION
Section 3.1 Administration of the
Plan by the Board. The Board shall administer the Plan. The Board may, by
resolution, appoint the Compensation Committee to administer the Plan and
delegate its powers described under this Section 3.1 and otherwise under the
Plan for purposes of Awards granted to Eligible Employees and
Consultants.
Subject
to the provisions of the Plan, the Board shall have exclusive power
to:
(a)
Select Eligible Employees and Consultants to participate in the
Plan.
(b)
Determine the time or times when Awards will be made to Eligible Employees or
Consultants.
(c)
Determine the form of an Award, whether an Incentive Stock Option, Nonqualified
Stock Option, Restricted Stock Award, SAR, Performance Unit, or Performance
Bonus, the number of shares of Common Stock or Performance Units subject to the
Award, the amount and all the terms, conditions (including performance
requirements), restrictions and/or limitations, if any, of an Award, including
the time and conditions of exercise or vesting, and the terms of any Award
Agreement, which may include the waiver or amendment of prior terms and
conditions or acceleration or early vesting or payment of an Award under certain
circumstances determined by the Board.
(d)
Determine whether Awards will be granted singly or in combination.
(e)
Accelerate the vesting, exercise or payment of an Award or the performance
period of an Award.
(f)
Determine whether and to what extent a Performance Bonus may be deferred, either
automatically or at the election of the Participant or the Board.
(g) Take
any and all other action it deems necessary or advisable for the proper
operation or administration of the Plan.
Section 3.2 Administration of Grants
to Eligible Directors. The Board shall have the exclusive power to select
Eligible Directors to participate in the Plan and to determine the number of
Nonqualified Stock Options, Performance Units, SARs or shares of Restricted
Stock awarded to Eligible Directors selected for participation. If the Board
appoints a committee to administer the Plan, it may delegate to the committee
administration of all other aspects of the Awards made to Eligible
Directors.
Section 3.3 Board to Make Rules and
Interpret Plan. The Board in its sole discretion shall have the
authority, subject to the provisions of the Plan, to establish, adopt, or revise
such rules and regulations and to make all such determinations relating to the
Plan, as it may deem necessary or advisable for the administration of the Plan.
The Board’s interpretation of the Plan or any Awards and all decisions and
determinations by the Board with respect to the Plan shall be final, binding,
and conclusive on all parties.
Section 3.4 Section 162(m)
Provisions. The Company intends for the Plan and the Awards made there
under to qualify for the exception from Section 162(m) of the Code for
“qualified performance based compensation” if it is determined by the Board that
such qualification is necessary for an Award. Accordingly, the Board shall make
determinations as to performance targets and all other applicable provisions of
the Plan as necessary in order for the Plan and Awards made there under to
satisfy the requirements of Section 162(m) of the Code.
ARTICLE
IV
GRANT
OF AWARDS
Section 4.1 Grant of Awards.
Awards granted under this Plan shall be subject to the following
conditions:
(a) Any
shares of Common Stock related to Awards which terminate by expiration,
forfeiture, cancellation or otherwise without the issuance of shares of Common
Stock or are exchanged in the Board’s discretion for Awards not involving Common
Stock, shall be available again for grant under the Plan and shall not be
counted against the shares authorized under Section 1.3.
(b)
Common Stock delivered by the Company in payment of an Award authorized under
Articles V and VI of the Plan may be authorized and unissued Common Stock or
Common Stock held in the treasury of the Company.
(c) The
Board shall, in its sole discretion, determine the manner in which fractional
shares arising under this Plan shall be treated.
(d)
Separate certificates or a book-entry registration representing Common Stock
shall be delivered to a Participant upon the exercise of any
Option.
(e) The
Board shall be prohibited from canceling, reissuing or modifying Awards if such
action will have the effect of repricing the Participant’s Award.
(f)
Eligible Directors may only be granted Nonqualified Stock Options, Restricted
Stock Awards, SARs or Performance Units under this Plan.
(g) The
maximum term of any Award shall be ten years.
ARTICLE
V
STOCK
OPTIONS
Section 5.1 Grant of Options.
The Board may, from time to time, subject to the provisions of the Plan and such
other terms and conditions as it may determine, grant Options to Eligible
Employees. These Options may be Incentive Stock Options or Nonqualified Stock
Options, or a combination of both. The Board may, subject to the provisions of
the Plan and such other terms and conditions as it may determine, grant
Nonqualified Stock Options to Eligible Directors and Consultants. Each grant of
an Option shall be evidenced by an Award Agreement executed by the Company and
the Participant, and shall contain such terms and conditions and be in such form
as the Board may from time to time approve, subject to the requirements of
Section 5.2.
Section 5.2 Conditions of
Options. Each Option so granted shall be subject to the following
conditions:
(a)
Exercise Price. As limited by Section 5.2(e) below, each Option shall state the
exercise price which shall be set by the Board at the Date of Grant; provided,
however, no Option shall be granted at an exercise price which is less than the
Fair Market Value of the Common Stock on the Date of Grant.
(b) Form
of Payment. The exercise price of an Option may be paid (i) in cash or by check,
bank draft or money order payable to the order of the Company; (ii) by
delivering shares of Common Stock having a Fair Market Value on the date of
payment equal to the amount of the exercise price, but only to the extent such
exercise of an Option would not result in an adverse accounting charge to the
Company for financial accounting purposes with respect to the shares used to pay
the exercise price unless otherwise determined by the Board; or (iii) a
combination of the foregoing. In addition to the foregoing, the Board may permit
an Option granted under the Plan to be exercised by a broker-dealer acting on
behalf of a Participant through procedures approved by the Board.
(c)
Exercise of Options. Options granted under the Plan shall be exercisable, in
whole or in such installments and at such times, and shall expire at such time,
as shall be provided by the Board in the Award Agreement. Exercise of an Option
shall be by written notice to the Secretary of the Company at least two business
days in advance of such exercise stating the election to exercise in the form
and manner determined by the Board. Every share of Common Stock acquired through
the exercise of an Option shall be deemed to be fully paid at the time of
exercise and payment of the exercise price.
(d) Other
Terms and Conditions. Among other conditions that may be imposed by the Board,
if deemed appropriate, are those relating to (i) the period or periods and the
conditions of exercisability of any Option; (ii) the minimum periods during
which Participants must be employed by the Company, its Subsidiaries, or an
Affiliated Entity, or must hold Options before they may be exercised; (iii) the
minimum periods during which shares acquired upon exercise must be held before
sale or transfer shall be permitted; (iv) conditions under which such Options or
shares may be subject to forfeiture; (v) the frequency of exercise or the
minimum or maximum number of shares that may be acquired at any one time; (vi)
the achievement by the Company of specified performance criteria; and (vii)
non-compete and protection of business matters.
(e)
Special Restrictions Relating to Incentive Stock Options. Options issued in the
form of Incentive Stock Options shall only be granted to Eligible Employees of
the Company or a Subsidiary, and not to Eligible Employees of an Affiliated
Entity unless such entity shall be considered as a “disregarded entity” under
the Code and shall not be distinguished for federal tax purposes from the
Company or the applicable Subsidiary.
(f)
Application of Funds. The proceeds received by the Company from the sale of
Common Stock pursuant to Options will be used for general corporate
purposes.
(g)
Stockholder Rights. No Participant shall have a right as a stockholder with
respect to any share of Common Stock subject to an Option prior to purchase of
such shares of Common Stock by exercise of the Option.
ARTICLE
VI
RESTRICTED
STOCK AWARDS
Section 6.1 Grant of Restricted
Stock Awards. The Board may, from time to time, subject to the provisions
of the Plan and such other terms and conditions as it may determine, grant a
Restricted Stock Award to Eligible Employees, Consultants or Eligible Directors.
Restricted Stock Awards shall be awarded in such number and at such times during
the term of the Plan as the Board shall determine. Each Restricted Stock Award
shall be subject to an Award Agreement setting forth the terms of such
Restricted Stock Award and may be evidenced in such manner as the Board deems
appropriate, including, without limitation, a book-entry registration or
issuance of a stock certificate or certificates.
Section 6.2 Conditions of Restricted
Stock Awards. The grant of a Restricted Stock Award shall be subject to
the following:
(a)
Restriction Period. Restricted Stock Awards granted to an Eligible Employee
shall require the holder to remain in the employment of the Company, a
Subsidiary, or an Affiliated Entity for a prescribed period. Restricted Stock
Awards granted to Consultants or Eligible Directors shall require the holder to
provide continued services to the Company for a period of time. These employment
and service requirements are collectively referred to as a “Restriction Period”.
The Board or the Committee, as the case may be, shall determine the Restriction
Period or Periods which shall apply to the shares of Common Stock covered by
each Restricted Stock Award or portion thereof. In addition to any time vesting
conditions determined by the Board or the Committee, as the case may be,
Restricted Stock Awards may be subject to the achievement by the Company of
specified performance criteria based upon the Company’s achievement of all or
any of the operational, financial or stock performance criteria set forth on
Exhibit A annexed hereto, as may from time to time be established by the Board
or the Committee, as the case may be. At the end of the Restriction Period,
assuming the fulfillment of any other specified vesting conditions, the
restrictions imposed by the Board or the Committee, as the case may be shall
lapse with respect to the shares of Common Stock covered by the Restricted Stock
Award or portion thereof. In addition to acceleration of vesting upon the
occurrence of a Change of Control Event as provided in Section 11.5, the Board
or the Committee, as the case may be, may, in its discretion, accelerate the
vesting of a Restricted Stock Award in the case of the death, Disability or
Retirement of the Participant who is an Eligible Employee or resignation of a
Participant who is a Consultants or an Eligible Director.
(b)
Restrictions. The holder of a Restricted Stock Award may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of the shares of Common
Stock represented by the Restricted Stock Award during the applicable
Restriction Period. The Board shall impose such other restrictions and
conditions on any shares of Common Stock covered by a Restricted Stock Award as
it may deem advisable including, without limitation, restrictions under
applicable Federal or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.
(c)
Rights as Stockholders. During any Restriction Period, the Board may, in its
discretion, grant to the holder of a Restricted Stock Award all or any of the
rights of a stockholder with respect to the shares, including, but not by way of
limitation, the right to vote such shares and to receive dividends. If any
dividends or other distributions are paid in shares of Common Stock, all such
shares shall be subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were paid.
ARTICLE
VII
STOCK
APPRECIATION RIGHTS
Section 7.1 Grant of SARs.
The Board may from time to time, in its sole discretion, subject to the
provisions of the Plan and subject to other terms and conditions as the Board
may determine, grant a SAR to any Eligible Employee, Consultant or Eligible
Director. SARs may be granted in tandem with an Option, in which event, the
Participant has the right to elect to exercise either the SAR or the Option.
Upon the Participant’s election to exercise one of these Awards, the other
tandem Award is automatically terminated. SARs may also be granted as an
independent Award separate from an Option. Each grant of a SAR shall be
evidenced by an Award Agreement executed by the Company and the Participant and
shall contain such terms and conditions and be in such form as the Board may
from time to time approve, subject to the requirements of the Plan. The exercise
price of the SAR shall not be less than the Fair Market Value of a share of
Common Stock on the Date of Grant of the SAR.
Section 7.2 Exercise and
Payment. SARs granted under the Plan shall be exercisable in whole or in
installments and at such times as shall be provided by the Board in the Award
Agreement. Exercise of a SAR shall be by written notice to the Secretary of the
Company at least two business days in advance of such exercise. The amount
payable with respect to each SAR shall be equal in value to the excess, if any,
of the Fair Market Value of a share of Common Stock on the exercise date over
the exercise price of the SAR. Payment of amounts attributable to a SAR shall be
made in shares of Common Stock.
Section 7.3 Restrictions. In
the event a SAR is granted in tandem with an Incentive Stock Option, the Board
shall subject the SAR to restrictions necessary to ensure satisfaction of the
requirements under Section 422 of the Code. In the case of a SAR granted in
tandem with an Incentive Stock Option to an Eligible Employee who owns more than
10% of the combined voting power of the Company or its Subsidiaries on the date
of such grant, the amount payable with respect to each SAR shall be equal in
value to the applicable percentage of the excess, if any, of the Fair Market
Value of a share of Common Stock on the Exercise date over the exercise price of
the SAR, which exercise price shall not be less than 110% of the Fair Market
Value of a share of Common Stock on the date the SAR is granted.
ARTICLE
VIII
PERFORMANCE
UNITS
Section 8.1 Grant of Awards.
The Board may, from time to time, subject to the provisions of the Plan and such
other terms and conditions as it may determine, grant Performance Units to
Eligible Employees, Consultants and Eligible Directors. Each Award of
Performance Units shall be evidenced by an Award Agreement executed by the
Company and the Participant, and shall contain such terms and conditions and be
in such form as the Board may from time to time approve, subject to the
requirements of Section 8.2.
Section 8.2 Conditions of
Awards. Each Award of Performance Units shall be subject to the following
conditions:
(a)
Establishment of Award Terms. Each Award shall state the target, maximum and
minimum value of each Performance Unit payable upon the achievement of
performance goals.
(b)
Achievement of Performance Goals. The Board shall establish performance targets
for each Award for a period of no less than a year based upon some or all of the
operational, financial or performance criteria listed in Exhibit A attached. The
Board shall also establish such other terms and conditions as it deems
appropriate to such Award. The Award may be paid out in cash or Common Stock as
determined in the sole discretion of the Board.
ARTICLE
IX
PERFORMANCE
BONUS
Section 9.1 Grant of Performance
Bonus. The Board may from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Board may determine, grant a
Performance Bonus to certain Eligible Employees selected for participation. The
Board will determine the amount that may be earned as a Performance Bonus in any
period of one year or more upon the achievement of a performance target
established by the Board. The Board shall select the applicable performance
target(s) for each period in which a Performance Bonus is awarded. The
performance target shall be based upon all or some of the operational, financial
or performance criteria more specifically listed in Exhibit A
attached.
Section 9.2 Payment of Performance
Bonus. In order for any Participant to be entitled to payment of a
Performance Bonus, the applicable performance target(s) established by the Board
must first be obtained or exceeded. Payment of a Performance Bonus shall be made
within 60 days of the Board’s certification that the performance target(s) has
been achieved unless the Participant has previously elected to defer payment
pursuant to a nonqualified deferred compensation plan adopted by the Company.
Payment of a Performance Bonus may be made in either cash or Common Stock as
determined in the sole discretion of the Board.
ARTICLE
X
STOCK
ADJUSTMENTS
In the
event that the shares of Common Stock, as constituted on the effective date of
the Plan, shall be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
stock split, spin-off, combination of shares or otherwise), or if the number of
such shares of Common Stock shall be increased through the payment of a stock
dividend, or a dividend on the shares of Common Stock, or if rights or warrants
to purchase securities of the Company shall be issued to holders of all
outstanding Common Stock, then there shall be substituted for or added to each
share available under and subject to the Plan, and each share theretofore
appropriated under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged or to which each such share
shall be entitled, as the case may be, on a fair and equivalent basis in
accordance with the applicable provisions of Section 424 of the Code; provided,
however, with respect to Options, in no such event will such adjustment result
in a modification of any Option as defined in Section 424(h) of the Code. In the
event there shall be any other change in the number or kind of the outstanding
shares of Common Stock, or any stock or other securities into which the Common
Stock shall have been changed or for which it shall have been exchanged, then if
the Board shall, in its sole discretion, determine that such change equitably
requires an adjustment in the shares available under and subject to the Plan, or
in any Award, theretofore granted, such adjustments shall be made in accordance
with such determination, except that no adjustment of the number of shares of
Common Stock available under the Plan or to which any Award relates that would
otherwise be required shall be made unless and until such adjustment either by
itself or with other adjustments not previously made would require an increase
or decrease of at least 1% in the number of shares of Common Stock available
under the Plan or to which any Award relates immediately prior to the making of
such adjustment (the “Minimum Adjustment”). Any adjustment representing a change
of less than such minimum amount shall be carried forward and made as soon as
such adjustment together with other adjustments required by this Article X and
not previously made would result in a Minimum Adjustment. Notwithstanding the
foregoing, any adjustment required by this Article X which otherwise would not
result in a Minimum Adjustment shall be made with respect to shares of Common
Stock relating to any Award immediately prior to exercise, payment or settlement
of such Award. No fractional shares of Common Stock or units of other securities
shall be issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by rounding downward
to the nearest whole share.
ARTICLE
XI
GENERAL
Section 11.1 Amendment or
Termination of Plan. The Board may alter, suspend or terminate the Plan
at any time provided, however, that it may not, without stockholder approval,
adopt any amendment which would (i) increase the aggregate number of shares of
Common Stock available under the Plan (except by operation of Article X), (ii)
materially modify the requirements as to eligibility for participation in the
Plan, or (iii) materially increase the benefits to Participants provided by the
Plan.
Section 11.2 Termination of
Employment; Termination of Service. If an Eligible Employee’s employment
with the Company, a Subsidiary or an Affiliated Entity terminates as a result of
death, Disability or Retirement, the Eligible Employee (or personal
representative in the case of death) shall be entitled to purchase all or any
part of the shares subject to any (i) vested Incentive Stock Option for a period
of up to three months from such date of termination (one year in the case of
death or Disability (as defined above) in lieu of the three-month period), and
(ii) vested Nonqualified Stock Option during the remaining term of the Option.
If an Eligible Employee’s employment terminates for any other reason, the
Eligible Employee shall be entitled to purchase all or any part of the shares
subject to any vested Option for a period of up to three months from such date
of termination. In no event shall any Option be exercisable past the term of the
Option. The Board may, in its sole discretion, accelerate the vesting of
unvested Options in the event of termination of employment of any
Participant.
In the
event a Consultant ceases to provide services to the Company or an Eligible
Director terminates service as a director of the Company, the unvested portion
of any Award shall be forfeited unless otherwise accelerated pursuant to the
terms of the Eligible Director’s Award Agreement or by the Board. The Consultant
or Eligible Director shall have a period of three years following the date he
ceases to provide consulting services or ceases to be a director, as applicable,
to exercise any Nonqualified Stock Options which are otherwise exercisable on
his date of termination of service.
Section 11.3 Limited
Transferability – Options. The Board may, in its discretion,
authorize all or a portion of the Nonqualified Stock Options granted under this
Plan to be on terms which permit transfer by the Participant to (i) the
ex-spouse of the Participant pursuant to the terms of a domestic relations
order, (ii) the spouse, children or grandchildren of the Participant (“Immediate
Family Members”), (iii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (iv) a partnership or limited liability company in
which such Immediate Family Members are the only partners or members. In
addition, there may be no consideration for any such transfer. The Award
Agreement pursuant to which such Nonqualified Stock Options are granted
expressly provide for transferability in a manner consistent with this
paragraph. Subsequent transfers of transferred Nonqualified Stock Options shall
be prohibited except as set forth below in this Section 11.3. Following
transfer, any such Nonqualified Stock Options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of Section 11.2 hereof the term “Participant” shall
be deemed to refer to the transferee. The events of termination of employment of
Section 11.2 hereof shall continue to be applied with respect to the original
Participant, following which the Nonqualified Stock Options shall be exercisable
by the transferee only to the extent, and for the periods specified in Section
11.2 hereof. No transfer pursuant to this Section 11.3 shall be effective to
bind the Company unless the Company shall have been furnished with written
notice of such transfer together with such other documents regarding the
transfer as the Board shall request. With the exception of a transfer in
compliance with the foregoing provisions of this Section 11.3, all other types
of Awards authorized under this Plan shall be transferable only by will or the
laws of descent and distribution; however, no such transfer shall be effective
to bind the Company unless the Board has been furnished with written notice of
such transfer and an authenticated copy of the will and/or such other evidence
as the Board may deem necessary to establish the validity of the transfer and
the acceptance by the transferee of the terms and conditions of such
Award.
Section 11.4 Withholding
Taxes. Unless otherwise paid by the Participant, the Company, its
Subsidiaries or any of its Affiliated Entities shall be entitled to deduct from
any payment under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment or may require the Participant to pay to it such
tax prior to and as a condition of the making of such payment. In accordance
with any applicable administrative guidelines it establishes, the Board may
allow a Participant to pay the amount of taxes required by law to be withheld
from an Award by (i) directing the Company to withhold from any payment of the
Award a number of shares of Common Stock having a Fair Market Value on the date
of payment equal to the amount of the required withholding taxes or (ii)
delivering to the Company previously owned shares of Common Stock having a Fair
Market Value on the date of payment equal to the amount of the required
withholding taxes. However, any payment made by the Participant pursuant to
either of the foregoing clauses (i) or (ii) shall not be permitted if it would
result in an adverse accounting charge with respect to such shares used to pay
such taxes unless otherwise approved by the Board.
Section 11.5 Change of
Control. Notwithstanding any other provision in this Plan to the
contrary, in the event of a Change of Control Event, the Board shall have the
discretion to determine whether and to what extent to accelerate the vesting,
exercise or payment of an Award.
Section 11.6 Amendments to
Awards. Subject to the limitations of Article IV, such as the prohibition
on repricing of Options, the Board may at any time unilaterally amend the terms
of any Award Agreement, whether or not presently exercisable or vested, to the
extent it deems appropriate. However, amendments which are adverse to the
Participant shall require the Participant’s consent.
Section 11.7 Registration;
Regulatory Approval. Following approval of the Plan by the stockholders
of the Company as provided in Section 1.2 of the Plan, the Board, in its sole
discretion, may determine to file with the Securities and Exchange Commission
and keep continuously effective, a Registration Statement on Form S-8 with
respect to shares of Common Stock subject to Awards hereunder. Notwithstanding
anything contained in this Plan to the contrary, the Company shall have no
obligation to issue shares of Common Stock under this Plan prior to the
obtaining of any approval from, or satisfaction of any waiting period or other
condition imposed by, any governmental agency which the Board shall, in its sole
discretion, determine to be necessary or advisable.
Section 11.8 Right to Continued
Employment. Participation in the Plan shall not give any Eligible
Employee any right to remain in the employ of the Company, any Subsidiary, or
any Affiliated Entity. The Company or, in the case of employment with a
Subsidiary or an Affiliated Entity, the Subsidiary or Affiliated Entity reserves
the right to terminate any Eligible Employee at any time. Further, the adoption
of this Plan shall not be deemed to give any Eligible Employee or any other
individual any right to be selected as a Participant or to be granted an
Award.
Section 11.9 Reliance on
Reports. Each member of the Board and each member of the Board shall be
fully justified in relying or acting in good faith upon any report made by the
independent public accountants of the Company and its Subsidiaries and upon any
other information furnished in connection with the Plan by any person or persons
other than himself or herself. In no event shall any person who is or shall have
been a member of the Board be liable for any determination made or other action
taken or any omission to act in reliance upon any such report or information or
for any action taken, including the furnishing of information, or failure to
act, if in good faith.
Section 11.10 Construction.
Masculine pronouns and other words of masculine gender shall refer to both men
and women. The titles and headings of the sections in the Plan are for the
convenience of reference only, and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
Section 11.11 Governing Law.
The Plan shall be governed by and construed in accordance with the laws of the
State of Delaware except as superseded by applicable Federal law.
Section 11.12 Other Laws. The
Board may refuse to issue or transfer any shares of Common Stock or other
consideration under an Award if, acting in its sole discretion, it determines
that the issuance or transfer of such shares or such other consideration might
violate any applicable law or regulation or entitle the Company to recover the
same under Section 16(b) of the Exchange Act, and any payment tendered to the
Company by a Participant, other holder or beneficiary in connection with the
exercise of such Award shall be promptly refunded to the relevant Participant,
holder or beneficiary.
Section 11.13 No Trust or Fund
Created. Neither the Plan nor an Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between
the Company and a Participant or any other person. To the extent that a
Participant acquires the right to receive payments from the Company pursuant to
an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company.
Section 11.14 Conformance to Section
409A of the Code. To the extent that the Committee determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Award
Agreement evidencing such Award shall incorporate the terms and conditions
required by Section 409A of the Code. To the extent applicable, the Plan and
Award Agreements shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the Effective Date. Notwithstanding any
provision of the Plan to the contrary, in the event that the Committee
determines that any Award may be subject to Section 409A of the Code and related
Department of Treasury guidance, the Committee may adopt such amendments to the
Plan and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that the Committee determines are necessary or appropriate to
(i) exempt the Award from Section 409A of the Code or (ii) comply with the
requirements of Section 409A of the Code and related Department of Treasury
guidance.