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8-K - FORM 8-K - ULTICOM INC | mm06-0710_8k.htm |
Exhibit
99.1
ULTICOM,
INC.
2010 STOCK INCENTIVE COMPENSATION
PLAN
Article
1. Establishment
& Purpose
1.1 Establishment. Ulticom,
Inc. hereby establishes the Ulticom, Inc. 2010 Stock Incentive Compensation
Plan, as amended from time to time (hereinafter referred to as the “Plan”) as set forth
in this document.
1.2 Purpose of the
Plan. The purposes of the Plan are to assist the Company, its
Subsidiaries and Affiliates in attracting and retaining valued Directors,
Employees and Consultants, to align their respective interests with
shareholders’ interests through equity-based compensation and to permit the
granting of awards that are intended to constitute performance-based
compensation for certain executive officers under Section 162(m) of the
Code.
Article
2. Definitions
Whenever
capitalized in the Plan, the following terms shall have the meanings set forth
below.
2.1 “Affiliate” means any entity that the
Company, either directly or indirectly, is in common control with, is controlled
by or controls, or any entity that the Company has a substantial direct or
indirect equity interest, as determined by the Board.
2.2 “Annual
Award Limit”
shall have the meaning set forth in Section 5.1(b).
2.3 “Award” means any Option, Stock
Appreciation Right, Restricted Stock, Other Stock-Based Award, or
Performance-Based Compensation award that is granted under the
Plan.
2.4 “Award
Agreement” means
either (a) a written or electronic agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award
granted under this Plan, or (b) a written or electronic statement issued by the
Company, a Subsidiary, or Affiliate to a Participant describing the terms and
provisions of the actual grant of such Award.
2.5 “Beneficial
Owner” shall have
the meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.6 “Board” means the Board of Directors
of the Company.
2.7 “Cause”
unless otherwise specified in an Award Agreement, means: (i) the Participant’s
refusal or failure to perform any of his duties and responsibilities as
determined from time to time by the Board, including, without limitation: (a)
the Participant’s persistent neglect of duty or chronic unapproved absenteeism
(other than for a temporary or permanent disability) which remains uncured to
the reasonable satisfaction of the Board following 30 days’ written notice from
the Company of such alleged fault; and (b) the Participant’s refusal to comply
with any lawful directive or policy of the Board which refusal is not cured by
the Participant within 30 days of such written notice from the Company;
provided, however, that the Company shall not be required to give the
Participant a cure period with respect to this clause (i) on more than one
occasion; (ii) the Participant acts (including a failure to act) in a manner
which constitutes willful misconduct, gross negligence, or insubordination;
(iii) the Company’s determination that, in the reasonable judgment of the Board,
the Participant has: (x) committed an act of fraud, personal dishonesty or
misappropriation relating to the Company; (y) violated any material provision of
any written policy of the Company; or (z) committed any other act causing
material harm to the Company’s standing or reputation, or any act of dishonesty,
embezzlement, unauthorized use or disclosure of confidential information or
other intellectual property or trade secrets, common law fraud or other fraud
with respect thereto; (iv) a material breach by the Participant of the terms of
the Plan or any Award Agreement, any other written agreement with the Company or
any fiduciary duty to the
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Company;
(v) the Participant’s arrest, indictment for or conviction (or the entry of a
plea of a nolo contendere or equivalent plea) in a court of competent
jurisdiction of a felony or any misdemeanor involving material dishonesty or
moral turpitude; or (vi) the Participant’s habitual or repeated misuse of, or
habitual or repeated performance of the Participant’s duties under the influence
of, alcohol or controlled substances. As used in this definition of
“Cause”, the “Company” shall mean the Company and each of the Company’s
Affiliates and Subsidiaries.
2.8 “Change of
Control” unless
otherwise specified in the Award Agreement, means the occurrence of any of the
following events:
(a)
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any
Person, other than Comverse Technology, Inc. (“Comverse”) or
an affiliate thereof, becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company’s
then-outstanding securities; or;
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(b)
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individuals
who, on the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason over a period of one (1) year to
constitute a majority of the number of directors then serving on the
Board; provided, however, that any new director whose appointment or
election by the Incumbent Board or nomination for election by the
Company’s stockholders was approved or recommended by Comverse or a vote
of at least a majority of the directors then still in office who either
were directors on the Effective Date, or whose appointment, election or
nomination for election was previously so approved or recommended, shall
be considered as though such person were a member of the Incumbent Board;
or
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(c)
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there
is consummated a merger or consolidation of the Company or any Subsidiary
with any other corporation (in one or a series of related transactions),
other than (A) a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or any
parent thereof) more than fifty percent (50%) of the combined voting power
of the securities of the Company or any surviving entity or any parent
thereof outstanding immediately after such merger or consolidation, or (B)
a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person, other than Comverse
or an affiliate thereof, is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing more than fifty
percent (50%) or more of the combined voting power of the Company’s
then-outstanding securities; or
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(d)
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there
is consummated one or more sales, leases, exchanges, or other transfers
(in one or a series of related transactions) of all or substantially all
of the Company’s assets, other than a sale, lease, exchange, or other
transfer of all or substantially all of the Company’s assets to Comverse
or an affiliate thereof.
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Notwithstanding
the foregoing, with respect to any Award which constitutes “nonqualified
deferred compensation” under, and subject to, Section 409A, to the extent
necessary to comply with the requirements of Section 409A, the term “Change of
Control” shall mean an occurrence that both (i) satisfies the requirements set
forth above in the definition of Change of Control, and (ii) qualifies as a
“change in the ownership or effective control of a corporation, or a change in
the ownership of a substantial portion of the assets of a corporation,” in each
case, within the meaning of Section 409A.
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2.9 “Code” means the U.S. Internal
Revenue Code of 1986, as amended from time to time.
2.10 “Committee” means the compensation
committee of the Board, or any other committee (or subcommittee thereof)
designated by the Board to administer this Plan, and the Board when it acts in
such capacity. The Committee shall have at least two members, each of
whom shall be (i) a member of the Board, (ii) a Non-Employee Director, (iii) an
Outside Director, and (iv) an “independent director” within the meaning of the
listing requirements of any exchange on which the equity securities of the
Company are listed.
2.11 “Company” means Ulticom, Inc., a New
Jersey corporation, and any successor thereto.
2.12 “Consultant” means ay person (other than
an Employee or a Director) who is engaged by the Company, a Subsidiary or an
Affiliate to render consulting or advisory services to the Company or such
Subsidiary or Affiliate.
2.13 “Continuous
Service” means
that the provision of services to the Company or a Subsidiary or Affiliate in
any capacity of Employee, Director or Consultant is not interrupted or
terminated. In jurisdictions requiring notice in advance of an
effective termination as an Employee, Director or Consultant, Continuous Service
shall be deemed terminated upon the actual cessation of providing services to
the Company or a Subsidiary or Affiliate which, to the extent applicable, shall
not be deemed to occur until the expiration of any required notice period that
must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under applicable labor laws. Continuous Service
shall not be considered interrupted in the case of (i) any sick leave, military
leave or other approved “bona fide leave of absence” (within the meaning of
Treasury Regulation Section 1.409A-1(h)(1)), (ii) transfers among the Company,
any Subsidiary or Affiliate, or any successor, in any capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the individual
remains in the service of the Company or a Subsidiary or Affiliate in any
capacity of Employee, Director or Consultant (except as otherwise provided in
the Award Agreement). Notwithstanding the foregoing, for purposes of
each Incentive Stock Option granted under the Plan, if any sick leave, military
leave or other approved “bona fide leave of absence” exceeds ninety (90) days,
and reemployment upon expiration of such leave is not guaranteed by statue or
contract, then the Incentive Stock Option shall be treated as a Non-Qualified
Option on the day three (3) months and one (1) day following the expiration of
such ninety (90) day period.
2.14 “Director” means each member of the
Board who is not an Employee, who does not receive compensation from the Company
or any Subsidiary in any capacity other than as a Director and whose membership
on the Board is not attributable to any contract between the Company and such
Director or any other entity with which such Director is
affiliated.
2.15 “Disability” unless otherwise specified
in an Award Agreement, means “Disability” within the meaning of Treasury
Regulation Section 1.409A-3(i)(4).
2.16 “Effective
Date” means the
date set forth in Section 14.19.
2.17 “Employee” means an officer or other
employee of the Company, a Subsidiary or Affiliate, including a member of the
Board who is an employee of the Company, a Subsidiary or Affiliate.
2.18 “Exchange
Act” means the
Securities Exchange Act of 1934, as amended from time to time.
2.19 “Fair
Market Value”
means, as of any date, the per Share value determined as follows, in accordance
with applicable provisions of Section 409A:
(a)
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If
the Shares are listed on any established stock exchange or a national
market system, the per Share Fair Market Value shall be the closing price
per share of such stock on the date of determination (or, if no closing
price was reported on that date, on the last date such closing price was
reported), as reported by the applicable stock exchange or national market
system or such other source as the Committee deems
reliable;
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(b)
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If
the Shares are regularly quoted on an automated quotation system
(including the OTC Bulletin Board and the “Pink Sheets” published by the
National Quotation Bureau, Inc.) or by a recognized securities dealer, the
closing sales price for each share of such stock or, if closing sales
prices are not reported, the per Share Fair Market Value shall be the mean
between the high bid and low asked prices for a Share on the date of
determination (or, if no such prices were reported on that date, on the
last date such prices were reported), as reported in The Wall Street
Journal or such other source as the Committee deems reliable;
or
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(c)
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In
the absence of an established market for the Shares of the type described
in (a) and (b), above, the per Share Fair Market Value thereof shall be
determined by the Committee in good faith and in accordance with the
applicable provision of Section
409A.
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2.20 “Incentive
Stock Option”
means an Option intended to meet the requirements of an incentive stock option
as defined in Section 422 of the Code and designated as an Incentive Stock
Option.
2.21 “Non-Employee
Director” means a
person defined in Rule 16b-3(b)(3) promulgated by the Securities and Exchange
Commission under the Exchange Act, or any successor definition adopted by the
Securities and Exchange Commission.
2.22 “Nonqualified
Stock Option”
means an Option that is not an Incentive Stock Option.
2.23 “Other
Stock-Based Award” means any right granted
under Article 9 of the Plan.
2.24 “Option” means any stock option
granted under Article 6 of the Plan.
2.25 “Option
Price” means the
purchase price per Share subject to an Option, as determined pursuant to Section
6.2 of the Plan.
2.26 “Outside
Director” means a
member of the Board who is an “outside director” within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder.
2.27 “Participant” means any eligible person as
set forth in Section 4.1 to whom an Award is granted.
2.28 “Performance-Based
Compensation”
means compensation, including, without limitation any Option, Stock Appreciation
Right, Restricted Stock, or Other Stock-Based Award, that is intended to
constitute “qualified performance-based compensation” within the meaning of
Section 162(m) of Code and all regulations promulgated thereunder.
2.29 “Performance
Measures” means
measures as described in Section 10.2 on which the performance goals are based
in order to qualify Awards as Performance-Based Compensation.
2.30 “Performance
Period” means the
period of time, which shall be no shorter than twelve months, during which the
performance goals must be met in order to determine the degree of payout and/or
vesting with respect to an Award.
2.31 “Person” shall have the meaning
ascribed to such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) thereof.
2.32 “Plan” shall have the meaning set
forth in Section 1.1.
2.33 “Plan
Year” means the
applicable fiscal year of the Company.
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2.34 “Restricted
Stock” means any Award granted under Article 8 of the Plan.
2.35 “Restriction
Period” means the
period during which Restricted Stock awarded under Article 8 of the Plan is
subject to forfeiture.
2.36 “Section
409A” means
Section 409A of the Code and all regulations, guidance, compliance programs and
other interpretative authority thereunder.
2.37 “Share” means a share of common
stock of the Company, or such other class or kind of shares or other securities
resulting from the application of Section 12.1 of the Plan.
2.38 “Stock
Appreciation Right” means any right granted
under Article 7 of the Plan.
2.39 “Subsidiary” means any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
Company (or any parent of the Company) if each of the corporations, other than
the last corporation in each unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
2.40 “Ten
Percent Shareholder” means a person who on any
given date owns, either directly or indirectly (taking into account the
attribution rules contained in Section 424(d) of the Code), stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or a Subsidiary or Affiliate.
Article
3. Administration
3.1 Authority of the
Committee. The Plan shall be administered by the Committee,
which shall have full power to interpret and administer the Plan and Award
Agreements and full authority to select the Directors, Employees and Consultants
to whom Awards will be granted and determine the type and amount of Awards to be
granted to each such Director, Employee or Consultant, and the terms and
conditions of Awards and Award Agreements. Without limiting the
generality of the foregoing, the Committee may, in its sole discretion but
subject to the limitations in Article 13, clarify, construe or resolve any
ambiguity in any provision of the Plan or any Award Agreement, accelerate or
waive vesting of Awards, lapsing of restrictions or deferral limitations imposed
on Awards, and exercisability of Awards, extend the term or period of
exercisability of any Awards, modify the purchase price under any Award, or
modify or waive any terms or conditions applicable to any
Award. Awards may, in the discretion of the Committee, be made under
the Plan in assumption of, or in substitution for, outstanding awards previously
granted by the Company or any of its Subsidiaries or Affiliates or a company
acquired by the Company or with which the Company combines. The
Committee shall have full and exclusive discretionary power to adopt rules,
forms, instruments, and guidelines for administering the Plan as the Committee
deems necessary or proper. Notwithstanding anything in this Section
3.1 to the contrary, the Board, or any other committee or sub-committee
designated by the Board, is hereby authorized (in addition to any necessary
action by the Committee) to grant or approve Awards as necessary to satisfy the
requirements of Section 16 of the Exchange Act and the rules and regulations
thereunder and to act in lieu of the Committee with respect to Awards made to
Non-Employee Directors under the Plan. All actions taken and all
interpretations and determinations made by the Committee or by the Board (or any
other committee or sub-committee thereof), as applicable, shall be final and
binding upon the Participants, the Company, and all other interested
individuals.
3.2 Delegation. The
Committee may delegate to one or more of its members or members of the Board,
one or more officers of the Company or any of its Subsidiaries or Affiliates,
and one or more agents or advisors such administrative duties or powers as it
may deem advisable; provided that the Committee
shall not delegate to officers of the Company or any of its Subsidiaries or
Affiliates the power to make grants of Awards to officers or Non-Employee
Directors of the Company or any of its Subsidiaries or Affiliates; provided, further, that no delegation
shall be permitted under the Plan that is prohibited by applicable
law.
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Article
4. Eligibility
and Participation
4.1 Eligibility. Participants
will consist of such Directors, Employees and Consultants as the Committee in
its sole discretion determines and whom the Committee may designate from time to
time to receive Awards. Designation of a Participant in any year
shall not require the Committee to designate such person to receive an Award in
any other year or, once designated, to receive the same type or amount of Award
as granted to the Participant in any other year.
4.2 Type of
Awards. Awards under the Plan may be granted in any one or a
combination of: (a) Options, (b) Stock Appreciation Rights, (c)
Restricted Stock, (d) Other Stock-Based Awards, and (e) Performance-Based
Compensation awards. The Plan sets forth the types of performance
goals and sets forth procedural requirements to permit the Company to design
Awards that qualify as Performance-Based Compensation, as described in Article
10 hereof. Awards granted under the Plan shall be evidenced by Award
Agreements (which need not be identical) that provide additional terms and
conditions associated with such Awards, as determined by the Committee in its
sole discretion; provided, however, that in the event of
any conflict between the provisions of the Plan and any such Award Agreement,
the provisions of the Plan shall prevail.
Article
5. Shares
Subject to the Plan and Maximum Awards
5.1 Number
of Shares Available for Awards.
(a)
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(i)
General. Subject
to adjustment as provided in Article 12 hereof, the maximum number of
Shares available for issuance to Participants pursuant to Awards under the
Plan shall be 500,000 Shares. The Shares available for issuance
under the Plan may consist, in whole or in part, of authorized and
unissued Shares or treasury Shares. The number of Shares
available for granting Incentive Stock Options under the Plan shall not
exceed 500,000 Shares, subject to adjustments provided in Article 12
hereof and subject to the provisions of Sections 422 or 424 of the Code
and any successor provisions. Any Shares delivered to the
Company as part or full payment for the purchase price of an Award granted
under this Plan or, to the extent the Committee determines that the
availability of Incentive Stock Options under the Plan will not be
compromised, to satisfy the Company’s withholding obligation with respect
to an Award granted under this Plan, shall again be available for Awards
under the Plan; provided, that such
Shares shall continue to be counted as outstanding for purposes of
determining whether an Annual Award Limit has been
attained.
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(b)
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Annual Award
Limits. The maximum number of Shares with respect to
which any Options, Stock Appreciation Rights and Performance-Based
Compensation denominated in Shares may be granted to any Participant in
any Plan Year shall be 250,000 Shares, subject to adjustments made in
accordance with Article 12 hereof, and the maximum amount of cash payable
and fair value of property with respect to Awards denominated in cash or
property that may be granted to any Participant in any Plan Year shall be
$3,000,000, subject to adjustments made in accordance with Article 12
hereof (each an “Annual Award
Limit” and collectively, “Annual Award
Limits”).
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(c)
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Additional
Shares. In the event that any outstanding Award expires,
is forfeited, cancelled or otherwise terminated without the issuance of
Shares or is otherwise settled for cash, the Shares subject to such Award,
to the extent of any such forfeiture, cancellation, expiration,
termination or settlement for cash, shall again be available for
Awards. If the Committee authorizes the assumption or
substitution under this Plan, in connection with any merger,
consolidation, acquisition of property or stock, or reorganization, of
awards granted by another entity under another plan (each, a “Substitute
Award”) , such substitution or assumption shall not (i) reduce the
maximum number of Shares available for issuance under this Plan or (ii) be
subject to or counted against a Participant’s Annual Award
Limit.
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6
(i)
reduce the maximum number of Shares available for issuance under this Plan
or (ii) be subject to or counted against a Participant’s Annual Award
Limit.
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6.1 Grant of
Options. The Committee is hereby authorized to grant Options
to Participants. Each Option shall permit a Participant to purchase
from the Company a stated number of Shares at an Option Price established by the
Committee, subject to the terms and conditions described in this Article 6 and
to such additional terms and conditions, as established by the Committee, in its
sole discretion, that are consistent with the provisions of the
Plan. Options shall be designated as either Incentive Stock Options
or Nonqualified Stock Options, provided, that Options
granted to Directors and Consultants shall be Nonqualified Stock
Options. An Option granted as an Incentive Stock Option shall, to the
extent it fails to qualify as an Incentive Stock Option, be treated as a
Nonqualified Stock Option. Neither the Committee nor the Company or
any of its Affiliates shall be liable to any Participant or to any other person
if it is determined that an Option intended to be an Incentive Stock Option does
not qualify as an Incentive Stock Option. Options shall be evidenced
by Award Agreements which shall state the number of Shares covered by such
Option. Such agreements shall conform to the requirements of the
Plan, and may contain such other provisions, as the Committee shall deem
advisable.
6.2 Terms of Option
Grant. The Option Price shall be determined by the Committee
at the time of grant, but shall not be less than one-hundred percent (100%) of
the Fair Market Value of a Share on the date of
grant. Notwithstanding the foregoing, the Option Price of an Option
that is a Substitute Award may be less than the Fair Market Value of a Share on
the date of grant; provided, that such substitution complies with applicable
laws and regulations, including applicable listing requirements and, to the
extent applicable, Section 424 of the Code and/or Section 409A. In
the case of any Incentive Stock Option granted to a Ten Percent Shareholder, the
Option Price shall not be less than one-hundred-ten percent (110%) of the Fair
Market Value of a Share on the date of grant.
6.3 Option Term. The
term of each Option shall be determined by the Committee at the time of grant
and shall be stated in the Award Agreement, but in no event shall such term be
greater than ten (10) years (or, in the case on an Incentive Stock Option
granted to a Ten Percent Shareholder, five (5) years).
6.4 Time of
Exercise. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant
6.5 Method of
Exercise. Except as otherwise provided in the Plan or in an
Award Agreement, an Option may be exercised for all, or from time to time any
part, of the Shares for which it is then exercisable. For purposes of
this Article 6, the exercise date of an Option shall be the later of the date a
notice of exercise is received by the Company (or such later date specified in
the notice) and, if applicable, the date payment is received by the Company
pursuant to clauses (i), (ii), (iii) or (iv) of the following sentence
(including the applicable tax withholding pursuant to Section 14.3 of the
Plan). The aggregate Option Price for the Shares as to which an
Option is exercised shall be paid to the Company in full at the election of the
Participant (i) in cash or its equivalent (e.g., by check, draft, money order,
cashier’s check, or wire transfer made payable to the Company), (ii) to the
extent permitted by the Committee, in Shares (whether or not previously owned by
the Participant) having a Fair Market Value equal to the aggregate Option Price
for the Shares being purchased and satisfying such other requirements as may be
imposed by the Committee, (iii) partly in cash and, to the extent permitted
by the Committee, partly in such Shares (as described in (ii) above) or (iv) if
there is a public market for the Shares at such time, subject to such
requirements as may be imposed by the Committee, through the delivery of
irrevocable instructions to a broker to sell Shares obtained upon the exercise
of the Option and to deliver promptly to the Company an amount out of the
proceeds of such sale equal to the aggregate Option Price for the Shares being
purchased. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage
firms. The Committee may prescribe any other method of payment that
it determines to be consistent with applicable law and the purpose of the
Plan.
6.6 Limitations on Incentive Stock
Options. Incentive Stock Options may be granted only to
employees of the Company or of a “parent corporation” or “subsidiary
corporation” (as such terms are defined in Section 424 of the Code) at the date
of grant. The aggregate Fair Market Value (generally determined as of
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the time
the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year under all plans of the Company and of any “parent corporation” or
“subsidiary corporation” shall not exceed one hundred thousand dollars
($100,000), or the Option shall be treated as a Nonqualified Stock
Option. For purposes of the preceding sentence, Incentive Stock
Options will be taken into account generally in the order in which they are
granted. No Incentive Stock Option may be exercised later than ten
(10) years after the date it is granted. Each provision of the Plan
and each Award Agreement relating to an Incentive Stock Option shall be
construed so that each Incentive Stock Option shall be an incentive stock option
as defined in Section 422 of the Code, and any provisions of the Award Agreement
thereof that cannot be so construed shall be disregarded.
6.7 Notification upon Disqualifying
Disposition of an Incentive Stock Option. Each Participant
awarded an Incentive Stock Option under the Plan shall notify the Company in
writing immediately after the date the Participant makes a disqualifying
disposition of any Shares acquired pursuant to the exercise of such Incentive
Stock Option. A disqualifying disposition is any disposition
(including, without limitation, any sale) of such Shares before the later of (A)
two years after the date of grant of the Incentive Stock Option or (B) one year
after the date of exercise of the Incentive Stock Option. The Company
may, if determined by the Committee and in accordance with procedures
established by the Committee, retain possession of any Shares acquired pursuant
to the exercise of an Incentive Stock Option as agent for the applicable
Participant until the end of the period described in the preceding
sentence.
Article
7. Stock
Appreciation Rights
7.1 Grant of Stock Appreciation
Rights. The Committee is hereby authorized to grant Stock
Appreciation Rights to Participants, including a grant of Stock Appreciation
Rights in tandem with any Option at the same time such Option is granted (a
“Tandem
SAR”). Stock Appreciation Rights shall be evidenced by Award
Agreements that shall conform to the requirements of the Plan and may contain
such other provisions, as the Committee shall deem advisable. Subject
to the terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the holder thereof a
right to receive, upon exercise thereof, the excess of (a) the Fair Market Value
of a specified number of Shares on the date of exercise over (b) the grant price
of the right as specified by the Committee on the date of the
grant. Such payment may be in the form of cash, Shares, other
property or any combination thereof, as the Committee shall determine in its
sole discretion.
7.2 Terms of Stock Appreciation
Right. Subject to the terms of the Plan and any applicable
Award Agreement, the grant price (which shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant; provided, that
notwithstanding the foregoing, the grant price of any Stock Appreciation Right
that is a Substitute Award may be less than the Fair Market Value of a Share on
the date of grant, subject to the same conditions set forth in Section 6.2 for
Options that are Substitute Awards), term, methods of exercise, methods of
settlement, and any other terms and conditions of any Stock Appreciation Right
shall be as determined by the Committee. The Committee may impose
such other conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate. No Stock Appreciation Right shall
have a term of more than ten (10) years from the date of grant.
7.3 Tandem Stock Appreciation Rights and
Options. A Tandem SAR shall be exercisable only to the extent
that the related Option is exercisable and shall expire no later than the
expiration of the related Option. Upon the exercise of all or a
portion of a Tandem SAR, a Participant shall be required to forfeit the right to
purchase an equivalent portion of the related Option (and, when a Share is
purchased under the related Option, the Participant shall be required to forfeit
an equivalent portion of the Stock Appreciation Right).
Article
8. Restricted
Stock
8.1 Grant of Restricted
Stock. The Committee is authorized to grant Restricted Stock,
which is a grant by the Committee of a specified number of Shares to the
Participant, which Shares are subject to forfeiture upon the occurrence of
specified events. Participants shall be awarded Restricted Stock in
exchange for consideration not less than the minimum consideration required by
applicable law. Restricted Stock shall be evidenced by an Award
Agreement, which shall conform to the requirements of the Plan and may contain
such other provisions, as the Committee shall deem advisable.
8
8.2 Terms of Restricted Stock
Awards. Each Award Agreement evidencing a Restricted Stock
grant shall specify the period(s) of restriction, the number of Shares of
Restricted Stock subject to the Award, the purchase price, if any, of the Shares
of Restricted Stock, the performance, employment or other conditions (including
the termination of a Participant's Continuous Service whether due to death,
disability or other reason) under which the Restricted Stock may be forfeited to
the Company and such other provisions as the Committee shall determine; provided, that
notwithstanding the foregoing, except in the case of an Award Agreement with a
Non-Employee Director, (i) Shares of Restricted Stock which vest based on the
passage of time shall have a minimum vesting period of three years and (ii)
Shares of Restricted Stock which vest based on the achievement of performance
goals shall have a minimum vesting period of one year, subject, in each case of
(i) and (ii), to acceleration of vesting as may be set forth in the applicable
Award Agreement in the event of death, Disability, or Change of Control or as
otherwise may be determined in accordance with the Plan. Any
Restricted Stock granted under the Plan shall be evidenced in such manner as the
Committee may deem appropriate, including book-entry registration or issuance of
a stock certificate or certificates (in which case, the certificate(s)
representing such shares shall be legended as to sale, transfer, assignment,
pledge or other encumbrances during the Restriction Period and deposited by the
Participant, together with a stock power endorsed in blank, with the Company, to
be held in escrow during the Restriction Period). At the end of the
Restriction Period, the restrictions imposed hereunder and under the Award
Agreement shall lapse with respect to the number of Shares of Restricted Stock
as determined by the Committee, and the legend shall be removed and such number
of Shares delivered to the Participant (or, where appropriate, the Participant's
legal representative).
8.3 Voting and Dividend
Rights. Unless otherwise determined by the Committee and set
forth in a Participant’s Award Agreement, Participant’s holding Restricted Stock
granted hereunder shall have the right to exercise voting rights with respect to
the Restricted Stock and have the right to receive dividends on such Restricted
Stock. Notwithstanding the foregoing, dividends on Shares of
Restricted Stock which vest based on the achievement of performance goals shall
be subject to the same vesting conditions as the underlying Shares of Restricted
Stock.
8.4 Performance
Goals. The Committee may condition the grant of Restricted
Stock or the expiration of the Restriction Period upon the Participant's
achievement of one or more performance goal(s) specified in the Award
Agreement. If the Participant fails to achieve the specified
performance goal(s), the Committee shall not grant the Restricted Stock to such
Participant or the Participant shall forfeit the Award of Restricted Stock to
the Company, as applicable.
8.5 Section 83(b)
Election. If a Participant makes an election pursuant to
Section 83(b) of the Code concerning Restricted Stock, the Participant shall be
required to file promptly a copy of such election with the Company.
Article
9. Other
Stock-Based Awards
The
Committee, in its sole discretion, may grant awards of Shares and awards that
are valued, in whole or in part, by reference to, or are otherwise based on the
Fair Market Value of, Shares (the “Other Stock-Based
Awards”), including without limitation, restricted stock units and other
phantom awards. Such Other Stock-Based Awards shall be in such form,
and dependent on such conditions, as the Committee shall determine, including,
without limitation, the right to receive one or more Shares (or the equivalent
cash value of such Shares) upon the completion of a specified period of
Continuous Service, the occurrence of an event and/or the attainment of
performance objectives or goals. Other Stock-Based Awards may be
granted alone or in addition to any other Awards granted under the
Plan. Subject to the provisions of the Plan, the Committee shall
determine to whom and when Other Stock-Based Awards will be made, the number of
Shares to be awarded under (or otherwise related to) such Other Stock-Based
Awards, whether such Other Stock-Based Awards shall be settled in cash, Shares
or a combination of cash and Shares, and all other terms and conditions of such
awards (including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be fully paid
and non-assessable). Notwithstanding the foregoing, except in the
case of an Award Agreement with a Non-Employee Director, (A) Other Stock-Based
Awards which vest (i) based on the passage of time shall have a minimum vesting
period of three years and (ii) based on the achievement of performance goals
shall have a minimum vesting period of one year, subject, in each case of (i)
and (ii), to acceleration of vesting as may be set forth in the applicable Award
Agreement in the event of death, Disability, or Change of Control or as
otherwise may determined in accordance with the Plan and
(B) to the extent a
9
Participant
is eligible to receive dividends in connection with any Other Stock-Based Award,
such dividends on Other Stock-Based Awards which vest based on the achievement
of performance goals shall be subject to the same vesting conditions as the
underlying Other Stock-Based Award.
Article
10. Performance-Based
Compensation
10.1 Grant of Performance-Based
Compensation. The Committee is authorized to design any Award
so that the amounts or Shares payable or distributed pursuant to such Award are
treated as “qualified performance-based compensation” within the meaning of
Section 162(m) of the Code and related regulations.
10.2 Performance
Measures. The vesting, crediting and/or payment of
Performance-Based Compensation shall be based on the achievement of objective
performance goals based on one or more of the following Performance Measures:
(a) sales or revenue; (b) earnings per share; (c) measurable achievement in
quality, operation and compliance initiatives; (d) objectively determinable
measure of non-financial operating and management performance objectives; (e)
net earnings (either before or after interest, taxes, depreciation and
amortization); (f) economic value-added; (g) net income (either before or after
taxes); (h) operating earnings; (i) cash flow (including, but not limited to,
operating cash flow and free cash flow); (j) cash flow return on capital; (k)
return on net assets; (l) return on stockholders’ equity; (m) return on
assets; (n) return on capital; (o) stockholder returns, dividends and/or other
distributions; (p) return on sales; (q) gross or net profit margin;
(r) productivity; (s) expenses; (t) margins; (u) operating efficiency;
(v) customer satisfaction; (w) measurable achievement in quality and
compliance initiatives; (x) working capital; (y) debt; (z) debt reduction; (aa)
price per share of stock; (bb) market share; (cc) completion of acquisitions;
(dd) business expansion; (ee) product diversification; and (ff) new or
expanded market penetration. The foregoing criteria shall have any
reasonable definitions that the Committee may specify, which may include or
exclude any or all of the following items, as the Committee may specify: (pp)
extraordinary, unusual or non-recurring items; (qq) effects of changes in tax
law, accounting principles or other such laws or provisions affecting reported
results; (rr) effects of currency fluctuations; (ss) effects of financing
activities (e.g., effect on earnings per share of issuing convertible debt
securities); (tt) expenses for restructuring, productivity initiatives or new
business initiatives; (uu) impairment of tangible or intangible assets; (vv)
litigation or claim judgments or settlements; (ww) non-operating items;
(xx) acquisition expenses; (yy) discontinued operations; and (zz) effects
of assets sales or divestitures.
Any
Performance Measure may be (i) used to measure the performance of the Company
and/or any of its Subsidiaries or Affiliates as a whole, any business unit or
divisional level thereof or any combination thereof against any goal including
past performance or (ii) compared to the performance of a group of comparable
companies, or a published or special index, in each case that the Committee, in
its sole discretion, deems appropriate. Subject to Section 162(m) of
the Code, the Committee may adjust the performance goals (including to prorate
goals and payments for a partial Plan Year) in the event of the following
occurrences: (a) non-recurring events, including divestitures, spin-offs, or
changes in accounting standards or policies; (b) mergers and acquisitions; and
(c) financing transactions, including selling accounts receivable.
10.3 Establishment of Performance
Goals. No later than ninety (90) days after the commencement
of a Performance Period (but in no event after twenty-five percent (25%) of such
Performance Period has elapsed), the Committee shall establish in
writing: (i) the performance goals applicable to the Performance
Period; (ii) the Performance Measures to be used to measure the performance
goals in terms of an objective formula or standard; (iii) the formula for
computing the amount of compensation payable to the Participant if such
performance goals are obtained; and (iv) the Participants or class of
Participants to which such performance goals apply. The outcome of
such performance goals must be substantially uncertain when the Committee
establishes the goals.
10.4 Adjustment of Performance-Based
Compensation. Awards that are designed to qualify as
Performance-Based Compensation may not be adjusted upward. The
Committee shall retain the discretion to adjust such Awards downward, either on
a formula or discretionary basis or any combination, as the Committee
determines.
10.5 Certification of
Performance. Except for Awards that pay compensation
attributable solely to an increase in the value of Shares, no Award designed to
qualify as Performance-Based Compensation shall be vested, credited or paid, as
applicable, with respect to any Participant until the Committee certifies in
writing
10
that the
performance goals and any other material terms applicable to such Performance
Period have been satisfied.
10.6 Performance
Goals. The Committee may condition the grant, vesting or
delivery of any Award upon the achievement of one or more performance goal(s)
specified in the Award Agreement.
10.7 Interpretation. Each
provision of the Plan and each Award Agreement relating to Performance-Based
Compensation shall be construed so that each such Award shall be “qualified
performance-based compensation” within the meaning of Section 162(m) of the Code
and related regulations, and any provisions of the Award Agreement thereof that
cannot be so construed shall be disregarded, except as otherwise determined by
the Committee.
Article
11. Compliance
with Section 409A of the Code and Section 457A of the Code
11.1 General. The
Company intends that any Awards be structured in compliance with, or to satisfy
an exemption from, Section 409A, such that there are no adverse tax
consequences, interest, or penalties under Section 409A as a result of the
Awards. Notwithstanding the Company’s intention, in the event any
Award is subject to Section 409A, the Committee may, in its sole discretion and
without a Participant’s prior consent, amend the Plan and/or Awards, adopt
policies and procedures, or take any other actions (including amendments,
policies, procedures and actions with retroactive effect) as are necessary or
appropriate to (i) exempt the Plan and/or any Award from the application of
Section 409A, (ii) preserve the intended tax treatment of any such Award, or
(iii) comply with the requirements of Section 409A, including without limitation
any such regulations guidance, compliance programs and other interpretative
authority that may be issued after the date of grant of an
Award. This Plan, Awards and Award Agreements granted hereunder shall
be interpreted at all times in such a manner that the terms and provisions of
the Plan, Awards and Award Agreements are exempt from or comply with Section
409A.
11.2 Payments to Specified
Employees. Notwithstanding any contrary provision in the Plan
or any Award Agreement, any payment(s) of “nonqualified deferred compensation”
(within the meaning of Section 409A) that are otherwise required to be made
under the Plan or any Award Agreement to a “specified employee” (as defined
under Section 409A) as a result of his or her “separation from service” (as
defined below) (other than a payment that is not subject to Section
409A) shall be delayed for the first six (6) months following such “separation
from service” and shall instead be paid (in a manner set forth in the Award
Agreement) on the date that immediately follows the end of such six-month period
(or, if earlier, within 10 business days following the date of death of the
specified employee) (the “New Payment Date”) or
as soon as administratively practicable thereafter, but in no event later than
the later of the end of the applicable taxable year of the “specified
employee” or the fifteenth (15th) day of the third calendar month following the
New Payment Date.
11.3 Separation from
Service. A termination of employment shall not be deemed to
have occurred for purposes of any provision of the Plan or any Award Agreement
providing for the payment of any amounts or benefits that are considered
nonqualified deferred compensation under Section 409A upon or following a
termination of employment, unless such termination is also a “separation from
service” within the meaning of Section 409A and the payment thereof prior to a
“separation from service” would violate Section 409A. For purposes of
any such provision of the Plan or any Award Agreement relating to any such
payments or benefits, references to a “termination,” “termination of
employment,” “termination of Continuous Service” or like terms shall mean
“separation from service.”
11.4 Section 457A. The
Company intends that any Awards be structured in compliance with, or to satisfy
an exemption from, Section 457A of the Code and all regulations, guidance,
compliance programs and other interpretative authority thereunder (“Section 457A”), such
that there are no adverse tax consequences, interest, or penalties as a result
of the Awards. Notwithstanding the Company’s intention, in the event
any Award is subject to Section 457A, the Committee may, in its sole discretion
and without a Participant’s prior consent, amend the Plan and/or Awards, adopt
policies and procedures, or take any other actions (including amendments,
policies, procedures and actions with retroactive effect) as are necessary or
appropriate to (i) exempt the Plan and/or any Award from the application of
Section 457A, (ii) preserve the intended tax treatment of any such Award, or
(iii) comply with the requirements of Section 457A, including without limitation
any
11
such
regulations, guidance, compliance programs and other interpretative authority
that may be issued after the date of the grant.
Article
12. Adjustments
12.1 Adjustments in Authorized
Shares. In the event of any corporate event or transaction
involving the Company, a Subsidiary and/or an Affiliate (including, but not
limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, combination of Shares, exchange of Shares, dividend in kind,
extraordinary cash dividend, amalgamation, or other like change in capital
structure (other than regular cash dividends to shareholders of the Company), or
any similar corporate event or transaction, the Committee, to prevent dilution
or enlargement of Participants’ rights under the Plan, shall substitute or
adjust, in its sole discretion, the number and kind of Shares or other property
that may be issued under the Plan or under particular forms of Awards, the
number and kind of Shares or other property subject to outstanding Awards, the
Option Price, grant price or purchase price applicable to outstanding Awards,
the Annual Award Limits, and/or other value determinations applicable to the
Plan or outstanding Awards.
12.2 Change of Control. Unless the
Committee shall provide otherwise at the time of grant of an Award, upon the
occurrence of a Change of Control any outstanding Awards under the Plan (A)
which are not continued or assumed by the Company (if it is the surviving
company or corporation) or by the surviving company or corporation or its parent
shall immediately prior to the occurrence of the Change of Control vest in full,
become exercisable and all restrictions lapse, as may be applicable and (B)
which are assumed by the Company (if it is the surviving company or corporation)
or by the surviving company or corporation or its parent shall vest in full,
become exercisable and all restrictions shall lapse, as may be applicable, to
the extent the Participant’s employment or service (which for the avoidance of
doubt shall include Continuous Service, to the extent applicable), as
applicable, is terminated within a specified period of time following such
Change of Control as determined by the Committee and set forth in the applicable
Award Agreement. In addition to the foregoing, the Committee is
authorized (but not obligated) to make adjustments in the terms and conditions
of outstanding Awards, including without limitation the following (or any
combination thereof): (i) continuation or assumption of such
outstanding Awards under the Plan by the Company (if it is the surviving company
or corporation) or by the surviving company or corporation or its parent; (ii)
substitution by the surviving company or corporation or its parent of awards
with substantially the same terms for such outstanding Awards; (iii) accelerated
exercisability, vesting and/or lapse of restrictions under outstanding Awards
immediately prior to the occurrence of such event; (iv) upon written notice,
provide that any outstanding Awards must be exercised, to the extent then
exercisable, during a reasonable period of time immediately prior to the
scheduled consummation of the event, or such other period as determined by the
Committee (in either case, contingent upon the consummation of the event), and
at the end of such period, such Awards shall terminate to the extent not so
exercised within the relevant period; and (v) cancellation of all or any portion
of outstanding Awards for fair value (as determined in the sole discretion of
the Committee and which may be zero) which, in the case of Options and Stock
Appreciation Rights or similar Awards, if the Committee so determines, may equal
the excess, if any, of the value of the consideration to be paid in the Change
of Control transaction to holders of the same number of Shares subject to such
Awards (or Fair Market Value of the Shares subject to such outstanding Awards or
portion thereof being canceled) over the aggregate Option Price or grant price,
as applicable, with respect to such Awards or portion thereof being canceled
(which may be zero).
Article
13.
Duration,
Amendment, Modification, Suspension and Termination
13.1 Duration of the
Plan. Unless sooner terminated as provided in Section 13.2,
the Plan shall terminate on the tenth (10th) anniversary of the Effective
Date.
13.2 Amendment, Modification, Suspension
and Termination of Plan. The Committee may amend, alter,
suspend, discontinue, or terminate (for purposes of this Section 13.2, an “Action”) the Plan or
any portion thereof or any Award (or Award Agreement) thereunder at any time;
provided that no such
Action shall be made, other than as permitted under Article 11 or 12, (i)
without shareholder approval (A) if such approval is necessary to comply with
any tax or regulatory requirement applicable to the Plan, (B) if such Action
increases the number of Shares available under the Plan (other than an increase
permitted under Article 5 absent shareholder approval), (C) to take account of
any changes in applicable law, or to obtain or maintain favorable
12
tax,
exchange, or regulatory treatment (including, without limitation increases in
the Annual Award Limits) for the Company, a Subsidiary, and/or an Affiliate or a
change in eligibility requirements under the Plan, or (D) for any
Action that results in a reduction of the Option Price or grant price per
Share, as applicable, of any outstanding Options or Stock Appreciation Rights or
cancellation of any outstanding Options or Stock Appreciation Rights in exchange
for cash, or for other Awards, such as other Options or Stock Appreciation
Rights, with an Option Price or grant price per Share, as applicable, that is
less than such price of the original Options or Stock Appreciation Rights, and
(ii) without the written consent of the affected Participant, if such Action
would materially diminish the rights of any Participant under any Award
theretofore granted to such Participant under the Plan; provided, however, that the Committee
may amend the Plan, any Award or any Award Agreement without such consent of the
Participant in such manner as it deems necessary to comply with applicable
laws.
Article
14. General
Provisions
14.1 No Right to
Service. The granting of an Award under the Plan shall impose
no obligation on the Company, any Subsidiary or any Affiliate to continue the
Continuous Service of a Participant and shall not lessen or affect any right
that the Company, any Subsidiary or any Affiliate may have to terminate the
Continuous Service of such Participant. No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Participants, or holders or beneficiaries of
Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same
with respect to each Participant (whether or not such Participants are similarly
situated).
14.2 Settlement of Awards; Fractional
Shares. Each Award Agreement shall establish the form in which
the Award shall be settled. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, Awards, other securities or other property shall be
issued or paid in lieu of fractional Shares or whether such fractional Shares or
any rights thereto shall be rounded, forfeited or otherwise
eliminated.
14.3 Tax
Withholding. The Company shall have the power and the right to
deduct or withhold automatically from any amount deliverable under the Award or
otherwise, or require a Participant to remit to the Company, the amount
necessary to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan. With respect to required
withholding, Participants may elect (subject to the Company's automatic
withholding right set out above), subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax that could be imposed on the
transaction.
14.4 No Guarantees Regarding Tax
Treatment. Participants (or their beneficiaries) shall be
responsible for all taxes with respect to any Awards under the
Plan. The Committee and the Company make no guarantees to any person
regarding the tax treatment of Awards or payments made under the
Plan. Neither the Committee nor the Company has any obligation to
take any action to prevent the assessment of any tax on any person with respect
to any Award under Section 409A or Section 457A or otherwise and none of the
Company, any of its Subsidiaries or Affiliates, or any of their employees or
representatives shall have any liability to a Participant with respect
thereto.
14.5 Section 16 Participants. With
respect to Participants subject to Section 16 of the Exchange Act, transactions
under the Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Committee.
14.6 Non-Transferability of
Awards. Unless otherwise determined by the Committee, an Award
shall not be transferable or assignable by the Participant except in the event
of his death (subject to the applicable laws of descent and distribution) and
any such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate. No transfer shall be permitted for value or
consideration. An award exercisable after the death of a Participant
may
13
be
exercised by the legatees, personal representatives or distributees of the
Participant. Any permitted transfer of the Awards to heirs or
legatees of the Participant shall not be effective to bind the Company unless
the Committee shall have been furnished with written notice thereof and a copy
of such evidence as the Committee may deem necessary to establish the validity
of the transfer and the acceptance by the transferee or transferees of the terms
and conditions hereof.
14.7 Conditions and Restrictions on
Shares. The Committee may impose such other conditions or
restrictions on any Shares received in connection with an Award as it may deem
advisable or desirable. These restrictions may include, but shall not
be limited to, a requirement that the Participant hold the Shares received for a
specified period of time or a requirement that a Participant represent and
warrant in writing that the Participant is acquiring the Shares for investment
and without any present intention to sell or distribute such
Shares. The certificates for Shares may include any legend which the
Committee deems appropriate to reflect any conditions and restrictions
applicable to such Shares.
14.8 Compliance with
Law. The granting of Awards and the issuance of Shares under
the Plan shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies, or any stock exchanges on which the
Shares are admitted to trading or listed, as may be required. The
Company shall have no obligation to issue or deliver evidence of title for
Shares issued under the Plan prior to:
(a)
|
Obtaining
any approvals from governmental agencies that the Company determines are
necessary or advisable; and
|
(b)
|
Completion
of any registration or other qualification of the Shares under any
applicable national, state or foreign law or ruling of any governmental
body that the Company determines to be necessary or
advisable.
|
The
restrictions contained in this Section 14.8 shall be in addition to any
conditions or restrictions that the Committee may impose pursuant to Section
14.7. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
14.9 Awards to Non-U.S. Directors,
Employees or Consultants. To comply with the laws in countries
other than the United States in which the Company or any of its Subsidiaries or
Affiliates operates or has Directors, Employees or Consultants, the Committee,
in its sole discretion, shall have the power and authority to:
(a)
|
Determine
which Subsidiaries or Affiliates shall be covered by the
Plan;
|
(b)
|
Determine
which Directors, Employees or Consultants outside the United States are
eligible to participate in the
Plan;
|
(c)
|
Modify
the terms and conditions of any Award granted to Directors, Employees or
Consultants outside the United States to comply with applicable foreign
laws;
|
(d)
|
Take
any action, before or after an Award is made, that it deems advisable to
obtain approval or comply with any necessary local government regulatory
exemptions or approvals; and
|
(e)
|
Establish
subplans and modify exercise procedures and other terms and procedures, to
the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under
this Section 14.9 by the Committee shall be attached to this Plan document
as appendices.
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14
14.10 Rights as a
Shareholder. Except as otherwise provided herein or in the
applicable Award Agreement, a Participant shall have none of the rights of a
shareholder with respect to Shares covered by any Award until the Participant
becomes the record holder of such Shares.
14.11 Severability. If
any provision of the Plan or any Award is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan
or the Award, such provision shall be stricken as to such jurisdiction, Person,
or Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.
14.12 Unfunded
Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company or any of its Subsidiaries
or Affiliates may make to aid it in meeting its obligations under the
Plan. Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other person. To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from
the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts. The Plan is not subject to the U.S. Employee Retirement
Income Security Act of 1974, as amended from time to time.
14.13 No Constraint on Corporate
Action. Nothing in the Plan shall be construed to (i) limit,
impair, or otherwise affect the Company’s or its Subsidiary’s or Affiliate’s
right or power to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure, or to merge or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of its business or
assets, or (ii) limit the right or power of the Company, its Subsidiaries or
Affiliates to take any action which such entity deems to be necessary or
appropriate.
14.14 Successors. All
obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
or assets of the Company.
14.15 Governing Law. The
Plan and each Award Agreement shall be governed by the laws of the State of New
Jersey, excluding any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of the Plan to the substantive
law of another jurisdiction.
14.16 Waiver of Certain
Claims. By participating in the Plan, the Participant waives
all and any rights to compensation or damages in consequence of the termination
of his or her office or Continuous Service for any reason whatsoever, whether
lawfully or otherwise, insofar as those rights arise or may arise from his or
her ceasing to have rights under the Plan as a result of such termination, or
from the loss or diminution in value of such rights or entitlements, including
by reason of the operation of the terms of the Plan, any determination by the
Board or Committee pursuant to a discretion contained in the Plan or any Award
Agreement or the provisions of any statute or law relating to
taxation.
14.17 Data Protection. By
participating in the Plan, the Participant consents to the collection,
processing, transmission and storage by the Company in any form whatsoever, of
any data of a professional or personal nature which is necessary for the
purposes of introducing and administering the Plan. The Company may
share such information with any Subsidiary or Affiliate, the trustee of any
employee benefit trust, its registrars, trustees, brokers, other third party
administrator or any Person who obtains control of the Company or acquires the
Company, undertaking or part-undertaking which employs the Participant, wherever
situated.
14.18 Clawback. An Award
Agreement may also specify other events that may cause a Participant’s rights,
payments and benefits with respect to an Award to be subject to reduction,
cancellation,
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forfeiture,
or recoupment, or which may affect any otherwise applicable vesting or
performance conditions of an Award.
14.19 Effective Date. The
Plan shall be effective as of the date of adoption by the Board, which date is
set forth below (the “Effective Date”);
provided, that the Plan
is approved by the shareholders of the Company at an annual meeting or any
special meeting of shareholders of the Company within 12 months of the Effective
Date, and such approval of shareholders shall be a condition to the right of
each Participant to receive any Awards hereunder. Any Awards granted
under the Plan prior to such approval of shareholders shall be effective as of
the date of grant, but no such Award may be exercised or settled and no
restrictions relating to any Award may lapse prior to such shareholder approval,
and if shareholders fail to approve the Plan as specified hereunder, any such
Award shall be cancelled.
* * *
This Plan
was duly adopted and approved by the Board by resolution at a meeting held on
the 19th day of April, 2010.
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