Attached files
| file | filename |
|---|---|
| 8-K - GARMIN LTD | v188974_8k.htm |
| EX-3.2 - GARMIN LTD | v188974_ex3-2.htm |
| EX-3.1 - GARMIN LTD | v188974_ex3-1.htm |
| EX-10.4 - GARMIN LTD | v188974_ex10-4.htm |
| EX-10.8 - GARMIN LTD | v188974_ex10-8.htm |
| EX-10.2 - GARMIN LTD | v188974_ex10-2.htm |
| EX-99.1 - GARMIN LTD | v188974_ex99-1.htm |
| EX-10.9 - GARMIN LTD | v188974_ex10-9.htm |
| EX-10.5 - GARMIN LTD | v188974_ex10-5.htm |
| EX-10.6 - GARMIN LTD | v188974_ex10-6.htm |
| EX-10.7 - GARMIN LTD | v188974_ex10-7.htm |
| EX-10.1 - GARMIN LTD | v188974_ex10-1.htm |
Exhibit
10.3
Garmin
Ltd.
Amended
and Restated 2000 Non-Employee
Directors’
Option Plan
Effective
June 5, 2009
as
amended and restated on June 27, 2010
Garmin
Ltd.
Amended
and Restated 2000
Non-Employee
Directors’ Option Plan
as
amended and restated on June 27, 2010
Article
1. Establishment, Objectives and Duration
1.1.
Establishment and
Amendment of the Plan. Garmin Ltd., a Swiss company (the
“Company”) hereby establishes the non-employee directors' option plan to be
known as the Garmin Ltd. 2000 Non-Employee Directors’ Option Plan (the “Plan”).
The Plan was originally adopted by the Board of Directors of the Garmin Ltd., a
Cayman Islands company ("Garmin Cayman") on October 20, 2000 and approved by
such company’s shareholders on October 24, 2000. The Plan is effective as of
November 1, 2000 (the "Original Effective Date"). In 2006, Garmin Cayman
effected a two-for-one stock split of its shares, (the “Stock Split”). The Board
of Directors of Garmin Cayman adopted an amended and restated plan effective
June 5, 2009, (the “New Effective Date”) to increase the authorized number of
common shares that may be issued under the Plan and to make certain amendments
reflecting the Stock Split and changes in the law. The Plan was again
amended and restated on June 27, 2010 following the redomestication transaction
on June 27, 2010 pursuant to which the shares of Garmin Cayman were exchanged
for shares of the Company and the Company became the public holding company of
Garmin Cayman and its subsidiaries.
1.2.
Objectives of the
Plan. The Plan is intended to allow Eligible Directors of the
Company to acquire or increase equity ownership in the Company, thereby
strengthening their commitment to the success of the Company, aligning their
interests with those of the shareholders of the Company, and to assist the
Company in attracting and retaining experienced and knowledgeable individuals to
serve as directors.
1.3.
Duration of the
Plan. The Plan commenced on the Original Effective Date and
shall remain in effect, subject to the right of the Board to amend or terminate
the Plan at any time pursuant to Article 8 hereof, until the earlier of
(a) the 10 year anniversary of the New Effective Date and (b) the date
all Shares subject to the Plan shall have been delivered according to the Plan’s
provisions; provided that the Plan shall remain in effect with respect to and
shall govern any grants made hereunder including any amounts deferred in
connection with such grants.
Article
2. Definitions
Whenever
used in the Plan, the following terms shall have the meanings set forth
below:
2.1.
“Annual Meeting of
Shareholders” means the regularly scheduled annual meeting of the
Company’s shareholders.
2.2.
“Annual Option
Grant” shall mean that portion of the Retainer payable to an Eligible
Director in Options.
2.3.
“Article” means
an Article of the Plan.
2.4. “Beneficial Owner” has
the meaning specified in Rule 13d-3 of the SEC under the Exchange
Act.
2.5.
“Board” means
the Board of Directors of the Company.
2.6. “Cause” means,
(i) an Eligible Director’s conviction of a felony or other crime
involving fraud, dishonesty or moral turpitude; (ii) willful or
reckless material misconduct in an Eligible Director’s performance of his or her
duties as a Director; or (iii) an Eligible Director’s habitual neglect of
duties; provided, that
an Eligible Director who agrees to resign his position on the Board in lieu of
being removed for Cause, may be deemed to have been removed for Cause for
purposes of this Plan.
2.7.
Change of
Control” means, unless otherwise defined in an Option Agreement, any one
or more of the following:
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(a)
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any
Person other than (i) a Subsidiary, (ii) any employee benefit plan (or any
related trust) of the Company or any of its Subsidiaries or (iii) any
Excluded Person, becomes the Beneficial Owner of 35% or more of the shares
of the Company representing 35% or more of the combined voting power of
the Company (such a person or group, a “35% Owner”),
except that (i) no Change of Control shall be deemed to have occurred
solely by reason of such beneficial ownership by a corporation with
respect to which both more than 60% of the common shares of such
corporation and Voting Securities representing more than 60% of the
aggregate voting power of such corporation are then owned, directly or
indirectly, by the persons who were the direct or indirect owners of the
shares of the Company immediately before such acquisition in substantially
the same proportions as their ownership, immediately before such
acquisition, of the shares of the Company, as the case may be and (ii)
such corporation shall not be deemed a 35% Owner;
or
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(b)
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the
Incumbent Directors (determined using the Original Effective Date as the
baseline date) cease for any reason to constitute at least a majority of
the directors of the Company then serving;
or
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(c)
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the
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of a
merger, reorganization, consolidation, or similar transaction, or the sale
or other disposition of all or substantially all (at least 40%) of the
consolidated assets of the Company or a resolution of dissolution of the
Company (any of the foregoing transactions, a “Reorganization
Transaction”) which is not an Exempt Reorganization
Transaction.
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-2-
The
definition of “Change of Control” may be amended at any time prior to the
occurrence of a Change of Control, and such amended definition shall be applied
to all Options granted under the Plan whether or not outstanding at the time
such definition is amended, without requiring the consent of any Eligible
Director. Notwithstanding the occurrence of any of the foregoing
events, (a) a Change of Control shall be deemed not to have occurred with
respect to any Section 16 Person if such Section 16 Person is, by agreement
(written or otherwise), a participant on such Section 16 Person’s own behalf in
a transaction which causes the Change of Control to occur and (b) a Change of
Control shall not occur with respect to a Eligible Director if, in advance of
such event, the Eligible Director agrees in writing that such event shall not
constitute a Change of Control.
2.8. “Code” means the
Internal Revenue Code of 1986, as amended from time to time, and regulations and
rulings thereunder. References to a particular section of the Code include
references to successor provisions of the Code or any successor
statute.
2.9.
“Committee” has
the meaning set forth in Article 3.1.
2.10.
“Company” has
the meaning set forth in Section 1.1.
2.11.
“Disabled” or
“Disability”
means an individual (i) is unable to engage in any substantial gainful activity
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 twelve (12) months or (ii) is, 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 twelve (12) months, receiving income replacement benefits for a period of
not less than 3 months under a Company-sponsored accident and health
plan.
2.12. “Eligible Director”
means (i) any individual serving as a director on the Board immediately
following the Annual Meeting of Shareholders of the Company and (ii) any
individual elected or appointed to serve as a director on the Board at some time
other than the Annual Meeting of Shareholders; provided, that a director who
is an officer of the Company or a Subsidiary or otherwise employed by the
Company or a Subsidiary shall not be an Eligible Director.
2.13.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended. References to a
particular section of the Exchange Act include references to successor
provisions.
2.14.
“Excluded
Person” means any Person who, along with such Person’s Affiliates and
Associates (as such terms are defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act) is the Beneficial Owner of 15% or more of
the Shares outstanding as of the Original Effective Date.
-3-
2.15.
“Exempt Reorganization
Transaction” means a Reorganization Transaction which (i) results in the
Persons who were the direct or indirect owners of the outstanding shares of the
Company immediately before such Reorganization Transaction becoming, immediately
after the consummation of such Reorganization Transaction, the direct or
indirect owners of both more than 60% of the then-outstanding common shares of
the Surviving Corporation and Voting Securities representing more than 60% of
the aggregate voting power of the Surviving Corporation, in substantially the
same respective proportions as such Persons’ ownership of the shares of the
Company immediately before such Reorganization Transaction, or (ii) after such
transaction, more than 50% of the members of the board of directors of the
Surviving Corporation were Incumbent Directors at the time of the Board’s
approval of the agreement providing for the Reorganization Transaction or other
action of the Board approving the transaction (or whose election or nomination
was approved by a vote of at least two-thirds of the members who were members of
the Board at that time).
2.16.
“Fair Market
Value” means, unless otherwise determined or provided by the Plan
Committee in the circumstances, (A) with respect to any property other than
Shares, the fair market value of such property determined by such methods or
procedures as shall be established from time to time by the Plan Committee, and
(B) with respect to Shares, (i) the last sale price (also referred to as the
closing price) of a Share on such U.S. securities exchange as the Shares are
then traded, for the applicable date, (ii) if such U.S. securities exchange is
closed for trading on such date, or if the Shares do not trade on such date,
then the last sales price used shall be the one on the date the Shares last
traded on such U.S. securities exchange, or (iii) in the event that there shall
be no public market for the Shares, the fair market value of the Shares as
determined in good faith by the Plan Committee using a method consistently
applied. Notwithstanding the above, for all Options granted before
June 5, 2009, Fair Market Value for purposes of establishing the Option Price
was established based on the average of the high and low trading prices on the
Nasdaq Global Select Market (or, if no sale of Shares was reported for such
date, on the next preceding date on which a sale of Shares was
reported).
2.17.
“Grant Date”
has the meaning set forth in Section 5.1.
2.18.
“Including” or
“includes” mean
“including, without limitation,” or “includes, without limitation,”
respectively.
2.19.
“Incumbent
Directors” means, as of any specified baseline date, individuals then
serving as members of the Board who were members of the Board as of the date
immediately preceding such baseline date; provided that any
subsequently-appointed or elected member of the Board whose election, or
nomination for election by shareholders of the Company or the Surviving
Corporation, as applicable, was approved by a vote or written consent of a
majority of the directors then comprising the Incumbent Directors shall also
thereafter be considered an Incumbent Director, unless the initial assumption of
office of such subsequently-elected or appointed director was in connection with
(i) an actual or threatened election contest, including a consent solicitation,
relating to the election or removal of one or more members of the Board, (ii) a
“tender offer” (as such term is used in Section 14(d) of the Exchange Act), or
(iii) a proposed Reorganization Transaction.
2.20. “Mandatory Retirement
Age” means the age for mandatory retirement according to the policy of
the Board, if any, in place from time to time.
2.22.
“New Effective
Date” has the meaning set forth in Section 1.1.
2.23.
“Option” means
an option to purchase Shares.
2.24.
“Option
Agreement” means a written agreement by which an Option is
evidenced.
-4-
2.25.
“Option Price”
means the price at which a Share may be purchased by an Eligible Director
pursuant to an Option.
2.26.
“Option Term”
means the period beginning on the Grant Date of an Option and ending on the
expiration date of such Option, as specified in the Option Agreement for such
Option.
2.27.
“Original Effective
Date” has the meaning set forth in Section 1.1.
2.28.
“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.
2.29.
“Plan” has the
meaning set forth in Section 1.1.
2.30.
"Plan
Committee" has the meaning set forth in Section 3.1.
2.31.
“Reorganization
Transaction” has the meaning set forth in Section 2.8(c).
2.32.
“Rule 16b-3”
means Rule 16b-3 promulgated by the SEC under the Exchange
Act, together with any successor rule, as in effect from time
to time.
2.33.
“SEC” means the
United States Securities and Exchange Commission, or any successor
thereto.
2.34.
“Section”
means, unless the context otherwise requires, a Section of the
Plan.
2.35.
“Share” means a
share, CHF 10 par value, of the Company.
2.36. “Subsidiary” means
(a) any corporation of which more than 50% of the Voting Securities are at
the time, directly or indirectly, owned by the Company, and (b) any partnership
or limited liability company in which the Company has a direct or indirect
interest (whether in the form of voting power or participation in profits or
capital contribution) of more than 50%.
2.37.
“Substitute
Options” has the meaning set forth in Section 8.2.
2.38.
“Surviving
Corporation” means the corporation resulting from a Reorganization
Transaction or, if Voting Securities representing at least 50% of the aggregate
voting power of such resulting corporation are directly or indirectly owned by
another corporation, such other corporation.
2.39.
“Termination of
Affiliation” occurs on the first day on which an individual is for any
reason no longer serving as a Director of the Company.
2.40.
“Voting
Securities” of a corporation means securities of such corporation that
are entitled to vote generally in the election of directors, but not including
any other class of securities of such corporation that may have voting power by
reason of the occurrence of a contingency.
-5-
Article
3. Administration
3.1.
Committee. Subject
to Article 9, and to Section 3.2, the Plan shall be administered by the Board,
or a committee of the Board appointed by the Board to administer the Plan (“Plan
Committee”). To the extent the Board considers it desirable for
transactions relating to Options to be eligible to qualify for an exemption
under Rule 16b-3, unless such qualification will be obtained by another means,
the Board may require that the Plan Committee consist of two or more directors
of the Company, all of whom qualify as “non-employee directors” within the
meaning of Rule 16b-3. The number of members of the Plan Committee
shall from time to time be increased or decreased, and shall be subject to such
conditions, including, but not limited to having exclusive authority to make
certain grants of Options or to perform such other acts, in each case as the
Board deems appropriate to permit transactions in Shares pursuant to the Plan to
satisfy such conditions of applicable securities or other laws then in
effect. Any references herein to “Committee” are references to the
Board or the Plan Committee, as applicable.
3.2.
Powers of
Committee. Subject to the express provisions of the Plan, the
Committee has full and final authority and sole discretion as
follows:
(a) to
determine the terms and conditions applicable to each Option, including, but not
limited to, the Option Price and the Option Term;
(b) to
construe and interpret the Plan and to make all determinations necessary or
advisable for the administration of the Plan;
(c) to
make, amend, and rescind rules relating to the Plan, including rules with
respect to the exercisability and nonforfeitability of Options upon the
Termination of Affiliation of an Eligible Director;
(d) to
determine the terms and conditions of all Option Agreements and, with the
consent of the Eligible Director, to amend any such Option Agreement at any
time, among other things, to permit transfers of Options to the extent permitted
by the Plan; provided
that the consent of the Eligible Director shall not be required for any
amendment which (i) does not materially adversely affect the rights of the
Eligible Director, or (ii) is necessary or advisable (as determined by the
Committee) to carry out the purpose of the grant of Options as a result of any
new or change in existing applicable law;
(e) to
cancel, with the consent of the Eligible Director, outstanding Options and to
grant new Options in substitution therefore; provided that any replacement
grant that would be considered a repricing shall be subject to shareholder
approval;
(f) to
accelerate the exercisability (including exercisability within a period of less
than six months after the Grant Date) of, and to accelerate or waive any or all
of the terms and conditions applicable to, any Option or any group of other
benefit hereunder for any reason and at any time, including in connection with a
Termination of Affiliation;
(g) subject
to Sections 1.3 and 5.2, to extend the time during which any Option or other
benefit may be exercised;
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(h) to
correct any defect or supply any omission or reconcile any inconsistency, and
construe and interpret the Plan, the rules and regulations, any Option Agreement
or any other instrument entered into or relating to an Option awarded under the
Plan, and to make all determinations, including factual determinations,
necessary or advisable for the administration of the Plan;
(i) to
delegate to officers, employees or independent contractors of the Company
matters involving the routine administration of the Plan and which are not
specifically required by any provision of this Plan to be performed by the
Committee;
(j) to
impose such additional terms and conditions upon the grant, exercise or
retention of Options and other grants as the Committee may, before or
concurrently with the grant thereof, deem appropriate; and
(k) to
take any other action with respect to any matters relating to the Plan for which
it is responsible.
All
determinations on any matter relating to the Plan, any Option Agreement or other
agreement under the Plan may be made in the sole and absolute discretion of the
Committee, and to the fullest extent permitted by the applicable law all such
determinations of the Committee shall be final, conclusive and binding on all
Persons. To the fullest extent permitted by the applicable law no member of the
Committee shall be liable for any action or determination made with respect to
the Plan or any Annual Option Grant.
3.3.
Majority
Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority present at a meeting at
which a quorum is present or any action taken without a meeting evidenced by a
writing executed by a majority of the whole Committee shall constitute the
action of the Committee.
3.4.
Company
Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to Eligible Directors and
such pertinent facts related thereto as the Committee may
require. The Company shall furnish the Committee with such clerical
and other assistance as is necessary in the performance of its
duties.
3.5.
Plan Operation in
Compliance with Rule 16b-3 of the 1934 Act. The
Plan shall be interpreted and administered to comply with Rule 16b-3 promulgated
under the 1934 Act, as then applicable to the Company’s employee benefit
plans.
Article
4. Shares Subject to the Plan
4.1.
Number of Shares
Available. Subject
to adjustment as provided in Section 4.2, the number of Shares hereby reserved
for delivery under the Plan is 250,000 Shares. If any Shares subject
to an option granted hereunder are forfeited or an option or any portion thereof
otherwise terminates or is settled without the issuance of Shares, the Shares
subject to such option, to the extent of any such forfeiture, termination or
settlement, shall again be available for grant under the Plan. The
Committee may from time to time determine the appropriate methodology for
calculating the number of Shares issued pursuant to the Plan.
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4.2.
Adjustments in
Shares. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, subdivision, consolidation or reduction of capital, reorganization,
merger, scheme of arrangement, split-up, spin-off or combination involving the
Company or repurchase or exchange of Shares or other rights to purchase Shares
or other securities of the Company, or other similar corporate transaction or
event affects the Shares such that any adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or property of the
Company or any Person that is a party to a Reorganization Transaction with the
Company) with respect to which Options or Shares may be granted, (ii) the
number and type of Shares (or other securities or property of the Company or any
Person that is a party to a Reorganization Transaction with the Company) subject
to outstanding Options, and (iii) the grant or exercise price with respect to
any Option or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Option or the substitution of other property for Shares
subject to an outstanding Option; provided, that the number of
Shares subject to any Option denominated in Shares shall always be a whole
number.
Article
5. General Conditions of Options
5.1.
Grant
Date. The Grant Date of Options received pursuant to an Annual
Option Grant shall be the date of the Annual Meeting of Shareholders in the
calendar year to which such grant relates or such later date as specified by the
Committee (i) in the Committee’s resolutions or minutes addressing the Option
grant or (ii) in the Option Agreement. In the case of an Eligible
Director who is initially appointed or elected on a date other than the date of
an Annual Meeting of Shareholders, the Grant Date of such initial (prorata)
Annual Option Grant shall be the first day such Eligible Director becomes an
Eligible Director.
5.2.
Term. The
Option Term shall be 10 years from the Grant Date, and shall be subject to
earlier termination as herein specified; provided, that any deferral
of the delivery of Shares with respect to an Option that is exercised within 10
years of the Grant Date may, if so permitted, extend more than 10 years after
the Grant Date of the Annual Option Grant to which the deferral
relates.
5.3.
Option
Agreement. The terms and conditions of each Option shall be
set forth in an Option Agreement.
5.4.
Option
Price. The Option Price of an Option under this Plan shall be
the higher of 100% of the Fair Market Value of a Share on the Grant Date or 100%
of the par value of a Share; provided, however, that any
Option granted as a Substitute Option that is (x) granted to an Eligible
Director in connection with the acquisition (“Acquisition”), however effected,
by the Company of another corporation or entity (“Acquired Entity”) or the
assets thereof, (y) associated with an option to purchase shares of stock or
other equity interest of the Acquired Entity or an affiliate thereof (“Acquired
Entity Option”) held by such Eligible Director immediately prior to such
Acquisition, and (z) intended to preserve for the Eligible Director the economic
value of all or a portion of such Acquired Entity Option, shall be granted such
that such option substitution is completed in conformity with the rules set
forth in Section 424(a) of the Code.
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5.5.
Restrictions on Share
Transferability. The Committee may include in the Option
Agreement such restrictions on any Shares acquired pursuant to the exercise or
vesting of an Option as it may deem advisable, including restrictions under
applicable federal securities laws.
5.6.
Exercise of
Options. Unless otherwise specified in the Option Agreement,
Options shall become exercisable in accordance with the following table, or if
sooner, shall become fully exercisable on the earliest of the first to occur of
the Eligible Director’s (a) death, (b) Termination of Affiliation on
account of Disability, (c) mandatory retirement upon attaining Mandatory
Retirement Age, (d) Termination of Affiliation after a Change of Control under
the conditions described in Section 8.1, and (e) involuntary Termination of
Affiliation as described in Section 5.8(c).
|
Time Elapsed After Grant
Date
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Percentage of Option
Exercisable
|
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Less
than 1 year
|
0 | % | ||
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1
year but less than 2 years
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33-1/3 | % | ||
|
2
years but less than 3 years
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66-2/3 | % | ||
|
3
years or more
|
100 | % | ||
5.7.
Payment. Options
shall be exercised by the delivery of a written notice of exercise to the
Company or its designee, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the Shares
as instructed by the Committee or, subject to the approval of the Committee,
pursuant to procedures approved by the Committee,
(a)
through the sale of the Shares acquired on exercise of the Option through a
broker-dealer to whom the Eligible Director has submitted an irrevocable notice
of exercise and irrevocable instructions to deliver promptly to the Company the
amount of sale or loan proceeds sufficient to pay for such Shares;
(b)
through simultaneous sale through a broker of Shares acquired on exercise, as
permitted under Regulation T of the Federal Reserve Board;
(c) by
transfer to the Company of number of Shares then owned by the Eligible Director,
the Fair Market Value of which equals the purchase price of the Shares purchased
in connection with the Option exercise, properly authorized or endorsed for
transfer to the Company; provided however, that Shares used for this purpose
must have been held by the Eligible Director for such minimum period of time as
may be established from time to time by the Board; and provided further that the
Fair Market Value of any Shares delivered in payment of the purchase price upon
exercise of the Options shall be the Fair Market Value as of the exercise date,
which shall be the date of delivery of the Shares used as payment of the
exercise price. For purposes of this Section 5.7(c), in lieu of
actually transferring to the Company the number of Shares then owned by the
Eligible Director, the Board may, in its discretion permit the Eligible Director
to submit to the Company a statement affirming ownership by the Eligible
Director of such number of Shares and request that such Shares, although not
actually transferred, be deemed to have been transferred by the Eligible
Director as payment of the exercise price, or
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(d) by a
“net exercise” arrangement pursuant to which the Company will not require a
payment of the Option Price but will reduce the number of Shares upon the
exercise by the largest number of whole shares that has a Fair Market Value on
the date of exercise that does not exceed the aggregate Option
Price. With respect to any remaining balance of the aggregate option
price, the Company will accept a cash payment from the Eligible
Director.
5.8.
Termination of
Affiliation. Except as otherwise provided in an Option
Agreement (including an Option Agreement as amended by the Committee), and subject to the
provisions of Section 8.1, the
extent to which the Eligible Director shall have the right to exercise, an
Option following Termination of Affiliation shall be determined in accordance
with this Section 5.8.
(a) For
Cause. If an Eligible Director has a Termination of
Affiliation for Cause any unexercised Option shall terminate effective
immediately upon such Termination of Affiliation for Cause.
(b) On Account of Death,
Disability, Retirement or Mandatory Retirement. If an Eligible
Director has a Termination of Affiliation on account of death, Disability, or
retirement upon attaining Mandatory Retirement Age, any unexercised Option,
whether or not exercisable immediately before such Termination of Affiliation,
may be exercised, in whole or in part, for a period of one year after such
Termination of Affiliation (but only during the Option Term) by the Eligible
Director or, after his or her death, by (i) his or her personal representative
or the person to whom the Option is transferred by will or the applicable laws
of descent and distribution, or (ii) the Eligible Director’s beneficiary
designated in accordance with Article 7.
(c) Involuntary
Removal. If an Eligible Director is removed by the Company
other than for Cause including, but not limited to, the Company’s decision not
to slate such Eligible Director for reelection, any unexercised Option whether
or not exercisable immediately
before such Termination of Affiliation, may be exercised in whole or in part, at
any time within the first twelve (12) months following such Termination of
Affiliation (but only during the Option Term) by the Eligible Director or, after
his death or her death, by (i) his or her personal representative or the
person to whom the Option is transferred by will or the applicable laws of
descent or distribution, or (ii) the Eligible Director’s beneficiary
designated in accordance with Article 7.
(d) Any Other
Reason. If an Eligible Director has a Termination of
Affiliation for any other reason including, but not limited to, failure to be
reelected to the Board or voluntary resignation including failure to run for
reelection, any unexercised Option to the extent exercisable immediately before
such Termination of Affiliation, shall remain exercisable in whole or in part
for six (6)
months after such Termination of Affiliation (but only during the Option Term)
by the Eligible Director or, after his or her death, by (i) his or her personal
representative or the person to whom the Option is transferred by will or the
applicable laws of descent and distribution, or (ii) the Eligible Director’s
beneficiary designated in accordance with Article 7.
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5.9.
Nontransferability of
Option Grants.
(a) Except
as provided in Section 5.9(c) below, each Option shall be exercisable only by
the Eligible Director during the Eligible Director’s lifetime, or, if
permissible under applicable law, by the Eligible Director’s guardian or legal
representative.
(b) Except
as provided in Section 5.9(c) below, no Option (prior to the time Shares are
issued) may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Eligible Director otherwise than by will or by
the 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 Subsidiary; provided, that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
(c) To
the extent and in the manner permitted by the Committee, and subject to such
terms and conditions as may be prescribed by the Committee, an Eligible Director
may transfer an Option to (a) a child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law of the Eligible Director, (including adoptive relationships), (b)
any person sharing the Eligible Director’s household (other than a tenant or
employee), (c) a trust in which persons described in (a) or (b) have more than
50% of the beneficial interest, (d) a foundation in which persons described in
(a) or (b) or the Eligible Director own more than 50% of the voting interests;
provided such transfer is not for value. The following shall not be
considered transfers for value: (i) a transfer under a domestic
relations order in settlement of marital property rights; and (ii) a transfer to
an entity in which more than 50% of the voting interests are owned by persons
described in (a) or (b) above or the Eligible Director, in exchange for an
interest in that entity.
Article
6. Annual Option Grant Program
6.1.
Subject to the terms and provisions of this Plan, immediately following the
Annual Meeting of Shareholders in each year, each Eligible Director shall
automatically receive an Option to purchase a number of Shares equal to (a)
divided by (b) where: (a) equals four (4) times the dollar amount of
the Eligible Director’s annual retainer for service on the Board and (b) equals
the Fair Market Value of Shares as of the date of the Annual Meeting of
Shareholders; provided,
that fractional Shares shall be rounded up to the next larger whole number of
Shares. An Eligible Director who is not initially elected at the
Annual Meeting of Shareholders shall, within ten (10) days of becoming an
Eligible Director, receive a pro rata Annual Option Grant for the year of such
initial election or appointment. Such pro rata Annual Option Grant
shall be for a number of Shares equal to four (4) times the dollar amount of the
full annual retainer for an Eligible Director, divided by the Fair Market Value
of a Share as of the Grant Date multiplied by a fraction, the numerator of which
is 365 minus the number of days elapsed after the most recent prior Annual
Meeting of Shareholders and before the Eligible Director’s election or
appointment and the denominator of which is 365, provided that fractional
Shares shall be rounded up to the next larger whole number of
Shares.
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6.2. The
Annual Option Grant Program set forth above in section 6.1 will be reviewed
annually but will remain in effect until changed by the Company’s Board of
Directors.
Article
7. Beneficiary Designation
7.1. Each
Eligible Director under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Eligible Director, shall be in a form prescribed
by the Company, and will be effective only when filed by the Eligible Director
in writing with the Company during the Eligible Director’s lifetime. In the
absence of any such designation, benefits remaining unpaid at the Eligible
Director’s death shall be paid to the Eligible Director’s estate.
Article
8. Change of Control and Certain Corporate
Transactions
8.1.
Change of
Control. If an Eligible Director, upon a Change of Control or
within one year thereafter, (a) is removed by the Company other than
for Cause, or (b) fails to be reelected to the Board after being slated for
reelection, or (c) is not slated for reelection, having expressed a
willingness to be so slated, and if such Eligible Director has not reached
Mandatory Retirement Age as of the date of such termination, and would not have
reached Mandatory Retirement Age during his or her ensuing term as a Director if
he or she were to be elected, then any unexercised Option, whether or not
exercisable on the date of such termination, shall become fully exercisable and
may be exercised, in whole or in part for the balance of its original
term.
8.2.
Substituting Options
in Certain Corporate Transactions. In connection with the
Company’s acquisition, however effected, of another corporation or entity (the
“Acquired Entity”) or the assets thereof, the Committee may, at its discretion,
grant Options (“Substitute Options”) to a person who becomes an Eligible
Director in connection with such acquisition and who held options or other
equity interests in such Acquired Entity (“Acquired Entity Option”) immediately
prior to such Acquisition in order to preserve for such Eligible Director the
economic value of all or a portion of such Acquired Entity Option at such price
as the Committee determines necessary to achieve preservation of economic
value. Any Shares delivered pursuant to substitute options under this
section shall be in addition to the Shares under Section 4.1
hereof. Any grant of a Substitute Option shall be made in conformity
with the rules set forth in Section 424(a) of the Code.
Article
9. Amendment, Modification, and Termination
9.1.
Amendment,
Modification, and Termination. Subject to the terms of the
Plan, the Board may at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part without the approval of the Company’s
shareholders.
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9.2.
Adjustments Upon
Certain Unusual or Nonrecurring Events. The Committee may make
adjustments in the terms and conditions of Options in recognition of unusual or
nonrecurring events (including the events described in Section 4.2) affecting
the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
9.3.
Options Previously
Granted. Notwithstanding any other provision of the Plan to
the contrary, no termination, amendment or modification of the Plan shall
adversely affect in any material way any Option previously granted under the
Plan, without the written consent of the Eligible Director who holds such
Option, provided that to the extent any Option shall be adversely affected by
any amendment or restatement to the Plan, the provisions of the Plan in effect
as of the Grant Date of such Option shall prevail.
9.4.
Adjustments in
Connection with Change of Control. In the event the Company
undergoes a Change of Control or in the event of a separation, spin-off, sale of
a material portion of the Company’s assets or any “going private” transaction
under Rule 13e-3 promulgated pursuant to the Exchange Act and in which a Change
of Control does not occur, the Board, or the board of directors of any
corporation assuming the obligations of the Company, shall have the full power
and discretion to prescribe and amend the terms and conditions for the exercise,
or modification, of any outstanding Options granted hereunder in the manner as
agreed to by the Board as set forth in the definitive agreement relating to the
transaction. Without limitation, the Board may:
(a)
provide that Options granted hereunder must be exercised in connection with the
closing of such transactions, and that if not so exercised such Options will
expire;
(b)
provide for the purchase by the Company of any such Option, upon the Eligible
Director’s request, for an amount of cash equal to the amount that could have
been attained upon the exercise of such Option had such Option been currently
exercisable or payable;
(c) make
such adjustment to any such Option then outstanding as the Board deems
appropriate to reflect such Change of Control;
(d) cause
any such Option then outstanding to be assumed, or new rights substituted
therefore, by the acquiring or surviving corporation after such Change of
Control. Any such determinations by the Board may be made generally
with respect to all Eligible Directors, or may be made on a case-by-case basis
with respect to particular Eligible Director.
Notwithstanding
the foregoing, any transaction undertaken for the purpose of reincorporating the
Company under the laws of another jurisdiction, if such transaction does not
materially affect the beneficial ownership of the Company’s Shares, such
transaction shall not constitute a merger, consolidation, major acquisition of
property for stock, separation, reorganization, liquidation, or Change of
Control.
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9.5.
Prohibition on
Repricings. Except in connection with a corporate transaction
involving the Company (including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, or exchange of shares), the
terms of outstanding Options may not be amended to reduce the exercise price of
outstanding Options or cancel outstanding Options in exchange for cash, or other
Options with an exercise price that is less than the exercise price of the
original Options without stockholder approval.
Article
10. Additional Provisions
10.1.
Successors. All
obligations of the Company under the Plan with respect to benefits 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.
10.2.
Gender and
Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
10.3.
Severability. If
any part of the Plan is declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
other part of the Plan. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give
effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.
10.4.
Requirements of
Law. The granting of Options 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 stock exchanges as may be
required. Notwithstanding any provision of the Plan or any Option Agreement,
Eligible Directors shall not be entitled to exercise and the Company shall not
be obligated to deliver any Shares or other benefits to an Eligible Director, if
such exercise or delivery would constitute a violation by the Eligible Director
or the Company of any applicable law or regulation.
10.5.
Securities Law
Compliance.
(a) If
the Committee deems it necessary to comply with any applicable securities law,
or the requirements of any stock exchange upon which Shares may be listed, the
Committee may impose any restriction on Shares acquired pursuant to grants
hereunder as it may deem advisable. All Shares transferred under the
Plan shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the SEC, any stock exchange upon which Shares are then listed, any applicable
securities law. If so requested by the Company, the Eligible Director shall
represent to the Company in writing that he or she will not sell or offer to
sell any Shares unless a registration statement shall be in effect with respect
to such Shares under the Securities Act of 1933 or unless he or she shall have
furnished to the Company evidence satisfactory to the Company that such
registration is not required.
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(b) If
the Committee determines that the exercise of, or delivery of Shares would
violate any applicable provision of securities laws or the listing requirements
of any stock exchange upon which any of the Company’s equity securities are then
listed, then the Committee may postpone any such exercise or delivery, as
applicable, but the Company shall use all reasonable efforts to cause such
exercise or delivery to comply with all such provisions at the earliest
practicable date.
10.6.
No Rights as a
Shareholder. An Eligible Director shall not have any rights as
a shareholder with respect to the Shares which may be deliverable until such
shares have been delivered to him or her.
10.7.
Military
Service. Options shall be administered in accordance with
Section 414(u) of the Code and the Uniformed Services Employment and
Reemployment Rights Act of 1994.
10.8.
Data Protection.
The Board, the Plan Committee and any other person or entity empowered by
the Board or the Plan Committee to administer the Plan may process, store,
transfer or disclose personal data of the Eligible Directors to the extent
required for the implementation and administration of the Plan. The Board, the
Plan Committee and any other person or entity empowered by the Board or the Plan
Committee to administer the Plan shall comply with any applicable data
protection laws.
10.9.
Governing
Law. The Plan and the rights of any Eligible Director
receiving an Option award thereunder shall be construed and interpreted in
accordance with and governed by the laws of the State of Kansas without giving
effect to the principles of the conflict of laws to the
contrary.
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