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-10.3 - GARMIN LTD | v188974_ex10-3.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-10.6 - GARMIN LTD | v188974_ex10-6.htm |
EX-10.7 - GARMIN LTD | v188974_ex10-7.htm |
EX-10.1 - GARMIN LTD | v188974_ex10-1.htm |
Garmin
Ltd.
2005
Equity Incentive Plan
as
amended and restated on June 27, 2010
Page
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||
Article
1. Establishment, Objectives and Duration
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1
|
|
1.1.
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Establishment
and Amendment of the Plan.
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1
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1.2.
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Objectives
of the Plan.
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1
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1.3.
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Duration
of the Plan.
|
1
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Article
2. Definitions
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1
|
|
Article
3. Administration
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8
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|
3.1.
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Board
and Plan Committee.
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8
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3.2.
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Powers
of the Board.
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9
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Article
4. Shares Subject to the Plan
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11
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|
4.1.
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Number
of Shares Available.
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11
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4.2.
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Adjustments
in Authorized Shares.
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12
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Article
5. Eligibility and General Conditions of Awards
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12
|
|
5.1.
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Eligibility.
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12
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5.2.
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Grant
Date.
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12
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5.3.
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Maximum
Term.
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13
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5.4.
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Award
Agreement.
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13
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5.5.
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Restrictions
on Share Transferability.
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13
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5.6.
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Termination
of Affiliation.
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13
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5.7.
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Nontransferability
of Awards.
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16
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5.8.
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Section
162(m) Performance Awards.
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17
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Article
6. Stock Options
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20
|
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6.1.
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Grant
of Options.
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20
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6.2.
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Award
Agreement.
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20
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6.3.
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Option
Price.
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20
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6.4.
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Grant
of Incentive Stock Options.
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20
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6.5.
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Exercise
of Options.
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22
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Article
7. Stock Appreciation Rights
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23
|
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7.1.
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Grant
of SARs.
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23
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7.2.
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SAR
Award Agreement
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23
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7.3.
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Exercise
of SARs.
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23
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7.4.
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Expiration
of SARs.
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23
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7.5.
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Payment
of SAR Amount.
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24
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Article
8. Restricted Shares and Bonus Shares
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24
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8.1.
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Grant
of Restricted Shares.
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24
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8.2.
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Bonus
Shares.
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24
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8.3.
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Award
Agreement.
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24
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8.4.
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Consideration.
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24
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8.5.
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Effect
of Forfeiture.
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24
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8.6.
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Escrow.
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25
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i
Article
9. Restricted Stock Units (f/k/a “Deferred Shares”)
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25
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9.1.
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Grant
of Restricted Stock Units.
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25
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9.2.
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Award
Agreement.
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25
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9.3.
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Crediting
Restricted Stock Units.
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25
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9.4.
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Settlement
of RSU Accounts.
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25
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Article
10. Performance Units and Performance Shares
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26
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10.1.
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Grant
of Performance Units and Performance Shares.
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26
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10.2.
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Value/Performance
Goals.
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26
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10.3.
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Payment
of Performance Units and Performance Shares.
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26
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10.4.
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Form
and Timing of Payment of Performance Units and Performance
Shares.
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26
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Article
11. Beneficiary Designation
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27
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Article
12. Rights of Employees
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27
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12.1.
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Employment.
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27
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12.2.
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Participation.
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27
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Article
13. Amendment, Modification, and Termination
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27
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13.1.
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Amendment,
Modification, and Termination.
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27
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13.2.
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Adjustments
Upon Certain Unusual or Nonrecurring Events.
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27
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13.3.
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Awards
Previously Granted.
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28
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13.4.
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Adjustments
in Connection with Change of Control.
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28
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13.5.
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Prohibition
on Repricings.
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29
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Article
14. Withholding
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29
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14.1.
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Mandatory
Tax Withholding.
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29
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14.2.
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Notification
under Code Section 83(b).
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30
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Article
15. Equity Incentive Plans of Foreign Subsidiaries
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30
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Article
16. Additional Provisions
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30
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16.1.
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Successors.
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30
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16.2.
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Gender
and Number.
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30
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16.3.
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Severability.
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30
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16.4.
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Requirements
of Law.
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31
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16.5.
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Securities
Law Compliance.
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31
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16.6.
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No
Rights as a Shareholder.
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31
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16.7.
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Nature
of Payments.
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32
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16.8.
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Military
Service.
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32
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16.9.
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Data
Protection.
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32
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16.10.
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Governing
Law.
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32
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Annex
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A1
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ii
GARMIN
LTD.
2005
Equity Incentive Plan
as
amended and restated on June 27, 2010
Article
1. Establishment, Objectives and Duration
|
1.1.
|
Establishment and
Amendment of the Plan. The Board of Directors (the
“Board”) of Garmin Ltd., a Swiss company (the "Company"), hereby
establishes the incentive compensation plan to be known as the Garmin Ltd.
2005 Equity Incentive Plan (the "Plan"). The Plan was adopted
by the Board of Directors of Garmin Ltd., a Cayman Islands company
(“Garmin Cayman”),on March 1, 2005 and was approved by the
shareholders of Garmin Cayman on June 3, 2005. The Plan is
effective as of June 3, 2005 (the "Effective Date"). In 2006,
Garmin Cayman effected a two-for-one stock split of its common Shares (the
"Stock Split"). Subject to approval of the shareholders of
Garmin Cayman, the Board of Directors of Garmin Cayman adopted an amended
and restated plan effective June 5, 2009 with certain amendments
reflecting the Stock Split, updated changes in the law and an expanded
type of performance-based awards eligible to be granted under the Plan.
The Plan was 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 employees of the
Company and its Subsidiaries to acquire or increase equity ownership in
the Company, or to be compensated under the Plan based on growth in the
Company's equity value, thereby strengthening their commitment to the
success of the Company and stimulating their efforts on behalf of the
Company, and to assist the Company and its Subsidiaries in attracting new
employees and retaining existing employees. The Plan is also
intended to optimize the profitability and growth of the Company through
incentives which are consistent with the Company's goals; to provide
incentives for excellence in individual performance; and to promote
teamwork.
|
|
1.3.
|
Duration of the
Plan. The Plan shall commence on the 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 13 hereof, until all
Shares subject to it shall have been purchased or acquired according to
the Plan's provisions.
|
Article
2. Definitions
Whenever
used in the Plan, the following terms shall have the meanings set forth
below:
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2.1.
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"Article" means
an Article of the Plan.
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2.2.
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"Award" means
Options, Restricted Shares, Bonus Shares, SARs, Restricted Stock Units,
Performance Units or Performance Shares granted under the
Plan.
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2.3.
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"Award
Agreement" means a written agreement by which an Award is
evidenced.
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2.4.
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"Beneficial
Owner" has the meaning specified in Rule 13d-3 of the SEC under the
Exchange Act.
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2.5.
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"Board" means
the Board of Directors of the
Company..
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2.6.
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"Bonus Shares"
means Shares that are awarded to a Grantee without cost and without
restrictions in recognition of past performance (whether determined by
reference to another employee benefit plan of the Company or otherwise) or
as an incentive to become an employee of the Company or a
Subsidiary.
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2.7.
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"Business
Criteria" has the meaning set forth in Section
5.8(c).
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2.8.
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"Cause" means,
unless otherwise defined in an Award
Agreement,
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(a)
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a
Grantee's conviction of, plea of guilty to, or plea of nolo contendere to
a felony or other crime that involves fraud, dishonesty or moral
turpitude,
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(b)
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any
willful action or omission by a Grantee which would constitute grounds for
immediate dismissal under the employment policies of the Company or the
Subsidiary by which Grantee is employed, including but not limited to
intoxication with alcohol or illegal drugs while on the premises of the
Company or any Subsidiary, or violation of sexual harassment laws or the
internal sexual harassment policy of the Company or the Subsidiary by
which Grantee is employed, irrespective of whether the applicable law
would allow an immediate dismissal in these
cases,
|
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(c)
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a
Grantee's habitual neglect of duties, including but not limited to
repeated absences from work without reasonable excuse,
or
|
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(d)
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a
Grantee's willful and intentional material misconduct in the performance
of his duties that results in financial detriment to the Company or any
Subsidiary;
|
provided, however, that for
purposes of clauses (b), (c) and (d), Cause shall not include any one or more of
the following: bad judgment, negligence or any act or omission believed by the
Grantee in good faith to have been in or not opposed to the interest of the
Company (without intent of the Grantee to gain, directly or indirectly, a profit
to which the Grantee was not legally entitled). A Grantee who agrees
to resign from his affiliation with the Company or a Subsidiary in lieu of being
terminated for Cause may be deemed to have been terminated for Cause for
purposes of the Plan.
|
2.9.
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"Change of
Control" means, unless otherwise defined in an Award Agreement, any
one or more of the following:
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- 2
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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
|
|
(b)
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the
Incumbent Directors (determined using the 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)
|
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.
|
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 Awards granted under the Plan whether or not outstanding at the time such
definition is amended, without requiring the consent of any
Grantee. 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 Grantee if, in advance of such event,
the Grantee agrees in writing that such event shall not constitute a Change of
Control.
2.10.
|
"Change
of Control Period" has the meaning set forth in Section
5.6(c).
|
2.11.
|
"Change
of Control Value" means the Fair Market Value of a Share on the
date of a Change of Control.
|
2.12.
|
"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.
|
- 3
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2.13.
|
"Company"
has the meaning set forth in Section
1.1.
|
2.14.
|
"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. Notwithstanding the
foregoing, with respect to an Incentive Stock Option, "Disability" means a
permanent and total disability, within the meaning of Code Section
22(e)(3), as determined by the Board in good faith, upon receipt of
medical advice from one or more individuals, selected by the Board, who
are qualified to give professional medical
advice.
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2.15.
|
"Effective
Date" has the meaning set forth in Section
1.1.
|
2.16.
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"Eligible
Person" means any employee (including any officer) of the Company
or any Subsidiary, including any such employee who is on an approved leave
of absence or has been subject to a disability which does not qualify as a
Disability.
|
2.17.
|
"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.
|
2.18.
|
"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 Effective
Date.
|
2.19.
|
"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).
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- 4
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2.20.
|
"Fair
Market Value" means, unless otherwise determined or provided by the
Board 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 Board, 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
Board using a method consistently applied. Notwithstanding the
above, for all Options, SARs and Deferred Shares (RSUs) granted before
June 5, 2009, Fair Market Value for purposes of establishing Option
Prices, Exercise Prices or values of Shares, respectively, 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).
|
2.21.
|
"Freestanding
SAR" means any SAR that is granted independently of any
Option.
|
2.22.
|
"Good
Reason" means any action by the Company or the Subsidiary employing
a Grantee which results in any of the following without the Grantee's
consent: (a) a material diminution or other material adverse
change in the Grantee's position, authority or duties, (b) requiring the
Grantee to be based at any office or location more than 50 miles from the
location where he or she was previously based; (c) a material diminution
in the Grantee's compensation in the aggregate, other than a diminution
applicable to all similarly situated employees. A Grantee shall
not have Good Reason to terminate his or her position unless, (1) within
60 days following the event or circumstance set forth above in (a), (b) or
(c), the Grantee notifies the Company of such event or circumstance, (2)
the Grantee gives the Company 30 days to correct the event or
circumstance, and (3) the Company does not correct, in all material
respects, such event or
circumstance.
|
2.23.
|
"Grant
Date" has the meaning set forth in Section
5.2.
|
2.24.
|
"Grantee"
means an individual who has been granted an
Award.
|
2.25.
|
"Including"
or "includes"
mean "including, without limitation," or "includes, without limitation",
respectively.
|
- 5
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2.26.
|
"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.
|
2.27.
|
"Option"
means an option granted under Article 6 of the Plan, including an
incentive stock option.
|
2.28.
|
"Option
Price" means the price at which a Share may be purchased by a
Grantee pursuant to an Option.
|
2.29.
|
"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 Award
Agreement for such Option and as may, consistent with the provisions of
the Plan, be extended from time to time by the Board prior to the
expiration date of such Option then in
effect.
|
2.30.
|
"Performance
Award" means any Award that will be issued, granted, vested,
exercisable or payable, as the case may be, upon the achievement of one or
more Business Criteria, as set forth in Section
5.8.
|
2.31.
|
"Performance
Period" has the meaning set forth in Section
10.2.
|
2.32.
|
"Performance
Share" or "Performance
Unit" has the meaning set forth in
Article 10.
|
2.33.
|
"Period
of Restriction" means the period during which the transfer of
Restricted Shares is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other
events as determined by the Board) or the Shares are subject to a
substantial risk of forfeiture, as provided in Article
8.
|
2.34.
|
"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.
|
2.35.
|
"Plan"
has the meaning set forth in Section
1.1.
|
2.36.
|
"Plan
Committee" has the meaning set forth in Section
3.1.
|
2.37.
|
"Reorganization
Transaction" has the meaning set forth in Section
2.8(c).
|
- 6
-
2.38.
|
"Restricted
Shares" means Shares that are issued as an Award under the Plan
that is subject to Restrictions.
|
2.39.
|
"Restricted
Stock Units" (f/k/a "Deferred
Shares") means units awarded to Grantees pursuant to Article 9
hereof, which are convertible into Shares at such time as such units are
no longer subject to Restrictions as established by the
Board. Restricted Stock Units are the same as "Deferred Shares"
previously referred to and granted under the Plan prior to this Amended
and Restated Plan becoming
effective.
|
2.40.
|
"Restriction"
means any restriction on a Grantee's free enjoyment of the Shares or other
rights underlying Awards, including (a) that the Grantee or other holder
may not sell, transfer, pledge, or assign a Share or right, and (b) such
other restrictions as the Board may impose in the Award Agreement that are
permissible under Swiss law. Restrictions may be based on the passage of
time or the satisfaction of performance criteria or the occurrence of one
or more events or conditions, and shall lapse separately or in combination
upon such conditions and at such time or times, in installments or
otherwise, as the Board shall specify. Awards subject to a Restriction
shall be forfeited if the Restriction does not lapse prior to such date or
the occurrence of such event or the satisfaction of such other criteria as
the Board shall determine.
|
2.41.
|
"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.
|
2.42.
|
"SAR"
means a stock appreciation right and includes both Tandem SARs and
Freestanding SARs.
|
2.43.
|
"SAR
Term"
means the period beginning on the Grant Date of a SAR and ending on the
expiration date of such SAR, as specified in the Award Agreement for such
SAR and as may, consistent with the provisions of the Plan, be extended
from time to time by the Board prior to the expiration date of such SAR
then in effect.
|
2.44.
|
"SEC"
means the United States Securities and Exchange Commission, or any
successor thereto.
|
2.45.
|
"Section"
means, unless the context otherwise requires, a Section of the
Plan.
|
2.46.
|
"Section
16 Person" means a person who is subject to obligations under
Section 16 of the Exchange Act with respect to transactions involving
equity securities of the Company.
|
2.47.
|
"Share"
means a registered share, CHF 10 par value, of the
Company.
|
2.48.
|
"Subsidiary"
means with respect to any Person (a) any corporation of which more than
50% of the Voting Securities are at the time, directly or indirectly,
owned by such Person, and (b) any partnership or limited liability company
in which such Person has a direct or indirect interest (whether in the
form of voting power or participation in profits or capital contribution)
of more than 50%. Solely with respect to a grant of an
incentive stock option under the requirements of Section 422 of the Code,
"Subsidiary" means a "subsidiary corporation" as defined in Section 424(f)
of the Code.
|
- 7
-
2.49.
|
"Substitute
Option" has the meaning set forth in Section
6.3.
|
2.50.
|
"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.
|
2.51.
|
"Tandem
SAR" means a SAR that is granted in connection with, or related to,
an Option, and which requires forfeiture of the right to purchase an equal
number of Shares under the related Option upon the exercise of such SAR;
or alternatively, which requires the cancellation of an equal amount of
SARs upon the purchase of the Shares subject to the
Option.
|
2.52.
|
"Tax
Withholding" has the meaning set forth in Section
14.1(a).
|
2.53.
|
"Termination
of Affiliation" occurs on the first day on which an individual is
for any reason no longer providing services to the Company or any
Subsidiary in the capacity of an employee, or with respect to an
individual who is an employee of a Subsidiary, the first day on which such
Subsidiary ceases to be a Subsidiary. A Termination of
Affiliation shall have the same meaning as a "separation from service"
under Code Section 409A(2)(A)(i).
|
2.54.
|
"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.
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Article
3. Administration
|
3.1.
|
Board and Plan
Committee. Subject to Article 13, 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 Awards to be eligible to qualify for an exemption
under Rule 16b-3, the Plan Committee shall consist of two or more
directors of the Company, all of whom qualify as "non-employee directors"
within the meaning of Rule 16b-3. To the extent the Board
considers it desirable for compensation delivered pursuant to Awards to be
eligible to qualify for an exemption from the limit on tax deductibility
of compensation under Section 162(m) of the Code, the Plan Committee shall
consist of two or more directors of the Company, all of whom shall qualify
as "outside directors" within the meaning of Code Section
162(m). 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 Awards 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 Rule 16b-3 or Code Section
162(m) as then in effect.
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Any
references herein to "Board" are, except as the context requires otherwise,
references to the Board or the Plan Committee, as applicable.
|
3.2.
|
Powers of the
Board. Subject to the express provisions of the Plan,
the Board has full and final authority and sole discretion as
follows:
|
|
(a)
|
taking
into consideration the reasonable recommendations of management, to
determine when, to whom and in what types and amounts Awards should be
granted and the terms and conditions applicable to each Award, including
the Option Price, the Option Term, the Restrictions, the benefit payable
under any SAR, Performance Unit or Performance Share and whether or not
specific Awards shall be granted in connection with other specific Awards,
and if so whether they shall be exercisable cumulatively with, or
alternatively to, such other specific
Awards;
|
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(b)
|
to
determine the amount, if any, that a Grantee shall pay for Restricted
Shares, whether and on what terms to permit or require the payment of cash
dividends thereon to be deferred, when Restrictions on Restricted Shares
(including Restricted Shares acquired upon the exercise of an Option)
shall lapse and whether such shares shall be held in
escrow;
|
|
(c)
|
to
construe and interpret the Plan and to make all determinations necessary
or advisable for the administration of the
Plan;
|
|
(d)
|
to
make, amend, and rescind rules relating to the Plan, including rules with
respect to the exercisability and nonforfeitability of Awards and lapse of
Restrictions upon the Termination of Affiliation of a
Grantee;
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|
(e)
|
to
determine the terms and conditions of all Award Agreements (which need not
be identical) and, with the consent of the Grantee, to amend any such
Award Agreement at any time, among other things, to permit transfers of
such Awards to the extent permitted by the Plan; provided that the
consent of the Grantee shall not be required for any amendment which (A)
does not adversely affect the rights of the Grantee, or (B) is necessary
or advisable (as determined by the Board) to carry out the purpose of the
Award as a result of any new or change in existing applicable
law;
|
|
(f)
|
to
cancel, with the consent of the Grantee, outstanding Awards and to grant
new Awards in substitution therefor; provided that any
replacement grant that would be considered a repricing shall be subject to
shareholder approval;
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- 9
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|
(g)
|
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 conditions or Restrictions applicable
to, any Award or any group of Awards for any reason and at any time,
including in connection with a Termination of
Affiliation;
|
|
(h)
|
subject
to Section 5.3, to extend the time during which any Award or group of
Awards may be exercised;
|
|
(i)
|
to
make such adjustments or modifications to Awards to Grantees who are
working outside the United States as are advisable to fulfill the purposes
of the Plan or to comply with applicable local law, and to authorize
foreign Subsidiaries to adopt plans as provided in Article
15;
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|
(j)
|
to
delegate to any member of the Board or committee of Board members such of
its powers as it deems appropriate, including the power to subdelegate,
except that only a member of the Board of Directors of the Company (or a
committee thereof) may grant Awards from time to time to specified
categories of Eligible Persons in amounts and on terms to be specified by
the Board; provided that no such grants shall be made other than by the
Board or the Plan Committee to individuals who are then Section 16 Persons
or other than by the Plan Committee to individuals who are then or are
deemed likely to become a "covered employee" within the meaning of Code
Section 162(m);
|
|
(k)
|
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 the Plan to be
performed by the Board of Directors of the
Company;
|
|
(l)
|
to
delegate its duties and responsibilities under the Plan with respect to
foreign Subsidiary plans, except its duties and responsibilities with
respect to Section 16 Persons, and (A) the acts of such delegates shall be
treated hereunder as acts of the Board and (B) such delegates shall report
to the Board regarding the delegated duties and
responsibilities;
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|
(m)
|
to
correct any defect or supply any omission or reconcile any inconsistency,
and construe and interpret the Plan, the rules and regulations, any Award
Agreement or any other instrument entered into or relating to an Award
under the Plan, and to make all determinations, including factual
determinations, necessary or advisable for the administration of the
Plan;
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|
(n)
|
to
impose such additional terms and conditions upon the grant, exercise or
retention of Awards as the Board may, before or concurrently with the
grant thereof, deem appropriate, including limiting the percentage of
Awards which may from time to time be exercised by a Grantee;
and
|
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|
(o)
|
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 or any Award Agreement may be
made in the sole and absolute discretion of the Board, and to the fullest extent
permitted by the applicable law all such determinations of the Board shall be
final, conclusive and binding on all Persons. To the fullest extent
permitted by the applicable law no member of the Board shall be liable for any
action or determination made with respect to the Plan or any Award.
Article
4. Shares Subject to the Plan
|
4.1.
|
Number of Shares
Available.
|
|
(a)
|
Plan
Limit. Subject to adjustment as provided in Section 4.2,
the number of Shares hereby reserved for delivery under the Plan is ten
million (10,000,000) Shares. The maximum number of Shares that
may be delivered pursuant to the exercise of Options (including incentive
stock options under Code Section 422) or SARs is ten million (10,000,000
Shares. The maximum number of Shares that may be delivered as Restricted
Shares or pursuant to Performance Units or Restricted Stock Units is three
million (3,000,000) Shares. The maximum number of Bonus Shares
that may be awarded is one million (1,000,000) Shares. If any
Shares subject to an Award granted hereunder are forfeited or an Award or
any portion thereof otherwise terminates or is settled without the
issuance of Shares, the Shares subject to such Award, to the extent of any
such forfeiture, termination or settlement, shall again be available for
grant under the Plan. The Board may from time to time determine
the appropriate methodology for calculating the number of Shares issued
pursuant to the Plan.
|
|
(b)
|
Individual
Limit. No individual Grantee may be granted Options,
SARs, Restricted Shares, Restricted Stock Units, Bonus Shares, Performance
Units or Performance Shares in Shares, or in any combination thereof,
relating to an aggregate number of Shares under the Plan that exceeds two
million (2,000,000) Shares in any 5-year period. If a
previously granted Option, SAR, Restricted Stock Unit, Performance Unit,
or Performance Share is forfeited, canceled or repriced, such forfeited,
canceled or repriced Award as the case may be, shall continue to be
counted against the maximum number of Shares subject to Awards that may be
delivered to any Grantee under this Section
4.1(b).
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|
4.2.
|
Adjustments in
Shares.
|
|
(a)
|
Adjustment
Principle. In the event that the Board determines that
any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, share split,
reverse share 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 Board 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 Board 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 Awards 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 Awards, and (iii) the grant or exercise price with respect to
any Award or, if deemed appropriate, make provision for a cash payment to
the holder of an outstanding Award or the substitution of other property
for Shares subject to an outstanding Award; provided, that the number of
Shares subject to any Award denominated in Shares shall always be a whole
number.
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|
(b)
|
Example. By
way of illustration, and not by way of limitation, the following
illustrates how the foregoing adjustment principles would apply in the
context of a stock split: Assume a Grantee holds an Option to
purchase 1,000 shares of Company stock at an Option Price of $50 per
share. Assume further that the Company completes a two-for-one
share split such that every shareholder on the requisite record date
receives two Shares for every one Share held on the record
date. Pursuant to the adjustment principles set forth above in
Section 4.2(a), the Grantee's Option would be adjusted such that, after
such adjustment, the Grantee would hold an Option to purchase 2,000 Shares
at an Option Price of $25 per Share. All other terms and
conditions of the Option would remain the same. Similar
adjustment principles would apply to SARs, Performance Shares, Performance
Units, Bonus Shares and Deferred Shares. This Section 4.2(b) is
for illustrative purposes only, assumes hypothetical facts, and shall not,
under any event or circumstance, be interpreted as the adjustment outcome
with respect to specific factual
situations.
|
Article
5. Eligibility and General Conditions of Awards
|
5.1.
|
Eligibility. The
Board may grant Awards to any Eligible Person, whether or not he or she
has previously received an Award.
|
|
5.2.
|
Grant
Date. The Grant Date of an Award shall be the date on
which the Board grants the Award or such later date as specified by the
Board (i) in the Board's resolutions or minutes addressing the Award
grants or (ii) in the Award
Agreement.
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|
5.3.
|
Maximum
Term. Subject to the following proviso, the Option Term
or other period during which an Award may be outstanding shall not extend
more than 10 years after the Grant Date, and shall be subject to earlier
termination as herein specified.
|
|
5.4.
|
Award
Agreement. To the extent not set forth in the Plan, the
terms and conditions of each Award (which need not be the same for each
grant or for each Grantee) shall be set forth in an Award
Agreement.
|
|
5.5.
|
Restrictions on Share
Transferability. The Board may include in the Award
Agreement such restrictions on any Shares acquired pursuant to the
exercise or vesting of an Award as it may deem advisable, including
restrictions under applicable federal securities
laws.
|
|
5.6.
|
Termination of
Affiliation. Except as otherwise provided in an Award
Agreement (including an Award Agreement as amended by the Board pursuant
to Section 3.2), and subject to the provisions of Section 13.1, the extent
to which the Grantee shall have the right to exercise, vest in, or receive
payment in respect of an Award following Termination of Affiliation shall
be determined in accordance with the following provisions of this Section
5.6.
|
|
(a)
|
For
Cause. If a Grantee has a Termination of Affiliation for
Cause:
|
|
(i)
|
the
Grantee's Restricted Shares that are forfeitable immediately before such
Termination of Affiliation shall automatically be forfeited on such date,
subject in the case of Restricted Shares to the provisions of Section 8.5
regarding repayment of certain amounts to the
Grantee;
|
|
(ii)
|
the
Grantee's Restricted Stock Units shall automatically be forfeited;
and
|
|
(iii)
|
any
unexercised Option or SAR, and any Performance Share or Performance Unit
with respect to which the Performance Period has not ended immediately
before such Termination of Affiliation, shall terminate effective
immediately upon such Termination of
Affiliation.
|
|
(b)
|
On Account of Death or
Disability. If a Grantee has a Termination of
Affiliation on account of death or
Disability:
|
|
(i)
|
the
Grantee's Restricted Shares that were forfeitable immediately before such
Termination of Affiliation shall thereupon become
nonforfeitable;
|
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-
|
(ii)
|
the
Grantee’s Restricted Stock Units shall immediately be settled in
accordance with Section 9.4;
|
|
(iii)
|
any
unexercised Option or SAR, whether or not exercisable immediately before
such Termination of Affiliation, shall be fully exercisable and may be
exercised, in whole or in part, at any time up to one year after such
Termination of Affiliation (but only during the Option Term or SAR Term,
respectively) by the Grantee or, after his or her death, by (A) his or her
personal representative or the person to whom the Option or SAR, as
applicable, is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's beneficiary designated in accordance
with Article 11; and
|
|
(iv)
|
the
benefit payable with respect to any Performance Share or Performance Unit
with respect to which the Performance Period has not ended immediately
before such Termination of Affiliation on account of death or Disability
shall be equal to the product of the Fair Market Value of a Share as of
the date of such Termination of Affiliation or the value of the
Performance Unit specified in the Award Agreement (determined as of the
date of such Termination of Affiliation), as applicable, multiplied
successively by each of the
following:
|
(A) a
fraction, the numerator of which is the number of months (including as a whole
month any partial month) that have elapsed since the beginning of such
Performance Period until the date of such Termination of Affiliation and the
denominator of which is the number of months (including as a whole month any
partial month) in the Performance Period; and
(B)
a percentage determined by the Plan Committee that would be earned under the
terms of the applicable Award Agreement assuming that the rate at which the
performance goals have been achieved as of the date of such Termination of
Affiliation would continue until the end of the Performance Period, or, if the
Board elects to compute the benefit after the end of the Performance Period, the
Performance percentage, as determined by the Board, attained during the
Performance Period.
|
(c)
|
Change of Control
Period. If a Grantee has a Termination of Affiliation
during the period ("Change of Control Period") commencing on a Change of
Control and ending on the first anniversary of the Change of Control,
which Termination of Affiliation is initiated by the Company or a
Subsidiary other than for Cause, or initiated by the Grantee for Good
Reason, then
|
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|
(i)
|
the
Grantee’s Restricted Shares that were forfeitable shall thereupon become
nonforfeitable;
|
|
(ii)
|
the
Grantee’s Restricted Stock Units shall immediately be settled in
accordance with Section 9.4;
|
|
(iii)
|
any
unexercised Option or SAR, whether or not exercisable on the date of such
Termination of Affiliation, shall thereupon be fully exercisable and may
be exercised, in whole or in part for ninety (90) days following such
Termination of Affiliation (but only during the Option Term or SAR Term,
respectively); and
|
|
(iv)
|
the
Company shall immediately pay to the Grantee, with respect to any
Performance Share or Performance Unit with respect to which the
Performance Period has not ended as of the date of such Termination of
Affiliation, a cash payment equal to the product of (A) in the case of a
Performance Share, the Change of Control Value or (B) in the case of a
Performance Unit, the value of the Performance Unit specified in the Award
Agreement, as applicable, multiplied successively by each of the
following:
|
(A) a
fraction, the numerator of which is the number of whole and partial months that
have elapsed between the beginning of such Performance Period and the date of
such Termination of Affiliation and the denominator of which is the number of
whole and partial months in the Performance Period; and
(B) a
percentage equal to a greater of (x) the target percentage, if any, specified in
the applicable Award Agreement or (y) the maximum percentage, if any, that would
be earned under the terms of the applicable Award Agreement assuming that the
rate at which the performance goals have been achieved as of the date of such
Termination of Affiliation would continue until the end of the Performance
Period.
|
(d)
|
Any Other
Reason. If a Grantee has a Termination of Affiliation
for any reason other than for Cause, death or Disability, and other than
under the circumstances described in Section 5.6(c),
then:
|
|
(i)
|
the
Grantee's Restricted Shares, to the extent forfeitable immediately before
such Termination of Affiliation, shall thereupon automatically be
forfeited, subject in the case of Restricted Shares to the provisions of
Section 8.5 regarding repayment of certain amounts to the
Grantee;
|
|
(ii)
|
the
Grantee's Restricted Stock Units shall automatically be
forfeited;
|
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|
(iii)
|
any
unexercised Option or SAR, to the extent exercisable immediately before
such Termination of Affiliation, shall remain exercisable in whole or in
part for ninety (90) days after such Termination of Affiliation (but only
during the Option Term or SAR Term, respectively) by the Grantee or, after
his or her death, by (A) his or her personal representative or the person
to whom the Option or SAR, as applicable, is transferred by will or the
applicable laws of descent and distribution, or (B) the Grantee's
beneficiary designated in accordance with Article 11;
and
|
|
(iv)
|
any
Performance Shares or Performance Units with respect to which the
Performance Period has not ended as of the date of such Termination of
Affiliation shall terminate immediately upon such Termination of
Affiliation.
|
|
5.7.
|
Nontransferability of
Awards.
|
|
(a)
|
Except
as provided in Section 5.7(c) below, each Award, and each right under any
Award, shall be exercisable only by the Grantee during the Grantee's
lifetime, or, if permissible under applicable law, by the Grantee's
guardian or legal representative.
|
|
(b)
|
Except
as provided in Section 5.7(c) below, no Award (prior to the time, if
applicable, Shares are issued in respect of such Award), and no right
under any Award, may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Grantee 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 Board, and subject to such
terms and conditions as may be prescribed by the Board, a Grantee may
transfer an Award 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 Grantee, (including adoptive relationships), (b)
any person sharing the Grantee'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 Grantee 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 Grantee, in exchange for an interest in that
entity.
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- 16
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|
5.8.
|
Section 162(m)
Performance Awards.
|
|
(a)
|
General. Any
type of Award that is eligible to be granted under the Plan may be granted
to officers and employees as awards intended to satisfy the requirements
of "performance-based compensation" within the meaning of Section 162(m)
of the Code ("Performance
Awards"). The grant, vesting, exercisability or payment
of Performance Awards may depend on the degree of achievement of one or
more performance goals relative to a preestablished target level or levels
using one or more of the Business Criteria set forth
below.
|
|
(b)
|
Class. The
eligible class of persons to receive Performance Awards shall be any
hourly or salaried officer or employee of the Company or one of its
subsidiaries. The Plan Committee approving Performance Awards
or making any certification required pursuant to Section 5.8(c) must be
constituted as provided for in Section 3.1 for awards that are intended as
performance-based compensation under Section 162(m) of the
Code.
|
|
(c)
|
Performance
Goals. The specific performance goals for Performance
Awards shall be, on an absolute or relative basis, established based on
one or more of the following business criteria ("Business
Criteria") for the Company on a segregated or consolidated basis or
for one or more of the Company's subsidiaries, segments, divisions, or
business units, as selected by the Plan
Committee:
|
(i) Earnings
(either in the aggregate or on a per-Share basis);
(ii) Operating
profit (either in the aggregate or on a per-Share basis);
(iii) Operating
income (either in the aggregate or on a per-Share basis);
(iv) Net
earnings on either a LIFO or FIFO basis (either in the aggregate or on a
per-Share basis);
(v) Net
income or loss (either in the aggregate or on a per-Share basis);
(vi) Ratio
of debt to debt plus equity;
(vii) Net
borrowing;
(viii) Credit
quality or debt ratings;
(ix) Inventory
levels, inventory turn or shrinkage;
(x) Cash
flow provided by operations (either in the aggregate or on a per-Share
basis);
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(xi) Free
cash flow (either in the aggregate or on a per-Share basis);
(xii) Reductions
in expense levels, determined either on a Company-wide basis or in respect of
any one or more business units;
(xiii) Operating
and maintenance cost management and employee productivity;
(xiv) Gross
margin;
(xv) Return
measures (including return on assets, equity, or sales);
(xvi) Productivity
increases;
(xvii) Share
price (including attainment of a specified per-Share price during the relevant
performance period; growth measures and total shareholder return or attainment
by the Shares of a specified price for a specified period of time);
(xviii) Where
applicable, growth or rate of growth of any of the above Business Criteria set
forth in this Section 5.8(c);
(xix) Strategic
business criteria, consisting of one or more objectives based on meeting
specified revenue, market share, market penetration, geographic business
expansion goals, objectively identified project milestones, production volume
levels, cost targets, and goals relating to acquisitions or
divestitures;
(xx) Achievement
of business or operational goals such as market share and/or business
development; and/or
(xxi) Accomplishment
of mergers, acquisitions, dispositions, public offerings or similar
extraordinary business transactions;
provided
that applicable Business Criteria may be applied on a pre- or post-tax basis;
and provided further that the Plan Committee may, when the applicable
performance goals are established, provide that the formula for such goals may
include or exclude items to measure specific objectives, such as losses from
discontinued operations, extraordinary gains or losses, the cumulative effect of
accounting changes, acquisitions or divestitures, foreign exchange impacts and
any unusual, nonrecurring gain or loss. As established by the Plan
Committee, the Business Criteria may include, without limitation, GAAP and
non-GAAP financial measures. In addition to the foregoing performance goals, the
performance goals shall also include any performance goals which are set forth
in a Company bonus or incentive plan, if any, which has been approved by the
Company's shareholders, which are incorporated herein by reference. Such
performance goals shall be set by the Plan Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Code Section
162(m).
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(d)
|
Flexibility as to
Timing, Weighting, Applicable Business Unit. For Awards
intended to comply with the performance-based exception to Code Section
162(m), the Plan Committee shall set the Business Criteria within the time
period prescribed by Section 162(m) of the Code. The levels of performance
required with respect to Business Criteria may be expressed in absolute or
relative levels and may be based upon a set increase, set positive result,
maintenance of the status quo, set decrease or set negative result.
Business Criteria may differ for Awards to different Grantees. The Plan
Committee shall specify the weighting (which may be the same or different
for multiple objectives) to be given to each performance objective for
purposes of determining the final amount payable with respect to any such
Award. Any one or more of the Business Criteria may apply to a Grantee, to
the Company as a whole, to one or more Subsidiaries or to a department,
unit, division or function within the Company, within any one or more
Subsidiaries or any one or more joint ventures of which the Company is a
party, and may apply either alone or relative to the performance of other
businesses or individuals (including industry or general market
indices).
|
|
(e)
|
Discretion to
Adjust. The Plan Committee shall have the discretion to
adjust the determinations of the degree of attainment of the
pre-established performance goals; provided, however, that Awards which
are designed to qualify for the performance-based exception under Code
Section 162(m) may not (unless the Plan Committee determines to amend the
Award so that it no longer qualifies for such performance-based exception)
be adjusted upward. The Plan Committee shall retain the discretion to
adjust such Awards downward. The Plan Committee may not, unless the Plan
Committee determines to amend the Award so that it no longer qualifies for
the performance-based exception, delegate any responsibility with respect
to Awards intended to qualify for such performance-based exception. All
determinations by the Plan Committee as to the achievement of the Business
Criteria shall be certified in writing prior to payment of the
Award.
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(f)
|
Alteration of
Performance Measures. In the event that applicable laws
allow an Award to qualify for the performance-based exception to Code
Section 162(m) even if the Plan Committee alters the governing Business
Criteria without obtaining shareholder approval, the Plan Committee shall
have sole discretion to make such changes without obtaining shareholder
approval.
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Article
6. Stock Options
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6.1.
|
Grant of
Options. Subject to the terms and provisions of the
Plan, Options may be granted to any Eligible Person in such number, and
upon such terms, and at any time and from time to time as shall be
determined by the Board. Without limiting the generality of the
foregoing, the Board may grant to any Eligible Person, or permit any
Eligible Person to elect to receive, an Option in lieu of or in
substitution for any other compensation (whether payable currently or on a
deferred basis, and whether payable under the Plan or otherwise) which
such Eligible Person may be eligible to receive from the Company or a
Subsidiary, which Option may have a value (as determined by the Board
under Black-Scholes or any other option valuation method) that is equal to
or greater than the amount of such other
compensation.
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|
6.2.
|
Award
Agreement. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the Option Term, the
number of shares to which the Option pertains, the time or times at which
such Option shall be exercisable and such other provisions as the Board
shall determine.
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|
6.3.
|
Option
Price. The Option Price of an Option under the Plan
shall be determined by the Board, and 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 ("Substitute Option") that is (x) granted
to a Grantee 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 Grantee
immediately prior to such Acquisition, and (z) intended to preserve for
the Grantee 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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|
6.4.
|
Grant of Incentive
Stock Options.
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|
(a)
|
At
the time of the grant of any Option to an Eligible Person who is an
employee of the Company or a Subsidiary, the Board may designate that such
option shall be made subject to additional restrictions to permit it to
qualify as an "incentive stock option" under the requirements of Section
422 of the Code. Any option designated as an incentive stock
option:
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(i)
|
shall
not be granted to a person who owns shares (including shares treated as
owned under Section 424(d) of the Code) possessing more than 10% of the
total combined voting power of all classes of shares of the
Company;
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|
(ii)
|
shall
be for a term of not more than 10 years from the Grant Date, and shall be
subject to earlier termination as provided herein or in the applicable
Award Agreement;
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|
(iii)
|
shall
not have an aggregate Fair Market Value (determined for each incentive
stock option at its Grant Date) of Shares with respect to which incentive
stock options are exercisable for the first time by such Grantee during
any calendar year (under the Plan and any other employee stock option plan
of the Grantee's employer or any parent or Subsidiary thereof ("Other
Plans")), determined in accordance with the provisions of Section 422 of
the Code, which exceeds $100,000 (the "$100,000
Limit");
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(iv)
|
shall,
if the aggregate Fair Market Value of a Share (determined on the Grant
Date) with respect to the portion of such grant which is exercisable for
the first time during any calendar year ("Current Grant") and all
incentive stock options previously granted under the Plan and any Other
Plans which are exercisable for the first time during a calendar year
("Prior Grants") would exceed the $100,000 Limit, be exercisable as
follows:
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(A)
the portion of the Current Grant which would, when added to any
Prior Grants, be exercisable with respect to Shares which would have an
aggregate Fair Market Value (determined as of the respective Grant Date for such
options) in excess of the $100,000 Limit shall, notwithstanding the terms of the
Current Grant, be exercisable for the first time by the Grantee in the first
subsequent calendar year or years in which it could be exercisable for the first
time by the Grantee when added to all Prior Grants without exceeding the
$100,000 Limit; and
(B) if,
viewed as of the date of the Current Grant, any portion of a Current Grant could
not be exercised under the preceding provisions of this Subsection (iv) during
any calendar year commencing with the calendar year in which it is first
exercisable through and including the last calendar year in which it may by its
terms be exercised, such portion of the Current Grant shall not be an incentive
stock option, but shall be exercisable as a separate Option at such date or
dates as are provided in the Current Grant;
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(v)
|
shall
be granted within 10 years from the earlier of the date the Plan is
adopted or the date the Plan is approved by the shareholders of the
Company;
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(vi)
|
shall
require the Grantee to notify the Board of any disposition of any Shares
issued pursuant to the exercise of the incentive stock option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within 10 days of such disposition;
and
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(vii)
|
shall
by its terms not be assignable or transferable other than by will or the
laws of descent and distribution and may be exercised, during the
Grantee's lifetime, only by the Grantee; provided, however, that the
Grantee may, to the extent provided in the Plan in any manner specified by
the Board, designate in writing a beneficiary to exercise such incentive
stock option after the Grantee's
death.
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Notwithstanding
the foregoing, the Board may, without the consent of the Grantee, at any time
before the exercise of an option (whether or not an incentive stock option),
take any action necessary to prevent such option from being treated as an
incentive stock option.
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6.5.
|
Exercise of
Options. 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 Board or,
subject to the approval of the Board pursuant to procedures approved by
the Board,
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(a)
|
through
the sale of the Shares acquired on exercise of the Option through a
broker-dealer to whom the Grantee 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,
together with, if requested by the Company, the amount of federal, state,
local or foreign withholding taxes payable by Grantee by reason of such
exercise,
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(b)
|
through
simultaneous sale through a broker of Shares acquired on exercise, as
permitted under Regulation T of the Federal Reserve
Board,
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(c)
|
by
transfer to the Company of the number of Shares then owned by the Grantee,
the Fair Market Value of which equals the purchase price of the Shares
purchased in connection with the Option exercise, properly endorsed for
transfer to the Company; provided however, that Shares used for this
purpose must have been held by the Grantee 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
certificates for the Stock used as payment of the exercise
price. For purposes of this Section 6.5(c), in lieu of actually
transferring to the Company the number of Shares then owned by the
Grantee, the Board may, in its discretion permit the Grantee to submit to
the Company a statement affirming ownership by the Grantee of such number
of Shares and request that such Shares, although not actually transferred,
be deemed to have been transferred by the Grantee 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
Grantee. Notwithstanding the foregoing, a "net exercise" arrangement will
not be an eligible exercise method for incentive stock options unless and
until the Company and its advisors conclude that such method of exercise
may be utilized without resulting in a disqualification of the incentive
stock option.
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Article
7. Stock Appreciation Rights
|
7.1.
|
Grant of
SARs. Subject to the terms and conditions of the Plan,
SARs may be granted to any Eligible Person at any time and from time to
time as shall be determined by the Board in its sole
discretion. The Board may grant Freestanding SARs or Tandem
SARs, or any combination thereof.
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(a)
|
Number of
Shares. The Board shall have complete discretion to
determine the number of SARs granted to any Grantee, subject to the
limitations imposed in the Plan and by applicable
law.
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(b)
|
Exercise Price and
Other Terms. All SARs shall be granted with an exercise
price no less than the Fair Market Value of the underlying Shares on the
SARs' Grant Date. The Board, subject to the provisions of the
Plan, shall have complete discretion to determine the terms and conditions
of SARs granted under the Plan. The exercise price per Share of
Tandem SARs shall equal the exercise price per Share of the related
Option.
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|
7.2.
|
SAR Award
Agreement. Each SAR granted under the Plan shall be
evidenced by a written SAR Award Agreement which shall be entered into by
the Company and the Grantee to whom the SAR is granted and which shall
specify the exercise price per share, the SAR Term, the conditions of
exercise, and such other terms and conditions as the Board in its sole
discretion shall determine.
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|
7.3.
|
Exercise of
SARs. SARs shall be exercised by the delivery of a
written notice of exercise to the Company or its designee, setting forth
the number of Shares over which the SAR is to be
exercised. Tandem SARs (a) may be exercised with respect to all
or part of the Shares subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related Option; (b)
may be exercised only with respect to the Shares for which its related
Option is then exercisable; and (c) may be exercised only when the Fair
Market Value of the Shares subject to the Option exceeds the Option Price
of the Option. The value of the payment with respect to the
Tandem SAR may be no more than 100% of the difference between the Option
Price of the underlying Option and the Fair Market Value of the Shares
subject to the underlying Option at the time the Tandem SAR is
exercised.
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|
7.4.
|
Expiration of
SARs. A SAR granted under the Plan shall expire on the
date set forth in the SAR Award Agreement, which date shall be determined
by the Board in its sole discretion. Unless otherwise
specifically provided for in the SAR Award agreement, a Tandem SAR granted
under the Plan shall be exercisable at such time or times and only to the
extent that the related Option is exercisable. The Tandem SAR
shall terminate and no longer be exercisable upon the termination or
exercise of the related Options, except that Tandem SARs granted with
respect to less than the full number of Shares covered by a related Option
shall not be reduced until the exercise or termination of the related
Option exceeds the number of Shares not covered by the
SARs.
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- 23
-
|
7.5.
|
Payment of SAR
Amount. Upon exercise of a SAR, a Grantee shall be
entitled to receive payment from the Company in an amount determined by
multiplying (i) the positive difference between the Fair Market Value of a
Share on the date of exercise over the exercise price per Share by (ii)
the number of Shares with respect to which the SAR is
exercised. The payment upon a SAR exercise shall be solely in
whole Shares of equivalent value. Fractional Shares shall be
rounded down to the nearest whole Share with no cash consideration being
paid upon exercise.
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Article
8. Restricted Shares and Bonus Shares
|
8.1.
|
Grant of Restricted
Shares. Subject to the terms and provisions of the Plan,
the Board, at any time and from time to time, may grant Restricted Shares
to any Eligible Person in such amounts as the Board shall
determine.
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|
8.2.
|
Bonus
Shares. Subject to the terms of the Plan, the Board may
grant Bonus Shares to any Eligible Person, in such amount and upon such
terms and at any time and from time to time as shall be determined by the
Board. Bonus Shares shall be Shares issued without any
Restriction.
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|
8.3.
|
Award
Agreement. Each grant of Restricted Shares shall be
evidenced by an Award Agreement, which shall specify the Restrictions and
the Period(s) of Restriction, the number of Restricted Shares granted, and
such other provisions as the Board shall determine. The Board
may impose such Restrictions on any Restricted Shares as it may deem
advisable, including Restrictions based upon the achievement of specific
performance goals (Company-wide, divisional, Subsidiary or individual),
time-based Restrictions on vesting or Restrictions under applicable
securities laws; provided that in all cases, the Restricted Shares shall
be subject to a minimum two-year graduated vesting schedule (50% each
year), except, if as provided in the Award Agreement, in the event of
death, disability, Change of Control, Termination of Affiliation with Good
Reason, or Termination of Affiliation by the Employer other than for
Cause.
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|
8.4.
|
Consideration. The
Board shall determine the amount, if any, that a Grantee shall pay for
Restricted Shares or Bonus Shares. Such payment shall be made
in full by the Grantee before the delivery of the shares and in any event
no later than 10 business days after the Grant Date for such
shares.
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|
8.5.
|
Effect of
Forfeiture. If Restricted Shares are forfeited, and if
the Grantee was required to pay for such shares or acquired such
Restricted Shares upon the exercise of an Option, the Grantee shall resell
such Restricted Shares to the Company at a price equal to the lesser of
(x) the amount paid by the Grantee for such Restricted Shares, or (y) the
Fair Market Value of a Share on the date of such
forfeiture. The Company shall pay to the Grantee the required
amount as soon as is administratively
practical.
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- 24
-
|
8.6.
|
Escrow. The
Board may provide that any Restricted Shares or Bonus Shares shall be
represented by, at the option of the Board, either book entry registration
or by a stock certificate or certificates. If the shares of
Restricted Shares are represented by a certificate or certificates, such
shares shall be held (together with an assignment or
endorsement executed in blank by the Grantee) in escrow by an escrow agent
until such Restricted Shares become nonforfeitable or are
forfeited.
|
Article
9. Restricted Stock Units (f/k/a "Deferred
Shares")
9.1. Grant of Restricted Stock
Units. Subject to and consistent with the provisions of the
Plan and Code Sections 409A(a)(2), (3) and (4), the Board, at any time and from
time to time, may grant Restricted Stock Units to any Eligible Person, in such
amount and upon such terms as the Board shall determine. A Grantee shall have no
voting rights in Restricted Stock Units.
9.2. Award
Agreement. Each grant of Restricted Stock Units shall be
evidenced by an Award Agreement that shall specify the Restrictions, the number
of Shares subject to the Restricted Stock Units granted, and such other
provisions as the Plan Committee shall determine in accordance with the Plan and
Code Section 409A. The Plan Committee may impose such Restrictions on
Restricted Stock Units, including time-based Restrictions, Restrictions based on
the achievement of specific performance goals, time-based Restrictions following
the achievement of specific performance goals, Restrictions based on the
occurrence of a specified event, and/or restrictions under applicable securities
laws; provided that in all cases the Restricted Stock Units shall be subject to
a minimum two-year graduated vesting schedule (50% each year), except, if as
provided in the Award Agreement, in the event of death, Disability, Change of
Control, Termination of Affiliation with Good Reason, or Termination of
Affiliation by the Employer other than for Cause.
9.3. Crediting Restricted Stock
Units. The Company shall establish an account ("RSU Account") on its
books for each Eligible Person who receives a grant of Restricted Stock Units.
Restricted Stock Units shall be credited to the Grantee's RSU Account as of the
Grant Date of such Restricted Stock Units. RSU Accounts shall be maintained for
recordkeeping purposes only and the Company shall not be obligated to segregate
or set aside assets representing securities or other amounts credited to RSU
Accounts. The obligation to make distributions of securities or other amounts
credited to RSU Accounts shall be an unfunded, unsecured obligation of the
Company.
9.4. Settlement of RSU
Accounts. The Company shall settle an RSU Account by
delivering to the holder thereof (which may be the Grantee or his or her
Beneficiary, as applicable) a number of Shares equal to the whole number of
Shares underlying the Restricted Stock Units then credited to the Grantee's RSU
Account (or a specified portion in the event of any partial settlement);
provided that any fractional Shares underlying Restricted Stock Units remaining
in the RSU Account on the Settlement Date shall be distributed in cash in an
amount equal to the Fair Market Value of a Share as of the Settlement Date
multiplied by the remaining fractional Restricted Share Unit. The
"Settlement Date" for all Restricted Stock Units credited to a Grantee's RSU
Account shall be the date when Restrictions applicable to an Award of Restricted
Stock Units have lapsed.
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Article
10. Performance Units and Performance Shares
10.1.
|
Grant of Performance
Units and Performance Shares. Subject to the terms of
the Plan, Performance Units or Performance Shares may be granted to any
Eligible Person in such amounts and upon such terms, and at any time and
from time to time, as the Board shall determine. Each grant of
Performance Units or Performance Shares shall be evidenced by an Award
Agreement which shall specify the terms and conditions applicable to the
Performance Units or Performance Shares, as the Board
determines.
|
10.2.
|
Value/Performance
Goals. Each Performance Unit shall have an initial value
that is established by the Board at the time of grant, that is equal to
the Fair Market Value of a Share on the Grant Date. The Board
shall set the Business Criteria which, depending on the extent to which
they are met, will determine the number or value of Performance Units or
Performance Shares that will be paid to the Grantee. For
purposes of this Article 10, the time period during which the performance
goals must be met shall be called a "Performance Period." The
Board shall have complete discretion to establish the performance
goals.
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10.3.
|
Payment of Performance
Units and Performance Shares. Subject to the terms of
the Plan, after the applicable Performance Period has ended, the holder of
Performance Units or Performance Shares shall be entitled to receive a
payment based on the number and value of Performance Units or Performance
Shares earned by the Grantee over the Performance Period, determined as a
function of the extent to which the corresponding performance goals have
been achieved.
|
If a
Grantee is promoted, demoted or transferred to a different business unit of the
Company during a Performance Period, then, to the extent the Board determines
appropriate, the Board may adjust, change or eliminate the performance goals or
the applicable Performance Period as it deems appropriate in order to make them
appropriate and comparable to the initial performance goals or Performance
Period.
10.4.
|
Form and Timing of
Payment of Performance Units and Performance
Shares. Payment of earned Performance Units or
Performance Shares shall be made in a lump sum following the close of the
applicable Performance Period. The Board may cause earned
Performance Units or Performance Shares to be paid in cash or in Shares
(or in a combination thereof) which have an aggregate Fair Market Value
equal to the value of the earned Performance Units or Performance Shares
at the close of the applicable Performance Period. Such Shares
may be granted subject to any restrictions deemed appropriate by the
Board. The form of payout of such Awards shall be set forth in
the Award Agreement pertaining to the grant of the
Award.
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- 26
-
As
determined by the Board, a Grantee may be entitled to receive any dividends
declared with respect to Shares which have been earned in connection with grants
of Performance Units or Performance Shares but not yet distributed to the
Grantee. In addition, a Grantee may, as determined by the Board, be
entitled to exercise his or her voting rights with respect to such
Shares.
Article
11. Beneficiary Designation
Each
Grantee 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 the Grantee's death before he or
she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Grantee, shall be in a form prescribed
by the Company, and will be effective only when filed by the Grantee in writing
with the Company during the Grantee's lifetime. In the absence of any
such designation, benefits remaining unpaid at the Grantee's death shall be paid
to the Grantee's estate.
Article
12. Rights of Employees
12.1.
|
Employment. Nothing
in the Plan shall interfere with or limit in any way the right of the
Company to terminate any Grantee's employment at any time, nor confer upon
any Grantee the right to continue in the employ of the
Company.
|
12.2.
|
Participation. No
employee shall have the right to be selected to receive an Award, or,
having been so selected, to be selected to receive a future
Award.
|
Article
13. Amendment, Modification, and Termination
13.1.
|
Amendment,
Modification, and Termination. Subject to the terms of
the Plan, the Board of Directors of the Company 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, except to the
extent the Board of Directors of the Company determines it is desirable to
obtain approval of the Company's shareholders, to retain eligibility for
exemption from the limitations of Code Section 162(m), to have available
the ability for Options to qualify as ISOs, to comply with the
requirements for listing on any exchange where the Company's Shares are
listed, or for any other purpose the Board of Directors of the Company
deems appropriate.
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13.2.
|
Adjustments Upon
Certain Unusual or Nonrecurring Events. The Board may
make adjustments in the terms and conditions of Awards 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 Board 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.
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13.3.
|
Awards Previously
Granted. Notwithstanding any other provision of the Plan
to the contrary (but subject to Section 2.8 and Section 13.2), no
termination, amendment or modification of the Plan shall adversely affect
in any material way any Award previously granted under the Plan, without
the written consent of the Grantee of such Award. Any
adjustment, modification, extension or renewal of an Option shall be
effected such that the Option is either exempt from, or is compliant with,
Code section 409A.
|
13.4.
|
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 Awards 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 or Plan Committee
may:
|
|
(a)
|
remove
restrictions on Restricted Shares and Restricted Stock
Units;
|
|
(b)
|
modify
the performance requirements for any other
Awards;
|
|
(c)
|
provide
that Options or other Awards granted hereunder must be exercised in
connection with the closing of such transactions, and that if not so
exercised such Awards will expire;
|
|
(d)
|
provide
for the purchase by the Company of any such Award, upon the Grantee's
request, for an amount of cash equal to the amount that could have been
attained upon the exercise of such Award or realization of the Grantee's
rights had such Award been currently exercisable or
payable;
|
|
(e)
|
make
such adjustment to any such Award then outstanding as the Board deems
appropriate to reflect such Change of
Control;
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|
(f)
|
cause
any such Award 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 Participants, or may be made on a
case-by-case basis with respect to particular
Participants.
|
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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13.5.
|
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
Awards may not be amended to reduce the exercise price of outstanding
Options or SARs or cancel outstanding Options or SARs in exchange for
cash, other Awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SARs without
stockholder approval.
|
Article
14. Withholding
14.1.
|
Mandatory Tax
Withholding.
|
|
(a)
|
Whenever
under the Plan, Shares are to be delivered upon exercise or payment of an
Award, or upon the lapse of Restrictions on an Award, or any other event
with respect to rights and benefits hereunder (the exercise date, date
such Restrictions lapse or such payment of any other benefit or right
occurs hereinafter referred to as the "Tax Date"), the
Company shall be entitled to require and may accommodate the Grantee's
request if so requested, to satisfy all federal, state, local and foreign
tax withholding requirements, including Social Security and Medicare
("FICA")
taxes related thereto ("Tax
Withholding"), by one or a combination of the following
methods:
|
(i) Payment
of an amount in cash equal to the amount to be withheld;
(ii) Requesting
the Company to withhold from those Shares that would otherwise be received upon
exercise of the Option or the SAR payable in Shares, upon the lapse of
Restrictions on an Award, a number of Shares having a Fair Market Value on the
Tax Date equal to the amount to be withheld; or
(iii) withholding
from compensation otherwise due to the Grantee.
The Board in its sole discretion may
provide that the maximum amount of tax withholding to be satisfied by
withholding Shares pursuant to clause (ii) above shall not exceed the minimum
amount of taxes, including FICA taxes, required to be withheld under federal,
state and local law. An election by Grantee under this subsection is
irrevocable. Any fractional share amount and any additional withholding not paid
by the withholding or surrender of Shares must be paid in cash. If no
timely election is made, the Grantee must deliver cash to satisfy all tax
withholding requirements.
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|
(b)
|
Any
Grantee who makes a disqualifying disposition of an incentive stock option
granted under the Plan or who makes an election under Section 83(b) of the
Code shall remit to the Company an amount sufficient to satisfy all
resulting Tax Withholding; provided that, in lieu
of or in addition to the foregoing, the Company shall have the right to
withhold such Tax Withholding from compensation otherwise due to the
Grantee or from any Shares or other payment due to the Grantee under the
Plan.
|
14.2.
|
Notification under
Code Section 83(b). If the Grantee, in connection with
the exercise of any Option, or the grant of Restricted Shares, makes the
election permitted under Section 83(b) of the Code to include in such
Grantee's gross income in the year of transfer the amounts specified in
Section 83(b) of the Code, then such Grantee shall notify the Company of
such election within 10 days of filing the notice of the election with the
Internal Revenue Service, in addition to any filing and notification
required pursuant to regulations issued under Section 83(b) of the
Code. The Board may, in connection with the grant of an Award
or at any time thereafter prior to such an election being made, prohibit a
Grantee from making the election described
above.
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Article
15. Equity Incentive Plans of Foreign Subsidiaries
The Board
may authorize any foreign Subsidiary to adopt a plan for granting Awards
("Foreign Equity Incentive Plan"). All awards granted under such
Foreign Equity Incentive Plans shall be treated as grants under the
Plan. Such Foreign Equity Incentive Plans shall have such terms and
provisions as the Board permits not inconsistent with the provisions of the Plan
and which may be more restrictive than those contained in the
Plan. Awards granted under such Foreign Equity Incentive Plans shall
be governed by the terms of the Plan except to the extent that the provisions of
the Foreign Equity Incentive Plans are more restrictive than the terms of the
Plan, in which case such terms of the Foreign Equity Incentive Plans shall
control.
Article
16. Additional Provisions
16.1.
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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.
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16.2.
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Gender and
Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the
plural.
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16.3.
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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.
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16.4.
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Requirements of
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 stock
exchanges as may be required. Notwithstanding any provision of
the Plan or any Award, Grantees shall not be entitled to exercise, or
receive benefits under, any Award, and the Company shall not be obligated
to deliver any Shares or other benefits to a Grantee, if such exercise or
delivery would constitute a violation by the Grantee or the Company of any
applicable law or regulation.
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16.5.
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Securities Law
Compliance.
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(a)
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If
the Board deems it necessary to comply with any applicable securities law,
or the requirements of any stock exchange upon which Shares may be listed,
the Board may impose any restriction on Shares acquired pursuant to Awards
under the Plan as it may deem advisable. All Shares transferred
under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Board
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
Grantee 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)
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If
the Board determines that the exercise of, or delivery of benefits
pursuant to, any Award 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
Board 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.
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16.6.
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No Rights as a
Shareholder. A Grantee shall not have any rights as a shareholder
with respect to the Shares (other than Restricted Shares) which may be
deliverable upon exercise or payment of such Award until such shares have
been delivered to him or her. Restricted Shares, whether held by a Grantee
or in escrow by the escrow agent, shall confer on the Grantee all rights
of a shareholder of the Company, except as otherwise provided in the Plan
or Award Agreement. Unless otherwise determined by the Board at the time
of a grant of Restricted Shares, any cash dividends that become payable on
Restricted Shares shall be deferred and, if the Board so determines,
reinvested in additional Restricted Shares. Except as otherwise provided
in an Award Agreement, any share dividends and deferred cash dividends
issued with respect to Restricted Shares shall be subject to the same
restrictions and other terms as apply to the Restricted Shares with
respect to which such dividends are issued. The Board may provide for
payment of interest on deferred cash
dividends.
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16.7.
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Nature of
Payments. Awards shall be special incentive payments to
the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any
pension, retirement, death or other benefit under (a) any pension,
retirement, profit-sharing, bonus, insurance or other employee benefit
plan of the Company or any Subsidiary or (b) any agreement between (i) the
Company or any Subsidiary and (ii) the Grantee, except as such plan or
agreement shall otherwise expressly
provide.
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16.8.
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Military
Service. Awards shall be administered in accordance with
Section 414(u) of the Code and the Uniformed Services Employment and
Reemployment Rights Act of 1994.
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16.9.
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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 Grantees 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.
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16.10.
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Governing
Law. The Plan and the rights of any Grantee receiving an
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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Annex
to the Plan for Swiss based Grantees and Grantees subject to Swiss inheritance
law
1.
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Section
5.6(a)(i) shall be replaced with the
following:
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(i)
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to
the extent permitted by the applicable Swiss law the Grantee's Restricted
Shares that are forfeitable immediately before such Termination of
Affiliation shall automatically be forfeited on such date, subject in the
case of Restricted Shares to the provisions of Section 8.5 regarding
repayment of certain amounts to the
Grantee;
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2.
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Section
5.6(a)(ii) shall be replaced with the
following:
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(ii)
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to
the extent permitted by the applicable Swiss law the Grantee's Restricted
Stock Units shall automatically be
forfeited;
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3.
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Section
5.6(a)(iii) shall be replaced with the
following:
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(iii)
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to
the extent permitted by the applicable Swiss law any unexercised Option or
SAR, and any Performance Share or Performance Unit with respect to which
the Performance Period has not ended immediately before such Termination
of Affiliation, shall terminate effective immediately upon such
Termination of Affiliation.
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4.
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Section
5.6(d)(i) shall be replaced with the
following:
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(i)
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to
the extent permitted by the applicable Swiss law the Grantee's Restricted
Shares and Deferred Shares, to the extent forfeitable immediately before
such Termination of Affiliation, shall thereupon automatically be
forfeited, subject in the case of Restricted Shares to the provisions of
Section 8.4 regarding repayment of certain amounts to the
Grantee;
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5.
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Section
5.6(d)(ii) shall be replaced with the
following:
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(ii)
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to
the extent permitted by the applicable Swiss law the Grantee's Restricted
Stock Units shall automatically be
forfeited;
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6.
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Section
5.6(d)(iv) shall be replaced with the
following:
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(iv)
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to
the extent permitted by the applicable Swiss law any Performance Shares or
Performance Units with respect to which the Performance Period has not
ended as of the date of such Termination of Affiliation shall terminate
immediately upon such Termination of
Affiliation.
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7.
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Section
6.1 shall be replaced with the
following:
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6.1
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Grant of
Options. Subject to the terms and provisions of the
Plan, Options may be granted to any Eligible Person in such number, and
upon such terms, and at any time and from time to time as shall be
determined by the Board. Without limiting the generality of the
foregoing and to the extent permitted by the applicable Swiss law, the
Board may grant to any Eligible Person, or permit any Eligible Person to
elect to receive, an Option in lieu of or in substitution for any other
compensation (whether payable currently or on a deferred basis, and
whether payable under the Plan or otherwise) which such Eligible Person
may be eligible to receive from the Company or a Subsidiary, which Option
may have a value (as determined by the Board under Black-Scholes or any
other option valuation method) that is equal to or greater than the amount
of such other compensation.
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8.
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Article
11. shall be replaced with the
following:
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Each
Grantee 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 the Grantee's death before he or
she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Grantee, shall be in a form and
procedure prescribed by the applicable Swiss inheritance law. Irrespective of
any such designation, benefits remaining unpaid at the Grantee's death shall be
paid to the Grantee's estate.
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