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| 8-K - NU HORIZONS ELECTRONICS CORP | v192309_8-k.htm |
Exhibit
10.1
NU
HORIZONS ELECTRONICS CORP.
2010
OUTSIDE DIRECTORS’ STOCK INCENTIVE PLAN
ARTICLE
I
PURPOSES
Nu Horizons
Electronics Corp. hereby adopts and establishes the Nu Horizons Electronics
Corp. (the “Company”)
2010 Outside Directors’ Stock Incentive Plan (the “Plan”) to attract and retain
highly skilled individuals as directors of the Company, to provide additional
incentive to the outside directors of the Company to serve as directors and to
encourage their continued service on the board of directors of the
Company. The Plan is intended to comply with Section 409A (as
defined below), and to supplement any existing director stock option
plan.
ARTICLE
II
DEFINITIONS
The
capitalized terms used in this Plan have the meanings set forth below, or as
otherwise defined herein. Except when otherwise indicated by the
context, reference to the masculine gender shall include the feminine gender and
any term used in the singular shall also include the plural.
(a)
“Affiliate” means
(i) any Subsidiary of the Company, (ii) any entity or Person or group
of Persons that, directly or through one or more intermediaries, is controlled
by the Company and (iii) any entity or Person or group of Persons in which
the Company has a significant equity interest, as determined by the
Board.
(b)
“Agreement” means any
written agreement, contract or other instrument or document evidencing any Award
granted under the Plan, which may, but need not, be executed or acknowledged by
a Participant.
(c)
“Award” means any
Option, award of Restricted Stock or Restricted Stock Units or Other Stock-Based
Award granted under the Plan.
(d)
“Board” or “Board of Directors” means the
Board of Directors of the Company.
(e)
“Change in Control”
means a change of control of the Company, or in any person directly or
indirectly controlling the Company, which shall mean:
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(i)
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a
change in control as such term is presently defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended;
or
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(ii)
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if
any “person” (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) other than the Company or any “person” who on the date of
this Agreement is a director or officer of the Company, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of securities of the Company representing thirty
percent (30%) or more of the voting power of the Company’s then
outstanding securities; or
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(iii)
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if
during any period of two (2) consecutive years during the term of
this Plan, individuals who at the beginning of such period constitute the
Board of Directors, cease for any reason to constitute at least a majority
thereof.
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Notwithstanding
the foregoing or any provision of this Plan to the contrary, if an Award is
subject to Section 409A (and not excepted therefrom) and a Change of
Control is a distribution event for purposes of such Award, the foregoing
definition of Change in Control shall be interpreted, administered and construed
in manner necessary to ensure that the occurrence of any such event shall result
in a Change of Control only if such event qualifies as a change in the ownership
or effective control of the Company, or a change in the ownership of a
substantial portion of the assets of the Company, as applicable, within the
meaning of Treasury Regulation § 1.409A-3(i)(5).
(f)
“Code” means the
Internal Revenue Code of 1986, as amended and in effect from time to time, or
any successor statute.
(g)
“Disability” means the
disability of a Participant (i) such that the Participant is considered
disabled under any long term disability plan of the Company, or otherwise
(ii) as determined by the Board.
(h)
“Director” means a
member of the Board of Directors of the Company.
(i)
“Employee” means any
person, including officers and Directors, employed by the Company or any
Subsidiary of the Company. The payment of a Director’s fee or
consulting fee by the Company shall not be sufficient in and of itself to
constitute “employment” by the Company unless the Director and the Company agree
that, as a result of payment of such fees in connection with services rendered,
such Director should not be considered an Outside Director.
(j)
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
(k)
“Fair Market Value”
means, as of any date, the value of Stock determined as follows:
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(i)
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If
the Common Stock is listed on any established stock exchange or national
market system, including without limitation the Nasdaq National Market,
the Fair Market Value of a Share of Common Stock shall be the closing sale
price for such stock (or the closing bid, if no sales were reported), as
quoted on such system or exchange (or, if more than one, on the exchange
with the greatest volume of trading in the Company’s Common Stock) on the
day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable;
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(ii)
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If
the Common Stock is quoted on Nasdaq (but not on the National Market) or
regularly quoted by a recognized securities dealer, but selling prices are
not reported, the Fair Market Value of a Share of Common Stock shall be
the mean between the high and low asked prices for the Common Stock on the
date of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable,
or;
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(iii)
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In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the
Board.
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(l)
“Option” means a stock
option to purchase Shares granted under Article VI.
(m)
“Other Stock-Based
Award” means any right granted under Article VIII.
ii
(n) “Outside Director” means a
Director who is not an Employee.
(o)
“Participant” means an
Outside Director to whom an Award has been made.
(p)
“Person” means any
individual, corporation, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
(q)
“Plan” means this 2010
Outside Directors’ Stock Incentive Plan, as amended and in effect from time to
time.
(r)
“Restricted Stock” means
any Share underlying an Award granted under Article VII.
(s)
“Restricted Stock Unit”
means a contractual right underlying an Award granted under Article VII that is
denominated in Shares, which Unit represents a right to receive the value of a
Share (or a percentage of such value, which percentage may be higher than 100%)
upon the terms and conditions set forth in the Plan and the applicable
Agreement.
(t)
“Section 409A”
shall mean Section 409A of the Code, the regulations and other binding
guidance promulgated thereunder.
(u)
“Separation from
Service” and “Separate
from Service” shall mean the Participant’s death, retirement or other
termination of directorship with the Company (including all persons treated as a
single employer under Section 414(b) and 414(c) of the Code) or change in
circumstances that constitutes a “separation from service” (within the meaning
of Section 409A). For purposes hereof, the determination of
controlled group members shall be made pursuant to the provisions of
Section 414(b) and 414(c) of the Code; provided that the language “at least
50 percent” shall be used instead of “at least 80 percent” in each place it
appears in Section 1563(a)(1), (2) and (3) of the Code and Treas. Reg.
§ 1.414(c)-2; provided, further, where legitimate business reasons exist
(within the meaning of Treas. Reg. § 1.409A-1(h)(3)), the language “at
least 20 percent” shall be used instead of “at least 80 percent” in
each place it appears.
(v)
“Share” means a share of
Stock.
(w)
“Stock” means the common
stock, $.0066 par value per share (as such par value may be adjusted from time
to time), of the Company.
(x)
“Subsidiary” means any
entity in which the Company owns or otherwise controls, directly or indirectly,
stock or other ownership interests having the voting power to elect a majority
of the Board, or other governing group having functions similar to a board of
directors, as determined by the Board.
(y)
“Successor” with respect
to a Participant means the legal representative of an incompetent Participant
and, if the Participant is deceased, the legal representative of the estate of
the Participant or the person or persons who may, by bequest or inheritance, or
under the terms of an Award or of forms submitted by the Participant to the
Board, acquire the right to receive cash and/or Shares issuable in satisfaction
of an Award.
iii
ARTICLE
III
ADMINISTRATION
The
authority to control and manage the operation and administration of the Plan
shall be vested in the Board.
(a) The
Board shall have exclusive power to make Awards, to determine when and to whom
Awards will be granted, the types of Awards and the number of Shares covered by
the Awards, to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards and, subject to the terms of
the Plan, to cancel or suspend Awards. In making such Award
determinations, the Board may take into account the Participant’s present and
potential contribution to the Company’s success and such other factors as the
Board deems relevant.
(b) Subject
to Section 11(b) of the Plan, the Board may determine whether, to what
extent and under what circumstances Awards may be settled, paid or exercised in
cash, Shares or other Awards or other property, or canceled, forfeited or
suspended.
(c) Subject
to Section 11(b) of the Plan, the Board shall have the authority to
interpret the Plan and any Award or Agreement made under the Plan, to establish,
amend, waive and rescind any rules and regulations relating to the
administration of the Plan, to determine the terms and provisions of any
Agreements entered into hereunder (not inconsistent with the Plan), and to make
all other determinations necessary or advisable for the administration of the
Plan.
(d) The
Board shall determine whether, to what extent, and under what circumstances
cash, Shares, other securities, other Awards, other property, and other amounts
payable with respect to an Award under the Plan shall be deferred either
automatically, or at the election of the holder thereof, or by the
Board.
(e) The
Board may correct any defect, supply any omission or reconcile any inconsistency
in the Plan or in any Award in the manner and to the extent it shall deem
desirable. The determinations of the Board in the administration of the Plan, as
described herein, shall be final, binding and conclusive.
(f)
In controlling and managing the operation
and administration of the Plan, the Board shall act by a majority of its then
members, by meeting or by writing or email filed without a
meeting. The Board shall maintain and keep adequate records
concerning the Plan and concerning its proceedings and acts in such form and
detail as the Board may decide.
(g) Except
to the extent prohibited by applicable law or regulation, the Board may allocate
all or any portion of its responsibilities and powers to any one or more of its
members. The Board may revoke any such allocation or delegation at
any time.
(h) The
Company and any Affiliate shall furnish the Board with such data and information
as may be required for it to discharge its duties. The records of the
Company and any Affiliate shall be conclusive on all persons unless determined
to be incorrect. Participants and other persons entitled to benefit
under the Plan must furnish the Board such evidence, data or information as the
Board considers desirable to carry out the terms of the Plan.
(i)
To the fullest extent permitted by law, each
member and former member of the Board and each person to whom the Board
delegates or has delegated authority under this Plan shall be entitled to
indemnification by the Company against and from any loss, liability, judgment,
damage, cost and reasonable expense incurred by such member, former member or
other person by reason of any action taken, failure to act or determination made
in good faith under or with respect to this Plan.
iv
ARTICLE
IV
SHARES
AVAILABLE FOR AWARDS
(a) Subject
to adjustment as provided in Section 4(e), the maximum number of Shares
that may be delivered pursuant to Awards granted under the Plan is
255,000. Notwithstanding the foregoing and subject to adjustment as
provided in Section 4(e), no Participant may receive Awards under this Plan
in any calendar year that relate to more than 30,000 Shares.
(b) Any
Shares subject to Awards shall be counted against the numerical limits of this
Article IV as one share for every share subject thereto. To the
extent that a Share that was subject to an Award that counted as one Share
against the Plan reserve is recycled back into the Plan under paragraph (d)
of this Article IV, the Plan shall be credited with one Share.
(c) Shares
to be issued under the Plan may be made available from authorized but unissued
Stock, Stock held by the Company in its treasury, or Stock purchased by the
Company on the open market or otherwise. During the term of the Plan, the
Company will at all times reserve and keep available the number of Shares that
shall be sufficient to satisfy the requirements of the Plan.
(d) If
any Shares covered by an Award or to which such an Award relates, terminate,
lapse or are forfeited or cancelled, or such an Award is otherwise settled
without the delivery of the full number of Shares underlying the Award, then the
Shares covered by such Award, or to which such Award relates, to the extent of
any such forfeiture, termination, lapse, cancellation, etc., shall again be, or
shall become available for issuance under the Plan; provided, however, that
Shares (i) delivered in payment of the exercise price of an Option,
(ii) not issued upon the net settlement or net exercise of stock
appreciation rights, or (iii) delivered to or withheld by the Company to
pay withholding taxes related to an Award, shall not become available again for
issuance under this Plan.
(e) In
the event of any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, share split,
reverse share split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affecting the Shares, the Board shall make such provision as it shall consider
appropriate for (i) the number and type of Shares (or other securities or
property) which thereafter may be made the subject of Awards, including without
limitation the individual limit set forth in Section 4(a), (ii) the
number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant, purchase, 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; provided, however, that the
number of Shares subject to any Award shall always be a whole number. The
determination of the Board shall be conclusive; provided, further, with
respect to any Award subject to Section 409A, any such adjustment shall be
authorized only to the extent that such adjustment would not cause the Award to
fail to comply with Section 409A.
v
ARTICLE
V
ELIGIBILITY
All
Outside Directors are eligible to participate in this Plan and receive Awards
hereunder.
ARTICLE
VI
OPTIONS
(a) Unless
otherwise provided by the Board at the time of the grant of an Award, and not
inconsistent with the provisions of the Plan and subject to Section 11(b)
of the Plan, the terms of each Option shall be as follows:
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(i)
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Each
Option shall terminate, if not previously exercised or otherwise
terminated, on a date ten (10) years after the date of
grant.
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(ii)
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Each
Option shall be exercisable only while the Outside Director remains a
Director of the Company, except as set forth in Articles IX
and XII hereof.
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(iii)
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The
exercise price per Share of each Option shall be 100% of the Fair Market
Value per Share on the date of grant of the
Option.
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(b) Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 6(a) above. An Option may not be exercised for a
fraction of a Share. An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may consist of any
consideration and method of payment allowable under Section 6(c)
below. Until the issuance (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company)
of the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
optioned Stock, notwithstanding the exercise of the Option. A share
certificate for the number of Shares so acquired shall be issued to the optionee
as soon as practicable after exercise of the option. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in
Section (4)(e) of the Plan. Except as otherwise provided in
Article IV, exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the option, by the number of Shares as to which the
option is exercised.
(c) The
consideration to be paid for the Shares to be issued upon exercise of an Option
may consist of (i) cash, (ii) check, (iii) other shares of the
Company’s Stock which have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option shall be
exercised, or (iv) consideration received by the Company under any cashless
exercise program implemented by the Company in connection with the
Plan.
(d) Shares
shall not be issued pursuant to the exercise of an Option unless the exercise of
such Option and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, state securities laws, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an Option, the Company
may require the person exercising such Option to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares,
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law. Inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
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ARTICLE
VII
RESTRICTED
STOCK AND RESTRICTED STOCK UNIT AWARDS
The Board
is hereby authorized to grant Awards of Restricted Stock and/or Restricted Stock
Units to Participants.
(a) The
Awards granted under this Article VII shall be subject to such restrictions
as the Board may impose (including, without limitation, any limitation on the
right to vote Shares underlying Restricted Stock Awards or the right to receive
any dividend, other right or property), which restrictions may lapse separately
or in combination at such time or times, in such installments or otherwise, as
the Board may deem appropriate. If the vesting conditions applicable
to an Award of Restricted Stock or Restricted Stock Units relate exclusively to
the passage of time and continued service as a director, the last vesting date
of all or a portion of such Award shall occur no less than 36 months
following the date of such Award, except that the foregoing restriction shall
not apply to such Awards if they are issued in connection with the exercise of
an Option or other Award hereunder.
(b) Any
Award of Restricted Stock or Restricted Stock Units may be evidenced in such
manner as the Board may deem appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates. In
the event any stock certificate is issued in respect of Shares underlying a
Restricted Stock Award, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Shares.
ARTICLE
VIII
OTHER
STOCK-BASED AWARDS
The Board
is hereby authorized to grant to Participants such other Awards (including,
without limitation, stock appreciation rights and rights to dividends and
dividend equivalents) that are denominated or payable in, valued in whole or in
part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares) as are deemed by the
Board to be consistent with the purposes of the Plan. Rights to
dividends and dividend equivalents may not attach to Options or stock
appreciations rights. Subject to the terms of the Plan, the Board shall
determine the terms and conditions of such Awards. Notwithstanding
the foregoing, the term of a stock appreciation right shall not exceed
ten (10) years, and the exercise price for a stock appreciation right shall
not be less than the Fair Market Value of a Share on the date of grant of such
stock appreciation right. Shares or other securities delivered pursuant to a
purchase right granted under this Article VIII shall be purchased for such
consideration, which may be paid by such method or methods and in such form or
forms, including, without limitation, cash, Shares, other securities, other
Awards, or other property, or any combination thereof, as the Board shall
determine, the value of which consideration, as established by the Board, shall
not be less than the Fair Market Value of such Shares or other securities as of
the date such purchase right is granted.
vii
ARTICLE
IX
TERMINATION
OF DIRECTORSHIP
Except as
otherwise provided in an applicable Agreement or determined by the Board and to
the extent not inconsistent with Section 13(k) hereof, in case of
termination of directorship, the following provisions shall apply:
(a) Termination of Status as a
Director. If an Outside Director ceases to serve as a
Director, such Person may, but only within three (3) months after the date
he/she ceases to be a Director of the Company, exercise any Option to the extent
that he/she was entitled to exercise it at the date of such termination.
Notwithstanding the foregoing, in no event may the Option be exercised after its
term has expired. To the extent that the Director was not entitled to
exercise an Option at the date of such termination, or if he/she does not
exercise such Option (which he/she was entitled to exercise) within the time
specified herein, the Option shall terminate. All other Awards shall
be payable in accordance with their terms.
(b) Disability of a
Participant. Notwithstanding the provisions of
Section 9(a) above, in the event a Participant is unable to continue
his/her service as a Director as a result of Disability, he/she may, but only
within twelve (12) months from the date of termination, exercise any Option
to the extent he/she was entitled to exercise it at the date of such
termination. Notwithstanding the foregoing, in no event may the
Option be exercised after its term has expired. To the extent that
he/she was not entitled to exercise the Option at the date of termination, or if
he/she does not exercise such Option (which he/she was entitled to exercise)
within the time specified herein, the Option shall terminate. All other Awards
shall be payable in accordance with their terms.
(c) Death of
Participant. In the event of the death of a Participant during
the term of an Option, the Option shall be exercisable to the extent it was
exercisable at the date of termination, at any time within twelve (12)
months following the date of death, by the Participant’s
Successor. Notwithstanding the foregoing, in no event may the Option
be exercised after its term has expired. All other Awards shall be
payable in accordance with their terms.
ARTICLE
X
DURATION
The Plan
shall be effective as of May 20, 2010, subject to its approval by the
stockholders of the Company. No Award shall be granted under the Plan after the
tenth anniversary of the effective date. However, unless otherwise
expressly provided in the Plan or in an applicable Agreement, any Award
theretofore granted may extend beyond such date, and the authority of the Board
to administer the Plan and to amend, alter, adjust, suspend, discontinue, or
terminate any such Award, or to waive any conditions or rights under any such
Award, and the authority of the Board to amend the Plan, shall extend beyond
such date.
viii
ARTICLE
XI
AMENDMENT,
MODIFICATION AND TERMINATION
(a) Except
to the extent prohibited by applicable law and unless otherwise expressly
provided in an Agreement or in the Plan, the Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided, however, that no
such amendment, alteration, suspension, discontinuation or termination shall be
made without (i) shareholder approval (x) if such approval is
necessary to comply with any tax or regulatory requirement for which or with
which the Board deems it necessary or desirable to qualify or comply or
(y) if the proposed amendment will increase the number of Shares that may
be issued under the Plan, modify the requirements for participation in the Plan,
or increase benefits that have already accrued to Participants under the Plan or
(ii) the consent of the affected Participant, if such action would
adversely affect the rights of such Participant under any outstanding
Award. Notwithstanding anything to the contrary herein, the Board may
amend the Plan in such manner as may be necessary to enable the Plan to achieve
its stated purposes in any jurisdiction outside the United States in a
tax-efficient manner and in compliance with local rules and
regulations. Notwithstanding the foregoing or any provision of the
Plan or an Award to the contrary, (i) the Board may at any time (without
the consent of any Participant) modify or amend any or all of the provisions of
the Plan or an Award to the extent necessary to conform the provisions of the
Plan or an Award to comply with Section 409A, the regulations issued
thereunder or an exception thereto, regardless of whether such modification or
amendment of the Award shall adversely affect the rights of a Participant, and
(ii) 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 stock appreciation rights or cancel outstanding Options
or stock appreciation rights in exchange for cash, other Awards, Options or
stock appreciation rights with an exercise price that is less than the exercise
price of the original Award, without stockholder approval.
(b) The
Board may waive any conditions or rights under, amend any terms of, or amend,
alter, suspend, discontinue or terminate, any Award theretofore granted,
prospectively or retroactively, without the consent of any Participant or holder
or beneficiary of an Award,
provided, however, that no such action shall impair the rights of a
Participant or holder or beneficiary under any Award theretofore granted under
the Plan. Notwithstanding the foregoing, the Board may not change the
vesting schedule of previously-granted Awards without shareholder
approval.
(c) With
respect to Participants who reside or work outside the United States of America,
the Board may, in its sole discretion, amend, or otherwise modify, without
shareholder approval, the terms of the Plan or Awards with respect to such
Participant in order to conform such terms with the provisions of local law;
provided that such amendment or other modification shall not increase the total
number of Shares reserved for purposes of the Plan without the approval of the
shareholders of the Company.
(d) The
Board shall be authorized to make adjustments in the terms and conditions of,
and the criteria included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, an event 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.
(e) To
the extent not inconsistent with Section 13(k) hereof, in connection with
an event described in Article XII or in Section 4(e), the Board may,
in its discretion (i) cancel any or all outstanding Awards under the Plan
in consideration for payment to the holder of each such cancelled Award of an
amount equal to the portion of the consideration that would have been payable to
such holder pursuant to such transaction if such Award had been fully vested and
exercisable, and had been fully exercised, immediately prior to such
transaction, less the exercise price if any that would have been payable
therefor, or (ii) if the net amount referred to in clause (i) would be
negative, cancel such Award for no consideration or payment of any kind. Payment
of any amount payable pursuant to the preceding sentence may be made in cash
and/or securities or other property in the Board’s discretion and to the extent
applicable, must comply with Section 409A.
ix
ARTICLE
XII
CHANGE
IN CONTROL, LIQUIDATION, MERGER OR ASSET SALE
(a) In
the event of a merger of the Company with or into another corporation or the
sale of substantially all of the assets of the Company, outstanding Awards may
be assumed or equivalent awards may be substituted by the successor corporation
or a parent or subsidiary thereof (the “Successor Corporation”). If
an Award is assumed or substituted for, the Award or equivalent award shall
continue to be exercisable and/or payable as provided in the original terms
thereof for so long as the Participant serves as a Director or a
director of the Successor Corporation. Following such assumption or
substitution, if the Participant’s status as a Director or director of the
Successor Corporation, as applicable, is terminated other than upon a voluntary
resignation, all Awards shall become immediately and fully exercisable and
payable. Thereafter, the Award shall remain exercisable and/or payable in
accordance with the terms of this Plan. If the Successor
Corporation does not assume an outstanding Award or substitute for it an
equivalent award, all Awards shall become immediately and fully exercisable and
payable. In such event with respect to Options, the Board shall
notify the Participant that the Option shall be fully exercisable for a period
of sixty (60) days from the date of such notice, and upon the expiration of
such period, the Option shall terminate.
For the
purposes of this Section 12(a), an Award shall be considered assumed if,
following the merger or sale of assets, the new Award confers the right to
purchase or receive consideration, for each Share of Stock or right subject to
the Award immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares).
(b) In
the event of a Change in Control, at the option of the Board, (i) all
Awards outstanding on the date of such Change in Control shall become
immediately and fully exercisable and payable, and (ii) a Participant will
be permitted to surrender for cancellation within sixty (60) days after
such Change in Control, any Option or portion of an Option which was granted
more than six (6) months prior to the date of such surrender, to the extent
not yet exercised, and to receive a cash payment in an amount equal to the
excess, if any, of the Fair Market Value (on the date of surrender) of the
Shares subject to the Option or portion thereof surrendered, over the aggregate
purchase price for such Shares under the Option.
(c) In
the event of a proposed dissolution or liquidation of the Company, all Awards
shall become fully vested, exercisable and payable. To the extent an
Option remains unexercised at the time of the dissolution or liquidation, the
Option shall terminate.
ARTICLE
XIII
MISCELLANEOUS
(a) Nothing
in the Plan or in any Agreement shall confer upon any Participant the right to
continue in the service or employment of the Company or any Affiliate or affect
any right which the Company or any Affiliate may have to terminate or modify the
employment or provision of service of the Participant with or without
cause.
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(b) The
Company shall have a right to withhold from any payment of cash or Stock to a
Participant or other person under the Plan an amount sufficient to cover any
required withholding taxes, including the Participant’s social security and
Medicare taxes (FICA) and Federal, state, local income tax or such other
applicable taxes (“Taxes”) with respect to income arising from payment of the
Award. The Company shall have the right to require the payment of any
Taxes before issuing any Stock pursuant to the Award. The Board may,
if it deems appropriate in the case of a Participant, withhold such Taxes
through a reduction of the number of Shares delivered to such individual, or
allow the Participant to elect to cover all or any part of the required
withholdings, and to cover any additional withholdings up to the amount needed
to cover the Taxes with respect to income arising from payment of the Award,
through a reduction of the number of Shares delivered to such individual or a
subsequent return to the Company of Shares held by the Participant or other
person, in each case valued in the same manner as used in computing the
withholding taxes under the applicable laws. Notwithstanding the
foregoing or any provisions of the Plan to the contrary, any broker-assisted
cashless exercise shall comply with the requirements for equity classification
of applicable SEC and accounting pronouncements and any withholding satisfied
through a net-settlement shall be limited to the minimum statutory withholding
requirements.
(c) Awards
received by a Participant under this Plan shall not be deemed a part of a
Participant’s regular, recurring compensation for purposes of any termination,
indemnity or severance pay laws and shall not be included in, nor have any
effect on, the determination of benefits under any other employee benefit plan,
contract or similar arrangement provided by the Company or an Affiliate, unless
expressly so provided by such other plan, contract or arrangement, or unless the
Board so determines.
(d) Subject
to the provisions of the Plan, (i) no Award and no right under any Award
shall be assignable, alienable, saleable or transferable by a Participant
otherwise than by will or by the laws of descent and distribution, provided, however, that, if so
determined by the Board, a Participant may, in the manner established by the
Board, designate a beneficiary or beneficiaries to exercise the rights of the
Participant, and to receive any property distributable, with respect to any
Award upon the death of the Participant, (ii) each Award, and each right
under any Award, shall be exercisable during the Participant’s lifetime only by
the Participant or, if permissible under applicable law, by the Participant’s
guardian or legal representative, and (iii) no Award and no right under any
such Award, may be pledged, alienated, attached, or otherwise encumbered, and
any purported pledge, alienation, attachment or encumbrance thereof shall be
void and unenforceable against the Company. The provisions of this
paragraph shall not apply to any Award which has been fully exercised, earned or
paid, as the case may be, and shall not preclude forfeiture of an Award in
accordance with the terms thereof.
(e) This
Plan shall be unfunded and the Company shall not be required to segregate any
assets that may at any time be represented by Awards under this
Plan. Neither the Company, its Affiliates, nor the Board shall be
deemed to be a trustee of any amounts to be paid under this Plan nor shall
anything contained in this Plan or any action taken pursuant to its provisions
create or be construed to create a fiduciary relationship between the Company
and/or its Affiliates, and a Participant or Successor. To the extent
any person acquires a right to receive an Award under this Plan, such right
shall be no greater than the right of an unsecured general creditor of the
Company.
(f) Any
liability of the Company to any Participant with respect to an Award shall be
based solely upon contractual obligations created by this Plan and the
applicable Agreement. Except as may be required by law, neither the
Company nor any member or former member of the Board, nor any other person
participating (including participation pursuant to a delegation of authority
hereunder) in any determination of any question under this Plan, or in the
interpretation, administration or application of this Plan, shall have any
liability to any party for any action taken, or not taken, under this
Plan.
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(g) No
certificate for Shares distributable pursuant to this Plan shall be issued and
delivered unless the issuance of such certificate complies with all applicable
legal requirements, including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act of 1933, as
amended and in effect from time to time or any successor statute, the Exchange
Act and the requirements of the exchanges on which the Company’s Shares may, at
such time be listed.
(h) To
the extent that federal laws do not otherwise control, this Plan and all
determinations made and actions taken pursuant to this Plan shall be governed by
the laws of Delaware and construed accordingly.
(i) In
the event that any provision of this Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining
provisions of this Plan, and this Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
(j) No
fractional shares shall be issued or delivered pursuant to this Plan or any
Agreement, and the Board shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any fractional shares, or
whether such fractional Shares or any rights thereto shall be canceled,
terminated, or otherwise eliminated.
(k) Notwithstanding
any provision of the Plan or an Agreement to the contrary, if any Award or
benefit provided under this Plan is subject to the provisions of
Section 409A, the provisions of the Plan and any applicable Agreement shall
be administered, interpreted and construed in a manner necessary to comply with
Section 409A or an exception thereto (or disregarded to the extent such
provision cannot be so administered, interpreted or construed). The following
provisions shall apply, as applicable:
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(i)
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For
purposes of Section 409A, and to the extent applicable to any Award
or benefit under the Plan, it is intended that distribution events qualify
as permissible distribution events for purposes of Section 409A and
shall be interpreted and construed accordingly. With respect to
payments subject to Section 409A, the Company reserves the right to
accelerate and/or defer any payment to the extent permitted and consistent
with Section 409A. Whether a Participant has Separated
from Service will be determined based on all of the facts and
circumstances and, to the extent applicable to any Award or benefit, in
accordance with the guidance issued under
Section 409A. For this purpose, a Participant will be
presumed to have experienced a Separation from Service when it is
anticipated that the level of bona fide services
performed permanently will decrease to a level less than twenty percent
(20%) of the average level of bona fide services
performed by the Participant during the immediately preceding thirty-six
(36) month period or such other applicable period as provided by
Section 409A.
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(ii)
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The
Board, in its discretion, may specify the conditions under which the
payment of all or any portion of any Award may be deferred until a later
date. Deferrals shall be for such periods or until the
occurrence of such events, and upon such terms and conditions, as the
Board shall determine in its discretion, in accordance with the provisions
of Section 409A, the regulations and other binding guidance
promulgated thereunder; provided, however, that no deferral shall be
permitted with respect to Awards to the extent it would result in a
violation of Section 409A. An election shall be made by
filing an election with the Company (on a form provided by the Company) on
or prior to December 31st of the calendar year immediately preceding
the beginning of the calendar year (or other applicable service period) to
which such election relates (or at such other date as may be specified by
the Board to the extent consistent with Section 409A) and shall be
irrevocable for such applicable calendar year (or other applicable service
period).
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xii
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(iii)
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The
grant of Options and stock appreciation rights shall be granted under
terms and conditions consistent with Treas. Reg. § 1.409A-1(b)(5)
such that any such Award does not constitute a deferral of compensation
under Section 409A. Accordingly, any such Award may be
granted with respect to Stock of the Company and any Subsidiary and
Affiliate in which the Company has a controlling interest. In
determining whether the Company has a controlling interest, the rules of
Treas. Reg. § 1.414(c)-2(b)(2)(i) shall apply; provided that the
language “at least 50 percent” shall be used instead of “at least
80 percent” in each place it appears; provided, further, where
legitimate business reasons exist (within the meaning of Treas. Reg.
§ 1.409A-1(b)(5)(iii)(E)(i)), the language “at least 20 percent”
shall be used instead of “at least 80 percent” in each place it
appears. The rules of Treas. Reg. §§ 1.414(c)-3 and
1.414(c)-4 shall apply for purposes of determining ownership
interests.
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(iv)
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In
no event shall any member of the Board or the Company have any liability
to any Participant (or any other Person) due to the failure of an Award to
satisfy the requirements of
Section 409A.
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This
Nu Horizons Electronics Corp. 2010 Outside Directors’ Stock Incentive Plan
has been duly adopted by the Board on May 20, 2010 and approved by shareholders
on July 29, 2010.
xiii