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EXCEL - IDEA: XBRL DOCUMENT - RALPH LAUREN CORP | Financial_Report.xls |
10-Q - FORM 10-Q - RALPH LAUREN CORP | y85876e10vq.htm |
EX-32.1 - EX-32.1 - RALPH LAUREN CORP | y85876exv32w1.htm |
EX-10.5 - EX-10.5 - RALPH LAUREN CORP | y85876exv10w5.htm |
EX-32.2 - EX-32.2 - RALPH LAUREN CORP | y85876exv32w2.htm |
EX-31.2 - EX-31.2 - RALPH LAUREN CORP | y85876exv31w2.htm |
EX-10.3 - EX-10.3 - RALPH LAUREN CORP | y85876exv10w3.htm |
EX-31.1 - EX-31.1 - RALPH LAUREN CORP | y85876exv31w1.htm |
EX-10.1 - EX-10.1 - RALPH LAUREN CORP | y85876exv10w1.htm |
EX-10.2 - EX-10.2 - RALPH LAUREN CORP | y85876exv10w2.htm |
EXHIBIT 10.4
POLO
RALPH LAUREN CORPORATION
2010
LONG-TERM STOCK INCENTIVE PLAN
As
adopted on August 5, 2010
Section 1. PURPOSE
AND HISTORY. The purposes of this Polo Ralph
Lauren Corporation 2010 Long-Term Stock Incentive Plan are to
promote the interests of Polo Ralph Lauren Corporation and its
stockholders by (i) attracting and retaining exceptional
directors, officers and other employees and third party service
providers of the Company and its Subsidiaries, as defined below;
(ii) motivating such individuals by means of
performance-related incentives to achieve longer-range
performance goals; and (iii) enabling such individuals to
participate in the long-term growth and financial success of the
Company. The Plan was originally adopted by the Companys
Board of Directors on June 17, 2010, subject to the
approval of the Companys stockholders at the
Companys 2010 annual meeting of stockholders.
Section 2. DEFINITIONS. As
used in the Plan, the following terms shall have the meanings
set forth below:
Affiliate shall mean (i) any Person
that, directly or indirectly, is controlled by, or controls or
is under common control with, the Company and (ii) any
entity in which the Company has a significant equity interest,
in either case as determined by the Committee.
Award shall mean any Option, Stock
Appreciation Right, Restricted Stock Award, Restricted Stock
Unit Award, Performance Award, Other Stock-Based Award or
Performance Compensation Award.
Award Agreement shall mean any agreement,
contract, or other instrument or document, in any form (written
or electronic) as determined by the Committee (including,
without limitation, a Board or Committee resolution, an
employment agreement, a notice, a certificate or a letter),
evidencing any Award or the terms and conditions thereof, which
may, but need not, be executed or acknowledged by a Participant.
Board shall mean the Board of Directors of
the Company.
Cause shall mean in the case of a particular
Award, unless the applicable Award Agreement states otherwise,
(i) the Company or an Affiliate having cause to
terminate a Participants employment or service, as defined
in any employment or consulting agreement between the
Participant and the Company or an Affiliate in effect at the
time of such termination or (ii) in the absence of any such
employment or consulting agreement (or the absence of any
definition of Cause contained therein):
(A) failure by the Participant to perform the duties of the
Participant to the Company or an Affiliate (other than due to
his or her Disability), provided that such conduct shall not
constitute Cause unless and until such failure by Participant to
perform his or her duties has not been cured to the satisfaction
of the Company, in its sole discretion, within fifteen
(15) days after notice of such failure has been given by
the Company to Participant; (B) an act of fraud,
embezzlement, theft, breach of fiduciary duty, dishonesty, or
any other misconduct or any violation of law (other than a
traffic violation) committed by the Participant; (C) any
action by the Participant causing damage to or misappropriation
of the Companys assets; (D) the Participants
wrongful disclosure of confidential information of the Company
or any of its Affiliates; (E) the Participants breach
of (x) any non-competition, non-solicitation,
non-disparagement or other restrictive covenants to which he or
she is subject under any employment or consulting agreement or
otherwise,
and/or
(y) the Participants duty of loyalty; (F) the
Participants breach of any employment policy of the
Company, including, but not limited to, conduct relating to
falsification of business records, violation of the
Companys code of business conduct & ethics,
harassment, creation of a hostile work environment, excessive
absenteeism, insubordination, violation of the Companys
policy on drug & alcohol use, or violent acts or
threats of violence; (G) performance by the Participant of
his or her employment duties in a manner deemed by the
Committee, in its sole discretion, to be grossly negligent; or
(H) the commission of any act by the Participant, whether
or not performed in the workplace, which subjects or, if
publicly known, would be likely to subject the Company to public
ridicule or embarrassment, or would likely be detrimental or
damaging to the Companys reputation, goodwill, or
relationships with its customers,
suppliers, vendors, licensees or employees. Any determination of
whether Cause exists shall be made by the Committee in its sole
discretion.
Change of Control shall mean the occurrence
of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the
Company to any person or group (as such
terms are used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act other than Permitted Holders; (ii) any person
or group is or becomes the beneficial owner (as
defined in
Rules 13d-3
and 13d-5
under the Exchange Act, except that a person shall be deemed to
have beneficial ownership of all Shares that any
such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50 percent of the
total voting power of the voting stock of the Company, including
by way of merger, consolidation or otherwise; provided, however,
that for purposes of this Plan, the following acquisitions shall
not constitute a Change in Control: (I) any acquisition by
the Company or any Affiliate, (II) any acquisition by any
employee benefit plan sponsored or maintained by the Company or
any Affiliate, (III) any acquisition by one or more of the
Permitted Holders, or (IV) any acquisition which complies
with clauses (A), (B) and (C) of subsection (v)
below; (iii) during any period of twelve
(12) consecutive months, Present
and/or New
Directors cease for any reason to constitute a majority of the
Board; (iv) the Permitted Holders beneficial
ownership of the total voting power of the voting stock of the
Company falls below 30 percent and either Ralph Lauren is
not nominated for a position on the Board, or he stands for
election to the Board and is not elected; (v) the
consummation of a reorganization, recapitalization, merger,
consolidation, statutory share exchange or similar form of
corporate transaction involving the Company that requires the
approval of the Companys stockholders, whether for such
transaction or the issuance of securities in the transaction (a
Business Combination), if immediately following such
Business Combination: (A) more than 50% of the total voting
power of (x) the entity resulting from such Business
Combination (the Surviving Company), or (y) if
applicable, the ultimate parent entity that directly or
indirectly has beneficial ownership of sufficient voting
securities eligible to elect a majority of the members of the
board of directors (or the analogous governing body) of the
Surviving Company (the Parent Company), is
represented by the Shares that were outstanding immediately
prior to such Business Combination (or, if applicable, is
represented by shares into which the shares of voting stock of
the Company were converted pursuant to such Business
Combination), and such voting power among the holders thereof is
in substantially the same proportion as the voting power was
among the holders of the Shares that were outstanding
immediately prior to the Business Combination, (B) no
person (other than any employee benefit plan sponsored or
maintained by the Surviving Company or the Parent Company, or
one or more Permitted Holders), is or becomes the beneficial
owner, directly or indirectly, of 50% or more of the total
voting power of the outstanding voting securities eligible to
elect members of the board of directors of the Parent Company
(or the analogous governing body) (or, if there is no Parent
Company, the Surviving Company) and (C) at least a majority
of the members of the board of directors (or the analogous
governing body) of the Parent Company (or, if there is no Parent
Company, the Surviving Company) following the consummation of
the Business Combination were Board members at the time of the
Boards approval of the execution of the initial agreement
providing for such Business Combination; or (vi) the
stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Code shall mean the Internal Revenue Code of
1986, as amended from time to time.
Committee shall mean either (i) the
Board or (ii) a committee of the Board designated by the
Board to administer the Plan and composed of not less two
directors, each of whom is required to be a Non-Employee
Director (within the meaning of
Rule 16b-3)
and an outside director (within the meaning of
Section 162(m) of the Code) to the extent
Rule 16b-3
and Section 162(m) of the Code, respectively, are
applicable to the Company and the Plan. If at any time such a
committee has not been so designated, the Board shall constitute
the Committee.
Company shall mean Polo Ralph Lauren
Corporation, together with any successor thereto.
Disability shall mean that as a result of a
Participants incapacity due to physical or mental illness,
the Participant shall have been (or the Committee reasonably
determines that the Participant is reasonably likely to
2
be) absent and unable to perform the duties of the
Participants position on a full-time basis for an entire
period of six consecutive months.
Effective Date shall mean the date on which
this Plan is approved by the Stockholders of the Company at the
Companys 2010 annual meeting of Stockholders.
Exchange Act shall mean the Securities
Exchange Act of 1934, as amended.
Fair Market Value shall mean, (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 Committee and
(B) with respect to the Shares, as of any date,
(i) the mean between the high and low sales prices of the
Shares (provided that the Committee may in its discretion use
the closing sales price) as reported on the New York Stock
Exchange for such date (or if not then trading on the New York
Stock Exchange, the mean between the high and low sales price of
the Shares (provided that the Committee may in its discretion
use the closing sales price) on the stock exchange or
over-the-counter
market on which the Shares are principally trading on such
date), or if, there were no sales on such date, on the closest
preceding date on which there were sales of Shares or
(ii) in the event there shall be no public market for the
Shares on such date, the fair market value of the Shares as
determined in good faith by the Committee.
Full Value Award shall mean an Award which is
other than in the form of an Option or Stock Appreciation Right,
and that is settled by the issuance of Shares.
Good Reason shall mean in the case of a
particular Award, unless the applicable Award Agreement states
otherwise, (i) the Participant having good
reason to terminate his or her employment or service, as
defined in any employment or consulting agreement between the
Participant and the Company or an Affiliate in effect at the
time of such termination or (ii) in the absence of any such
employment or consulting agreement (or the absence of any
definition of good reason contained therein), Good
Reason shall not apply to such Participant.
Incentive Stock Option shall mean a right to
purchase Shares from the Company that is granted under
Section 6 of the Plan and that is intended to meet the
requirements of Section 422 of the Code or any successor
provision thereto.
Negative Discretion shall mean the discretion
authorized by the Plan to be applied by the Committee to
eliminate or reduce the size of a Performance Compensation
Award; PROVIDED that the exercise of such discretion would not
cause the Performance Compensation Award to fail to qualify as
performance-based compensation under
Section 162(m) of the Code. By way of example and not by
way of limitation, in no event shall any discretionary authority
granted to the Committee by the Plan including, but not limited
to, Negative Discretion, be used to (a) grant or provide
payment in respect of Performance Compensation Awards for a
Performance Period if the Performance Goals for such Performance
Period have not been attained; or (b) increase a
Performance Compensation Award above the maximum amount payable
under Sections 4(a) or 11(d)(vi) of the Plan.
Notwithstanding anything herein to the contrary, in no event
shall Negative Discretion be exercised by the Committee with
respect to any Option or Stock Appreciation Right (other than an
Option or Stock Appreciation Right that is intended to be a
Performance Compensation Award under Section 11 of the
Plan).
New Directors shall mean any directors whose
election by the Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority
of the directors of the Company who, at the time of such vote,
were either Present Directors or New Directors but excluding any
such individual whose initial assumption of office occurs solely
as a result of an actual or threatened proxy contest with
respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board.
Non-Qualified Stock Option shall mean a right
to purchase Shares from the Company that is granted under
Section 6 of the Plan and that is not intended to be an
Incentive Stock Option.
Option shall mean an Incentive Stock Option
or a Non-Qualified Stock Option.
3
Other Stock-Based Award shall mean any right
granted under Section 10 of the Plan.
Participant shall mean any Person eligible to
receive an Award under Section 5 of the Plan and selected
by the Committee to receive an Award under the Plan.
Performance Award shall mean any right
granted under Section 9 of the Plan.
Performance Compensation Award shall mean any
Award designated by the Committee as a Performance Compensation
Award pursuant to Section 11 of the Plan.
Performance Criteria shall mean the criterion
or criteria that the Committee shall select for purposes of
establishing the Performance Goal(s) for a Performance Period
with respect to any Performance Compensation Award under the
Plan. The Performance Criteria that will be used to establish
the Performance Goal(s) shall be based on the attainment of
specific levels of performance of the Company (and/or one or
more Subsidiaries, Affiliates, divisions or operational
and/or
business units, product lines, brands, business segments,
administrative departments or any combination of the foregoing)
and shall be limited to the following: (a) net earnings or
net income (before or after taxes); (b) basic or diluted
earnings per share (before or after taxes); (c) net revenue
or net revenue growth; (d) gross revenue or gross revenue
growth, or gross profit or gross profit growth; (e) net
operating profit (before or after taxes); (f) return
measures (including, but not limited to, return on investment,
assets, capital, employed capital, invested capital, equity, or
sales); (g) cash flow measures (including, but not limited
to, operating cash flow, free cash flow, and cash flow return on
capital), which may but are not required to be measured on a per
share basis; (h) earnings before or after taxes, interest,
depreciation
and/or
amortization; (i) gross or net operating margins;
(j) productivity ratios; (k) share price (including,
but not limited to, growth measures and total stockholder
return); (l) expense targets or cost reduction goals;
(m) general and administrative expense savings;
(n) operating efficiency; (o) objective measures of
customer satisfaction; (p) working capital targets;
(q) measures of economic value added or other value
creation metrics; (r) inventory control;
(s) enterprise value; (t) customer retention;
(u) competitive market metrics; (v) employee
retention; (w) timely completion of new product rollouts;
(x) timely launch of new facilities; (y) objective
measures of personal targets, goals or completion of projects
(including but not limited to succession and hiring projects,
completion of specific acquisitions, reorganizations or other
corporate transactions or capital-raising transactions,
expansions of specific business operations and meeting
divisional or project budgets); (z) royalty income; (aa)
same store sales (comparable sales), comparisons of continuing
operations to other operations; (bb) market share; (cc) new
store openings (gross or net), store remodelings; (dd) cost
of capital, debt leverage year-end cash position or book value;
(ee) strategic objectives, development of new product lines and
related revenue, sales and margin targets, franchisee growth and
retention, menu design and growth, co-branding or international
operations; or (ii) any combination of the foregoing. Any
one or more of the Performance Criteria may be stated as a
percentage of another Performance Criterion, or used on an
absolute or relative basis to measure the performance of the
Company, Subsidiary
and/or
Affiliate as a whole or any divisions or operational
and/or
business units, product lines, brands, business segments, or
administrative departments of the Company, Subsidiary
and/or
Affiliate or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Criteria may be
compared to the performance of a group of comparator companies,
or published or special index that the Committee, in its sole
discretion, deems appropriate, or compared to various stock
market indices. The Committee also has the authority to provide
for accelerated vesting of any Award based on the achievement of
Performance Goals pursuant to the Performance Criteria specified
in this paragraph. To the extent required under
Section 162(m) of the Code, the Committee shall, within the
first 90 days of a Performance Period (or, if longer,
within the maximum period allowed under Section 162(m) of
the Code), define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such
Performance Period. In the event that applicable tax
and/or
securities laws change to permit Committee discretion to alter
the governing Performance Criteria without obtaining stockholder
approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder
approval.
Performance Formula shall mean, for a
Performance Period, the one or more objective formulas applied
against the relevant Performance Goal to determine, with regard
to the Performance Compensation
4
Award of a particular Participant, whether all, some portion but
less than all, or none of the Performance Compensation Award has
been earned for the Performance Period.
Performance Goals shall mean, for a
Performance Period, the one or more goals established by the
Committee for the Performance Period based upon the Performance
Criteria. The Committee is authorized at any time during the
first 90 days of a Performance Period, or at any time
thereafter (but only to the extent the exercise of such
authority after the first 90 days of a Performance Period
would not cause the Performance Compensation Awards granted to
any Participant for the Performance Period to fail to qualify as
performance-based compensation under
Section 162(m) of the Code), in its sole and absolute
discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period to the extent permitted under
Section 162(m) of the Code in order to prevent the dilution
or enlargement of the rights of Participants based on the
following events: (a) asset write-downs,
(b) litigation or claim judgments or settlements,
(c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported
results, (d) any reorganization and restructuring programs,
(e) extraordinary nonrecurring items as described in the
Financial Accounting Standards Board Accounting Standards
Codification Topic
225-20 (or
any successor pronouncement thereto)
and/or in
managements discussion and analysis of financial condition
and results of operations appearing in the Companys annual
report to stockholders for the applicable year,
(f) acquisitions or divestitures, (g) any other
specific, unusual or nonrecurring events, or objectively
determinable category thereof, (h) foreign exchange gains
and losses, and (i) a change in the Companys fiscal
year. To the extent such inclusions or exclusions affect Awards
to Participants, they shall be prescribed in a form that meets
the requirements of Section 162(m) of the Code for
deductibility.
Performance Period shall mean the one or more
periods of time of at least one year in duration, as the
Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of
determining a Participants right to and the payment of a
Performance Compensation Award.
Permitted Holders shall mean, as of the date
of determination, (i) any and all of Ralph Lauren, his
spouse, his siblings and their spouses, and descendants of any
of them (whether natural or adopted) (collectively, the
Lauren Group) and (ii) any trust established
and maintained primarily for the benefit of any member of the
Lauren Group and any entity controlled by any member of the
Lauren Group.
Person shall mean any individual,
corporation, partnership, association, joint-stock company,
trust, unincorporated organization, government or political
subdivision thereof or other entity.
Plan shall mean this Polo Ralph Lauren
Corporation 2010 Long-Term Stock Incentive Plan.
Present Directors shall mean individuals who
at the beginning of any one year period were members of the
Board.
Prior Plan shall mean the Polo Ralph Lauren
Corporation 1997 Long-Term Stock Incentive Plan, as amended.
Restricted Stock shall mean any Share granted
under Section 8 of the Plan.
Restricted Stock Unit shall mean any unit
granted under Section 8 of the Plan.
Rule 16b-3
shall mean
Rule 16b-3
as promulgated and interpreted by the SEC under the Exchange
Act, or any successor rule or regulation thereto as in effect
from time to time.
SEC shall mean the Securities and Exchange
Commission or any successor thereto and shall include the Staff
thereof.
Shares shall mean the shares of Class A
Common Stock of the Company, $.01 par value, or such other
securities of the Company (i) into which such common shares
shall be changed by reason of a recapitalization, merger,
consolidation,
split-up,
combination, exchange of shares or other similar transaction or
(ii) as may be determined by the Committee pursuant to
Section 4(b).
Stock Appreciation Right shall mean any right
granted under Section 7 of the Plan.
5
Subsidiary shall mean (i) any entity
that, directly or indirectly, is controlled by the Company and
(ii) any entity in which the Company has a significant
equity interest, in either case as determined by the Committee.
Substitute Awards shall have the meaning
specified in Section 4(c).
Third Party Service Provider means any
consultant, agent, advisor, or independent contractor who is a
natural person and who renders services to the Company, a
Subsidiary, or an Affiliate, that (a) are not in connection
with the offer and sale of the Companys securities in a
capital raising transaction, and (b) do not directly or
indirectly promote or maintain a market for the Companys
securities.
Section 3. EFFECTIVE
DATE AND ADMINISTRATION.
(a) The Plan shall be effective as of the Effective Date.
The expiration date of the Plan, on and after which date no
Awards may be granted hereunder, shall be the tenth anniversary
of the Effective Date; provided, however, that
such expiration shall not affect Awards then outstanding, and
the terms and conditions of the Plan shall continue to apply to
such Awards.
(b) The Plan shall be administered by the Committee.
Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on
the Committee by the Plan, the Committee shall have full power
and authority to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to
a Participant and designate those Awards which shall constitute
Performance Compensation Awards; (iii) determine the number
of Shares to be covered by, or with respect to which payments,
rights, or other matters are to be calculated in connection
with, Awards; (iv) determine the terms and conditions of
any Award; (v) determine whether, to what extent, and under
what circumstances Awards may be settled or exercised in cash,
Shares, other securities, other Awards or other property, or
canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or
suspended; (vi) 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 (subject to Section 162(m) of the Code with
respect to Performance Compensation Awards) shall be deferred
either automatically or at the election of the holder thereof or
of the Committee; (vii) interpret, administer reconcile any
inconsistency, correct any default
and/or
supply any omission in the Plan and any instrument or agreement
relating to, or Award made under, the Plan;
(viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; (ix) establish
and administer Performance Goals and certify whether, and to
what extent, they have been attained; and (x) make any
other determination and take any other action that the Committee
deems necessary or desirable for the administration of the Plan.
(c) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall
be within the sole discretion of the Committee, may be made at
any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant,
any holder or beneficiary of any Award, and any stockholder.
(d) The mere fact that a Committee member shall fail to
qualify as a Non-Employee Director or outside
director within the meaning of
Rule 16b-3
and Code Section 162(m), respectively, shall not invalidate
any award made by the Committee which award is otherwise validly
made under the Plan.
(e) No member of the Board, the Committee or any employee
or agent of the Company (each such person, an
Indemnifiable Person) shall be liable for any action
taken or omitted to be taken or any determination made with
respect to the Plan or any Award hereunder (unless constituting
fraud or a willful criminal act or omission). Each Indemnifiable
Person shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense
(including attorneys fees) that may be imposed upon or
incurred by such Indemnifiable Person in connection with or
resulting from any action, suit or proceeding to which such
Indemnifiable Person may be a party or in which such
Indemnifiable Person may be involved by reason of any action
taken or omitted to be taken or determination made under the
Plan or any Award Agreement and against and from any and all
amounts paid by such Indemnifiable Person with the
Companys approval, in settlement thereof, or paid by such
Indemnifiable Person in satisfaction of any judgment in any such
action, suit or proceeding against such Indemnifiable Person,
and the Company shall advance to such Indemnifiable Person any
such expenses promptly upon written request (which
6
request shall include an undertaking by the Indemnifiable Person
to repay the amount of such advance if it shall ultimately be
determined as provided below that the Indemnifiable Person is
not entitled to be indemnified); provided that the Company shall
have the right, at its own expense, to assume and defend any
such action, suit or proceeding and once the Company gives
notice of its intent to assume the defense, the Company shall
have sole control over such defense with counsel of the
Companys choice. The foregoing right of indemnification
shall not be available to an Indemnifiable Person to the extent
that a final judgment or other final adjudication (in either
case not subject to further appeal) binding upon such
Indemnifiable Person determines that the acts or omissions or
determinations of such Indemnifiable Person giving rise to the
indemnification claim resulted from such Indemnifiable
Persons fraud or willful criminal act or omission or that
such right of indemnification is otherwise prohibited by law or
by the Companys Certificate of Incorporation or By Laws.
The foregoing right of indemnification shall not be exclusive of
or otherwise supersede any other rights of indemnification to
which such Indemnifiable Persons may be entitled under the
Companys Amended and Restated Certificate of Incorporation
or By Laws, as a matter of law, individual indemnification
agreement or contract or otherwise, or any other power that the
Company may have to indemnify such Indemnifiable Persons or hold
them harmless.
(f) With respect to any Performance Compensation Award
granted under the Plan, the Plan shall be interpreted and
construed in accordance with Section 162(m) of the Code.
(g) Notwithstanding the foregoing, the Committee may
delegate, in a manner consistent with Section 157(c) of the
Delaware General Corporation Law (or other applicable law), to
one or more officers of the Company (i) the authority to
grant awards to Participants who are not officers or directors
of the Company subject to Section 16 of the Exchange Act or
covered employees within the meaning of
Section 162(m) of the Code or (ii) the authority to
make certain determinations permitted or required to be made by
the Committee under the Plan (including, without limitation,
determinations relating to the existence of Cause or Disability).
(h) Notwithstanding anything to the contrary contained in
the Plan, the Board may, in its sole discretion, at any time and
from time to time, grant Awards and administer the Plan with
respect to such Awards. Any such actions by the Board shall be
subject to the applicable rules of the New York Stock Exchange
or any other securities exchange or inter-dealer quotation
system on which the Common Stock is listed or quoted. In any
such case, the Board shall have all the authority granted to the
Committee under the Plan.
Section 4. SHARES AVAILABLE
FOR AWARDS.
(a) SHARES AVAILABLE. Subject to
adjustment as provided in Section 4(b), the aggregate
number of Shares with respect to which Awards may be granted
under the Plan shall be the sum (such sum, the Absolute
Share Limit) of (i) the number of Shares remaining
available for issuance as of the Effective Date under the Prior
Plan that are not subject to outstanding awards under the Prior
Plan plus (ii) 3,000,000; the maximum number of Shares with
respect to which Awards may be granted to any Participant who is
a director of the Company but not an employee of the Company in
any fiscal year may not exceed 25,000; the maximum number of
Shares with respect to which Options and Stock Appreciation
Rights may be granted to any Participant in any fiscal year
shall be 1,000,000 and the maximum number of Shares which may be
paid to a Participant in the Plan in connection with the
settlement of any Award(s) designated as Performance
Compensation Awards in respect of a single Performance
Period shall be 1,000,000 or, in the event such Performance
Compensation Award is paid in cash, the equivalent cash value
thereof. In addition, of the Shares reserved for issuance under
the Plan pursuant to this Section 4(a), no more than the
Absolute Share Limit may be issued pursuant to Incentive Stock
Options. If, after the Effective Date of the Plan, any Shares
covered by an Award granted under the Plan or an award granted
under the Prior Plan, or to which such an Award relates, are
forfeited, or if an Award granted under the Plan (or an award
granted under the Prior Plan) has expired, terminated or been
canceled for any reason whatsoever (other than by reason of
exercise or vesting), then the Shares covered by such Award (or
award granted under the Prior Plan) shall again be, or shall
become, Shares with respect to which Awards may be granted
hereunder. In addition, Shares delivered (either directly or by
means of attestation or withholding) in full or partial payment
of the exercise price of any Award (or an award granted under
the Prior Plan) or of any tax withholding obligation, shall be
deducted from the number of Shares delivered to the Participant
pursuant to such Award (or award granted under the Prior Plan)
for purposes of determining the number of Shares acquired
pursuant to the Plan.
7
(b) ADJUSTMENTS. Notwithstanding any
provisions of the Plan to the contrary, in the event that the
Committee determines that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split,
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 affects the Shares
such that an adjustment is determined by the Committee in its
discretion to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of
(i) the number of Shares or other securities of the Company
(or number and kind of other securities or property) with
respect to which Awards may be granted, (ii) the number of
Shares or other securities of the Company (or number and kind of
other securities or property) which may be delivered in respect
of Awards or with respect to which Awards may be granted under
the Plan (including without limitation adjusting any or all of
the limitations in Section 4(a) of the Plan),
(iii) the terms of any outstanding Award, including,
without limitation, (1) the number of Shares or other
securities of the Company (or number and kind of other
securities or other property) subject to outstanding Awards or
to which outstanding Awards relate (2) the grant or
exercise price with respect to any Award or (3) any
applicable performance measures (including, without limitation,
Performance Criteria and Performance Goals), (iv) if deemed
appropriate, make provision for a payment in cash, Shares, other
securities or other property, or any combination thereof, to the
holder of an outstanding Award in consideration for the
cancellation of such Award which, in the case of Options and
Stock Appreciation Rights shall equal the excess if any, of the
Fair Market Value of the Shares (which if applicable may be
based upon the price per Share received or to be received by
other stockholders of the Company in such event) subject to such
Options or Stock Appreciation Rights over the aggregate exercise
price or strike price of such Options or Stock Appreciation
Rights (it being understood that, in such event, any Option or
SAR having a per Share exercise price or strike price equal to,
or in excess of, the Fair Market Value of a Share subject
thereto may be canceled and terminated without any payment or
consideration therefor), and (v) accelerating the
exercisability of, lapse of restrictions on, or termination of,
Awards or providing for a period of time (which shall not be
required to be more than ten (10) days) for Participants to
exercise outstanding Awards prior to the occurrence of such
event (and any such Award not so exercised shall terminate upon
the occurrence of such event);
PROVIDED, however, that in the case of any equity
restructuring (within the meaning of the Financial
Accounting Standards Board Accounting Standards Codification
Topic 718 (or any successor pronouncement thereto)), the
Committee shall make an equitable or proportionate adjustment to
outstanding Awards to reflect such equity restructuring. Any
adjustment in Incentive Stock Options under this
Section 4(b) (other than any cancellation of Incentive
Stock Options) shall be made only to the extent not constituting
a modification within the meaning of
Section 424(h)(3) of the Code, and any adjustments under
this Section 4(b) shall be made in a manner which does not
adversely affect the exemption provided pursuant to
Rule 16b-3
under the Exchange Act. Any such adjustment shall be conclusive
and binding for all purposes.
(c) SUBSTITUTE AWARDS. Subject to
Section 12(b), Awards may, in the discretion of the
Committee, be made under the Plan in assumption of, or in
substitution for, outstanding awards previously granted by the
Company or its Affiliates or a company acquired by the Company
or with which the Company combines (Substitute
Awards). The number of Shares underlying any Substitute
Awards shall be counted against the aggregate number of Shares
available for Awards under the Plan.
(d) SOURCES OF SHARES DELIVERABLE UNDER
AWARDS. Any Shares delivered pursuant to an Award
may consist, in whole or in part, of authorized and unissued
Shares, treasury Shares, Shares purchased on the open market, or
by private purchase, or a combination of the foregoing.
Following the Effective Date, no further awards shall be granted
under any Prior Plan.
(e) FULL VALUE AWARDS. Except with
respect to a maximum of five percent (5%) of the Shares
authorized under the Plan, any Full Value Awards that vest
solely on the basis of the Participants continued
employment with or provision of service to the Company shall not
provide for vesting that is any more rapid than annual pro rata
vesting over a three (3) year period, and any Full Value
Awards that vest upon the attainment of performance goals shall
provide for a performance period of at least twelve
(12) months. The vesting of Full Value Awards may only be
accelerated upon (i) death, Disability, retirement or other
termination of employment or service of the Participant or
(ii) a Change of Control.
8
Section 5. ELIGIBILITY. Any
director, officer or employee of, or Third Party Service
Provider to, the Company or any of its Subsidiaries (including
any prospective director, officer, employee or Third Party
Service Provider) shall be eligible to be designated a
Participant.
Section 6. STOCK
OPTIONS.
(a) GRANT. Subject to the provisions of
the Plan, the Committee shall have sole and complete authority
to determine the Participants to whom Options shall be granted,
the number of Shares to be covered by each Option, the exercise
price therefor and the conditions and limitations applicable to
the exercise of the Option. The Committee shall have the
authority to grant Incentive Stock Options, or to grant
Non-Qualified Stock Options, or to grant both types of Options.
In the case of Incentive Stock Options, the terms and conditions
of such grants shall be subject to and comply with such rules as
may be prescribed by Section 422 of the Code, as from time
to time amended, and any regulations implementing such statute.
All Options when granted under the Plan are intended to be
Non-Qualified Stock Options, unless the applicable Award
Agreement expressly states that the Option is intended to be an
Incentive Stock Option. If an Option is intended to be an
Incentive Stock Option, and if for any reason such Option (or
any portion thereof) shall not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, such
Option (or portion thereof) shall be regarded as a Non-Qualified
Stock Option appropriately granted under the Plan; provided that
such Option (or portion thereof) otherwise complies with the
Plans requirements relating to Non-Qualified Stock Options.
(b) EXERCISE PRICE. The Committee shall
establish the exercise price at the time each Option is granted,
which exercise price shall be set forth in the applicable Award
Agreement, but shall be no less than the Fair Market Value of a
Share at the date of grant.
(c) EXERCISE. Each Option shall be
exercisable at such times and subject to such terms and
conditions as the Committee may, in its sole discretion, specify
in the applicable Award Agreement or thereafter. Each Option
shall expire at such time as the Committee shall determine at
the time of grant; provided, however, no Option shall be
exercisable after the tenth anniversary of the grant date. The
Committee may impose such conditions with respect to the
exercise of Options, including without limitation, any relating
to the application of federal or state securities laws, as it
may deem necessary or advisable. Options with an exercise price
equal to or greater than the Fair Market Value per Share as of
the date of grant are intended to qualify as
performance-based compensation under
Section 162(m) of the Code.
(d) PAYMENT.
(i) No Shares shall be delivered pursuant to any exercise
of an Option until payment in full of the aggregate exercise
price therefor is received by the Company. Such payment may be
made (x) in cash, or its equivalent or (y) by
tendering to the Company Shares valued at Fair Market Value at
the time the Option is exercised, which are not the subject of
any pledge or other security interest or which have such other
characteristics, if any, as may be determined by the Committee,
or (z) subject to such rules as may be established by the
Committee, through delivery of irrevocable instructions to a
broker to sell the Shares otherwise deliverable upon the
exercise of the Option and to deliver promptly to the Company an
amount equal to the aggregate exercise price, or by a
combination of the foregoing, provided that the combined value
of all cash and cash equivalents and the Fair Market Value of
any such Shares so tendered to the Company as of the date of
such tender is at least equal to such aggregate exercise price.
(ii) Wherever in this Plan or any Award Agreement a
Participant is permitted to pay the exercise price of an Option
or taxes relating to the exercise of an Option by delivering
Shares, the Participant may, subject to procedures satisfactory
to the Committee, satisfy such delivery requirement by
presenting proof of beneficial ownership of such Shares, in
which case the Company shall treat the Option as exercised
without further payment and shall withhold such number of Shares
from the Shares acquired by the exercise of the Option.
(e) NOTIFICATION UPON DISQUALIFYING DISPOSITION OF AN
INCENTIVE STOCK OPTION. Each Participant awarded
an Incentive Stock Option under the Plan shall notify the
Company in writing immediately after the date he or she makes a
disqualifying disposition of any Shares acquired pursuant to the
exercise of such Incentive Stock Option. A disqualifying
disposition is any disposition (including, without limitation,
any sale) of any Shares acquired pursuant to any Incentive Stock
Option before the later of (A) two years after the Date of
Grant of the Incentive Stock Option or (B) one year after
the date of exercise of the Incentive Stock Option. The Company
9
may, if determined by the Committee and in accordance with
procedures established by the Committee, retain possession, as
agent for the applicable Participant, of any Shares acquired
pursuant to the exercise of an Incentive Stock Option until the
end of the period described in the preceding sentence, subject
to complying with any instructions from such Participant as to
the sale of such Shares.
Section 7. STOCK
APPRECIATION RIGHTS.
(a) GRANT. Subject to the provisions of
the Plan, the Committee shall have sole and complete authority
to determine the Participants to whom Stock Appreciation Rights
shall be granted, the number of Shares to be covered by each
Stock Appreciation Right Award, the strike price thereof (which
shall be no less than the Fair Market Value of a Share at the
date of grant) and the conditions and limitations applicable to
the exercise thereof. Stock Appreciation Rights with a strike
price equal to or greater than the Fair Market Value per Share
as of the date of grant are intended to qualify as
performance-based compensation under
Section 162(m) of the Code. Stock Appreciation Rights may
be granted in tandem with another Award, in addition to another
Award, or freestanding and unrelated to another Award. Stock
Appreciation Rights granted in tandem with or in addition to an
Award may be granted either at the same time as the Award or at
a later time.
(b) EXERCISE AND PAYMENT. A Stock
Appreciation Right shall entitle the Participant to receive an
amount equal to the excess of the Fair Market Value of a Share
on the date of exercise of the Stock Appreciation Right over the
strike price thereof. The Committee shall determine whether a
Stock Appreciation Right shall be settled in cash, Shares or a
combination of cash and Shares.
(c) OTHER TERMS AND CONDITIONS. Subject
to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine, at or after the grant of a Stock
Appreciation Right, the term, methods of exercise, methods and
form of settlement, and any other terms and conditions of any
Stock Appreciation Right; PROVIDED, HOWEVER, that no Stock
Appreciation rights shall be exercisable after the tenth
anniversary of the date of its grant. Any such determination by
the Committee may be changed by the Committee from time to time
and may govern the exercise of Stock Appreciation Rights granted
or exercised prior to such determination as well as Stock
Appreciation Rights granted or exercised thereafter. The
Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it shall deem
appropriate.
Section 8. RESTRICTED
STOCK AND RESTRICTED STOCK UNITS.
(a) GRANT. Subject to the provisions of
the Plan, the Committee shall have sole and complete authority
to determine the Participants to whom Shares of Restricted Stock
and Restricted Stock Units shall be granted, the number of
Shares of Restricted Stock
and/or the
number of Restricted Stock Units to be granted to each
Participant, the duration of the period during which, and the
conditions, if any, under which, the Restricted Stock and
Restricted Stock Units may be forfeited to the Company, and the
other terms and conditions of such Awards.
(b) TRANSFER RESTRICTIONS. Shares of
Restricted Stock and Restricted Stock Units may not be sold,
assigned, transferred, pledged or otherwise encumbered, except,
in the case of Restricted Stock, as provided in the Plan or the
applicable Award Agreements. Upon the grant of Restricted Stock,
the Committee shall cause a stock certificate registered in the
name of the Participant to be issued or shall cause Shares to be
registered in the name of the Participant and held in book-entry
form subject to the Companys directions. The Committee may
also require that certificates issued in respect of Shares of
Restricted Stock be registered in the name of the Participant
and deposited by such Participant, together with a stock power
endorsed in blank, with the Company. Upon the lapse of the
restrictions applicable to such Shares of Restricted Stock, the
Company shall deliver such certificates to the Participant or
the Participants legal representative. Subject to the
restrictions set forth in this Section 8 and the applicable
Award Agreement, the Participant generally shall have the rights
and privileges of a stockholder as to such Restricted Stock,
including without limitation the right to vote such Restricted
Stock. To the extent Shares of Restricted Stock are forfeited,
any stock certificates issued to the Participant evidencing such
shares shall be returned to the Company, and all rights of the
Participant to such Shares and as a stockholder with respect
thereto shall terminate without further obligation on the part
of the Company.
(c) PAYMENT. Each Restricted Stock Unit
shall have a value equal to the Fair Market Value of a Share.
Restricted Stock Units shall be paid in cash, Shares, other
securities or other property, as determined in the sole
discretion of the Committee, upon the lapse of the restrictions
applicable thereto, or otherwise in accordance with
10
the applicable Award Agreement. Dividends paid on any Shares of
Restricted Stock may be paid directly to the Participant,
withheld by the Company subject to vesting of the Restricted
Shares pursuant to the terms of the applicable Award Agreement,
or may be reinvested in additional Shares of Restricted Stock or
in additional Restricted Stock Units, as determined by the
Committee in its sole discretion.
(d) MINIMUM VESTING
REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any Awards of
Shares of Restricted Stock
and/or
Restricted Stock Units that are Full Value Awards and vest
solely on the basis of the Participants continued
employment with or provision of service to the Company shall not
provide for vesting that is any more rapid than annual pro rata
vesting over a three (3) year period, and any Awards of
Shares of Restricted Stock
and/or
Restricted Stock Units that are Full Value Awards and vest upon
the attainment of performance goals (whether or not combined
with other conditions) shall provide for a performance period of
at least twelve (12) months; and (ii) the vesting of
Awards of Shares of Restricted Stock
and/or
Restricted Stock Units that are Full Value Awards may only be
accelerated upon (A) death, Disability, retirement or other
termination of employment or service of the Participant or
(B) a Change of Control.
Section 9. PERFORMANCE
AWARDS.
(a) GRANT. The Committee shall have sole
and complete authority to determine the Participants who shall
receive a Performance Award, which shall consist of
a right which is (i) denominated in cash or Shares,
(ii) valued, as determined by the Committee, in accordance
with the achievement of such performance goals during such
performance periods as the Committee shall establish, and
(iii) payable at such time and in such form as the
Committee shall determine.
(b) TERMS AND CONDITIONS. Subject to the
terms of the Plan and any applicable Award Agreement, the
Committee shall determine the performance goals to be achieved
during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and
kind of any payment or transfer to be made pursuant to any
Performance Award.
(c) PAYMENT OF PERFORMANCE
AWARDS. Performance Awards may be paid in a lump
sum or in installments following the close of the performance
period or, in accordance with procedures established by the
Committee, on a deferred basis.
(d) MINIMUM VESTING
REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any
Performance Awards that are Full Value Awards and vest upon the
attainment of performance goals shall provide for a performance
period of at least twelve (12) months; and (ii) the
vesting of Performance Awards that are Full Value Awards may
only be accelerated upon (A) death, Disability, retirement
or other termination of employment or service of the Participant
or (B) a Change of Control.
Section 10. OTHER
STOCK-BASED AWARDS.
(a) GENERAL. The Committee shall have
authority to grant to Participants an Other Stock-Based
Award, which shall consist of any right which is
(i) not an Award described in Sections 6 through 9
above and (ii) an Award of Shares or an Award 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 deemed by
the Committee to be consistent with the purposes of the Plan;
provided that any such rights must comply, to the extent deemed
desirable by the Committee, with
Rule 16b-3
and applicable law. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the
terms and conditions of any such Other Stock-Based Award,
including the price, if any, at which securities may be
purchased pursuant to any Other Stock-Based Award granted under
this Plan.
(b) DIVIDEND EQUIVALENTS. In the sole and
complete discretion of the Committee, an Award, whether made as
an Other Stock-Based Award under this Section 10 or as an
Award granted pursuant to Sections 6 through 9 hereof, may
provide the Participant with dividends or dividend equivalents,
payable in cash, Shares, other securities or other property on a
current or deferred basis; provided, that no dividend
equivalents shall be payable in respect of outstanding
(i) Options or Stock Appreciation Rights or
(ii) unearned Performance Compensation Awards or other
unearned Awards subject to performance conditions (other than or
in addition to the passage of time) (although
11
dividend equivalents may be accumulated in respect of unearned
Awards and paid after such Awards are earned and become payable
or distributable).
(c) MINIMUM VESTING
REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any
Other Stock-Based Awards that are Full Value Awards
and vest solely on the basis of the Participants continued
employment with or provision of service to the Company shall not
provide for vesting that is any more rapid than annual pro rata
vesting over a three (3) year period, and any Other
Stock-Based Awards that are Full Value Awards and vest
upon the attainment of performance goals shall provide for a
performance period of at least twelve (12) months; and
(ii) the vesting of Other Stock-Based Awards
that are Full Value Awards may only be accelerated for
(A) death, Disability, retirement or other termination of
employment or service of the Participant or (B) a Change of
Control.
Section 11. PERFORMANCE
COMPENSATION AWARDS.
(a) GENERAL. The Committee shall have the
authority, at the time of grant of any Award described in
Sections 6 through 10 (other than Options and Stock
Appreciation Rights granted with an exercise price or strike
price, as the case may be, equal to or greater than the Fair
Market Value per Share on the date of grant), to designate such
Award as a Performance Compensation Award in order to qualify
such Award as performance-based compensation under
Section 162(m) of the Code.
(b) ELIGIBILITY. The Committee will, in
its sole discretion, designate within the first 90 days of
a Performance Period (or, if longer, within the maximum period
allowed under Section 162(m) of the Code) which
Participants will be eligible to receive Performance
Compensation Awards in respect of such Performance Period.
However, designation of a Participant eligible to receive an
Award hereunder for a Performance Period shall not in any manner
entitle the Participant to receive payment in respect of any
Performance Compensation Award for such Performance Period. The
determination as to whether or not such Participant becomes
entitled to payment in respect of any Performance Compensation
Award shall be decided solely in accordance with the provisions
of this Section 11. Moreover, designation of a Participant
eligible to receive an Award hereunder for a particular
Performance Period shall not require designation of such
Participant eligible to receive an Award hereunder in any
subsequent Performance Period and designation of one Person as a
Participant eligible to receive an Award hereunder shall not
require designation of any other Person as a Participant
eligible to receive an Award hereunder in such period or in any
other period.
(c) DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE
COMPENSATION AWARDS. With regard to a particular
Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the type(s) of
Performance Compensation Awards to be issued, the Performance
Criteria that will be used to establish the Performance Goal(s),
the kind(s)
and/or
level(s) of the Performance Goals(s) is(are) to apply to the
Company and the Performance Formula. Within the first
90 days of a Performance Period (or, if longer, within the
maximum period allowed under Section 162(m) of the Code),
the Committee shall, with regard to the Performance Compensation
Awards to be issued for such Performance Period, exercise its
discretion with respect to each of the matters enumerated in the
immediately preceding sentence of this Section 11(c) and
record the same in writing.
(d) PAYMENT OF PERFORMANCE COMPENSATION AWARDS
(i) CONDITION TO RECEIPT OF
PAYMENT. Unless otherwise provided in the
applicable Award Agreement, a Participant must be employed by
the Company on the last day of a Performance Period to be
eligible for payment in respect of a Performance Compensation
Award for such Performance Period.
(ii) LIMITATION. A Participant shall be
eligible to receive payment in respect of a Performance
Compensation Award only to the extent that: (1) the
Performance Goals for such period are achieved; and (2) the
Performance Formula as applied against such Performance Goals
determines that all or some portion of such Participants
Performance Award has been earned for the Performance Period.
(iii) CERTIFICATION. Following the
completion of a Performance Period, the Committee shall meet to
review and certify in writing whether, and to what extent, the
Performance Goals for the Performance Period have been achieved
and, if so, to calculate and certify in writing that amount of
the Performance Compensation Awards
12
earned for the period based upon the Performance Formula. The
Committee shall then determine the actual size of each
Participants Performance Compensation Award for the
Performance Period and, in so doing, may apply Negative
Discretion, if and when it deems appropriate.
(iv) NEGATIVE DISCRETION. In determining
the actual size of an individual Performance Award for a
Performance Period, the Committee may reduce or eliminate the
amount of the Performance Compensation Award earned under the
Performance Formula in the Performance Period through the use of
Negative Discretion if, in its sole judgment, such reduction or
elimination is appropriate.
(v) TIMING OF AWARD PAYMENTS. The Awards
granted for a Performance Period shall be paid to Participants
as soon as administratively possible following completion of the
certifications required by this Section 11.
(vi) MAXIMUM AWARD
PAYABLE. Notwithstanding any provision contained
in this Plan to the contrary, the maximum Performance
Compensation Award payable to any one Participant under the Plan
for a Performance Period is 1,000,000 Shares or, in the
event the Performance Compensation Award is paid in cash, the
equivalent cash value thereof on the last day of the Performance
Period to which such Award relates. Furthermore, any Performance
Compensation Award that has been deferred shall not (between the
date as of which the Award is deferred and the payment date)
increase (A) with respect to Performance Compensation Award
that is payable in cash, by a measuring factor for each fiscal
year greater than a reasonable rate of interest set by the
Committee or (B) with respect to a Performance Compensation
Award that is payable in Shares, by an amount greater than the
appreciation of a Share from the date such Award is deferred to
the payment date.
(e) MINIMUM VESTING
REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any
Performance Compensation Awards that are Full Value Awards and
vest upon the attainment of performance goals shall provide for
a performance period of at least twelve (12) months; and
(ii) the vesting of Performance Compensation Awards that
are Full Value Awards may only be accelerated upon
(A) death, Disability, retirement or other termination of
employment or service of the Participant or (B) a Change of
Control.
Section 12. AMENDMENT
AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may
amend, alter, suspend, discontinue, or terminate the Plan or any
portion thereof at any time; provided that (a) no such
amendment, alteration, suspension, discontinuation or
termination shall be made without stockholder approval if such
approval is necessary to comply with any tax or regulatory
requirement applicable to the Plan; and provided, further, that
any such amendment, alteration, suspension, discontinuance or
termination that would impair the rights of any Participant or
any holder or beneficiary of any Award theretofore granted shall
not to that extent be effective without the consent of the
affected Participant, holder or beneficiary, and (b) no
material revision to the Plan shall be made without stockholder
approval. A material revision shall include, without
limitation: (i) a material increase in the number of Shares
available under the Plan (other than an increase solely to
reflect a reorganization, stock split, merger, spin-off or
similar transaction); (ii) an expansion of the types of
Awards available under the Plan; (iii) a material expansion
of the class of employees, directors or other service providers
eligible to participate in the Plan; (iv) a material
extension of the term of the Plan; (v) a material change to
the method of determining the exercise price of Options or
strike price of Stock Appreciation Rights granted under the
Plan; and (vi) the deletion or limitation of any provision
prohibiting repricing of Options or Stock Appreciation Rights.
(b) AMENDMENTS TO AWARDS. The Committee
may, to the extent consistent with the terms of any applicable
Award Agreement, waive any conditions or rights under, amend any
terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted or the associated Award Agreement,
prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation
or termination that would impair the rights of any Participant
or any holder or beneficiary of any Award theretofore granted
shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary; and provided,
further, that, without stockholder approval, except as otherwise
permitted under Section 4(b), (i) no amendment or
modification may reduce the exercise price of any Option or the
strike price of any Stock Appreciation Right, (ii) the
Committee may not cancel any outstanding Option or Stock
Appreciation Right and replace it with a new Option or Stock
Appreciation Right (with a lower exercise price or strike price,
as the case
13
may be) or other Award or cash in a manner which would either
(A) be reportable on the Companys proxy statement as
Options or Stock Appreciation Rights which have been
repriced (as such term is used in Item 402 of
Regulation S-K
promulgated under the Exchange Act), or (B) cause any
Option or Stock Appreciation Right to fail to qualify for equity
accounting treatment and (iii) the Committee may not take
any other action which is considered a repricing for
purposes of the stockholder approval rules of any applicable
stock exchange on which the securities of the Company are listed.
(c) ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN
UNUSUAL OR NONRECURRING EVENTS. The Committee is
hereby authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including,
without limitation, the actions described in Section 4(b)
hereof) in recognition of unusual or nonrecurring events
(including, without limitation, the events described in
Section 4(b) hereof) affecting the Company, any Affiliate,
or the financial statements of the Company or any Affiliate, or
of changes in applicable laws, rules, rulings, regulations, or
other requirements of any governmental body or securities
exchange or inter-deal quotation system, or accounting
principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan.
(d) FORFEITURE EVENTS. For purposes of
this Section 12(d), a named executive officer
means a Participant who is a named executive officer of the
Company (as defined for purposes of the executive compensation
disclosure rules of the Exchange Act). The Committee may specify
in an Award that a named executive officers rights,
payments, and benefits with respect to an Award shall be subject
to reduction, cancellation, forfeiture, or recoupment, in the
reasonable discretion of the Committee, upon the occurrence of
certain specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award. Such
events may include, but shall not be limited to, termination of
the named executive officers employment for cause,
material violation of material written policies of the Company,
or breach of noncompetition, confidentiality, or other
restrictive covenants that may apply to the named executive
officer, as determined by the Committee in its reasonable
discretion. In addition, with respect to an Award, if, as a
result of a named executive officers intentional
misconduct or gross negligence, as determined by the Committee
in its reasonable discretion, the Company is required to prepare
an accounting restatement due to the material noncompliance of
the Company with any financial reporting requirement under the
securities laws, the Committee may, in its reasonable
discretion, require the named executive officer to promptly
reimburse the Company for the amount of any payment (whether in
cash, Shares, other securities or other property) previously
received by the named executive officer pursuant to any Award
(or otherwise forfeit to the Company any outstanding Award) that
was earned or accrued (or exercised or settled) during the
twelve (12) month period following the earlier of the first
public issuance or filing with the United States Securities and
Exchange Commission of any financial document embodying such
financial reporting requirement that required such accounting
restatement.
Section 13. CHANGE
OF CONTROL. In the event that a
Participants employment with the Company is terminated by
the Company without Cause or by the Participant for Good Reason,
in each case on or within 12 months following the date of a
Change of Control, any outstanding Awards then held by such
affected Participant which are unexercisable or otherwise
unvested shall automatically be deemed exercisable or otherwise
vested, as the case may be, as of immediately prior to such
termination of employment; provided, that in the event the
vesting or exercisability of any Award would otherwise be
subject to the achievement of performance conditions, a portion
of any such Award that shall become fully vested and immediately
exercisable shall be based on (a) actual performance
through the date of termination as determined by the Committee
or (b) if the Committee determines that measurements of
actual performance cannot be reasonably assessed, the assumed
achievement of target performance as determined by the Committee.
Section 14. GENERAL
PROVISIONS.
(a) NONTRANSFERABILITY.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant during the
Participants lifetime, or, if permissible under applicable
law, by the Participants legal guardian or representative.
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(ii) No Award may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a
Participant 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 Affiliate; provided
that the designation of a beneficiary shall not constitute an
assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.
(iii) Notwithstanding the foregoing, the Committee may in
the applicable Award Agreement evidencing an Option granted
under the Plan or at any time thereafter in an amendment to an
Award Agreement provide that Options granted hereunder which are
not intended to qualify as Incentive Stock Options may be
transferred by the Participant to whom such Option was granted
(the Grantee) without consideration, subject to such
rules as the Committee may adopt to preserve the purposes of the
Plan, to:
(A) the Grantees spouse, children or grandchildren
(including adopted and stepchildren and grandchildren)
(collectively, the Immediate Family);
(B) a trust solely for the benefit of the Grantee and his
or her Immediate Family; or
(C) a partnership or limited liability company whose only
partners or stockholders are the Grantee and his or her
Immediate Family members;
(each transferee described in clauses (A), (B) and
(C) above is hereinafter referred to as a Permitted
Transferee); PROVIDED that the Grantee gives the Committee
advance written notice describing the terms and conditions of
the proposed transfer and the Committee notifies the Grantee in
writing that such a transfer would comply with the requirements
of the Plan and any applicable Award Agreement evidencing the
option.
The terms of any option transferred in accordance with the
immediately preceding sentence shall apply to the Permitted
Transferee and any reference in the Plan or in an Award
Agreement to an optionee, Grantee or Participant shall be deemed
to refer to the Permitted Transferee, except that
(a) Permitted Transferees shall not be entitled to transfer
any Options, other than by will or the laws of descent and
distribution; (b) Permitted Transferees shall not be
entitled to exercise any transferred Options unless there shall
be in effect a registration statement on an appropriate form
covering the shares to be acquired pursuant to the exercise of
such Option if the Committee determines that such a registration
statement is necessary or appropriate, (c) the Committee or
the Company shall not be required to provide any notice to a
Permitted Transferee, whether or not such notice is or would
otherwise have been required to be given to the Grantee under
the Plan or otherwise and (d) the consequences of
termination of the Grantees employment by, or services to,
the Company under the terms of the Plan and applicable Award
Agreement shall continue to be applied with respect to the
Grantee, following which the Options shall be exercisable by the
Permitted Transferee only to the extent, and for the periods,
specified in the Plan and the applicable Award Agreement.
(b) NO RIGHTS TO AWARDS. No Participant
or other Person shall have any claim to be granted any Award,
and there is no obligation for uniformity of treatment of
Participants, or holders or beneficiaries of Awards. The terms
and conditions of Awards and the Committees determinations
and interpretations with respect thereto need not be the same
with respect to each Participant (whether or not such
Participants are similarly situated).
(c) SHARE CERTIFICATES. All certificates
for Shares or other securities of the Company or any Affiliate
delivered under the Plan (or, if applicable, a notice evidencing
a book entry notation) pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan
or the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon
which such Shares or other securities are then listed, and any
applicable Federal or state laws, and the Committee may cause a
legend or legends to be put on any such certificates, as
applicable, make appropriate reference to such restrictions.
(d) WITHHOLDING.
(i) A Participant may be required to pay to the Company or
any Affiliate, and the Company or any Affiliate shall have the
right and is hereby authorized to withhold from any Award, from
any payment due or transfer made under any Award or under the
Plan or from any compensation or other amount owing to a
Participant, the amount (in cash, Shares, other securities,
other Awards or other property) of any applicable withholding
taxes in respect of an
15
Award, its exercise, or any payment or transfer under an Award
or under the Plan and to take such other action as may be
necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes. The Committee may
provide for additional cash payments to holders of Awards to
defray or offset any tax arising from the grant, vesting,
exercise or payments of any Award.
(ii) Without limiting the generality of clause (i)
above, a Participant may satisfy, in whole or in part, the
foregoing withholding liability by delivery of Shares owned by
the Participant (which are not subject to any pledge or other
security interest) with a Fair Market Value equal to such
withholding liability or by having the Company withhold from the
number of Shares otherwise issuable pursuant to the exercise of
the option a number of Shares with a Fair Market Value equal to
such withholding liability.
(iii) Notwithstanding any provision of this Plan to the
contrary, in connection with the transfer of an Option to a
Permitted Transferee pursuant to Section 14(a) of the Plan,
the Grantee shall remain liable for any withholding taxes
required to be withheld upon the exercise of such Option by the
Permitted Transferee.
(e) 409A OF THE CODE. Notwithstanding any
provision of the Plan to the contrary, it is intended that the
provisions of this Plan comply with Section 409A of the
Code, and all provisions of this Plan shall be construed and
interpreted in a manner consistent with the requirements for
avoiding taxes or penalties under Section 409A of the Code.
Each Participant is solely responsible and liable for the
satisfaction of all taxes and penalties that may be imposed on
or in respect of such Participant in connection with this Plan
or any other plan maintained by the Company (including any taxes
and penalties under Section 409A of the Code), and neither
the Company nor any Affiliate shall have any obligation to
indemnify or otherwise hold such Participant (or any
beneficiary) harmless from any or all of such taxes or
penalties. Notwithstanding any provision of the Plan to the
contrary and only to the extent required to avoid the imputation
of any tax, penalty or interest pursuant to Section 409A of
the Code, if any Participant is a specified employee
within the meaning of Section 409A(a)(2)(B)(i) of the Code,
no payments in respect of any Award that are deferred
compensation subject to Section 409A of the Code
shall be made to such Participant prior to the date that is six
months after the date of Participants separation
from service (as defined in Section 409A of the Code)
or, if earlier, Participants date of death. Following any
applicable six (6) month delay, all such delayed payments
will be paid in a single lump sum on the earliest permissible
payment date. With respect to any Award that is considered
deferred compensation subject to Section 409A
of the Code, references in the Plan to termination of
employment (and substantially similar phrases) shall mean
separation from service within the meaning of
Section 409A of the Code. Unless otherwise provided by the
Committee, in the event that the timing of payments in respect
of any Award (that would otherwise be considered deferred
compensation subject to Section 409A of the Code)
would be accelerated upon the occurrence of (i) a Change in
Control, no such acceleration shall be permitted unless the
event giving rise to the Change in Control satisfies the
definition of a change in the ownership or effective control of
a corporation, or a change in the ownership of a substantial
portion of the assets of a corporation pursuant to
Section 409A of the Code or (ii) a Disability, no such
acceleration shall be permitted unless the Disability also
satisfies the definition of Disability pursuant to
Section 409A of the Code. For purposes of Section 409A
of the Code, each of the payments that may be made in respect of
any Award granted under the Plan is designated as separate
payments.
(f) AWARD AGREEMENTS. Each Award
hereunder shall be evidenced by an Award Agreement which shall
be delivered to the Participant and shall specify the terms and
conditions of the Award and any rules applicable thereto,
including but not limited to the effect on such Award of the
death, Disability or termination of employment or service of a
Participant and the effect, if any, of such other events as may
be determined by the Committee.
(g) NO LIMIT ON OTHER COMPENSATION
ARRANGEMENTS. Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing
in effect other compensation arrangements, which may, but need
not, provide for the grant of Options, Restricted Stock, Shares
and other types of Awards provided for hereunder (subject to
stockholder approval if such approval is required), and such
arrangements may be either generally applicable or applicable
only in specific cases.
(h) NO RIGHT TO EMPLOYMENT. The grant of
an Award shall not be construed as giving a Participant the
right to be retained in the employ of, or in any consulting
relationship to, the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant
from employment or discontinue any consulting
16
relationship, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.
(i) NO RIGHTS AS STOCKHOLDER. Subject to
the provisions of the applicable Award, no Participant or holder
or beneficiary of any Award shall have any rights as a
stockholder with respect to any Shares to be distributed under
the Plan until he or she has become the holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of
Restricted Stock hereunder, the applicable Award shall specify
if and to what extent the Participant shall not be entitled to
the rights of a stockholder in respect of such Restricted Stock.
(j) GOVERNING LAW. The validity,
construction, and effect of the Plan and any rules and
regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of
New York.
(k) SEVERABILITY. If any provision of the
Plan or any Award is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award under
any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform the applicable laws,
or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent
of the Plan or the Award, such provision shall be stricken as to
such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(l) OTHER LAWS. The Committee may refuse
to issue or transfer any Shares or other consideration under an
Award if, acting in its sole discretion, it determines that the
issuance or transfer of such Shares or such other consideration
might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the
Exchange Act, and any payment tendered to the Company by a
Participant, other holder or beneficiary in connection with the
exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting
the generality of the foregoing, no Award granted hereunder
shall be construed as an offer to sell securities of the
Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that
any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws.
(m) NO TRUST OR
FUND CREATED. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or
any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.
(n) NO FRACTIONAL SHARES. No fractional
Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee 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.
(o) PAYMENTS TO PERSONS OTHER THAN
PARTICIPANTS. If the Committee or the senior
human resource officer of the Company shall find that any Person
to whom any amount is payable under the Plan is unable to care
for his affairs because of illness or accident, or is a minor,
or has died, then any payment due to such Person or his estate
(unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee or the senior human
resource officer of the Company so directs the Company, be paid
to his spouse, child, relative, an institution maintaining or
having custody of such Person, or any other Person deemed by the
Committee to be a proper recipient on behalf of such Person
otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Committee and the
Company therefor.
(p) RELATIONSHIP TO OTHER BENEFITS. No
payment or benefit under the Plan shall be taken into account in
determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company or
any Subsidiary except as otherwise specifically provided in such
other plan.
(q) HEADINGS. Headings are given to the
Sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
17
Section 15. TERM
OF THE PLAN.
(a) EXPIRATION DATE. No Award shall be
granted under the Plan on or after the tenth anniversary of the
Effective Date. Unless otherwise expressly provided in the Plan
or in an applicable Award Agreement, any Award granted hereunder
may, and the authority of the Board or the Committee to amend,
alter, adjust, suspend, discontinue, or terminate any such Award
or to waive any conditions or rights under any such Award shall,
continue after the tenth anniversary of the Effective Date.
(b) SECTION 162(M) REAPPROVAL. The
provisions of the Plan regarding Performance Compensation Awards
shall be disclosed and reapproved by stockholders of the Company
no later than the first stockholder meeting that occurs in the
fifth year following the year that stockholders previously
approved such provisions, in order for Performance Compensation
Awards granted after such time to be exempt from the deduction
limitations of Section 162(m) of the Code. Nothing in this
Section 15(b), however, shall affect the validity of
Performance Compensation Awards granted after such time if such
stockholder approval has not been obtained.
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