Attached files
file | filename |
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8-K - PERPETUAL TECHNOLOGIES, INC. | v196338_8k.htm |
EX-10.1 - PERPETUAL TECHNOLOGIES, INC. | v196338_ex10-1.htm |
EX-10.2 - PERPETUAL TECHNOLOGIES, INC. | v196338_ex10-2.htm |
EX-10.3 - PERPETUAL TECHNOLOGIES, INC. | v196338_ex10-3.htm |
Exhibit
10.4
CHINA
SLP FILTRATON TECHNOLOGY, INC.
2010
STOCK INCENTIVE PLAN
1
TABLE OF
CONTENTS
ARTICLE
I
|
PURPOSE
|
3
|
ARTICLE
II
|
DEFINITIONS
|
3
|
ARTICLE
III
|
ADMINISTRATION
|
7
|
ARTICLE
IV
|
SHARE
LIMITATION
|
10
|
ARTICLE
V
|
ELIGIBILITY –
GENERAL REQUIREMENTS FOR AWARDS
|
13
|
ARTICLE
VI
|
STOCK
OPTIONS
|
13
|
ARTICLE
VII
|
STOCK
APPRECIATION RIGHTS
|
15
|
ARTICLE
VIII
|
RESTRICTED
STOCK
|
18
|
ARTICLE
IX
|
PERFORMANCE
SHARES
|
20
|
ARTICLE
X
|
OTHER
STOCK-BASED AWARDS
|
21
|
ARTICLE
XI
|
PERFORMANCE-BASED
CASH AWARDS
|
22
|
ARTICLE
XII
|
TERMINATION
|
23
|
ARTICLE
XIII
|
CHANGE
IN CONTROL PROVISIONS
|
24
|
ARTICLE
XIV
|
TERMINATION
OR AMENDMENT OF PLAN
|
27
|
ARTICLE
XV
|
UNFUNDED
PLAN
|
28
|
ARTICLE
XVI
|
GENERAL
PROVISIONS
|
28
|
ARTICLE
XVII
|
EFFECTIVE
DATE OF PLAN
|
31
|
ARTICLE XVIII
|
TERM
OF PLAN
|
31
|
ARTICLE
XIX
|
NAME
OF PLAN
|
32
|
2
ARTICLE
I
PURPOSE
The
purpose of this Plan is to enhance the profitability and value of the Company
for the benefit of its stockholders by enabling the Company to offer Eligible
Employees, Consultants and Non-Employee Directors cash and stock-based
incentives in the Company to attract, retain and reward such individuals and
strengthen the mutuality of interests between such individuals and the Company’s
stockholders.
ARTICLE
II
DEFINITIONS
For
purposes of this Plan, the following terms shall have the following
meanings:
2.1
“Acquisition
Event” means a merger or consolidation in
which the Company is not the surviving entity, any transaction that results in
the acquisition of all or substantially all of the Company’s outstanding Common
Stock by a single person or entity or by a group of persons and/or entities
acting in concert, or the sale or transfer of all or substantially all of the
Company’s assets.
2.2
“Affiliate” means each of the following:
(a) any Subsidiary; (b) any Parent; (c) any corporation, trade or
business (including, without limitation, a partnership or limited liability
company) which is directly or indirectly controlled 50% or more (whether by
ownership of stock, assets or an equivalent ownership interest or voting
interest) by the Company; (d) any corporation, trade or business (including,
without limitation, a partnership or limited liability company) which directly
or indirectly controls 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) of the Company; and
(e) any other entity in which the Company or any of its Affiliates has a
material equity interest and which is designated as an “Affiliate” by resolution
of the Committee; provided that the Common Stock subject to any Award
constitutes “service recipient stock” for purposes of Section 409A of the Code
or otherwise does not subject the Award to Section 409A of the
Code.
2.3
“Appreciation
Award” means any Award under this Plan of any
Stock Option, Stock Appreciation Right or Other Stock-Based Award, provided that
such Other Stock-Based Award is based on the appreciation in value of a share of
Common Stock in excess of an amount equal to at least the Fair Market Value of
the Common Stock on the date such Other Stock-Based Award is
granted.
2.4
“Award” means any award under this Plan of any
Stock Option, Stock Appreciation Right, Restricted Stock, Performance Share,
Other Stock-Based Award or Performance-Based Cash Awards. All Awards shall be
granted by, confirmed by, and subject to the terms of, a written agreement
executed by the Company and the Participant.
2.5
“Board” means the Board of Directors of the
Company.
2.6
“Cause” means with respect to a Participant’s
Termination of Employment or Termination of Consultancy from and after the date
hereof, the following: (a) in the case where there is no employment agreement,
consulting agreement, change in control agreement or similar agreement in effect
between the Company or an Affiliate and the Participant at the time of the grant
of the Award (or where there is such an agreement but it does not define “cause”
(or words of like import)), termination due to: (i) a Participant’s conviction
of, or plea of guilty or nolo contendere to, a felony; (ii) perpetration by a
Participant of an illegal act, or fraud which could cause significant economic
injury to the Company; (iii) continuing willful and deliberate failure by the
Participant to perform the Participant’s duties in any material respect,
provided that the Participant is given notice and an opportunity to effectuate a
cure as determined by the Committee; or (iv) a Participant’s willful misconduct
with regard to the Company that could have a material adverse effect on the
Company; or (b) in the case where there is an employment agreement, consulting
agreement, change in control agreement or similar agreement in effect between
the Company or an Affiliate and the Participant at the time of the grant of the
Award that defines “cause” (or words of like import), “cause” as defined under
such agreement; provided, however, that with regard to any agreement under which
the definition of “cause” only applies on occurrence of a change in control,
such definition of “cause” shall not apply until a change in control actually
takes place and then only with regard to a termination thereafter. With respect
to a Participant’s Termination of Directorship, “cause” means an act or failure
to act that constitutes cause for removal of a director under applicable
Delaware law.
3
2.7 “Change
in Control” has the meaning set forth in Section
13.2.
2.8 “Change
in Control Price” has the meaning set forth in Section
13.1.
2.9 “Code” means the Internal Revenue Code of
1986, as amended. Any reference to any section of the Code shall also be a
reference to any successor provision and any Treasury Regulation promulgated
thereunder.
2.10 “Committee” means: (a) with respect to the
application of this Plan to Eligible Employees and Consultants, a committee or
subcommittee of the Board appointed from time to time by the Board, which
committee or subcommittee shall consist of two or more non-employee directors,
each of whom shall be (i) a “non-employee director” as defined in Rule 16b-3;
(ii) to the extent required by Section 162(m) of the Code, an “outside director”
as defined under Section 162(m) of the Code; and (iii) an “independent director”
for purposes of the applicable stock exchange rules; and (b) with respect
to the application of this Plan to Non-Employee Directors, the Board. To the
extent that no Committee exists that has the authority to administer this Plan,
the functions of the Committee shall be exercised by the Board. If for any
reason the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance shall not affect the validity of
Awards, grants, interpretations or other actions of the
Committee.
2.11 “Common
Stock” means the common stock, no par value,
of the Company.
2.12 “Company” means China SLP Filtration Technology,
Inc., a Delaware corporation, and its successors by operation of
law.
2.13 “Consultant” means any individual or entity who
provides bona fide consulting or advisory services to the Company or its
Affiliates pursuant to a written agreement, which are not in connection with the
offer and sale of securities in a capital-raising
transaction.
2.14 “Disability” means with respect to a Participant’s
Termination, a permanent and total disability as defined in Section 22(e)(3) of
the Code. A Disability shall only be deemed to occur at the time of the
determination by the Committee of the Disability. Notwithstanding the foregoing,
for Awards that are subject to Section 409A of the Code, Disability shall mean
that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the
Code.
2.15 “Effective
Date” means the effective date of this Plan
as defined in Article XVII.
2.16 “Eligible
Employees” means each employee of the Company or
an Affiliate.
2.17 “Exchange
Act” means the Securities Exchange Act of
1934, as amended. Any references to any section of the Exchange Act shall also
be a reference to any successor provision.
4
2.18 “Fair
Market Value” means, unless otherwise required by
any applicable provision of the Code or any regulations issued thereunder, as of
any date and except as provided below, the last sales price reported for the
Common Stock on the applicable date: (a) as reported on the principal national
securities exchange in the United States on which it is then traded, or (b) if
the Common Stock is not traded, listed or otherwise reported or quoted, the
Committee shall determine in good faith the Fair Market Value in whatever manner
it considers appropriate taking into account the requirements of Section 409A of
the Code. For purposes of the grant of any Award, the applicable date shall be
the trading day immediately prior to the date on which the Award is granted. For
purposes of the exercise of any Award, the applicable date shall be the date a
notice of exercise is received by the Committee or, if not a day on which the
applicable market is open, the next day that it is open.
2.19 “Family
Member” means “family member” as defined in
Section A.1.(5) of the general instructions of Form S-8.
2.20 “GAAP” has the meaning set forth in Section
11.2(c)(ii).
2.21 “Incentive
Stock Option” means any Stock Option awarded to an
Eligible Employee of the Company, its Subsidiaries and its Parent (if any) under
this Plan intended to be and designated as an “Incentive Stock Option” within
the meaning of Section 422 of the Code.
2.22 “Non-Employee
Director” means a director of the Company who is
not an active employee of the Company or an Affiliate.
2.23 “Non-Qualified
Stock Option” means any Stock Option awarded under
this Plan that is not an Incentive Stock Option.
2.24 “Other
Stock-Based Award” means an Award under Article X of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock, including, without limitation, a restricted
stock unit or an Award valued by reference to an Affiliate.
2.25 “Parent” means any parent corporation of the
Company within the meaning of Section 424(e) of the Code.
2.26 “Participant” means an Eligible Employee,
Non-Employee Director or Consultant to whom an Award has been granted pursuant
to this Plan.
2.27 “Performance
Goals” means, for purposes of the grant or
vesting of Awards of Restricted Stock, Other Stock-Based Awards, Performance
Shares and/or Performance-Based Cash Awards, each intended to be
“performance-based” under Section 162(m) of the Code, shall be based on the
attainment of certain target levels of, or a specified increase or decrease (as
applicable) of the performance goals established by the
Committee.
2.28 “Performance-Based
Cash Award” means a cash Award under Article XI of
this Plan that is payable or otherwise based on the attainment of certain
pre-established performance goals during a Performance
Period.
2.29 “Performance
Period” means the duration of the period
during which receipt of an Award is subject to the satisfaction of performance
criteria, such period as determined by the Committee in its sole
discretion.
5
2.30 “Performance
Share” means an Award made pursuant to
Article IX of this Plan of the right to receive Common Stock or cash of an
equivalent value at the end of a specified Performance
Period.
2.31 “Person” means any individual, corporation,
partnership, limited liability company, firm, joint venture, association,
joint-stock company, trust, incorporated organization, governmental or
regulatory or other entity.
2.32 “Plan” means this China SLP
Filtration Technology, Inc. 2010 Stock Incentive Plan, as amended from time to
time.
2.33 “Reference
Stock Option” has the meaning set forth in Section
7.1.
2.34 “Restricted
Stock” means an Award of shares of Common
Stock under this Plan that is subject to restrictions under Article
VIII.
2.35 “Restriction
Period” has the meaning set forth in
Subsection 8.3(a).
2.36 “Rule
16b-3” means Rule 16b-3 under Section 16(b)
of the Exchange Act as then in effect or any successor
provision.
2.37 “Section
162(m) of the Code” means the exception for
performance-based compensation under Section 162(m) of the Code and any
applicable Treasury regulations thereunder.
2.38 “Section
409A of the Code” means the nonqualified deferred
compensation rules under Section 409A of the Code and any applicable Treasury
regulations thereunder.
2.39 “Securities
Act” means the Securities Act of 1933, as
amended and all rules and regulations promulgated thereunder. Any reference to
any section of the Securities Act shall also be a reference to any successor
provision.
2.40 “Stock
Appreciation Right” means the right pursuant to an Award
granted under Article VII. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of a Stock Option in
exchange for cash or a number of shares of Common Stock (as determined by the
Committee, in its sole discretion, on the date of grant) equal to the difference
between (a) the Fair Market Value on the date such Stock Option (or such
portion thereof) is surrendered, of the Common Stock covered by such Stock
Option (or such portion thereof), and (b) the aggregate exercise price of
such Stock Option (or such portion thereof). A Non-Tandem Stock Appreciation
Right shall mean the right to receive cash or a number of shares of Common Stock
(as determined by the Committee, in its sole discretion, on the date of grant)
equal to the difference between (i) the Fair Market Value of a share of
Common Stock on the date such right is exercised, and (ii) the aggregate
exercise price of such right, otherwise than on surrender of a Stock
Option.
2.41 “Stock
Option” or “Option” means any option to purchase shares of
Common Stock granted to Eligible Employees, Non-Employee Directors or
Consultants granted pursuant to Article VI.
2.42 “Subsidiary” means any subsidiary corporation of
the Company within the meaning of Section 424(f) of the
Code.
6
2.43 “Ten
Percent Stockholder” means a person owning stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, its Subsidiaries or its Parent.
2.44 “Termination” means a Termination of Consultancy,
Termination of Directorship or Termination of Employment, as
applicable.
2.45 “Termination
of Consultancy” means: (a) that the Consultant is no
longer acting as a consultant to the Company or an Affiliate; or (b) when an
entity which is retaining a Participant as a Consultant ceases to be an
Affiliate unless the Participant otherwise is, or thereupon becomes, a
Consultant to the Company or another Affiliate at the time the entity ceases to
be an Affiliate. In the event that a Consultant becomes an Eligible Employee or
a Non-Employee Director upon the termination of his or her consultancy, unless
otherwise determined by the Committee, in its sole discretion, no Termination of
Consultancy shall be deemed to occur until such time as such Consultant is no
longer a Consultant, an Eligible Employee or a Non-Employee Director.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
otherwise define Termination of Consultancy in the Award agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Consultancy thereafter.
2.46 “Termination
of Directorship” means that the Non-Employee Director
has ceased to be a director of the Company; except that if a Non-Employee
Director becomes an Eligible Employee or a Consultant upon the termination of
his or her directorship, his or her ceasing to be a director of the Company
shall not be treated as a Termination of Directorship unless and until the
Participant has a Termination of Employment or Termination of Consultancy, as
the case may be.
2.47 “Termination
of Employment” means: (a) a termination of
employment (for reasons other than a military or personal leave of absence
granted by the Company) of a Participant from the Company and its Affiliates; or
(b) when an entity which is employing a Participant ceases to be an
Affiliate, unless the Participant otherwise is, or thereupon becomes, employed
by the Company or another Affiliate at the time the entity ceases to be an
Affiliate. In the event that an Eligible Employee becomes a Consultant or a
Non-Employee Director upon the termination of his or her employment, unless
otherwise determined by the Committee, in its sole discretion, no Termination of
Employment shall be deemed to occur until such time as such Eligible Employee is
no longer an Eligible Employee, a Consultant or a Non-Employee Director.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
otherwise define Termination of Employment in the Award agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Employment thereafter.
2.48 “Transfer” means: (a) when used as a noun, any
direct or indirect transfer, sale, assignment, pledge, hypothecation,
encumbrance or other disposition (including the issuance of equity in a Person),
whether for value or no value and whether voluntary or involuntary (including by
operation of law), and (b) when used as a verb, to directly or indirectly
transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise
dispose of (including the issuance of equity in a Person) whether for value or
for no value and whether voluntarily or involuntarily (including by operation of
law). “Transferred” and “Transferrable” shall have a correlative
meaning.
ARTICLE
III
ADMINISTRATION
3.1 The
Committee. The Plan shall be administered and
interpreted by the Committee.
3.2 Grants
of Awards. The Committee
shall have full authority to grant, pursuant to the terms of this Plan, to
Eligible Employees, Consultants and Non-Employee Directors: (i) Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock,
(iv) Performance Shares; (v) Other Stock-Based Awards, and (vi)
Performance-Based Cash Awards. In particular, the Committee shall have the
authority:
7
|
(a)
|
to select the Eligible Employees,
Consultants and Non-Employee Directors to whom Awards may from time to
time be granted hereunder;
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(b)
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to determine whether and to what
extent Awards, or any combination thereof, are to be granted hereunder to
one or more Eligible Employees, Consultants or Non-Employee
Directors;
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(c)
|
to determine the number of shares
of Common Stock to be covered by each Award granted
hereunder;
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(d)
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to determine the terms and
conditions, not inconsistent with the terms of this Plan, of any Award
granted hereunder (including, but not limited to, the exercise or purchase
price (if any), any restriction or limitation, any vesting schedule or
acceleration thereof, or any forfeiture restrictions or waiver thereof,
regarding any Award and the shares of Common Stock relating thereto, based
on such factors, if any, as the Committee shall determine, in its sole
discretion);
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(e)
|
to determine whether, to what
extent and under what circumstances grants of Options and other Awards
under this Plan are to operate on a tandem basis and/or in conjunction
with or apart from other awards made by the Company outside of this
Plan;
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(f)
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to determine whether and under
what circumstances a Stock Option may be settled in cash, Common Stock
and/or Restricted Stock under
Section 6.3(d);
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(g)
|
to determine whether, to what
extent and under what circumstances Common Stock and other amounts payable
with respect to an Award under this Plan shall be deferred either
automatically or at the election of the Participant in any case, subject
to, and in accordance with, Section 409A of the
Code;
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(h)
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to determine whether a Stock
Option is an Incentive Stock Option or Non-Qualified Stock Option;
and
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(i)
|
to determine whether to require a
Participant, as a condition of the granting of any Award, to not sell or
otherwise dispose of shares acquired pursuant to the exercise of an Award
for a period of time as determined by the Committee, in its sole
discretion, following the date of the acquisition of such
Award.
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3.3
Guidelines. Subject to Article XIV hereof, the
Committee shall, in its sole discretion, have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing this Plan
and perform all acts, including the delegation of its responsibilities (to the
extent permitted by applicable law and applicable stock exchange rules), as it
shall, from time to time, deem advisable; to construe and interpret the terms
and provisions of this Plan and any Award issued under this Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
this Plan. The Committee may, in its sole discretion, correct any defect, supply
any omission or reconcile any inconsistency in this Plan or in any agreement
relating thereto in the manner and to the extent it shall deem necessary to
effectuate the purpose and intent of this Plan. The Committee may, in its sole
discretion, adopt special guidelines and provisions for persons who are residing
in or employed in, or subject to, the taxes of, any domestic or foreign
jurisdictions to comply with applicable tax and securities laws of such domestic
or foreign jurisdictions. This Plan is intended to comply with the applicable
requirements of Rule 16b-3 and with respect to Awards intended to be
“performance-based,” the applicable provisions of Section 162(m) of the Code,
and this Plan shall be limited, construed and interpreted in a manner so as to
comply therewith.
8
3.4 Decisions
Final. Any decision,
interpretation or other action made or taken in good faith by or at the
direction of the Company, the Board or the Committee (or any of its members)
arising out of or in connection with this Plan shall be within the absolute
discretion of all and each of them, as the case may be, and shall be final,
binding and conclusive on the Company and all employees and Participants and
their respective heirs, executors, administrators, successors and
assigns.
3.5 Procedures. If the Committee is appointed, the
Board shall designate one of the members of the Committee as chairman and the
Committee shall hold meetings, subject to the By-Laws of the Company, at such
times and places as it shall deem advisable, including, without limitation, by
telephone conference or by written consent to the extent permitted by applicable
law. A majority of the Committee members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing and signed by all the Committee
members in accordance with the By-Laws of the Company shall be fully effective
as if it had been made by a vote at a meeting duly called and held. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
3.6 Designation
of Consultants/Liability.
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(a)
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The Committee may, in its sole
discretion, designate employees of the Company and professional advisors
to assist the Committee in the administration of this Plan and (to the
extent permitted by applicable law and applicable exchange rules) may
grant authority to officers to grant Awards and/or execute agreements or
other documents on behalf of the
Committee.
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(b)
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The Committee may, in its sole
discretion, employ such legal counsel, consultants and agents as it may
deem desirable for the administration of this Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the
Committee or the Board in the engagement of any such counsel, consultant
or agent shall be paid by the Company. The Committee, its members and any
person designated pursuant to sub-section (a) above shall not be liable
for any action or determination made in good faith with respect to this
Plan. To the maximum extent permitted by applicable law, no officer of the
Company or member or former member of the Committee or of the Board shall
be liable for any action or determination made in good faith with respect
to this Plan or any Award granted under
it.
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3.7 Indemnification. To the maximum extent permitted by
applicable law and the Certificate of Incorporation and By-Laws of the Company
and to the extent not covered by insurance directly insuring such person, each
officer or employee of the Company or any Affiliate and member or former member
of the Committee or the Board shall be indemnified and held harmless by the
Company against any cost or expense (including reasonable fees of counsel
reasonably acceptable to the Committee) or liability (including any sum paid in
settlement of a claim with the approval of the Committee), and advanced amounts
necessary to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection with the
administration of this Plan, except to the extent arising out of such officer’s,
employee’s, member’s or former member’s fraud. Such indemnification shall be in
addition to any rights of indemnification the officers, employees, directors or
members or former officers, directors or members may have under applicable law
or under the Certificate of Incorporation or By-Laws of the Company or any
Affiliate. Notwithstanding anything else herein, this indemnification will not
apply to the actions or determinations made by an individual with regard to
Awards granted to him or her under this Plan.
9
ARTICLE
IV
SHARE
LIMITATION
4.1 Shares.
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(a)
|
General
Limitations. The
aggregate number of shares of Common Stock that may be issued or used for
reference purposes or with respect to which Awards may be granted under
this Plan shall not exceed Two Million One Hundred Eighty Six Thousand Two
Hundred Eighteen (2,186,218) (or such number as shall be equal to 10% of
the outstanding shares on a fully diluted basis after the offering and the
conversion of the notes) shares (subject to any increase or decrease
pursuant to Section 4.2), which may be either authorized and unissued
Common Stock or Common Stock held in or acquired for the treasury of the
Company or both; provided, however, that such number shall be
increased at the end of each fiscal year of the Company in the same
proportion as the issued and outstanding stock of the during such fiscal
year; subject to a maximum of 10% of the issued and outstanding
stock of the Company. If any Award granted under this Plan expires,
terminates, is canceled or is forfeited for any reason, the number of
shares of Common Stock underlying any such Award shall again be available
for the purpose of Awards under the Plan, as provided in this Section
4.1(a). If a Tandem Stock Appreciation Right or a Limited Stock
Appreciation Right is granted in tandem with an Option, such grant shall
only apply once against the maximum number of shares of Common Stock which
may be issued under this Plan. Notwithstanding anything herein to the
contrary, other than with respect to Incentive Stock Options, any share of
Common Stock subject to an Award that again becomes available for grant
pursuant to this Section 4.1(a) shall be added back to the aggregate
maximum limit.
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(b)
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Individual
Participant Limitations.
|
(i)
The maximum number of
shares of Common Stock subject to any Award of Stock Options, Stock Appreciation
Rights or shares of Restricted Stock for which the grant of such Award or the
lapse of the relevant Restriction Period is subject to the attainment of
Performance Goals in accordance with Section 8.3(a)(ii) herein which may be
granted under this Plan during any fiscal year of the Company to each Eligible
Employee or Consultant shall be such number of shares per type of Award (which
shall be subject to any further increase or decrease pursuant to Section 4.2) as
determined by the Committee, provided that the maximum number of shares of
Common Stock for all types of Awards does not exceed such number of shares as
determined by the Committee (which shall be subject to any further increase or
decrease pursuant to Section 4.2) with respect to any fiscal year of the
Company. If a Tandem Stock Appreciation Right is granted or a Limited Stock
Appreciation Right is granted in tandem with a Stock Option, it shall apply
against the Eligible Employee's or Consultant's individual share limitations for
both Stock Appreciation Rights and Stock Options.
(ii)
The
maximum number of shares of Common Stock subject to any Award of Stock Options
(other than Incentive Stock Options), Stock Appreciation Rights, Performance
Shares or Other Stock-Based Awards which may be granted under this Plan during
any fiscal year of the Company to each Non-Employee Director shall be such
number of shares per type of Award (which shall be subject to any further
increase or decrease pursuant to Section 4.2) as determined by the Committee,
provided that the maximum number of shares of Common Stock for all types of
Awards does not exceed such number of shares as determined by the Committee
(which shall be subject to any further increase or decrease pursuant to Section
4.2) with respect to any fiscal year of the Company. If a Tandem Stock
Appreciation Right is granted or a Limited Stock Appreciation Right is granted
in tandem with a Stock Option, it shall apply against the Non-Employee
Director's individual share limitations for both Stock Appreciation Rights and
Stock Options.
10
(iii) There are no annual individual Eligible
Employee or Consultant share limitations on Restricted Stock for which the grant
of such Award or the lapse of the relevant Restriction Period is not subject to
attainment of Performance Goals in accordance with Section 8.3(a)(ii)
hereof.
(iv) The maximum number of shares of Common
Stock subject to any Award of Performance Shares which may be granted under this
Plan during any fiscal year of the Company to each Eligible Employee or
Consultant shall be such number of shares (which shall be subject to any further
increase or decrease pursuant to Section 4.2) as determined by the Committee
with respect to any fiscal year of the Company. Each Performance
Share shall be referenced to one share of Common Stock and shall be charged
against the available shares under this Plan at the time the unit value
measurement is converted to a referenced number of shares of Common Stock in
accordance with Section 9.1.
(v) The maximum payment under any
Performance-Based Cash Award payable with respect to any fiscal year of the
Company and for which the grant of such Award is subject to the attainment of
Performance Goals in accordance with Section 11.2(c) herein which may be granted
under this Plan with respect to any fiscal year of the Company to each Eligible
Employee or Consultant shall be as determined by the
Committee.
(vi) The individual Participant limitations
set forth in this Section 4.1(b) shall be cumulative; that is, to the extent
that shares of Common Stock for which Awards are permitted to be granted to an
Eligible Employee or a Consultant during a fiscal year are not covered by an
Award to such Eligible Employee or Consultant in a fiscal year, the number of
shares of Common Stock available for Awards to such Eligible Employee or
Consultant shall automatically increase in the subsequent fiscal years during
the term of the Plan until used.
4.2 Changes.
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(a)
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The existence of this Plan and
the Awards granted hereunder shall not affect in any way the right or
power of the Board or the stockholders of the Company to make or authorize
(i) any adjustment, recapitalization, reorganization or other change in
the Company’s capital structure or its business, (ii) any merger or
consolidation of the Company or any Affiliate, (iii) any issuance of
bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, (iv) the dissolution or liquidation of the
Company or any Affiliate, (v) any sale or transfer of all or part of the
assets or business of the Company or any Affiliate or (vi) any other
corporate act or proceeding.
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11
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(b)
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Subject to the provisions of
Section 4.2(d), if there shall occur any such change in the capital
structure of the Company by reason of any stock split, reverse stock
split, stock dividend, subdivision, combination or reclassification of
shares that may be issued under the Plan, any recapitalization, any
merger, any consolidation, any spin off, any reorganization or any partial
or complete liquidation, or any other corporate transaction or event
having an effect similar to any of the foregoing (a “Section
4.2 Event”), then
(i) the aggregate number and/or kind of shares that thereafter may be
issued under the Plan, (ii) the number and/or kind of shares or other
property (including cash) to be issued upon exercise of an outstanding
Award or under other Awards granted under the Plan, (iii) the purchase
price thereof, and/or (iv) the individual Participant limitations set
forth in Section 4.1(b) (other than those based on cash limitations) shall
be appropriately adjusted. In addition, subject to Section 4.2(d), if
there shall occur any change in the capital structure or the business of
the Company that is not a Section 4.2 Event (an “Other
Extraordinary Event”), including by reason of any
extraordinary dividend (whether cash or stock), any conversion, any
adjustment, any issuance of any class of securities convertible or
exercisable into, or exercisable for, any class of stock, or any sale or
transfer of all or substantially all the Company’s assets or business,
then the Committee, in its sole discretion, may adjust any Award and make
such other adjustments to the Plan. Any adjustment pursuant to this
Section 4.2 shall be consistent with the applicable Section 4.2 Event or
the applicable Other Extraordinary Event, as the case may be, and in such
manner as the Committee may, in its sole discretion, deem appropriate and
equitable to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants under the Plan. Any such
adjustment determined by the Committee shall be final, binding and
conclusive on the Company and all Participants and their respective heirs,
executors, administrators, successors and permitted assigns. Except as
expressly provided in this Section 4.2 or in the applicable Award
agreement, a Participant shall have no rights by reason of any Section 4.2
Event or any Other Extraordinary
Event.
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(c)
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Fractional shares of Common Stock
resulting from any adjustment in Awards pursuant to Section 4.2(a) or (b)
shall be aggregated until, and eliminated at, the time of exercise by
rounding-down for fractions less than one-half and rounding-up for
fractions equal to or greater than one-half. No cash settlements shall be
made with respect to fractional shares eliminated by rounding.
Notice of any adjustment shall be given by the Committee to each
Participant whose Award has been adjusted and such adjustment (whether or
not such notice is given) shall be effective and binding for all purposes
of this Plan.
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(d)
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In the event of an Acquisition
Event, the Committee may, in its sole discretion, terminate all
outstanding and unexercised Stock Options or Stock Appreciation Rights or
any Other Stock Based Award that provides for a Participant elected
exercise effective as of the date of the Acquisition Event, by delivering
notice of termination to each Participant at least 20 days prior to the
date of consummation of the Acquisition Event, in which case during the
period from the date on which such notice of termination is delivered to
the consummation of the Acquisition Event, each such Participant shall
have the right to exercise in full all of his or her Stock Options or
Stock Appreciation Rights that are then outstanding (without regard to any
limitations on exercisability otherwise contained in the Award
agreements), but any such exercise shall be contingent on the occurrence
of the Acquisition Event, and, provided that, if the Acquisition Event
does not take place within a specified period after giving such notice for
any reason whatsoever, the notice and exercise pursuant thereto shall be
null and void.
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If an
Acquisition Event occurs but the Committee does not terminate the outstanding
Awards pursuant to this Section 4.2(d), then the provisions of Section 4.2(b)
and Article XIII shall apply.
4.3 Minimum
Purchase Price.
Notwithstanding any provision of this Plan to the contrary, if authorized but
previously unissued shares of Common Stock are issued under this Plan, such
shares shall not be issued for a consideration that is less than as permitted
under applicable law.
12
ARTICLE
V
ELIGIBILITY –
GENERAL REQUIREMENTS FOR AWARDS
5.1 General
Eligibility. All Eligible
Employees, Consultants, Non-Employee Directors and prospective employees and
consultants are eligible to be granted Awards, subject to the terms and
conditions of this Plan. Eligibility for the grant of Awards and actual
participation in this Plan shall be determined by the Committee in its sole
discretion.
5.2 Incentive
Stock Options.
Notwithstanding anything herein to the contrary, only Eligible Employees of the
Company, its Subsidiaries and its Parent (if any) are eligible to be granted
Incentive Stock Options under this Plan. Eligibility for the grant of an
Incentive Stock Option and actual participation in this Plan shall be determined
by the Committee in its sole discretion.
5.3 General
Requirement. The vesting
and exercise of Awards granted to a prospective employee, consultant or
non-employee director are conditioned upon such individual actually becoming an
Eligible Employee or Consultant, or Non-Employee Director.
ARTICLE
VI
STOCK
OPTIONS
6.1 Options. Stock Options may be granted alone or
in addition to other Awards granted under this Plan. Each Stock Option granted
under this Plan shall be of one of two types: (a) an Incentive Stock Option
or (b) a Non-Qualified Stock Option.
6.2 Grants. The Committee shall, in its sole
discretion, have the authority to grant to any Eligible Employee (subject to
Section 5.2) Incentive Stock Options, Non-Qualified Stock Options, or both types
of Stock Options. The Committee shall, in its sole discretion, have the
authority to grant any Consultant or Non-Employee Director Non-Qualified Stock
Options. To the extent that any Stock Option does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of its
exercise or otherwise), such Stock Option or the portion thereof which does not
qualify shall constitute a separate Non-Qualified Stock
Option.
6.3 Terms
of Options. Options
granted under this Plan shall be subject to the following terms and conditions
and shall be in such form and contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee, in its sole
discretion, shall deem desirable:
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(a)
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Exercise
Price. The exercise
price per share of Common Stock subject to a Stock Option shall be
determined by the Committee at the time of grant, provided that the per
share exercise price of a Stock Option shall not be less than 100% (or, in
the case of an Incentive Stock Option granted to a Ten
Percent Stockholder, 110%) of the Fair Market Value of the Common Stock at
the time of grant.
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(b)
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Stock
Option Term. The
term of each Stock Option shall be fixed by the Committee, provided that
no Stock Option shall be exercisable more than 10 years after the date the
Option is granted; and provided further that the term of an Incentive
Stock Option granted to a Ten Percent Stockholder shall not exceed five
years.
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(c)
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Exercisability. Stock Options shall be
exercisable at such time or times and subject to such terms and conditions
or as shall be determined by the Committee at grant. If the Committee
provides, in its discretion, that any Stock Option is exercisable subject
to certain limitations (including, without limitation, that such Stock
Option is exercisable only in installments or within certain time
periods), the Committee may waive such limitations on the exercisability
at any time at or after grant in whole or in part (including, without
limitation, waiver of the installment exercise provisions or acceleration
of the time at which such Stock Option may be exercised), based on such
factors, if any, as the Committee shall determine, in its sole discretion.
In the event that a written employment agreement between the Company and a
Participant provides for a vesting schedule that is more favorable than
the vesting schedule provided in the form of Award agreement, the vesting
schedule in such employment agreement shall govern, provided that such
agreement is in effect on the date of grant and applicable to the specific
Award.
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13
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(d)
|
Method
of Exercise. Subject
to whatever installment exercise and waiting period provisions apply under
subsection (c) above, to the extent vested, Stock Options may be exercised
in whole or in part at any time during the Option term, by giving written
notice of exercise to the Company specifying the number of shares of
Common Stock to be purchased. Such notice shall be accompanied by payment
in full of the purchase price as follows: (i) in cash or by check, bank
draft or money order payable to the order of the Company; (ii) solely to
the extent permitted by applicable law, if the Committee authorizes,
through a procedure whereby the Participant delivers irrevocable
instructions to a broker reasonably acceptable to the Committee to deliver
promptly to the Company an amount equal to the purchase price; or (iii) on
such other terms and conditions as may be acceptable to the Committee
(including, without limitation, the relinquishment of Stock Options or by
payment in full or in part in the form of Common Stock owned by the
Participant based on the Fair Market Value of the Common Stock on the
payment date as determined by the Committee, in its sole discretion). No
shares of Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided
for.
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(e)
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Non-Transferability
of Options. No Stock
Option shall be Transferable by the Participant otherwise than by will or
by the laws of descent and distribution, and all Stock Options shall be
exercisable, during the Participant’s lifetime, only by the Participant.
Notwithstanding the foregoing, the Committee may determine, in its sole
discretion, at the time of grant or thereafter that a Non-Qualified Stock
Option that is otherwise not Transferable pursuant to this Section is
Transferable to a Family Member in whole or in part and in such
circumstances, and under such conditions, as determined by the Committee,
in its sole discretion. A Non-Qualified Stock Option that is Transferred
to a Family Member pursuant to the preceding sentence (i) may not be
subsequently Transferred otherwise than by will or by the laws of descent
and distribution and (ii) remains subject to the terms of this Plan and
the applicable Award agreement. Any shares of Common Stock acquired upon
the exercise of a Non-Qualified Stock Option by a permissible transferee
of a Non-Qualified Stock Option or a permissible transferee pursuant to a
Transfer after the exercise of the Non-Qualified Stock Option shall be
subject to the terms of this Plan and the applicable Award
agreement.
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(f)
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Incentive
Stock Option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of the
Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by an Eligible Employee during any calendar year under
this Plan and/or any other stock option plan of the Company, any
Subsidiary or any Parent exceeds $100,000, such Options shall be treated
as Non-Qualified Stock Options. Should any provision of this Plan not be
necessary in order for the Stock Options to qualify as Incentive Stock
Options, or should any additional provisions be required, the Committee
may, in its sole discretion, amend this Plan accordingly, without the
necessity of obtaining the approval of the stockholders of the
Company.
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14
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(g)
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Form,
Modification, Extension and Renewal of Stock Options. Subject to the terms and
conditions and within the limitations of this Plan, Stock Options shall be
evidenced by such form of agreement or grant as is approved by the
Committee, and the Committee may, in its sole discretion (i) modify,
extend or renew outstanding Stock Options granted under this Plan
(provided that the rights of a Participant are not reduced without his or
her consent and provided further that such action does not subject the
Stock Options to Section 409A of the Code), and (ii) accept the surrender
of outstanding Stock Options (up to the extent not theretofore exercised)
and authorize the granting of new Stock Options in substitution therefor
(to the extent not theretofore exercised). Notwithstanding the foregoing,
an outstanding Option may not be modified to reduce the exercise price
thereof nor may a new Option at a lower price be substituted for a
surrendered Option (other than adjustments or substitutions in accordance
with Section 4.2), unless such action is approved by the stockholders of
the Company.
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(h)
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Early
Exercise. The
Committee may provide that a Stock Option include a provision whereby the
Participant may elect at any time before the Participant’s Termination to
exercise the Stock Option as to any part or all of the shares of Common
Stock subject to the Stock Option prior to the full vesting of the Stock
Option and such shares shall be subject to the provisions of Article VIII
and treated as Restricted Stock. Any unvested shares of Common Stock so
purchased may be subject to a repurchase option in favor of the Company or
to any other restriction the Committee determines to be
appropriate.
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(i)
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Other
Terms and Conditions. Stock Options may contain such
other provisions, which shall not be inconsistent with any of the terms of
this Plan, as the Committee shall, in its sole discretion, deem
appropriate.
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ARTICLE
VII
STOCK
APPRECIATION RIGHTS
7.1 Tandem
Stock Appreciation Rights.
Stock Appreciation Rights may be granted in conjunction with all or part of any
Stock Option (a “Reference
Stock Option”) granted
under this Plan (“Tandem
Stock Appreciation Rights”). In the case of a Non-Qualified
Stock Option, such rights may be granted either at or after the time of the
grant of such Reference Stock Option. In the case of an Incentive Stock Option,
such rights may be granted only at the time of the grant of such Reference Stock
Option.
7.2 Terms
and Conditions of Tandem Stock Appreciation Rights. Tandem Stock Appreciation Rights
granted hereunder shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee in its sole discretion, and the
following:
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(a)
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Exercise
Price. The exercise
price per share of Common Stock subject to a Tandem Stock Appreciation
Right shall be determined by the Committee at the time of grant, provided
that the per share exercise price of a Tandem Stock Appreciation Right
shall not be less than 100% of the Fair Market Value of the Common Stock
at the time of grant.
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(b)
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Term. A Tandem Stock Appreciation
Right or applicable portion thereof granted with respect to a Reference
Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the Reference Stock Option, except that, unless
otherwise determined by the Committee, in its sole discretion, at the time
of grant, a Tandem Stock Appreciation Right granted with respect to less
than the full number of shares covered by the Reference Stock Option shall
not be reduced until and then only to the extent the exercise or
termination of the Reference Stock Option causes the number of shares
covered by the Tandem Stock Appreciation Right to exceed the number of
shares remaining available and unexercised under the Reference Stock
Option.
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15
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(c)
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Exercisability. Tandem Stock Appreciation
Rights shall be exercisable only at such time or times and to the extent
that the Reference Stock Options to which they relate shall be exercisable
in accordance with the provisions of Article VI, and shall be subject to
the provisions of Section
6.3(c).
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(d)
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Method
of Exercise. A
Tandem Stock Appreciation Right may be exercised by the Participant by
surrendering the applicable portion of the Reference Stock Option. Upon
such exercise and surrender, the Participant shall be entitled to receive
an amount determined in the manner prescribed in this Section 7.2. Stock
Options which have been so surrendered, in whole or in part, shall no
longer be exercisable to the extent the related Tandem Stock Appreciation
Rights have been exercised.
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(e)
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Payment. Upon the exercise of a Tandem
Stock Appreciation Right, a Participant shall be entitled to receive up
to, but no more than, an amount in cash or a number of shares of Common
Stock (as determined by the Committee, in its sole discretion, on the date
of grant) equal in value to the excess of the Fair Market Value of one
share of Common Stock over the Option exercise price per share specified
in the Reference Stock Option agreement, multiplied by the number of
shares in respect of which the Tandem Stock Appreciation Right shall have
been exercised.
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(f)
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Deemed
Exercise of Reference Stock Option. Upon the exercise of a Tandem
Stock Appreciation Right, the Reference Stock Option or part thereof to
which such Stock Appreciation Right is related shall be deemed to have
been exercised for the purpose of the limitation set forth in Article IV
of the Plan on the number of shares of Common Stock to be issued under the
Plan.
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(g)
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Non-Transferability. Tandem Stock Appreciation
Rights shall be Transferable only when and to the extent that the
underlying Stock Option would be Transferable under Section 6.3(e) of the
Plan.
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7.3 Non-Tandem
Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights may also be granted without reference to
any Stock Options granted under this Plan.
7.4 Terms
and Conditions of Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation Rights
granted hereunder shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee in its sole discretion, and the
following:
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(a)
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Exercise
Price. The exercise
price per share of Common Stock subject to a Non-Tandem Stock Appreciation
Right shall be determined by the Committee at the time of grant, provided
that the per share exercise price of a Non-Tandem Stock Appreciation Right
shall not be less than 100% of the Fair Market Value of the Common Stock
at the time of grant.
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16
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(b)
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Term. The term of each Non-Tandem
Stock Appreciation Right shall be fixed by the Committee, but shall not be
greater than 10 years after the date the right is
granted.
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(c)
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Exercisability. Non-Tandem Stock Appreciation
Rights shall be exercisable at such time or times and subject to such
terms and conditions as shall be determined by the Committee at grant. If
the Committee provides, in its discretion, that any such right is
exercisable subject to certain limitations (including, without limitation,
that it is exercisable only in installments or within certain time
periods), the Committee may waive such limitations on the exercisability
at any time at or after grant in whole or in part (including, without
limitation, waiver of the installment exercise provisions or acceleration
of the time at which such right may be exercised), based on such factors,
if any, as the Committee shall determine, in its sole discretion. In the
event that a written employment agreement between the Company and a
Participant provides for a vesting schedule that is more favorable than
the vesting schedule provided in the form of Award agreement, the vesting
schedule in such employment agreement shall govern, provided that such
agreement is in effect on the date of grant and applicable to the specific
Award.
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(d)
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Method
of Exercise. Subject
to whatever installment exercise and waiting period provisions apply under
subsection (c) above, Non-Tandem Stock Appreciation Rights may be
exercised in whole or in part at any time in accordance with the
applicable Award agreement, by giving written notice of exercise to the
Company specifying the number of Non-Tandem Stock Appreciation Rights to
be exercised.
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(e)
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Payment. Upon the exercise of a
Non-Tandem Stock Appreciation Right a Participant shall be entitled to
receive, for each right exercised, up to, but no more than, an amount in
cash or a number of shares of Common Stock (as determined by the
Committee, in its sole discretion, on the date of grant) equal in value to
the excess of the Fair Market Value of one share of Common Stock on the
date the right is exercised over the Fair Market Value of one share of
Common Stock on the date the right was awarded to the
Participant.
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(f)
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Non-Transferability. No Non-Tandem Stock
Appreciation Rights shall be Transferable by the Participant otherwise
than by will or by the laws of descent and distribution, and all such
rights shall be exercisable, during the Participant’s lifetime, only by
the Participant.
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7.5 Limited
Stock Appreciation Rights.
The Committee may, in its sole discretion, grant Tandem and Non-Tandem Stock
Appreciation Rights either as a general Stock Appreciation Right or as a Limited
Stock Appreciation Right. Limited Stock Appreciation Rights may be exercised
only upon the occurrence of a Change in Control or such other event as the
Committee may, in its sole discretion, designate at the time of grant or
thereafter. Upon the exercise of Limited Stock Appreciation Rights, except as
otherwise provided in an Award agreement, the Participant shall receive in cash
or Common Stock, as determined by the Committee, an amount equal to the amount
(a) set forth in Section 7.2(e) with respect to Tandem Stock Appreciation
Rights, or (b) set forth in Section 7.4(e) with respect to Non-Tandem Stock
Appreciation Rights, as applicable.
17
ARTICLE
VIII
RESTRICTED
STOCK
8.1 Awards
of Restricted Stock.
Shares of Restricted Stock may be issued either alone or in addition to other
Awards granted under the Plan. The Committee shall, in its sole discretion,
determine the Eligible Employees, Consultants and Non-Employee Directors, to
whom, and the time or times at which, grants of Restricted Stock shall be made,
the number of shares to be awarded, the price (if any) to be paid by the
Participant (subject to Section 8.2), the time or times within which such Awards
may be subject to forfeiture, the vesting schedule and rights to acceleration
thereof, and all other terms and conditions of the Awards. The Committee may
condition the grant or vesting of Restricted Stock upon the attainment of
specified performance targets or such other factors as the Committee may
determine, in its sole discretion, including to comply with the requirements of
Section 162(m) of the Code.
8.2 Awards
and Certificates. Eligible
Employees, Consultants and Non-Employee Directors selected to receive Restricted
Stock shall not have any rights with respect to such Award, unless and until
such Participant has delivered a fully executed copy of the agreement evidencing
the Award to the Company and has otherwise complied with the applicable terms
and conditions of such Award. Further, such Award shall be subject to the
following conditions:
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(a)
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Purchase
Price. The purchase
price of Restricted Stock shall be fixed by the Committee. Subject to
Section 4.3, the purchase price for shares of Restricted Stock may be zero
to the extent permitted by applicable law, and, to the extent not so
permitted, such purchase price may not be less than par
value.
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(b)
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Acceptance. Awards of Restricted Stock must
be accepted within a period of 60 days (or such other period as the
Committee may specify) after the grant date, by executing a Restricted
Stock agreement and by paying whatever price (if any) the Committee has
designated thereunder.
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(c)
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Legend. Each Participant receiving
Restricted Stock shall be issued a stock certificate in respect of such
shares of Restricted Stock, unless the Committee elects to use another
system, such as book entries by the transfer agent, as evidencing
ownership of shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant, and shall, in addition to such
legends required by applicable securities laws, bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Award, substantially in the following
form:
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“The
anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the China SLP Filtration
Technology, Inc. (the “Company”) 2010 Stock Incentive Plan (the “Plan”) and an
agreement entered into between the registered owner and the Company dated
__________. Copies of such Plan and agreement are on file at the principal
office of the Company.”
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(d)
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Custody. If stock certificates are
issued in respect of shares of Restricted Stock, the Committee may require
that any stock certificates evidencing such shares be held in custody by
the Company until the restrictions thereon shall have lapsed, and that, as
a condition of any grant of Restricted Stock, the Participant shall have
delivered a duly signed stock power, endorsed in blank, relating to the
Common Stock covered by such
Award.
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18
8.3 Restrictions
and Conditions. The shares
of Restricted Stock awarded pursuant to this Plan shall be subject to the
following restrictions and conditions:
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(a)
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Restriction
Period. (i) The
Participant shall not be permitted to Transfer shares of Restricted Stock
awarded under this Plan during the period or periods set by the Committee
(the “Restriction
Period”) commencing
on the date of such Award, as set forth in a Restricted Stock Award
agreement and such agreement shall set forth a vesting schedule and any
events which would accelerate vesting of the shares of Restricted Stock.
Within these limits, based on service, attainment of performance goals
pursuant to Section 8.3(a)(ii) below and/or such other factors or criteria
as the Committee may determine in its sole discretion, the Committee may
condition the grant or provide for the lapse of such restrictions in
installments in whole or in part, or may accelerate the vesting of all or
any part of any Restricted Stock Award and/or waive the deferral
limitations for all or any part of any Restricted Stock Award. In the
event that a written employment agreement between the Company and a
Participant provides for a vesting schedule that is more favorable than
the vesting schedule provided in the form of Award agreement, the vesting
schedule in such employment agreement shall govern, provided that such
agreement is in effect on the date of grant and applicable to the specific
Award.
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(ii) Objective
Performance Goals, Formulae or Standards. If the grant of shares of Restricted
Stock or the lapse of restrictions is based on the attainment of Performance
Goals, the Committee shall establish the Performance Goals and the applicable
vesting percentage of the Restricted Stock Award applicable to each Participant
or class of Participants in writing prior to the beginning of the applicable
fiscal year or at such later date as otherwise determined by the Committee and
while the outcome of the Performance Goals are substantially uncertain. Such
Performance Goals may incorporate provisions for disregarding (or adjusting for)
changes in accounting methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar type events or
circumstances. With regard to a Restricted Stock Award that is intended to
comply with Section 162(m) of the Code, to the extent any such provision would
create impermissible discretion under Section 162(m) of the Code or otherwise
violate Section 162(m) of the Code, such provision shall be of no force or
effect. The applicable Performance Goals shall be based on one or more of the
performance criteria set forth in Exhibit A hereto.
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(b)
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Rights
as a Stockholder.
Except as provided in this subsection (b) and subsection (a) above and as
otherwise determined by the Committee, the Participant shall have, with
respect to the shares of Restricted Stock, all of the rights of a holder
of shares of Common Stock of the Company including, without limitation,
the right to receive any dividends, the right to vote such shares and,
subject to and conditioned upon the full vesting of shares of Restricted
Stock, the right to tender such shares. The Committee may, in its sole
discretion, determine at the time of grant that the payment of dividends
shall be deferred until, and conditioned upon, the expiration of the
applicable Restriction
Period.
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(c)
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Lapse
of Restrictions. If
and when the Restriction Period expires without a prior forfeiture of the
Restricted Stock, the certificates for such shares shall be delivered to
the Participant. All legends shall be removed from said certificates at
the time of delivery to the Participant, except as otherwise required by
applicable law or other limitations imposed by the
Committee.
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19
ARTICLE
IX
PERFORMANCE
SHARES
9.1 Award
of Performance Shares.
Performance Shares may be awarded either alone or in addition to other Awards
granted under this Plan. The Committee shall, in its sole discretion, determine
the Eligible Employees, Consultants and Non-Employee Directors, to whom, and the
time or times at which, Performance Shares shall be awarded, the number of
Performance Shares to be awarded to any person, the Performance Period during
which, and the conditions under which, receipt of the Shares will be deferred,
and the other terms and conditions of the Award in addition to those set forth
in Section 9.2.
Except as
otherwise provided herein, the Committee shall condition the right to payment of
any Performance Share upon the attainment of objective performance goals
established pursuant to Section 9.2(c) below.
9.2 Terms
and Conditions.
Performance Shares awarded pursuant to this Article IX shall be subject to the
following terms and conditions:
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(a)
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Earning
of Performance Share Award. At the expiration of the
applicable Performance Period, the Committee shall determine the extent to
which the performance goals established pursuant to Section 9.2(c) are
achieved and the percentage of each Performance Share Award that has been
earned.
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(b)
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Non-Transferability. Subject to the applicable
provisions of the Award agreement and this Plan, Performance Shares may
not be Transferred during the Performance
Period.
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(c)
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Objective
Performance Goals, Formulae or Standards. The Committee shall establish
the objective Performance Goals for the earning of Performance Shares
based on a Performance Period applicable to each Participant or class of
Participants in writing prior to the beginning of the applicable
Performance Period or at such later date as permitted under Section 162(m)
of the Code and while the outcome of the Performance Goals are
substantially uncertain. Such Performance Goals may incorporate, if and
only to the extent permitted under Section 162(m) of the Code, provisions
for disregarding (or adjusting for) changes in accounting methods,
corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. To the
extent any such provision would create impermissible discretion under
Section 162(m) of the Code or otherwise violate Section 162(m) of the
Code, such provision shall be of no force or effect. The applicable
Performance Goals shall be based on one or more of the performance
criteria set forth in Exhibit A
hereto.
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(d)
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Dividends. Unless otherwise determined by
the Committee at the time of grant, amounts equal to any dividends
declared during the Performance Period with respect to the number of
shares of Common Stock covered by a Performance Share will not be paid to
the Participant.
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20
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(e)
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Payment. Following the Committee’s
determination in accordance with subsection (a) above, shares of Common
Stock or, as determined by the Committee in its sole discretion, the cash
equivalent of such shares shall be delivered to the Eligible Employee,
Consultant or Non-Employee Director, or his legal representative, in an
amount equal to such individual’s earned Performance Share.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
award an amount less than the earned Performance Share and/or subject the
payment of all or part of any Performance Share to additional vesting,
forfeiture and deferral conditions as it deems
appropriate.
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(f)
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Accelerated
Vesting. Based on
service, performance and/or such other factors or criteria, if any, as the
Committee may determine, the Committee may, in its sole discretion, at or
after grant, accelerate the vesting of all or any part of any Performance
Share Award and/or waive the deferral limitations for all or any part of
such Award.
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ARTICLE
X
OTHER
STOCK-BASED AWARDS
10.1 Other
Awards. The Committee, in
its sole discretion, is authorized to grant to Eligible Employees, Consultants
and Non-Employee Directors Other Stock-Based Awards that are payable in, valued
in whole or in part by reference to, or otherwise based on or related to shares
of Common Stock, including, but not limited to, shares of Common Stock awarded
purely as a bonus and not subject to any restrictions or conditions, shares of
Common Stock in payment of the amounts due under an incentive or performance
plan sponsored or maintained by the Company or an Affiliate, performance units,
dividend equivalent units, stock equivalent units, restricted stock units and
deferred stock units. To the extent permitted by law, the Committee may, in its
sole discretion, permit Eligible Employees and/or Non-Employee Directors to
defer all or a portion of their cash compensation in the form of Other
Stock-Based Awards granted under this Plan, subject to the terms and conditions
of any deferred compensation arrangement established by the Company, which shall
be intended to comply with Section 409A of the Code. Other Stock-Based Awards
may be granted either alone or in addition to or in tandem with other Awards
granted under the Plan.
Subject
to the provisions of this Plan, the Committee shall, in its sole discretion,
have authority to determine the Eligible Employees, Consultants and Non-Employee
Directors, to whom, and the time or times at which, such Awards shall be made,
the number of shares of Common Stock to be awarded pursuant to such Awards, and
all other conditions of the Awards. The Committee may also provide for the grant
of Common Stock under such Awards upon the completion of a specified performance
period.
The
Committee may condition the grant or vesting of Other Stock-Based Awards upon
the attainment of specified Performance Goals set forth on Exhibit A as the
Committee may determine, in its sole discretion; provided that to the extent
that such Other Stock-Based Awards are intended to comply with Section 162(m) of
the Code, the Committee shall establish the objective Performance Goals for the
vesting of such Other Stock-Based Awards based on a performance period
applicable to each Participant or class of Participants in writing prior to the
beginning of the applicable performance period or at such later date as
permitted under Section 162(m) of the Code and while the outcome of the
Performance Goals are substantially uncertain. Such Performance Goals may
incorporate, if and only to the extent permitted under Section 162(m) of the
Code, provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. To the extent any
such provision would create impermissible discretion under Section 162(m) of the
Code or otherwise violate Section 162(m) of the Code, such provision shall be of
no force or effect. The applicable Performance Goals shall be based on one or
more of the performance criteria set forth in Exhibit A hereto.
10.2 Terms
and Conditions. Other
Stock-Based Awards made pursuant to this Article X shall be subject to the
following terms and conditions:
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(a)
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Non-Transferability. Subject to the applicable
provisions of the Award agreement and this Plan, shares of Common Stock
subject to Awards made under this Article X may not be Transferred prior
to the date on which the shares are issued, or, if later, the date on
which any applicable restriction, performance or deferral period
lapses.
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(b)
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Dividends. Unless otherwise determined by
the Committee at the time of Award, subject to the provisions of the Award
agreement and this Plan, the recipient of an Award under this Article X
shall not be entitled to receive, currently or on a deferred basis,
dividends or dividend equivalents with respect to the number of shares of
Common Stock covered by the
Award.
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(c)
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Vesting. Any Award under this Article X
and any Common Stock covered by any such Award shall vest or be forfeited
to the extent so provided in the Award agreement, as determined by the
Committee, in its sole discretion. In the event that a written employment
agreement between the Company and a Participant provides for a vesting
schedule that is more favorable than the vesting schedule provided in the
form of Award agreement, the vesting schedule in such employment agreement
shall govern, provided that such agreement is in effect on the date of
grant and applicable to the specific
Award.
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(d)
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Price. Common Stock issued on a bonus
basis under this Article X may be issued for no cash consideration; Common
Stock purchased pursuant to a purchase right awarded under this Article X
shall be priced, as determined by the Committee in its sole
discretion.
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(e)
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Payment. Form of payment for the Other
Stock-Based Award shall be specified in the Award
agreement.
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ARTICLE
XI
PERFORMANCE-BASED
CASH AWARDS
11.1 Performance-Based
Cash Awards.
Performance-Based Cash Awards may be granted either alone or in addition to or
in tandem with Stock Options, Stock Appreciation Rights, or Restricted Stock.
Subject to the provisions of this Plan, the Committee shall, in its sole
discretion, have authority to determine the Eligible Employees, Consultants and
Non-Employee Directors to whom, and the time or times at which, such Awards
shall be made, the dollar amount to be awarded pursuant to such Awards, and all
other conditions of the Awards. The Committee may also provide for the payment
of a dollar amount under such Awards upon the completion of a specified
Performance Period.
For each
Participant, the Committee may specify a targeted performance award. The
individual target award may be expressed, at the Committee’s discretion, as a
fixed dollar amount, a percentage of base pay or total pay (excluding payments
made under the Plan), or an amount determined pursuant to an objective formula
or standard. Establishment of an individual target award for a Participant for a
calendar year shall not imply or require that the same level individual target
award (if any such award is established by the Committee for the relevant
Participant) be set for any subsequent calendar year. At the time the
Performance Goals are established, the Committee shall prescribe a formula to
determine the percentages (which may be greater than 100%) of the individual
target award which may be payable based upon the degree of attainment of the
Performance Goals during the calendar year. Notwithstanding anything else
herein, the Committee may, in its sole discretion, elect to pay a Participant an
amount that is less than the Participant’s individual target award (or attained
percentage thereof) regardless of the degree of attainment of the Performance
Goals; provided that no such discretion to reduce an Award earned based on
achievement of the applicable Performance Goals shall be permitted for the
calendar year in which a Change in Control of the Company occurs, or during such
calendar year with regard to the prior calendar year if the Awards for the prior
calendar year have not been made by the time of the Change in Control of the
Company, with regard to individuals who were Participants at the time of the
Change in Control of the Company.
22
11.2 Terms
and Conditions.
Performance-Based Awards made pursuant to this Article XI shall be subject to
the following terms and conditions:
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(a)
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Vesting
of Performance-Based Cash Award. At the expiration of the
applicable Performance Period, the Committee shall determine and certify
in writing the extent to which the Performance Goals established pursuant
to Section 11.2(c) are achieved and the percentage of the Participant’s
individual target award has been vested and
earned.
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(b)
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Waiver
of Limitation. In
the event of the Participant’s Disability or death, or in cases of special
circumstances, the Committee may, in its sole discretion, waive in whole
or in part any or all of the limitations imposed hereunder (if any) with
respect to any or all of an Award under this Article
XI.
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(c)
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Objective
Performance Goals, Formulae or Standards.
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(i)
The Committee shall establish the
objective Performance Goals and the individual target award (if any) applicable
to each Participant or class of Participants in writing prior to the beginning
of the applicable Performance Period or at such later date as permitted under
Section 162(m) of the Code and while the outcome of the Performance Goals are
substantially uncertain. Such Performance Goals may incorporate, if and only to
the extent permitted under Section 162(m) of the Code, provisions for
disregarding (or adjusting for) changes in accounting methods, corporate
transactions (including, without limitation, dispositions and acquisitions) and
other similar type events or circumstances. To the extent any Performance-Based
Award is intended to comply with the provisions of Section 162(m) of the Code,
if any provision would create impermissible discretion under Section 162(m) of
the Code or otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect. The applicable Performance Goals shall be based on one
or more of the performance criteria set forth in Exhibit A
hereto.
(ii) The measurements used in Performance
Goals set under the Plan shall be determined in accordance with Generally
Accepted Accounting Principles (“GAAP”), except, to the extent that any
objective Performance Goals are used, if any measurements require deviation from
GAAP, such deviation shall be at the discretion of the Committee at the time the
Performance Goals are set or at such later time to the extent permitted under
Section 162(m) of the Code.
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(d)
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Payment. Following the Committee’s
determination and certification in accordance with subsection (a) above,
the Performance-Based Cash Award amount shall be delivered to the Eligible
Employee, Consultant or Non-Employee Director, or his legal
representative, in accordance with the terms and conditions of the Award
agreement.
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ARTICLE
XII
TERMINATION
12.1 Termination. The following rules apply with regard
to the Termination of a Participant.
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(a)
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Rules
Applicable to Stock Option and Stock Appreciation Rights. Unless otherwise determined by
the Committee at grant (or, if no rights of the Participant are reduced,
thereafter):
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(i)
Termination
by Reason of Death or Disability. If a Participant’s Termination is by
reason of death or Disability, all Stock Options or Stock Appreciation Rights
that are held by such Participant that are vested and exercisable at the time of
the Participant’s Termination may be exercised by the Participant (or, in the
case of death, by the legal representative of the Participant’s estate) at any
time within a one-year period from the date of such Termination, but in no event
beyond the expiration of the stated term of such Stock Options or Stock
Appreciation Rights; provided, however, if the Participant dies within such
exercise period, all unexercised Stock Options or Stock Appreciation Rights held
by such Participant shall thereafter be exercisable, to the extent to which they
were exercisable at the time of death, for a period of one year from the date of
such death, but in no event beyond the expiration of the stated term of such
Stock Options or Stock Appreciation Rights.
(ii) Involuntary
Termination Without Cause. If a Participant’s Termination is by
involuntary termination without Cause, all Stock Options or Stock Appreciation
Rights that are held by such Participant that are vested and exercisable at the
time of the Participant’s Termination may be exercised by the Participant at any
time within a period of 90 days from the date of such Termination, but in no
event beyond the expiration of the stated term of such Stock Options or Stock
Appreciation Rights.
(iii) Voluntary
Termination. If a
Participant’s Termination is voluntary (other than a voluntary termination
described in Section 12.2(a)(iv)(2) below), all Stock Options or Stock
Appreciation Rights that are held by such Participant that are vested and
exercisable at the time of the Participant’s Termination may be exercised by the
Participant at any time within a period of 30 days from the date of such
Termination, but in no event beyond the expiration of the stated terms of such
Stock Options or Stock Appreciation Rights.
(iv) Termination for
Cause. If a Participant’s
Termination: (1) is for Cause or (2) is a voluntary Termination (as provided in
sub-section (iii) above) after the occurrence of an event that would be grounds
for a Termination for Cause, all Stock Options or Stock Appreciation Rights,
whether vested or not vested, that are held by such Participant shall thereupon
terminate and expire as of the date of such Termination.
(v) Unvested Stock
Options and Stock Appreciation Rights. Stock Options or Stock Appreciation
Rights that are not vested as of the date of a Participant’s Termination for any
reason shall terminate and expire as of the date of such
Termination.
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(b)
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Rules
Applicable to Restricted Stock, Performance Shares, Other Stock-Based
Awards and Performance-Based Cash
Awards. Unless otherwise determined by
the Committee at grant or thereafter, upon a Participant’s Termination for
any reason: (i) during the relevant Restriction Period, all
Restricted Stock still subject to restriction shall be forfeited; and
(ii) any unvested Performance Shares, Other Stock-Based Awards or
Performance-Based Cash Awards shall be
forfeited
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ARTICLE
XIII
CHANGE IN
CONTROL PROVISIONS
13.1
Benefits. In the event of a Change in Control
of the Company, and except as otherwise provided by the Committee in an Award
agreement or in a written employment agreement between the Company and a
Participant, a Participant’s unvested Award shall vest and a Participant’s Award
shall be treated in accordance with one of the following methods as determined
by the Committee in its sole discretion:
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(a)
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Awards, whether or not then
vested, shall be continued, assumed, have new rights substituted therefor
or be treated in accordance with Section 4.2(d) hereof, as determined by
the Committee in its sole discretion, and restrictions to which any shares
of Restricted Stock or any other Award granted prior to the Change in
Control are subject shall not lapse upon a Change in Control and the
Restricted Stock or other Award shall, where appropriate in the sole
discretion of the Committee, receive the same distribution as other Common
Stock on such terms as determined by the Committee; provided that, the
Committee may, in its sole discretion, decide to award additional
Restricted Stock or other Award in lieu of any cash distribution.
Notwithstanding anything to the contrary herein, for purposes of Incentive
Stock Options, any assumed or substituted Stock Option shall comply with
the requirements of Treasury Regulation § 1.424-1 (and any
amendments thereto).
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(b)
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The Committee, in its sole
discretion, may provide for the purchase of any Awards by the Company or
an Affiliate for an amount of cash equal to the excess of the Change in
Control Price (as defined below) of the shares of Common Stock covered by
such Awards, over the aggregate exercise price of such Awards. For
purposes of this Section 13.1, “Change
in Control Price”
shall mean the highest price per share of Common Stock paid in any
transaction related to a Change in Control of the
Company.
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(c)
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The Committee may, in its sole
discretion, provide for the cancellation of any Awards without payment, if
the Change in Control Price is less than the Fair Market Value of such
Award on the date of grant.
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(d)
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Notwithstanding anything else
herein, the Committee may, in its sole discretion, provide for accelerated
vesting or lapse of restrictions, of an Award at the time of grant or at
any time thereafter.
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13.2 Change
in Control. Unless
otherwise determined by the Committee in the applicable Award agreement (or
other written agreement approved by the Committee including, without limitation,
an employment agreement), a “Change in
Control” shall be deemed
to occur on the occurrence of any of the following:
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(a)
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An acquisition of any common
stock or other voting securities of the Company entitled to vote generally
for the election of directors (the "Voting
Securities") by any
“Person” or “Group” (as each such term is used for purposes of Section
13(d) or 14(d) of the Exchange Act), immediately after which such Person
or Group, as the case may be, has “Beneficial
Ownership” (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
20% of the then outstanding shares of Common Stock or the combined voting
power of the Company’s then outstanding Voting Securities; provided, however, that in determining whether a
“Change in Control” has occurred, shares of Common Stock or Voting
Securities that are acquired in a Non-Control Acquisition (as defined
below) shall not constitute an acquisition which would cause a Change in
Control. A “Non-Control
Acquisition” shall
mean an acquisition by (i) the Company, (ii) any Subsidiary or (iii) any
employee benefit plan maintained by the Company or any Subsidiary,
including a trust forming part of any such plan (an “Employee
Benefit Plan”);
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(b)
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During any 2-year period,
individuals who, at the beginning of such 2-year period, constitute the
Board (the “Incumbent
Board of Directors”), cease for any reason to
constitute at least 50% of the members of the Board; provided, however,
that (i) if the election or nomination for election by the Company’s
shareholders of any new director was approved by a vote of at least
two-thirds of the Incumbent Board of Directors, such new director shall,
for purposes hereof, be deemed to be a member of the Incumbent Board of
Directors, and (ii) no individual shall be deemed to be a member of the
Incumbent Board of Directors if such individual initially assumed office
as a result of either an actual or threatened “Election
Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf
of a Person or Group other than the Board of Directors (a “Proxy
Contest”) including
by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest;
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(c)
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The consummation of a merger,
consolidation or reorganization involving the Company or any Subsidiary,
unless the merger, consolidation or reorganization is a Non-Control
Transaction. A “Non-Control
Transaction” shall
mean a merger, consolidation or reorganization of the Company or any
Subsidiary where: (A) the shareholders of the Company (or such Subsidiary,
as the case may be) who immediately prior to the merger, consolidation or
reorganization owned, directly or indirectly, at least 50% of the combined
voting power of the outstanding Voting Securities of the Company or such
Subsidiary immediately following such merger, consolidation or
reorganization, own at least 50% of the combined voting power of the
outstanding voting securities of the corporation resulting from such
merger, consolidation or reorganization (the "Surviving
Corporation"), in
substantially the same proportions as their ownership of the Common Stock
or Voting Securities, as the case may be, immediately prior to the merger,
consolidation or reorganization; (B) the individuals who were members of
the Incumbent Board of Directors immediately prior to the execution of the
agreement providing for the merger, consolidation or reorganization
constitute at least two-thirds of the members of the board of directors of
the Surviving Corporation, or a corporation beneficially owning, directly
or indirectly, a majority of the outstanding voting securities of the
Surviving Corporation, and (C) no Person or Group, other than (1) the
Company, (2) any Subsidiary, (3) any Employee Benefit Plan or (4) any
other Person or Group who, immediately prior to the merger, consolidation
or reorganization, had Beneficial Ownership of not less than 20% of the
outstanding Voting Securities or Common Stock, has Beneficial Ownership of
20% or more of the combined voting power of the Surviving Corporation's
outstanding voting securities or common
stock;
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(d)
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A complete liquidation or
dissolution of the Company;
or
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(e)
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The sale or other disposition of
all or substantially all of the assets of the Company to any Person (other
than a transfer to a
Subsidiary).
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Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred solely
because any Person or Group (the “Subject Person”)
acquired Beneficial Ownership of more than the permitted amount of the then
outstanding Voting Securities or Common Stock of the Company as a result of an
acquisition of Voting Securities or Common Stock by the Company, which, by
reducing the number of shares of Voting Securities or Common Stock then
outstanding, increases the proportional number of shares beneficially owned by
the Subject Person; provided, however, that if a Change in Control would have
occurred (but for the operation of this sentence) as a result of the acquisition
of Voting Securities or common stock by the Company, and after such acquisition
by the Company, the Subject Person becomes the beneficial owner of any
additional shares of Voting Securities or Common Stock, which increases the
percentage of the then outstanding shares of Voting Securities or Common Stock
beneficially owned by the Subject Person, then a Change in Control shall be
deemed to have occurred. In addition, notwithstanding the foregoing, the
acquisition or ownership of any Common Stock or Voting Securities by Applied
Digital Solutions, Inc. and its Affiliates (determined as if it was the Company)
shall not cause or result in a Change in Control.
26
ARTICLE
XIV
TERMINATION
OR AMENDMENT OF PLAN
14.1 Termination
or Amendment.
Notwithstanding any other provision of this Plan, the Board or the Committee may
at any time, and from time to time, amend, in whole or in part, any or all of
the provisions of this Plan (including any amendment deemed necessary to ensure
that the Company may comply with any regulatory requirement referred to in
Article XVI), or suspend or terminate it entirely, retroactively or otherwise;
provided, however, that, unless otherwise required by law or specifically
provided herein, the rights of a Participant with respect to Awards granted
prior to such amendment, suspension or termination, may not be impaired without
the consent of such Participant and, provided further, without the approval of
the stockholders of the Company in accordance with the laws of the State of
Delaware, to the extent required by the applicable provisions of Rule 16b-3 or
Section 162(m) of the Code, pursuant to the requirements of any applicable stock
exchange rule, or, to the extent applicable to Incentive Stock Options, Section
422 of the Code, no amendment may be made which would:
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(a)
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increase the aggregate number of
shares of Common Stock that may be issued under this Plan pursuant to
Section 4.1 (except by operation of Section
4.2);
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(b)
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increase the maximum individual
Participant limitations for a fiscal year under Section 4.1(b) (except by
operation of Section 4.2);
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(c)
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change the classification of
Eligible Employees or Consultants eligible to receive Awards under this
Plan;
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(d)
|
decrease the minimum option price
of any Stock Option or Stock Appreciation
Right;
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(e)
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extend the maximum option period
under Section 6.3;
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(f)
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alter the Performance Goals for
the Award of Restricted Stock, Performance Shares or Other Stock-Based
Awards subject to satisfaction of Performance Goals as set forth in
Exhibit A;
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(g)
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award any Stock Option or Stock
Appreciation Right in replacement of a canceled Stock Option or Stock
Appreciation Right with a higher exercise price, except in accordance with
Section 6.3(g); or
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(h)
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require stockholder approval in
order for this Plan to continue to comply with the applicable provisions
of Section 162(m) of the Code or, to the extent applicable to Incentive
Stock Options, Section 422 of the Code. In no event may this Plan be
amended without the approval of the stockholders of the Company in
accordance with the applicable laws of the State of Delaware to increase
the aggregate number of shares of Common Stock that may be issued under
this Plan, decrease the minimum exercise price of any Stock Option or
Stock Appreciation Right, or to make any other amendment that would
require stockholder approval under any applicable rule of any exchange or
system on which the Company's securities are listed or traded at the
request of the Company.
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27
The
Committee may amend the terms of any Award theretofore granted, prospectively or
retroactively, but, subject to Article IV above or as otherwise specifically
provided herein, no such amendment or other action by the Committee shall impair
the rights of any holder without the holder's consent.
ARTICLE
XV
UNFUNDED
PLAN
15.1 Unfunded
Status of Plan. This Plan
is an “unfunded” plan for incentive and deferred compensation. With respect to
any payments as to which a Participant has a fixed and vested interest but that
are not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
unsecured creditor of the Company.
ARTICLE
XVI
GENERAL
PROVISIONS
16.1 Legend. The Committee may require each person
receiving shares of Common Stock pursuant to a Stock Option or other Award under
the Plan to represent to and agree with the Company in writing that the
Participant is acquiring the shares without a view to distribution thereof. In
addition to any legend required by this Plan, the certificates for such shares
may include any legend that the Committee, in its sole discretion, deems
appropriate to reflect any restrictions on Transfer.
All
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stop transfer orders and other restrictions as the Committee
may, in its sole discretion, deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any national
securities exchange system upon whose system the Common Stock is then quoted,
any applicable Federal or state securities law, and any applicable corporate
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
16.2 Other
Plans. Nothing contained
in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such approval is
required, and such arrangements may be either generally applicable or applicable
only in specific cases.
16.3 No
Right to Employment/Directorship/Consultancy. Neither this Plan nor the grant of
any Option or other Award hereunder shall give any Participant or other
employee, Consultant or Non-Employee Director any right with respect to
continuance of employment, consultancy or directorship by the Company or any
Affiliate, nor shall they be a limitation in any way on the right of the Company
or any Affiliate by which an employee is employed or a Consultant or
Non-Employee Director is retained to terminate his or her employment,
consultancy or directorship at any time.
16.4 Withholding
of Taxes. The Company
shall have the right to deduct from any payment to be made pursuant to this
Plan, or to otherwise require, prior to the issuance or delivery of any shares
of Common Stock or the payment of any cash hereunder, payment by the Participant
of, any Federal, state or local taxes required by law to be withheld. Upon the
vesting of Restricted Stock (or other Award that is taxable upon vesting), or
upon making an election under Section 83(b) of the Code, a Participant shall pay
all required withholding to the Company. Any statutorily required withholding
obligation with regard to any Participant may be satisfied, subject to the
advance consent of the Committee, by reducing the number of shares of Common
Stock otherwise deliverable or by delivering shares of Common Stock already
owned. Any fraction of a share of Common Stock required to satisfy such tax
obligations shall be disregarded and the amount due shall be paid instead in
cash by the Participant.
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16.5 No
Assignment of Benefits. No
Award or other benefit payable under this Plan shall, except as otherwise
specifically provided by law or permitted by the Committee, be Transferable in
any manner, and any attempt to Transfer any such benefit shall be void, and any
such benefit shall not in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person who shall be entitled
to such benefit, nor shall it be subject to attachment or legal process for or
against such person.
16.6 Listing
and Other Conditions.
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(a)
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Unless otherwise determined by
the Committee, as long as the Common Stock is listed on a national
securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to an Award
shall be conditioned upon such shares being listed on such exchange or
system. The Company shall have no obligation to issue such shares unless
and until such shares are so listed, and the right to exercise any Option
or other Award with respect to such shares shall be suspended until such
listing has been effected.
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(b)
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If at any time counsel to the
Company shall be of the opinion that any sale or delivery of shares of
Common Stock pursuant to an Option or other Award is or may in the
circumstances be unlawful or result in the imposition of excise taxes on
the Company under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act or otherwise, with
respect to shares of Common Stock or Awards, and the right to exercise any
Option or other Award shall be suspended until, in the opinion of said
counsel, such sale or delivery shall be lawful or will not result in the
imposition of excise taxes on the
Company.
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(c)
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Upon termination of any period of
suspension under this Section 16.6, any Award affected by such suspension
which shall not then have expired or terminated shall be reinstated as to
all shares available before such suspension and as to shares which would
otherwise have become available during the period of such suspension, but
no such suspension shall extend the term of any
Award.
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(d)
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A Participant shall be required
to supply the Company with any certificates, representations and
information that the Company requests and otherwise cooperate with the
Company in obtaining any listing, registration, qualification, exemption,
consent or approval the Company deems necessary or
appropriate.
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16.7 Governing
Law. This Plan and actions
taken in connection herewith shall be governed and construed in accordance with
the laws of the State of Delaware (regardless of the law that might otherwise
govern under applicable Delaware principles of conflict of
laws).
16.8 Construction. Wherever any words are used in this
Plan in the masculine gender they shall be construed as though they were also
used in the feminine gender in all cases where they would so apply, and wherever
any words are used herein in the singular form they shall be construed as though
they were also used in the plural form in all cases where they would so
apply.
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16.9 Other
Benefits. No Award granted
or paid out under this Plan shall be deemed compensation for purposes of
computing benefits under any retirement plan of the Company or its Affiliates
nor affect any benefits under any other benefit plan now or subsequently in
effect under which the availability or amount of benefits is related to the
level of compensation.
16.10 Costs. The Company shall bear all expenses
associated with administering this Plan, including expenses of issuing Common
Stock pursuant to any Awards hereunder.
16.11 No
Right to Same Benefits.
The provisions of Awards need not be the same with respect to each Participant,
and such Awards to individual Participants need not be the same in subsequent
years.
16.12 Death/Disability. The Committee may in its sole
discretion require the transferee of a Participant to supply it with written
notice of the Participant’s death or Disability and to supply it with a copy of
the will (in the case of the Participant’s death) or such other evidence as the
Committee deems necessary to establish the validity of the transfer of an Award.
The Committee may, in its discretion, also require the agreement of the
transferee to be bound by all of the terms and conditions of the
Plan.
16.13 Section
16(b) of the Exchange Act.
All elections and transactions under this Plan by persons subject to Section 16
of the Exchange Act involving shares of Common Stock are intended to comply with
any applicable exemptive condition under Rule 16b-3. The Committee may, in
its sole discretion, establish and adopt written administrative guidelines,
designed to facilitate compliance with Section 16(b) of the Exchange Act, as it
may deem necessary or proper for the administration and operation of this Plan
and the transaction of business thereunder.
16.14 Section
409A of the Code. The Plan
is intended to comply with the applicable requirements of Section 409A of the
Code and shall be limited, construed and interpreted in accordance with such
intent. To the extent that any Award is subject to Section 409A of the Code, it
shall be paid in a manner that will comply with Section 409A of the Code,
including proposed, temporary or final regulations or any other guidance issued
by the Secretary of the Treasury and the Internal Revenue Service with respect
thereto. Notwithstanding anything herein to the contrary, any provision in the
Plan that is inconsistent with Section 409A of the Code shall be deemed to be
amended to comply with Section 409A of the Code and to the extent such provision
cannot be amended to comply therewith, such provision shall be null and
void.
16.15 Successor
and Assigns. The Plan
shall be binding on all successors and permitted assigns of a Participant,
including, without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate.
16.16 Severability
of Provisions. If any
provision of the Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and the Plan
shall be construed and enforced as if such provisions had not been
included.
16.17 Payments
to Minors, Etc. Any benefit payable to or for the
benefit of a minor, an incompetent person or other person incapable of receipt
thereof shall be deemed paid when paid to such person’s guardian or to the party
providing or reasonably appearing to provide for the care of such person, and
such payment shall fully discharge the Committee, the Board, the Company, its
Affiliates and their employees, agents and representatives with respect
thereto.
16.18 Headings
and Captions. The headings
and captions herein are provided for reference and convenience only, shall not
be considered part of the Plan, and shall not be employed in the construction of
the Plan.
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ARTICLE
XVII
EFFECTIVE
DATE OF PLAN
The Plan
shall become effective upon the date specified by the Board in its resolution
adopting the Plan, subject to the approval of the Plan by the stockholders of
the Company in accordance with the requirements of the laws of the State of
Delaware.
ARTICLE
XVIII
TERM OF
PLAN
No Award
shall be granted pursuant to the Plan on or after the tenth anniversary of the
earlier of the date the Plan is adopted or the date of stockholder approval, but
Awards granted prior to such tenth anniversary may extend beyond that date;
provided that no Award (other than a Stock Option or Stock Appreciation Right)
that is intended to be “performance-based” under Section 162(m) of the Code
shall be granted on or after the fifth anniversary of the stockholder approval
of the Plan unless the Performance Goals set forth on Exhibit A are reapproved
(or other designated performance goals are approved) by the stockholders no
later than the first stockholder meeting that occurs in the fifth year following
the year in which stockholders approve the Performance Goals set forth on
Exhibit A.
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ARTICLE
XIX
NAME OF
PLAN
This Plan
shall be known as “The China SLP Filtration Technology, Inc. 2010 Stock
Incentive Plan.”
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