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8-K - FORM 8-K - MARINEMAX INC | c11417e8vk.htm |
EX-10.29(B) - EXHIBIT 10.29(B) - MARINEMAX INC | c11417exv10w29xby.htm |
EX-10.29(C) - EXHIBIT 10.29(C) - MARINEMAX INC | c11417exv10w29xcy.htm |
EXHIBIT 10.29(a)
MarineMax, Inc.
2011 Stock-Based Compensation Plan
1. Purpose. The purpose of this Plan is to assist the Company and its Related Entities in
attracting, motivating, retaining and rewarding high-quality Employees, officers, Directors, and
Consultants by enabling such persons to acquire or increase a proprietary interest in the Company
in order to strengthen the mutuality of interests between such persons and the Companys
stockholders and providing such persons with annual and long-term performance incentives to expend
their maximum efforts in the creation of stockholder value. The Plan is intended to qualify
certain compensation awarded under the Plan for tax deductibility under Section 162(m) of the Code
(as hereafter defined) to the extent deemed appropriate by the Plan Administrator.
2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth
below.
(a) 2007 Plan Award means a stock award granted under the 2007 Incentive Compensation Plan.
(b) Applicable Laws means the requirements relating to the administration of equity
compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, the rules and regulations of any stock exchange upon which the Common Stock is listed, and
the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
(c) Award means any award granted pursuant to the terms of this Plan, including an Option,
Stock Appreciation Right, Restricted Stock, Stock Unit, Stock granted as a bonus or in lieu of
another award, Dividend Equivalent, and Other Stock-Based Award or Performance Award, together with
any other right or interest, granted to a Participant under the Plan.
(d) Award Agreement means the written agreement evidencing an Award granted under the Plan.
(e) Beneficiary means the person, persons, trust, or trusts that have been designated by a
Participant in his or her most recent written beneficiary designation filed with the Plan
Administrator to receive the benefits specified under the Plan upon such Participants death or to
which Awards or other rights are transferred if and to the extent permitted under Section 10(b)
hereof. If, upon a Participants death, there is no designated Beneficiary or surviving designated
Beneficiary, then the term Beneficiary means the person, persons, trust, or trusts entitled by will
or the laws of descent and distribution to receive such benefits.
(f) Beneficial Owner, Beneficially Owning, and Beneficial Ownership shall have the
meanings ascribed to such terms in Rule 13d-3 under the Exchange Act and any successor to such
Rule.
(g) Board means the Companys Board of Directors.
(h) Cause shall, with respect to any Participant, have the meaning specified in the Award
Agreement. In the absence of any definition in the Award Agreement, Cause shall have the
equivalent meaning or the same meaning as cause or for cause set forth in any employment,
consulting, change in control, or other agreement for the performance of services between the
Participant and the Company or a Related Entity or, in the absence of any such definition in such
agreement, such term shall mean (i) the failure by the Participant to perform his or her duties as
assigned by the Company (or a Related Entity) in a reasonable manner, (ii) any violation or breach
by the Participant of his or her employment, consulting, or other similar agreement with the
Company (or a Related Entity), if any, (iii) any violation or breach by the Participant of his or
her confidential information and invention assignment, non-competition, non-solicitation,
non-disclosure, and/or other similar agreement with the Company or a Related Entity, if any, (iv)
any act by the Participant of dishonesty or bad faith with respect to the Company (or a Related
Entity), (v) any material violation or breach by the Participant of the Companys or a Related
Entitys policy for employee conduct, if any, (vi) use of alcohol, drugs, or other similar
substances in a manner that adversely affects the Participants work performance, or (vii) the
commission by the Participant of any act, misdemeanor, or crime reflecting unfavorably upon the
Participant or the Company or any Related Entity. The good faith determination by the Plan
Administrator of whether the Participants Continuous Service was terminated by the Company for
Cause shall be final and binding for all purposes hereunder.
(i) Change in Control means and shall be deemed to have occurred on the earliest of the
following dates:
(i) the date on which any person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), obtains beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) or a
pecuniary interest in fifty percent (50%) or more of the Voting Stock;
(ii) the consummation of a merger, consolidation, reorganization, or similar transaction other
than a transaction (1) (a) in which substantially all of the holders of Companys Voting Stock hold
or receive directly or indirectly fifty percent (50%) or more of the voting stock of the resulting
entity or a parent company thereof, in substantially the same proportions as their ownership of the
Company immediately prior to the transaction; or (2) in which the holders of Companys capital
stock immediately before such transaction will, immediately after such transaction, hold as a group
on a fully diluted basis the ability to elect at least a majority of the directors of the surviving
corporation (or a parent company);
(iii) there is consummated a sale, lease, exclusive license, or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license, or other disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries to an entity, fifty percent (50%) or more of the combined
voting power of the voting securities of which are owned by the stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately prior to such
sale, lease, license or other disposition; or
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(iv) individuals who, on the date this Plan is adopted by the Board, are Directors (the
Incumbent Board) cease for any reason to constitute at least a majority of the Directors;
provided, however, that if the appointment or election (or nomination for election) of any new
Director was approved or recommended by a majority vote of the members of the Incumbent Board then
still in office, such new member shall, for purposes of this Plan, be considered as a member of the
Incumbent Board.
For purposes of determining whether a Change in Control has occurred, a transaction includes
all transactions in a series of related transactions, and terms used in this definition but not
defined are used as defined in the Plan. The term Change in Control shall not include a sale of
assets, merger, or other transaction effected exclusively for the purpose of changing the domicile
of the Company.
Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the Company and the
Participant shall supersede the foregoing definition with respect to Awards subject to such
agreement (it being understood, however, that if no definition of Change in Control or any
analogous term is set forth in such an individual written agreement, the foregoing definition shall
apply).
(j) Code means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations thereto.
(k) Committee means a committee designated by the Board to administer the Plan with respect
to at least a group of Employees, Directors, or Consultants.
(l) Company means MarineMax, Inc., a Delaware corporation.
(m) Consultant means any person (other than an Employee or a Director, solely with respect
to rendering services in such persons capacity as a director) who is engaged by the Company or any
Related Entity to render consulting or advisory services to the Company or such Related Entity.
(n) Continuous Service means uninterrupted provision of services to the Company or any
Related Entity in the capacity as either an officer, Employee, Director, or Consultant. Continuous
Service shall not be considered to be interrupted in the case of (i) any approved leave of absence,
(ii) transfers among the Company, any Related Entities, or any successor entities, in the capacity
as either an officer, Employee, Director, or Consultant or (iii) any change in status as long as
the individual remains in the service of the Company or a Related Entity in the capacity as either
an officer, Employee, Director, or Consultant (except as otherwise provided in the Award
Agreement). An approved leave of absence shall include sick leave, military leave, or any other
authorized personal leave.
(o) Corporate Transaction means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i) a sale, lease, exclusive license, or other disposition of a substantial portion of the
consolidated assets of the Company and its Subsidiaries, as determined by the Plan Administrator,
in its discretion;
(ii) a sale or other disposition of more than twenty percent (20%) of the outstanding
securities of the Company; or
(iii) a merger, consolidation, reorganization, or similar transaction, whether or not the
Company is the surviving corporation.
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(p) Covered Employee means an Eligible Person who is a Covered Employee as specified in
Section 7(d) of the Plan.
(q) Director means a member of the Board or the board of directors of any Related Entity.
(r) Disability means a permanent and total disability (within the meaning of Section 22(e)
of the Code), as determined by a medical doctor satisfactory to the Plan Administrator.
(s) Dividend Equivalent means a right, granted to a Participant under Section 6(g) hereof,
to receive cash, Shares, other Awards, or other property equal in value to dividends paid with
respect to a specified number of Shares or other periodic payments.
(t) Effective Date means the effective date of this Plan, which shall be the date this Plan
is adopted by the Board, subject to the approval of the stockholders of the Company.
(u) Eligible Person means each officer, Director, Employee, or Consultant. The foregoing
notwithstanding, only employees of the Company, any Parent, or any Subsidiary shall be Eligible
Persons for purposes of receiving Incentive Stock Options. An Employee on leave of absence may be
considered as still in the employ of the Company or a Related Entity for purposes of eligibility
for participation in the Plan.
(v) Employee means any person, including an officer or Director, who is an employee of the
Company or any Related Entity. The payment of a directors fee by the Company or a Related Entity
shall not be sufficient to constitute employment by the Company.
(w) Exchange Act means the Securities Exchange Act of 1934, as amended from time to time,
including rules thereunder and successor provisions and rules thereto.
(x) Executive Officer means an executive officer of the Company as defined under the
Exchange Act.
(y) Fair Market Value means the fair market value of Shares, Awards, or other property as
determined by the Plan Administrator, or under procedures established by the Plan Administrator.
Unless otherwise determined by the Plan Administrator, the Fair Market Value of Shares as of any
given date, after which the Shares are publicly traded on a stock
exchange or market, shall be the closing sale price per share reported on a consolidated basis
for stock listed on the principal stock exchange or market on which Shares are traded on the date
as of which such value is being determined or, if there is no sale on that date, then on the last
previous day on which a sale was reported.
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(z) Good Reason shall, with respect to any Participant, have the meaning specified in the
Award Agreement. In the absence of any definition in the Award Agreement, Good Reason shall have
the equivalent meaning (or the same meaning as good reason or for good reason) set forth in any
employment, consulting, change in control, or other agreement for the performance of services
between the Participant and the Company or a Related Entity or, in the absence of any such
definition in such agreement(s), such term shall mean (i) the assignment to the Participant of any
duties inconsistent in any material respect with the Participants position (including status,
offices, titles, and reporting requirements), authority, duties, or responsibilities as assigned by
the Company (or a Related Entity) or any other action by the Company (or a Related Entity) that
results in a material diminution in such position, authority, duties, or responsibilities,
excluding for this purpose an isolated, insubstantial, and inadvertent action not taken in bad
faith and which is remedied by the Company (or a Related Entity) promptly after receipt of notice
thereof given by the Participant; (ii) any failure by the Company (or a Related Entity) to comply
with its obligations to the Participant as agreed upon, other than an isolated, insubstantial, or
inadvertent failure not occurring in bad faith and which is remedied by the Company (or a Related
Entity) promptly after receipt of notice thereof given by the Participant; (iii) the Companys (or
Related Entitys) requiring the Participant to be based at any office or location more than fifty
(50) miles from the location of employment as of the date of Award, except for travel reasonably
required in the performance of the Participants responsibilities; (iv) any purported termination
by the Company (or a Related Entity) of the Participants Continuous Service otherwise than for
Cause, as defined in Section 2(h), death, or by reason of the Participants Disability as defined
in Section 2I; or (v) any reduction in the Participants base salary (unless such reduction is part
of Company-wide reduction that affects a majority of the persons of comparable level to the
Participant).
(aa) Incentive Stock Option means any Option intended to be designated as an incentive stock
option within the meaning of Section 422 of the Code or any successor provision thereto.
(bb) Non-Employee Director means a Director of the Company who is not an Employee.
(cc) Non-Qualified Stock Option means any Option that is not intended to be designated as an
incentive stock option within the meaning of Section 422 of the Code or any successor provision
thereto.
(dd) Option means a right, granted to a Participant under Section 6(b) hereof, to purchase
Shares or other Awards at a specified price during specified time periods.
(ee) Other Stock-Based Awards means Awards granted to a Participant pursuant to Section 6(h)
hereof.
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(ff) Parent means any corporation (other than the Company), whether now or hereafter
existing, in an unbroken chain of corporations ending with the Company, if each of the corporations
in the chain (other than the Company) owns stock possessing fifty percent (50%) or more of the
combined voting power of all classes of stock in one of the other corporations in the chain.
(gg) Participant means a person who has been granted an Award under the Plan that remains
outstanding, including a person who is no longer an Eligible Person.
(hh) Performance Award means a right, granted to an Eligible Person under Sections 6(h)
hereof, to receive Awards based upon performance criteria specified by the Plan Administrator.
(ii) Performance Period means that period established by the Plan Administrator at the time
any Performance Award is granted or at any time thereafter during which any performance goals
specified by the Plan Administrator with respect to such Award are to be measured.
(jj) Person has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof, and shall include a group as defined in Section 12(d)
thereof.
(kk) Plan means this MarineMax, Inc. 2011 Stock-Based Compensation Plan.
(ll) Plan Administrator means the Board or any Committee delegated by the Board to
administer the Plan. There may be different Plan Administrators with respect to different groups
of Eligible Persons.
(mm) Related Entity means any Parent, Subsidiary, and any business, corporation,
partnership, limited liability company, or other entity designated by the Plan Administrator in
which the Company, a Parent, or a Subsidiary, directly or indirectly, holds a substantial ownership
interest.
(nn) Restricted Stock means Stock granted to a Participant under Section 6(d) hereof, that
is subject to certain restrictions, including a risk of forfeiture.
(oo) Rule 16b-3 and Rule 16a-1(c)(3) means Rule 16b-3 and Rule 16a-1(c)(3), as from time
to time in effect and applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(pp) Share means a share of the Companys Common Stock, and the share of such other
securities as may be substituted (or resubstituted) for Stock pursuant to Section 10(c) hereof.
(qq) Stock means the Companys Common Stock, and such other securities as may be substituted
(or resubstituted) for the Companys Common Stock pursuant to Section 10(c) hereof.
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(rr) Stock Appreciation Right means a right granted to a Participant pursuant to Section
6(c) hereof.
(ss) Stock Unit means a right, granted to a Participant pursuant to Section 6(e) hereof, to
receive Shares, cash, or a combination thereof at the end of a specified period of time.
(tt) Subsidiary means any corporation (other than the Company), whether now or hereafter
existing, in an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(uu) Voting Stock means the stock of the Company with a right to vote for the election of
Directors.
3. Administration.
(a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in Section 3(c). The Board and/or
Committee(s) administering the Plan shall be the Plan Administrator.
(b) Powers of the Plan Administrator. The Plan Administrator shall have the following powers,
subject to, and within the limitations of, the express provisions of the Plan:
(i) Subject to Section 3(g) below, to determine from time to time those of the persons
eligible under the Plan shall be granted Awards; when and how each Award shall be granted; what
type or combination of types of Award shall be granted; the provisions of each Award granted (which
need not be identical), including the time or times when a person shall be permitted to receive
Shares or cash pursuant to an Award; and the number of Shares or amount of cash with respect to
which an Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Awards granted under it and to establish, amend,
and revoke rules and regulations for its administration. The Plan Administrator, in the exercise
of this power, may correct any one or more defects, omissions, or inconsistencies in the Plan or in
any Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(iii) To amend the Plan or an Award as provided in Section 10(e).
(iv) To terminate or suspend the Plan as provided in Section 10(e).
(v) To adopt such modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or Related Entities
may operate to assure the viability of the benefits from Awards granted to Participants performing
services in such countries and to meet the objectives of the Plan.
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(vi) Generally, to exercise such powers and to perform such acts as the Plan Administrator
deems necessary or appropriate to promote the best interests of the Company and that are not in
conflict with the provisions of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Plan to a Committee or Committees
of more members of the Board, and the term Committee shall apply to any person or persons to whom
such authority has been delegated. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board, to the extent delegated by the Board, including the power to delegate to a subcommittee
any of the administrative powers the Committee is authorized to exercise, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time
by the Board. The Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
(ii) Section 162(m) and Rule 16b-3 Compliance. In the discretion of the Board, the Committee
may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the
Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. In
addition, the Plan Administrator may delegate to a committee of two or more members of the Board
the authority to grant Awards to Eligible Persons who are either (a) not then Covered Employees and
are not expected to be Covered Employees at the time of recognition of income resulting from such
Award, (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the
Code or (c) not then subject to Section 16 of the Exchange Act.
(d) Effect of Plan Administrators Decision. All determinations, interpretations, and
constructions made by the Plan Administrator shall be made in good faith and shall not be subject
to review by any person and shall be final, binding and conclusive on all persons.
(e) Arbitration. Any dispute or claim concerning any Award granted (or not granted) pursuant
to the Plan or any disputes or claims relating to or arising out of the Plan shall be fully,
finally, and exclusively resolved by binding and confidential arbitration conducted pursuant to the
rules of Judicial Arbitration and Mediation Services, Inc. (JAMS) in the nearest city in which
JAMS conducts business to the city in which the Participant is employed by the Company. The
Company shall pay all arbitration fees. In addition to any other relief, the arbitrator may award
to the prevailing party recovery of its attorneys fees and costs. By accepting an Award, the
Participant and the Company waive their respective rights to have any such disputes or claims tried
by a judge or jury.
(f) Limitation of Liability. The Board and any Committee(s), and each member thereof, who act
as the Plan Administrator, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or Employee, the Companys independent
auditors, Consultants, or any other agents assisting in the administration of the Plan. Members of
the Board and any Committee(s), and any officer or Employee acting at the direction or on behalf of
the Board and any Committee(s), shall not be personally liable for
any action or determination taken or made in good faith with respect to the Plan and shall, to
the extent permitted by law, be fully indemnified and protected by the Company with respect to any
such action or determination.
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(g) Administration of the Plan For Non-Employee Directors. Notwithstanding the foregoing, the
grant of all Awards to the Non-Employee Directors shall be approved by a majority of the Directors
who qualify as independent under the rules of the principal stock exchange or market on which
Shares are traded or a Committee composed solely of such independent Directors.
4. Shares Issuable Under the Plan.
(a) Number of Shares Available for Issuance Under Plan. Subject to adjustment as provided in
Section 10(c) hereof, the total number of Shares reserved and available for issuance in connection
with Awards shall be 1,000,000 Shares. In addition, any shares available for issuance under the
2007 Incentive Compensation Plan that are not subject to an outstanding award under the 2007
Incentive Compensation Plan as of the date of stockholder approval of this Plan shall become
available for issuance under this Plan, and shall no longer be available for issuance under the
2007 Incentive Compensation Plan, as applicable. Any Shares issued under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
(b) Availability of Shares Not Issued pursuant to Awards.
(i) If any Shares subject to an Award or to an 2007 Plan Award are forfeited, expire, or
otherwise terminate without issuance of such Shares, any Award or 2007 Plan Award is settled for
cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such
Award or 2007 Plan Award, the Shares shall, to the extent of such forfeiture, expiration,
termination, cash settlement, or non-issuance, be available for Awards under the Plan, subject to
Section 4(b)(iv) below.
(ii) If any Shares issued pursuant to an Award or 2007 Plan Award are forfeited back to or
repurchased by the Company, including, but not limited to, any repurchase or forfeiture caused by
the failure to meet a contingency or condition required for the vesting of such shares, then the
Shares forfeited or repurchased shall revert to and become available for issuance under the Plan,
subject to Section 4(b)(iv) below.
(iii) In the event that any Option or other Award granted hereunder is exercised through the
withholding of Shares from the Award by the Company or withholding tax liabilities arising from
such Option or other Award are satisfied by the withholding of Shares from the Award by the
Company, then only the number of Shares issued net of the Shares withheld shall be counted as
issued for purposes of determining the maximum number of Shares available for grant under the Plan,
subject to Section 4(b)(iv) below. In the event that any 2007 Plan Award is exercised through the
withholding of Shares by the Company from the 2007 Plan Award or withholding tax liabilities
arising from such 2007 Plan Award are satisfied by the withholding of Shares from the 2007 Plan
Award by the Company, then Shares withheld shall become available for issuance under the Plan,
subject to Section 4(b)(iv) below.
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(iv) Notwithstanding anything in this Section 4(b) to the contrary, solely for purposes of
determining whether Shares are available for the grant of Incentive Stock Options, the maximum
aggregate number of Shares that may be granted under this Plan through Incentive Stock Options
shall be determined without regard to any Shares restored pursuant to this Section 4(b) that, if
taken into account, would cause the Plan, for purposes of the grant of Incentive Stock Options, to
fail the requirement under Code Section 422 that the Plan designate a maximum aggregate number of
shares that may be issued.
(c) Application of Limitations. The limitation contained in this Section 4 shall apply not
only to Awards that are settled by the delivery of Shares but also to Awards relating to Shares but
settled only in cash (such as cash-only Stock Appreciation Rights). The Plan Administrator may
adopt reasonable counting procedures to ensure appropriate counting, and avoid double counting (as,
for example, in the case of tandem or substitute awards) and may make adjustments if the number of
Shares actually delivered differs from the number of shares previously counted in connection with
an Award.
5. Eligibility; Per-Person Award Limitations. Awards may be granted under the Plan only to
Eligible Persons.
In any one calendar year, an Eligible Person may not be granted Awards under which more than
fifty percent (50%) of the total number of Shares reserved for issuance under the Plan (whether or
not issued) could be received by the Participant, subject to adjustment as provided in Section
10(c). In addition, the maximum dollar value payable in cash to any one Participant with respect
to Performance Awards vesting based on the performance objectives of Section 7 is $5,000,000 per
calendar year.
6. Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set forth in this Section 6.
In addition, the Plan Administrator may impose on any Award or the exercise thereof, at the date of
grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Plan Administrator shall determine, including
terms requiring forfeiture of Awards in the event of termination of the Participants Continuous
Service and terms permitting a Participant to make elections relating to his or her Award. The
Plan Administrator shall retain full power and discretion to accelerate, waive or modify, at any
time, any term or condition of an Award that is not mandatory under the Plan.
(b) Options. The Plan Administrator is authorized to grant Options to any Eligible Person on
the following terms and conditions:
(i) Stock Option Agreement. Each grant of an Option shall be evidenced by an Award Agreement.
Such Award Agreement shall be subject to all applicable terms and conditions of the Plan and may
be subject to any other terms and conditions, which are not inconsistent with the Plan and which
the Plan Administrator deems appropriate for inclusion in the Award Agreement. The provisions of
the various Award Agreements entered into under the Plan need not be identical.
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(ii) Number of Shares. The Plan Administrator shall determine and each Award Agreement shall
specify the number of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 10(c) hereof. The Award Agreement shall also specify
whether the Stock Option is an Incentive Stock Option or a Non-Qualified Stock Option.
(iii) Exercise Price.
(A) In General. The Plan Administrator shall determine and each Award Agreement shall state
the price at which Shares subject to the Option may be purchased (the Exercise Price), which
shall be not less than 100% of the Fair Market Value of the Stock on the date of grant.
(B) Ten Percent Stockholder. If a Participant owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, any Incentive Stock
Option granted to such Employee must have an exercise price per Share of at least 110% of the Fair
Market Value of a Share on the date of grant.
(iv) Time and Method of Exercise. The Plan Administrator shall determine the time or times at
which or the circumstances under which an Option may be exercised in whole or in part (including
based on achievement of performance goals and/or future service requirements), the time or times at
which Options shall cease to be or become exercisable following termination of Continuous Service
or upon other conditions, the methods by which the exercise price may be paid or deemed to be paid
(including, in the discretion of the Plan Administrator, a cashless exercise procedure), the form
of such payment, including, without limitation, cash, Stock, net exercise, other Awards, or awards
granted under other plans of the Company or a Related Entity, other property (including notes or
other contractual obligations of Participants to make payment on a deferred basis) or any other
form of consideration legally permissible, and the methods by or forms in which Stock will be
delivered or deemed to be delivered to Participants.
(v) Termination of Service. Subject to earlier termination of the Option as otherwise
provided in the Plan and unless otherwise provided by the Plan Administrator with respect to an
Option and set forth in the Award Agreement, an Option shall be exercisable after a Participants
termination of Continuous Service only during the applicable time period determined in accordance
with this Section and thereafter shall terminate and no longer be exercisable:
(A) Death or Disability. If the Participants Continuous Service terminates because of the
death or Disability of the Participant, the Option, to the extent unexercised and exercisable on
the date on which the Participants Continuous Service terminated, may be exercised by the
Participant (or the Participants legal representative or estate) at any time prior to the
expiration of twelve (12) months (or such other period of time as determined by the Plan
Administrator, in its discretion) after the date on which the Participants Continuous Service
terminated, but in any event only with respect to the vested portion of the
Option and no later than the date of expiration of the Options term as set forth in the Award
Agreement evidencing such Option (the Option Expiration Date).
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(B) Termination for Cause. Notwithstanding any other provision of the Plan to the contrary,
if the Participants Continuous Service is terminated for Cause, the Option shall terminate and
cease to be exercisable immediately upon such termination of Continuous Service.
(C) Other Termination of Service. If the Participants Continuous Service terminates for any
reason, except Disability, death, or Cause, the Option, to the extent unexercised and exercisable
by the Participant on the date on which the Participants Continuous Service terminated, may be
exercised by the Participant at any time prior to the expiration of three (3) months (or such
longer period of time as determined by the Plan Administrator, in its discretion) after the date on
which the Participants Continuous Service terminated, but in any event only with respect to the
vested portion of the Option and no later than the Option Expiration Date.
(vi) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan
shall comply in all respects with the provisions of Section 422 of the Code. If and to the extent
required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall
be subject to the following special terms and conditions:
(1) The Option shall not be exercisable more than ten (10) years after the date such Incentive
Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or any Parent or Subsidiary and the Incentive Stock
Option is granted to such Participant, the Incentive Stock Option shall not be exercisable (to the
extent required by the Code at the time of the grant) for no more than five (5) years from the date
of grant; and
(2) If the aggregate Fair Market Value (determined as of the date the Incentive Stock Option
is granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and
all other option plans of the Company, its Parent or any Subsidiary are exercisable for the first
time by a Participant during any calendar year in excess of $100,000, then such Participants
Incentive Stock Option(s) or portions thereof that exceed such $100,000 limit shall be treated as
Non-Qualified Stock Options (in the reverse order in which they were granted, so that the last
Incentive Stock Option will be the first treated as a Non-Qualified Stock Option). This paragraph
shall only apply to the extent such limitation is applicable under the Code at the time of the
grant.
(c) Stock Appreciation Rights. The Plan Administrator is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:
(i) Agreement. Each grant of a Stock Appreciation Right shall be evidenced by an Award
Agreement. Such Award Agreement shall be subject to all applicable terms and conditions of the
Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan
and which the Plan Administrator deems appropriate for inclusion
in the Award Agreement. The provisions of the various Award Agreements entered into under the
Plan need not be identical.
12
(ii) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it
is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of
one share of stock on the date of exercise over (B) the grant price of the Stock Appreciation Right
as determined by the Plan Administrator. The per Share grant price of each Stock Appreciation
Right shall not be less than the Fair Market Value of a Share on the grant date.
(iii) Other Terms. The Plan Administrator shall determine at the date of grant or thereafter,
the time or times at which and the circumstances under which a Stock Appreciation Right may be
exercised in whole or in part (including based on achievement of performance goals and/or future
service requirements), the time or times at which Stock Appreciation Rights shall cease to be or
become exercisable following termination of Continuous Service or upon other conditions, the form
of payment upon exercise of Shares, cash, or other property, the method of exercise, method of
settlement, form of consideration payable in settlement (either cash, Shares or other property),
method by or forms in which Stock will be delivered or deemed to be delivered to Participants,
whether or not a Stock Appreciation Right shall be in tandem or in combination with any other
Award, and any other terms and conditions of any Stock Appreciation Right. Stock Appreciation
Rights may be either freestanding or in tandem with other Awards. Notwithstanding any other
provision of the Plan, unless otherwise exempt from Section 409A of the Code or otherwise
specifically determined by the Plan Administrator, each Stock Appreciation Right shall be
structured to avoid the imposition of any excise tax under Section 409A of the Code.
(d) Restricted Stock. The Plan Administrator is authorized to grant Restricted Stock to any
Eligible Person on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture, and other restrictions, if any, as the Plan Administrator may
impose, or as otherwise provided in this Plan. The terms of any Restricted Stock granted under the
Plan shall be set forth in a written Award Agreement that shall contain provisions determined by
the Plan Administrator and not inconsistent with the Plan. The restrictions may lapse separately
or in combination at such times, under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such installments or otherwise, as the
Plan Administrator may determine at the date of grant or thereafter. Except to the extent
restricted under the terms of the Plan and any Award Agreement relating to the Restricted Stock, a
Participant granted Restricted Stock shall have all of the rights of a stockholder, including the
right to vote the Restricted Stock and the right to receive dividends thereon (subject to any
mandatory reinvestment or other requirement imposed by the Plan Administrator). During the
restricted period applicable to the Restricted Stock, subject to Section 10(b) below, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined, or otherwise
encumbered by the Participant. Notwithstanding the foregoing, all grants of Restricted Stock shall
comply with the vesting terms of Section 8(f).
13
(ii) Forfeiture. Except as otherwise determined by the Plan Administrator, upon termination
of a Participants Continuous Service during the applicable restriction period, the Participants
Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or
otherwise been satisfied shall be forfeited to or reacquired by the Company; provided that the Plan
Administrator may provide, by rule or regulation or in any Award Agreement or may determine in any
individual case, that restrictions or forfeiture conditions relating to Restricted Stock shall be
waived in whole or in part in the event of terminations resulting from specified causes, and the
Plan Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock.
Notwithstanding the foregoing, all grants of Stock Units shall comply with the vesting
acceleration terms of Sections 8(g).
(iii) Certificates for Shares. Restricted Stock granted under the Plan may be evidenced in
such manner as the Plan Administrator shall determine. If certificates representing Restricted
Stock are registered in the name of the Participant, the Plan Administrator may require that such
certificates bear an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, that the Company retain physical possession of the
certificates, that the certificates be kept with an escrow agent, and that the Participant deliver
a stock power to the Company, endorsed in blank, relating to the Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the
Plan Administrator may require that any cash dividends paid on a share of Restricted Stock be
automatically reinvested in additional shares of Restricted Stock or applied to the purchase of
additional Awards under the Plan. Unless otherwise determined by the Plan Administrator, Shares
distributed in connection with a stock split or stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Shares or other property has been distributed.
(e) Stock Units. The Plan Administrator is authorized to grant Stock Units to Participants,
which are rights to receive Shares, cash, or other property, or a combination thereof at the end of
a specified time period, subject to the following terms and conditions:
(i) Award and Restrictions. Satisfaction of an Award of Stock Units shall occur upon
expiration of the time period specified for such Stock Units by the Plan Administrator (or, if
permitted by the Plan Administrator, as elected by the Participant). In addition, Stock Units
shall be subject to such restrictions (which may include a risk of forfeiture) as the Plan
Administrator may impose, if any, which restrictions may lapse at the expiration of the time period
or at earlier specified times (including based on achievement of performance goals and/or future
service requirements), separately or in combination, in installments or otherwise, as the Plan
Administrator may determine. The terms of an Award of Stock Units shall be set forth in a written
Award Agreement that shall contain provisions determined by the Plan Administrator and not
inconsistent with the Plan. Stock Units may be satisfied by delivery of Stock, cash equal to the
Fair Market Value of the specified number of Shares covered by the Stock Units, or a combination
thereof, as determined by the Plan Administrator at the date of grant or thereafter. Prior to
satisfaction of an Award of Stock Units, an Award of Stock Units carries no voting or dividend or
other rights associated with share ownership. Notwithstanding
the foregoing, all grants of Stock Units shall comply with the vesting terms of Sections 8(f).
Notwithstanding any other provision of the Plan, unless otherwise exempt from Section 409A of the
Code or otherwise specifically determined by the Plan Administrator, each Stock Unit shall be
structured to avoid the imposition of any excise tax under Section 409A of the Code.
14
(ii) Forfeiture. Except as otherwise determined by the Plan Administrator, upon termination
of a Participants Continuous Service during the applicable time period thereof to which forfeiture
conditions apply (as provided in the Award Agreement evidencing the Stock Units), the Participants
Stock Units (other than those Stock Units subject to deferral at the election of the Participant)
shall be forfeited; provided that the Plan Administrator may provide, by rule or regulation or in
any Award Agreement or may determine in any individual case, that restrictions or forfeiture
conditions relating to Stock Units shall be waived in whole or in part in the event of terminations
resulting from specified causes, and the Plan Administrator may in other cases waive in whole or in
part the forfeiture of Stock Units. Notwithstanding the foregoing, all grants of Stock Units shall
comply with the vesting acceleration terms of Sections 8(g).
(iii) Dividend Equivalents. Unless otherwise determined by the Plan Administrator at date of
grant, any Dividend Equivalents that are granted with respect to any Award of Stock Units shall be
either (A) paid with respect to such Stock Units at the dividend payment date in cash or in Shares
of unrestricted Stock having a Fair Market Value equal to the amount of such dividends or (B)
deferred with respect to such Stock Units and the amount or value thereof automatically deemed
reinvested in additional Stock Units, other Awards or other investment vehicles, as the Plan
Administrator shall determine or permit the Participant to elect.
(f) Bonus Stock and Awards in Lieu of Obligations. The Plan Administrator is authorized to
grant Shares as a bonus or to grant Shares or other Awards in lieu of Company obligations to pay
cash or deliver other property under the Plan or under other plans or compensatory arrangements,
provided that, in the case of Participants subject to Section 16 of the Exchange Act, the amount of
such grants remains within the discretion of the Plan Administrator to the extent necessary to
ensure that acquisitions of Shares or other Awards are exempt from liability under Section 16(b) of
the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as shall
be determined by the Plan Administrator. Notwithstanding the foregoing, all grants Shares pursuant
to this Section shall comply with the vesting terms of Section 8(f) and the vesting acceleration
terms of Section 8(g).
(g) Dividend Equivalents. The Plan Administrator is authorized to grant Dividend Equivalents
to any Eligible Person entitling the Eligible Person to receive cash, Shares, other Awards, or
other property equal in value to dividends paid with respect to a specified number of Shares, or
other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award. The terms of an Award of Dividend Equivalents shall be set forth in
a written Award Agreement that shall contain provisions determined by the Plan Administrator and
not inconsistent with the Plan. The Plan Administrator may provide that Dividend Equivalents shall
be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock,
Awards, or other investment vehicles, and subject to such restrictions on transferability and risks
of forfeiture, as the Plan Administrator may specify. Notwithstanding any other provision of the
Plan, unless otherwise
exempt from Section 409A of the Code or otherwise specifically determined by the Plan
Administrator, each Dividend Equivalent shall be structured to avoid the imposition of any excise
tax under Section 409A of the Code.
15
(h) Performance Awards. The Plan Administrator is authorized to grant Performance Awards to
any Eligible Person payable in cash, Shares, other property, or other Awards, on terms and
conditions established by the Plan Administrator, including Awards subject to the provisions of
Section 7, if and to the extent that the Plan Administrator shall, in its sole discretion,
determine that an Award shall be subject to those provisions. The performance criteria to be
achieved during any Performance Period and the length of the Performance Period shall be determined
by the Plan Administrator upon the grant of each Performance Award. Except as provided in this
Plan or as may be provided in an Award Agreement, Performance Awards will be distributed only after
the end of the relevant Performance Period. The performance goals to be achieved for each
Performance Period shall be conclusively determined by the Plan Administrator and may be based upon
the criteria set forth in Section 7(b), or in the case of an Award that the Plan Administrator
determines shall not be subject to Section 7 hereof, any other criteria that the Plan
Administrator, in its sole discretion, shall determine should be used for that purpose. The amount
of the Award to be distributed shall be conclusively determined by the Plan Administrator.
Performance Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the Plan Administrator, on a
deferred basis. Notwithstanding the foregoing, all grants of Performance Awards which would
qualify as Full Value Awards (as defined in Section 8(f)) shall comply with the vesting terms of
Section 8(f).
(i) Other Stock-Based Awards. The Plan Administrator is authorized, subject to limitations
under applicable law, to grant to any Eligible Person such other Awards that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on, or related to,
Shares, as deemed by the Plan Administrator to be consistent with the purposes of the Plan,
including, without limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or any other factors designated by the Plan
Administrator, and Awards valued by reference to the book value of Stock or the value of securities
of or the performance of specified Related Entities or business units. The Plan Administrator
shall determine the terms and conditions of such Awards. The terms of any Award pursuant to this
Section shall be set forth in a written Award Agreement that shall contain provisions determined by
the Plan Administrator and not inconsistent with the Plan. Stock delivered pursuant to an Award in
the nature of a purchase right granted under this Section 6(h) shall be purchased for such
consideration (including without limitation loans from the Company or a Related Entity), paid for
at such times, by such methods, and in such forms, including, without limitation, cash, Stock,
other Awards, or other property, as the Plan Administrator shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, may also be granted pursuant to this
Section 6(h). Notwithstanding any other provision of the Plan, unless otherwise exempt from
Section 409A of the Code or otherwise specifically determined by the Plan Administrator, each such
Award shall be structured to avoid the imposition of any excise tax under Section 409A of the Code.
Notwithstanding the foregoing, all grants of Other Stock Based Award which would qualify as Full
Value Awards (as defined in
Section 8(f)) shall comply with the vesting terms of Section 8(f) and the vesting acceleration
terms of Section 8(g).
16
7. Tax Qualified Performance Awards.
(a) Covered Employees. A Committee, composed in compliance with the requirements of Section
162(m) of the Code, in its discretion, may determine at the time an Award is granted to an Eligible
Person who is, or is likely to be, as of the end of the tax year in which the Company would claim a
tax deduction in connection with such Award, a Covered Employee, that the provisions of this
Section 7 shall be applicable to such Award.
(b) Performance Criteria. If an Award is subject to this Section 7, then the lapsing of
restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as
applicable, shall be contingent upon achievement of one or more objective performance goals.
Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of
the Code and regulations thereunder, including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance goals being
substantially uncertain. One or more of the following business criteria for the Company, on a
consolidated basis, and/or for Related Entities, or for business or geographical units of the
Company and/or a Related Entity (except with respect to the total stockholder return and earnings
per share criteria), shall be used by the Committee in establishing performance goals for such
Awards: (1) earnings per share; (2) revenues or gross margins; (3) cash flow; (4) operating margin;
(5) return on net assets, investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before
interest, taxes, depreciation, and amortization; earnings after interest expense and before
extraordinary or special items; operating income; income before interest income or expense, unusual
items, and income taxes, local, state, or federal and excluding budgeted and actual bonuses that
might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of
fixed costs or variable costs; (11) identification or consummation of investment opportunities or
completion of specified projects in accordance with corporate business plans, including strategic
mergers, acquisitions, or divestitures; (12) total stockholder return; and (13) debt reduction.
Any of the above goals may be determined on an absolute or relative basis or as compared to the
performance of a published or special index deemed applicable by the Committee, including, but not
limited to, the Standard & Poors 500 Stock Index or a group of companies that are comparable to
the Company. The Committee shall exclude the impact of an event or occurrence which the Committee
determines should appropriately be excluded, including without limitation, (i) restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) an
event either not directly related to the operations of the Company or not within the reasonable
control of the Companys management, or (iii) a change in accounting standards required by
generally accepted accounting principles.
(c) Performance Period; Timing For Establishing Performance Goals. Achievement of performance
goals in respect of such Performance Awards shall be measured over a Performance Period, as
specified by the Committee. Performance goals shall be established not later than ninety (90) days
after the beginning of any Performance Period
applicable to such Performance Awards, or at such other date as may be required or permitted
for performance-based compensation under Section 162(m) of the Code.
17
(d) Adjustments. The Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with Awards subject to this Section 7, but may not exercise
discretion to increase any such amount payable to a Covered Employee in respect of an Award subject
to this Section 7. The Committee shall specify the circumstances in which such Awards shall be
paid or forfeited in the event of termination of Continuous Service by the Participant prior to the
end of a Performance Period or settlement of Awards.
(e) Committee Certification. Within a reasonable period of time after the performance
criteria have been satisfied (but no later than three (3) months after the satisfaction of the
performance criteria), to the extent necessary to qualify the payments as performance based
compensation under Section 162(m) of the Code, the Committee shall certify, by resolution or other
appropriate action in writing, that the performance criteria and any other material terms
previously established by the Committee or set forth in the Plan, have been satisfied.
8. Certain Provisions Applicable to Awards or Sales.
(a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted under the Plan may,
in the discretion of the Plan Administrator, be granted either alone or in addition to, in tandem
with or in substitution or exchange for, any other Award or any award granted under another plan of
the Company, any Related Entity or any business entity to be acquired by the Company or a Related
Entity or any other right of a Participant to receive payment from the Company or any Related
Entity. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If
an Award is granted in substitution or exchange for another Award or award, the Plan Administrator
shall require the surrender of such other Award or award in consideration for the grant of the new
Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash
amounts payable under other plans of the Company or any Related Entity.
(b) Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a Related Entity upon the
exercise of an Option or other Award or settlement of an Award may be made in such forms as the
Plan Administrator shall determine, including, without limitation, cash, other Awards, or other
property, and may be made in a single payment or transfer, in installments, or on a deferred basis.
The settlement of any Award may be accelerated, and cash paid in lieu of Shares in connection with
such settlement, in the discretion of the Plan Administrator or upon occurrence of one or more
specified events (in addition to a Change in Control). Installment or deferred payments may be
required by the Plan Administrator (subject to Section 10(g) of the Plan) or permitted at the
election of the Participant on terms and conditions established by the Plan Administrator.
Payments may include, without limitation, provisions for the payment or crediting of a reasonable
interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents
or other amounts in respect of installment or deferred payments denominated in Shares.
18
(c) Exemptions from Section 16(b) Liability. It is the intent of the Company that this Plan
comply in all respects with applicable provisions of Rule 16b-3 or Rule 16a-1(c)(3) to the extent
necessary to ensure that neither the grant of any Awards to nor other transaction by a Participant
who is subject to Section 16 of the Exchange Act is subject to liability under Section 16(b)
thereof (except for transactions acknowledged in writing to be non-exempt by such Participant).
Accordingly, if any provision of this Plan or any Award Agreement does not comply with the
requirements of Rule 16b-3 or Rule 16a-1(c)(3) as then applicable to any such transaction, such
provision will be construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall avoid liability under
Section 16(b).
(d) Code Section 409A. If and to the extent that the Plan Administrator believes that any
Awards may constitute a nonqualified deferred compensation plan under Section 409A of the Code,
the terms and conditions set forth in the Award Agreement for that Award shall be drafted in a
manner that is intended to comply with, and shall be interpreted in a manner consistent with, the
applicable requirements of Section 409A of the Code, unless otherwise agreed to in writing by the
Participant and the Company.
(e) No Option or Stock Appreciation Right Repricing. Other than pursuant to Section 10(c),
without approval of the Companys stockholders, the Plan Administrator shall not be permitted to
(A) lower the exercise price per Share of an Option or Stock Appreciation Right after it is
granted, (B) cancel an Option or Stock Appreciation Right when the exercise price per Share exceeds
the Fair Market Value of the underlying Shares in exchange for another Award or cash, or (C) take
any other action with respect to an Option or Stock Appreciation Right that may be treated as a
repricing.
(f) Vesting Restrictions for Full Value Awards. Each award of Restricted Stock, Stock Units,
Bonus Stock, a Performance Award, or Other Stock Based Award where the Participant is not required
to pay more than the par value of the Award in cash for the Shares delivered (each a Full Value
Award) shall have a minimum vesting schedule of (A) with respect to Full Value Awards that vest
over time, a three (3) year vesting schedule with a maximum of one-third (1/3rd) of the Full Value
Award vesting in any one (1) year; (B) with respect to Full Value Awards that vest based upon the
achievement of performance goals, the performance period shall be a minimum of one (1) year in
length; provided, however, that 10% of the Shares reserved under the Plan may be granted as Full
Value Awards that are not subject to the vesting requirements of the last sentence; provided,
further, that any such grants shall be approved by the Committee.
9. Change in Control; Corporate Transaction.
(a) Change in Control.
(i) The Plan Administrator may, in its discretion, accelerate the vesting, exercisability,
lapsing of restrictions, or expiration of deferral of any Award, including upon a Change in
Control. In addition, the Plan Administrator may provide in an Award Agreement that the
performance goals relating to any Award will be deemed to have been met upon the occurrence of any
Change in Control.
19
(ii) In the event of a Change in Control that the Board has not approved prior to the
consummation of such Change in Control, then all outstanding Awards shall become fully vested and
exercisable immediately prior to and contingent on the consummation of the Change in Control.
(iii) In addition to the terms of Sections 9(a)(i) and 9(a)(i) above, the effect of a change
in control, may be provided (1) in an employment, compensation, or severance agreement, if any,
between the Company or any Related Entity and the Participant, relating to the Participants
employment, compensation, or severance with or from the Company or such Related Entity or (2) in
the Award Agreement.
(b) Corporate Transactions. In the event of a Corporate Transaction, any surviving entity or
acquiring entity (together, the Successor Entity) may either (i) assume any or all Awards
outstanding under the Plan; (ii) continue any or all Awards outstanding under the Plan; or (iii)
substitute similar stock awards for outstanding Awards (it being understood that similar awards
include, but are not limited to, awards to acquire the same consideration paid to the stockholders
or the Company, as the case may be, pursuant to the Corporate Transaction); provided that if the
Corporate Transaction is not a Change in Control, each outstanding Award shall be either assumed,
continued, or substituted pursuant to the terms of this Section. In the event that the Successor
Entity does not assume or continue any or all such outstanding Awards or substitute similar stock
awards for such outstanding Awards, then with respect to Awards that have been not assumed,
continued, or substituted, such Awards shall terminate if not exercised (if applicable) at or prior
to such effective time (contingent upon the effectiveness of the Corporate Transaction).
The Plan Administrator, in its discretion and without the consent of any Participant, may (but
is not obligated to) either (i) accelerate the vesting of any Awards (determined on an Award by
Award basis), including permitting the lapse of any repurchase rights held by the Company (and, if
applicable, the time at which such Awards may be exercised), in full or as to some percentage of
the Award, to a date prior to the effective time of such Corporate Transaction as the Plan
Administrator shall determine (contingent upon the effectiveness of the Corporate Transaction) or
(ii) provide for a cash payment in exchange for the termination of an Award or any portion thereof
where such cash payment is equal to the Fair Market Value of the Shares that the Participant would
receive if the Award were fully vested and exercised (if applicable) as of such date (less any
applicable exercise price).
Notwithstanding any other provision in this Plan to the contrary, with respect to Restricted
Stock and any other Award granted under the Plan with respect to which the Company has any
reacquisition or repurchase rights, the reacquisition or repurchase rights for such Awards may be
assigned by the Company to the successor of the Company (or the successors parent company) in
connection with such Corporate Transaction. In the event any such rights are not continued or
assigned to the Successor Entity, then such rights shall lapse and the Award shall be fully vested
as of the effective time of the Corporate Transaction. In addition, the Plan Administrator, in its
discretion, may (but is not obligated to) provide that any reacquisition or repurchase rights held
by the Company with respect to any such Awards (determined on an Award by Award basis) shall lapse
in whole or in part (contingent upon the effectiveness of the Corporate Transaction).
20
(c) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Awards shall terminate immediately prior to the completion of such dissolution
or liquidation, and Shares subject to the Companys repurchase option may be repurchased by the
Company notwithstanding the fact that the holder of such stock is still in Continuous Service.
10. General Provisions.
(a) Compliance With Legal and Other Requirements. The Company may, to the extent deemed
necessary or advisable by the Plan Administrator, postpone the issuance or delivery of Shares or
payment of other benefits under any Award until completion of such registration or qualification of
such Shares or other required action under any federal or state law, rule, or regulation, listing
or other required action with respect to any stock exchange or automated quotation system upon
which the Shares or other Company securities are listed or quoted or compliance with any other
obligation of the Company, as the Plan Administrator may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply with or be subject to
such other conditions as it may consider appropriate in connection with the issuance or delivery of
Shares or payment of other benefits in compliance with applicable laws, rules, and regulations,
listing requirements or other obligations.
(b) Limits on Transferability; Beneficiaries.
(i) General. Except as provided in the Award Agreement, a Participant may not assign, sell,
transfer, or otherwise encumber or subject to any lien any Award or other right or interest granted
under this Plan, in whole or in part, other than by will or by operation of the laws of descent and
distribution, and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or legal representative.
In no event may an Award be transferred to a third party in exchange for consideration.
(ii) Permitted Transfer of Option. The Plan Administrator, in its sole discretion, may permit
the transfer of an Option (but not an Incentive Stock Option or any other right to purchase Shares
other than an Option) as follows: (A) by gift to a member of the Participants Immediate Family or
(B) by transfer by instrument to a trust providing that the Option is to be passed to beneficiaries
upon death of the Participant. For purposes of this Section 10(b)(ii), Immediate Family shall
mean the Participants spouse (including a former spouse subject to terms of a domestic relations
order); child, stepchild, grandchild, child-in-law; parent, stepparent, grandparent, parent-in-law;
sibling and sibling-in-law, and shall include adoptive relationships. If a determination is made
by counsel for the Company that the restrictions contained in this Section 10(b)(ii) are not
required by applicable federal or state securities laws under the circumstances, then the Plan
Administrator, in its sole discretion, may permit the transfer of Awards (other than Incentive
Stock Options and Stock Appreciation Rights in tandem therewith) to one or more Beneficiaries or
other transferees during the lifetime of the Participant, which may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the extent permitted by
the Plan Administrator pursuant to the express terms of an Award Agreement (subject to any terms
and conditions which the Plan Administrator may impose thereon, and further subject to any
prohibitions and restrictions on such transfers
pursuant to Rule 16b-3). A Beneficiary, transferee or other person claiming any rights under
the Plan from or through any Participant shall be subject to all terms and conditions of the Plan
and any Award Agreement applicable to such Participant, except as otherwise determined by the Plan
Administrator, and to any additional terms and conditions deemed necessary or appropriate by the
Plan Administrator.
21
(c) Adjustments.
(i) Adjustments.
(A) In the event that any dividend paid in Stock, forward or reverse split, merger,
consolidation, combination, or other similar corporate transaction or event affects the Stock, then
the Plan Administrator shall substitute, exchange, or adjust any or all of the following in a
manner that precludes the enlargement or dilution of rights and benefits: (A) the number and kind
of Shares reserved for issuance in connection with Awards granted thereafter, (B) the number and
kind of Shares by which annual per-person Award limitations are measured under Section 5 hereof,
(C) the number and kind of Shares subject to or deliverable in respect of outstanding Awards, (D)
the exercise price, grant price, or purchase price relating to any Award and/or make provision for
payment of cash or other property in respect of any outstanding Award, and (E) any other aspect of
any Award that the Plan Administrator determines to be appropriate.
(B) In the event that a dividend or other distribution in the form of cash or other property
(but excluding a dividend paid in Stock), recapitalization, reorganization, spin-off, repurchase,
share exchange, liquidation, dissolution or other similar corporate transaction or event affects
the Stock and/or such other securities of the Company or any other issuer such that a substitution,
exchange, or adjustment is determined by the Plan Administrator to be appropriate, then the Plan
Administrator shall, in such manner as the Plan Administrator may deem equitable, substitute,
exchange, or adjust any or all of (A) the number and kind of Shares reserved for issuance in
connection with Awards granted thereafter, (B) the number and kind of Shares by which annual
per-person Award limitations are measured under Section 5 hereof, (C) the number and kind of Shares
subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price, or
purchase price relating to any Award and/or make provision for payment of cash or other property in
respect of any outstanding Award, and (E) any other aspect of any Award that the Plan Administrator
determines to be appropriate.
(ii) Other Adjustments. The Plan Administrator (which shall be a Committee to the extent such
authority is required to be exercised by a Committee to comply with Code Section 162(m)) is
authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards
(including Awards subject to performance goals) in recognition of unusual or nonrecurring events
(including, without limitation, acquisitions and dispositions of businesses and assets) affecting
the Company, any Related Entity, or any business unit or the financial statements of the Company or
any Related Entity, or in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations, or business conditions or in view of the Plan
Administrators assessment of the business strategy of the Company, any Related Entity, or business
unit thereof, performance of comparable
organizations, economic and business conditions, personal performance of a Participant, and
any other circumstances deemed relevant; provided that no such adjustment shall be authorized or
made if and to the extent that such authority or the making of such adjustment would cause Options,
Stock Appreciation Rights, or Performance Awards granted to Participants designated by the Plan
Administrator as Covered Employees and intended to qualify as performance-based compensation
under Code Section 162(m) and the regulations thereunder to otherwise fail to qualify as
performance-based compensation under Code Section 162(m) and regulations thereunder.
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(d) Taxes. The Company and any Related Entity are authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a distribution of Shares
or any payroll or other payment to a Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and to take such other
action as the Plan Administrator may deem advisable to enable the Company and Participants to
satisfy obligations for the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Shares or other property and
to make cash payments in respect thereof in satisfaction of a Participants tax obligations, either
on a mandatory or elective basis in the discretion of the Plan Administrator.
(e) Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue, or
terminate the Plan or the Committees authority to grant Awards under the Plan, without the consent
of stockholders or Participants. Any amendment or alteration to the Plan shall be subject to the
approval of the Companys stockholders if such stockholder approval is deemed necessary and
advisable by the Board or if required under the rules or regulations of the stock exchange that has
the highest trading volume for the Shares for the prior calendar year. However, without the
consent of an affected Participant, no such amendment, alteration, suspension, discontinuance, or
termination of the Plan may materially and adversely affect the rights of such Participant under
any previously granted and outstanding Award. The Plan Administrator may waive any conditions or
rights under or amend, alter, suspend, discontinue, or terminate any Award theretofore granted and
any Award Agreement relating thereto, except as otherwise provided in the Plan; provided that,
without the consent of an affected Participant, no such action may materially and adversely affect
the rights of such Participant under such Award.
(f) Limitation on Rights Conferred Under Plan. Neither the Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue
as an Eligible Person or Participant or in the employ of the Company or a Related Entity; (ii)
interfering in any way with the right of the Company or a Related Entity to terminate any Eligible
Persons or Participants Continuous Service at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated uniformly with other
Participants and Employees, or (iv) conferring on a Participant any of the rights of a stockholder
of the Company unless and until the Participant is duly issued or transferred Shares in accordance
with the terms of an Award.
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(g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an
unfunded plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant or obligations to deliver Shares pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company; provided that the Plan Administrator may
authorize the creation of trusts and deposit therein cash, Shares, other Awards, or other property
or make other arrangements to meet the Companys obligations under the Plan. Such trusts or other
arrangements shall be consistent with the unfunded status of the Plan unless the Plan
Administrator otherwise determines with the consent of each affected Participant. The trustee of
such trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Plan Administrator may specify and in
accordance with applicable law.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Plan Administrator to adopt such other incentive arrangements as it
may deem desirable including incentive arrangements and awards which do not qualify under Code
Section 162(m).
(i) Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan
or any Award. The Plan Administrator shall determine whether cash, other Awards, or other property
shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
(j) Governing Law. The validity, construction, and effect of the Plan, any rules and
regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws
of the state of Delaware without giving effect to principles of conflicts of laws, and applicable
federal law.
(k) Plan Effective Date and Stockholder Approval; Termination of Plan. The Plan shall become
effective on the Effective Date, subject to subsequent approval within twelve (12) months of its
adoption by the Board by stockholders of the Company eligible to vote in the election of directors,
by a vote sufficient to meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule
16b-3 under the Exchange Act (if applicable), applicable requirements of the principal stock
exchange or market on which Shares are traded, and other laws, regulations, and obligations of the
Company applicable to the Plan. Awards may be granted subject to stockholder approval, but may not
be exercised or otherwise settled in the event stockholder approval is not obtained. The Plan
shall terminate no later than ten (10) years from the date of the later of (x) the Effective Date
and (y) the date an increase in the number of shares reserved for issuance under the Plan is
approved by the Board (so long as such increase is also approved by the stockholders).
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