Attached files
file | filename |
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S-1/A - FORM S-1/A - AIR LEASE CORP | v57988a2sv1za.htm |
EX-3.2 - EX-3.2 - AIR LEASE CORP | v57988a2exv3w2.htm |
EX-23.3 - EX-23.3 - AIR LEASE CORP | v57988a2exv23w3.htm |
EX-10.5 - EX-10.5 - AIR LEASE CORP | v57988a2exv10w5.htm |
EX-21.1 - EX-21.1 - AIR LEASE CORP | v57988a2exv21w1.htm |
EX-23.1 - EX-23.1 - AIR LEASE CORP | v57988a2exv23w1.htm |
EX-10.4 - EX-10.4 - AIR LEASE CORP | v57988a2exv10w4.htm |
EX-10.18 - EX-10.18 - AIR LEASE CORP | v57988a2exv10w18.htm |
EX-10.12 - EX-10.12 - AIR LEASE CORP | v57988a2exv10w12.htm |
EX-10.17 - EX-10.17 - AIR LEASE CORP | v57988a2exv10w17.htm |
Exhibit 10.3
AMENDED AND RESTATED
AIR LEASE CORPORATION
2010 EQUITY INCENTIVE PLAN
AIR LEASE CORPORATION
2010 EQUITY INCENTIVE PLAN
(Effective as of June 4, 2010 and amended as of February 15, 2011)
1. Purpose
The purpose of the Plan is to give the Company a competitive advantage in attracting,
retaining and motivating officers, employees, directors and/or consultants and to provide a means
whereby officers, employees, directors and/or consultants of the Company and its Affiliates can
acquire and maintain Common Stock ownership, or be paid incentive compensation measured by
reference to the value of Common Stock, thereby strengthening their commitment to the welfare of
the Company and its Affiliates and promoting an identity of interest between shareholders and these
persons.
So that the appropriate incentive can be provided, the Plan provides for granting Incentive
Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
Restricted Stock Unit Awards, Stock Bonus Awards and Incentive Bonus Awards, or any combination of
the foregoing.
2. Definitions
For purposes of this Plan, the following terms are defined as set forth below:
(a) 162(m) Effective Date means the first date on which Awards granted under the Plan do not
qualify for an exemption from the deduction limitations of Section 162(m) of the Code on account of
an exemption, or a transition or grandfather rule.
(b) Affiliate means, with respect to any specified entity, any other entity that directly or
indirectly is controlled by, controls, or is under common control with such specified entity.
(c) Applicable Exchange means the securities exchange as may at the applicable time be the
principal market for the Common Stock.
(d) Award means, individually or collectively, any Incentive Stock Option, Nonqualified
Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Stock
Bonus Award or Incentive Bonus Award granted pursuant to the terms of this Plan.
(e) Award Agreement means a written or electronic document or agreement setting forth the
terms and conditions of a specific Award. An Award Agreement may be in the form of an agreement to
be executed by both the Participant and the Company (or an authorized
representative of the Company) or certificates, notices or similar instruments as approved by
the Committee.
(f) Beneficial Ownership shall have the meaning given in Rule 13d-3 promulgated under the
Exchange Act.
(g) Board means the Board of Directors of the Company.
(h) Cause means, unless otherwise provided in an Award Agreement, (i) Cause as defined in
any employment, consulting or similar agreement with the Company or any of its Affiliates to which
the applicable Participant is a party (an Individual Agreement), or (ii) if there is no such
Individual Agreement or if it does not define Cause: (A) the willful or gross neglect by a
Participant of his employment duties (other than as a result of his incapacity due to physical or
mental illness or injury) as determined by the Committee; (B) the plea of guilty or nolo contendere
to, or conviction for, the commission of a felony offense by a Participant; (C) conduct by a
Participant that is injurious to the Company or an Affiliate, or an act of fraud, embezzlement,
misrepresentation or breach of a fiduciary duty against the Company or any of its Subsidiaries, as
determined by the Committee; (D) a breach by a Participant of any nondisclosure, non-solicitation
or noncompetition obligation owed to the Company or any of its Affiliates; or (E) the failure of a
Participant to follow instructions of the Board or his direct superiors.
(i) Change in Control shall, unless in the case of a particular Award where the applicable
Award Agreement states otherwise or contains a different definition of Change in Control, for the
purpose of this Plan, be the first to occur following the Effective Date of:
(i) the acquisition by any Person or Group of Beneficial Ownership of 35% or more (on a
fully diluted basis) of either (A) the then outstanding shares of all classes of common
stock of the Company, taking into account as outstanding for this purpose such common stock
issuable upon the exercise of options or warrants, the conversion of convertible stock or
debt, and the exercise or settlement of any similar right to acquire such common stock (the
Outstanding Company Common Stock), or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of
directors (the Outstanding Company Voting Securities); provided, however, that for
purposes of this Agreement, the following acquisitions shall not constitute a Change in
Control: (I) any acquisition by the Company or any Affiliate, (II) any acquisition directly
from the Company, (III) any acquisition by any employee benefit plan sponsored or maintained
by the Company or any Affiliate or (IV) any acquisition by any Person pursuant to a
transaction that complies with clauses (A), (B) and (C) of subsection (iv) of this Section
2(i);
(ii) individuals who, on the Effective Date, constitute the Board (the Incumbent
Directors) cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the Effective Date, whose election or
nomination for election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for
director, without written objection to such nomination), shall be an Incumbent
Director; provided, however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest with respect to
directors
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or as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to be an
Incumbent Director;
(iii) a complete dissolution or liquidation of the Company; or
(iv) the consummation of a merger, consolidation, statutory share exchange, a sale or
other disposition of all or substantially all of the assets of the Company or similar form
of corporate transaction involving the Company that requires the approval of the Companys
shareholders, whether for such transaction or the issuance of securities in the transaction
(a Business Combination), in each case, unless immediately following such Business
Combination: (A) more than 50% of the total voting power of (x) the entity resulting from
such Business Combination (the Surviving Company) or (y) if applicable, the ultimate
parent corporation that directly or indirectly has beneficial ownership of sufficient voting
securities eligible to elect a majority of the directors of the Surviving Company (the
Parent Company) is represented by the Outstanding Company Voting Securities that were
outstanding immediately prior to such Business Combination (or, if applicable, is
represented by shares into which the Outstanding Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders thereof is
in substantially the same proportion as the voting power of the Outstanding Company Voting
Securities among the holders thereof immediately prior to the Business Combination, (B) no
Person or Group (other than any employee benefit plan sponsored or maintained by the
Surviving Company or the Parent Company), is or becomes the beneficial owner, directly or
indirectly, of 35% or more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Company (or, if there is no Parent Company, the
Surviving Company) and (C) at least two-thirds of the members of the board of directors of
the Parent Company (or, if there is no Parent Company, the Surviving Company) following the
consummation of the Business Combination were Board members at the time of the Boards
approval of the execution of the initial agreement providing for such Business Combination.
The Companys closing of a public offering of any class of the Companys common stock pursuant to a
registration statement declared effective under the Securities Act (and any reorganization
transactions consummated in connection therewith) shall in no event, by itself, be deemed a Change
in Control for purposes of this Plan or any Award Agreement.
(j) Code means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto, the Treasury Regulations thereunder and other relevant interpretive guidance
issued by the Internal Revenue Service or the Treasury Department. Reference in the Plan to any
specific section of the Code shall be deemed to include any amendments or successor provisions to
such section and any regulations and guidance under such section.
(k) Committee means a committee appointed by the Board to administer the Plan or, if no such
committee has been appointed by the Board, the Board.
(l) Common Stock means the Class A common stock, par value $0.01 per share, of the Company,
and any stock into which such common stock may be converted or into which it may be exchanged.
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(m) Company means Air Lease Corporation, or its successor.
(n) Date of Grant means the date on which the granting of an Award is authorized, or such
other date as may be specified in such authorization or, if there is no such date, the date
indicated on the applicable Award Agreement.
(o) Disability means, unless otherwise provided in an Award Agreement, the Company or an
Affiliate having cause to terminate a Participants employment or service on account of
disability, as defined in any existing Individual Agreement, or, in the absence of such an
Individual Agreement, a condition entitling the Participant to receive benefits under a long-term
disability plan of the Company or an Affiliate or, in the absence of such a plan, the complete and
permanent inability by reason of illness or accident to perform the duties of the occupation at
which a Participant was employed or served when such disability commenced or, as determined by the
Committee, based upon medical evidence acceptable to it. Notwithstanding the above, with respect
to an Incentive Stock Option, Disability shall mean Permanent and Total Disability as defined in
Section 22(e)(3) of the Code.
(p) Disaffiliation means a Subsidiarys or Affiliates ceasing to be a Subsidiary or
Affiliate for any reason (including, without limitation, as a result of a public offering, or a
spin-off or sale by the Company, of the stock of the Subsidiary or Affiliate or a sale of a
division of the Company and its Affiliates).
(q) Effective Date means immediately prior to the first consummation to occur after Board
approval of this Plan of an offering and concurrent private placement of shares of the Companys
Common Stock and Class B non-voting common stock, par value $0.01 per share, pursuant to Rule 144A,
Regulation S and Regulation D under the Securities Act.
(r) Eligible Person means any director, officer, employee or consultant of the Company or
any of its Subsidiaries or Affiliates, or any prospective employee and consultant who has accepted
an offer of employment or consultancy from the Company or its Subsidiaries or Affiliates.
(s) Exchange Act means the Securities Exchange Act of 1934, as amended.
(t) Fair Market Value means, as of a given date, the closing price of the Common Stock on
the Applicable Exchange on that date, or if no prices are reported on that date, on the last
preceding date on which such prices of the Common Stock are so reported. If the Common Stock is
not then listed on any national securities exchange but is traded over the counter at the time
determination of its Fair Market Value is required to be made, its Fair Market Value shall be
deemed to be equal to the average between the reported high and low sales prices of Common Stock on
the most recent date on which the Common Stock was publicly traded. If the Common Stock is not
publicly traded at the time a determination of its Fair Market Value is made, the Committee shall
determine its Fair Market Value in good faith in such manner as it deems appropriate (such
determination to be made in a manner that satisfies Section 409A of the Code
(to the extent applicable)).
(u) Full-Value Awards means an Award that is not an Option or Stock Appreciation Right.
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(v) Group shall have the meaning given in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act.
(w) Incentive Bonus means a bonus opportunity awarded under Section 11 pursuant to which a
Participant may become entitled to receive an amount based on satisfaction of such Performance
Goals as are specified in the Award Agreement. Nothing herein shall be construed as creating any
limitations on the Companys ability to adopt such other incentive arrangements as either may deem
desirable, including without limitation, annual and/or long-term cash-based incentive compensation
plans.
(x) Incentive Stock Option means an Option granted by the Committee to a Participant under
the Plan that is intended to qualify as an incentive stock option as described in Section 422 of
the Code.
(y) Individual Agreement has the meaning set forth in the definition of Cause in Section
2(h).
(z) Nonqualified Stock Option means an Option granted by the Committee to a Participant
under the Plan that is not designated by the Committee as an Incentive Stock Option.
(aa) Offerings means (i) all issuances by the Company of shares of any class of the
Companys common stock pursuant to an exemption from the registration requirements under the
Securities Act (including, without limitation, offerings and/or private placements pursuant to Rule
144A, Regulation S or Regulation D promulgated under the Securities Act) through the date of
closing of an initial public offering by the Company of shares of any class of the Companys common
stock registered under the Securities Act, excluding any issuances prior to the initial date of
adoption of this Plan of shares of Common Stock at a price of $2.00 per share (the Pre-IPO
Offerings), and (ii) an initial public offering by the Company of shares of any class of the
Companys common stock registered under the Securities Act (an IPO Offering).
(bb) Option means an Award granted under Section 7.
(cc) Option Price means the exercise price for an Option as described in Section 7(a).
(dd) Parent means any parent of the Company, as defined in Section 424(e) of the Code.
(ee) Participant means an Eligible Person who has been selected by the Committee to
participate in the Plan and to receive an Award pursuant to Section 6.
(ff) Performance-Based Award means an Award, the grant, issuance, retention, vesting or
settlement of which is subject to satisfaction or attainment of one or more
Performance Goals.
(gg) Performance Goals means the performance objectives established for the purpose of
determining the number of shares of Common Stock to be granted, retained, vested, issued or
issuable under or in settlement of or the amount payable pursuant to a Performance-
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Based Award. To
the extent a Performance-Based Award is intended to qualify as performance-based compensation
under Section 162(m) of the Code, (A) the Performance Goals shall be established with reference to
one or more of the following, either on a Company-wide basis or, as relevant, in respect of one or
more Affiliates, Subsidiaries, divisions, departments or operations of the Company: earnings
(gross, net, pre-tax, post-tax or per share), net profit after tax, EBITDA, gross profit, cash
generation, unit volume, market share, sales, asset quality, earnings per share, operating income,
revenues, return on assets, return on operating assets, return on equity, profits, total
shareholder return (measured in terms of stock price appreciation and/or dividend growth), cost
saving levels, marketing spending efficiency, core non-interest income, change in working capital,
return on capital, and/or stock price, with respect to the Company or any Subsidiary, Affiliate,
division or department of the Company and (B) such Performance Goals shall be set by the Committee
within the time period prescribed by Section 162(m) of the Code and related regulations. Such
Performance Goals also may be based upon the attaining of specified levels of Company, Subsidiary,
Affiliate or divisional performance under one or more of the measures described above relative to
the performance of other entities, divisions or subsidiaries.
(hh) Performance Period means that period of time determined by the Committee over which
performance is measured for the purpose of determining a Participants right to, and the payment
value of, any Performance-Based Award.
(ii) Person shall mean an individual or a corporation, association, partnership, limited
liability company, joint venture, organization, business, trust, or any other entity or
organization, including a government or any subdivision or agency thereof.
(jj) Plan means this Air Lease Corporation 2010 Equity Incentive Plan, as amended from time
to time.
(kk) Restricted Period means, with respect to any share of Restricted Stock or any
Restricted Stock Unit, the period of time determined by the Committee during which such Award is
subject to the restrictions set forth in Section 9.
(ll) Restricted Stock means an Award of shares of Common Stock issued or transferred to a
Participant subject to forfeiture and the other restrictions set forth in Section 9.
(mm) Restricted Stock Unit means an Award granted to a Participant pursuant to Section 9
pursuant to which Common Stock or cash in lieu thereof may be issued in the future.
(nn) Securities Act means the Securities Act of 1933, as amended.
(oo) Stock Appreciation Right or SAR means an Award granted under Section 8 of the Plan.
(pp) Stock Bonus means an Award granted under Section 10 of the Plan.
(qq) Strike Price means, in respect of an SAR, (i) in the case of a Tandem SAR, the Option
Price of the related Option, or (ii) in the case of a Free-Standing SAR, the Fair Market Value on
the Date of Grant.
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(rr) Subsidiary means any corporation, partnership, joint venture, limited liability company
or other entity during any period in which at least a 50% voting or profits interest is owned,
directly or indirectly, by the Company or any successor to the Company.
(ss) Termination of Service means the termination of the applicable Participants employment
with, or performance of services for, the Company and any of its Subsidiaries or Affiliates.
Unless otherwise determined by the Committee, if a Participants employment with the Company and
any of its Subsidiaries or Affiliates, or membership on the Board, terminates but such Participant
continues to provide services to the Company and its Affiliates in a nonemployee director capacity
or as an employee, as applicable, such change in status shall not be deemed a Termination of
Service. A Participant employed by, or performing services for, a Subsidiary or an Affiliate or a
division of the Company and its Affiliates shall not be deemed to incur a Termination of Service
if, as a result of a Disaffiliation, such Subsidiary, Affiliate, or division ceases to be a
Subsidiary, Affiliate or division, as the case may be, and the Participant immediately thereafter
becomes an employee of (or service provider for), the Company or another Subsidiary or Affiliate.
Notwithstanding the foregoing, with respect to any Award that constitutes a nonqualified deferred
compensation plan within the meaning of Section 409A of the Code, Termination of Service shall
mean a separation from service as defined under Section 409A of the Code.
3. Effective Date, Duration and Shareholder Approval
The Plan was adopted by the Board on April 29, 2010 and will be effective on the Effective
Date. All Awards granted under the Plan are subject to, and may not be exercised before, the
approval of the Plan by shareholders prior to the first anniversary date of the Effective Date, by
the affirmative vote of the holders of a majority of the combined voting power of the outstanding
voting securities of the Company present, or represented by proxy, and entitled to vote, at a
meeting of the Companys shareholders or by written consent in accordance with the laws of the
State of Delaware; provided that if such approval by the shareholders of the Company is not
forthcoming, all Awards previously granted under this Plan shall be void.
The expiration date of the Plan, on and after which no Awards may be granted hereunder, shall
be the tenth anniversary of the Effective Date (the Expiration Date); provided, however, that the
administration of the Plan shall continue in effect until all matters relating to Awards previously
granted have been settled. Awards outstanding as of the Expiration Date shall not be affected or
impaired by termination of the Plan.
4. Administration
(a) The Plan shall be administered by the Committee or such other committee of the Board as
the Board may from time to time designate. The Committee may only act by a majority of its members
then in office, except that the Committee may, except to the extent prohibited by
applicable law or the listing standards of the Applicable Exchange, allocate all or any
portion of its responsibilities and powers to any one or more of its members. Any power of the
Committee may also be exercised by the Board, except to the extent that the grant or exercise of
such authority would cause any Award or transaction to become subject to (or lose an exemption
under) the short-swing profit recovery provisions of Section 16 of the Securities Exchange Act of
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1934 or cause an Award designated as a Performance-Based Award not to qualify for treatment as
performance-based compensation under Section 162(m) of the Code. The Committee may by resolution
authorize one or more officers of the Company to perform any or all things that the Committee is
authorized and empowered to do or perform under the Plan, and for all purposes under this Plan,
such officer or officers shall be treated as the Committee; provided, however, that the resolution
so authorizing such officer or officers shall specify the total number of Awards (if any) such
officer or officers may award pursuant to such delegated authority. No such officer shall
designate himself or herself as a recipient of any Awards granted under authority delegated to such
officer. The Board hereby designates the Secretary of the Company and the head of the Companys
human resource function to assist the Committee in the administration of the Plan and execute
agreements evidencing Awards made under this Plan or other documents entered into under this Plan
on behalf of the Committee or the Company. In addition, the Committee may delegate any or all
aspects of the day-to-day administration of the Plan to one or more officers or employees of the
Company or any Subsidiary, and/or to one or more agents.
(b) Subject to the terms and conditions of the Plan and applicable law, the Committee shall
have, in addition to other express powers and authorizations conferred on the Committee by the
Plan, the power to: (i) designate Participants; (ii) determine the type or types of Awards to be
granted to a Participant; (iii) determine the number of shares of Common Stock to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in cash, shares of Common
Stock, other securities, other Awards or other property, or canceled, forfeited or suspended and
the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended;
(vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common
Stock, other securities, other Awards, other property and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret, administer, reconcile any inconsistency, correct any defect and/or
supply any omission in the Plan and any instrument or agreement relating to, or Award granted
under, the Plan; (viii) establish, amend, suspend or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the Plan; (ix) establish
any blackout period that the Committee in its sole discretion deems necessary or advisable; and
(x) make any other determination and take any other action specified under the Plan or that the
Committee deems necessary or desirable for the administration of the Plan. The Committee may, in
its sole and absolute discretion, without amendment to the Plan, waive or amend the operation of
Plan provisions respecting exercise after Termination of Service and, except as otherwise provided
herein, adjust any of the terms of any Award. The Committee may also (A) accelerate the date on
which any Award granted under the Plan becomes exercisable or (B) accelerate the vesting date or
waive or adjust any condition imposed hereunder with respect to the vesting or exercisability of an
Award, provided that the Committee, in good faith, determines that such acceleration, waiver or
other adjustment is necessary or desirable.
(c) All designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award or any documents evidencing Awards granted pursuant to the Plan
shall be within the sole discretion of the Committee, may be made at any time and shall
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be final,
conclusive and binding upon all parties, including, without limitation, the Company, any Affiliate,
any Participant, any holder or beneficiary of any Award and any shareholder.
(d) The terms and conditions of each Award, as determined by the Committee, shall be set forth
in an Award Agreement, which shall be delivered to the Participant receiving such Award upon, or as
promptly as is reasonably practicable following, the grant of such Award. The effectiveness of an
Award shall not be subject to the Award Agreements being signed by the Company and/or the
Participants receiving the Award unless specifically so provided in the Award Agreement.
5. Shares Subject to the Plan
(a) Subject to Section 13, the maximum number of shares of Common Stock that may be issued
under the Plan is the sum of (i) 10% of the aggregate number of shares of common stock issued in
the Pre-IPO Offerings and (ii) 5% of the aggregate number of shares of common stock issued in an
IPO Offering. The maximum number of shares of Common Stock that may be granted pursuant to Options
intended to be Incentive Stock Options is 6,500,000 shares, which number shall be calculated and
adjusted pursuant to Section 13 only to the extent that such calculation or adjustment will not
affect the status of any option intended to qualify as an Incentive Stock Option under Section 422
of the Code. Subject to Section 13, the maximum number of shares of Common Stock that may be
granted pursuant to Restricted Stock Awards, Restricted Stock Unit Awards, Stock Bonus Awards or
Incentive Bonus Awards under the Plan is 5% of the aggregate number of shares of common stock
issued in the Offerings.
(b) To the extent that any Award is forfeited, or any Option or Stock Appreciation Right
terminates, expires or lapses without being exercised, or any Award is settled for cash, the shares
of Common Stock subject to such Award not delivered as a result thereof shall again be available
for Awards under the Plan.
(c) If the Option Price of any Option and/or the tax withholding obligations relating to any
Award are satisfied by the Participant delivering shares of Common Stock to the Company (by either
actual delivery or by attestation), only the number of shares of Common Stock issued net of the
shares of Common Stock delivered or attested to shall be deemed delivered for purposes of
determining the maximum numbers of shares of Common Stock available for delivery under the Plan.
To the extent any shares of Common Stock subject to an Award are not delivered because such shares
are withheld to satisfy the Option Price (in the case of an Option) and/or the tax withholding
obligations relating to such Award, such shares shall not be deemed to have been delivered for
purposes of determining the maximum number of shares of Common Stock available for delivery under
the Plan.
(d) Common Stock delivered by the Company in settlement of Awards may be authorized and
unissued Common Stock, Common Stock held in the treasury of the Company,
Common Stock purchased on the open market or by private purchase or a combination of the
foregoing.
(e) On and after the 162(m) Effective Date, no person may be granted Awards under the Plan
during any calendar year with respect to more than 4,000,000 shares of Common Stock,
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which number
shall be adjusted pursuant to Section 13, and shares otherwise counted against such number, only in
a manner that will not cause the Awards granted under the Plan to fail to qualify as
performance-based compensation for purposes of Section 162(m) of the Code. On and after the
162(m) Effective Date, the maximum cash amount payable pursuant to that portion of an Incentive
Bonus granted in any calendar year to any Participant under this Plan that is intended to satisfy
the requirements for performance-based compensation under Section 162(m) of the Code shall not
exceed $5,000,000.
6. Eligibility
Participation shall be limited to Eligible Persons who have entered into an Award Agreement or
who have received written notification from the Committee, or from a person designated by the
Committee, that they have been selected to participate in the Plan.
7. Options
The Committee is authorized to grant one or more Incentive Stock Options or Nonqualified Stock
Options to any Eligible Person; provided, however, that no Incentive Stock Option shall be granted
to any Eligible Person who is not an employee of the Company or a Parent or Subsidiary (within the
meaning of Section 424(f) of the Code). Each Option shall be evidenced by an Award Agreement.
Each Option so granted shall be subject to the following conditions, or to such other conditions as
may be reflected in the applicable Award Agreement.
(a) Option Price. The Option Price per share of Common Stock for each Option shall be set by
the Committee at the time of grant but shall not be less than the Fair Market Value of a share of
Common Stock at the Date of Grant.
(b) Manner of Exercise and Form of Payment. No shares of Common Stock shall be delivered
pursuant to any exercise of an Option until payment in full of the Option Price therefor is
received by the Company. Options that have become exercisable may be exercised by delivery of
written notice of exercise to the Committee accompanied by payment of the Option Price. The Option
Price shall be payable in cash and/or shares of Common Stock valued at the Fair Market Value at the
time the Option is exercised (including by means of attestation of ownership of a sufficient number
of shares of Common Stock in lieu of actual delivery of such shares to the Company). In addition,
the Option Price may be payable by such other method as the Committee may allow, including an
irrevocable commitment by a broker to pay over such amount from a sale of the shares of Common
Stock issuable under an Option and withholding of shares of Common Stock otherwise deliverable upon
exercise.
(c) Vesting, Option Period and Expiration. Options shall vest and become exercisable in such
manner and on such date or dates determined by the Committee and shall expire after such period,
not to exceed ten years, as may be determined by the Committee (the Option Period). If an Option
is exercisable in installments, such installments or portions
thereof which become exercisable shall remain exercisable until the Option expires.
(d) Disqualifying Dispositions of Incentive Stock Options. Each Participant awarded an
Incentive Stock Option under the Plan shall notify the Company in writing
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immediately after the
date he makes a disqualifying disposition of any Common Stock acquired pursuant to the exercise of
such Incentive Stock Option.
(e) Incentive Stock Option Grants to 10% Shareholders. Notwithstanding anything to the
contrary in this Section 7, if an Incentive Stock Option is granted to a Participant who owns stock
representing more than ten percent of the voting power of all classes of stock of the Company or of
a Parent or Subsidiary, the Option Period shall not exceed five years from the Date of Grant of
such Option and the Option Price shall be at least 110% of the Fair Market Value (on the Date of
Grant) of the Common Stock subject to the Option.
(f) $100,000 Per Year Limitation for Incentive Stock Options. To the extent the aggregate
Fair Market Value (determined as of the Date of Grant) of Common Stock for which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar year (under all
plans of the Company) exceeds $100,000, such excess Incentive Stock Options shall be treated as
Nonqualified Stock Options.
8. Stock Appreciation Rights
Any Option granted under the Plan may include SARs, either at the Date of Grant or, except in
the case of an Incentive Stock Option, by subsequent amendment (SARs that are granted in
conjunction with an Option are referred to in this Plan as Tandem SARs). The Committee also may
award SARs to Eligible Persons independent of any Option (SARs that are granted independent of any
Option are referred to in this Plan as Free-Standing SARs). Each SAR shall be evidenced by an
Award Agreement. Each SAR shall be subject to such terms and conditions not inconsistent with the
Plan as the Committee shall impose as set forth in the applicable Award Agreement, including, but
not limited to, the following:
(a) Vesting, Transferability and Expiration. Tandem SARs shall become exercisable, be
transferable and shall expire according to the same vesting schedule, transferability rules and
expiration provisions as the corresponding Option. Free-Standing SARs shall become exercisable, be
transferable and shall expire in accordance with a vesting schedule, transferability rules and
expiration provisions as established by the Committee and reflected in an Award Agreement.
(b) Payment. Upon the exercise of an SAR, the Company shall pay to the Participant an amount
equal to the number of shares subject to the SAR multiplied by the excess, if any, of the Fair
Market Value of one share of Common Stock on the exercise date over the Strike Price. The Company
shall pay such excess in cash, in shares of Common Stock valued at Fair Market Value, or any
combination thereof, as determined by the Committee. Fractional shares shall be settled in cash.
(c) Method of Exercise. A Participant may exercise an SAR at such time or times as may be
determined by the Committee at the time of grant by filing an irrevocable written notice with the
Committee or its designee, specifying the number of SARs to be exercised.
(d) Expiration. Except as otherwise provided in the case of Tandem SARs, a SAR shall expire
on a date designated by the Committee that is not later than ten years after the Date of Grant of
the SAR.
11
9. Restricted Stock Awards and Restricted Stock Units
(a) Award of Restricted Stock and Restricted Stock Units.
(i) The Committee shall have the authority to grant Restricted Stock and Restricted
Stock Units to Eligible Persons, and to establish terms, conditions and restrictions
applicable to such Restricted Stock and Restricted Stock Units, including (A) the Restricted
Period, (B) the time or times at which Restricted Stock or Restricted Stock Units shall be
granted or become vested, including upon the attainment of performance conditions (whether
or not such conditions are Performance Goals) or upon both the attainment of performance
conditions (whether or not such conditions are Performance Goals) and the continued service
of the applicable Participant and (C) the number of shares or units to be covered by each
grant. Each Restricted Stock and Restricted Stock Unit Award shall be evidenced by an Award
Agreement.
(ii) Subject to the restrictions set forth in Section 9(b), the Participant generally
shall have the rights and privileges of a shareholder as to such Restricted Stock, including
the right to vote such Restricted Stock. The Award Agreement for Restricted Stock shall
specify whether, to what extent and on what terms and conditions the applicable Participant
shall be entitled to receive current or deferred payments of dividends payable in respect of
the shares underlying the Restricted Stock Award, including whether any such dividends will
be held subject to the vesting of the Restricted Stock, subject to Section 12(e) below in
the case of dividends settled in Common Stock.
(iii) Awards of Restricted Stock shall be evidenced in such manner as the Committee may
deem appropriate, including book-entry registration or issuance of one or more stock
certificates. Any certificate issued in respect of shares of Restricted Stock shall be
registered in the name of the applicable Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award. The
Committee may require that the 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
Award of Restricted Stock, the applicable Participant shall have delivered a stock power,
endorsed in blank, relating to the Common Stock covered by such Award.
(iv) No shares of Common Stock shall be issued at the time a Restricted Stock Unit is
granted and the Company will not be required to set aside a fund for the payment of any such
Award. The Award Agreement for Restricted Stock Units shall specify whether, to what extent
and on what terms and conditions the applicable Participant shall be entitled to receive
current or deferred payments of dividends payable in respect of the shares underlying the
Restricted Stock Units, including whether any such dividends will be held subject to the
vesting of the underlying Restricted Stock Units, subject to Section 12(e) below in the case
of dividends settled in Common Stock.
(b) Restrictions.
(i) Restricted Stock awarded to a Participant shall be subject to the following
restrictions until the expiration of the Restricted Period, and to such other terms and
12
conditions as may be set forth in the applicable Award Agreement: (A) the shares shall be
subject to the restrictions on transferability set forth in the Award Agreement and (B) the
shares shall be subject to forfeiture to the extent provided in the applicable Award
Agreement, and satisfaction of any applicable Performance Goals during such period, to the
extent provided in the applicable Award Agreement and, to the extent such shares are
forfeited, the stock certificates shall be returned to the Company and all rights of the
Participant to such shares and as a shareholder shall terminate without further obligation
on the part of the Company.
(ii) Restricted Stock Units awarded to any Participant shall be subject to (A)
forfeiture until the expiration of the Restricted Period, and satisfaction of any applicable
Performance Goals during such period, to the extent provided in the applicable Award
Agreement, and to the extent such Restricted Stock Units are forfeited, all rights of the
Participant to such Restricted Stock Units shall terminate without further obligation on the
part of the Company and (B) such other terms and conditions as may be set forth in the
applicable Award Agreement.
(c) Restricted Period. The Restricted Period of Restricted Stock and Restricted Stock Units
shall commence on the Date of Grant and shall expire from time to time as to that part of the
Restricted Stock and Restricted Stock Units indicated in a schedule established by the Committee in
the applicable Award Agreement.
(d) Delivery of Restricted Stock and Settlement of Restricted Stock Units.
(i) Restricted Stock. Upon the expiration of the Restricted Period with respect to any
shares of Restricted Stock and/or the satisfaction of any applicable Performance Goals, the
restrictions set forth in Section 9(b) and the applicable Award Agreement shall be of no
further force or effect with respect to such shares, except as set forth in the applicable
Award Agreement.
(ii) Restricted Stock Units. Upon the expiration of the Restricted Period with respect
to any outstanding Restricted Stock Units the Company shall deliver to the Participant, or
his beneficiary, without charge, one share of Common Stock for each such outstanding
Restricted Stock Unit (Vested Unit); provided, however, that, if explicitly provided in
the applicable Award Agreement, the Committee may, in its sole discretion, elect to (i) pay
cash or part cash and part Common Stock in lieu of delivering only shares of Common Stock
for Vested Units or (ii) delay the delivery of Common Stock (or cash or part Common Stock
and part cash, as the case may be) beyond the expiration of the Restricted Period; provided,
that any such delay must comply with Section 409A of the Code. If a cash payment is made in
lieu of delivering shares of Common Stock, the amount of such payment shall be equal to the
Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed
with respect to such Vested Unit.
(e) Applicability of Section 162(m). With respect to Performance-Based Awards made on and
after the 162(m) Effective Date and intended to qualify as performance-based compensation under
Section 162(m) of the Code, this Section 9 (including the substance of the Performance Goals, the
timing of establishment of the Performance Goals, the adjustment of the
13
Performance Goals and
determination of the Award) shall be implemented by the Committee in a manner designed to preserve
such Awards as such performance-based compensation.
10. Stock Bonus Awards
The Committee may issue unrestricted Common Stock, or other Awards denominated in Common Stock
(valued at Fair Market Value as of the date of payment), under the Plan to Eligible Persons, alone
or in tandem with other Awards, in such amounts and subject to such terms and conditions as the
Committee shall from time to time in its sole discretion determine. Stock Bonus Awards under the
Plan shall be granted as, or in payment of, a bonus, or to provide incentives or recognize special
achievements or contributions. With respect to Stock Bonus Awards made on and after the 162(m)
Effective Date and intended to qualify as performance-based compensation under Section 162(m) of
the Code, the Committee shall establish and administer Performance Goals in the manner described in
Section 9 as an additional condition to the vesting and payment of such Stock Bonus Awards. The
Stock Bonus Award for any Performance Period to any Participant may be reduced or eliminated by the
Committee in its discretion.
11. Incentive Bonus Awards
Incentive Bonus Awards may be granted under the Plan at any time and from time to time on or
prior to the Expiration Date. Each Incentive Bonus Award shall be evidenced by an Award Agreement
that shall be executed by the Company and the Participant. The Award Agreement shall specify the
terms and conditions of the Incentive Bonus Award, including without limitation, (a) the target and
maximum amount payable to the Participant as an Incentive Bonus Award, (b) the performance criteria
and level of achievement versus these criteria that shall determine the amount of such payment, (c)
the term of the Performance Period, (d) the timing of any payment earned by virtue of performance,
(e) restrictions on the alienation or transfer of the Incentive Bonus Award prior to actual
payment, (f) forfeiture provisions and (g) such further terms and conditions, in each case not
inconsistent with this Plan as may be determined from time to time by the Committee. Payment of
the amount due under an Incentive Bonus Award may be made in cash or in Common Stock, as determined
by the Committee. With respect to Incentive Bonus Awards made on and after the 162(m) Effective
Date and intended to qualify as performance-based compensation under Section 162(m) of the Code,
the Committee shall establish and administer Performance Goals in the manner described in Section 9
as an additional condition to the vesting and payment of such Incentive Bonus Awards. The
Incentive Bonus Award for any Performance Period to any Participant may be reduced or eliminated by
the Committee in its discretion. Incentive Bonus Awards payable hereunder may be pursuant to one
or more subplans.
12. General
(a) Additional Provisions of an Award. Awards to a Participant under the Plan also
may be subject to such other provisions, restrictions, conditions or limitations (whether or
not applicable to Awards granted to any other Participant) as the Committee determines appropriate
including, without limitation, (i) provisions for the forfeiture of or restrictions on resale or
other disposition of shares of Common Stock acquired under any Award, (ii) provisions giving the
14
Company the right to repurchase shares of Common Stock acquired under any Award in the event the
Participant elects to dispose of such shares, (iii) provisions allowing the Participant to elect to
defer the receipt of payment in respect of Awards for a specified period or until a specified
event, provided such provisions comply with Section 409A of the Code and (iv) provisions to comply
with federal and state securities laws and federal and state tax withholding requirements. Without
limiting the foregoing, additional restrictions may address the timing and manner of any resales by
the Participant or other subsequent transfers by the Participant of any shares issued under an
Award, including without limitation (A) restrictions under an insider trading policy or pursuant to
applicable law, (B) restrictions designed to delay and/or coordinate the timing and manner of sales
by Participant and holders of other Company equity compensation arrangements, and (C) restrictions
as to the use of a specified brokerage firm for such resales or other transfers.
(b) Privileges of Stock Ownership. Except as otherwise specifically provided in the Plan, no
person shall be entitled to the privileges of ownership in respect of shares of Common Stock that
are subject to Awards hereunder until such shares have been issued to that person.
(c) Conditions for Issuance. The obligation of the Company to settle Awards in Common Stock
or otherwise shall be subject to all applicable laws, rules and regulations and to such approvals
by governmental agencies as may be required. Notwithstanding any other provision of the Plan or
agreements made pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for Common Stock under the Plan prior to fulfillment of all of the
following conditions: (i) listing or approval for listing upon notice of issuance, of such Common
Stock on the Applicable Exchange; (ii) any registration or other qualification of such Common Stock
of the Company under any state or federal law or regulation, or the maintaining in effect of any
such registration or other qualification that the Committee shall, in its absolute discretion upon
the advice of counsel, deem necessary or advisable; and (iii) obtaining any other consent, approval
or permit from any state or federal governmental agency that the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be necessary or advisable. The
Company shall be under no obligation to register for sale under the Securities Act any of the
shares of Common Stock to be offered or sold under the Plan. If the shares of Common Stock offered
for sale or sold under the Plan are offered or sold pursuant to an exemption from registration
under the Securities Act, the Company may restrict the transfer of such shares and may legend the
Common Stock certificates representing such shares in such manner as it deems advisable to ensure
the availability of any such exemption.
(d) Tax Withholding.
(i) A Participant may be required to pay to the Company or any Affiliate and the
Company or any Affiliate shall have the right and is hereby authorized to withhold from any
shares of Common Stock or other property deliverable under any Award or from any
compensation or other amounts owing to a Participant the amount (in cash,
Common Stock or other property) of any required income tax withholding and payroll
taxes in respect of an Award, its exercise, or any payment or transfer under an Award or
under the Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such withholding and taxes.
15
(ii) Without limiting the generality of clause (i) above, the Committee may, in its
sole discretion, permit a Participant to satisfy, in whole or in part, the foregoing
withholding liability (but no more than the minimum required withholding liability) by (A)
delivery of shares of Common Stock owned by the Participant with a Fair Market Value equal
to such withholding liability or (B) having the Company withhold from the number of shares
of Common Stock otherwise issuable pursuant to the exercise or settlement of the Award a
number of shares with a Fair Market Value equal to such withholding liability.
(e) Limitation on Dividend Reinvestment and Dividend Equivalents. Reinvestment of dividends
in additional Restricted Stock at the time of any dividend payment, and the payment of Common Stock
with respect to dividends to Participants holding Awards of Restricted Stock Units, shall only be
permissible if sufficient shares of Common Stock are available under Section 5 for such
reinvestment or payment (taking into account then-outstanding Awards). In the event that
sufficient shares of Common Stock are not available for such reinvestment or payment, such
reinvestment or payment shall be made in the form of a grant of Restricted Stock Units equal in
number to the shares of Common Stock that would have been obtained by such payment or reinvestment,
the terms of which Restricted Stock Units shall provide for settlement in cash and for dividend
equivalent reinvestment in further Restricted Stock Units on the terms contemplated by this Section
12(e).
(f) Claim to Awards and Employment Rights. No employee of the Company, Subsidiary or
Affiliate, or other person, shall have any claim or right to be granted an Award under the Plan or,
having been selected for the grant of an Award, to be selected for a grant of any other Award.
Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ or service of the Company or an Affiliate.
(g) No Liability of Committee Members. No member of the Committee shall be personally liable
by reason of any contract or other instrument executed by such member or on his behalf in his
capacity as a member of the Committee nor for any mistake of judgment made in good faith, and the
Company shall indemnify and hold harmless each member of the Committee and each other employee,
officer or director of the Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act
or omission to act in connection with the Plan unless arising out of such persons own fraud or
willful bad faith; provided, however, that approval of the Board shall be required for the payment
of any amount in settlement of a claim against any such person. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Companys Articles or Certificate of Incorporation or By-Laws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
(h) Governing Law. The Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware without regard to the principles of conflicts of law thereof
or principles of conflicts of laws of any other jurisdiction that could cause the application of
the laws of any jurisdiction other than the State of Delaware.
16
(i) Funding. No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or
other entity or otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that insofar as they may have
become entitled to payment of additional compensation by performance of services, they shall have
the same rights as other employees under general law.
(j) Nontransferability.
(i) Each Award shall be exercisable only by the Participant during the Participants
lifetime, or, if permissible under applicable law, by the Participants legal guardian or
representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant other than by will or by the laws of descent and
distribution and any such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against the Company, Subsidiary or
Affiliate; provided that the designation of a beneficiary shall not constitute an
assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
(ii) Notwithstanding the foregoing, the Committee may, in its sole discretion, permit
Awards other than Incentive Stock Options to be transferred by a Participant without
consideration, subject to such rules as the Committee may adopt consistent with any
applicable Award Agreement to preserve the purposes of the Plan, to:
(A) | any person who is a family member of the Participant, as such term is used in the instructions to Form S-8 (collectively, the Immediate Family Members); | ||
(B) | a trust solely for the benefit of the Participant and his Immediate Family Members; | ||
(C) | a partnership or limited liability company whose only partners or shareholders are the Participant and his Immediate Family Members; or | ||
(D) | any other transferee as may be approved either (1) by the Board or the Committee in its sole discretion or (2) as provided in the applicable Award Agreement; |
(each transferee described in clauses (A), (B), (C) and (D) above is hereinafter referred to
as a Permitted Transferee); provided that the Participant gives the Committee advance
written notice describing the terms and conditions of the proposed transfer and the
Committee notifies the Participant in writing that such a transfer would comply with the
requirements of this Plan and any applicable Award Agreement.
(iii) The terms of any Award transferred in accordance with the immediately preceding
sentence shall apply to the Permitted Transferee and any reference in this Plan,
17
or in any
applicable Award Agreement, to a Participant shall be deemed to refer to the Permitted
Transferee, except that (A) Permitted Transferees shall not be entitled to transfer any
Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees
shall not be entitled to exercise any transferred Option unless there shall be in effect a
registration statement on an appropriate form covering the shares of Common Stock to be
acquired pursuant to the exercise of such Option if the Committee determines, consistent
with any applicable Award Agreement, that such a registration statement is necessary or
appropriate; (C) the Committee or the Company shall not be required to provide any notice to
a Permitted Transferee, whether or not such notice is or would otherwise have been required
to be given to the Participant under the Plan or otherwise; and (D) the consequences of the
termination of the Participants employment by, or services to, the Company, or an Affiliate
under the terms of the Plan and the applicable Award Agreement shall continue to be applied
with respect to the Participant, including, without limitation, that an Option shall be
exercisable by the Permitted Transferee only to the extent, and for the periods, specified
in the Plan and the applicable Award Agreement.
(k) Section 409A of the Code. It is the intention of the Company that no Award shall be
deferred compensation subject to Section 409A of the Code, unless and to the extent that the
Committee specifically determines otherwise as provided in this Section 12(k), and the Plan and the
terms and conditions of all Awards shall be interpreted accordingly. The terms and conditions
governing any Awards that the Committee determines will be subject to Section 409A of the Code,
including any rules for elective or mandatory deferral of the delivery of cash or shares of Common
Stock pursuant thereto and any rules regarding treatment of such Awards in the event of a Change in
Control, shall be set forth in the applicable Award Agreement and shall comply in all respects with
Section 409A of the Code. Notwithstanding any other provision of the Plan to the contrary, with
respect to any Award that constitutes a nonqualified deferred compensation plan subject to
Section 409A of the Code that has been granted to a Participant who is a specified employee
(within the meaning of Section 409A) on the date of the Participants Termination of Service, any
payments (whether in cash, shares of Common Stock or other property) to be made with respect to
such Award upon the Participants Termination of Service shall be delayed until the earlier of (i)
the first day of the seventh month following the Participants Termination of Service and (ii) the
Participants death.
(l) Relationship to Other Benefits. No payment under the Plan shall be taken into account in
determining any benefits under any pension, retirement, profit sharing, group insurance or other
benefit plan of the Company or any Subsidiary except as otherwise specifically provided in such
other plan.
(m) Subsidiary Employee. In the case of a grant of an Award to any employee of a Subsidiary
of the Company, the Company may, if the Committee so directs, issue or transfer the shares, if any,
covered by the Award to the Subsidiary, for such lawful consideration as the
Committee may specify, upon the condition or understanding that the Subsidiary will transfer
the shares to the employee in accordance with the terms of the Award specified by the Committee
pursuant to the provisions of the Plan. All shares underlying Awards that are forfeited or
canceled should revert to the Company.
18
(n) Foreign Employees and Foreign Law Considerations. The Committee may grant Awards to
Eligible Persons who are foreign nationals, who are located outside the United States or who are
not compensated from a payroll maintained in the United States, or who are otherwise subject to (or
could cause the Company to be subject to) legal or regulatory provisions of countries or
jurisdictions outside the United States, on such terms and conditions different from those
specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster
and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the
Committee may make such modifications, amendments, procedures or subplans as may be necessary or
advisable to comply with such legal or regulatory provisions.
(o) No Contract of Employment. The Plan shall not constitute a contract of employment, and
adoption of the Plan shall not confer upon any employee any right to continued employment, nor
shall it interfere in any way with the right of the Company or any Subsidiary or Affiliate to
terminate the employment of any employee at any time.
(p) Titles and Headings. The titles and headings of the sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.
(q) Severability. If any provision of the Plan or any Award Agreement is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee, materially altering
the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award and the remainder of the Plan and any such Award shall remain in full force and
effect.
13. Changes in Capital Structure
(a) In the event of a merger, consolidation, acquisition of property or shares, stock rights
offering, liquidation, Disaffiliation, or similar event affecting the Company or any of its
Subsidiaries (each, a Corporate Transaction), the Committee or the Board shall make such
substitutions or adjustments as it deems equitable to (A) the aggregate number and kind of shares
of Common Stock or other securities reserved for issuance and delivery under the Plan, (B) the
various maximum limitations set forth in Section 5 upon certain types of Awards and upon the grants
to individuals of certain types of Awards, (C) the number and kind of shares of Common Stock or
other securities subject to outstanding Awards and (D) the exercise price of outstanding Options
and Stock Appreciation Rights. In the case of Corporate Transactions, such adjustments may
include, without limitation, (1) the cancellation of outstanding Awards in exchange for payments of
cash, property or a combination thereof having an aggregate value equal to the value of such
Awards, as determined by the Committee or the Board in its sole discretion (it being
understood that in the case of a Corporate Transaction with respect to which holders of Common
Stock receive consideration other than publicly traded equity securities of the ultimate surviving
entity, any such determination by the Committee that the value of an Option or Stock Appreciation
Right shall for this purpose be deemed to equal the excess, if any, of the value of the
consideration being paid for each share of Common Stock pursuant to such Corporate
19
Transaction over
the exercise price of such Option or Stock Appreciation Right shall conclusively be deemed valid);
(2) the substitution of other property (including, without limitation, cash or other securities of
the Company and securities of entities other than the Company) for the Common Stock subject to
outstanding Awards; and (3) in connection with any Disaffiliation, arranging for the assumption of
Awards, or replacement of Awards with new awards based on other property or other securities
(including, without limitation, other securities of the Company and securities of entities other
than the Company), by the affected Subsidiary, Affiliate or division or by the entity that controls
such Subsidiary, Affiliate or division following such Disaffiliation (as well as any corresponding
adjustments to Awards that remain based upon Company securities).
(b) In the event of a stock dividend, stock split, reverse stock split, separation, spinoff,
reorganization, extraordinary dividend of cash or other property, share combination, or
recapitalization or similar event affecting the capital structure of the Company (each, a Stock
Change), the Committee or the Board shall make such substitutions or adjustments as it deems
equitable to (i) the aggregate number and kind of shares of Common Stock or other securities
reserved for issuance and delivery under the Plan, (ii) the various maximum limitations set forth
in Section 5 upon certain types of Awards and upon the grants to individuals of certain types of
Awards, (iii) the number and kind of shares of Common Stock or other securities subject to
outstanding Awards and (iv) the exercise price of outstanding Options and Stock Appreciation
Rights.
(c) The Committee may adjust in its sole discretion the Performance Goals applicable to any
Awards to reflect any Stock Change and any Corporate Transaction and any unusual or nonrecurring
events and other extraordinary items, impact of charges for restructurings, discontinued operations
and the cumulative effects of accounting or tax changes, each as defined by generally accepted
accounting principles or as identified in the Companys financial statements, notes to the
financial statements, managements discussion and analysis or the Companys other SEC filings;
provided that with respect to Awards granted on and after the 162(m) Effective Date that are
intended to qualify as performance-based compensation under Section 162(m) of the Code, such
adjustments or substitutions shall be made only to the extent that the Committee determines that
such adjustments or substitutions may be made without causing the Company to be denied a tax
deduction on account of Section 162(m) of the Code. The Company shall give each Participant notice
of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
(d) Any adjustment under this Section 13 need not be the same for all Participants.
(e) Notwithstanding the foregoing: (i) any adjustments made pursuant to this Section 13 to
Awards that are considered deferred compensation within the meaning of Section 409A of the Code
shall be made in compliance with the requirements of Section 409A of the Code; (ii) any adjustments
made pursuant to this Section 13 to Awards that are not considered deferred
compensation subject to Section 409A of the Code shall be made in such a manner as to ensure
that, after such adjustment, the Awards either (A) continue not to be subject to Section 409A of
the Code or (B) comply with the requirements of Section 409A of the Code; and (iii) in any event,
neither the Committee nor the Board shall have the authority to make any adjustments
20
pursuant to
this Section 13 to the extent the existence of such authority would cause an Award that is not
intended to be subject to Section 409A of the Code to be subject thereto.
14. Effect of Change in Control
(a) Impact of Event/Single Trigger. Unless otherwise provided by the Committee in the
applicable Award Agreement or at any other time prior to the occurrence of a Change in Control, and
subject to Section 13, notwithstanding any other provision of the Plan to the contrary, immediately
upon the occurrence of a Change in Control:
(i) any Options and Stock Appreciation Rights outstanding that are not then exercisable
and vested shall become fully exercisable and vested;
(ii) the restrictions, including the Restricted Period, which may differ with respect
to each grantee, and deferral limitations applicable to any Restricted Stock shall lapse and
such Restricted Stock shall become free of all restrictions and become fully vested and
transferable;
(iii) all Restricted Stock Units shall be considered to be earned and payable in full,
and any restrictions shall lapse and such Restricted Stock Units shall be settled as
promptly as is practicable in the form set forth in the applicable Award Agreement;
provided, however, that with respect to any Restricted Stock Unit that constitutes a
nonqualified deferred compensation plan within the meaning of Section 409A of the Code,
the settlement of each such Restricted Stock Unit pursuant to this Section 14(a)(iii) shall
not occur until the earliest of (A) the Change in Control if such Change in Control
constitutes a change in the ownership of the corporation, a change in effective control
of the corporation or a change in the ownership of a substantial portion of the assets of
the corporation, within the meaning of Section 409A(a)(2)(A)(v) of the Code (each, a 409A
Change in Control) and (B) the date such Restricted Stock Units would otherwise be settled
pursuant to the terms of the Award Agreement;
(iv) with respect to Performance-Based Awards, the Committee may in its discretion
provide that all incomplete Performance Periods in effect on the date the Change in Control
occurs shall end on the date of such Change in Control and, if the Committee exercises such
discretion, the Committee shall (A) determine the extent to which Performance Goals with
respect to each such Performance Period have been met based upon such audited or unaudited
financial information then available as it deems relevant and (B) cause to be paid to each
Participant partial or full Awards with respect to Performance Goals for each such
Performance Period based upon the Committees determination of the degree of attainment of
Performance Goals; provided, however, that with respect to any Performance-Based Award that
constitutes a nonqualified deferred compensation plan within the meaning of Section 409A
of the Code, the payment of each such Award pursuant to this Section 14(a)(iv) shall not
occur until the earliest of (1)
the Change in Control if such Change in Control constitutes a 409A Change in Control
and (2) the date such Award would otherwise be settled pursuant to the terms of the Award
Agreement;
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(v) the Committee may in its discretion, and upon at least 10 days advance notice to
the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash
or stock, or any combination thereof, the value of such Awards based upon the price per
share of Common Stock received or to be received by other shareholders of the Company in the
event; and
(vi) the Committee may also make additional adjustments and/or settlements of
outstanding Awards as it deems appropriate and consistent with the Plans purposes.
(b) The obligations of the Company under the Plan shall be binding upon any successor
corporation or organization resulting from the merger, consolidation or other reorganization of the
Company, or upon any successor corporation or organization succeeding to substantially all of the
assets and business of the Company. The Company agrees that it will make appropriate provisions
for the preservation of Participants rights under the Plan in any agreement or plan that it may
enter into or adopt to effect any such merger, consolidation, reorganization or transfer of assets.
15. Nonexclusivity of the Plan
Neither the adoption of this Plan by the Board nor the submission of this Plan to the
shareholders of the Company for approval shall be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under this Plan, and such
arrangements may be either applicable generally or only in specific cases.
16. Amendments and Termination
(a) Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue
or terminate the Plan or any portion thereof at any time; provided that no such amendment,
alteration, suspension, discontinuation or termination shall be made without shareholder approval
if such approval is necessary to comply with any tax or regulatory requirement applicable to the
Plan; and provided further that any such amendment, alteration, suspension, discontinuance or
termination that would impair the rights of any Participant or any holder or beneficiary of any
Award theretofore granted shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary, except such an amendment made to comply with applicable law,
including, without limitation, Section 409A of the Code, Applicable Exchange rules or accounting
rules. In no event may any Option or Free-Standing SAR granted under this Plan be amended, other
than pursuant to Section 13, to decrease the exercise price thereof, cancelled in conjunction with
the grant of any new Option or Free-Standing SAR with a lower exercise price, or otherwise be
subject to any action that would be treated, for accounting purposes, as a repricing of such
Option or Free-Standing SAR, unless such amendment, cancellation or action is approved by the
Companys shareholders.
(b) Amendment of Award Agreements. The Committee may, to the extent
consistent with the terms of any applicable Award Agreement, waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award
theretofore granted or the associated Award Agreement, prospectively or retroactively; provided
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that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant or any holder or beneficiary of any
Award theretofore granted shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
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