Attached files
Exhibit 10.27
57TH STREET ACQUISITION CORP.
EQUITY INCENTIVE PLAN
EQUITY INCENTIVE PLAN
1. Purpose. The purpose of the 57th Street Acquisition Corp. Equity Incentive Plan is to
provide a means through which the Company and its Affiliates may attract and retain key personnel
and to provide a means whereby directors, officers, members, managers, employees, consultants and
advisors (and prospective directors, officers, members, managers, employees, consultants and
advisors) of the Company and its Affiliates can acquire and maintain an equity interest in the
Company, or be paid incentive compensation, which may (but need not) be measured by reference to
the value of Common Shares, thereby strengthening their commitment to the welfare of the Company
and its Affiliates and aligning their interests with those of the Companys stockholders.
2. Definitions. The following definitions shall be applicable throughout this Plan:
(a) Affiliate means (i) any person or entity that directly or indirectly controls,
is controlled by or is under common control with the Company and/or (ii) to the extent provided by
the Committee, any person or entity in which the Company has a significant interest as determined
by the Committee in its discretion. The term control (including, with correlative meaning, the
terms controlled by and under common control with), as applied to any person or entity, means
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through the ownership of voting or other
securities, by contract or otherwise.
(b) Award means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock
Bonus Award, and Performance Compensation Award granted under this Plan.
(c) Board means the Board of Directors of the Company.
(d) Business Combination has the meaning given such term in the definition of
Change in Control.
(e) Business Day means any day other than a Saturday, a Sunday or a day on which
banking institutions in New York City are authorized or obligated by federal law or executive order
to be closed
(f) Cause means, in the case of a particular Award, unless the applicable Award
agreement states otherwise, (i) the Company or an Affiliate having cause to terminate a
Participants employment or service, as defined in any employment or consulting agreement or
similar document or policy between the Participant and the Company or an Affiliate in effect at the
time of such termination or (ii) in the absence of any such employment or consulting agreement,
document or policy (or the absence of any definition of Cause contained therein), (A) the
Participants commission of, conviction for, plea of guilty or nolo contendere to a felony or a
crime involving moral turpitude, or other material act or omission involving dishonesty or fraud,
regardless of whether involving the Company or its Affiliates, (B) the Participants
conduct that results in or is reasonably likely to result in harm to the reputation or
business of the Company or any of its Affiliates in any material way, (C) the Participants (1)
failure to perform duties as reasonably directed by or on behalf of the Company, (2) material
breach of any agreement between the Participant and the Company or its Affiliates (including,
without limitation, any consulting, confidentiality, intellectual property assignment,
non-solicitation or non-competition agreement), which, if curable, is not cured within 5 Business
Days after notice thereof is provided to the Participant or (3) material violation of any rule,
regulation, policy or plan for the conduct of (as the case may be) any director, officer, employee,
member, manager, consultant or service provider of or to the Company or its Affiliates or its or
their business (which, if curable, is not cured within 5 Business Days after notice thereof is
provided to the Participant) or (D) the Participants gross negligence, fraud, willful malfeasance
or material act of disloyalty with respect to the Company or its Affiliates (which, if curable, is
not cured within 5 Business Days after notice thereof is provided to the Participant). Any
determination of whether Cause exists shall be made by the Committee in its sole discretion.
(g) Change in Control shall, in the case of a particular Award, unless the
applicable Award agreement states otherwise or contains a different definition of Change in
Control, be deemed to occur upon:
(i) Any sale, lease, exchange or other transfer (in one or a series of related transactions)
of all or substantially all of the assets of the Company;
(ii) Any person as such term is used in Section 13(d) and Section 14(d) of the Securities
Exchange Act of 1934, as amended (the Exchange Act) is or becomes, directly or indirectly, the
beneficial owner as defined in Rule 13d-3 under the Exchange Act of securities of the Company
that represent more than 50% of the combined voting power of the Companys then outstanding voting
securities (the Outstanding Company Voting Securities); provided, however, that,
for purposes of this Section 2(f), the following acquisitions shall not constitute a Change in
Control: (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III)
any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, (IV) any acquisition by any corporation pursuant to a transaction that
complies with Sections 2(f)(iv)(A) and 2(f)(iv)(B), (V) any acquisition involving beneficial
ownership of less than 50% of the then-outstanding Common Shares (the Outstanding Company Common
Shares) or the Outstanding Company Voting Securities that is determined by the Board, based on
review of public disclosure by the acquiring Person with respect to its passive investment intent,
not to have a purpose or effect of changing or influencing the control of the Company;
provided, however, that for purposes of this clause (V), any such acquisition in
connection with (x) an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or consents or (y) any
Business Combination (as defined below) shall be presumed to be for the purpose or with the
effect of changing or influencing the control of the Company;
(iii) During any period of two (2) consecutive years, the individuals who at the beginning of
such period constituted the Board together with any individuals subsequently elected to the Board
whose nomination by the stockholders of the Company was approved by a vote of the then incumbent
Board (i.e. those members of the Board who either
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have been directors from the beginning of such two-year period or whose election or nomination for
election was previously approved by the Board as provided in this Section 2(f)(iii)) cease for any
reason to constitute a majority of the Board;
(iv) The Board or the stockholders of the Company approve and consummate a merger,
amalgamation or consolidation (a Business Combination) of the Company with any other corporation,
unless, following such Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors (or, for
a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Companys assets either directly
or through one or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, and (B) at least a majority of the
members of the board of directors (or, for a non-corporate entity, equivalent governing body) of
the entity resulting from such Business Combination were members of the incumbent Board at the time
of the execution of the initial agreement or of the action of the Board providing for such Business
Combination;
(v) The date which is 10 Business Days prior to the approval by the Board of the complete
liquidation of the Company.
For the avoidance of doubt, the business combination contemplated by the Business Combination
Agreement entered into as of January 9, 2011, as amended by that certain Amendment to Business
Combination Agreement, dated as of February 18, 2011, Amendment No. 2 to Business Combination
Agreement, dated as of March 17, 2011 and Amendment No. 3 to Business Combination Agreement, dated
as of April 7, 2011 by and among 57th Street General Acquisition Corp., 57th Street Merger Sub LLC,
Crumbs Holdings LLC, and certain other parties set forth therein shall not constitute a Change in
Control.
(h) Code means the Internal Revenue Code of 1986, as amended, and any successor
thereto. Reference in this Plan to any section of the Code shall be deemed to include any
regulations or other interpretative guidance under such section, and any amendments or successor
provisions to such section, regulations or guidance.
(i) Committee means a committee of at least two people as the Board may appoint to
administer this Plan or, if no such committee has been appointed by the Board, the Board.
(j) Common Shares means the common shares, par value $0.0001 per share, of the
Company (and any stock or other securities into which such common shares may be converted or into
which they may be exchanged).
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(k) Company means 57th Street General Acquisition Corp., a Delaware
corporation, together with its successors and assigns. The term Company shall further apply to
any different corporate name for the Company that may be duly approved in the future.
(l) Confidential Information means any and all confidential and/or proprietary trade
secrets, knowledge, data, or information of the Company, regardless and whether or not (and in
whatever medium) memorialized, and including, without limitation, any: (A) drawings, inventions,
methodologies, mask works, ideas, processes, formulas, source and object codes, data, programs,
software source documents, works of authorship, know-how, improvements, discoveries, developments,
designs and techniques, and all other work product of the Company, whether or not patentable or
registrable under trademark, copyright, patent or similar laws; (B) information regarding or
relating to plans for research, development, new service offerings and/or products, marketing,
advertising and selling, manufacturing, distribution, business plans and strategies (including
those relating to acquisitions or new store openings), business forecasts, budgets and unpublished
financial statements, licenses, prices and costs, suppliers, customers, customer history, customer
preferences, or any related agreements, documents, data, surveys or other written or oral
information; (C) any information regarding the skills or compensation of employees, suppliers,
agents, and/or independent contractors of the Company; (D) concepts and ideas relating to the
development and distribution of content in any medium or to the current, future and proposed
products or services of the Company; (E) information about the Companys investment program,
trading methodology, or portfolio holdings; or (F) any other oral or written information, data or
the like that is not generally available to the public or is labeled confidential or described as
confidential.
(m) 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.
(n) Effective Date means the date as of which this Plan is adopted by the Board,
subject to Section 3 of this Plan.
(o) Eligible Director means a person who is (i) a non-employee director within the
meaning of Rule 16b-3 under the Exchange Act, and (ii) an outside director within the meaning of
Section 162(m) of the Code.
(p) Eligible Person means any (i) individual employed by the Company or an
Affiliate; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent that such eligibility is
set forth in such collective bargaining agreement or in an agreement or instrument relating
thereto; (ii) director of the Company or an Affiliate; (iii) consultant or advisor to the Company
or an Affiliate, provided that if the Securities Act applies such persons must be eligible to be
offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective employees,
directors, officers, consultants or advisors who have accepted offers of employment or consultancy
from the Company or its Affiliates (and would satisfy the provisions of clauses (i) through (iii)
above once he or she begins employment with or begins providing services to the Company or its
Affiliates).
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(q) Exchange Act has the meaning given such term in the definition of Change in
Control, and any reference in this Plan to any section of (or rule promulgated under) the Exchange
Act shall be deemed to include any rules, regulations or other interpretative guidance under such
section or rule, and any amendments or successor provisions to such section, rules, regulations or
guidance.
(r) Exercise Price has the meaning given such term in Section 7(b) of this Plan.
(s) Fair Market Value means, on a given date, (i) if the Common Stock is listed on
the New York Stock Exchange or another national securities exchange, the closing sales price of the
Common Stock reported on such national securities exchange, or, if there is no such sale on that
date, then on the last preceding date on which such a sale was reported; (ii) if the Common Stock
is not listed on the New York Stock Exchange or another national securities exchange, but is quoted
by the OTC Markets Group, Inc. (www.otcmarkets.com) or any successor or alternative recognized
over-the-counter market or another inter-dealer quotation system on a last sale basis, the closing
bid price or, if there is no such sale on that date, then on the last preceding date on which a
sale was reported; or (iii) if the Common Stock is not listed on a national securities exchange or
quoted in an inter-dealer quotation system on a last sale basis, the amount determined by the
Committee in good faith to be the fair market value of the Common Stock.
(t) Immediate Family Members shall have the meaning set forth in Section 16(b).
(u) Incentive Stock Option means an Option that is designated by the Committee as an
incentive stock option as described in Section 422 of the Code and otherwise meets the requirements
set forth in this Plan.
(v) Indemnifiable Person shall have the meaning set forth in Section 4(e) of this
Plan.
(w) Intellectual Property Products shall have the meaning set forth in Section 15(c)
of this Plan.
(x) Mature Shares means Common Shares owned by a Participant that are not subject to
any pledge or security interest and that have been either previously acquired by the Participant on
the open market or meet such other requirements, if any, as the Committee may determine are
necessary in order to avoid an accounting earnings charge on account of the use of such shares to
pay the Exercise Price or satisfy a withholding obligation of the Participant.
(y) Negative Discretion shall mean the discretion authorized by this Plan to be
applied by the Committee to eliminate or reduce the size of a Performance Compensation Award
consistent with Section 162(m) of the Code.
(z) Nonqualified Stock Option means an Option that is not designated by the
Committee as an Incentive Stock Option.
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(aa) Option means an Award granted under Section 7 of this Plan.
(bb) Option Period has the meaning given such term in Section 7(c) of this Plan.
(cc) Outstanding Company Common Shares has the meaning given such term in the
definition of Change in Control.
(dd) Outstanding Company Voting Securities has the meaning given such term in the
definition of Change in Control.
(ee) Participant means an Eligible Person who has been selected by the Committee to
participate in this Plan and to receive an Award pursuant to Section 6 of this Plan.
(ff) Performance Compensation Award shall mean any Award designated by the Committee
as a Performance Compensation Award pursuant to Section 11 of this Plan.
(gg) Performance Criteria shall mean the criterion or criteria that the Committee
shall select for purposes of establishing the Performance Goal(s) for a Performance Period with
respect to any Performance Compensation Award under this Plan.
(hh) Performance Formula shall mean, for a Performance Period, the one or more
objective formulae applied against the relevant Performance Goal to determine, with regard to the
Performance Compensation Award of a particular Participant, whether all, some portion but less than
all, or none of the Performance Compensation Award has been earned for the Performance Period.
(ii) Performance Goals shall mean, for a Performance Period, the one or more goals
established by the Committee for the Performance Period based upon the Performance Criteria.
(jj) Performance Period shall mean the one or more periods of time, as the Committee
may select, over which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participants right to, and the payment of, a Performance Compensation
Award.
(kk) Permitted Transferee shall have the meaning set forth in Section 16(b) of this
Plan.
(ll) Person has the meaning given such term in the definition of Change in
Control.
(mm) Plan means this 57th Street Acquisition Corp. Equity Incentive Plan.
(nn) Restricted Period means the period of time determined by the Committee during
which an Award is subject to restrictions or, as applicable, the period of time within which
performance is measured for purposes of determining whether an Award has been earned.
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(oo) Restricted Stock Unit means an unfunded and unsecured promise to deliver Common
Shares, cash, other securities or other property, subject to certain restrictions (including,
without limitation, a requirement that the Participant remain continuously employed or provide
continuous services for a specified period of time), granted under Section 9 of this Plan.
(pp) Restricted Stock means Common Shares, subject to certain specified restrictions
(including, without limitation, a requirement that the Participant remain continuously employed or
provide continuous services for a specified period of time), granted under Section 9 of this Plan.
(qq) SAR Period has the meaning given such term in Section 8(c) of this Plan.
(rr) Securities Act means the Securities Act of 1933, as amended, and any successor
thereto. Reference in this Plan to any section of the Securities Act shall be deemed to include
any rules, regulations or other interpretative guidance under such section, and any amendments or
successor provisions to such section, rules, regulations or guidance.
(ss) Stock Appreciation Right or SAR means an Award granted under Section
8 of this Plan.
(tt) Stock Bonus Award means an Award granted under Section 10 of this Plan.
(uu) Strike Price means, except as otherwise provided by the Committee in the case
of Substitute Awards, (i) in the case of a SAR granted in tandem with an Option, the Exercise Price
of the related Option, or (ii) in the case of a SAR granted independent of an Option, the Fair
Market Value on the Date of Grant.
(vv) Subsidiary means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than 50% of the total
voting power of shares of Outstanding Company Voting Securities (without regard to the occurrence
of any contingency and after giving effect to any voting agreement or stockholders agreement that
effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership or limited liability company (or any comparable foreign entity (a) the
sole general partner or managing member (or functional equivalent thereof) or the managing general
partner of which is such Person or Subsidiary of such Person or (b) the only general partners or
managing members (or functional equivalents thereof) of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
(ww) Substitute Award has the meaning given such term in Section 5(e).
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3. Effective Date; Duration. The Plan shall be effective as of the Effective Date, but no
Award shall be exercised or paid (or, in the case of a stock Award, shall be granted) unless and
until this Plan has been approved by the stockholders of the Company, which approval shall be
within twelve (12) months after the date this Plan is adopted by the Board. The expiration date of
this Plan, on and after which date no Awards may be granted hereunder, shall be the tenth
anniversary of the Effective Date; provided, however, that such expiration shall
not affect Awards then outstanding, and the terms and conditions of this Plan shall continue to
apply to such Awards.
4. Administration. (a) The Committee shall administer this Plan. To the extent required to
comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is not
acting as the Committee under this Plan) or necessary to obtain the exception for performance-based
compensation under Section 162(m) of the Code, as applicable, it is intended that each member of
the Committee shall, at the time he takes any action with respect to an Award under this Plan, be
an Eligible Director. However, the fact that a Committee member shall fail to qualify as an
Eligible Director shall not invalidate any Award granted by the Committee that is otherwise validly
granted under this Plan. The acts of a majority of the members present at any meeting at which a
quorum is present or acts approved in writing by a majority of the Committee shall be deemed the
acts of the Committee. Whether a quorum is present shall be determined based on the Committees
charter as approved by the Board.
(b) Subject to the provisions of this Plan and applicable law, the Committee shall have the
sole and plenary authority, in addition to other express powers and authorizations conferred on the
Committee by this Plan, to: (i) designate Participants; (ii) determine the type or types of Awards
to be granted to a Participant; (iii) determine the number of Common Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in cash, Common Shares,
other securities, other Awards or other property, or canceled, forfeited, or suspended and the
method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common
Shares, other securities, other Awards or other property and other amounts payable with respect to
an Award shall be deferred either automatically or at the election of the Participant or of the
Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in
and/or supply any omission in this Plan and any instrument or agreement relating to, or Award
granted under, this Plan; (viii) establish, amend, suspend, or waive any rules and regulations and
appoint such agents as the Committee shall deem appropriate for the proper administration of this
Plan; (ix) accelerate the vesting or exercisability of, payment for or lapse of restrictions on,
Awards; and (x) make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of this Plan.
(c) The Committee may delegate to one or more officers of the Company or any Affiliate the
authority to act on behalf of the Committee with respect to any matter, right, obligation, or
election that is the responsibility of or that is allocated to the Committee herein, and that may
be so delegated as a matter of law, except for grants of Awards to persons (i) subject to Section
16 of the Exchange Act or (ii) who are, or who are reasonably expected to be, covered employees
for purposes of Section 162(m) of the Code.
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(d) Unless otherwise expressly provided in this Plan, all designations, determinations,
interpretations, and other decisions under or with respect to this Plan or any Award or any
documents evidencing Awards granted pursuant to this Plan shall be within the sole discretion of
the Committee, may be made at any time and shall be final, conclusive and binding upon all persons
or entities, including, without limitation, the Company, any Affiliate, any Participant, any holder
or beneficiary of any Award, and any stockholder of the Company.
(e) No member of the Board, the Committee, delegate of the Committee or any employee, advisor
or agent of the Company or the Board or the Committee (each such person, an Indemnifiable Person)
shall be liable for any action taken or omitted to be taken or any determination made in good faith
with respect to this Plan or any Award hereunder. Each Indemnifiable Person shall be indemnified
and held harmless by the Company against and from (and the Company shall pay or reimburse on demand
for) any loss, cost, liability, or expense (including attorneys fees) that may be imposed upon or
incurred by such Indemnifiable Person in connection with or resulting from any action, suit or
proceeding to which such Indemnifiable Person may be a party or in which such Indemnifiable Person
may be involved by reason of any action taken or omitted to be taken under this Plan or any Award
agreement and against and from any and all amounts paid by such Indemnifiable Person with the
Companys approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of
any judgment in any such action, suit or proceeding against such Indemnifiable Person,
provided, that the Company shall have the right, at its own expense, to assume and defend
any such action, suit or proceeding and once the Company gives notice of its intent to assume the
defense, the Company shall have sole control over such defense with counsel of the Companys
choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person
to the extent that a final judgment or other final adjudication (in either case not subject to
further appeal) binding upon such Indemnifiable Person determines that the acts or omissions of
such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable
Persons bad faith, fraud or willful criminal act or omission or that such right of indemnification
is otherwise prohibited by law or by the Companys Certificate of Incorporation or Bylaws. The
foregoing right of indemnification shall not be exclusive of any other rights of indemnification to
which such Indemnifiable Persons may be entitled under the Companys Certificate of Incorporation
or Bylaws, as a matter of law, or otherwise, or any other power that the Company may have to
indemnify such Indemnifiable Persons or hold them harmless.
(f) Notwithstanding anything to the contrary contained in this Plan, the Board may, in its
sole discretion, at any time and from time to time, grant Awards and administer this Plan with
respect to such Awards. In any such case, the Board shall have all the authority granted to the
Committee under this Plan.
5. Grant of Awards; Shares Subject to this Plan; Limitations. (a) The Committee may, from
time to time, grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Stock Bonus Awards and/or Performance Compensation Awards to one or more Eligible Persons.
(b) Awards granted under this Plan shall be subject to the following limitations: (i) subject
to Section 12 of this Plan, the Committee is authorized to deliver under this Plan 338,295 Common
Shares. Subject to adjustment in accordance with Section 12, no
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Participant shall be granted, during any one (1) year period, Options to purchase Common
Shares or Stock Appreciation Rights with respect to more than 338,295 Common Shares or any other
Awards with respect to more than 338,295 Common Shares.
(c) Use of Common Shares to pay the required Exercise Price or tax obligations, or shares not
issued in connection with settlement of an Option or SAR or that are used or withheld to satisfy
tax obligations of the Participant shall, notwithstanding anything herein to the contrary, not be
available again for other Awards under this Plan. Shares underlying Awards under this Plan that
are forfeited, cancelled, expire unexercised, or are settled in cash are available again for Awards
under this Plan.
(d) Common Shares delivered by the Company in settlement of Awards may be authorized and
unissued shares, shares held in the treasury of the Company, shares purchased on the open market or
by private purchase, or a combination of the foregoing.
(e) Awards may, in the sole discretion of the Committee, be granted under this Plan in
assumption of, or in substitution for, outstanding awards previously granted by an entity acquired
by the Company or with which the Company combines (Substitute Awards). The number of Common
Shares underlying any Substitute Awards shall be counted against the aggregate number of Common
Shares available for Awards under this Plan.
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 this Plan.
7. Options. (a) Generally. Each Option granted under this Plan shall be evidenced by
an Award agreement (whether in paper or electronic medium (including email or the posting on a web
site maintained by the Company or a third party under contract with the Company)). Each Option so
granted shall be subject to the conditions set forth in this Section 7, and to such other
conditions not inconsistent with this Plan as may be reflected in the applicable Award agreement.
All Options granted under this Plan shall be Nonqualified Stock Options unless the applicable Award
agreement expressly states that the Option is intended to be an Incentive Stock Option. Incentive
Stock Options shall be granted only to Eligible Persons who are employees of the Company and its
Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible
to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive
Stock Option unless this Plan has been approved by the stockholders of the Company in a manner
intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code,
provided that any Option intended to be an Incentive Stock Option shall not fail to be effective
solely on account of a failure to obtain such approval, but rather such Option shall be treated as
a Nonqualified Stock Option unless and until such approval is obtained. In the case of an
Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with
such rules as may be prescribed by Section 422 of the Code. If for any reason an Option intended
to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, such Option or portion thereof shall be
regarded as a Nonqualified Stock Option appropriately granted under this Plan.
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(b) Exercise Price. The exercise price (Exercise Price) per Common Share for each
Option shall not be less than 100% of the Fair Market Value of such share determined as of the Date
of Grant; provided, however, that in the case of an Incentive Stock Option granted to an employee
who, at the time of the grant of such Option, owns shares representing more than 10% of the voting
power of all classes of shares of the Company or any Affiliate, the Exercise Price per share shall
not be less than 110% of the Fair Market Value per share on the Date of Grant and provided further
that, notwithstanding any provision herein to the contrary, the Exercise Price shall not be less
than the par value per Common Share.
(c) Vesting 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); provided,
however, that the Option Period shall not exceed five years from the Date of Grant in the
case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns shares
representing more than 10% of the voting power of all classes of shares of the Company or any
Affiliate; provided, further, that notwithstanding any vesting dates set by the
Committee, the Committee may, in its sole discretion, accelerate the exercisability of any Option,
which acceleration shall not affect the terms and conditions of such Option other than with respect
to exercisability. Unless otherwise provided by the Committee in an Award agreement: (i) an
Option shall vest and become exercisable with respect to 100% of the Common Shares subject to such
Option on the third anniversary of the Date of Grant; (ii) the unvested portion of an Option shall
expire upon termination of employment or service of the Participant granted the Option, and the
vested portion of such Option shall remain exercisable for (A) one year following termination of
employment or service by reason of such Participants death or disability (as determined by the
Committee), but not later than the expiration of the Option Period or (B) 90 calendar days
following termination of employment or service for any reason other than such Participants death
or disability, and other than such Participants termination of employment or service for Cause,
but not later than the expiration of the Option Period; and (iii) both the unvested and the vested
portion of an Option shall expire upon the termination of the Participants employment or service
by the Company for Cause.
(d) Method of Exercise and Form of Payment. No Common Shares shall be delivered
pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is
received by the Company and the Participant has paid to the Company an amount equal to any federal,
state, local and non-U.S. income and employment taxes required to be withheld. Options that have
become exercisable may be exercised by delivery of written or electronic notice of exercise to the
Company in accordance with the terms of the Option accompanied by payment of the Exercise Price.
The Exercise Price shall be payable (i) in cash, check, cash equivalent and/or Common Shares valued
at the fair market value at the time the Option is exercised (including, pursuant to procedures
approved by the Committee, by means of attestation of ownership of a sufficient number of Common
Shares in lieu of actual delivery of such shares to the Company); provided, that such
Common Shares are not subject to any pledge or other security interest and are Mature Shares and;
(ii) by such other method as the Committee may permit in accordance with applicable law, in its
sole discretion, including without limitation: (A) in other property having a fair market value on
the date of exercise equal to the Exercise Price or (B) if there is a public market for the Common
Shares at such time, by means of a broker-assisted cashless exercise pursuant to which the
Company is delivered a copy of
11
irrevocable instructions to a stockbroker to sell the Common Shares otherwise deliverable upon
the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise
Price or (C) by a net exercise method whereby the Company withholds from the delivery of the
Common Shares for which the Option was exercised that number of Common Shares having a fair market
value equal to the aggregate Exercise Price for the Common Shares for which the Option was
exercised. Any fractional Common Shares shall be settled in cash.
(e) Notification upon Disqualifying Disposition of an Incentive Stock Option. Each
Participant awarded an Incentive Stock Option under this Plan shall notify the Company in writing
immediately after the date he makes a disqualifying disposition of any Common Shares acquired
pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any
disposition (including, without limitation, any sale) of such Common Shares before the later of (A)
two years after the Date of Grant of the Incentive Stock Option or (B) one year after the date of
exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in
accordance with procedures established by the Committee, retain possession of any Common Shares
acquired pursuant to the exercise of an Incentive Stock Option as agent for the applicable
Participant until the end of the period described in the preceding sentence.
(f) Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall a
Participant be permitted to exercise an Option in a manner that the Committee determines would
violate the Sarbanes-Oxley Act of 2002, if applicable, or any other applicable law or the
applicable rules and regulations of the Securities and Exchange Commission or the applicable rules
and regulations of any securities exchange or inter-dealer quotation system on which the securities
of the Company are listed or traded.
8. Stock Appreciation Rights. (a) Generally. Each SAR granted under this Plan shall
be evidenced by an Award agreement (whether in paper or electronic medium (including email or the
posting on a web site maintained by the Company or a third party under contract with the Company)).
Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such
other conditions not inconsistent with this Plan as may be reflected in the applicable Award
agreement. Any Option granted under this Plan may include tandem SARs. The Committee also may
award SARs to Eligible Persons independent of any Option.
(b) Exercise Price. The Exercise Price per Common Share for each Option shall not be
less than 100% of the Fair Market Value of such share determined as of the Date of Grant.
(c) Vesting and Expiration. A SAR granted in connection with an Option shall become
exercisable and shall expire according to the same vesting schedule and expiration provisions as
the corresponding Option. A SAR granted independent of an Option shall vest and become exercisable
and shall expire 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 SAR
Period); provided, however, that notwithstanding any vesting dates set by the Committee, the
Committee may, in its sole discretion, accelerate the exercisability of any SAR, which acceleration
shall not affect the terms and conditions of such SAR other than with respect to exercisability.
Unless otherwise provided by the Committee in an Award agreement: (i) a SAR shall vest and become
exercisable with respect to 100% of the Common
12
Shares subject to such SAR on the third anniversary of the Date of Grant; (ii) the unvested
portion of a SAR shall expire upon termination of employment or service of the Participant granted
the SAR, and the vested portion of such SAR shall remain exercisable for (A) one year following
termination of employment or service by reason of such Participants death or disability (as
determined by the Committee), but not later than the expiration of the SAR Period or (B) 90
calendar days following termination of employment or service for any reason other than such
Participants death or disability, and other than such Participants termination of employment or
service for Cause, but not later than the expiration of the SAR Period; and (iii) both the unvested
and the vested portion of a SAR shall expire upon the termination of the Participants employment
or service by the Company for Cause.
(d) Method of Exercise. SARs that have become exercisable may be exercised by
delivery of written or electronic notice of exercise to the Company in accordance with the terms of
the Award, specifying the number of SARs to be exercised and the date on which such SARs were
awarded. Notwithstanding the foregoing, if on the last day of the Option Period (or in the case of
a SAR independent of an option, the SAR Period), the fair market value exceeds the Strike Price,
the Participant has not exercised the SAR or the corresponding Option (if applicable), and neither
the SAR nor the corresponding Option (if applicable) has expired, such SAR shall be deemed to have
been exercised by the Participant on such last day and the Company shall make the appropriate
payment therefor.
(e) Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an
amount equal to the number of shares subject to the SAR that are being exercised multiplied by the
excess, if any, of the fair market value of one Common Share on the exercise date over the Strike
Price, less an amount equal to any federal, state, local and non-U.S. income and employment taxes
required to be withheld. The Company shall pay such amount in cash, in Common Shares valued at
fair market value, or any combination thereof, as determined by the Committee. Any fractional
Common Share shall be settled in cash.
9. Restricted Stock and Restricted Stock Units. (a) Generally. Each grant of
Restricted Stock and Restricted Stock Units shall be evidenced by an Award agreement (whether in
paper or electronic medium (including email or the posting on a web site maintained by the Company
or a third party under contract with the Company)). Each such grant shall be subject to the
conditions set forth in this Section 9, and to such other conditions not inconsistent with this
Plan as may be reflected in the applicable Award agreement.
(b) Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of Restricted
Stock, a book entry in a restricted account shall be established in the Participants name at the
Companys transfer agent and, if the Committee determines that the Restricted Stock shall be held
by the Company or in escrow rather than held in such restricted account pending the release of the
applicable restrictions, the Committee may require the Participant to additionally execute and
deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and
(ii) the appropriate share power (endorsed in blank) with respect to the Restricted Stock covered
by such agreement. If a Participant shall fail to execute an agreement evidencing an Award of
Restricted Stock and, if applicable, an escrow agreement and blank share power within the amount of
time specified by the Committee, the Award shall be null and void. Subject to the restrictions set
forth in this Section 9 and the applicable Award
13
agreement, the Participant generally shall have the rights and privileges of a stockholder as
to such Restricted Stock, including without limitation the right to vote such Restricted Stock and
the right to receive dividends, if applicable. To the extent shares of Restricted Stock are
forfeited, any share certificates issued to the Participant evidencing such shares shall be
returned to the Company, and all rights of the Participant to such shares and as a stockholder with
respect thereto shall terminate without further obligation on the part of the Company.
(c) Vesting; Acceleration of Lapse of Restrictions. Unless otherwise provided by the
Committee in an Award agreement: (i) the Restricted Period shall lapse with respect to 100% of the
Restricted Stock and Restricted Stock Units on the third anniversary of the Date of Grant; and (ii)
the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be
forfeited upon termination of employment or service of the Participant granted the applicable
Award.
(d) Delivery of Restricted Stock and Settlement of Restricted Stock Units. (i) Upon
the expiration of the Restricted Period with respect to any shares of Restricted Stock, the
restrictions set forth in 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. If an escrow
arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his
beneficiary, without charge, the share certificate evidencing the shares of Restricted Stock that
have not then been forfeited and with respect to which the Restricted Period has expired (rounded
down to the nearest full share). Dividends, if any, that may have been withheld by the Committee
and attributable to any particular share of Restricted Stock shall be distributed to the
Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a
fair market value equal to the amount of such dividends, upon the release of restrictions on such
share and, if such share is forfeited, the Participant shall have no right to such dividends
(except as otherwise set forth by the Committee in the applicable Award agreement).
(ii) Unless otherwise provided by the Committee in an Award agreement, 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 Common Share for each such
outstanding Restricted Stock Unit; provided, however, that the Committee may, in
its sole discretion, elect to (i) pay cash or part cash and part Common Share in lieu of delivering
only Common Shares in respect of such Restricted Stock Units or (ii) defer the delivery of Common
Shares (or cash or part Common Shares and part cash, as the case may be) beyond the expiration of
the Restricted Period if such delivery would result in a violation of applicable law until such
time as is no longer the case. If a cash payment is made in lieu of delivering Common Shares, the
amount of such payment shall be equal to the fair market value of the Common Shares as of the date
on which the Restricted Period lapsed with respect to such Restricted Stock Units, less an amount
equal to any federal, state, local and non-U.S. income and employment taxes required to be
withheld.
10. Stock Bonus Awards. The Committee may issue unrestricted Common Shares, or other Awards
denominated in Common Shares, under this Plan to Eligible Persons, either alone or in tandem with
other awards, in such amounts as the Committee shall from time to time in its sole discretion
determine. Each Stock Bonus Award granted under this Plan shall be evidenced by an Award agreement
(whether in paper or electronic medium (including email or the posting
14
on a web site maintained by the Company or a third party under contract with the Company)).
Each Stock Bonus Award so granted shall be subject to such conditions not inconsistent with this
Plan as may be reflected in the applicable Award agreement.
11. Performance Compensation Awards. (a) Generally. The Committee shall have the
authority, at the time of grant of any Award described in Sections 7 through 10 of this Plan, to
designate such Award as a Performance Compensation Award intended to qualify as performance-based
compensation under Section 162(m) of the Code. The Committee shall have the authority to make an
award of a cash bonus to any Participant and designate such Award as a Performance Compensation
Award intended to qualify as performance-based compensation under Section 162(m) of the Code.
(b) Discretion of Committee with Respect to Performance Compensation Awards. With
regard to a particular Performance Period, the Committee shall have sole discretion to select the
length of such Performance Period, the type(s) of Performance Compensation Awards to be issued, the
Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or
level(s) of the Performance Goals(s) that is (are) to apply and the Performance Formula. Within
the first 90 calendar days of a Performance Period (or, if longer or shorter, within the maximum
period allowed under Section 162(m) of the Code, if applicable), the Committee shall, with regard
to the Performance Compensation Awards to be issued for such Performance Period, exercise its
discretion with respect to each of the matters enumerated in the immediately preceding sentence and
record the same in writing.
(c) Performance Criteria. The Performance Criteria that will be used to establish the
Performance Goal(s) shall be based on the attainment of specific levels of performance of the
Company (and/or one or more Affiliates, divisions or operational units, or any combination of the
foregoing) and shall include the following: (i) net earnings or net income (before or after
taxes); (ii) basic or diluted earnings per share (before or after taxes); (iii) net revenue or
revenue growth; (iv) gross profit or gross profit growth; (v) operating profit (before or after
taxes); (vi) return measures (including, but not limited to, return on assets, capital, invested
capital, equity, or sales); (vii) cash flow (including, but not limited to, operating cash flow,
free cash flow, and cash flow return on capital); (viii) earnings before or after taxes, interest,
depreciation and/or amortization; (ix) gross or operating margins; (x) productivity ratios; (xi)
share price (including, but not limited to, growth measures and total stockholder return); (xii)
expense targets; (xiii) margins; (xiv) operating efficiency; (xv) objective measures of customer
satisfaction; (xvi) working capital targets; (xvii) measures of economic value added; (xviii)
inventory control; (xix) enterprise value; (xx) sales; (xxi) debt levels and net debt; (xxii)
combined ratio; (xxiii) launch or acquisition (including the timings therefore) of new stores or
other facilities; (xxiv) customer retention; (xxv) employee retention; (xxvi) timely completion of
new product rollouts; and (xxvii) objective measures of personal targets, goals or completion of
projects. Any one or more of the Performance Criteria may be used on an absolute or relative basis
to measure the performance of the Company and/or one or more Affiliates as a whole or any business
unit(s) of the Company and/or one or more Affiliates or any combination thereof, as the Committee
may deem appropriate, or any of the above Performance Criteria may be compared to the performance
of a selected group of comparison companies, or a published or special index that the Committee, in
its sole discretion, deems appropriate, or as compared to various stock market indices. The
Committee also has the authority to provide for accelerated
15
vesting of any Award based on the achievement of Performance Goals pursuant to the Performance
Criteria specified in this paragraph. To the extent required under Section 162(m) of the Code, the
Committee shall, within the first 90 calendar days of a Performance Period (or, if longer or
shorter, within the maximum period allowed under Section 162(m) of the Code), define in an
objective fashion the manner of calculating the Performance Criteria it selects to use for such
Performance Period and thereafter promptly communicate such Performance Criteria to the
Participant.
(d) Modification of Performance Goal(s). In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing Performance Criteria
without obtaining stockholder approval of such alterations, the Committee shall have sole
discretion to make such alterations without obtaining stockholder approval. The Committee is
authorized at any time during the first 90 calendar days of a Performance Period (or, if longer or
shorter, within the maximum period allowed under Section 162(m) of the Code, if applicable), or at
any time thereafter to the extent the exercise of such authority at such time would not cause the
Performance Compensation Awards granted to any Participant for such Performance Period to fail to
qualify as performance-based compensation under Section 162(m) of the Code, in its sole
discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period,
based on and in order to appropriately reflect the following events: (i) asset write-downs; (ii)
litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting
principles, or other laws or regulatory rules affecting reported results; (iv) any reorganization
and restructuring programs; (v) extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 (or any successor pronouncement thereto) and/or in managements
discussion and analysis of financial condition and results of operations appearing in the Companys
annual report to stockholders for the applicable year; (vi) acquisitions or divestitures; (vii) any
other specific unusual or nonrecurring events, or objectively determinable category thereof; (viii)
foreign exchange gains and losses; and (ix) a change in the Companys fiscal year.
(e) Payment of Performance Compensation Awards. (i) Condition to Receipt of
Payment. Unless otherwise provided in the applicable Award agreement, a Participant must be
employed by the Company on the last day of a Performance Period to be eligible for payment in
respect of a Performance Compensation Award for such Performance Period.
(ii) Limitation. A Participant shall be eligible to receive payment in respect of a
Performance Compensation Award only to the extent that: (A) the Performance Goals for such period
are achieved; and (B) all or some of the portion of such Participants Performance Compensation
Award has been earned for the Performance Period based on the application of the Performance
Formula to such achieved Performance Goals.
(iii) Certification. Following the completion of a Performance Period, the Committee
shall review and certify in writing whether, and to what extent, the Performance Goals for the
Performance Period have been achieved and, if so, calculate and certify in writing that amount of
the Performance Compensation Awards earned for the period based upon the Performance Formula. The
Committee shall then determine the amount of each Participants Performance Compensation Award
actually payable for the Performance Period and, in so doing, may apply Negative Discretion.
16
(iv) Use of Negative Discretion. In determining the actual amount of an individual
Participants Performance Compensation Award for a Performance Period, the Committee may reduce or
eliminate the amount of the Performance Compensation Award earned under the Performance Formula in
the Performance Period through the use of Negative Discretion if, in its sole judgment, such
reduction or elimination is appropriate. The Committee shall not have the discretion, except as is
otherwise provided in this Plan, to (A) grant or provide payment in respect of Performance
Compensation Awards for a Performance Period if the Performance Goals for such Performance Period
have not been attained; or (B) increase a Performance Compensation Award above the applicable
limitations set forth in Section 5 of this Plan.
(f) Timing of Award Payments. Performance Compensation Awards granted for a
Performance Period shall be paid to Participants as soon as administratively practicable following
completion of the certifications required by this Section 11, but in no event later than
two-and-one-half months following the end of the fiscal year during which the Performance Period is
completed.
12. Changes in Capital Structure and Similar Events. In the event of (a) any dividend or
other distribution (whether in the form of cash, Common Shares, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization, merger,
amalgamation, consolidation, split-up, split-off, combination, repurchase or exchange of Common
Shares or other securities of the Company, issuance of warrants or other rights to acquire Common
Shares or other securities of the Company, or other similar corporate transaction or event
(including, without limitation, a Change in Control) that affects the Common Shares, or (b) unusual
or nonrecurring events (including, without limitation, a Change in Control) affecting the Company,
any Affiliate, or the financial statements of the Company or any Affiliate, or changes in
applicable rules, rulings, regulations or other requirements of any governmental body or securities
exchange or inter-dealer quotation system, accounting principles or law, such that in either case
an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate,
then the Committee shall make any such adjustments that are equitable, including without limitation
any or all of the following:
(i) adjusting any or all of (A) the number of Common Shares or other securities of the Company
(or number and kind of other securities or other property) that may be delivered in respect of
Awards or with respect to which Awards may be granted under this Plan (including, without
limitation, adjusting any or all of the limitations under Section 5 of this Plan) and (B) the terms
of any outstanding Award, including, without limitation, (1) the number of Common Shares or other
securities of the Company (or number and kind of other securities or other property) subject to
outstanding Awards or to which outstanding Awards relate, (2) the Exercise Price or Strike Price
with respect to any Award or (3) any applicable performance measures (including, without
limitation, Performance Criteria and Performance Goals);
(ii) providing for a substitution or assumption of Awards, accelerating the exercisability of,
lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise
prior to the occurrence of such event; and
17
(iii) canceling any one or more outstanding Awards and causing to be paid to the holders
thereof, in cash, Common Shares, other securities or other property, or any combination thereof,
the value of such Awards, if any, as determined by the Committee (which if applicable may be based
upon the price per Common Share received or to be received by other stockholders of the Company in
such event), including without limitation, in the case of an outstanding Option or SAR, a cash
payment in an amount equal to the excess, if any, of the fair market value (as of a date specified
by the Committee) of the Common Shares subject to such Option or SAR over the aggregate Exercise
Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event,
any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the
fair market value of a Common Share subject thereto may be canceled and terminated without any
payment or consideration therefor);
provided, however, that in the case of any equity restructuring (within the
meaning of the Financial Accounting Standards Board Statement of Financial Accounting Standards No.
123 (revised 2004) or ASC Topic 718, or any successor thereto), the Committee shall make an
equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring.
Any adjustment in Incentive Stock Options under this Section 12 (other than any cancellation of
Incentive Stock Options) shall be made only to the extent not constituting a modification within
the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 12 shall be
made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under
the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and,
upon notice, such adjustment shall be conclusive and binding for all purposes.
13. Effect of Change in Control. Except to the extent otherwise provided in an Award
agreement, in the event of a Change in Control, notwithstanding any provision of this Plan to the
contrary, the Committee may provide that, with respect to all or any portion of a particular
outstanding Award or Awards:
(a) all of the then outstanding Options and SARs shall immediately vest and become immediately
exercisable as of a time prior to the Change in Control;
(b) the Restricted Period shall expire as of a time prior to the Change in Control (including
without limitation a waiver of any applicable Performance Goals);
(c) Performance Periods in effect on the date the Change in Control occurs shall end on such
date, and the Committee shall (i) 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 or other information then available as it deems relevant and (ii) cause the Participant
to receive partial or full payment of Awards for each such Performance Period based upon the
Committees determination of the degree of attainment of the Performance Goals, or assuming that
the applicable target levels of performance have been attained or on such other basis determined
by the Committee.
To the extent practicable, any actions taken by the Committee under the immediately preceding
clauses (a) through (c) shall occur in a manner and at a time which allows affected Participants
18
the ability to participate in the Change in Control transactions with respect to the Common Shares
subject to their Awards.
14. Amendments and Termination.
(a) Amendment and Termination of this Plan. The Board may amend, alter, suspend,
discontinue, or terminate this Plan or any portion thereof at any time; provided, that (i)
no amendment to Section 11(c) or Section 14(b) (to the extent required by the proviso in such
Section 14(b)) shall be made without stockholder approval and (ii) no such amendment, alteration,
suspension, discontinuation or termination shall be made without stockholder approval if such
approval is necessary to comply with any tax or regulatory requirement applicable to this Plan
(including, without limitation, as necessary to comply with any rules or requirements of any
securities exchange or inter-dealer quotation system on which the Common Shares may be listed or
quoted or to prevent the Company from being denied a tax deduction under Section 162(m) of the
Code); provided, further, that any such amendment, alteration, suspension,
discontinuance or termination that would materially and adversely affect 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.
(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 that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant with respect to any Award theretofore
granted shall not to that extent be effective without the consent of the affected Participant;
provided, further, that without stockholder approval, except as otherwise permitted
under Section 12 of this Plan, (i) no amendment or modification may reduce the Exercise Price of
any Option or the Strike Price of any SAR, (ii) the Committee may not cancel any outstanding Option
or SAR and replace it with a new Option or SAR, another Award or cash and (iii) the Committee may
not take any other action that is considered a repricing for purposes of the stockholder approval
rules of the applicable securities exchange or inter-dealer quotation system on which the Common
Shares are listed or quoted.
15. Restrictive Covenants.
(a) Confidentiality. By accepting an Award under this Plan, and as a condition
thereof, each Participant agrees not to, at any time, either during their employment or thereafter,
divulge, use, publish or in any other manner reveal, directly or indirectly, to any person, firm,
corporation or any other form of business organization or arrangement, and to keep in the strictest
confidence any Confidential Information, except (i) as may be necessary to the performance of the
Participants duties to the Company, (ii) with the Companys express written consent, (iii) to the
extent that any such information is in or becomes in the public domain other than as a result of
the Participants breach of any of his or her obligations under this Section 15(a), or (iv) where
required to be disclosed by court order, subpoena or other government process and in such event,
the Participant shall cooperate with the Company in attempting to keep such information
confidential to the maximum extent possible. Upon the request of the
19
Company or an Affiliate, the Participant agrees to promptly deliver to the Company the
originals and all copies, in whatever medium, of all such Confidential Information.
(b) Non-Disparagement. By accepting an Award under this Plan, and as a condition
thereof, the Participant acknowledges and agrees that he or she will not defame or publicly
criticize the services, business, integrity, veracity or personal or professional reputation of the
Company, including its officers, directors, partners, executives or agents, in either a
professional or personal manner at any time during or following his or her employment.
(c) Post-Employment Property. By accepting an Award under this Plan, and as a
condition thereof, the Participant agrees that any work of authorship, invention, design,
discovery, development, technique, improvement, source code, hardware, device, data, apparatus,
practice, process, method or other work product whatever (whether patentable or subject to
copyright or other intellectual property protection, or not, and hereinafter collectively called
discovery) related to the business of the Company that the Participant, either solely or in
collaboration with others, has made or may make, discover, invent, develop, perfect, or reduce to
practice during his, her or its employment by or association with the Company, whether or not
during regular business hours and created, conceived or prepared on the Companys premises or
otherwise shall be the sole and complete property of the Company. More particularly, and without
limiting the foregoing, the Participant agrees that all of the foregoing and any (i) inventions
(whether patentable or not, and without regard to whether any patent therefor is ever sought), (ii)
marks, names, or logos (whether or not registrable as trade or service marks, and without regard to
whether registration therefor is ever sought), (iii) works of authorship (without regard to whether
any claim of copyright therein is ever registered), and (iv) trade secrets, ideas, and concepts
((i) (iv) collectively, Intellectual Property Products) created, conceived, or prepared on the
Companys premises or otherwise, whether or not during normal business hours, shall perpetually and
throughout the world be the exclusive property of the Company, as shall all tangible media
(including, but not limited to, papers, computer media of all types, and models) in which such
Intellectual Property Products shall be recorded or otherwise fixed. The Participant further
agrees promptly to disclose in writing and deliver to the Company all Intellectual Property
Products created during his, her or its employment by or association with the Company, whether or
not during normal business hours. The Participant agrees that all works of authorship created by
the Participant during his, her or its employment by or association with the Company shall be works
made for hire of which the Company is the author and owner of copyright or other rights thereto.
To the extent that any competent decision-making authority should ever determine that any work of
authorship created by the Participant during his, her or its employment by or association with the
Company is not a work made for hire, by accepting an Award, the Participant assigns (without
royalty or other compensation) all right, title and interest in the copyright or other intellectual
property therein, in perpetuity and throughout the world, to the Company. To the extent that this
Plan does not otherwise serve to grant or otherwise vest in the Company all rights in any
Intellectual Property Product created by the Participant during his, her or its employment by or
association with the Company, by accepting an Award, the Participant assigns (without royalty or
other compensation) all right, title and interest therein, in perpetuity and throughout the world,
to the Company. The Participant agrees to execute, immediately upon the Companys reasonable
request and without charge, any further assignments, applications, conveyances or other
instruments, at any time, whether or not the Participant is employed by or associated with the
Company at the time such
20
request is made, in
order to permit the Company and/or its respective assigns to protect, perfect, register,
record, maintain, or enhance their rights in any Intellectual Property Product; provided,
that, the Company shall bear the cost of any such assignments, applications or
consequences. Upon termination of the Participants employment by or association with the Company
for any reason whatsoever, and at any earlier time the Company so requests, the Participant will
immediately deliver to the custody of the person designated by the Company all originals and copies
of any documents and other property of the Company in the Participants possession, under the
Participants control or to which he or she may have access.
For purposes of this Section 15, the term Company shall include the Company and its
Affiliates.
(d) Notwithstanding anything herein or in an Award Agreement to the contrary, the provisions
of this Section 15 are meant to apply in addition to, and not in lieu of, any restrictive covenants
to which a Participant may be subject.
16. General.
(a) Award Agreements. Each Award under this Plan shall be evidenced by an Award
agreement, which shall be delivered to the Participant (whether in paper or electronic medium
(including email or the posting on a web site maintained by the Company or a third party under
contract with the Company)) and shall specify the terms and conditions of the Award and any rules
applicable thereto, including without limitation, the effect on such Award of the death, disability
or termination of employment or service of a Participant, or of such other events as may be
determined by the Committee.
(b) Nontransferability. (i) Each Award shall be exercisable only by a 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 or an 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 this 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 under the Securities Act
(collectively, the Immediate Family Members); (B) a trust solely for the benefit of the
Participant and his or her Immediate Family Members; or (C) a partnership or limited liability
company whose only partners or stockholders are the Participant and his or her Immediate Family
Members; or (D) any other transferee as may be approved either (I) by the Board or the Committee in
its sole discretion, or (II) 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
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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.
(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, 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 Common Shares 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 this 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 this 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 this Plan and the
applicable Award agreement.
(c) Tax Withholding. (i) A Participant shall 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 cash, Common Shares, other securities or other property deliverable under any
Award or from any compensation or other amounts owing to a Participant, the amount (in cash, Common
Shares, other securities or other property) of any required withholding taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under this Plan and to take such
other action as may be necessary in the opinion of the Committee or the Company to satisfy all
obligations for the payment of such withholding and taxes.
(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 by (A) the delivery of Common Shares (which are not subject to any pledge or other
security interest and are Mature Shares) owned by the Participant having a fair market value equal
to such withholding liability or (B) having the Company withhold from the number of Common Shares
otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of
shares with a fair market value equal to such withholding liability (but no more than the minimum
required statutory withholding liability).
(d) No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the
Company or an Affiliate, or other person, shall have any claim or right to be granted an Award
under this Plan or, having been selected for the grant of an Award, to be selected for a grant of
any other Award. There is no obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards. The terms and conditions of Awards and the Committees determinations and
interpretations with respect thereto need not be the same with respect to each Participant and may
be made selectively among Participants, whether or not such Participants are similarly situated.
Neither this Plan nor any action taken hereunder shall be
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construed as giving any Participant any right to be retained in the employ or service of the
Company or an Affiliate, nor shall it be construed as giving any Participant any rights to
continued service on the Board. The Company or any of its Affiliates may at any time dismiss a
Participant from employment or discontinue any consulting relationship, free from any liability or
any claim under this Plan, unless otherwise expressly provided in this Plan or any Award agreement.
By accepting an Award under this Plan, a Participant shall thereby be deemed to have waived any
claim to continued exercise or vesting of an Award or to damages or severance entitlement related
to non-continuation of the Award beyond the period provided under this Plan or any Award agreement,
notwithstanding any provision to the contrary in any written employment contract or other agreement
between the Company and its Affiliates and the Participant, whether any such agreement is executed
before, on or after the Date of Grant.
(e) International Participants. With respect to Participants who reside or work
outside of the United States of America and who are not (and who are not expected to be) covered
employees within the meaning of Section 162(m) of the Code, the Committee may in its sole
discretion amend the terms of this Plan or outstanding Awards (or establish a sub-plan) with
respect to such Participants in order to conform such terms with the requirements of local law or
to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.
(f) Designation and Change of Beneficiary. Each Participant may file with the
Committee a written designation of one or more persons as the beneficiary(ies) who shall be
entitled to receive the amounts payable with respect to an Award, if any, due under this Plan upon
his death. A Participant may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation with the Committee. The
last such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participants death, and in no event shall it be effective
as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the
beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time
of death, his or her estate.
(g) Termination of Employment/Service. Unless determined otherwise by the Committee
at any point following such event: (i) neither a temporary absence from employment or service due
to illness, vacation or leave of absence nor a transfer from employment or service with the Company
to employment or service with an Affiliate (or vice-versa) shall be considered a termination of
employment or service with the Company or an Affiliate; and (ii) if a Participants employment with
the Company and its Affiliates terminates, but such Participant continues to provide services to
the Company and its Affiliates in a non-employee capacity (or vice-versa), such change in status
shall not be considered a termination of employment with the Company or an Affiliate.
(h) No Rights as a Stockholder. Except as otherwise specifically provided in this
Plan or any Award agreement, no person shall be entitled to the privileges of ownership in respect
of Common Shares that are subject to Awards hereunder until such shares have been issued or
delivered to that person.
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(i) Government and Other Regulations. (i) The obligation of the Company to settle
Awards in Common Shares or other consideration shall be subject to all applicable laws, rules, and
regulations, and to such approvals by governmental agencies as may be required. Notwithstanding
any terms or conditions of any Award to the contrary, the Company shall be under no obligation to
offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Common
Shares pursuant to an Award unless such shares have been properly registered for sale pursuant to
the Securities Act with the Securities and Exchange Commission or unless the Company has received
an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without
such registration pursuant to an available exemption therefrom and the terms and conditions of such
exemption have been fully complied with. The Company shall be under no obligation to register for
sale under the Securities Act any of the Common Shares to be offered or sold under this Plan. The
Committee shall have the authority to provide that all certificates for Common Shares or other
securities of the Company or any Affiliate delivered under this Plan shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under this Plan, the
applicable Award agreement, the federal securities laws, or the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer
quotation system upon which such shares or other securities are then listed or quoted and any other
applicable federal, state, local or non-U.S. laws, and, without limiting the generality of Section
9 of this Plan, the Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions. Notwithstanding any provision in this Plan to the
contrary, the Committee reserves the right to add any additional terms or provisions to any Award
granted under this Plan that it in its sole discretion deems necessary or advisable in order that
such Award complies with the legal requirements of any governmental entity to whose jurisdiction
the Award is subject.
(ii) The Committee may cancel an Award or any portion thereof if it determines, in its sole
discretion, that legal or contractual restrictions and/or blockage and/or other market
considerations would make the Companys acquisition of Common Shares from the public markets, the
Companys issuance of Common Shares to the Participant, the Participants acquisition of Common
Shares from the Company and/or the Participants sale of Common Shares to the public markets,
illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of
an Award in accordance with the foregoing, the Company shall pay to the Participant an amount equal
to the excess of (A) the aggregate fair market value of the Common Shares subject to such Award or
portion thereof canceled (determined as of the applicable exercise date, or the date that the
shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price
or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a
condition of delivery of Common Shares (in the case of any other Award). Such amount shall be
delivered to the Participant as soon as practicable following the cancellation of such Award or
portion thereof.
(j) Payments to Persons Other Than Participants. If the Committee shall find that any
person to whom any amount is payable under this Plan is unable to care for his affairs because of
illness or accident, or is a minor, or has died, then any payment due to such person or his estate
(unless a prior claim therefor has been made by a duly appointed legal representative) may, if the
Committee so directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed
24
by the Committee to be a proper recipient on behalf of such person otherwise entitled to
payment. Any such payment shall be a complete discharge of the liability of the Committee and the
Company therefor.
(k) Nonexclusivity of this Plan. Neither the adoption of this Plan by the Board nor
the submission of this Plan to the stockholders 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 or other
equity-based awards otherwise than under this Plan, and such arrangements may be either applicable
generally or only in specific cases.
(l) No Trust or Fund Created. Neither this Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the
other hand. No provision of this Plan or any Award shall require the Company, for the purpose of
satisfying any obligations under this Plan, to purchase assets or place any assets in a trust or
other entity to which contributions are made 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 this Plan other than as general unsecured 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.
(m) Reliance on Reports. Each member of the Committee and each member of the Board
shall be fully justified in acting or failing to act, as the case may be, and shall not be liable
for having so acted or failed to act in good faith, in reliance upon any report made by the
independent public accountant of the Company and its Affiliates and/or any other information
furnished in connection with this Plan by any agent of the Company or the Committee or the Board,
other than himself.
(n) Relationship to Other Benefits. No payment under this 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 except as otherwise specifically provided in such other plan.
(o) Governing Law. The Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to the conflict of laws provisions.
(p) Severability. If any provision of this Plan or any Award or Award agreement is or
becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
person or entity or Award, or would disqualify this 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 this Plan or the Award, such provision shall be
construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder
of this Plan and any such Award shall remain in full force and effect.
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(q) Obligations Binding on Successors. The obligations of the Company under this Plan
shall be binding upon any successor corporation or organization resulting from the merger,
amalgamation, 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.
(r) Code Section 162(m) Approval. If so determined by the Committee, the provisions
of this Plan regarding Performance Compensation Awards shall be disclosed and reapproved by
stockholders no later than the first stockholder meeting that occurs in the fifth year following
the year in which stockholders previously approved such provisions, in each case in order for
certain Awards granted after such time to be exempt from the deduction limitations of Section
162(m) of the Code. Nothing in this clause, however, shall affect the validity of Awards granted
after such time if such stockholder approval has not been obtained.
(s) Expenses; Gender; Titles and Headings. The expenses of administering this Plan
shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine
gender shall refer to both men and women. The titles and headings of the sections in this Plan are
for convenience of reference only, and in the event of any conflict, the text of this Plan, rather
than such titles or headings shall control.
(t) Other Agreements. Notwithstanding the above, the Committee may require, as a
condition to the grant of and/or the receipt of Common Shares under an Award, that the Participant
execute lock-up, stockholder or other agreements, as it may determine in its sole and absolute
discretion.
(u) Section 409A. The Plan and all Awards granted hereunder are intended to comply
with, or otherwise be exempt from, Section 409A of the Code. The Plan and all Awards granted under
this Plan shall be administered, interpreted, and construed in a manner consistent with Section
409A of the Code to the extent necessary to avoid the imposition of additional taxes under Section
409A(a)(1)(B) of the Code. Notwithstanding anything in this Plan to the contrary, in no event
shall the Committee exercise its discretion to accelerate the payment or settlement of an Award
where such payment or settlement constitutes deferred compensation within the meaning of Section
409A of the Code unless, and solely to the extent that, such accelerated payment or settlement is
permissible under Treasury Regulation section 1.409A-3(j)(4) or any successor provision.
(v) Payments. Participants shall be required to pay, to the extent required by
applicable law, any amounts required to receive Common Shares under any Award made under this Plan.
* * *
As adopted
by the Board of Directors of
57th
Street General Acquisition Corp. on May 4, 2011.
As approved by the shareholders of 57th Street General Acquisition Corp. on
_________________.
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