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8-K - FORM 8-K - RENTECH, INC. | c17172e8vk.htm |
Exhibit 10.1
AMENDED AND RESTATED RENTECH, INC.
2009 INCENTIVE AWARD PLAN
ARTICLE 1.
PURPOSE
The purpose of the Amended and Restated Rentech, Inc. 2009 Incentive Award Plan (the
Plan) is to promote the success and enhance the value of Rentech, Inc. (the
Company) by linking the personal interests of certain members of the Board, Employees,
and Consultants to those of Company stockholders and by providing such individuals with an
incentive for outstanding performance to generate superior returns to Company stockholders. The
Plan is further intended to provide flexibility to the Company in its ability to motivate, attract,
and retain the services of certain members of the Board, Employees, and Consultants upon whose
judgment, interest, and special effort the successful conduct of the Companys operation is largely
dependent. The Plan amends and restates in its entirety the Rentech, Inc. 2009 Incentive Award
Plan (the Original Plan).
ARTICLE 2.
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.
2.1 Award means an Option, a Restricted Stock award, a Stock Appreciation Right
award, a Performance Share award, a Performance Stock Unit award, a Dividend Equivalents award, a
Stock Payment award, a Deferred Stock award, a Restricted Stock Unit award, a Performance Bonus
Award, or a Performance-Based Award granted to a Participant pursuant to the Plan.
2.2 Award Agreement means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.
2.3 Board means the Board of Directors of the Company.
2.4 Change in Control means:
(a) A transaction or series of transactions (other than an offering of Stock to the
general public through a registration statement filed with the Securities and Exchange
Commission) whereby any person or related group of persons (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its
subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries
or a person that, prior to such transaction, directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company possessing more than 50% of the total combined voting power of the Companys
securities outstanding immediately after such acquisition; or
(b) During any twelve-month period, individuals who, at the beginning of such period,
constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in Section 2.4(a) or Section 2.4(c)) whose election by the Board or nomination for
election by the Companys stockholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning of the
twelve-month period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) The consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or other disposition of
all or substantially all of the Companys assets in any single transaction or series of
related transactions or (z) the acquisition of assets or stock of another entity, in each
case other than a transaction:
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(i) Which results in the Companys voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding or by
being converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns, directly
or indirectly, all or substantially all of the Companys assets or otherwise succeeds
to the business of the Company (the Company or such person, the Successor
Entity)) directly or indirectly, at least a majority of the combined voting
power of the Successor Entitys outstanding voting securities immediately after the
transaction, and
(ii) After which no person or group beneficially owns voting securities
representing 35% or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of this
Section 2.4(c)(ii) as beneficially owning 35% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the Company prior to
the consummation of the transaction; or
(d) The Companys stockholders approve a liquidation or dissolution of the Company.
The Committee shall have full and final authority, which shall be exercised in its discretion, to
determine conclusively whether a Change in Control of the Company has occurred pursuant to the
above definition, and the date of the occurrence of such Change in Control and any incidental
matters relating thereto. Notwithstanding anything herein or in any Award Agreement to the
contrary, if a Change in Control constitutes a payment event with respect to any Award which
provides for a deferral of compensation that is subject to Section 409A of the Code, the
transaction or event described in subsection (a), (b), (c) or (d) must also constitute a change in
control event, as defined in Treasury Regulation §1.409A-3(i)(5), in order to constitute a Change
in Control for purposes of payment of such Award.
2.5 Code means the Internal Revenue Code of 1986, as amended, together with the
regulations and other official guidance promulgated thereunder.
2.6 Committee means the committee of the Board described in Article 12.
2.7 Consultant means any consultant or adviser if: (a) the consultant or adviser
renders bona fide services to the Company; (b) the services rendered by the consultant or adviser
are not in connection with the offer or sale of securities in a capital-raising transaction and do
not directly or indirectly promote or maintain a market for the Companys securities; and (c) the
consultant or adviser is a natural person who has contracted directly with the Company to render
such services.
2.8 Covered Employee means an Employee who is, or could be, a covered employee
within the meaning of Section 162(m) of the Code.
2.9 Deferred Stock means a right to receive a specified number of shares of Stock
during specified time periods pursuant to Section 8.5.
2.10 Disability means that the Participant qualifies to receive long-term disability
payments under the Companys long-term disability insurance program, as it may be amended from time
to time or, if no such plan is applicable to a Participant, as determined in the sole discretion of
the Committee. Notwithstanding anything herein or in any Award Agreement to the contrary, if a
Disability constitutes a payment event with respect to any Award which provides for a deferral of
compensation that is subject to Section 409A of the Code, the Participant shall only experience a
Disability hereunder for purposes of the payment of such Award if the Participant is disabled
within the meaning of Treasury Regulation Section 1.409A-3(i)(4).
2.11 Dividend Equivalents means a right granted to a Participant pursuant to Section
8.3 to receive the equivalent value (in cash or Stock) of dividends paid on Stock.
2.12 DRO means a domestic relations order as defined under Title I of the Employee
Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.
2.13 Effective Date shall have the meaning set forth in Section 13.1.
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2.14 Eligible Individual means any person who is an Employee, a Consultant or an
Independent Director, as determined in the sole discretion of the Committee.
2.15 Employee means any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company or any Subsidiary.
2.16 Equity Restructuring shall mean a nonreciprocal transaction between the Company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or
recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of
shares of Stock (or other securities of the Company) or the share price of Stock (or other
securities) and causes a change in the per share value of the Stock underlying outstanding Awards.
2.17 Exchange Act means the Securities Exchange Act of 1934, as amended.
2.18 Fair Market Value means, as of any given date, the value of a share of Stock
determined as follows:
(a) If the Stock is listed on any established stock exchange (such as the New York Stock
Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market) or national market system,
its Fair Market Value shall be the closing sales price for a share of Stock as quoted on such
exchange or system for such date or, if there is no closing sales price for a share of Stock on the
date in question, the closing sales price for a share of Stock on the last preceding date for which
such quotation exists, as reported in The Wall Street Journal or such other source as the Committee
deems reliable;
(b) If the Stock is not listed on an established stock exchange or national market system, but
the Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the
mean of the high bid and low asked prices for such date or, if there are no high bid and low asked
prices for a share of Stock on such date, the high bid and low asked prices for a share of Stock on
the last preceding date for which such information exists, as reported in The Wall Street Journal
or such other source as the Committee deems reliable; or
(c) If the Stock is neither listed on an established stock exchange or a national market
system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be
established by the Committee in good faith.
2.19 Full Value Award means any Award other than an Option or other Award for which
the Participant pays the intrinsic value (whether directly or by forgoing a right to receive a
payment from the Company).
2.20 Incentive Stock Option means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.
2.21 Independent Director means a member of the Board who is not an Employee of the
Company.
2.22 Non-Employee Director means a member of the Board who qualifies as a
Non-Employee Director as defined in Rule 16b-3(b)(3) under the Exchange Act, or any successor
rule.
2.23 Non-Qualified Stock Option means an Option that is not intended to be an
Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the
applicable requirements of Section 422 of the Code.
2.24 Option means a right granted to a Participant pursuant to Article 5 of the Plan
to purchase a specified number of shares of Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
2.25 Participant means any Eligible Individual who, as a member of the Board,
Consultant or Employee, has been granted an Award pursuant to the Plan.
2.26 Performance-Based Award means an Award granted to selected Covered Employees
pursuant to Section 8.7, but which is subject to the terms and conditions set forth in Article 9.
All Performance-Based Awards are intended to qualify as Qualified Performance-Based Compensation.
2.27 Performance Bonus Award has the meaning set forth in Section 8.7.
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2.28 Performance Criteria means the criteria that the Committee selects for purposes
of establishing the Performance Goal or Performance Goals for a Participant for a Performance
Period. The Performance Criteria that will be used to establish Performance Goals are limited to
the following: net earnings (either before or after interest, taxes, depreciation and
amortization), economic value-added, sales or revenue, net income (either before or after taxes),
operating earnings, cash flow (including, but not limited to, operating cash flow and free cash
flow), cash flow return on capital, return on net assets, return on stockholders equity, return on
assets, return on capital, stockholder returns, return on sales, gross or net profit margin,
productivity, expense, margins, operating efficiency, achievement of milestones related to the
development of projects utilizing the Companys technologies, customer satisfaction, working
capital, earnings per share, price per share of Stock, and market share, any of which may be
measured either in absolute terms or as compared to any incremental increase or as compared to
results of a peer group. The Committee shall define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such Performance Period for such
Participant.
2.29 Performance Goals means, for a Performance Period, the goals established in
writing by the Committee for the Performance Period based upon the Performance Criteria. Depending
on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be
expressed in terms of overall Company performance or the performance of a division, business unit,
or an individual. The Committee, in its discretion, may, within the time prescribed by Section
162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance
Period in order to prevent the dilution or enlargement of the rights of Participants (a) in the
event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event,
or development, or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company, or in response to, or in
anticipation of, changes in applicable laws, regulations, accounting principles, or business
conditions.
2.30 Performance Period means the one or more periods of time, which may be of
varying and overlapping durations, 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-Based Award.
2.31 Performance Share means a right granted to a Participant pursuant to Section
8.1, to receive Stock, the payment of which is contingent upon achieving certain Performance Goals
or other performance-based targets established by the Committee.
2.32 Performance Stock Unit means a right granted to a Participant pursuant to
Section 8.2, to receive Stock, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the Committee.
2.33 Qualified Performance-Based Compensation means any compensation that is
intended to qualify as qualified performance-based compensation as described in Section
162(m)(4)(C) of the Code.
2.34 Restatement Date means May 11, 2011, the date on which the Plan, as amended and
restated, was approved by the Companys stockholders.
2.35 Restricted Stock means Stock awarded to a Participant pursuant to Article 6
that is subject to certain restrictions and may be subject to risk of forfeiture.
2.36 Restricted Stock Unit means an Award granted pursuant to Section 8.6.
2.37 Securities Act shall mean the Securities Act of 1933, as amended.
2.38 Share Limit shall have the meaning set forth in Section 3.1.
2.39 Stock means the common stock of the Company, par value $0.01 per share, and
such other securities of the Company that may be substituted for Stock pursuant to Article 11.
2.40 Stock Appreciation Right or SAR means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a specified number
of shares of Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR
was granted as set forth in the applicable Award Agreement.
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2.41 Stock Payment means (a) a payment in the form of shares of Stock, or (b) an
option or other right to purchase shares of Stock, as part of any bonus, deferred compensation or
other arrangement, made in lieu of all or any portion of the bonus, deferred compensation or other
arrangement, granted pursuant to Section 8.4.
2.42 Subsidiary means any subsidiary corporation as defined in Section 424(f) of
the Code and any applicable regulations promulgated thereunder or any other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.
ARTICLE 3.
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares.
(a) Subject to Article 11 and Section 3.1(b), the aggregate number of shares of Stock
which may be issued or transferred pursuant to Awards under the Plan is 24,500,000 (the
Share Limit), all of which may be issued as Incentive Stock Options; provided,
however, that the Share Limit shall be reduced by 1.5 shares for each share of Stock
delivered in settlement of any Full Value Award that is granted on or after the Restatement
Date. For the avoidance of doubt, shares of Stock delivered in settlement of any Full Value
Award granted prior to the Restatement Date shall count against the Share Limit as 1 share.
(b) To the extent that an Award terminates, expires, or lapses for any reason or such
Award is settled in cash, any shares of Stock subject to the Award shall, to the extent of
such termination, expiration, forfeiture or cash settlement, be added back to the Share
Limit. To the extent that shares of Stock are added back to the Share Limit in accordance
with the preceding sentence, (i) each share of Stock added back in connection with the
termination, expiration, forfeiture or cash settlement of a Full Value Award shall increase
the Share Limit by 1.5 shares and (ii) each share of Stock added back in connection with the
termination, expiration, forfeiture or cash settlement of an Award other than a Full Value
Award shall increase the Share Limit by 1 share. Notwithstanding anything to the contrary
contained herein, any shares of Stock tendered or withheld to satisfy the grant or exercise
price or tax withholding obligation pursuant to any Award shall not again be available for
the grant of an Award pursuant to the Plan. To the extent permitted by applicable law or any
exchange rule, shares of Stock issued in assumption of, or in substitution for, any
outstanding awards of any entity acquired in any form of combination by the Company or any
Subsidiary shall not be counted against shares of Stock available for grant pursuant to this
Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards
shall not be counted against the shares available for issuance under the Plan.
Notwithstanding the provisions of this Section 3.1(b), no shares of Stock may again be
optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to
qualify as an incentive stock option under Section 422 of the Code.
3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open
market.
3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in
the Plan to the contrary, and subject to Article 11, the maximum number of shares of Stock with
respect to one or more Awards that may be granted to any one Eligible Individual during a rolling
three-year period (measured from the date of any grant) shall be 4,000,000 and the maximum amount
that may be paid in cash during any calendar year with respect to any Performance-Based Award
(including, without limitation, any Performance Bonus Award) shall be $2,000,000.
ARTICLE 4.
ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. Each Eligible Individual shall be eligible to be granted one or more
Awards pursuant to the Plan.
4.2 Participation. Subject to the provisions of the Plan, the Committee may, from time
to time, select from among all Eligible Individuals, those to whom Awards shall be granted and
shall determine the nature and amount of each Award. No Eligible Individual shall have any right to
be granted an Award pursuant to this Plan. No individual who is not an Eligible Individual shall
be granted any Award under this Plan.
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4.3 Foreign Participants. Notwithstanding any provision of the Plan to the contrary,
in order to comply with the laws in other countries in which the Company and its Subsidiaries
operate or have Eligible Individuals, the Committee, in its sole discretion, shall have the power
and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine
which Eligible Individuals outside the United States are eligible to participate in the Plan; (iii)
modify the terms and conditions of any Award granted to Eligible Individuals outside the United
States to comply with applicable foreign laws; (iv) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be necessary or advisable
(any such subplans and/or modifications shall be attached to this Plan as appendices); provided,
however, that no such subplans and/or modifications shall increase the share limitations contained
in Sections 3.1 and 3.3 of the Plan; and (v) take any action, before or after an Award is made,
that it deems advisable to obtain approval or comply with any necessary local governmental
regulatory exemptions or approvals. Notwithstanding the foregoing, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code,
any securities law or governing statute or any other applicable law.
ARTICLE 5.
STOCK OPTIONS
5.1 General. The Committee is authorized to grant Options to Eligible Individuals on
the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock subject to an Option
shall be determined by the Committee and set forth in the Award Agreement; provided, that,
subject to Section 5.2(d), the exercise price for any Option shall not be less than 100% of
the Fair Market Value of a share of Stock on the date of grant.
(b) Time and Conditions of Exercise. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part; provided that the term of any
Option granted under the Plan shall not exceed ten years. The Committee shall also determine
the performance or other conditions, if any, that must be satisfied before all or part of an
Option may be exercised.
(c) Payment. The Committee shall determine the methods by which the exercise
price of an Option may be paid, the form of payment, including, without limitation: (i)
cash, (ii) shares of Stock held for such period of time as may be required by the Committee
in order to avoid adverse accounting consequences and having a Fair Market Value on the date
of delivery equal to the aggregate exercise price of the Option or exercised portion
thereof, or (iii) other property acceptable to the Committee (including through the delivery
of a notice that the Participant has placed a market sell order with a broker with respect
to shares of Stock then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; provided that payment of such proceeds is then
made to the Company upon settlement of such sale), and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants. Notwithstanding any other
provision of the Plan to the contrary, no Participant who is a member of the Board or an
executive officer of the Company within the meaning of Section 13(k) of the Exchange Act
shall be permitted to pay the exercise price of an Option, or continue any extension of
credit with respect to the exercise price of an Option with a loan from the Company or a
loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
(d) Evidence of Grant. All Options shall be evidenced by an Award Agreement
between the Company and the Participant. The Award Agreement shall include such additional
provisions as may be specified by the Committee.
5.2 Incentive Stock Options. Incentive Stock Options shall be granted only to Eligible
Individuals who are Employees and the terms of any Incentive Stock Options granted pursuant to the
Plan, in addition to the requirements of Section 5.1, must comply with the provisions of this
Section 5.2.
(a) Expiration. Subject to Section 5.2(c), an Incentive Stock Option shall
expire and may not be exercised to any extent by anyone after the first to occur of the
following events:
(i) Ten years from the date it is granted, unless an earlier time is set in the
Award Agreement;
(ii) Six months after the Participants termination of employment as an Employee
other than on account of the Participants Disability or death, provided, that any
exercise of an Option more than three
months after the Participants termination of employment as an Employee on account of
the Participants Disability or death shall cause such Option to be treated as a
Non-Qualified Stock Option; and
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(iii) One year after the date of the Participants termination of employment or
service on account of Disability or death. Upon the Participants Disability or
death, any Incentive Stock Options exercisable at the Participants Disability or
death may be exercised by the Participants legal representative or representatives,
by the person or persons entitled to do so pursuant to the Participants last will
and testament, or, if the Participant fails to make testamentary disposition of such
Incentive Stock Option or dies intestate, by the person or persons entitled to
receive the Incentive Stock Option pursuant to the applicable laws of descent and
distribution.
(b) Dollar Limitation. The aggregate Fair Market Value (determined as of the
time the Option is granted) of all shares of Stock with respect to which Incentive Stock
Options are first exercisable by a Participant in any calendar year may not exceed $100,000
or such other limitation as imposed by Section 422(d) of the Code, or any successor
provision. To the extent that Incentive Stock Options are first exercisable by a Participant
in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.
(c) Ten Percent Owners. An Incentive Stock Option shall be granted to any
individual who, at the date of grant, owns stock possessing more than ten percent of the
total combined voting power of all classes of Stock of the Company only if such Option is
granted at a price that is not less than 110% of Fair Market Value on the date of grant and
the Option is exercisable for no more than five years from the date of grant.
(d) Notice of Disposition. The Participant shall give the Company prompt notice
of any disposition of shares of Stock acquired by exercise of an Incentive Stock Option
within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year
after the transfer of such shares of Stock to the Participant.
(e) Right to Exercise. During a Participants lifetime, an Incentive Stock
Option may be exercised only by the Participant.
(f) Failure to Meet Requirements. Any Option (or portion thereof) purported to
be an Incentive Stock Option, which, for any reason, fails to meet the requirements of
Section 422 of the Code shall be considered a Non-Qualified Stock Option.
5.3 Granting of Options to Independent Directors. The Board may from time to time, in
its sole discretion, and subject to the limitations of the Plan:
(a) Select from among the Independent Directors (including Independent Directors who
have previously been granted Options under the Plan) such of them as in its opinion should
be granted Options;
(b) Subject to Section 3.3, determine the number of shares of Stock that may be
purchased upon exercise of the Options granted to such selected Independent Directors; and
(c) Subject to the provisions of this Article 5, determine the terms and conditions of
such Options, consistent with the Plan.
Options granted to Independent Directors shall be Non-Qualified Stock Options.
ARTICLE 6.
RESTRICTED STOCK AWARDS
6.1 Grant of Restricted Stock. The Committee is authorized to make Awards of
Restricted Stock to any Participant selected by the Committee in such amounts and subject to such
terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be
evidenced by an Award Agreement.
6.2 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions
on transferability and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the
right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in
combination at such times, pursuant to such circumstances, in such installments, or otherwise, as
the Committee determines at the time of the grant of the Award or thereafter.
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6.3 Forfeiture. Except as otherwise determined by the Committee at the time of the
grant of the Award or thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions shall be
forfeited; provided, however, that the Committee may (a) provide in any Restricted Stock Award
Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in
whole or in part in the event of terminations resulting from specified causes, and (b) in other
cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.
6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Committee shall determine. If certificates representing
shares of Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.
ARTICLE 7.
STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights.
(a) A Stock Appreciation Right may be granted to any Participant selected by the
Committee. A Stock Appreciation Right shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose and shall be evidenced by an Award
Agreement.
(b) A Stock Appreciation Right shall entitle the Participant (or other person entitled
to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a
specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant
to its terms) and to receive from the Company an amount equal to the product of (i) the
excess of (A) the Fair Market Value of the Stock on the date the Stock Appreciation Right is
exercised over (B) the Fair Market Value of the Stock on the date the Stock Appreciation
Right was granted (or such greater value as the Committee shall determine at the time of
grant of the Stock Appreciation Right) and (ii) the number of shares of Stock with respect
to which the Stock Appreciation Right is exercised, subject to any limitations the Committee
may impose.
(c) The Committee shall determine the time or times a Stock Appreciation Right may be
exercised in whole or in part; provided that the term of any Stock Appreciation Right
granted under the Plan shall not exceed ten years.
7.2 Payment and Limitations on Exercise.
(a) Subject to Section 7.2(b), payment of the amounts determined under Section 7.1(b)
above shall be in cash, in Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as determined by the Committee in
the Award Agreement.
(b) To the extent any payment under Section 7.1(b) is effected in Stock, it shall be
made subject to satisfaction of all provisions of Article 5 above pertaining to Options.
ARTICLE 8.
OTHER TYPES OF AWARDS
8.1 Performance Share Awards. Any Participant selected by the Committee may be granted
one or more Performance Share awards which shall be denominated in a number of shares of Stock and
which may be linked to any one or more of the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee. In making such determinations, the
Committee shall consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the particular
Participant.
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8.2 Performance Stock Units. Any Participant selected by the Committee may be granted
one or more Performance Stock Unit awards which shall be denominated in unit equivalent of shares
of Stock and/or units of value including dollar value of shares of Stock and which may be linked to
any one or more of the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee. In making such determinations, the Committee shall consider
(among such other factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular Participant.
8.3 Dividend Equivalents.
(a) Any Participant selected by the Committee may be granted Dividend Equivalents based
on the dividends declared on the shares of Stock that are subject to any Award, to be
credited as of dividend payment dates, during the period between the date the Award is
granted and the date the Award is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or additional shares of
Stock by such formula and at such time and subject to such limitations as may be determined
by the Committee. Notwithstanding the foregoing, to the extent that any dividend
equivalents are credited with respect to shares of Stock underlying a Performance Share
Award or Performance Stock Unit, such dividend equivalents shall be subject to the same
vesting conditions applicable to the Performance Share Award or Performance Stock Unit in
respect of which such dividend equivalents are credited and shall not be paid to the
Participant holding such Award unless, until and to the extent that the Award vests.
(b) Dividend Equivalents granted with respect to Options or SARs that are intended to
be Qualified Performance-Based Compensation shall be payable, with respect to pre-exercise
periods, regardless of whether such Option or SAR is subsequently exercised.
8.4 Stock Payments. Subject to Section 10.5(b), any Participant selected by the
Committee may receive Stock Payments in the manner determined from time to time by the Committee;
provided, that unless otherwise determined by the Committee, such Stock Payments shall be made in
lieu of base salary, bonus, or other cash compensation otherwise payable to such Participant. The
number of shares shall be determined by the Committee and may be based upon the Performance
Criteria or other specific performance criteria determined appropriate by the Committee, determined
on the date such Stock Payment is made or on any date thereafter.
8.5 Deferred Stock. Any Participant selected by the Committee may be granted an award
of Deferred Stock in the manner determined from time to time by the Committee. The number of shares
of Deferred Stock shall be determined by the Committee and may be linked to the Performance
Criteria or other specific performance criteria determined to be appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined by the Committee.
Subject to Section 10.5(b), stock underlying a Deferred Stock award will not be issued until the
Deferred Stock award has vested, pursuant to a vesting schedule or performance criteria set by the
Committee. Unless otherwise provided by the Committee, a Participant awarded Deferred Stock shall
have no rights as a Company stockholder with respect to such Deferred Stock until such time as the
Deferred Stock Award has vested and the Stock underlying the Deferred Stock Award has been issued.
8.6 Restricted Stock Units. The Committee is authorized to make Awards of Restricted
Stock Units to any Participant selected by the Committee in such amounts and subject to such terms
and conditions as determined by the Committee. At the time of grant, the Committee shall specify
the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable,
and may specify such conditions to vesting as it deems appropriate. At the time of grant, the
Committee shall specify the maturity date applicable to each grant of Restricted Stock Units which
shall be no earlier than the vesting date or dates of the Award and may be determined at the
election of the grantee. On the maturity date, the Company shall, subject to Section 10.5(b),
transfer to the Participant one unrestricted, fully transferable share of Stock for each Restricted
Stock Unit scheduled to be paid out on such date and not previously forfeited.
8.7 Performance Bonus Awards. Any Participant selected by the Committee may be granted
one or more Performance-Based Awards in the form of a cash bonus (a Performance Bonus
Award) payable upon the attainment of Performance Goals that are established by the Committee
and relate to one or more of the Performance Criteria, in each case on a specified date or dates or
over any period or periods determined by the Committee. Any such Performance Bonus Award paid to a
Covered Employee shall be based upon objectively determinable bonus formulas established in
accordance with Article 9.
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8.8 Term. Except as otherwise provided herein, the term of any Award of Performance
Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted
Stock Units shall be set by the Committee in its discretion.
8.9 Exercise or Purchase Price. The Committee may establish the exercise or purchase
price, if any, of any Award of Performance Shares, Performance Stock Units, Deferred Stock, Stock
Payments or Restricted Stock Units; provided, however, that such price shall not be less than the
par value of a share of Stock on the date of grant, unless otherwise permitted by applicable state
law.
8.10 Exercise upon Termination of Employment or Service. An Award of Performance
Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments and
Restricted Stock Units shall only be exercisable or payable while the Participant is an Employee,
Consultant or a member of the Board, as applicable; provided, however, that the Committee in its
sole and absolute discretion may provide that an Award of Performance Shares, Performance Stock
Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted Stock Units may be
exercised or paid subsequent to a termination of employment or service, as applicable, or following
a Change in Control of the Company, or because of the Participants retirement, death or
disability, or otherwise; provided, however, that any such provision with respect to Performance
Shares or Performance Stock Units shall be subject to the requirements of Section 162(m) of the
Code that apply to Qualified Performance-Based Compensation.
8.11 Form of Payment. Payments with respect to any Awards granted under this Article 8
shall be made in cash, in Stock or a combination of both, as determined by the Committee.
8.12 Award Agreement. All Awards under this Article 8 shall be subject to such
additional terms and conditions as determined by the Committee and shall be evidenced by an Award
Agreement.
ARTICLE 9.
PERFORMANCE-BASED AWARDS
9.1 Purpose. The purpose of this Article 9 is to provide the Committee the ability to
qualify Awards other than Options and SARs and that are granted pursuant to Articles 6 and 8 as
Qualified Performance-Based Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over
any contrary provision contained in Articles 6 or 8; provided, however, that the Committee may in
its discretion grant Awards to Covered Employees that are based on Performance Criteria or
Performance Goals but that do not satisfy the requirements of this Article 9.
9.2 Applicability. This Article 9 shall apply only to those Covered Employees selected
by the Committee to receive Performance-Based Awards. The designation of a Covered Employee as a
Participant for a Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular
Performance Period shall not require designation of such Covered Employee as a Participant in any
subsequent Performance Period and designation of one Covered Employee as a Participant shall not
require designation of any other Covered Employees as a Participant in such period or in any other
period.
9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles 6 or 8 which may be granted to one or
more Covered Employees, no later than ninety (90) days following the commencement of any fiscal
year in question or any other designated fiscal period or period of service (or such other time as
may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (a)
designate one or more Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable,
which may be earned for such Performance Period, and (d) specify the relationship between
Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be
earned by each Covered Employee for such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing whether the applicable Performance Goals
have been achieved for such Performance Period. In determining the amount earned by a Covered
Employee, the Committee shall have the right to reduce or eliminate (but not to increase) the
amount payable at a given level of performance to take into account additional factors that the
Committee may deem relevant to the assessment of individual or corporate performance for the
Performance Period.
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9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company or a Subsidiary on the day a
Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved. In determining the
amount earned under a Performance-Based Award, the Committee may reduce or eliminate the amount of
the Performance-Based Award earned for the Performance Period, if in its sole and absolute
discretion, such reduction or elimination is appropriate.
9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any Award
which is granted to a Covered Employee and is intended to constitute Qualified Performance-Based
Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified performance-based compensation as
described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent
necessary to conform to such requirements.
ARTICLE 10.
PROVISIONS APPLICABLE TO AWARDS
10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other
Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards
may be granted either at the same time as or at a different time from the grant of such other
Awards.
10.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award which may include the term of
an Award, the provisions applicable in the event the Participants employment or service
terminates, and the Companys authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind an Award.
10.3 Limits on Transfer. No right or interest of a Participant in any Award may be
pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a
Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any
other party other than the Company or a Subsidiary, unless and until such Award has been exercised,
or the shares of Stock underlying such Award have been issued, and all restrictions applicable to
such shares of Stock have lapsed, and any attempted disposition of an Award prior to the
satisfaction of these conditions shall be null and void and of no effect, except to the extent that
such disposition is permitted by the immediately following sentence. Except as otherwise provided
by the Committee, no Award shall be assigned, transferred, or otherwise disposed of by a
Participant other than by will or the laws of descent and distribution or, subject to the consent
of the Committee, pursuant to a DRO, unless and until such Award has been exercised, or the shares
of Stock underlying such Award have been issued, and all restrictions applicable to such shares of
Stock have lapsed. The Committee by express provision in the Award or an amendment thereto may
permit an Award (other than an Incentive Stock Option) to be transferred to, exercised by and paid
to certain persons or entities related to the Participant, including but not limited to members of
the Participants family, charitable institutions, or trusts or other entities whose beneficiaries
or beneficial owners are members of the Participants family and/or charitable institutions, or to
such other persons or entities as may be expressly approved by the Committee, pursuant to such
conditions and procedures as the Committee may establish. Any permitted transfer shall be subject
to the condition that the Committee receive evidence satisfactory to it that the transfer is being
made for estate and/or tax planning purposes (or to a blind trust in connection with the
Participants termination of employment or service with the Company or a Subsidiary to assume a
position with a governmental, charitable, educational or similar non-profit institution) and on a
basis consistent with the Companys lawful issue of securities.
10.4 Beneficiaries. Notwithstanding Section 10.3, a Participant may, in the manner
determined by the Committee, designate a beneficiary to exercise the rights of the Participant and
to receive any distribution with respect to any Award upon the Participants death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Committee. If the Participant is
married and resides in a community property state, a designation of a person other than the
Participants spouse as his or her beneficiary with respect to more than 50% of the Participants
interest in the Award shall not be effective without the prior written consent of the Participants
spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to
the person entitled thereto pursuant to the Participants will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a
Participant at any time provided the change or revocation is filed with the Committee.
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10.5 Stock Certificates; Book Entry Procedures.
(a) Notwithstanding anything herein to the contrary, the Company shall not be required
to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel, that the
issuance and delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of any exchange
on which the shares of Stock are listed or traded. All Stock certificates delivered pursuant
to the Plan are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal, state, or foreign jurisdiction,
securities or other laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions applicable to
the Stock. In addition to the terms and conditions provided herein, the Board may require
that a Participant make such reasonable covenants, agreements, and representations as the
Board, in its discretion, deems advisable in order to comply with any such laws,
regulations, or requirements. The Committee shall have the right to require any Participant
to comply with any timing or other restrictions with respect to the settlement or exercise
of any Award, including a window-period limitation, as may be imposed in the discretion of
the Committee.
(b) Notwithstanding any other provision of the Plan, unless otherwise determined by the
Committee or required by any applicable law, rule or regulation, the Company shall not
deliver to any Participant certificates evidencing shares of Stock issued in connection with
any Award and instead such shares of Stock shall be recorded in the books of the Company
(or, as applicable, its transfer agent or stock plan administrator).
10.6 Paperless Exercise. In the event that the Company establishes, for itself or
using the services of a third party, an automated system for the exercise of Awards, such as a
system using an internet website or interactive voice response, then the paperless exercise of
Awards by a Participant may be permitted through the use of such an automated system.
ARTICLE 11.
CHANGES IN CAPITAL STRUCTURE
11.1 Adjustments.
(a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other distribution (other than normal cash dividends) of Company
assets to stockholders, or any other change affecting the shares of Stock or the share price
of the Stock other than an Equity Restructuring, the Committee shall make equitable
adjustments, if any, to reflect such change with respect to (i) the aggregate number and
kind of shares that may be issued under the Plan (including, but not limited to, adjustments
of the limitations in Section 3.1 above on the maximum number and kind of shares which may
be issued under the Plan, adjustments of the award limits under Section 3.3 of the Plan and
adjustments of the manner in which shares subject to Full Value Awards will be counted);
(ii) the number and kind of shares of Stock (or other securities or property) subject to
outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including,
without limitation, any applicable performance targets or criteria with respect thereto);
and (iv) the grant or exercise price per share for any outstanding Awards under the Plan.
(b) In the event of any transaction or event described in Section 11.1(a) or any
unusual or nonrecurring transactions or events affecting the Company, any affiliate of the
Company, or the financial statements of the Company or any affiliate, or of changes in
applicable laws, regulations or accounting principles, the Committee, in its sole
discretion, and on such terms and conditions as it deems appropriate, either by the terms of
the Award or by action taken prior to the occurrence of such transaction or event and either
automatically or upon the Participants request, is hereby authorized to take any one or
more of the following actions whenever the Committee determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to any Award under the
Plan, to facilitate such transactions or events or to give effect to such changes in laws,
regulations or principles:
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(i) To provide for either (A) termination of any such Award in exchange for an
amount of cash, if any, equal to the amount that would have been attained upon the
exercise of such Award or realization of the Participants rights (and, for the
avoidance of doubt, if as of the date of the occurrence of the transaction or event
described in this Section 11.1, the Committee determines in good faith that no amount
would have been attained upon the exercise of such Award or realization of the
Participants rights, then such Award may be terminated by the Company without
payment) or (B) the replacement of such Award with other rights or property selected
by the Committee in its sole discretion having an aggregate value not exceeding the
amount that could have been attained upon the exercise of such Award or realization
of the Participants rights had such Award been currently exercisable or payable or
fully vested;
(ii) To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as to
the number and kind of shares and prices;
(iii) To make adjustments in the number and type of shares of the Stock (or
other securities or property) subject to outstanding Awards, and in the number and
kind of outstanding Restricted Stock or Deferred Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria included in,
outstanding Awards and Awards which may be granted in the future;
(iv) To provide that such Award shall be exercisable or payable or fully vested
with respect to all shares covered thereby, notwithstanding anything to the contrary
in the Plan or the applicable Award Agreement; and
(v) To provide that the Award cannot vest, be exercised or become payable after
such event.
(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 11.1(a) and 11.1(b) above:
(i) The number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, shall be equitably adjusted.
The adjustments provided under this Section 11.1(c) shall be nondiscretionary and
shall be final and binding on the affected Participant and the Company.
(ii) The Committee shall make such equitable adjustments, if any, as the
Committee in its discretion may deem appropriate to reflect such Equity Restructuring
with respect to the aggregate number and kind of shares that may be issued under the
Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on
the maximum number and kind of shares which may be issued under the Plan, adjustments
of the award limits under Section 3.3 of the Plan and adjustments of the manner in
which shares subject to Full Value Awards will be counted).
(d) The Committee may, in its sole discretion, include such further provisions and
limitations in any Award, agreement or certificate, as it may deem equitable and in the best
interests of the Company that are not inconsistent with the provisions of the Plan.
(e) With respect to Awards which are granted to Covered Employees and are intended to
qualify as Performance-Based Compensation, no adjustment or action described in this Section
11.1 or in any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause such Award to fail to so qualify as Performance-Based
Compensation, unless the Committee determines that the Award should not so qualify. No
adjustment or action described in this Section 11.1 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause the Plan to
violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be
authorized to the extent such adjustment or action would result in short-swing profits
liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the
Committee determines that the Award is not to comply with such exemptive conditions.
(f) The existence of the Plan, the Award Agreement and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Companys capital structure or its business, any
merger or consolidation of the Company, any issue of stock or of options, warrants or rights
to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are superior to or
affect the Stock or the rights thereof or which are convertible into or exchangeable for
Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
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(g) No action shall be taken under this Section 11.1 which shall cause an Award to fail
to comply with Section 409A of the Code or the Treasury Regulations thereunder, to the
extent applicable to such Award.
11.2 Acceleration Upon a Change in Control.
(a) With respect to an Award granted prior to November 2, 2009:
(i) Notwithstanding any provision to the contrary contained herein or in any applicable
Award Agreement or other written agreement entered into between the Company and a
Participant, if a Change in Control occurs then, immediately prior to the Change in Control,
all Awards outstanding under the Plan shall become fully vested and exercisable and all
forfeiture restrictions on such Awards shall lapse. Subject to the foregoing, upon, or in
anticipation of, a Change in Control, the Committee may cause any and all Awards outstanding
hereunder to terminate at a specific time in the future, including but not limited to the
date of such Change in Control, and may give each Participant the right to exercise such
Awards during a period of time as the Committee, in its sole and absolute discretion, shall
determine. In the event that the terms of any agreement between the Company or any Company
subsidiary or affiliate and a Participant contains provisions that conflict with and are
more restrictive than the provisions of this Section 11.2(a), this Section 11.2(a) shall
prevail and control and the more restrictive terms of such agreement (and only such terms)
shall be of no force or effect.
(b) With respect to an Award granted on or after November 2, 2009:
(i) Notwithstanding any other provision of the Plan, in the event of a Change in
Control, each outstanding Award shall be assumed or an equivalent Award substituted
by the surviving or successor corporation or a parent or subsidiary of the surviving
or successor corporation.
(ii) In the event that the surviving or successor corporation in a Change in
Control declines for any reason to assume or provide an equivalent substitute for any
Award, as determined by the pre-Change in Control Committee in its sole discretion,
the Committee shall cause all forfeiture restrictions applicable to such Award to
lapse and such Award shall become fully vested and, as applicable, exercisable
immediately prior to the consummation of such transaction. If an Awards applicable
forfeiture restrictions lapse and such Award becomes vested (and exercisable, as
applicable) in lieu of assumption or substitution of an equivalent award in
connection with a Change in Control, the Committee shall notify the Participant that
the Award will be deemed to be exercised, if applicable, and, in any event, settled
upon the occurrence of the Change in Control, and the Award shall terminate upon the
Change in Control in exchange for payment of the consideration payable in the Change
in Control for such fully vested (and exercised, if applicable) Award.
11.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.
ARTICLE 12.
ADMINISTRATION
12.1 Committee. Unless and until the Board delegates administration of the Plan to a
Committee as set forth below, the Plan shall be administered by the full Board, and for such
purposes the term Committee as used in this Plan shall be deemed to refer to the Board. The
Board, at its discretion or as otherwise necessary to comply with the requirements of Section
162(m) of the Code, Rule 16b-3 promulgated under the Exchange Act or to the extent required by any
other applicable rule or regulation, shall delegate
14
administration
of the Plan to a Committee. The Committee shall consist
solely of two or more members of the Board each of whom is an outside director, within the
meaning of Section 162(m) of the Code, a Non-Employee Director and an independent director under
the rules of the American Stock Exchange (or other principal securities market on which shares of
Stock are traded). Notwithstanding the foregoing: (a) the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with respect to all Awards
granted to Independent Directors and for purposes of such Awards the term Committee as used in
this Plan shall be deemed to refer to the Board and (b) the Committee may delegate its authority
hereunder to the extent permitted by Section 12.5. Appointment of Committee members shall be
effective upon acceptance of appointment. In its sole discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Committee under the Plan except
with respect to matters which under Rule 16b 3 under the Exchange Act or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be determined in the sole
discretion of the Committee. Committee members may resign at any time by delivering written notice
to the Board. Vacancies in the Committee may only be filled by the Board.
12.2 Action by the Committee. A majority of the Committee shall constitute a quorum.
The acts of a majority of the members present at any meeting at which a quorum is present, and acts
approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts
of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other employee of the
Company or any Subsidiary, the Companys independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist in the
administration of the Plan.
12.3 Authority of Committee. Subject to any specific designation in the Plan, the
Committee has the exclusive power, authority and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the type or types of Awards to be granted to each Participant;
(c) Determine the number of Awards to be granted and the number of shares of Stock to
which an Award will relate;
(d) Determine the terms and conditions of any Award granted pursuant to the Plan,
including, but not limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions
or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any
provisions related to non-competition and recapture of gain on an Award, based in each case
on such considerations as the Committee in its sole discretion determines; provided,
however, that the Committee shall not have the authority to accelerate the vesting or waive
the forfeiture of any Performance-Based Awards;
(e) Determine whether, to what extent, and pursuant to what circumstances an Award may
be settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards,
or other property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;
(g) Decide all other matters that must be determined in connection with an Award;
(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;
(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and
(j) Make all other decisions and determinations that may be required pursuant to the
Plan or as the Committee deems necessary or advisable to administer the Plan.
12.4 Decisions Binding. The Committees interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the
Committee with respect to the Plan are final, binding, and conclusive on all parties.
15
12.5 Delegation of Authority. To the extent permitted by applicable law, the
Committee may from time to time
delegate to a committee of one or more members of the Board or one or more officers of the Company
the authority to grant or amend Awards to Participants other than (a) senior executives of the
Company who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers
of the Company (or members of the Board) to whom authority to grant or amend Awards has been
delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that
the Committee specifies at the time of such delegation, and the Committee may at any time rescind
the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under
this Section 12.5 shall serve in such capacity at the pleasure of the Committee.
ARTICLE 13.
EFFECTIVE AND EXPIRATION DATE
13.1 Effective Date. The Original Plan was submitted to and approved by the
Companys stockholders on May 18, 2009. The Plan, as amended and restated, is effective as of the
date on which the Companys stockholders approve the Plan. The Plan, as amended and restated, will
be deemed to be approved by the stockholders if a quorum is present at a stockholder meeting duly
held in accordance with the applicable provisions of the Companys Bylaws and the votes cast in
favor of the Plan exceed the votes cast opposing the Plan. In the event that the Plan, as amended
and restated, is not approved by the Companys stockholders, then the Original Plan shall continue
on its existing terms and conditions and the modifications to the Original Plan effected by this
amendment and restatement shall not take effect.
13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after the tenth anniversary of the Effective Date, except that no Incentive Stock
Options may be granted under the Plan after the earlier of the tenth anniversary of (i) the date
the Plan is approved by the Board or (ii) the Effective Date. Any Awards that are outstanding on
the tenth anniversary of the Effective Date shall remain in force according to the terms of the
Plan and the applicable Award Agreement.
ARTICLE 14.
AMENDMENT, MODIFICATION, AND TERMINATION
14.1 Amendment, Modification, and Termination. Subject to Section 15.14, with the
approval of the Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with
any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as required, (b) stockholder
approval is required for any amendment to the Plan that (i) increases the number of shares
available under the Plan (other than any adjustment as provided by Article 11), or (ii) results in
a material increase in benefits or a change in eligibility requirements, and (c) no amendment to
the Plan shall permit the Committee to grant Options or SARs with an exercise price or base price,
as applicable, that is below Fair Market Value on the date of grant or to extend the exercise
period for an Option or SAR beyond ten years from the date of grant. Notwithstanding any provision
in this Plan to the contrary, (A) no Option or SAR may be amended to reduce the per share exercise
price or base price, as applicable, of the shares subject to such Option or SAR below the per share
exercise price or base price as of the date the Option or SAR is granted, and (B) no Option or SAR
may be granted in exchange for, or in connection with, the cancellation or surrender of an Option
or SAR having a higher per share exercise price or base price.
14.2 Awards Previously Granted. Except with respect to amendments made pursuant to
Section 15.14, no termination, amendment, or modification of the Plan shall adversely affect in any
material way any Award previously granted pursuant to the Plan without the prior written consent of
the Participant.
ARTICLE 15.
GENERAL PROVISIONS
15.1 No Rights to Awards. No Eligible Individual or other person shall have any
claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Eligible Individuals, Participants or any other persons uniformly.
15.2 No Stockholders Rights. Except as otherwise provided herein, a Participant
shall have none of the rights of a
stockholder with respect to shares of Stock covered by any Award until the Participant becomes the
record owner of such shares of Stock.
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15.3 Withholding. The Company or any Subsidiary shall have the authority and the
right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, local and foreign taxes (including the Participants employment tax
obligations) required by law to be withheld with respect to any taxable event concerning a
Participant arising as a result of this Plan. The Committee may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold
shares of Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a
Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of
the Plan, the number of shares of Stock which may be withheld with respect to the issuance,
vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such
Award within six months (or such other period as may be determined by the Committee) after such
shares of Stock were acquired by the Participant from the Company) in order to satisfy the
Participants federal, state, local and foreign income and payroll tax liabilities with respect to
the issuance, vesting, exercise or payment of the Award shall be limited to the number of shares
which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for federal, state,
local and foreign income tax and payroll tax purposes that are applicable to such supplemental
taxable income.
15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate
any Participants employment or services at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or any Subsidiary.
15.5 Unfunded Status of Awards. The Plan is intended to be an unfunded plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Subsidiary.
15.6 Indemnification. To the extent allowable pursuant to applicable law, each
member of the Committee and of the Board shall be indemnified and held harmless by the Company from
any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such
member in connection with or resulting from any claim, action, suit, or proceeding to which he or
she may be a party or in which he or she may be involved by reason of any action or failure to act
pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of
judgment in such action, suit, or proceeding against him or her; provided he or she gives the
Company an opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such persons may be entitled
pursuant to the Companys Certificate of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.
15.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to
the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
15.8 Expenses. The expenses of administering the Plan shall be borne by the Company
and its Subsidiaries.
15.9 Titles and Headings. The titles and headings of the Sections in the Plan are
for convenience of reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control.
15.10 Fractional Shares. No fractional shares of Stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional
shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.
15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
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15.12 Government and Other Regulations. The obligation of the Company to make
payment of awards in Stock or otherwise shall be subject to all applicable laws, rules, and
regulations, and to such approvals by government agencies as may be required. The Company shall be
under no obligation to register pursuant to the Securities Act, as amended, any of the shares of
Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may in certain
circumstances be exempt from registration pursuant to the Securities Act, as amended, the Company
may restrict the transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
15.13 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California.
15.14 Section 409A. To the extent applicable, the Plan and all Award Agreements
shall be interpreted in accordance with Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder, including without limitation any
such regulations or other guidance that may be issued after the Effective Date. Notwithstanding
any provision of the Plan to the contrary, in the event that following the Effective Date the Board
determines that any Award may be subject to Section 409A of the Code and related Department of
Treasury guidance (including such Department of Treasury guidance as may be issued after the
Effective Date), the Board may adopt such amendments to the Plan and the applicable Award Agreement
or adopt other policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, that the Board determines are necessary or
appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (b) comply with the requirements
of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the
application of any penalty taxes under such Section; provided, however, that this Section 15.14
does not create an obligation on the part of the Company to adopt any such amendment, policy or
procedure or take any such other action or to indemnify any Participant with regard to any such
action or inaction.
* * * * *
I hereby certify that the foregoing Plan was duly authorized by the Board of Directors of Rentech,
Inc. on March 14, 2011, subject to approval by its stockholders.
* * * * *
I hereby certify that the foregoing Plan was approved by the stockholders of Rentech, Inc. on May
11, 2011.
Executed on this 11th day of May 2011.
/s/ Colin Morris | ||||
Corporate Secretary | ||||
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