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2.1
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“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.
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2.2
|
“Award
Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award, including through electronic
medium.
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2.3
|
“Board” means
the Board of Directors of the
Company.
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2.4
|
“Change in
Control” means and includes each of the
following:
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(a)
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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
Company’s securities outstanding immediately after such acquisition;
or
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(b)
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During
any period of two consecutive years, 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 Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of the two-year period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute a majority thereof; or
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(c)
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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
Company’s 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)
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Which
results in the Company’s 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 Company’s 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 Entity’s outstanding voting
securities immediately after the transaction,
and
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(ii)
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After
which no person or group beneficially owns voting securities representing
50% 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 50% 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
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(d)
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The
Company’s stockholders approve a liquidation or dissolution of the
Company.
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2.5
|
“Code” means the
Internal Revenue Code of 1986, as
amended.
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2.6
|
“Committee”
means the committee of the Board described in Article
13.
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2.7
|
“Consultant”
means any consultant or adviser if: (a) the consultant or adviser renders
bona fide services to the Company or any Subsidiary; (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 Company’s securities;
and (c) the consultant or adviser is a natural
person.
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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.
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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.
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2.10
|
“Director” means
a member of the Board, or as applicable, a member of the board of
directors of a Subsidiary.
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2.11
|
“Disability” means that the
Participant qualifies to receive long-term disability payments under the
Company’s long-term disability insurance program, as it may be amended
from time to time.
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2.12
|
“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.
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2.13
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“Effective Date”
shall have the meaning set forth in Section
14.1.
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2.14
|
“Eligible
Individual” means any person who is an Employee, a Consultant or an
Independent Director, as determined by the
Committee.
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2.15
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“Employee” means
any officer or other employee (as defined in accordance with Section
3401(c) of the Code) of the Company or any
Subsidiary.
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2.16
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“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 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.
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2.17
|
“Exchange Act”
means the Securities Exchange Act of 1934, as
amended.
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2.18
|
“Fair Market
Value” means, as of any given date, (a) if Stock is traded on any
established stock exchange, the closing price of a share of Stock as
reported in the Wall
Street Journal (or such other source as the Company may deem
reliable for such purposes) for such date, or if no sale occurred on such
date, the first trading date immediately prior to such date during which a
sale occurred; or (b) if Stock is not traded on an exchange but is quoted
on a national market or other quotation system, the last sales price on
such date, or if no sales occurred on such date, then on the date
immediately prior to such date on which sales prices are reported; or (c)
if Stock is not publicly traded, the fair market value established by the
Committee acting in good faith.
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2.19
|
“Incentive Stock
Option” means an Option that is intended to meet the requirements
of Section 422 of the Code or any successor provision
thereto.
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2.20
|
“Independent
Director” means a Director of the Company who is not an
Employee.
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2.21
|
“Non-Employee
Director” means a Director of the Company who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) under the Exchange
Act, or any successor rule.
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2.22
|
“Non-Qualified Stock
Option” means an Option that is not intended to be an Incentive
Stock Option.
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2.23
|
“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.
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2.24
|
“Participant”
means any Eligible Individual who, as a member of the Board, Consultant or
Employee, has been granted an Award pursuant to the
Plan.
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2.25
|
“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.
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2.26
|
“Performance Bonus
Award” has the meaning set forth in Section
8.7.
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2.27
|
“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, 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.
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2.28
|
“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.
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2.29
|
“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 Participant’s right to, and the payment of, a
Performance-Based Award.
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2.30
|
“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.
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2.31
|
“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.
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2.32
|
“Plan” means
this Tegal Corporation 2007 Incentive Award Plan, as it may be amended
from time to time.
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2.33
|
“Prior Plans”
means, collectively, the following plans of the Company: the Eighth
Amended and Restated 1998 Equity Participation Plan of Tegal Corporation
and the Fifth Amended and Restated Stock Option Plan for Outside Directors
of Tegal Corporation, in each case as such plan may be amended from time
to time.
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2.34
|
“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.
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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.
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2.36
|
“Restricted Stock
Unit” means an Award granted pursuant to Section
8.6.
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2.37
|
“Securities Act”
shall mean the Securities Act of 1933, as
amended.
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2.38
|
“Stock” means
the common stock of the Company and such other securities of the Company
that may be substituted for Stock pursuant to
Article 12.
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2.39
|
“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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2.40
|
“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 compensation, granted pursuant to Section
8.4.
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2.41
|
“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.
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3.1
|
Number of
Shares.
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(a)
|
Subject
to Article 12 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
816,704 shares, plus any
shares of Stock subject to awards under the Prior Plans which are
forfeited or lapse unexercised; provided, however, no
more than 816,704 shares of Stock may be issued upon the exercise of
Incentive Stock Options.
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(b)
|
To
the extent that an Award terminates, expires, or lapses for any reason,
any shares of Stock subject to the Award shall again be available for the
grant of an Award pursuant to the Plan. Additionally, any
shares of Stock tendered or withheld to satisfy the grant or exercise
price or tax withholding obligation pursuant to any Award shall 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 Common 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.
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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.
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3.3
|
Limitation on Number
of Shares Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Article 12, the
maximum number of shares of Stock with respect to one or more Awards that
may be granted to any one Participant during any calendar year shall be
100,000 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
$500,000.
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4.1
|
Eligibility. Each
Eligible Individual shall be eligible to be granted one or more Awards
pursuant to the Plan.
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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.
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4.3
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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.
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5.1
|
General. The
Committee is authorized to grant Options to Eligible Individuals on the
following terms and conditions:
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(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.
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(b)
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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.
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(c)
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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). The Committee shall also determine 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, after the Public Trading Date, no Participant who is a
Director 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.
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(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.
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5.2
|
Incentive Stock
Options. Incentive Stock Options shall be granted only
to 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.
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(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:
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(i)
|
Ten
years from the date it is granted, unless an earlier time is set in the
Award Agreement;
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(ii)
|
Three
months after the Participant’s termination of employment as an Employee;
and
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|
(iii)
|
One
year after the date of the Participant’s termination of employment or
service on account of Disability or death. Upon the
Participant’s Disability or death, any Incentive Stock Options exercisable
at the Participant’s Disability or death may be exercised by the
Participant’s legal representative or representatives, by the person or
persons entitled to do so pursuant to the Participant’s 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.
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(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 $500,000 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.
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(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.
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(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.
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(e)
|
Right to
Exercise. During a Participant’s lifetime, an Incentive
Stock Option may be exercised only by the
Participant.
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(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.
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6.1
|
Grant of Restricted
Stock. The Committee is authorized to make Awards of
Restricted Stock to any Eligible Individual 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.
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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.
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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.
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|
7.1
|
Grant
of Stock Appreciation Rights.
|
|
(a)
|
A
Stock Appreciation Right may be granted to any Eligible Individual
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.
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|
(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 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.
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|
7.2
|
Payment
and Limitations on Exercise.
|
|
(a)
|
Subject
to Sections 7.2(b) payment of the amounts determined under Sections 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.
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|
(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.
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|
8.1
|
Performance Share
Awards. Any Eligible Individual 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 Eligible
Individual 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.
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|
8.3
|
Dividend
Equivalents.
|
|
(a)
|
Any
Eligible Individual 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.
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|
(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. Any Eligible Individual selected by the Committee
may receive Stock Payments in the manner determined from time to time by
the Committee. 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.
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|
8.5
|
Deferred
Stock. Any Eligible Individual 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. 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.
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|
8.6
|
Restricted Stock
Units. The Committee is authorized to make Awards of
Restricted Stock Units to any Eligible Individual 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 11.5(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.
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|
8.7
|
Performance Bonus
Awards. Any Eligible Individual 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.
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|
8.9
|
Exercise or Purchase
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.
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|
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
Director, 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 Participant’s 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.
|
|
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 that do not satisfy
the requirements of this Article 9.
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|
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.
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|
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.
|
|
10.1
|
The
Board may grant Awards to Independent Directors, subject to the
limitations of the Plan, pursuant to a written non-discretionary formula
established by the Committee, or any successor committee thereto carrying
out its responsibilities on the date of grant of any such Award (the
“Independent
Director
Equity Compensation Policy”). The Independent Director
Equity Compensation Policy shall set forth the type of Award(s) to be
granted to Independent Directors, the number of shares of Stock to be
subject to Independent Director Awards, the conditions on which such
Awards shall be granted, become exercisable and/or payable and expire, and
such other terms and conditions as the Committee (or such other successor
committee as described above) shall determine in its
discretion.
|
|
11.1
|
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.
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|
11.2
|
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 Participant’s employment or service
terminates, and the Company’s authority to unilaterally or bilaterally
amend, modify, suspend, cancel or rescind an
Award.
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|
11.3
|
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. 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 pursuant to beneficiary designation procedures
approved from time to time by the Committee (or the Board in the case of
Awards granted to Independent Directors). 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 Participant’s family,
charitable institutions, or trusts or other entities whose beneficiaries
or beneficial owners are members of the Participant’s 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
Participant’s 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 Company’s lawful issue of
securities.
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|
11.4
|
Beneficiaries. Notwithstanding
Section 11.3, 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 Participant’s 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 Participant’s spouse as his or her beneficiary with
respect to more than 50% of the Participant’s interest in the Award shall
not be effective without the prior written consent of the Participant’s
spouse. If no beneficiary has been designated or survives the
Participant, payment shall be made to the person entitled thereto pursuant
to the Participant’s 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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|
11.5
|
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).
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|
11.6
|
Paperless
Administration. In the event that the Company
establishes, for itself or using the services of a third party, an
automated system for the documentation, granting or exercise of Awards,
such as a system using an internet website or interactive voice response,
then the paperless documentation, granting or exercise of Awards by a
Participant may be permitted through the use of such an automated
system.
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|
12.1
|
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 such equitable
adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (a) the aggregate
number and kind of shares that may be issued under the Plan (including,
but not limited to, adjustments of the limitations in Sections 3.1 and
3.3); (b) the terms and conditions of any outstanding Awards (including,
without limitation, any applicable performance targets or criteria with
respect thereto); and (c) the grant or exercise price per share for any
outstanding Awards under the Plan. Any adjustment affecting an
Award intended as Qualified Performance-Based Compensation shall be made
consistent with the requirements of Section 162(m) of the
Code.
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|
(b)
|
In
the event of any transaction or event described in Section 12.1 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 and absolute 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 Participant’s 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:
|
|
(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 Participant’s rights
(and, for the avoidance of doubt, if as of the date of the occurrence of
the transaction or event described in this Section 12.2 the Committee
determines in good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant’s 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;
|
|
(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 Common 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 options, rights and awards and
options, rights 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 12.1(a) and
12.1(b):
|
|
(i)
|
The
number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, will
be equitably adjusted. The adjustments provided under this
Section 12.1(c)(i) 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 Sections 3.1 and
3.3).
|
|
12.2
|
Acceleration Upon a
Change in Control. Notwithstanding Section 12.1, and
except as may otherwise be provided in any applicable Award Agreement or
other written agreement entered into between the Company and a
Participant, if a Change in Control occurs and a Participant’s Awards are
not converted, assumed, or replaced by a successor entity, then
immediately prior to the Change in Control such Awards shall become fully
exercisable and all forfeiture restrictions on such Awards shall
lapse. 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 shall 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 12.2, this Section
12.2 shall prevail and control and the more restrictive terms of such
agreement (and only such terms) shall be of no force or
effect.
|
|
12.3
|
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.
|
|
13.1
|
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, may delegate
administration of the Plan to a Committee consisting of two or more
members of the Board. Unless otherwise determined by the Board,
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 Nasdaq Stock Market (or other principal securities
market on which shares of Stock are traded); provided that any action
taken by the Committee shall be valid and effective, whether or not
members of the Committee at the time of such action are later determined
not to have satisfied the requirements for membership set forth in this
Section 13.1 or otherwise provided in any charter of the
Committee. 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 13.5. 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. Except as may otherwise
be provided in any charter of the Committee, appointment of Committee
members shall be effective upon acceptance of appointment; Committee
members may resign at any time by delivering written notice to the Board;
and vacancies in the Committee may only be filled by the
Board.
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|
13.2
|
Action by the
Committee. Unless otherwise established by the Board or
in any charter of the Committee, a majority of the Committee shall
constitute a quorum and 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 Company’s independent certified public accountants, or any
executive compensation consultant or other professional retained by the
Company to assist in the administration of the
Plan.
|
|
13.3
|
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 reload provision, 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.
|
|
13.4
|
Decisions
Binding. The Committee’s 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.
|
|
13.5
|
Delegation of
Authority. To the extent permitted by applicable law,
the Board 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) Employees who are
subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c)
officers of the Company (or Directors) 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 Board specifies
at the time of such delegation, and the Board may at any time rescind the
authority so delegated or appoint a new delegatee. At all
times, the delegatee appointed under this Section 13.5 shall serve in such
capacity at the pleasure of the
Board.
|
|
14.1
|
Effective
Date. The Plan is effective as of the date the Plan is
approved by the Company’s stockholders (the “Effective
Date”). The Plan will be deemed to be approved by the
stockholders if it is approved
either:
|
|
(a)
|
By
a majority of the votes cast at a duly held stockholder;s meeting at which
a quorum representing a majority of outstanding voting stock is, either in
person or by proxy, present and voting on the plan;
or
|
|
(b)
|
By
a method and in a degree that would be treated as adequate under Delaware
law in the case of an action requiring stockholder
approval.
|
|
14.2
|
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 (a) the date the Plan is
approved by the Board or (b) 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.
|
|
15.1
|
Amendment,
Modification, and Termination. Subject to Section 16.14,
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, and (b) stockholder approval shall be 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 12), (ii)
permits the Committee to grant Options with an exercise price that is
below Fair Market Value on the date of grant, or (iii) permits the
Committee to extend the exercise period for an Option beyond ten years
from the date of grant. Notwithstanding any provision in this
Plan to the contrary, absent approval of the stockholders of the Company,
no Option may be amended to reduce the per share exercise price of the
shares subject to such Option below the per share exercise price as of the
date the Option is granted and, except as permitted by Article 12, no
Option may be granted in exchange for, or in connection with, the
cancellation or surrender of an Option having a higher per share exercise
price.
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15.2
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Awards Previously
Granted. Except with respect to amendments
made pursuant to Section 16.14, 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.
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16.1
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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.
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16.2
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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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16.3
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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 Participant’s 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 Participant’s 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.
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16.4
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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 Participant’s 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.
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16.5
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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.
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16.6
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Indemnification. To
the extent allowable pursuant to applicable law, each member of the
Committee or 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 Company’s `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.
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16.7
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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.
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16.8
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Expenses. The
expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.
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16.9
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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.
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16.10
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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.
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16.11
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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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16.12
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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.
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16.13
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Governing
Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of
Delaware.
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16.14
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Section
409A. To the extent that the Committee determines that
any Award granted under the Plan is subject to Section 409A of the Code,
the Award Agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code. To the extent
applicable, the Plan and 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 Committee 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 Committee 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 Committee
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.
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Corporate
Secretary
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