Exhibit
10.1
FOSSIL,
INC.
2008
LONG-TERM INCENTIVE PLAN
The
Fossil, Inc. 2008 Long-Term Incentive Plan (the “
Plan
”) was
adopted by the Board of Directors of Fossil, Inc., a Delaware corporation (the
“
Company
”),
effective as of
May 21,
2008
(the “
Effective
Date
”), subject to approval by the Company’s stockholders.
ARTICLE
1
PURPOSE
The
purpose of the Plan is to attract and retain the services of key employees, key
contractors and Outside Directors of the Company and its Subsidiaries and to
provide such persons with a proprietary interest in the Company through the
granting of incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock, restricted stock units, performance
awards, dividend equivalent rights, and other awards, whether granted singly, or
in combination, or in tandem, that will
(a) increase
the interest of such persons in the Company’s welfare;
(b) furnish
an incentive to such persons to continue their services for the Company
or its Subsidiary
; and
(c) provide
a means through which the Company may attract able persons as Employees,
Contractors and Outside Directors.
With
respect to Reporting Participants, the Plan and all transactions under the Plan
are intended to comply with all applicable conditions of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934 (the “
1934
Act
”). To the extent any provision of the Plan or action by
the Committee fails to so comply, such provision or action shall be deemed null
and void
ab initio
, to
the extent permitted by law and deemed advisable by the Committee.
ARTICLE
2
DEFINITIONS
For the
purpose of the Plan, unless the context requires otherwise, the following terms
shall have the meanings indicated:
2.1 “
Award
”
means the grant of any Incentive Stock Option, Nonqualified Stock Option,
Restricted Stock, SAR, Restricted Stock Units, Performance Award, Dividend
Equivalent Right or Other Award, whether granted singly or in combination or in
tandem (each individually referred to herein as an “
Incentive
”).
2.2 “
Award
Agreement
” means a written agreement between a Participant and the
Company which sets out the terms of the grant of an Award.
2.3 “
Award
Period
” means the period set forth in the Award Agreement during which
one or more Incentives granted under an Award may be exercised.
2.4 “
Board
”
means the board of directors of the Company.
2.5 “
Change in
Control
” means the occurrence of the event set forth in any one of the
following paragraphs, except as otherwise provided herein:
(i) any
Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its Affiliates)
representing 30% or more of the combined voting power of the
Company’s then outstanding securities, or if such Person is the Beneficial
Owner, directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company’s outstanding securities as of
the date the particular Award is granted, such person becomes the Beneficial
owner, directly or indirectly, of the combined voting power of additional
securities representing 10% or more of the Company’s then outstanding
securities, excluding any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (i) of paragraph (iii) below;
or
(ii) the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective
Date of this Plan, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
stockholders
was
approved or recommended by a vote of at least a majority of the directors then
still in office who either were directors on the Effective Date of this Plan or
whose appointment, election or nomination for election was previously so
approved or recommended; or
(iii) there
is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least 60% of the
combined voting power of the securities of the Company or such surviving entity
or any parent thereof outstanding immediately after such merger or consolidation
or (ii) a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not
including the securities Beneficially Owned by such Person any securities
acquired directly from the Company or its Affiliates other than in connection
with the acquisition by the Company or its Affiliates of a business)
representing 30% or more of the combined voting power of the Company’s then
outstanding securities; or
(iv) the
stockholders
of the
Company approve a plan of complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity, at least 60% of the combined voting power of the voting securities
of which are owned by stockholders
of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale; or
(v) any
tender or exchange offer is made to acquire 30% or more of the securities of the
Company, other than an offer made by the Company, and shares are acquired
pursuant to that offer.
For purposes
hereof:
“
Affiliate
”
shall have the meaning set forth in Rule 12b-2 promulgated under the 1934
Act.
“
Beneficial
Owner
” shall have the meaning set forth in Rule 13d-3 under the 1934
Act.
“
Person
”
shall have the meaning given in Section 3(a)(9) of the 1934 Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities or (iv) a corporation owned, directly
or indirectly, by the stockholders
of the Company in
substantially the same proportions as their ownership of stock of the
Company.
The
provisions of this
Section 2.5
shall be
interpreted in accordance with the requirements of Section 409A of the Code and
the Final Treasury Regulations issued thereunder, it being the intent of the
parties that this
Section 2.5
shall be
compliance with the requirements of said Code Section and said
Regulations.
2.6 “
Code
”
means the Internal Revenue Code of 1986, as amended.
2.7 “
Committee
”
means the Compensation Committee of the Board.
2.8 “
Common
Stock
” means the common stock, par value $0.01 per share, which the
Company is currently authorized to issue or may in the future be authorized to
issue, or any securities into which or for which the common stock of the Company
may be converted or exchanged, as the case may be, pursuant to the terms of this
Plan.
2.9 “
Company
”
means Fossil, Inc. a Delaware corporation, and any successor
entity.
2.10 “
Contractor
”
means any natural person, who is not an Employee, rendering
bona fide
services
to the Company or a Subsidiary, with compensation, pursuant to a written
independent contractor agreement between such person and the Company or a
Subsidiary, provided that such services are not rendered 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.
2.11 “
Corporation
”
means any entity that (i) is defined as a corporation under Section 7701 of the
Code and (ii) is the Company or is in an unbroken chain of corporations (other
than the Company) beginning with the Company, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing a majority
of the total combined voting power of all classes of stock in one of the other
corporations in the chain. For purposes of clause (ii) hereof, an
entity shall be treated as a “corporation” if it satisfies the definition of a
corporation under Section 7701 of the Code.
2.12 “
Date of
Grant
” means the effective date on which an Award is made to a
Participant as set forth in the applicable Award Agreement; provided, however,
that solely for purposes of Section 16 of the 1934 Act and the rules and
regulations promulgated thereunder, the Date of Grant of an Award shall be the
date of stockholder approval of the Plan if such date is later than the
effective date of such Award as set forth in the Award Agreement. The
determination of Fair Market Value shall, where applicable, be in compliance
with Section 409A of the Code.
2.13 “
Dividend
Equivalent Right
” means the right of the holder thereof to receive
credits based on the cash dividends that would have been paid on the shares of
Common Stock specified in the Award if such shares were held by the Participant
to whom the Award is made.
2.14 “
Employee
”
means common law employee (as defined in accordance with the Regulations and
Revenue Rulings then applicable under Section 3401(c) of the Code) of the
Company or any Subsidiary of the Company
provided,
however, in the case of individuals whose employment status, by virtue of their
employer or residence, is not determined under Section 3401(c) of the Code,
“Employee” shall mean an individual treated as an employee for local payroll tax
or employment purposes by the applicable employer for the relevant
period
.
2.15 “
Executive
Officer
” means an officer of the Company or a Subsidiary subject to
Section 16 of the 1934 Act or a “covered employee” as defined in Section
162(m)(3) of the Code.
2.16 “
Exempt
Shares
” means shares of Common Stock designated as “Exempt Shares”
pursuant to
Section
5.1(b)
.
2.17 “
Fair Market
Value
” means, as of a particular date, (a) if the shares of Common Stock
are listed or quoted on any established national securities exchange, the
arithmetic mean of the high and low prices per share of the Common Stock on the
particular date (or, if the particular date is not a trading day, the arithmetic
mean of the high and low prices per share of the Common Stock immediately
preceding such particular date), determined in accordance with the requirements
of Section 422 of the Code (to the extent Incentive Stock Options are granted)
and/or Section 409A of the Code and the regulations and other guidance issued
thereunder; or (b) if the shares of Common Stock are not so listed or quoted,
such amount as may be determined by the Committee (acting on the advice of an
Independent Third Party, should the Committee elect in its sole discretion to
utilize an Independent Third Party for this purpose), in good faith, to be the
fair market value per share of Common Stock. Notwithstanding the
foregoing provisions of this
Section 2.17
, to the
extent an Award is intended to be in compliance with some or all of the
requirements of Section 409A of the Code, “Fair Market Value” for purposes of
the Plan and any Award shall be the definition provided for under Section 409A
of the Code and Section 1.409A-1(b)(5)(iv) of the regulations issued thereunder
or any successor provision thereto.
2.18 “
Full Value
Award
” means any Award with a net benefit to the Participant, without
regard to any restrictions such as those described in
Section 6.4(b)
, equal
to the aggregate Fair Market Value of the total shares of Common Stock subject
to the Award. Full Value Awards include Restricted Stock and
Restricted Stock Units, but do not include Stock Options and SARs.
2.19 “
Incentive
”
is defined in
Section
2.1
hereof.
2.20 “
Incentive Stock
Option
” means an incentive stock option within the meaning of Section 422
of the Code, granted pursuant to this Plan. For purposes of clarity,
Employees of Fossil Partners, L.P., Outside Directors, and
Contractors are not eligible to receive Incentive Stock Options.
2.21 “
Independent Third
Party
” means an individual or entity independent of the Company having
experience in providing investment banking or similar appraisal or valuation
services and with expertise generally in the valuation of securities or other
property for purposes of this Plan. The Committee may utilize one or
more Independent Third Parties.
2.22 “
Nonqualified
Stock Option
” means a nonqualified stock option, granted pursuant to this
Plan, which is not an Incentive Stock Option.
2.23 “
Option
Price
” means the price which must be paid by a Participant upon exercise
of a Stock Option to purchase a share of Common Stock.
2.24 “
Other
Award
” means an Award issued pursuant to
Section 6.9
hereof.
2.25 “
Outside
Director
” means a director of the Company who is not an Employee or
Contractor.
2.26 “
Participant
”
means an Employee, Contractor or Outside Director of the Company or a Subsidiary
to whom an Award is granted under this Plan.
2.27 “
Plan
”
means this Fossil, Inc. 2008 Long-Term Incentive Plan, as amended from time to
time.
2.28 “
Performance
Award
” means an Award hereunder of cash, shares of Common Stock, units or
rights based upon, payable in, or otherwise related to, Common Stock pursuant to
Section 6.7
hereof.
2.29 “
Performance
Goal
” means any of the goals set forth in
Section 6.10
hereof.
2.30 “
Reporting
Participant
” means a Participant who is subject to the reporting
requirements of Section 16 of the 1934 Act.
2.31 “
Restricted
Stock
” means shares of Common Stock issued or transferred to a
Participant pursuant to
Section 6.4
of this
Plan which are subject to restrictions or limitations set forth in this Plan and
in the related Award Agreement.
2.32 “
Restricted Stock
Units
” means units awarded to Participants pursuant to
Section 6.6
hereof,
which are convertible into Common Stock at such time as such units are no longer
subject to restrictions as established by the Committee.
2.33 “
Retirement
”
means any Termination of Service solely due to retirement upon or after
attainment of age sixty-five (65), or permitted early retirement as determined
by the Committee
, provided, however, in the case
of Participants who reside in the European Economic Area, “Retirement” shall
mean any Termination of Service as of a date they are eligible for
mandatory retirement benefits under local law, without regard to
age
.
2.34 “
SAR
” or
“
stock
appreciation right
” means the right to receive an amount, in cash and/or
Common Stock, equal to the excess of the Fair Market Value of a specified number
of shares of Common Stock as of the date the SAR is exercised (or, as provided
in the Award Agreement, converted) over the SAR Price for such
shares.
2.35 “
SAR Price
”
means the exercise price or conversion price of each share of Common Stock
covered by a SAR, determined on the Date of Grant of the SAR.
2.36 “
Stock
Option
” means a Nonqualified Stock Option or an Incentive Stock
Option.
2.37 “
Subsidiary
”
means (i) any corporation in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing a majority of the total
combined voting power of all classes of stock in one of the other corporations
in the chain, (ii) any limited partnership, if the Company or any corporation
described in item (i) above owns a majority of the general partnership interest
and a majority of the limited partnership interests entitled to vote on the
removal and replacement of the general partner, and (iii) any partnership or
limited liability company, if the partners or members thereof are composed only
of the Company, any corporation listed in item (i) above or any limited
partnership listed in item (ii) above. “Subsidiaries” means more than
one of any such corporations, limited partnerships, partnerships or limited
liability companies. Notwithstanding the foregoing, an entity shall
not be a “Subsidiary” for purposes of this Plan, unless at least twenty-five
percent (25%) of such entity’s Voting Equity is owned either directly or
indirectly by the Company.
2.38 “
Tenure
Award”
means an Award hereunder of cash, shares of Common Stock, units or
rights based upon, payable in, or otherwise related to, Common Stock that vests
over time based upon the Participant’s continued employment with or service to
the Company
or its Subsidiary
.
2.39 “
Termination of
Service
” occurs when a Participant who is (i) an Employee of the Company
or any Subsidiary ceases to
provide active
service
as an Employee of the Company and its Subsidiaries, for any
reason, (ii) a Contractor of the Company or any Subsidiary ceases to serve as
a Contractor
of the Company and its
Subsidiaries, for any reason; or (iii) an Outside Director of the Company or a
Subsidiary ceases to serve as a director of the Company and its Subsidiaries for
any reason. Except as may be necessary or desirable to comply with
applicable federal or state law, a “Termination of Service” shall not be deemed
to have occurred when a Participant who is an Employee becomes an Outside
Director or vice versa, or when a Participant who is serving in two capacities
(i.e., both an Employee and a director) ceases to serve in one of those
capacities (i.e., serves only as a director and not as an Employee); provided,
however, a "Termination of Service" shall be deemed to have occurred if a
Participant who is serving as an Employee becomes a Contractor, or vice versa,
or when an Outside Director ceases to be an Outside Director and becomes a
Contractor, unless otherwise specifically provided in the applicable award
agreement. If, however, a Participant who is an Employee and who has
an Incentive Stock Option ceases to be an Employee but does not suffer a
Termination of Service, and if that Participant does not exercise the Incentive
Stock Option within the time required under Section 422 of the Code upon ceasing
to be an Employee, the Incentive Stock Option shall thereafter become a
Nonqualified Stock Option. Notwithstanding the foregoing provisions
of this
Section
2.39
, in the event an Award issued under the Plan is subject to Section
409A of the Code, then, in lieu of the foregoing definition and to the extent
necessary to comply with the requirements of Section 409A of the Code, the
definition of “Termination of Service” for purposes of such Award shall be the
definition of “separation from service” provided for under Section 409A of the
Code and the regulations or other guidance issued thereunder.
2.40 “
Total and
Permanent Disability
” means a Participant is qualified for long-term
disability benefits under the Company’s or Subsidiary’s disability plan or
insurance policy
or under applicable non-U.S.
law
; or, if no such plan
,
policy
or law
is then in existence or if the
Participant is not eligible to participate in such plan or policy, that the
Participant, because of a physical or mental condition resulting from bodily
injury, disease, or mental disorder, is unable to perform his or her duties of
employment for a period of six (6) continuous months, as determined in good
faith by the Committee, based upon medical reports or other evidence
satisfactory to the Committee;
provided
that
, with respect to
any Incentive Stock Option, Total and Permanent Disability shall have the
meaning given it under the rules governing Incentive Stock Options under the
Code. Notwithstanding the foregoing provisions of this
Section 2.40
, in the
event an Award issued under the Plan is subject to Section 409A of the Code,
then, in lieu of the foregoing definition and to the extent necessary to comply
with the requirements of Section 409A of the Code, the definition of “Total and
Permanent Disability” for purposes of such Award shall be the definition of
“disability” provided for under Section 409A of the Code and the regulations or
other guidance issued thereunder.
2.41 “
Voting
Equity
” means the shares or other equity interests of an entity that has
the right to vote generally on matters submitted to a vote of the owners of such
entity.
ARTICLE
3
ADMINISTRATION
3.1
General Administration; Establishment
of Committee
. Subject to the terms of this
Article 3
, the Plan
shall be administered by the Committee. The Committee shall consist
of not fewer than two persons. Any member of the Committee may be
removed at any time, with or without cause, by resolution of the Board. Any
vacancy occurring in the membership of the Committee may be filled by
appointment by the Board. At any time there is no Committee to
administer the Plan, any references in this Plan to the Committee shall be
deemed to refer to the Board.
Membership
on the Committee shall be limited to those members of the Board who are “outside
directors” under Section 162(m) of the Code and “non-employee directors” as
defined in Rule 16b-3 promulgated under the 1934 Act. The Committee
shall select one of its members to act as its Chairman. A majority of
the Committee shall constitute a quorum, and the act of a majority of the
members of the Committee present at a meeting at which a quorum is present shall
be the act of the Committee.
3.2
Designation of Participants and
Awards
.
(a) The
Committee shall determine and designate from time to time the
eligible persons to whom Awards will be granted and shall set forth in each
related Award Agreement, where applicable, the Award Period, the Date of Grant,
and such other terms, provisions, limitations, and performance requirements, as
are approved by the Committee, but not inconsistent with the
Plan. The Committee shall determine whether an Award shall include
one type of Incentive or two or more Incentives granted in combination or two or
more Incentives granted in tandem (that is, a joint grant where exercise of one
Incentive results in cancellation of all or a portion of the other Incentive)
and shall determine, where applicable, whether the requirements of Section
162(m) of the Code shall apply to an Award to be granted to an Executive
Officer. Although the members of the Committee shall be eligible to
receive Awards, all decisions with respect to any Award, and the terms and
conditions thereof, to be granted under the Plan to any member of the Committee
shall be made solely and exclusively by the other members of the Committee, or
if such member is the only member of the Committee, by the Board.
(b) Notwithstanding
Section 3.2(a)
,
to the extent permitted by applicable law, the Committee may, in its
discretion and by a resolution adopted by the Committee, authorize one or more
officers of the Company (an “
Authorized
Officer
”) to (i) designate one or more Employees or Contractors as
eligible persons to whom Stock Options or SARs will be granted under
the Plan and (ii) determine the number of shares of Common Stock that will be
subject to such Stock Options or SARs; provided, however, that the resolution of
the Committee granting such authority shall (x) specify the total number of
shares of Common Stock that may be made subject to the Stock Options or SARs,
(y) set forth the price or prices (or a formula by which such price or prices
may be determined) to be paid for the purchase of the Common Stock subject to
such Stock Options or SARs, and (z) not authorize an officer to designate
himself as a recipient of any Stock Options or SARs.
3.3
Authority of the
Committee.
The Committee, in its discretion, shall (i)
interpret the Plan
and Award Agreements
,
(ii) prescribe, amend, and rescind any rules
,
regulations
and
sub-plans (including sub-plans for Awards made to Participants who are not
resident in the United States), as
necessary or appropriate for the
administration of the Plan
, to obtain favorable
tax treatment for the Awards or to ensure compliance with securities
laws
, (iii) establish performance goals for an Award and certify the
extent of their achievement, and (iv) make such other determinations or
certifications and take such other action as it deems necessary or advisable in
the administration of the Plan. Any interpretation, determination, or
other action made or taken by the Committee shall be final, binding, and
conclusive on all interested parties. The Committee’s discretion set
forth herein shall not be limited by any provision of the Plan, including any
provision which by its terms is applicable notwithstanding any other provision
of the Plan to the contrary.
The Committee may
delegate to officers of the Company, pursuant to a written delegation, the
authority to perform specified functions under the Plan. Any actions
taken by any officers of the Company pursuant to such written delegation of
authority shall be deemed to have been taken by the
Committee.
With respect to
restrictions in the Plan that are based on the requirements of Rule 16b-3
promulgated under the 1934 Act, Section 162(m) of the Code, Section 422 of the
Code, the rules of any exchange or inter-dealer quotation system upon which the
Company’s securities are listed or quoted, or any other applicable law, rule or
restriction (collectively, “
applicable
law
”), to the extent that any such restrictions are no longer required by
applicable law in order for an Award to comply with such applicable law, the
Committee shall have the sole discretion and authority to grant Awards that are
not subject to such formerly-mandated restrictions and/or to waive any such
formerly-mandated restrictions with respect to outstanding
Awards.
ARTICLE
4
ELIGIBILITY
Any
Employee (including an Employee who is also a director or an officer),
Contractor or Outside Director of the Company whose judgment, initiative, and
efforts contributed or may be expected to contribute to the successful
performance of the Company is eligible to participate in the Plan; provided that
only Employees of Fossil, Inc. and its Subsidiaries (excluding Subsidiaries that
are not corporations or that are less than fifty percent (50%) owned
subsidiaries) shall be eligible to receive Incentive Stock
Options For purposes
of
clarity,
Employees of Fossil Partners, L.P., Contractors and Outside Directors are not
eligible to receive Incentive Stock Options. The Committee, upon its own action,
may grant, but shall not be required to grant, an Award to any Employee,
Contractor or Outside Director of the Company or any
Subsidiary. Awards may be granted by the Committee at any time and
from time to time to new Participants, or to then Participants, or to a greater
or lesser number of Participants, and may include or exclude previous
Participants, as the Committee shall determine. Except as required by
this Plan, Awards granted at different times need not contain similar
provisions. The Committee’s determinations under the Plan (including
without limitation determinations of which Employees, Contractors or Outside
Directors, if any, are to receive Awards, the form, amount and timing of such
Awards, the terms and provisions of such Awards and the agreements evidencing
same) need not be uniform and may be made by it selectively among Participants
who receive, or are eligible to receive, Awards under the Plan.
ARTICLE
5
SHARES
SUBJECT TO PLAN
5.1
Number Available for
Awards
.
(a) Subject
to adjustment as provided in
Articles 11 and 12
,
the maximum number of shares of Common Stock that may be delivered pursuant to
Awards granted under the Plan is an aggregate of 4,685,030, 100% of which may be
delivered pursuant to Incentive Stock Options. Subject to adjustment
pursuant to
Articles
11 and 12
, the maximum number of shares of Common Stock with respect to
which Stock Options or SARs may be granted to any
Executive Officer during any calendar year is 250,000 shares of
Common Stock. Shares to be issued may be made available from
authorized but unissued Common Stock, Common Stock held by the Company in its
treasury, or Common Stock purchased by the Company on the open market or
otherwise. During the term of this Plan, the Company will at all
times reserve and keep available the number of shares of Common Stock that shall
be sufficient to satisfy the requirements of this Plan.
(b)
Exempt Shares.
No
more than ten percent (10%) of the shares of Common Stock that may be delivered
pursuant to Awards under
Section 5.1(a)
may be
shares designated as “Exempt Shares.”
5.2
Reuse of Shares
. To
the extent that any Award under this Plan shall be forfeited, shall expire or be
canceled, in whole or in part, then the number of shares of Common Stock covered
by the Award or stock option so forfeited, expired or canceled may again be
awarded pursuant to the provisions of this Plan. In the event that
previously acquired shares of Common Stock are delivered to the Company in full
or partial payment of the exercise price for the exercise of a Stock Option
granted under this Plan
or of employment tax
withholding or other tax payment due with respect to any Award
, the
number of shares of Common Stock available for future Awards under this Plan
shall be reduced only by the net number of shares of Common Stock issued upon
the exercise of the Stock Option o
r settlement of
an Award
. Awards that may be satisfied either by the issuance
of shares of Common Stock or by cash or other consideration shall be counted
against the maximum number of shares of Common Stock that may be issued under
this Plan only during the period that the Award is outstanding or to the extent
the Award is ultimately satisfied by the issuance of shares of Common
Stock. Awards will not reduce the number of shares of Common Stock
that may be issued pursuant to this Plan if the settlement of the Award will not
require the issuance of shares of Common Stock, as, for example, a SAR that can
be satisfied only by the payment of cash. Notwithstanding any
provisions of the Plan to the contrary, only shares forfeited back to the
Company, shares canceled on account of termination, expiration or lapse of an
Award, shares surrendered in payment of the exercise price of an option or
shares withheld for payment of applicable employment
tax
withholding obligations resulting from the
exercise of an option
shall again be
available for grant of Incentive Stock Options under the Plan, but shall not
increase the maximum number of shares described in
Section 5.1
above as
the maximum number of shares of Common Stock that may be delivered pursuant to
Incentive Stock Options.
ARTICLE
6
GRANT
OF AWARDS
6.1 In
General.
(a) The
grant of an Award shall be authorized by the Committee and shall be evidenced by
an Award Agreement setting forth the Incentive or Incentives being granted, the
total number of shares of Common Stock subject to the Incentive(s), the Option
Price (if applicable), the Award Period, the Date of Grant, and such other
terms, provisions, limitations, and performance objectives, as are approved by
the Committee, but (i) not inconsistent with the Plan, (ii) to the extent an
Award issued under the Plan is subject to Section 409A of the Code, in
compliance with the applicable requirements of Section 409A of the Code and the
regulations or other guidance issued thereunder, and (iii) to the extent the
Committee determines that an Award shall comply with the requirements of Section
162(m) of the Code, in compliance with the applicable requirements of Section
162(m) of the Code and the regulations and other guidance issued
thereunder. The Company shall execute an Award Agreement with a
Participant after the Committee approves the issuance of an
Award. Any Award granted pursuant to this Plan must be granted within
ten (10) years of the date of adoption of this Plan. The Plan shall be submitted
to the Company’s stockholders
for approval; however,
the Committee may grant Awards under the Plan prior to the time of stockholder
approval. Any such Award granted prior to such stockholder
approval shall be made
subject to such stockholder
approval. The grant of
an Award to a Participant shall not be deemed either to entitle the Participant
to, or to disqualify the Participant from, receipt of any other Award under the
Plan.
(b) If
the Committee establishes a purchase price for an Award, the Participant must
accept such Award within a period of thirty (30) days (or such shorter period as
the Committee may specify) after the Date of Grant by executing the applicable
Award Agreement and paying such purchase price.
(c) Any
Award under this Plan that is settled in whole or in part in cash on a deferred
basis may provide for interest equivalents to be credited with respect to such
cash payment. Interest equivalents may be compounded and shall be paid upon such
terms and conditions as may be specified by the grant.
6.2
Option Price.
The
Option Price for any share of Common Stock which may be purchased under a
Nonqualified Stock Option for any share of Common Stock may be equal to or
greater than the Fair Market Value of the share on the Date of
Grant. The Option Price for any share of Common Stock which may be
purchased under an Incentive Stock Option must be at least equal to the Fair
Market Value of the share on the Date of Grant; if an Incentive Stock Option is
granted to an Employee who owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than ten percent (10%) of
the combined voting power of all classes of stock of the Company (or any parent
or Subsidiary), the Option Price shall be at least 110% of the Fair Market Value
of the Common Stock on the Date of Grant.
6.3
Maximum ISO
Grants.
The Committee may not grant Incentive Stock Options
under the Plan to any Employee which would permit the aggregate Fair Market
Value (determined on the Date of Grant) of the Common Stock with respect to
which Incentive Stock Options (under this and any other plan of the Company and
its Subsidiaries) are exercisable for the first time by such Employee during any
calendar year to exceed $100,000. To the extent any Stock Option
granted under this Plan which is designated as an Incentive Stock Option exceeds
this limit or otherwise fails to qualify as an Incentive Stock Option, such
Stock Option (or any such portion thereof) shall be a Nonqualified Stock
Option. In such case, the Committee shall designate which stock will
be treated as Incentive Stock Option stock by causing the issuance of a separate
stock certificate and identifying such stock as Incentive Stock Option stock on
the Company’s stock transfer records.
6.4
Restricted
Stock.
If Restricted Stock is granted to or received by a
Participant under an Award (including a Stock Option), the Committee shall set
forth in the related Award Agreement: (i) the number of shares of Common Stock
awarded, (ii) the price, if any, to be paid by the Participant for such
Restricted Stock and the method of payment of the price, (iii) the time or times
within which such Award may be subject to forfeiture, (iv) specified Performance
Goals of the Company, a Subsidiary, any division thereof or any group of
Employees of the Company, or other criteria, which the Committee determines must
be met in order to remove any restrictions (including vesting) on such Award,
and (v) all other terms, limitations, restrictions, and conditions of the
Restricted Stock, which shall be consistent with this Plan, to the extent
applicable and in the event the Committee determines that an Award shall comply
with the requirements of Section 162(m) of the Code, in compliance with the
requirements of Section 162(m) of the Code and the regulations issued thereunder
and, to the extent Restricted Stock granted under the Plan is subject to Section
409A of the Code, in compliance with the applicable requirements of Section 409A
of the Code and the regulations or other guidance issued
thereunder. The provisions of Restricted Stock need not be the same
with respect to each Participant.
(a)
Legend on
Shares.
The Company shall electronically register the
Restricted Stock awarded to a Participant in the name of such Participant, which
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, substantially as provided in
Section 16.9
of
the Plan. No stock certificate or certificates shall be issued
with respect to such shares of Common Stock, unless, following the expiration of
the Restriction Period (as defined in
Section 6.4(b)(i)
)
without forfeiture in respect of such shares of Common Stock, the Participant
requests delivery of the certificate or certificates by submitting a written
request to the Committee (or such party designated by the Company) requesting
deliver of the certificates. The Company shall deliver the
certificates requested by the Participant to the Participant as soon as
administratively practicable following the Company’s receipt of such
request.
(b)
Restrictions and
Conditions.
Shares of Restricted Stock shall be subject to the
following restrictions and conditions:
(i) Subject
to the other provisions of this Plan and the terms of the particular Award
Agreements, during such period as may be determined by the Committee commencing
on the Date of Grant or the date of exercise of an Award (the “
Restriction
Period
”), the Participant shall not be permitted to sell, transfer,
pledge or assign shares of Restricted Stock. Except for these limitations and
subject to the provisions of
Section 8.2
below,
the Committee may in its sole discretion, remove any or all of the restrictions
on such Restricted Stock whenever it may determine that, by reason of changes in
applicable laws or other changes in circumstances arising after the date of the
Award, such action is appropriate.
(ii) Except
as provided in sub-paragraph (i) above or in the applicable Award Agreement, the
Participant shall have, with respect to his or her Restricted Stock, all of the
rights of a stockholder of the Company, including the right to vote the shares,
and the right to receive any dividends thereon. The Company shall
electronically register the Restricted Stock in the name of the Participant, but
shall not issue certificates for the Restricted Stock unless the Participant
requests delivery of the certificates for the Restricted Stock, in writing in
accordance with the procedures established by the Committee. A
Participant may only request delivery of certificates for shares of Common Stock
free of restriction under this Plan after the Restriction Period expires without
forfeiture in respect of such shares of Common Stock or after any other
restrictions imposed on such shares of Common Stock by the applicable Award
Agreement or other agreement have expired. Each Award Agreement shall
require that (x) each Participant, by his or her acceptance of Restricted Stock,
shall irrevocably grant to the Company a power of attorney to transfer any
shares so forfeited to the Company and agrees to execute any documents requested
by the Company in connection with such forfeiture and transfer, and (y) such
provisions regarding returns and transfers of stock certificates with respect to
forfeited shares of Common Stock shall be specifically performable by the
Company in a court of equity or law.
(iii) The
Restriction Period of Restricted Stock shall commence on the Date of Grant or
the date of exercise of an Award, as specified in the Award Agreement, and,
subject to
Article
13
of the Plan, unless otherwise established by the Committee in the
Award Agreement setting forth the terms of the Restricted Stock, shall expire
upon satisfaction of the conditions set forth in the Award Agreement; such
conditions may provide for vesting based on such Performance Goals, as may be
determined by the Committee in its sole discretion.
(iv) Except
as otherwise provided in the particular Award Agreement, upon Termination of
Service for any reason during the Restriction Period, the nonvested shares of
Restricted Stock shall be forfeited by the Participant. In the event
a Participant has paid any consideration to the Company for such forfeited
Restricted Stock, the Committee shall specify in the Award Agreement that either
(i) the Company shall be obligated to, or (ii) the Company may, in its sole
discretion, elect to, pay to the Participant, as soon as practicable after the
event causing forfeiture, in cash, an amount equal to the lesser of the total
consideration paid by the Participant for such forfeited shares or the Fair
Market Value of such forfeited shares as of the date of Termination of Service,
as the Committee, in its sole discretion shall select. Upon any forfeiture, all
rights of a Participant with respect to the forfeited shares of the Restricted
Stock shall cease and terminate, without any further obligation on the part of
the Company.
6.5
SARs.
The Committee
may grant SARs to any Participant, either as a separate Award or in connection
with a Stock Option. SARs shall be subject to such terms and
conditions as the Committee shall impose, provided that such terms and
conditions are (i) not inconsistent with the Plan, (ii) to
the extent a SAR issued under the Plan is subject to Section 409A of the Code,
in compliance with the applicable requirements of Section 409A of the Code and
the regulations or other guidance issued thereunder, and (iii) to the
extent the Committee determines that a SAR shall comply with the requirements of
Section 162(m) of the Code and the regulations and other guidance issued
thereunder, in compliance with the applicable requirements of Section 162(m) of
the Code and the regulations or other guidance issued thereunder. The
grant of the SAR may provide that the holder may be paid for the value of the
SAR either in cash or in shares of Common Stock, or a combination
thereof. In the event of the exercise of a SAR payable in shares of
Common Stock, the holder of the SAR shall receive that number of whole shares of
Common Stock having an aggregate Fair Market Value on the date of exercise equal
to the value obtained by multiplying (i) the difference between the Fair Market
Value of a share of Common Stock on the date of exercise over the SAR
Price as set forth in such SAR (or other value specified in the agreement
granting the SAR), by (ii) the number of shares of Common Stock as to which the
SAR is exercised, with a cash settlement to be made for any fractional shares of
Common Stock. The SAR Price for any share of Common Stock subject to
a SAR may be equal to or greater than the Fair Market
Value of the share on the Date of Grant. The Committee, in its sole
discretion, may place a ceiling on the amount payable upon exercise of a SAR,
but any such limitation shall be specified at the time that the SAR is
granted.
6.6
Restricted Stock
Units.
Restricted Stock Units may be awarded or sold to any
Participant under such terms and conditions as shall be established by the
Committee, provided, however, that such terms and conditions are (i) not
inconsistent with the Plan, (ii) to the extent a Restricted Stock Unit issued
under the Plan is subject to Section 409A of the Code, in compliance with the
applicable requirements of Section 409A of the Code and the regulations or other
guidance issued thereunder, and (iii) to the extent the Committee determines
that a Restricted Stock Unit shall comply with the requirements of Section
162(m) of the Code and the regulations and other guidance issued thereunder, in
compliance with the applicable requirements of Section 162(m) of the Code and
the regulations or other guidance issued thereunder. The grant of the
Restricted Stock Units may provide that the holder may be paid for the value of
the Restricted Stock Unit either in cash or in shares of Common Stock, or a
combination thereof. Restricted Stock Units shall be subject to such
restrictions as the Committee determines, including, without limitation, (a) a
prohibition against sale, assignment, transfer, pledge, hypothecation or other
encumbrance for a specified period; or (b) a requirement that the holder forfeit
(or in the case of shares of Common Stock or units sold to the Participant,
resell to the Company at cost) such shares or units in the event of Termination
of Service during the period of restriction.
6.7 Performance
Awards.
(a) The
Committee may grant Performance Awards to one or more
Participants. The terms and conditions of Performance Awards shall be
specified at the time of the grant and may include provisions establishing the
performance period, the Performance Goals to be achieved during a performance
period, and the maximum or minimum settlement values, provided that such terms
and conditions are (i) not inconsistent with the Plan and (ii) to the extent a
Performance Award issued under the Plan is subject to Section 409A of the Code,
in compliance with the applicable requirements of Section 409A of the Code and
the regulations or other guidance issued thereunder. If the
Performance Award is to be in shares of Common Stock, the Performance Awards may
provide for the issuance of the shares of Common Stock at the time of the grant
of the Performance Award or at the time of the certification by the
Committee that the Performance Goals for the performance period have been met;
provided, however, if shares of Common Stock are issued at the time of the grant
of the Performance Award and if, at the end of the performance period, the
Performance Goals are not certified by the Committee to have been fully
satisfied, then, notwithstanding any other provisions of this Plan to the
contrary, the Common Stock shall be forfeited in accordance with the terms of
the grant to the extent the Committee determines that the Performance Goals were
not met. The forfeiture of shares of Common Stock issued at the time of the
grant of the Performance Award due to failure to achieve the established
Performance Goals shall be separate from and in addition to any other
restrictions provided for in this Plan that may be applicable to such shares of
Common Stock. Each Performance Award granted to one or more
Participants shall have its own terms and conditions.
To the
extent the Committee determines that a Performance Award shall comply with the
requirements of Section 162(m) of the Code and the regulations and other
guidance issued thereunder, and if it is determined to be necessary in order to
satisfy Section 162(m) of the Code, at the time of the grant of a Performance
Award (other than a Stock Option) and to the extent permitted under Section
162(m) of the Code and the regulations issued thereunder, the Committeeshall
provide for the manner in which the Performance Goals shall be reduced to take
into account the negative effect on the achievement of specified levels of the
Performance Goals which may result from enumerated corporate transactions,
extraordinary events, accounting changes and other similar occurrences which
were unanticipated at the time the Performance Goal was initially
established. In no event, however, may the Committee increase
the amount earned under such a Performance Award, unless the reduction in the
Performance Goals would reduce or eliminate the amount to be earned under the
Performance Award and the Committee determines not to make such reduction or
elimination.
With
respect to a Performance Award that is not intended to satisfy the requirements
of Code Section 162(m), if the Committee determines, in its sole discretion,
that the established performance measures or objectives are no longer suitable
because of a change in the Company’s business, operations, corporate structure,
or for other reasons that the Committee deemed satisfactory, the Committee may
modify the performance measures or objectives and/or the performance
period.
(b) Performance
Awards may be valued by reference to the Fair Market Value of a share of Common
Stock or according to any formula or method deemed appropriate by the Committee,
in its sole discretion, including, but not limited to, achievement of
Performance Goals or other specific financial, production, sales or cost
performance objectives that the Committee believes to be relevant to the
Company’s business and/or remaining in the employ of the Company for a specified
period of time. Performance Awards may be paid in cash, shares of
Common Stock, or other consideration, or any combination thereof. If
payable in shares of Common Stock, the consideration for the issuance of such
shares may be the achievement of the performance objective established at the
time of the grant of the Performance Award. Performance Awards may be
payable in a single payment or in installments and may be payable at a specified
date or dates or upon attaining the performance objective. The extent
to which any applicable performance objective has been achieved shall be
conclusively determined by the Committee.
(c) Notwithstanding
the foregoing, in order to comply with the requirements of Section 162(m) of the
Code, if applicable, no Participant may receive in any calendar year Performance
Awards intended to comply with the requirements of Section 162(m) of the Code
which have an aggregate value of more than
$1,000,000, and if such
Performance Awards involve the issuance of shares of Common Stock, said
aggregate value shall be based on the Fair Market Value of such shares on the
time of the grant of the Performance Award. In no event, however,
shall any Performance Awards not intended to comply with the requirements of
Section 162(m) of the Code be issued contingent upon the failure to attain the
Performance Goals applicable to any Performance Awards granted hereunder that
the Committee intends to comply with the requirements of Section 162(m) of the
Code.
6.8
Dividend Equivalent
Rights.
The Committee may grant a Dividend Equivalent Right to
any Participant, either as a component of another Award or as a separate Award.
The terms and conditions of the Dividend Equivalent Right shall be specified by
the grant. Dividend equivalents credited to the holder of a Dividend
Equivalent Right may be paid currently or may be deemed to be reinvested in
additional shares of Common Stock (which may thereafter accrue additional
dividend equivalents). Any such reinvestment shall be at the Fair
Market Value at the time thereof. Dividend Equivalent Rights may be
settled in cash or shares of Common Stock, or a combination thereof, in a single
payment or in installments. A Dividend Equivalent Right granted as a
component of another Award may provide that such Dividend Equivalent Right shall
be settled upon exercise, settlement, or payment of, or lapse of restrictions
on, such other Award, and that such Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other Award.
6.9
Other Awards.
The
Committee may grant to any Participant other forms of Awards, based
upon, payable in, or otherwise related to, in whole or in part, shares of Common
Stock, if the Committee determines that such other form of Award is consistent
with the purpose and restrictions of this Plan. The terms and
conditions of such other form of Award shall be specified by the
grant. Such Other Awards may be granted for no cash consideration,
for such minimum consideration as may be required by applicable law, or for such
other consideration as may be specified by the grant.
6.10
Performance
Goals.
Awards of Restricted Stock, Restricted Stock Units,
Performance Award and Other Awards (whether relating to cash or shares of Common
Stock) under the Plan may be made subject to the attainment of Performance Goals
relating to one or more business criteria which, where applicable, shall be
within the meaning of Section 162(m) of the Code and consist of one or more or
any combination of the following criteria: cash flow; cost;
revenues; sales; ratio of debt to debt plus equity; net borrowing,
credit quality or debt ratings; profit before tax; economic profit; earnings
before interest and taxes; earnings before interest, taxes, depreciation and
amortization; gross margin; earnings per share (whether on a pre-tax, after-tax,
operational or other basis); operating earnings; capital expenditures; expenses
or expense levels; economic value added; ratio of operating earnings to capital
spending or any other operating ratios; free cash flow; net profit; net sales;
net asset value per share; the accomplishment of mergers, acquisitions,
dispositions, public offerings or similar extraordinary business transactions;
sales growth; price of the Company’s Common Stock; return on assets, equity or
stockholders’
equity; market share;
inventory levels, inventory turn or shrinkage; or total return to
stockholders
(“
Performance
Criteria
”). Any Performance Criteria may be used to measure
the performance of the Company as a whole or any business unit of the Company
and may be measured relative to a peer group or index. Any
Performance Criteria may include or exclude (i) extraordinary, unusual and/or
non-recurring items of gain or loss, (ii) gains or losses on the disposition of
a business, (iii) changes in tax or accounting regulations or laws, (iv) the
effect of a merger or acquisition, as identified in the Company’s quarterly and
annual earnings releases, or (v) other similar occurrences. In all
other respects, Performance Criteria shall be calculated in accordance with the
Company’s financial statements, under generally accepted accounting principles,
or under a methodology established by the Committee prior to the issuance of an
Award which is consistently applied and identified in the audited financial
statements, including footnotes, or the Management Discussion and Analysis
section of the Company’s annual report and/or the Compensation Discussion and
Analysis section of the Company’s annual report and/or
proxy. However, to the extent Section 162(m) of the Code is
applicable, the Committee may not in any event increase the amount of
compensation payable to an individual upon the attainment of a Performance
Goal.
6.11
Tandem Awards.
The
Committee may grant two or more Incentives in one Award in the form of a “tandem
Award,” so that the right of the Participant to exercise one Incentive shall be
canceled if, and to the extent, the other Incentive is exercised. For
example, if a Stock Option and a SAR are issued in a tandem Award, and the
Participant exercises the SAR with respect to 100 shares of Common Stock, the
right of the Participant to exercise the related Stock Option shall be canceled
to the extent of 100 shares of Common Stock.
ARTICLE
7
OUTSIDE
DIRECTOR GRANTS
7.1
Automatic
Grants
. Subject to the terms and conditions of this Plan, each
Outside Director of the Company who does not elect to decline to participate in
the Plan shall automatically be granted Nonqualified Stock Options as follows:
(1) each individual who first becomes an Outside Director shall automatically be
granted a one-time grant of Nonqualified Stock Options to purchase 5,000 shares
of Common Stock, with an exercise price equal to the Fair Market
Value of the Common Stock on the Date of Grant; and (2) on January 1
st
of each
year (other than the calendar year in which the individual first becomes an
Outside Director), each Outside Director shall automatically be granted
Nonqualified Stock Options to purchase 6,000 shares of Common Stock, with an
exercise price equal to the Fair Market Value of the Common Stock on the Date of
Grant, so long as such Outside Director has not suffered a Termination of
Service as an Outside Director prior to such date. Notwithstanding
the foregoing, in the case of any grant of Nonqualified Stock Options made
pursuant to this
Section 7.1
, such
grant shall only be made if the number of shares subject to future grant under
this
Section
7.1
is sufficient to make all automatic grants required to be made
pursuant to this
Section 7.1
on such
Date of Grant.
7.2
Vesting and
Forfeiture
.
(a) Subject
to certain restrictions and conditions set forth in this Plan, any Nonqualified
Stock Options granted pursuant to this
Article 7
shall be
vested and exercisable as follows: (i) Fifty percent (50%) of the total number
of shares of Common Stock subject to a Nonqualified Stock Option shall vest and
become exercisable on the first anniversary of the Date of Grant, provided the
Outside Director is providing services to the Company or a Subsidiary on such
date; (ii) An additional twenty-five percent (25%) of the total number of shares
of Common Stock subject to a Nonqualified Stock Option shall vest and become
exercisable on the second anniversary of the Date of Grant, provided the Outside
Director is providing services to the Company or a Subsidiary on such date; and
(iii) The remaining twenty-five percent (25%) of the total number of shares of
Common Stock subject to a Nonqualified Stock Option shall vest and become
exercisable on the third anniversary of the Date of Grant, provided the Outside
Director is providing services to the Company or a Subsidiary on such
date. Notwithstanding the foregoing, in the event of an Outside
Director’s Termination of Service due to his or her death, all unvested
Nonqualified Stock Options shall immediately become one hundred percent (100%)
vested and exercisable.
(b) Except
as otherwise provided herein, each Outside Director’s Nonqualified Stock Options
granted pursuant to this
Article 7
shall
terminate and be forfeited on the first to occur of the following: (i) 5 p.m. on
the date immediately preceding the tenth (10
th
)
anniversary of such Nonqualified Stock Option’s Date of Grant; (ii) the date of
his or her Termination of Service for any reason other than death, to the extent
such Nonqualified Stock Options are unvested on the date of his or her
Termination of Service; and (iii) to the extent such Nonqualified Stock Options
are vested, on the first anniversary of his or her Termination of Service for
any reason other than death.
ARTICLE
8
AWARD
PERIOD; VESTING
8.1
Award
Period.
Subject to the other provisions of this Plan, the
Committee may, in its discretion, provide that an Incentive may not be exercised
in whole or in part for any period or periods of time or beyond any date
specified in the Award Agreement. Except as provided in the Award
Agreement, an Incentive may be exercised in whole or in part at any time during
its term. The Award Period for an Incentive shall be reduced or
terminated upon Termination of Service. No Incentive granted under
the Plan may be exercised at any time after the end of its Award
Period. No portion of any Incentive may be exercised after the
expiration of ten (10) years from its Date of Grant. However, if an
Employee owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than ten percent (10%) of the combined voting power of
all classes of stock of the Company (or any parent or Subsidiary) and an
Incentive Stock Option is granted to such Employee, the term of such Incentive
Stock Option (to the extent required by the Code at the time of grant) shall be
no more than five (5) years from the Date of Grant.
8.2
Vesting.
(a)
General.
Except as
otherwise provided by
Section 8.2(b)
, the
Committee, in its sole discretion, may determine that an Incentive will be
immediately vested in whole or in part, or that all or any portion may not be
vested until a date, or dates, subsequent to its Date of Grant, or until the
occurrence of one or more specified events, subject in any case to the terms of
the Plan. If the Committee imposes conditions upon vesting, then,
except as otherwise provided by
Section 8.2(b)
,
subsequent to the Date of Grant, the Committee may, in its sole discretion,
accelerate the date on which all or any portion of the Incentive may be vested;
provided, however, that shares of Common Stock underlying all or any portion of
a Nonqualified Stock Option or Incentive Stock Option for which the Committee
accelerates the vesting date other than in the event of the Participant’s death,
Total and Permanent Disability or Retirement, or the occurrence of a Change in
Control shall be Exempt Shares.
(b)
Full Value Award
Vesting.
Except as otherwise provided herein, the Committee
must grant all Full Value Awards in accordance with the following
provisions:
(i) All
Full Value Awards granted by the Committee that constitute Performance Awards
must vest no earlier than one (1) year after the Date of Grant.
(ii) All
Full Value Awards granted by the Committee that constitute Tenure Awards must
vest no earlier than over the three (3) year period commencing on the Date of
Grant on a pro rata basis.
(iii) The
Committee may not accelerate the date on which all or any portion of a Full
Value Award may be vested or waive the Restriction Period on a Full Value Award
except upon the Participant's death, Total and Permanent Disability or
Retirement or the occurrence of a Change in Control.
Notwithstanding
the foregoing, the Committee may, in its sole discretion, grant Full Value
Awards with more favorable vesting provisions than set forth in this
Section 8.2(b)
or
accelerate the vesting or waive the Restriction Period for Full Value Awards at
any time, provided that the shares of Common Stock subject to such Awards shall
be Exempt Shares.
ARTICLE
9
EXERCISE
OR CONVERSION OF INCENTIVE
9.1
In General
. A
vested Incentive may be exercised or converted, during its Award Period, subject
to limitations and restrictions set forth in the Award
Agreement
9.2
Securities Law and Exchange
Restrictions.
In no event may an Incentive be exercised or
shares of Common Stock be issued pursuant to an Award if a necessary listing or
quotation of the shares of Common Stock on a stock exchange or inter-dealer
quotation system or any registration under state or federal securities laws
required under the circumstances has not been accomplished.
9.3 Exercise
of Stock Option.
(a)
In General.
If a
Stock Option is exercisable prior to the time it is vested, the Common Stock
obtained on the exercise of the Stock Option shall be Restricted Stock which is
subject to the applicable provisions of the Plan and the Award
Agreement. If the Committee imposes conditions upon exercise, then
subsequent to the Date of Grant, the Committee may, in its sole discretion,
accelerate the date on which all or any portion of the Stock Option may be
exercised. No Stock Option may be exercised for a
fractional share of Common Stock. The granting of a Stock Option
shall impose no obligation upon the Participant to exercise that Stock
Option.
(b)
Notice and
Payment.
Subject to such administrative regulations as the
Committee may from time to time adopt, a Stock Option may be exercised by the
delivery of notice (in writing, electronically, or telephonically) to the
Committee (or such person or persons designated by the Committee) setting forth
the number of shares of Common Stock with respect to which the Stock Option is
to be exercised (the “
Exercise
Notice
”). The date of exercise (the “
Exercise
Date
”) with respect to any Stock Option shall be the date that the
Participant has delivered both the Exercise Notice and consideration to the
Company with a value equal to the total Option Price of the shares to
be purchased,
plus any employment tax withholding
or other tax payment due with respect to such Award,
payable as provided
in the Award Agreement, which may provide for payment in any one or more of the
following ways: (a) cash or check, bank draft, or money order payable
to the order of the Company
and in U.S.
dollars
, (b) Common Stock (including Restricted Stock) owned by the
Participant on the Exercise Date, valued at its Fair Market Value on the
Exercise Date, (c) by delivery (including by FAX or electronic transmission) to
the Company or its designated agent of an executed irrevocable option exercise
form (or, to the extent permitted by the Company, exercise instructions, which
may be communicated in writing, telephonically, or electronically) together with
irrevocable instructions from the Participant to a broker or dealer, reasonably
acceptable to the Company, to sell certain of the shares of Common Stock
purchased upon exercise of the Stock Option or to pledge such shares as
collateral for a loan and promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay such purchase price, and/or (d) in any other form
of valid consideration that is acceptable to the Committee in its sole
discretion. In the event that shares of Restricted Stock are tendered
as consideration for the exercise of a Stock Option, a number of shares of
Common Stock issued upon the exercise of the Stock Option equal to the number of
shares of Restricted Stock used as consideration therefor shall be subject to
the same restrictions and provisions as the Restricted Stock so
tendered. If the Participant fails to deliver the consideration
described in this
Section 9.3(b)
within
three (3) business days of the date of the Exercise Notice, then the Exercise
Notice shall be null and void and the Company will have no obligation to deliver
any shares of Common Stock to the Participant in connection with such Exercise
Notice.
(c)
Issuance of
Certificate.
Except as otherwise provided in
Section 6.4
hereof
(with respect to shares of Restricted Stock) or in the applicable Award
Agreement, upon payment of all amounts due from the Participant, the Company
shall cause the Common Stock then being purchased to be registered in
the Participant’s name (or the person exercising the Participant’s
Stock Option in the event of his or her death), but shall not issue certificates
for the Common Stock unless the Participant requests delivery of the
certificates for the Common Stock, in writing in accordance with the procedures
established by the Committee. The Company shall deliver certificates
to the Participant (or the person exercising the Participant’s Stock
Option in the event of his or her death) as soon as administratively practicable
following the Company’s receipt of a written request from the Participant for
delivery of the certificates. Notwithstanding the forgoing, if the
Participant has exercised an Incentive Stock Option, the Company may at its
option retain physical possession of the certificate evidencing the shares
acquired upon exercise until the expiration of the holding periods described in
Section 422(a)(1) of the Code. Any obligation of the Company to
deliver shares of Common Stock shall, however, be subject to the condition that,
if at any time the Committee shall determine in its discretion that the listing,
registration, or qualification of the Stock Option or the Common Stock upon any
securities exchange or inter-dealer quotation system or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary as a condition of, or in connection with, the Stock Option or the
issuance or purchase of shares of Common Stock thereunder, the Stock Option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent, or approval shall have been effected or obtained free of
any conditions not reasonably acceptable to the Committee.
(d)
Failure to
Pay.
Except as may otherwise be provided in an Award
Agreement, if the Participant fails to pay for any of the Common Stock specified
in such notice or fails to accept delivery thereof, that portion of the
Participant’s Stock Option and right to purchase such Common Stock may be
forfeited by the Participant, in the Committee’s sole
discretion.
9.4
SARs.
Subject to
the conditions of this
Section 9.4
and such
administrative regulations as the Committee may from time to time adopt, a SAR
may be exercised by the delivery (including by FAX) of written notice to the
Committee setting forth the number of shares of Common Stock with respect to
which the SAR is to be exercised and the date of exercise thereof (the “
Exercise
Date
”) which shall be at least three (3) days after giving such notice
unless an earlier time shall have been mutually agreed upon. Subject to the
terms of the Award Agreement and only if permissible under Section 409A of the
Code and the regulations or other guidance issued thereunder (or, if not so
permissible, at such time as permitted by Section 409A of the Code and the
regulations or other guidance issued thereunder), the Participant shall receive
from the Company in exchange therefor in the discretion of the Committee, and
subject to the terms of the Award Agreement:
(i) cash
in an amount equal to the excess (if any) of the Fair Market Value (as of the
date of the exercise, or if provided in the Award Agreement, conversion, of the
SAR) per share of Common Stock over the SAR Price per share specified in such
SAR, multiplied by the total number of shares of Common Stock of the SAR being
surrendered;
(ii) that
number of shares of Common Stock having an aggregate Fair Market Value (as of
the date of the exercise, or if provided in the Award Agreement, conversion, of
the SAR) equal to the amount of cash otherwise payable to the Participant, with
a cash settlement to be made for any fractional share interests; or
(iii) the
Company may settle such obligation in part with shares of Common Stock and in
part with cash.
The
distribution of any cash or Common Stock pursuant to the foregoing sentence
shall be made at such time as set forth in the Award Agreement.
9.5
Disqualifying Disposition of
Incentive Stock Option.
If shares of Common Stock acquired
upon exercise of an Incentive Stock Option are disposed of by a Participant
prior to the expiration of either two (2) years from the Date of Grant of such
Stock Option or one (1) year from the transfer of shares of Common Stock to the
Participant pursuant to the exercise of such Stock Option, or in any other
disqualifying disposition within the meaning of Section 422 of the Code, such
Participant shall notify the Company in writing of the date and terms of such
disposition. A disqualifying disposition by a Participant shall not
affect the status of any other Stock Option granted under the Plan as an
Incentive Stock Option within the meaning of Section 422 of the
Code.
ARTICLE
10
AMENDMENT
OR DISCONTINUANCE
Subject
to the limitations set forth in this
Article 10
, the Board
may at any time and from time to time, without the consent of the Participants,
alter, amend, revise, suspend, or discontinue the Plan in whole or in part;
provided, however, that no amendment for which stockholder approval is required
either (i) by any securities exchange or inter-dealer quotation system on which
the Common Stock is listed or traded or (ii) in order for the Plan and
Incentives awarded under the Plan to continue to comply with Sections 162(m),
421, and 422 of the Code, including any successors to such Sections, or other
applicable law, shall be effective unless such amendment shall be approved by
the requisite vote of the stockholders of the Company entitled to vote
thereon. Notwithstanding the foregoing, no amendment to the Plan that
increases the benefits accrued to Participants, increases the maximum number of
shares of Common Stock which may be issued under the Plan, reprices any Stock
Options or modifies the requirements for participation in the Plan shall be
effective unless such amendment shall be approved by the stockholders of the
Company entitled to vote thereon in the manner set forth in the Company’s
articles of incorporation and bylaws. Any amendments made pursuant to this
Article 10
shall, to
the extent deemed necessary or advisable by the Committee, be applicable to any
outstanding Incentives theretofore granted under the Plan, notwithstanding any
contrary provisions contained in any Award Agreement. In the event of
any such amendment to the Plan, the holder of any Incentive outstanding under
the Plan shall, upon request of the Committee and as a condition to the
exercisability thereof, execute a conforming amendment in the form prescribed by
the Committee to any Award Agreement relating
thereto. Notwithstanding anything contained in this Plan to the
contrary, unless required by law, no action contemplated or permitted by this
Article 10
shall adversely affect any rights of Participants or obligations of the Company
to Participants with respect to any Incentive theretofore granted under the Plan
without the consent of the affected
Participant. For purposes of clarity, any
amendment to an existing Award resulting in a less favorable tax consequence to
a Participant under the Award shall not be considered to adversely affect the
rights of the
Participant.
ARTICLE
11
TERM
The Plan
shall be effective from the date that this Plan is approved by the
Board. Unless sooner terminated by action of the Board, the Plan will
terminate on
May
21, 2018
,
but Incentives
granted before that date will continue to be effective in accordance with their
terms and conditions.
ARTICLE
12
CAPITAL
ADJUSTMENTS
In the
event that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization, stock
split, reverse stock split, rights offering, reorganization, merger,
consolidation, split-up, spin-off, split-off, combination, subdivision,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
affects the fair value of an Award, then the Committee shall adjust any or all
of the following so that the fair value of the Award immediately after the
transaction or event is equal to the fair value of the Award immediately prior
to the transaction or event (i) the number of shares and type of Common Stock
(or the securities or property) which thereafter may be made the subject of
Awards, (ii) the number of shares and type of Common Stock (or other securities
or property) subject to outstanding Awards, (iii) the number of shares and type
of Common Stock (or other securities or property) specified as the annual
per-participant limitation under
Section 5.1
of the
Plan, (iv) the Option Price of each outstanding Award, (v) the amount, if any,
the Company pays for forfeited shares of Common Stock in accordance with
Section 6.4
, and (vi)
the number of or SAR Price of shares of Common Stock then subject to outstanding
SARs previously granted and unexercised under the Plan to the end that the same
proportion of the Company’s issued and outstanding shares of Common Stock in
each instance shall remain subject to exercise at the same aggregate SAR Price;
provided however, that the number of shares of Common Stock (or other securities
or property) subject to any Award shall always be a whole
number. Notwithstanding the foregoing, no such adjustment shall be
made or authorized to the extent that such adjustment would cause the Plan or
any Stock Option to violate Section 422 of the Code or Section 409A of the
Code. Such adjustments shall be made in accordance with the rules of
any securities exchange, stock market, or stock quotation system to which the
Company is subject.
The
computation of any adjustment under this
Article
12
shall be conclusive and shall be binding upon each affected
Participant To the extent required by applicable law, upon the
occurrence of any such adjustment, the Company shall provide notice to each
affected Participant of its computation of such adjustment.
ARTICLE
13
RECAPITALIZATION,
MERGER AND CONSOLIDATION
13.1
No Effect on Company’s
Authority.
The existence of this Plan and Incentives granted
hereunder shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, or other changes in the Company’s capital structure and its
business, or any Change in Control, or any merger or consolidation of the
Company, or any issuance of bonds, debentures, preferred or preference stocks
ranking prior to or otherwise affecting the Common Stock or the rights thereof
(or any rights, options, or warrants to purchase same), 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.
13.2
Conversion of Incentives Where
Company Survives.
Subject to any required action by the
stockholders and except as otherwise provided by
Section 13.4
hereof
or as may be required to comply with Section 409A of the Code and the
regulations or other guidance issued thereunder, if the Company shall be the
surviving or resulting corporation in any merger, consolidation or share
exchange, any Incentive granted hereunder shall pertain to and apply to the
securities or rights (including cash, property, or assets) to which a holder of
the number of shares of Common Stock subject to the Incentive would have been
entitled.
13.3
Exchange or Cancellation of
Incentives Where Company Does Not Survive.
Except as otherwise
provided by
Section
13.4
hereof or as may be required to comply with Section 409A of the Code
and the regulations or other guidance issued thereunder, in the event of any
merger, consolidation or share exchange pursuant to which the Company is not the
surviving or resulting corporation, there shall be substituted for each share of
Common Stock subject to the unexercised portions of outstanding Incentives, that
number of shares of each class of stock or other securities or that amount of
cash, property, or assets of the surviving, resulting or consolidated company
which were distributed or distributable to the stockholders of the Company in
respect to each share of Common Stock held by them, such outstanding Incentives
to be thereafter exercisable for such stock, securities, cash, or property in
accordance with their terms.
13.4
Cancellation of
Incentives.
Notwithstanding the provisions of
Sections 13.2 and
13.3
hereof, and except as may be required to comply with
Section 409A of the Code and the regulations or other guidance issued
thereunder, all Incentives granted hereunder may be canceled by the Company, in
its sole discretion, as of the effective date of any Change in Control, merger,
consolidation or share exchange, or any issuance of bonds, debentures, preferred
or preference stocks ranking prior to or otherwise affecting the Common Stock or
the rights thereof (or any rights, options, or warrants to purchase same), or of
any proposed sale of all or substantially all of the assets of the Company, or
of any dissolution or liquidation of the Company, by either:
(a) giving
notice to each holder thereof or his personal representative of its intention to
cancel those Incentives for which the issuance of shares of Common Stock
involved payment by the Participant for such shares, and permitting the purchase
during the thirty (30) day period next preceding such effective date of any or
all of the shares of Common Stock subject to such outstanding Incentives,
including in the Committee’s discretion some or all of the shares as to which
such Incentives would not otherwise be vested and exercisable; or
(b) in
the case of Incentives that are either (i) settled only in shares of Common
Stock, or (ii) at the election of the Participant, settled in shares of Common
Stock, paying the holder thereof an amount equal to a reasonable estimate of the
difference between the net amount per share payable in such transaction or as a
result of such transaction, and the price per share of such Incentive to be paid
by the Participant (hereinafter the “
Spread
”),
multiplied by the number of shares subject to the Incentive. In cases
where the shares constitute, or would after exercise, constitute Restricted
Stock, the Company, in its discretion, may include some or all of those shares
in the calculation of the amount payable hereunder. In estimating the
Spread, appropriate adjustments to give effect to the existence of the
Incentives shall be made, such as deeming the Incentives to have been exercised,
with the Company receiving the exercise price payable thereunder, and treating
the shares receivable upon exercise of the Incentives as being outstanding in
determining the net amount per share. In cases where the proposed
transaction consists of the acquisition of assets of the Company, the net amount
per share shall be calculated on the basis of the net amount receivable with
respect to shares of Common Stock upon a distribution and liquidation by the
Company after giving effect to expenses and charges, including but not limited
to taxes, payable by the Company before such liquidation could be
completed.
(c) An
Award that by its terms would be fully vested or exercisable upon a Change in
Control will be considered vested or exercisable for purposes of
Section 13.4(a)
hereof.
ARTICLE
14
LIQUIDATION
OR DISSOLUTION
Subject
to
Section 13.4
hereof, in case the Company shall, at any time while any Incentive under this
Plan shall be in force and remain unexpired, (i) sell all or substantially all
of its property, or (ii) dissolve, liquidate, or wind up its affairs, then each
Participant shall be entitled to receive, in lieu of each share of Common Stock
of the Company which such Participant would have been entitled to receive under
the Incentive, the same kind and amount of any securities or assets as may be
issuable, distributable, or payable upon any such sale, dissolution,
liquidation, or winding up with respect to each share of Common Stock of the
Company. If the Company shall, at any time prior to the expiration of
any Incentive, make any partial distribution of its assets, in the nature of a
partial liquidation, whether payable in cash or in kind (but excluding the
distribution of a cash dividend payable out of earned surplus and designated as
such) and an adjustment is determined by the Committee to be appropriate to
prevent the dilution of the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall, in such manner as it may
deem equitable, make such adjustment in accordance with the provisions of
Article 12
hereof.
ARTICLE
15
INCENTIVES
IN SUBSTITUTION FOR
INCENTIVES
GRANTED BY OTHER ENTITIES
Incentives
may be granted under the Plan from time to time in substitution for similar
instruments held by employees, independent contractors or directors of a
corporation, partnership, or limited liability company who become or are about
to become Employees, Contractors or Outside Directors of the Company or any
Subsidiary as a result of a merger or consolidation of the employing corporation
with the Company, the acquisition by the Company of equity of the employing
entity, or any other similar transaction pursuant to which the Company becomes
the successor employer. The terms and conditions of the substitute
Incentives so granted may vary from the terms and conditions set forth in this
Plan to such extent as the Committee at the time of grant may deem appropriate
to conform, in whole or in part, to the provisions of the Incentives in
substitution for which they are granted.
ARTICLE
16
MISCELLANEOUS
PROVISIONS
16.1
Investment
Intent.
The Company may require that there be presented to and
filed with it by any Participant under the Plan, such evidence as it may deem
necessary to establish that the Incentives granted or the shares of Common Stock
to be purchased or transferred are being acquired for investment and not with a
view to their distribution.
16.2
No Right to Continued
Employment.
Neither the Plan nor any Incentive granted under
the Plan shall confer upon any Participant any right with respect to continuance
of employment by the Company or any Subsidiary.
16.3
Indemnification of Board and
Committee.
No member of the Board or the Committee, nor any
officer or Employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board and the Committee, each officer of the Company, and each
Employee of the Company acting on behalf of the Board or the Committee shall, to
the extent permitted by law, be fully indemnified and protected by the Company
in respect of any such action, determination, or
interpretation.
16.4
Effect of the
Plan.
Neither the adoption of this Plan nor any action of the
Board or the Committee shall be deemed to give any person any right to be
granted an Award or any other rights except as may be evidenced by an Award
Agreement, or any amendment thereto, duly authorized by the Committee and
executed on behalf of the Company, and then only to the extent and upon the
terms and conditions expressly set forth therein.
16.5
Compliance With Other Laws and
Regulations.
Notwithstanding anything contained herein to the
contrary, the Company shall not be required to sell or issue shares of Common
Stock under any Incentive if the issuance thereof would constitute a violation
by the Participant or the Company of any provisions of any law or regulation of
any governmental authority or any national securities exchange or inter-dealer
quotation system or other forum in which shares of Common Stock are quoted or
traded (including without limitation Section 16 of the 1934 Act and Section
162(m) of the Code); and, as a condition of any sale or issuance of shares of
Common Stock under an Incentive, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation. The Plan, the grant and
exercise of Incentives hereunder, and the obligation of the Company to sell and
deliver shares of Common Stock, shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required.
16.6
Tax
Requirements.
The Company or, if applicable, any Subsidiary
(for purposes of this
Section 16.6
, the
term “
Company
”
shall be deemed to include any applicable Subsidiary), shall have the right to
deduct from all amounts paid in cash or other form in connection with the Plan,
any Federal, state, local, or other taxes required by law to be withheld in
connection with an Award granted under this Plan. The Company may, in
its sole discretion, also require the Participant receiving shares of Common
Stock issued under the Plan to pay the Company the amount of any taxes that the
Company is required to withhold in connection with the Participant’s income
arising with respect to the Award. Such payments shall be required to
be made when requested by the Company and may be required to be made prior to
the delivery of any certificate representing shares of Common
Stock. Such payment may be made (i) by the delivery of cash to the
Company in an amount that equals or exceeds (to avoid the issuance of fractional
shares under (iii) below) the required tax withholding obligations of the
Company; (ii) if the Company, in its sole discretion, so consents in writing,
the actual delivery by the exercising Participant to the Company of shares of
Common Stock, which shares so delivered have an aggregate Fair Market Value that
equals or exceeds (to avoid the issuance of fractional shares under (iii) below)
the required tax withholding payment; (iii) if the Company, in its sole
discretion, so consents in writing, the Company’s withholding of a number of
shares to be delivered upon the exercise of the Stock Option, which shares so
withheld have an aggregate Fair Market Value that equals or exceeds the required
tax withholding payment; or (iv) any combination of (i), (ii), or
(iii). To the extent the number of shares delivered in accordance
with
Section 16.6(i)
or (ii)
or withheld in accordance with
Section 16.6(iii)
exceeds the required tax withholding due, the Company shall make a cash payment
to the Participant equal to the excess amount as soon as administratively
practicable thereafter. The Company may, in its sole discretion,
withhold any such taxes from any other cash remuneration otherwise paid by the
Company to the Participant. The Committee may in the Award Agreement
impose any additional tax
, social insurance,
fringe benefit, payment on account
requirements or provisions that the
Committee deems necessary or desirable.
16.7
Assignability
. Incentive
Stock Options may not be transferred, assigned, pledged, hypothecated or
otherwise conveyed or encumbered other than by will or the laws of descent and
distribution and may be exercised during the lifetime of the
Participant only by the Participant or the Participant’s legally authorized
representative, and each Award Agreement in respect of an Incentive Stock Option
shall so provide. The designation by a Participant of a beneficiary will not
constitute a transfer of the Stock Option. The Committee may waive or
modify any limitation contained in the preceding sentences of this
Section 16.7
that is
not required for compliance with Section 422 of the Code.
Except as
otherwise provided herein, Nonqualified Stock Options and SARs may
not be transferred, assigned, pledged, hypothecated or otherwise conveyed or
encumbered other than by will or the laws of descent and distribution or in
accordance with the terms of a qualified domestic relations
order. The Committee may, in its discretion, authorize all or a
portion of a Nonqualified Stock Option or SAR to be granted to a
Participant on terms which permit transfer by such Participant to (i) the spouse
(or former spouse), children or grandchildren of the Participant (“
Immediate Family
Members
”), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, (iii) a partnership in which the only partners are (1)
such Immediate Family Members and/or (2) entities which are controlled by the
Participant and/or Immediate Family Members, (iv) an entity exempt from federal
income tax pursuant to Section 501(c)(3) of the Code or any successor provision,
or (v) a split interest trust or pooled income fund described in Section
2522(c)(2) of the Code or any successor provision,
provided that
(x)
there shall be no consideration for any such transfer, (y) the Award Agreement
pursuant to which such Nonqualified Stock Option or SAR is granted must be
approved by the Committee and must expressly provide for transferability in a
manner consistent with this Section, and (z) subsequent transfers of transferred
Nonqualified Stock Options or SARs shall be prohibited except those by will or
the laws of descent and distribution.
Following
any transfer, any such Nonqualified Stock Option and SAR shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of
Articles 9, 10, 12, 14 and
16
hereof the term “Participant” shall be deemed to include the
transferee. The events of Termination of Service shall continue to be
applied with respect to the original Participant, following which the
Nonqualified Stock Options and SARs shall be exercisable or convertible by the
transferee only to the extent and for the periods specified in the Award
Agreement. The Committee and the Company shall have no obligation to
inform any transferee of a Nonqualified Stock Option or SAR of any expiration,
termination, lapse or acceleration of such Stock Option or SAR. The
Company shall have no obligation to register with any federal or state
securities commission or agency any Common Stock issuable or issued under a
Nonqualified Stock Option or SAR that has been transferred by a Participant
under this
Section
16.7
.
16.8
Use of
Proceeds.
Proceeds from the sale of shares of Common Stock
pursuant to Incentives granted under this Plan shall constitute general funds of
the Company.
16.9
Legend.
Each
certificate representing shares of Restricted Stock issued to a Participant
shall bear the following legend, or a similar legend deemed by the Company to
constitute an appropriate notice of the provisions hereof (any such certificate
not having such legend shall be surrendered upon demand by the Company and so
endorsed):
On the
face of the certificate:
“Transfer
of this stock is restricted in accordance with conditions printed on the reverse
of this certificate.”
On the
reverse:
“The
shares of stock evidenced by this certificate are subject to and transferable
only in accordance with that certain Fossil, Inc. 2008 Long-Term Incentive Plan,
a copy of which is on file at the principal office of the Company in Dallas,
Texas. No transfer or pledge of the shares evidenced hereby may be
made except in accordance with and subject to the provisions of said
Plan. By acceptance of this certificate, any holder, transferee or
pledgee hereof agrees to be bound by all of the provisions of said
Plan.”
The
following legend shall be inserted on a certificate evidencing Common Stock
issued under the Plan if the shares were not issued in a transaction registered
under the applicable federal and state securities laws:
“Shares
of stock represented by this certificate have been acquired by the holder for
investment and not for resale, transfer or distribution, have been issued
pursuant to exemptions from the registration requirements of applicable state
and federal securities laws, and may not be offered for sale, sold or
transferred other than pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to the
Company.”
A copy of
this Plan shall be kept on file in the principal office of the Company in
Dallas, Texas.
***************
IN
WITNESS WHEREOF, the Company has caused this instrument to be executed as of May
21, 2008, by its Chief Executive Officer and Secretary pursuant to prior action
taken by the Board.
FOSSIL,
INC.
By: _________________
Name:_________________
Title: _________________
Attest:
____________________________________