Exhibit 99.1
Associated
Banc-Corp
2010 Incentive Compensation Plan
Table of
Contents
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Page
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Section 1.
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Establishment, Purpose and Duration
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1
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1.1.
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Effective Date and Purpose
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1
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1.2.
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Duration of the Plan
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1
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Section
2.
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Definitions
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1
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2.1.
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Annual Incentive Award
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1
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2.2.
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Award
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1
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2.3.
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Award Agreement
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1
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2.4.
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Beneficiary
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1
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2.5.
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Board
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1
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2.6.
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Bonus Opportunity
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1
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2.7.
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Cause
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1
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2.8.
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Change in Control
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2
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2.9.
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Code
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3
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2.10.
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Committee
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3
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2.11.
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Common Stock
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3
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2.12.
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Company
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3
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2.13.
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Compensation Limitations
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3
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2.14.
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Covered Employee
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4
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2.15.
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Deferred Compensation Award
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4
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2.16.
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Deferred Stock
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4
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2.17.
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Disability
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4
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2.18.
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Dividend Equivalent
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4
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2.19.
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Early Retirement
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4
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2.20.
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Effective Date
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4
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2.21.
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Eligible Person
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4
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2.22.
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Employer
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4
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2.23.
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Employment Agreement
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4
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2.24.
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Exchange Act
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4
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2.25.
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Exercise Date
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4
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2.26.
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Fair Market Value
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4
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2.27.
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Grant Date
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5
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2.28.
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Grantee
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5
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2.29.
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Incentive Stock Option
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5
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2.30.
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including
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5
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2.31.
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Non-Qualified Stock Option
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5
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2.32.
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Normal Retirement
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5
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2.33.
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Option
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5
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2.34.
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Option Price
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5
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2.35.
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Performance-Based Exception
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5
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2.36.
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Performance Goal
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5
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i
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Page
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2.37.
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Performance Measures
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5
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2.38.
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Performance Period
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5
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2.39.
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Performance Unit
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5
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2.40.
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Person
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6
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2.41.
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Plan
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6
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2.42.
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Restricted Stock
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6
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2.43.
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Restricted Stock Unit or RSU
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6
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2.44.
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Restrictions
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6
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2.45.
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Rule 16b-3
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6
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2.46.
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SEC
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6
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2.47.
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Section 16 Non-Employee Director
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6
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2.48.
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Section 16 Person
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6
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2.49.
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Settlement Date
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6
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2.50.
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Share
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6
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2.51.
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Stock Appreciation Right or SAR
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6
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2.52.
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Strike Price
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6
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2.53.
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Subsidiary
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6
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2.54.
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Substitute Award
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6
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2.55.
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Term
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6
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2.56.
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Termination of Service
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6
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2.57.
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Year
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7
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Section
3.
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Administration
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7
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3.1.
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Committee
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7
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3.2.
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Powers of the Committee
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7
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Section
4.
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Shares Subject to the Plan and Adjustments
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9
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4.1.
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Number of Shares Available for Grants
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9
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4.2.
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Adjustments in Authorized Shares and Awards
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10
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4.3.
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Compliance With Code Section 162(m)
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10
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4.4.
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Performance Based Exception Under Code Section 162(m)
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11
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Section
5.
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Eligibility and General Conditions of Awards
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12
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5.1.
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Eligibility
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12
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5.2.
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Award Agreement
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12
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5.3.
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General Terms and Termination of Service
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12
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5.4.
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Non-Transferability of Awards
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14
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5.5.
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Cancellation and Rescission of Awards
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15
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5.6.
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Substitute Awards
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15
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5.7.
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Exercise by Non-Grantee
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15
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5.8.
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No Cash Consideration for Awards
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15
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Section
6.
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Stock Options
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15
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6.1.
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Grant of Options
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15
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6.2.
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Award Agreement
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16
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ii
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Page
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6.3.
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Option Price
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16
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6.4.
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Vesting
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16
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6.5.
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Grant of Incentive Stock Options
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16
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6.6.
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Exercise and Payment
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17
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Section
7.
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Stock Appreciation Rights
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18
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7.1.
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Grant of SARs
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18
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7.2.
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Award Agreements
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18
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7.3.
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Strike Price
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18
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7.4.
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Vesting
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18
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7.5.
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Exercise and Payment
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18
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7.6.
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Grant Limitations
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18
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Section
8.
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Restricted Stock
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18
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8.1.
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Grant of Restricted Stock
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18
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8.2.
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Award Agreement
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18
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8.3.
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Consideration for Restricted Stock
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19
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8.4.
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Vesting
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19
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8.5.
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Effect of Forfeiture
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19
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8.6.
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Escrow; Legends
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19
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8.7.
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Shareholder Rights in Restricted Stock
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19
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Section
9.
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Restricted Stock Units
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19
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9.1.
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Grant of Restricted Stock Units
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19
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9.2.
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Award Agreement
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19
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9.3.
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Crediting Restricted Stock Units
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19
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Section
10.
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Deferred Stock
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20
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10.1.
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Grant of Deferred Stock
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20
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10.2.
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Award Agreement
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20
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10.3.
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Deferred Stock Elections
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20
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10.4.
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Deferral Account
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21
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Section
11.
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Performance Units
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21
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11.1.
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Grant of Performance Units
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21
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11.2.
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Value/Performance Goals
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22
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11.3.
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Earning of Performance Units
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22
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11.4.
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Adjustment on Change of Position
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22
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Section
12.
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Annual Incentive Awards
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22
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12.1.
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Annual Incentive Awards
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22
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12.2.
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Determination of Amount of Annual Incentive Awards
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22
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12.3.
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Time of Payment of Annual Incentive Awards
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23
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12.4.
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Form of Payment of Annual Incentive Awards
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23
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Section
13.
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Dividend Equivalents
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23
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iii
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Page
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Section
14.
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Change in Control
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23
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14.1.
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Acceleration of Vesting
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23
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14.2.
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Special Treatment in the Event of a Change in Control
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24
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Section
15.
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Amendments and Termination
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24
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15.1.
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Amendment and Termination
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24
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15.2.
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Previously Granted Awards
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24
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Section
16.
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Beneficiary Designation
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24
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Section
17.
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Withholding
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25
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17.1.
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Required Withholding
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25
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17.2.
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Notification under Code Section 83(b)
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25
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Section
18.
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General Provisions
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25
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18.1.
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Governing Law
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25
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18.2.
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Severability
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25
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18.3.
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Successors
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26
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18.4.
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Requirements of Law
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26
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18.5.
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Securities Law Compliance
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26
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18.6.
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Code Section 409A
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26
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18.7.
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Mitigation of Excise Tax
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27
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18.8.
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No Rights as a Shareholder
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27
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18.9.
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Awards Not Taken into Account for Other Benefits
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27
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18.10.
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Employment Agreement Supersedes Award Agreement
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27
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18.11.
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Non-Exclusivity of Plan
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27
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18.12.
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No Trust or Fund Created
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27
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18.13.
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No Right to Continued Employment or Awards
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28
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18.14.
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Military Service
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28
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18.15.
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Construction
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28
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18.16.
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No Fractional Shares
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28
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18.17.
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Plan Document Controls
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28
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18.18.
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Compensation Limitations
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28
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iv
Associated
Banc-Corp
2010
Incentive Compensation Plan
Section
1.
Establishment,
Purpose and Duration
1.1.
Effective Date and
Purpose
.
Associated Banc-Corp, a Wisconsin
corporation (the
Company
), hereby establishes
the Associated Banc-Corp 2010 Incentive Compensation Plan (the
Plan
). The Plan is intended to (a) align
the interests of key employees and consultants of the Company
and its subsidiaries, and directors of the Company, with the
interests of the Companys shareholders by encouraging
stock ownership; (b) provide long-term stock and cash
incentives and rewards to those individuals who are in a
position to contribute to the long-term success and growth of
the Company without encouraging participants to take unnecessary
and excessive risks; and (c) assist the Company in
attracting and retaining exceptionally qualified employees,
consultants and directors upon whom, in large measure, the
sustained progress, growth and profitability of the Company
depend. The Plan was approved by the Companys Board of
Directors (the
Board
) on March 1, 2010,
subject to approval by the Companys shareholders, and, if
approved by shareholders, the Plan shall become effective on
April 28, 2010 (the
Effective Date
).
1.2.
Duration of the
Plan
.
The Plan shall commence on the
Effective Date and shall remain in effect, subject to the right
of the Committee to amend or terminate the Plan at any time
pursuant to Section 15 hereof, until the earlier to occur
of (a) the date all Shares subject to the Plan shall have
been purchased or acquired and the Restrictions on all
Restricted Stock granted under the Plan shall have lapsed,
according to the Plans provisions, and (b) ten
(10) years from the Effective Date of the Plan. The
termination of the Plan shall not adversely affect any Awards
outstanding on the date of such termination.
Section
2.
Definitions
As used in the Plan, in addition to terms elsewhere defined in
the Plan, the following terms shall have the meanings set forth
below:
2.1.
Annual Incentive Award
means a performance bonus determined under Section 12.
2.2.
Award
means any Option
(including a Non-Qualified Stock Option and an Incentive Stock
Option), Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Deferred Stock, Performance Unit, Substitute Award,
Share, Dividend Equivalent or Annual Incentive Award.
2.3.
Award Agreement
means
any written agreement, contract or other instrument or document
evidencing any Award granted hereunder between the Company and
the Grantee.
2.4.
Beneficiary
means the
Person designated to receive Plan benefits, if any, following a
Grantees death in accordance with Section 16.
2.5.
Board
means the Board
of Directors of the Company.
2.6.
Bonus Opportunity
means a Grantees threshold, target and maximum bonus
opportunity for a Year, provided that such bonus opportunity
shall be either (a) to the extent that the Grantee has
entered into an Employment Agreement with the Company, the
threshold, target and maximum bonus levels, if any, specified in
such Employment Agreement for such Year based on the
Grantees base salary in effect on the first day of such
Year, or (b) if there is no Employment Agreement in effect
between the Company and the Grantee as of the first day of such
Year or if the Employment Agreement does not specify such bonus
levels, the percentage of such Grantees base salary in
effect on the first day of such Year (or such later date as such
person is designated as a Grantee) as determined by the
Committee in its sole discretion within the first ninety
(90) days of such Year (or before such later date as such
person is designated as a Grantee).
2.7.
Cause
means, as
determined by the Committee, the occurrence of any one of the
following: (a) commission of an act of fraud, embezzlement
or other act of dishonesty that would reflect adversely on the
integrity, character or reputation of the Company, or that would
cause harm to its customer
1
relations, operations or business prospects; (b) breach of
a fiduciary duty owed to the Company; (c) violation or
threatening to violate a restrictive covenant agreement, such as
a non-compete, non-solicit, or non-disclosure agreement, between
an Eligible Person and any Employer; (d) unauthorized
disclosure or use of confidential information or trade secrets;
(e) violation of any lawful policies or rules of the
Company, including any applicable code of conduct;
(f) commission of criminal activity; (g) failure to
reasonably cooperate in any investigation or proceeding
concerning the Company; (h) determination by a governmental
authority or agency that bars or prohibits the Grantee from
being employed in his or her current position with the Company;
or (i) neglect or misconduct in the performance of the
Grantees duties and responsibilities, provided that he or
she did not cure such neglect or misconduct within ten
(10) days after the Company gave written notice of such
neglect or misconduct to such Grantee;
provided
,
however
, that in the event a Grantee is party to a
Employment Agreement with the Company or a Subsidiary that
contains a different definition of Cause, the definition of
Cause contained in such Employment Agreement shall be
controlling.
2.8.
Change in Control
means:
(a) with respect to Awards other than Deferred Compensation
Awards, the occurrence of any one or more of the following:
(i) any corporation, person or other entity (other than the
Company, a majority-owned subsidiary of the Company or any of
its subsidiaries, or an employee benefit plan (or related trust)
sponsored or maintained by the Company), including a
group as defined in Section 13(d)(3) of the
Exchange Act, becomes the beneficial owner of stock representing
more than thirty-five percent (35%) of the combined voting power
of the Companys then outstanding securities;
(ii) (A) consummation of the Companys merger or
consolidation with or into another corporation other than a
majority-owned subsidiary of the Company, or the sale or other
disposition of at least eighty-five percent (85%) of the
Companys assets, and (B) the persons who were the
members of the Board prior to such approval do not represent a
majority of the directors of the surviving, resulting or
acquiring entity or parent thereof; (iii) the consummation
of a plan of liquidation; or (iv) within any period of 24
consecutive months, persons who were members of the Board
immediately prior to such
24-month
period, together with persons who were first elected as
directors (other than as a result of any settlement of a proxy
or consent solicitation contest or any action taken to avoid
such a contest) during such
24-month
period by or upon the recommendation of persons who were members
of the Board immediately prior to such
24-month
period and who constituted a majority of the Board at the time
of such election, cease to constitute a majority of the Board.
(b) with respect to Deferred Compensation Awards, the
occurrence of one or more of any of the following:
(i)
A Change in the Ownership of the
Company.
A change in ownership of the Company
shall occur on the date that any one Person, or more than one
Person acting as a Group (as defined below),
acquires ownership of stock of the Company that, together with
stock held by such Person or Group, constitutes more than fifty
percent (50%) of the total fair market value or total voting
power of the stock of the Company;
provided
,
however
, that, if any one Person, or more than one Person
acting as a Group, is considered to own more than fifty percent
(50%) of the total fair market value or total voting power of
the stock of the Company, the acquisition of additional stock by
the same Person or Persons is not considered to cause a change
in the ownership of the Company.
(ii)
A Change in the Effective Control of the
Company.
A change in the effective control of the
Company occurs on the date that any one Person, or more than one
Person acting as a Group, acquires (or has acquired during the
12-month
period ending on the date of the most recent acquisition by such
Person or Persons) ownership of stock of the Company possessing
thirty-five percent (35%) or more of the total voting power of
the stock of the Company;
provided
,
however
, that,
if any one Person, or more than one Person acting as a Group, is
considered to effectively control the Company, the acquisition
of additional control of the
2
Company by the same Person or Persons is not considered a change
in the effective control of the Company.
(iii)
A Change in the Ownership of a Substantial Portion
of the Companys Assets.
A change in the
ownership of a substantial portion of the Companys assets
occurs on the date that any one Person, or more than one Person
acting as a Group, acquires (or has acquired during the
12-month
period ending on the date of the most recent acquisition by such
Person or Persons) assets from the Company that have a total
Gross Fair Market Value (as defined below) equal to eighty-five
percent (85%) or more than the total Gross Fair Market Value of
all of the assets of the Company immediately prior to such
acquisition or acquisitions;
provided
,
however
,
that, a transfer of assets by the Company is not treated as a
change in the ownership of such assets if the assets are
transferred to:
(A) a shareholder of the Company (immediately before the
asset transfer) in exchange for or with respect to its stock;
(B) an entity, fifty percent (50%) or more of the total
Fair Market Value or voting power of which is owned, directly or
indirectly, by the Company;
(C) a Person, or more than one Person acting as a Group,
that owns, directly or indirectly, fifty percent (50%) or more
of the total Fair Market Value or voting power of all the
outstanding stock of the Company; or
(D) an entity, at least fifty percent (50%) of the total
Fair Market Value or voting power of which is owned, directly or
indirectly, by a Person described in Section 2.8(b)(iii)(C).
For purposes of this Section 2.8(b):
Gross Fair Market Value
means the
value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities
associated with such assets;
Group
shall have the meaning ascribed
to such term in Treasury Regulations
Section 1.409A-3(i)(5)(v)(B), (vi)(D) or (vii)(C), as
applicable;
stock ownership shall be determined under Code
Section 409A; and
any interpretation or determination of the Committee regarding
the payment of Deferred Compensation Awards in connection with a
Change in Control shall take into account any applicable
guidance and regulations under Code Section 409A, and shall
be made with the intent to comply with Code Section 409A.
2.9.
Code
means the
Internal Revenue Code of 1986 (and any successor thereto), as
amended from time to time. References to a particular section of
the Code include references to regulations and rulings
promulgated thereunder and to any successor provisions.
2.10.
Committee
has the
meaning set forth in Section 3.1(a).
2.11.
Common Stock
means
common stock, par value $.01 per share, of the Company.
2.12.
Company
has the
meaning set forth in Section 1.1.
2.13.
Compensation Limitations
means (a) the terms and conditions of the Troubled
Asset Relief Program (
TARP
) under the
Emergency Economic Stabilization Act of 2008, as amended,
including the Interim Final Rule published by the Department of
the Treasury on June 15, 2009, and any other rules and
regulations that are applicable to the Company pursuant to its
participation in the TARP, as they may be promulgated
and/or
amended from time to time; and (b) any other compensation
limitations that may become applicable to the Company or Grantee
pursuant to laws or other rules, regulations or written guidance
issued pursuant to the authority of the Federal Reserve Board,
the Office of the Comptroller of
3
the Currency, the Federal Deposit Insurance Corporation or other
applicable federal or state regulatory agency.
2.14.
Covered Employee
means a Grantee who, as of the last day of the fiscal year in
which the value of an Award is includable in income for federal
income tax purposes, is one of the group of covered
employees, within the meaning of Code Section 162(m),
with respect to the Company.
2.15.
Deferred Compensation
Award
means an Award that is not exempt from Code
Section 409A and, thus, could be subject to adverse tax
consequences under Code Section 409A.
2.16.
Deferred Stock
means
a right, granted as an Award under Section 10, to receive
payment in the form of Shares (or measured by the value of
Shares) at the end of a specified deferral period.
2.17.
Disability
means:
(a) with respect to Awards other than Deferred Compensation
Awards, a mental or physical illness that entitles the Grantee
to receive benefits under the long-term disability plan of an
Employer, or if the Grantee is not covered by such a plan or the
Grantee is not an employee of an Employer, a mental or physical
illness that renders a Grantee totally and permanently incapable
of performing the Grantees duties for the Company or a
Subsidiary.
(b) with respect to any Deferred Compensation Award, a
Grantees inability to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than
twelve (12) months.
Notwithstanding anything to the contrary in this
Section 2.17 to the contrary, a Disability shall not
qualify under the Plan if it is the result of (i) a
willfully self-inflicted injury or willfully self-induced
sickness; or (ii) an injury or disease contracted, suffered
or incurred while participating in a felony criminal offense.
2.18.
Dividend Equivalent
means any right to receive payments equal to dividends or
property, if and when paid or distributed, on Shares or
Restricted Stock Units.
2.19.
Early Retirement
means a Termination of Service, other than for Cause, death or
Disability, on or after reaching age fifty-five (55) and
completion of fifteen (15) years of service with an
Employer.
2.20.
Effective Date
has
the meaning set forth in Section 1.1.
2.21.
Eligible Person
means
any (a) employee of an Employer, (b) non-employee
director of the Company or (c) consultant engaged by an
Employer.
2.22.
Employer
means the
Company or any Subsidiary.
2.23.
Employment Agreement
means an employment agreement, offer letter, consulting
agreement or other written agreement between an Employer and an
Eligible Person, which relates to the terms and conditions of
such persons employment or other services for an Employer.
2.24.
Exchange Act
means
the Securities Exchange Act of 1934 (and any successor thereto),
as amended from time to time. References to a particular section
of the Exchange Act include references to rules, regulations and
rulings promulgated and in effect thereunder, and to any
successors thereto.
2.25.
Exercise Date
means
the date the Grantee or other holder of an Award that is subject
to exercise delivers notice of such exercise to the Company,
accompanied by such payment, attestations, representations and
warranties or other documentation as required hereunder, under
the applicable Award Agreement or as the Committee may otherwise
specify.
2.26.
Fair Market Value
means, as of any applicable date, (a) the closing sales
price for one Share on such date as reported on the NASDAQ
Global Select Market or, if the foregoing does not apply, on
such other market system or stock exchange on which the
Companys Common Stock is then listed or admitted to
trading, or on the last previous day on which a sale was
reported if no sale of a Share was reported on such date, or
(b) if the foregoing subsection (a) does not apply,
the fair market value of a Share as
4
reasonably determined in good faith by the Board in accordance
with Code Section 409A. For purposes of
subsection (b), the determination of such Fair Market Value
by the Board will be made no less frequently than every twelve
(12) months and will either (x) use one of the safe
harbor methodologies permitted under Treasury
Regulation Section 1.409A-1(b)(5)(iv)(B)(2)
(or such other similar regulation provision as may be provided)
or (y) include, as applicable, the value of tangible and
intangible assets of the Company, the present value of future
cash flows of the Company, the market value of stock or other
equity interests in similar corporations and other entities
engaged in trades or businesses substantially similar to those
engaged in by the Company, the value of which can be readily
determined through objective means (such as through trading
prices or an established securities market or an amount paid in
an arms length private transaction), and other relevant
factors such as control premiums or discounts for lack of
marketability and whether the valuation method is used for other
purposes that have a material economic effect on the Company,
its shareholders or its creditors.
2.27.
Grant Date
means the
date on which an Award is granted, which date may be specified
in advance by the Committee.
2.28.
Grantee
means an
Eligible Person who has been granted an Award.
2.29.
Incentive Stock
Option
means an Option granted under
Section 6 that is intended to meet the requirements of Code
Section 422.
2.30.
including
or
includes
means including, but
not limited to, or includes, but is not limited
to, respectively.
2.31.
Non-Qualified Stock
Option
means an Option granted under
Section 6 that is not intended to be an Incentive Stock
Option.
2.32.
Normal Retirement
means a Termination of Service, other than for Cause, death or
Disability, on or after reaching age sixty-two (62) and
completion of five (5) years of service with an Employer.
2.33.
Option
means an
Incentive Stock Option or Non-Qualified Stock Option.
2.34.
Option Price
means
the price at which a Share may be purchased by a Grantee
pursuant to an Option.
2.35.
Performance-Based
Exception
means the performance-based exception
from the tax deductibility limitations of Code
Section 162(m) contained in Code Section 162(m)(4)(C)
(including, to the extent applicable, the special provision for
options thereunder).
2.36.
Performance Goal
means the objective
and/or
subjective criteria determined by the Committee, the degree of
attainment of which will affect (a) in the case of an Award
other than an Annual Incentive Award, the amount of the Award
the Grantee is entitled to receive or retain, and (b) in
the case of an Annual Incentive Award, the portion of the
individuals Bonus Opportunity potentially payable as an
Annual Incentive Award. Performance Goals may contain threshold,
target and maximum levels of achievement and, to the extent the
Committee intends an Award (other than an Option, but including
an Annual Incentive Award) to comply with the Performance-Based
Exception, the Performance Goals shall be chosen from among the
Performance Measures set forth in Section 4.4(a).
2.37.
Performance Measures
has the meaning set forth in Section 4.4(a).
2.38.
Performance Period
means that period established by the Committee at the time any
Performance Unit is granted or at any time thereafter during
which any Performance Goals specified by the Committee with
respect to such Award are to be measured.
2.39.
Performance Unit
means any grant pursuant to Section 11 of (a) a bonus
consisting of cash or other property the amount or value of
which,
and/or
the
entitlement to which, is conditioned upon the attainment of any
Performance Goals specified by the Committee, or (b) a unit
valued by reference to a designated amount of property other
than Shares.
5
2.40.
Person
means any
individual, sole proprietorship, corporation, partnership, joint
venture, limited liability company, association, joint-stock
company, trust, unincorporated organization, institution, public
benefit corporation, entity or government instrumentality,
division, agency, body or department.
2.41.
Plan
has the meaning
set forth in Section 1.1 and also includes any appendices
hereto.
2.42.
Restricted Stock
means any Share issued as an Award under the Plan that is
subject to Restrictions.
2.43.
Restricted Stock Unit
or
RSU
means the right granted as an
Award under the Plan to receive a Share, conditioned on the
satisfaction of Restrictions imposed by the Committee, which may
be time-based, performance-based or based upon the occurrence of
one or more events or conditions.
2.44.
Restrictions
means
any restriction on a Grantees free enjoyment of the Shares
or other rights underlying Awards, including (a) a
restriction that the Grantee or other holder may not sell,
transfer, pledge, or assign a Share or right, and (b) such
other restrictions as the Committee may impose in the Award
Agreement (including any restriction on the right to vote such
Share and the right to receive any dividends). Restrictions may
be based upon the passage of time, the satisfaction of
performance criteria or the occurrence of one or more events or
conditions, and shall lapse separately or in combination upon
such conditions and at such time or times, in installments or
otherwise, as the Committee shall specify. Awards subject to a
Restriction shall be forfeited if the Restriction does not lapse
prior to such date, the occurrence of such event or the
satisfaction of such other criteria as the Committee shall
determine.
2.45.
Rule 16b-3
means
Rule 16b-3
promulgated by the SEC under the Exchange Act, as amended from
time to time, together with any successor rule.
2.46.
SEC
means the United
States Securities and Exchange Commission, or any successor
thereto.
2.47.
Section 16 Non-Employee
Director
means a member of the Board who satisfies
the requirements to qualify as a non-employee
director under
Rule 16b-3.
2.48.
Section 16 Person
means a person who is subject to potential liability under
Section 16(b) of the Exchange Act with respect to
transactions involving equity securities of the Company.
2.49.
Settlement Date
means
the payment date for Restricted Stock Units or Deferred Stock,
as set forth in Section 9.3(b) or 10.4(c), as applicable.
2.50.
Share
means a share
of Common Stock.
2.51.
Stock Appreciation
Right
or
SAR
means a
right granted as an Award under the Plan to receive, as of the
date specified in the Award Agreement, an amount equal to the
number of Shares with respect to which the SAR is exercised,
multiplied by the excess of (a) the Fair Market Value of
one Share on the Exercise Date over (b) the Strike Price.
2.52.
Strike Price
means
the per-Share price used as the baseline measure for the value
of a SAR, as specified in the applicable Award Agreement.
2.53.
Subsidiary
means any
Person that directly, or through one (1) or more
intermediaries, is controlled by the Company and that would be
treated as part of a single controlled group of corporations
with the Company under Code Sections 414(b) and 414(c) if
the language at least 50 percent is used
instead of at least 80 percent each place it
appears in Code Sections 1563(a)(1), (2) and
(3) and Treasury
Regulation Section 1.414(c)-2.
2.54.
Substitute Award
has
the meaning set forth in Section 5.6.
2.55.
Term
means the period
beginning on the Grant Date of an Option or SAR and ending on
the date such Option or SAR expires, terminates or is cancelled.
2.56.
Termination of Service
means,
6
(a) with respect to awards other than Deferred Compensation
Awards, the first day on which (i) an individual is for any
reason no longer providing services to an Employer as an
employee, director or consultant or (ii) with respect to an
individual who is an employee or consultant to a Subsidiary,
such entity ceases to be a Subsidiary of the Company and such
individual is no longer providing services to the Company or
another Subsidiary;
provided
,
however
, that the
Committee shall have the discretion to determine when a Grantee,
who terminates services as an employee, but continues to provide
services in the capacity of a consultant immediately following
such termination, has incurred a Termination of Service; or
(b) with respect to Deferred Compensation Awards, a
separation from service within the meaning of
Treasury
Regulation Section 1.409A-1(h)
or as permitted under Code Section 409A.
2.57.
Year
means a calendar
year.
Section 3.
Administration
3.1.
Committee
.
(a) Subject to Section 3.2, the Plan shall be
administered by the Compensation and Benefits Committee of the
Board, unless otherwise determined by the Board (the
Committee
). The members of the Committee
shall be appointed by the Board from time to time and may be
removed by the Board from time to time. To the extent the Board
considers it desirable to comply with
Rule 16b-3
and/or
meet
the Performance-Based Exception, the Committee shall consist of
two or more directors of the Company, all of whom (i) are
Section 16 Non-Employee Directors
and/or
(ii) qualify as outside directors within the
meaning of Code Section 162(m), as applicable. The number
of members of the Committee shall from time to time be increased
or decreased, and shall be subject to such conditions, in each
case if and to the extent the Board deems it appropriate to
permit transactions in Shares pursuant to the Plan to satisfy
such conditions of
Rule 16b-3
and the Performance-Based Exception as then in effect.
(b) Subject to Section 4.4(c), the Committee may
delegate, to the fullest extent permitted under applicable law,
to the Chief Executive Officer of the Company any or all of the
authority of the Committee with respect to the grant of Awards
to Grantees, other than Grantees who are executive officers, or
are (or are expected to be) Covered Employees
and/or
are
Section 16 Persons at the time any such delegated
authority is exercised.
3.2.
Powers of the
Committee
.
Subject to and consistent with the
provisions of the Plan, the Committee shall have full power and
authority and sole discretion as follows:
(a) to determine when, to whom (
i.e.
, what Eligible
Persons) and in what types and amounts Awards should be granted;
(b) to grant Awards to Eligible Persons in any number, and
to determine the terms and conditions applicable to each Award,
including (in each case, based on such considerations as the
Committee shall determine) conditions intended to comply with
Code Section 409A, the number of Shares or the amount of
cash or other property to which an Award will relate, any Option
Price or Strike Price, grant price or purchase price, any
limitation or Restriction, any schedule for or performance
conditions relating to the earning of the Award or the lapse of
limitations, forfeiture restrictions, restrictive covenants,
restrictions on exercisability or transferability, any
Performance Goals, including those relating to the Company
and/or
a
Subsidiary
and/or
any
division thereof
and/or
an
individual,
and/or
vesting based on the passage of time, satisfaction of
performance criteria or the occurrence of one or more events or
conditions;
(c) to determine whether an Award will be subject to
minimum vesting requirements under Section 5.3(d);
(d) to determine the benefit (including any Bonus
Opportunity) payable under any Award and to determine whether
any performance, vesting or transfer conditions, including
Performance Measures or Performance Goals, have been satisfied;
7
(e) to determine whether or not specific Awards shall be
granted in connection with other specific Awards;
(f) to determine the Term, as applicable;
(g) to determine the amount, if any, that a Grantee shall
pay for Restricted Stock, whether to permit or require the
payment of cash dividends thereon to be paid
and/or
deferred, and the terms related thereto, when Restricted Stock
(including Restricted Stock acquired upon the exercise of an
Option) shall be forfeited and whether such Shares shall be held
in escrow or other custodial arrangement;
(h) to determine whether, to what extent and under what
circumstances an Award may be settled in, or the exercise price
of an Award may be paid in, cash, Shares, other Awards or other
property, or an Award may be accelerated, vested, canceled,
forfeited or surrendered or any terms of the Award may be
waived, and to accelerate the exercisability of, and to
accelerate or waive any or all of the terms and conditions
applicable to, any Award or any group of Awards for any reason
and at any time or to extend the period subsequent to the
Termination of Service within which an Award may continue to
vest
and/or
be exercised;
(i) to determine with respect to Awards granted to Eligible
Persons, whether, to what extent and under what circumstances
cash, Shares, other Awards, other property and other amounts
payable with respect to an Award will be deferred, either at the
election of the Grantee or if and to the extent specified in the
Award Agreement automatically or at the election of the
Committee (for purposes of limiting loss of deductions pursuant
to Code Section 162(m) or otherwise) and to provide for the
payment of interest or other rate of return determined with
reference to a predetermined actual investment or independently
set interest rate, or with respect to other bases permitted
under Code Section 162(m), Code Section 409A or
otherwise, for the period between the date of exercise and the
date of payment or settlement of the Award;
(j) to determine whether a Grantee has a Disability or a
Retirement (including years of service);
(k) to determine whether and under what circumstances a
Grantee has incurred a Termination of Service (
e.g
.,
whether Termination of Service was for Cause);
(l) to determine whether an Eligible Person is subject to
Compensation Limitations;
(m) to make, amend, suspend, waive and rescind rules and
regulations relating to the Plan;
(n) without the consent of the Grantee, to make adjustments
in the terms and conditions of, and the criteria in, Awards in
recognition of unusual or non-recurring events (including events
described in Section 4.2) affecting an Employer or the
financial statements of an Employer, or in response to changes
in Compensation Limitations or other applicable laws,
regulations or accounting principles;
provided
,
however
, that in no event shall such adjustment increase
the value of an Award for a person expected to be a Covered
Employee for whom the Committee desires to have the
Performance-Based Exception apply;
(o) to appoint such agents as the Committee may deem
necessary or advisable to administer the Plan;
(p) to determine the terms and conditions of all Award
Agreements applicable to Eligible Persons (which need not be
identical) and, with the consent of the Grantee (except as
provided in this Section 3.2(p), and Sections 5.5 and
15.2), to amend any such Award Agreement at any time;
provided
,
however
, that the consent of the Grantee
shall not be required for any amendment (i) that does not
adversely affect the rights of the Grantee, or (ii) that is
necessary or advisable (as determined by the Committee) to carry
out the purpose of the Award as a result of any new Compensation
Limitation or other applicable law or regulation, or a change in
an existing
8
Compensation Limitation or other applicable law or regulation or
interpretation thereof, or (iii) to the extent the Award
Agreement specifically permits amendment without consent;
(q) to impose such additional terms and conditions upon the
grant, exercise or retention of Awards as the Committee may,
before or concurrently with the grant thereof, deem appropriate,
including limiting the percentage of Awards that may from time
to time be exercised by a Grantee and requiring the Grantee to
enter into restrictive covenants;
(r) to correct any defect, supply any omission or reconcile
any inconsistency, and to construe and interpret the Plan, any
rules and regulations adopted hereunder, Award Agreements or any
other instrument entered into or relating to an Award under the
Plan; and
(s) to take any other action with respect to any matters
relating to the Plan for which it is responsible and to make all
other decisions and determinations, including factual
determinations, as may be required under the terms of the Plan
or as the Committee may deem necessary or advisable for the
administration of the Plan.
Any action of the Committee with respect to the Plan shall be
final, conclusive and binding on all Persons, including the
Company, Subsidiaries, any Grantee, any Eligible Person, any
Person claiming any rights under the Plan from or through any
Grantee, and shareholders, except to the extent the Committee
may subsequently modify, or take further action not consistent
with, its prior action. If not specified in the Plan, the time
at which the Committee must or may make any determination shall
be determined by the Committee, and any such determination may
thereafter be modified by the Committee. The express grant of
any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any
power or authority of the Committee.
All determinations of the Committee shall be made by a majority
of its members;
provided
,
however
, that any
determination affecting any Awards made or to be made to a
member of the Committee may, at the Boards election, be
made by the Board.
Section 4.
Shares Subject
to the Plan and Adjustments
4.1.
Number of Shares Available for
Grants
.
(a) Subject to adjustment as provided in Section 4.2,
the aggregate number of Shares which may be delivered under the
Plan shall not exceed the sum of (i) 11,500,000, plus
(ii) the number of remaining Shares under the Associated
Banc-Corp 2003 Long-Term Incentive Stock Plan (the
2003
Plan
) (not subject to outstanding awards under the
2003 Plan and not delivered out of the Shares reserved
thereunder) as of the Effective Date of the Plan, plus
(iii) the number of Shares that become available under the
2003 Plan after the Effective Date of the Plan pursuant to
forfeiture, termination, lapse or satisfaction of an Award in
cash or property other than Shares (the combined total of (i),
(ii) and (iii) being referred to as the
Available Shares
). For purposes of this
Section 4.1(a)), (x) each Share delivered pursuant to
the exercise of an Option shall reduce the Available Shares by
one (1) Share; (y) a number equal to the greater of
each Share delivered upon exercise of a SAR and the number of
Shares underlying such SAR (whether the distribution is made in
cash, Shares or a combination of cash and Shares) shall reduce
the Available Shares by one (1) Share, other than a SAR
that, by its terms, from and after the Grant Date thereof is
payable only in cash, in which case the Available Shares shall
not be reduced; and (z) each Share delivered pursuant to an
Award, other than an Option, SAR or Substitute Award, shall
reduce the Available Shares by 2.16 Shares. If any Shares
subject to an Award granted hereunder are forfeited or such
Award otherwise terminates without the delivery of such Shares,
the Shares subject to such Award, to the extent of any such
forfeiture or termination, shall again be available for grant
under the Plan in the same ratio as such Shares were previously
counted as issued under the Plan with respect to such forfeited
or terminated Award. If any Award is settled in cash, the Shares
subject to such Award that are not delivered shall again be
available for grants under the Plan. The following Shares may
not again be made available for issuance as Awards under the
Plan: (i) Shares not issued or delivered as a result of the
net settlement of an outstanding Option or SAR, (ii) Shares
used to pay the Option Price or withholding taxes
9
related to an outstanding Award, and (iii) Shares
repurchased on the open market with the proceeds of the Option
Price.
(b) The Committee shall from time to time determine the
appropriate methodology for calculating the number of Shares
that have been delivered pursuant to the Plan. Shares delivered
pursuant to the Plan may be, in whole or in part, authorized and
unissued Shares, or treasury Shares, including Shares
repurchased by the Company for purposes of the Plan.
(c) The maximum number of shares of Common Stock that may
be issued under the Plan in this Section 4.1 shall not be
affected by (i) the cash payment of dividends or Dividend
Equivalents in connection with outstanding Awards; or
(ii) any Shares required to satisfy Substitute Awards.
4.2.
Adjustments in Authorized Shares and
Awards
.
(a) In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash,
Shares, or other securities or property), stock split or
combination, forward or reverse merger, reorganization,
subdivision, consolidation or reduction of capital,
recapitalization, consolidation, scheme of arrangement,
split-up,
spin-off or combination involving the Company or repurchase or
exchange of Shares, issuance of warrants or other rights to
purchase Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement 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, adjust any or all of: (i) the number
and type of Shares (or other securities or property) with
respect to which Awards may be granted, (ii) the number and
type of Shares (or other securities or property) subject to
outstanding Awards, (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision
for a cash payment to the holder of an outstanding Award,
(iv) the number and kind of Shares of outstanding
Restricted Stock or relating to any other outstanding Award in
connection with which Shares are subject, and (v) the
number of Shares with respect to which Awards may be granted to
a Grantee;
provided
,
however
, in each case, that
with respect to Awards of Incentive Stock Options intended to
continue to qualify as Incentive Stock Options after such
adjustment, no such adjustment shall be authorized to the extent
that such adjustment would cause the Incentive Stock Option to
fail to continue to qualify under Code Section 424(a); and
provided further
that the number of Shares subject to any
Award denominated in Shares shall always be a whole number.
(b) Notwithstanding Section 4.2(a), any adjustments
made pursuant to Section 4.2(a) shall be made in such a
manner as to ensure that, after such adjustment, Awards continue
not to be non-qualified deferred compensation subject to Code
Section 409A (or if such Awards are already subject to Code
Section 409A, so as not to give rise to adverse tax
consequences under Code Section 409A).
4.3.
Compliance With Code
Section 162(m)
.
(a)
Section 162(m)
Compliance
.
To the extent the Committee
determines that compliance with the Performance-Based Exception
is desirable with respect to an Award, Sections 4.3 and 4.4
shall apply. In the event that changes are made to Code
Section 162(m) to permit flexibility with respect to any
Awards available under the Plan, the Committee may, subject to
this Section 4.3, make any adjustments to such Awards as it
deems appropriate.
(b)
Annual Individual
Limitations
.
No Grantee may be granted Awards
for Options or SARs with respect to a number of Shares in any
one (1) Year exceeding 400,000 Shares. No Grantee may
be granted Awards for Restricted Stock, Deferred Stock,
Restricted Stock Units or Performance Units (or any other Award
other than Options or SARs which is determined by reference to
the value of Shares or appreciation in the value of Shares) with
respect to a number of Shares in any one (1) Year exceeding
400,000 Shares. If an Award denominated in Shares is
cancelled, the Shares subject to the cancelled Award continue to
count against the maximum number of Shares that may be granted
to a Grantee in any Year. All Shares specified in this
Section 4.3(b) shall be adjusted to the extent necessary to
reflect adjustments to Shares required by Section 4.2. No
Grantee may be granted a cash Award that would have a maximum
payout, during any Year, exceeding $3,000,000. No Grantee may be
granted a cash Award for
10
a Performance Period of more than one (1) Year that would
have a maximum payout, during the Performance Period, that would
exceed $6,000,000.
4.4.
Performance Based Exception Under Code
Section 162(m)
.
(a)
Performance Measures
.
Subject
to Section 4.4(d), unless and until the Committee proposes
for shareholder vote and shareholders approve a change in the
general Performance Measures set forth in this
Section 4.4(a), for Awards (other than Options and SARs)
designed to qualify for the Performance-Based Exception, the
objective performance criteria shall be based upon one or more
of the following (each a
Performance Measure
):
(i) Earnings before any or all of interest, tax,
depreciation or amortization (actual and adjusted and either in
the aggregate or on a per-Share basis);
(ii) Earnings (either in the aggregate or on a per-Share
basis);
(iii) Net income or loss (either in the aggregate or on a
per-Share basis);
(iv) Operating profit;
(v) Cash flow (either in the aggregate or on a per-Share
basis);
(vi) Free cash flow (either in the aggregate on a per-Share
basis);
(vii) Capital ratio (either Tier 1 or total);
(viii) Non-interest expense;
(ix) Costs;
(x) Gross revenues;
(xi) Deposit growth;
(xii) Loan loss provisions;
(xiii) Reductions in expense levels;
(xiv) Operating and maintenance cost management and
employee productivity;
(xv) Share price or total shareholder return (including
growth measures and total shareholder return or attainment by
the Shares of a specified value for a specified period of time);
(xvi) Net economic value;
(xvii) Non-performing asset ratio;
(xviii) Net charge-off ratio;
(xix) Net interest margin;
(xx) Economic value added or economic value added momentum;
(xxi) Aggregate product unit and pricing targets;
(xxii) Strategic business criteria, consisting of one or
more objectives based on meeting specified revenue, sales,
credit quality, loan quality, market share, market penetration,
geographic business expansion goals, objectively identified
project milestones, production volume levels, cost targets and
goals relating to acquisitions or divestitures;
(xxiii) Return on average assets or average equity;
(xxiv) Achievement of objectives relating to diversity,
employee turnover or other human capital metrics;
11
(xxv) Results of customer satisfaction surveys or other
objective measures of customer experience; and/or
(xxvi) Debt ratings, debt leverage and debt service;
provided
,
however
, that applicable Performance
Measures may be applied on a pre- or post-tax basis; and
provided
further
that the Committee may, on the
Grant Date of an Award intended to comply with the
Performance-Based Exception, and in the case of other Awards, at
any time, provide that the formula for such Award may include or
exclude items to measure specific objectives, such as losses
from discontinued operations, extraordinary gains or losses, the
cumulative effect of accounting changes, acquisitions or
divestitures, foreign exchange impacts and any unusual,
non-recurring gain or loss.
(b)
Flexibility in Setting Performance
Measures
.
For Awards intended to comply with
the Performance-Based Exception, the Committee shall set the
Performance Measures within the time period prescribed by Code
Section 162(m). The levels of performance required with
respect to Performance Measures may be expressed in absolute or
relative levels and may be based upon a set increase, set
positive result, maintenance of the status quo, set decrease or
set negative result. Performance Measures may differ for Awards
to different Grantees. The Committee shall specify the weighting
(which may be the same or different for multiple objectives) to
be given to each performance objective for purposes of
determining the final amount payable with respect to any such
Award. Any one or more of the Performance Measures may apply to
the Grantee, a department, unit, division or function within the
Company or any one or more Subsidiaries, and may apply either
alone or relative to the performance of other businesses or
individuals (including industry or general market indices).
(c)
Adjustments
.
The Committee
shall have the discretion to adjust the determinations of the
degree of attainment of the preestablished Performance Goals;
provided
,
however
, that Awards that are designed
to qualify for the Performance-Based Exception may not (unless
the Committee determines to amend the Award so that it no longer
qualified for the Performance-Based Exception) be adjusted
upward (the Committee shall retain the discretion to adjust such
Awards downward). The Committee may not, unless the Committee
determines to amend the Award so that it no longer qualifies for
the Performance-Based Exception, delegate any responsibility
with respect to Awards intended to qualify for the
Performance-Based Exception. All determinations by the Committee
as to the achievement of the Performance Measure(s) shall be in
writing prior to payment of the Award.
(d)
Changes to Performance
Measures
.
In the event that applicable laws,
rules or regulations change to permit Committee discretion to
alter the governing Performance Measures without obtaining
shareholder approval of such changes, and still qualify for the
Performance-Based Exception, the Committee shall have sole
discretion to make such changes without obtaining shareholder
approval.
Section
5.
Eligibility
and General Conditions of Awards
5.1.
Eligibility
.
The
Committee may in its discretion grant Awards to any Eligible
Person, whether or not he or she has previously received an
Award.
5.2.
Award Agreement
.
To the
extent not set forth in the Plan, the terms and conditions of
each Award shall be set forth in an Award Agreement.
5.3.
General Terms and Termination of
Service
.
Except as provided in an Award
Agreement or as otherwise provided below in this
Section 5.3, all Options or SARs that have not been
exercised, or any other Awards that remain subject to
Restrictions or which are not otherwise vested or exercisable,
at the time of a Termination of Service shall be cancelled and
forfeited to the Company. Any Restricted Stock that is forfeited
by the Grantee upon Termination of Service shall be reacquired
by the Company, and the
12
Grantee shall sign any document and take any other action
required to assign such Shares back to the Company.
(a)
Options and SARs
.
Except as
otherwise provided in an Award Agreement:
(i) If the Grantee incurs a Termination of Service due to
his or her death or Disability, the Options or SARs shall become
fully vested and exercisable at the time of such Termination of
Service, and such Options or SARs shall remain exercisable for a
period of one (1) year from the date of such Termination of
Service (but not beyond the original Term). To the extent the
Options or SARs are not exercised at the end of such one
(1) year period, the Options or SARs shall be immediately
cancelled and forfeited to the Company.
(ii) If the Grantee incurs a Termination of Service due to
his or her Early Retirement, (A) a pro rata portion of each
unvested Option or SAR shall become immediately vested and
exercisable upon the date of such Termination of Service and
(B) to the extent vested, such Options or SARs shall remain
exercisable for a period of one (1) year from the date of
such Termination of Service (but not beyond the original Term).
The number of Shares to become vested is equal to the product of
the number of Shares granted in the applicable Option or SAR
multiplied by a fraction, the numerator of which is the number
of days employed by the Employer during the vesting period of
such Option or SAR and the denominator of which is the number of
days in the vesting period, and such product is reduced by the
number of Shares already vested immediately prior to the date of
such Termination of Service. To the extent the Options or SARs
are not exercised at the end of such one (1) year period,
the Options or SARs shall be immediately cancelled and forfeited
to the Company.
(iii) If the Grantee incurs a Termination of Service due to
his or her Normal Retirement, the Options or SARs shall become
fully vested and exercisable at the time of such Termination of
Service, and such Options or SARs shall remain exercisable for a
period of one (1) year from the date of such Termination of
Service (but not beyond the original Term). To the extent the
Options or SARs are not exercised at the end of such one
(1) year period following a Termination of Service due to
the Grantees Retirement, the Options or SARs shall be
immediately cancelled and forfeited to the Company.
(iv) If the Grantee either incurs a Termination of Service
by an Employer without Cause or a Termination of Service, which
is voluntary on the part of the Grantee (and not due to such
Grantees death, Disability, Early Retirement or Normal
Retirement), the Options and SARs may thereafter be exercised,
to the extent they were vested and exercisable at the time of
such Termination of Service, for a period of thirty
(30) days from the date of such Termination of Service (but
not beyond the original Term). To the extent the Options or SARs
are not exercised at the end of such thirty (30) day
period, the Options or SARs shall be immediately cancelled and
forfeited to the Company. To the extent the Options and SARs are
not vested and exercisable on the date of such Termination of
Service, they shall be immediately cancelled and forfeited to
the Company.
(v) If the Grantee incurs a Termination of Service for
Cause all Options and SARs shall be immediately canceled and
forfeited to the Company.
(b)
Restricted Stock
.
Except as
otherwise provided in an Award Agreement:
(i) If the Grantee incurs a Termination of Service due to
his or her Early Retirement, a pro rata portion of each unvested
Restricted Stock Award shall become immediately vested and no
longer subject to the applicable Restrictions upon the date of
such Termination of Service. The number of Shares to become
vested is equal to the product of the number of Shares granted
in the applicable Restricted Stock Award multiplied by a
fraction, the numerator of which is the number of days employed
by the Employer during the vesting period of such Restricted
Stock Award and the denominator of which is the number of days
in the vesting period, and such product is reduced by the number
of Shares already vested immediately prior to the date of such
Termination of Service. Any Shares subject to a Restricted Stock
Award that are still subject to Restrictions and not vested
either
13
before or upon such Termination of Service shall be immediately
forfeited (on the date of such Termination of Service) by the
Grantee to the Company.
(ii) If Termination of Service occurs by reason of the
Grantees death, Disability or Normal Retirement, such
Grantees Restricted Stock shall become immediately vested
and no longer subject to the applicable Restrictions.
(iii) If Termination of Service occurs for any reason other
than the Grantees death, Disability, Early Retirement or
Normal Retirement while the Grantees Restricted Stock is
subject to a Restriction(s), all of such Grantees
Restricted Stock that is unvested or still subject to
Restrictions shall be forfeited by the Grantee.
(c)
Dividend Equivalents
.
If
Dividend Equivalents have been credited with respect to any
Award and such Award (in whole or in part) is forfeited, all
Dividend Equivalents issued in connection with such forfeited
Award (or portion of an Award) shall also be forfeited to the
Company.
(d)
Minimum Vesting
.
Except as
otherwise provided pursuant to this Section 5.3 and
Section 14, (i) in the case of any Award (other than
an Option or SAR) that is conditioned upon the attainment of
specified performance goals by the Grantee with the Company or a
Subsidiary (including a division or business unit of the Company
or a Subsidiary) and is payable in Shares, the Restrictions
shall last for no less than one (1) year, or (ii) in
the case of an Award, other than (x) Shares that are
payable as a component of base salary or (y) Deferred Stock
that is granted in connection with a Grantees Deferral
Election, that is conditioned solely upon the continuous
employment by the Grantee with the Company or a Subsidiary and
is payable in Shares, the Restrictions shall last for no less
than three (3) years. Except as otherwise provided pursuant
to this Section 5.3 and Section 14, during the
mandated one-year and three-year period of Restrictions, as
applicable, the Committee may not waive the Restrictions for all
or any part of such Award. Notwithstanding the foregoing, the
Committee shall have the authority under this
Section 5.3(d) to accelerate, vest or waive Restrictions
with respect to any Awards (that are subject to the minimum
vesting restrictions set forth above) that (A) (exclusive
of the accelerations, vesting and waivers permitted pursuant to
clauses (B) and (C) below) do not, in the aggregate,
exceed five percent (5%) of the Available Shares under the Plan
(as such number may be adjusted or increased from time to time
pursuant to the Plan), (B) occur in connection with a
Change in Control, or (C) occur, with a respect to any
Grantee, in connection with the death, Disability, Early
Retirement or Normal Retirement of such Grantee.
(e)
Waiver
.
Notwithstanding
anything to the contrary in the Plan, the Committee may in its
sole discretion as to all or part of any Award that is not
subject to the one-year or three-year minimum vesting
requirements specified in Section 5.3(d), at the time the
Award is granted or thereafter, (i) determine that Awards
shall become exercisable or vested, or Restrictions shall
lapse, (ii) determine that Awards shall continue to become
exercisable or vested in full or in installments, or
Restrictions shall continue to lapse, after a Termination of
Service, (iii) extend the period for exercise of Options or
SARs following a Termination of Service (but not beyond the
original Term), or (iv) provide that any Award shall, in
whole or in part, not be forfeited upon such Termination of
Service.
5.4.
Non-Transferability of Awards
.
(a) Each Award and each right under any Award shall be
exercisable only by the Grantee during the Grantees
lifetime, or, if permissible under applicable law, by the
Grantees guardian or legal representative.
(b) No Award (prior to the time, if applicable, Shares are
delivered in respect of such Award), and no right under any
Award, may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Grantee other than by
will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against
the Company or any Subsidiary;
provided
,
however
,
that the designation of a Beneficiary to receive benefits in the
event of the Grantees death, or a transfer by the Grantee
to the Company with respect to Restricted Stock, shall not
constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance for purposes of this
Section 5.4(b). If so determined by the
14
Committee, a Grantee may, in the manner established by the
Committee, designate a Beneficiary or Beneficiaries to exercise
the rights of the Grantee, and to receive any distribution with
respect to any Award upon the death of the Grantee. A
transferee, Beneficiary, guardian, legal representative or other
person claiming any rights under the Plan from or through any
Grantee shall be subject to the provisions of the Plan and any
applicable Award Agreement, except to the extent the Plan and
Award Agreement otherwise provide with respect to such persons,
and to any additional restrictions or limitations deemed
necessary or appropriate by the Committee.
(c) Notwithstanding Sections 5.4(a) and 5.4(b) above,
to the extent provided in the applicable Award Agreement,
Non-Qualified Stock Options may be transferred, without
consideration, to a Permitted Transferee. For this purpose,
(i) a
Permitted Transferee
in respect of
any Grantee means any member of the Immediate Family of such
Grantee, any trust of which all of the primary beneficiaries are
such Grantee or members of his or her Immediate Family, or any
partnership, limited liability company, corporation or similar
entity of which all of the partners, members or shareholders are
such Grantee or members of his or her Immediate Family, and
(ii) the
Immediate Family
of a Grantee
means the Grantees spouse, former spouse, children,
stepchildren, grandchildren, parents, stepparents, siblings,
grandparents, nieces and nephews,
mother-in-law,
father-in-law,
sons-in-law,
daughters-in-law,
brothers-in-law,
or
sisters-in-law,
including adoptive relationships. Such Award may be exercised by
such Permitted Transferee in accordance with the terms of such
Award.
(d) Nothing herein shall be construed as requiring the
Committee to honor the order of a domestic relations court
regarding an Award, except to the extent required under
applicable law.
5.5.
Cancellation and Rescission of
Awards
.
Unless the Award Agreement specifies
otherwise, the Committee may cancel, rescind, suspend, withhold
or otherwise limit or restrict any unexercised or unsettled
Award at any time if the Grantee is not in compliance with all
applicable provisions of the Award Agreement and the Plan, or is
in violation of any restrictive covenant or other agreement with
an Employer.
5.6.
Substitute Awards
.
The
Committee may, in its discretion and on such terms and
conditions as the Committee considers appropriate under the
circumstances, grant Substitute Awards under the Plan. For
purposes of this Section 5.6,
Substitute
Award
means an Award granted under the Plan in
substitution for stock and stock-based awards (
Acquired
Entity Awards
) held by current and former employees or
non-employee directors of, or consultants to, another
corporation or entity who become Eligible Persons as the result
of a merger, consolidation or combination of the employing
corporation or other entity (the
Acquired
Entity
) with the Company or a Subsidiary or the
acquisition by the Company or a Subsidiary of property or stock
of the Acquired Entity immediately prior to such merger,
consolidation, acquisition or combination (
Acquisition
Date
) in order to preserve for the Grantee the
economic value of all or a portion of such Acquired Entity Award
at such price as the Committee determines necessary to achieve
such preservation of economic value.
5.7.
Exercise by
Non-Grantee
.
If any Award is exercised as
permitted by the Plan by any Person other than the Grantee, the
exercise notice shall be accompanied by such documentation as
may reasonably be required by the Committee, including, without
limitation, evidence of authority of such Person or Persons to
exercise the Award and, if the Committee so specifies, evidence
satisfactory to the Company that any death taxes payable with
respect to such Shares have been paid or provided for.
5.8.
No Cash Consideration for
Awards
.
Awards may be granted for no cash
consideration or for such minimal cash consideration as may be
required by applicable law.
Section
6.
Stock
Options
6.1.
Grant of
Options
.
Subject to and consistent with the
provisions of the Plan, Options may be granted to any Eligible
Person in such number, and upon such terms, and at any time and
from time to time as shall be determined by the Committee.
15
6.2.
Award Agreement
.
Each
Option grant shall be evidenced by an Award Agreement in such
form as the Committee may approve that shall specify the Grant
Date, the Option Price, the Term (which shall be ten
(10) years from its Grant Date unless the Committee
otherwise specifies a shorter period in the Award Agreement),
the number of Shares to which the Option pertains, the time or
times at which such Option shall be exercisable and such other
provisions (including Restrictions) not inconsistent with the
provisions of the Plan as the Committee shall determine.
6.3.
Option Price
.
The
purchase price per Share purchasable under an Option shall be
determined by the Committee;
provided
,
however
,
that such purchase price shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant
Date. Subject to the adjustment allowed in Section 4.2, or
as otherwise permissible under this Section 6.3, neither
the Committee nor the Board shall have the authority or
discretion to change the Option Price of any outstanding Option.
Without the approval of shareholders, neither the Committee nor
the Board will amend or replace previously granted Options or
SARs in a transaction that constitutes repricing,
which for this purpose means any of the following or any action
that has the same effect: (a) lowering the exercise price
of an Option or SAR after it is granted; (b) any other
action that is treated as a repricing under generally accepted
accounting principles; (c) cancelling an Option or SAR at a
time when its exercise price exceeds the Fair Market Value of
the underlying Stock, in exchange for another Award, other
equity, cash or other property;
provided
,
however
,
that the foregoing transactions shall not be deemed a repricing
if done pursuant to an adjustment authorized under
Section 4.2.
6.4.
Vesting
.
Shares subject
to an Option shall become vested and exercisable as specified in
the applicable Award Agreement.
6.5.
Grant of Incentive Stock
Options
.
At the time of the grant of any
Option, the Committee may, in its discretion, designate that
such Option shall be made subject to additional restrictions to
permit it to qualify as an Incentive Stock Option. Any Option
designated as an Incentive Stock Option:
(a) shall be granted only to an employee of the Company or
a Subsidiary Corporation (as defined below in this
Section 6.5);
(b) shall have an Option Price of not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant
Date, and, if granted to a person who owns capital stock
(including stock treated as owned under Code
Section 424(d)) possessing more than ten percent (10%) of
the total combined voting power of all classes of capital stock
of the Company or any Subsidiary Corporation (a
10%
Owner
), have an Option Price not less than one hundred
ten percent (110%) of the Fair Market Value of a Share on its
Grant Date;
(c) shall have a Term of not more than ten (10) years
(five (5) years if the Grantee is a 10% Owner) from its
Grant Date, and shall be subject to earlier termination as
provided herein or in the applicable Award Agreement;
(d) shall not have an aggregate Fair Market Value (as of
the Grant Date) of the Shares with respect to which Incentive
Stock Options (whether granted under the Plan or any other
equity incentive plan of the Grantees employer or any
parent or Subsidiary Corporation (
Other
Plans
)) are exercisable for the first time by such
Grantee during any calendar year (
Current
Grant
), determined in accordance with the provisions
of Code Section 422, which exceeds $100,000 (the
$100,000 Limit
);
(e) shall, if the aggregate Fair Market Value of the Shares
(determined on the Grant Date) with respect to the Current Grant
and all Incentive Stock Options previously granted under the
Plan and any Other Plans which are exercisable for the first
time during a calendar year (
Prior Grants
)
would exceed the $100,000 Limit, be, as to the portion in excess
of the $100,000 Limit, exercisable as a separate Non-Qualified
Stock Option at such date or dates as are provided in the
Current Grant;
(f) shall require the Grantee to notify the Committee of
any disposition of any Shares delivered pursuant to the exercise
of the Incentive Stock Option under the circumstances described
in Code
16
Section 421(b) (relating to holding periods and certain
disqualifying dispositions) (
Disqualifying
Disposition
), within ten (10) days of such a
Disqualifying Disposition;
(g) shall by its terms not be assignable or transferable
other than by will or the laws of descent and distribution and
may be exercised, during the Grantees lifetime, only by
the Grantee;
provided
,
however
, that the Grantee
may, to the extent provided in the Plan in any manner specified
by the Committee, designate in writing a Beneficiary to exercise
his or her Incentive Stock Option after the Grantees
death; and
(h) shall, if such Option nevertheless fails to meet the
foregoing requirements, or otherwise fails to meet the
requirements of Code Section 422 for an Incentive Stock
Option, be treated for all purposes of the Plan, except as
otherwise provided in subsections (d) and (e) above,
as a Non-Qualified Stock Option.
For purposes of this Section 6.5,
Subsidiary
Corporation
means a corporation other than the Company
in an unbroken chain of corporations beginning with the Company
if, at the time of granting the Option, each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain. Notwithstanding the foregoing and
Sections 3.2(p) and 15.2, the Committee may, without the
consent of the Grantee, at any time before the exercise of an
Option (whether or not an Incentive Stock Option), take any
action necessary to prevent such Option from being treated as an
Incentive Stock Option.
6.6.
Exercise and Payment
.
(a) Except as may otherwise be provided by the Committee in
an Award Agreement, Options shall be exercised by the delivery
of a written notice (
Notice
) to the Company
setting forth the number of Shares to be exercised, accompanied
by full payment (including any applicable tax withholding) for
the Shares made by any one or more of the following means on the
Exercise Date (or such other date as may be permitted in writing
by the Secretary of the Company):
(i) cash, personal check or wire transfer;
(ii) with the approval of the Committee, Shares or Shares
of Restricted Stock valued at the Fair Market Value of a Share
on the Exercise Date; or
(iii) subject to applicable law and the Companys
policies, through the sale of the Shares acquired on exercise of
the Option through a broker-dealer to whom the Grantee has
submitted an irrevocable notice of exercise and irrevocable
instructions to deliver promptly to the Company the amount of
sale or loan proceeds sufficient to pay for such Shares,
together with, if requested by the Company, the amount of
applicable withholding taxes payable by Grantee by reason of
such exercise.
(b) The Committee may, in its discretion, specify that, if
any Shares of Restricted Stock (
Tendered Restricted
Shares
) are used to pay the Option Price, (i) all
the Shares acquired on exercise of the Option shall be subject
to the same Restrictions as the Tendered Restricted Shares,
determined as of the Exercise Date, or (ii) a number of
Shares acquired on exercise of the Option equal to the number of
Tendered Restricted Shares shall be subject to the same
Restrictions as the Tendered Restricted Shares, determined as of
the Exercise Date.
(c) At the discretion of the Committee and subject to
applicable law, the Company may loan a Grantee all or any
portion of the amount payable by the Grantee to the Company upon
exercise of the Option on such terms and conditions as the
Committee may determine.
(d) If the Option is exercised as permitted by the Plan by
any Person other than the Grantee, the Notice shall be
accompanied by documentation as may reasonably be required by
the Company, including evidence of authority of such Person or
Persons to exercise the Option.
17
(e) At the time a Grantee exercises an Option or to the
extent provided by the Committee in the applicable Award
Agreement, in lieu of accepting payment of the Option Price of
the Option and delivering the number of Shares of Common Stock
for which the Option is being exercised, the Committee may
direct that the Company either (i) pay the Grantee a cash
amount, or (ii) issue a lesser number of Shares of Common
Stock, in any such case, having a Fair Market Value on the
Exercise Date equal to the amount, if any, by which the
aggregate Fair Market Value (or such other amount as may be
specified in the applicable Award Agreement, in the case of an
exercise occurring concurrent with a Change in Control) of the
Shares of Common Stock as to which the Option is being exercised
exceeds the aggregate Option Price for such Shares, based on
such terms and conditions as the Committee shall establish.
Section
7.
Stock
Appreciation Rights
7.1.
Grant of SARs
.
Subject
to and consistent with the provisions of the Plan, the
Committee, at any time and from time to time, may grant SARs to
any Eligible Person on a standalone basis or in tandem with an
Option. The Committee may impose such conditions or restrictions
on the exercise of any SAR as it shall deem appropriate.
7.2.
Award Agreements
.
Each
SAR grant shall be evidenced by an Award Agreement in such form
as the Committee may approve, which shall specify the Grant
Date, the Strike Price, the Term (which shall be ten
(10) years from its Grant Date unless the Committee
otherwise specifies a shorter period in the Award Agreement),
the number of Shares to which the SAR pertains, the time or
times at which such SAR shall be exercisable and such other
provisions (including Restrictions) not inconsistent with the
provisions of the Plan as shall be determined by the Committee.
7.3.
Strike Price
.
The
Strike Price of a SAR shall be determined by the Committee in
its sole discretion;
provided
,
however
,
that the Strike Price shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant
Date of the SAR.
7.4.
Vesting
.
Shares subject
to a SAR shall become vested and exercisable as specified in the
applicable Award Agreement.
7.5.
Exercise and
Payment
.
Except as may otherwise be provided
by the Committee in an Award Agreement, SARs shall be exercised
by the delivery of a written notice to the Company, setting
forth the number of Shares with respect to which the SAR is to
be exercised. No payment of a SAR shall be made unless
applicable tax withholding requirements have been satisfied in
accordance with Section 17.1 or otherwise. Any payment by
the Company in respect of a SAR may be made in cash, Shares,
other property, or any combination thereof, as the Committee, in
its sole discretion, shall determine.
7.6.
Grant Limitations
.
The
Committee may at any time impose any other limitations or
Restrictions upon the exercise of SARs that it deems necessary
or desirable in order to achieve desirable tax results for the
Grantee or the Company.
Section
8.
Restricted
Stock
8.1.
Grant of Restricted
Stock
.
Subject to and consistent with the
provisions of the Plan, the Committee, at any time and from time
to time, may grant Restricted Stock to any Eligible Person in
such amounts as the Committee shall determine.
8.2.
Award Agreement
.
Each
grant of Restricted Stock shall be evidenced by an Award
Agreement that shall specify the Restrictions, the number of
Shares subject to the Restricted Stock Award, and such other
provisions not inconsistent with the provisions of the Plan as
the Committee shall determine. The Committee may impose such
Restrictions on any Award of Restricted Stock as it deems
appropriate, including time-based Restrictions, Restrictions
based upon the achievement of specific Performance Goals,
Restrictions based on the occurrence of a specified event,
Restrictions under applicable laws or pursuant to a regulatory
entity with authority over the Company or a Subsidiary,
and/or
a
combination of any of the above.
18
8.3.
Consideration for Restricted
Stock
.
The Committee shall determine the
amount, if any, that a Grantee shall pay for Restricted Stock.
8.4.
Vesting
.
Shares subject
to a Restricted Stock Award shall become vested and transferable
as specified in the applicable Award Agreement and in accordance
with Section 5.3(d) (thereafter being referred to as
Unrestricted Stock
). For purposes of
calculating the number of Shares of Restricted Stock that become
Unrestricted Stock as set forth above, Share amounts shall be
rounded to the nearest whole Share amount, unless otherwise
specified in the applicable Award Agreement.
8.5.
Effect of
Forfeiture
.
If Restricted Stock is forfeited,
and if the Grantee was required to pay for such Shares of
Restricted Stock or acquired such Shares upon the exercise of an
Option, the Grantee shall be deemed to have resold such
Restricted Stock to the Company at a price equal to the lesser
of (a) the amount paid by the Grantee for such Restricted
Stock or the Option Price, as applicable, and (b) the Fair
Market Value of a Share on the date of such forfeiture. The
Company shall pay to the Grantee the deemed sale price as soon
as administratively practical. Such Restricted Stock shall cease
to be outstanding and shall no longer confer on the Grantee
thereof any rights as a shareholder of the Company, from and
after the date of the event causing the forfeiture, whether or
not the Grantee accepts the Companys tender of payment for
such Restricted Stock.
8.6.
Escrow; Legends
.
The
Committee may provide that the certificates for any Restricted
Stock (a) shall be held (together with a stock power
executed in blank by the Grantee) in escrow by the Secretary of
the Company until such Restricted Stock becomes non-forfeitable
or vested and transferable, or is forfeited
and/or
(b) shall bear an appropriate legend restricting the
transfer of such Restricted Stock under the Plan. If any
Restricted Stock becomes non-forfeitable or vested and
transferable, the Company shall cause certificates for such
Shares to be delivered without such legend or shall cause a
release of restrictions on a book entry account maintained by
the Companys transfer agent.
8.7.
Shareholder Rights in Restricted
Stock
.
Restricted Stock, whether held by a
Grantee or in escrow or other custodial arrangement by the
Secretary of the Company, shall confer on the Grantee all rights
of a shareholder of the Company, except as otherwise provided in
the Plan or Award Agreement. At the time of a grant of
Restricted Stock, the Committee may require the payment of cash
dividends thereon to be deferred and, if the Committee so
determines, reinvested in additional Shares of Restricted Stock.
Stock dividends and deferred cash dividends issued with respect
to Restricted Stock shall be subject to the same Restrictions
and other terms (including forfeiture) as apply to the Shares of
Restricted Stock with respect to which such dividends are
issued. The Committee may, in its discretion, provide for
payment of interest on deferred cash dividends.
Section
9.
Restricted
Stock Units
9.1.
Grant of Restricted Stock
Units
.
Subject to and consistent with the
provisions of the Plan and applicable requirements of Code
Sections 409A(a)(2), (3) and (4), the Committee, at
any time and from time to time, may grant Restricted Stock Units
to any Eligible Person, in such amount and upon such terms as
the Committee shall determine. A Grantee shall have no voting
rights with respect to Restricted Stock Units.
9.2.
Award Agreement
.
Each
grant of Restricted Stock Units shall be evidenced by an Award
Agreement that shall specify the Restrictions, the number of
Shares subject to the Restricted Stock Units granted, and such
other provisions not inconsistent with the Plan or Code
Section 409A as the Committee shall determine. The
Committee may impose such Restrictions on Restricted Stock Units
as it deems appropriate, including time-based Restrictions,
Restrictions based on the achievement of specific Performance
Goals, Restrictions based on the occurrence of a specified
event, restrictions under securities laws or pursuant to a
regulatory entity with authority over the Company or a
Subsidiary,
and/or
a
combination of any of the above, provided that such Restrictions
are in accordance with Section 5.3(d) if applicable.
9.3.
Crediting Restricted Stock
Units
.
The Company shall establish an account
(
RSU Account
) on its books for each Eligible
Person who receives a grant of Restricted Stock Units.
Restricted Stock Units
19
shall be credited to the Grantees RSU Account as of the
Grant Date of such Restricted Stock Units. RSU Accounts shall be
maintained for recordkeeping purposes only and the Company shall
not be obligated to segregate or set aside assets representing
securities or other amounts credited to RSU Accounts. The
obligation to make distributions of securities or other amounts
credited to RSU Accounts shall be an unfunded, unsecured
obligation of the Company.
(a)
Crediting of Dividend
Equivalents
.
Except as otherwise provided in
an Award Agreement, whenever dividends are paid or distributions
made with respect to Shares, Dividend Equivalents shall be
credited to RSU Accounts on all Restricted Stock Units credited
thereto as of the record date for such dividend or distribution.
Such Dividend Equivalents shall be credited to the RSU Account
in the form of additional Restricted Stock Units in a number
determined by dividing the aggregate value of such Dividend
Equivalents by the Fair Market Value of a Share at the payment
date of such dividend or distribution.
(b)
Settlement of RSU
Accounts
.
The Company shall settle an RSU
Account by delivering to the holder thereof (which may be the
Grantee or his or her Beneficiary, as applicable) a number of
Shares equal to the whole number of Shares underlying the
Restricted Stock Units then credited to the Grantees RSU
Account (or a specified portion in the event of any partial
settlement);
provided
,
however
,
that any
fractional Shares underlying Restricted Stock Units remaining in
the RSU Account on the Settlement Date shall either be forfeited
or distributed in cash in an amount equal to the Fair Market
Value of a Share as of the Settlement Date multiplied by the
remaining fractional Restricted Stock Unit, as determined by the
Committee. Unless otherwise provided in an Award Agreement, the
Settlement Date for all Restricted Stock Units credited to a
Grantees RSU Account shall be as soon as administratively
practical following when Restrictions applicable to an Award of
Restricted Stock Units have lapsed, but in no event shall such
Settlement Date be later than March 15 of the Year following the
Year in which the Restrictions applicable to an Award of
Restricted Stock Units have lapsed. Unless otherwise provided in
an Award Agreement, in the event of a Grantees Termination
of Service prior to the lapse of such Restrictions, such
Grantees Restricted Stock Units shall be immediately
cancelled and forfeited to the Company.
Section 10.
Deferred
Stock
10.1.
Grant of Deferred
Stock
.
Subject to and consistent with the
provisions of the Plan and applicable requirements of Code
Sections 409A(a)(2), (3), and (4), the Committee, at any
time and from time to time, may grant Deferred Stock to any
Eligible Person in such number, and upon such terms, as the
Committee, at any time and from time to time, shall determine
(including, to the extent allowed by the Committee, grants at
the election of a Grantee to convert Shares to be acquired upon
lapse of Restrictions on Restricted Stock or Restricted Stock
Units into such Deferred Stock). A Grantee shall have no voting
rights in Deferred Stock.
10.2.
Award Agreement
.
Each
grant of Deferred Stock shall be evidenced by an Award Agreement
that shall specify the number of Shares underlying the Deferred
Stock subject to an Award, the Settlement Date such Shares of
Deferred Stock shall be settled and such other provisions as the
Committee shall determine that are in accordance with the Plan
(including Section 5.3(d) if applicable) and Code
Section 409A.
10.3.
Deferred Stock Elections
.
(a)
Making of Deferral
Elections
.
If and to the extent permitted by
the Committee, an Eligible Person may elect (a
Deferral
Election
) at such times and in accordance with rules
and procedures adopted by the Committee (which shall comport
with Code Section 409A), to receive all or any portion of
his salary, bonus
and/or
cash
retainer (in the case of a director) (including any cash or
Share Award, other than Options or SARs) either in the form of a
number of shares of Deferred Stock equal to the quotient of the
amount of salary, bonus
and/or
cash
retainer or other permissible Award to be paid in the form of
Deferred Stock divided by the Fair Market Value of a Share on
the date such salary, bonus, cash retainer or other such Award
would otherwise be paid in cash or distributed in Shares or
pursuant to such other terms and conditions as the Committee may
determine. The Grant Date for an Award of Deferred Stock made
20
pursuant to a Deferral Election shall be the date the deferrable
amount subject to a Deferral Election would otherwise have been
paid to the Grantee in cash or Shares.
(b)
Timing of Deferral
Elections
.
An initial Deferral Election must
be filed with the Company (pursuant to procedures established by
the Committee) no later than December 31 of the Year
preceding the Year in which the amounts subject to the Deferral
Election would otherwise be earned, subject to such restrictions
and advance filing requirements as the Company may impose. A
Deferral Election shall be irrevocable as of the filing
deadline, unless the Company has specified an earlier time at
which it shall be irrevocable. Each Deferral Election shall
remain in effect with respect to subsequently earned amounts
unless the Eligible Person revokes or changes such Deferral
Election. Any such revocation or change shall have prospective
application only and must be made at a time at which a
subsequent Deferral Election is permitted.
(c)
Subsequent Deferral
Elections
.
A Deferral Election (other
than an initial Deferral Election) made with respect to a
Deferred Compensation Award must meet the timing requirements
for a subsequent deferral election as specified in Treasury
Regulation Section 1.409A-2(b).
10.4.
Deferral Account
.
(a)
Establishment of Deferral
Accounts
.
The Company shall establish an
account (
Deferral Account
) on its books for
each Eligible Person who receives a grant of Deferred Stock or
makes a Deferral Election. Deferred Stock shall be credited to
the Grantees Deferral Account as of the Grant Date of such
Deferred Stock. Deferral Accounts shall be maintained for
recordkeeping purposes only and the Company shall not be
obligated to segregate or set aside assets representing
securities or other amounts credited to Deferral Accounts. The
obligation to make distributions of securities or other amounts
credited to Deferral Accounts shall be an unfunded, unsecured
obligation of the Company.
(b)
Crediting of Dividend
Equivalents
.
Except as otherwise provided in
an Award Agreement, whenever dividends are paid or distributions
made with respect to Shares, Dividend Equivalents shall be
credited to Deferral Accounts on all Deferred Stock credited
thereto as of the record date for such dividend or distribution.
Such Dividend Equivalents shall be credited to the Deferral
Account in the form of additional Deferred Stock in a number
determined by dividing the aggregate value of such Dividend
Equivalents by the Fair Market Value of a Share at the payment
date of such dividend or distribution.
(c)
Settlement of Deferral
Accounts
.
The Company shall settle a Deferral
Account by delivering to the holder thereof (which may be the
Grantee or his or her Beneficiary, as applicable) a number of
Shares equal to the whole number of Shares of Deferred Stock
then credited to the Grantees Deferral Account (or a
specified portion in the event of any partial settlement);
provided
,
however
,
that any fractional
Shares of Deferred Stock remaining in the Deferral Account on
the Settlement Date shall either be forfeited or distributed in
cash in an amount equal to the Fair Market Value of a Share as
of the Settlement Date multiplied by the remaining fractional
Share, as determined by the Committee. The Settlement Date for
all Deferred Stock credited in a Grantees Deferral Account
shall be determined in accordance with Code Section 409A
and shall be specified in the applicable Award Agreement or
Deferral Election. The Settlement Date for Deferred Stock, as
may be permitted by the Committee in its discretion and as
specified in the Award Agreement or Deferral Election, is
limited to one or more of the following events: (i) a
specified date as in Treasury
Regulation Section 1.409A-3(i)(1),
(ii) a Change in Control (within the meaning of
Section 2.8(b), (iii) the Grantees
separation from service as provided in Treasury
Regulation Section 1.409A-1(b),
(iv) the Grantees death, (v) the Grantees
Disability, or (vi) an unforeseeable emergency
of the Grantee as provided in Treasury
Regulation Section 1.409A-3(i)(3).
Section
11.
Performance
Units
11.1.
Grant of Performance
Units
.
Subject to and consistent with the
provisions of the Plan, Performance Units may be granted to any
Eligible Person in such number and upon such terms, and at any
time and from time to time, as shall be determined by the
Committee. Performance Units shall be evidenced by an Award
Agreement in such form as the Committee may approve, which shall
contain such
21
terms and conditions not inconsistent with the provisions of the
Plan (including Section 5.3(d)) as shall be determined by
the Committee.
11.2.
Value/Performance
Goals
.
The Committee shall set Performance
Goals in its discretion which, depending on the extent to which
they are met during a Performance Period, will determine the
number or value of Performance Units that will be paid to the
Grantee at the end of the Performance Period. Each Performance
Unit shall have an initial value that is established by the
Committee at the time of grant. The Performance Goals for Awards
of Performance Units may be set by the Committee at threshold,
target and maximum performance levels with the number or value
of the Performance Units payable directly correlated to the
degree of attainment of the various performance levels during
the Performance Period. Unless otherwise provided in an Award
Agreement, no payment shall be made with respect to a
Performance Unit Award if the threshold performance level is not
satisfied. If Performance Goals are attained between the
threshold and target performance levels or between the target
and maximum performance levels, the number or value of
Performance Units under such Award shall be determined by linear
interpolation, unless otherwise provided in an Award Agreement.
With respect to Covered Employees and to the extent the
Committee deems it appropriate to comply with Code
Section 162(m), all Performance Goals shall be based on
objective Performance Measures satisfying the requirements for
the Performance-Based Exception, and shall be set by the
Committee within the time period prescribed by Code
Section 162(m).
11.3.
Earning of Performance
Units
.
Except as provided in Section 13,
after the applicable Performance Period has ended, the holder of
Performance Units shall be entitled to payment based on the
level of achievement of Performance Goals set by the Committee
and as described in Section 11.2. If the Performance Unit
is intended to comply with the Performance-Based Exception, the
Committee shall certify the level of achievement of the
Performance Goals in writing before the Award is settled. At the
discretion of the Committee, the Award Agreement may specify
that an Award of Performance Units is payable in cash, Shares,
Restricted Stock or Restricted Stock Units.
11.4.
Adjustment on Change of
Position
.
If a Grantee is promoted, demoted
or transferred to a different business unit of the Company
during a Performance Period, then, to the extent the Committee
determines that the Award, the Performance Goals or the
Performance Period are no longer appropriate, the Committee may
adjust, change, eliminate or cancel the Award, the Performance
Goals or the applicable Performance Period, as it deems
appropriate in order to make them appropriate and comparable to
the initial Award, the Performance Goals or the Performance
Period.
Section
12.
Annual
Incentive Awards
12.1.
Annual Incentive
Awards
.
Subject to and consistent with the
provisions of the Plan, Annual Incentive Awards may be granted
to any Eligible Person in accordance with the provisions of this
Section 12. The Committee shall designate the individuals
eligible to be granted an Annual Incentive Award for a Year. In
the case of an Annual Incentive Award intended to qualify for
the Performance-Based Exception, such designation shall occur
within the first ninety (90) days of such Year. The
Committee may designate an Eligible Person as eligible for a
full Year or for a period of less than a full Year. The
opportunity to be granted an Annual Incentive Award shall be
evidenced by an Award Agreement or in such form as the Committee
may approve, which shall specify the individuals Bonus
Opportunity, the Performance Goals, and such other terms not
inconsistent with the Plan as the Committee shall determine.
12.2.
Determination of Amount of Annual
Incentive Awards
.
(a)
Aggregate Maximum
.
The
Committee may establish guidelines as to the maximum aggregate
amount of Annual Incentive Awards payable for any Year.
(b)
Establishment of Performance Goals and Bonus
Opportunities
.
For any Annual Incentive Award
granted, the Committee shall establish Performance Goals for the
Year (which may be the same or different for some or all
Eligible Persons) and shall establish the threshold, target and
maximum Bonus Opportunity for each Grantee for the attainment of
specified threshold, target and maximum Performance
22
Goals. In the case of an Annual Incentive Award intended to
qualify for the Performance-Based Exception, such designation
shall occur within the first ninety (90) days of the Year.
Performance Goals and Bonus Opportunities may be weighted for
different factors and measures as the Committee shall determine,
and as provided under Section 4.4.
(c)
Committee Certification and Determination of
Amount of Annual Incentive Award
.
The
Committee shall determine and certify in writing the degree of
attainment of Performance Goals as soon as administratively
practicable after the end of each Year but not later than sixty
(60) days after the end of such Year. The Committee shall
determine an individuals maximum Annual Incentive Award
based on the level of attainment of the Performance Goals (as
certified by the Committee) and the individuals Bonus
Opportunity. The Committee may adjust an Annual Incentive Award,
or delegate with respect to such an Award, as provided in
Section 4.4. The determination of the Committee to reduce
(or not pay) an individuals Annual Incentive Award for a
Year shall not affect the maximum Annual Incentive Award payable
to any other individual. No Annual Incentive Award intended to
qualify for the Performance-Based Exception shall be payable to
an individual unless at least the threshold Performance Goal is
attained.
(d)
Termination of Service
.
If a
Grantee has a Termination of Service during the Year, the
Committee may, in its absolute discretion and under such rules
as the Committee may from time to time prescribe, authorize the
payment of an Annual Incentive Award to such Grantee in
accordance with the foregoing provisions of this
Section 12.2 and in the absence of such determination by
the Committee the Grantee shall receive no Annual Incentive
Award for such Year;
provided
,
however
, that, to
extent that an Annual Incentive Award is intended to comply with
the Performance-Based Exception, the payment of such Award shall
be determined based upon actual performance at the end of the
Year and any payment of such Award shall be paid in accordance
with Section 12.3, unless otherwise provided in the
applicable Award Agreement in a manner compliant with Code
Section 162(m).
12.3.
Time of Payment of Annual Incentive
Awards
.
Annual Incentive Awards shall be paid
as soon as administratively practicable after the Committee
determines the amount of the Award payable under Section 12
but not later than the March 15 after the end of the Year for
which the Annual Incentive Award relates.
12.4.
Form of Payment of Annual Incentive
Awards
.
An individuals Annual Incentive
Award for a Year shall be paid in cash, Shares, Restricted
Stock, Options or any other form of an Award, or any combination
thereof, as provided in the Award Agreement or in such form as
the Committee may approve.
Section
13.
Dividend
Equivalents
The Committee is authorized to grant Awards of Dividend
Equivalents alone or in conjunction with other Awards (other
than Options and SARs), on such terms and conditions as the
Committee shall determine in accordance with the Plan and Code
Section 409A. Unless otherwise provided in the Award
Agreement or in Section 9 and Section 10 of the Plan,
Dividend Equivalents shall be paid immediately when accrued and,
in no event, later than March 15 of the Year following the Year
in which such Dividend Equivalents accrue. Unless otherwise
provided in the Award Agreement or in Section 9 and
Section 10 of the Plan, if the Grantee incurs a Termination
of Service prior to the date such Dividend Equivalents accrue,
the Grantees right to such Dividend Equivalents shall be
immediately forfeited. Notwithstanding the foregoing, no
Dividend Equivalents may be paid with respect to unvested
Performance Units.
Section
14.
Change
in Control
14.1.
Acceleration of
Vesting
.
Unless otherwise provided in the
applicable Award Agreement, upon the occurrence of (a) an
event satisfying the Section 2.8 definition of Change
in Control with respect to a particular Award, and
(b) a Grantees involuntary Termination of Service
(other than due to Cause) that occurs during the two
(2) year period immediately following such Change in
Control event, such Award shall become vested, all Restrictions
shall lapse and all Performance Goals shall be deemed to be met,
as applicable;
provided
,
however
,
that no
payment of an Award shall be accelerated to the extent such
23
payment would cause such Award to be subject to the adverse tax
consequences under Code Section 409A. The Committee may, in
its discretion, include such further provisions and limitations
with respect to a Change in Control in any Award Agreement as it
may deem desirable.
14.2.
Special Treatment in the Event of a
Change in Control
.
In order to maintain the
Grantees rights upon the occurrence of any event
satisfying the Section 2.8 definition of Change in
Control with respect to an Award, the Committee, as
constituted before such event, may, in its sole discretion, as
to any such Award, either at the time the Award is made
hereunder or any time thereafter: (a) make such adjustment
to any such Award then outstanding as the Committee deems
appropriate to reflect such Change in Control;
and/or
(b) cause any such Award then outstanding to be assumed, or
new rights substituted therefor, by the acquiring or surviving
entity after such Change in Control. Additionally, in the event
of any Change in Control with respect to Options and SARs, the
Committee, as constituted before such Change in Control, may, in
its sole discretion (except as may be otherwise provided in the
Award Agreement): (a) cancel any outstanding unexercised
Options or SARs (whether or not vested) that have a per-Share
Option Price or Strike Price (as applicable) that is greater
than the Change in Control Price (defined below); or
(b) cancel any outstanding unexercised Options or SARs
(whether or not vested) that have a per-Share Option Price or
Strike Price (as applicable) that is less than or equal to the
Change in Control Price in exchange for a cash payment of an
amount equal to (x) the difference between the Change in
Control Price and the Option Price or Strike Price (as
applicable), multiplied by (y) the total number of Shares
underlying such Option or SAR that are vested and exercisable at
the time of the Change in Control. The Committee may, in its
discretion, include such further provisions and limitations in
any Award Agreement as it may deem desirable. The Change
in Control Price means the lower of (a) the per-Share
Fair Market Value as of the date of the Change in Control, or
(b) the price paid per Share as part of the transaction
which constitutes the Change in Control.
Section
15.
Amendments
and Termination
15.1.
Amendment and Termination
.
(a) Subject to Section 15.2, the Board may at any time
amend, alter, suspend, discontinue or terminate the Plan in
whole or in part without the approval of the Companys
shareholders, provided that (i) any amendment shall be
subject to the approval of the Companys shareholders if
(A) such approval is required by any federal or state law
or regulation or any stock exchange or automated quotation
system on which the Shares may then be listed or quoted or
(B) such amendment would decrease the minimum vesting
requirements under Section 5.3(d); and (ii) any Plan
amendment or termination will not impermissibly accelerate the
timing of any payments that constitute non-qualified deferred
compensation under Code Section 409A and result in adverse
tax consequences under Code Section 409A.
(b) Subject to Section 15.2, the Committee may amend
the terms of any Award Agreement, prospectively or
retroactively, in accordance with the terms of the Plan.
15.2.
Previously Granted
Awards
.
Except as otherwise specifically
provided in the Plan (including Sections 3.2(m), 3.2(p),
5.5, 15.1 and this Section 15.2) or an Award Agreement, no
termination, amendment or modification of the Plan shall
adversely affect in any material way any Award previously
granted under the Plan or an Award Agreement without the written
consent of the Grantee of such Award. Notwithstanding the
foregoing, the Board or the Committee (as applicable) shall have
the authority to amend the Plan and outstanding Awards to the
extent necessary or advisable to account for changes in
applicable law, regulations, rules or other written guidance
(including Compensation Limitations) without a Grantees
consent.
Section
16.
Beneficiary
Designation
Each Grantee under the Plan may, from time to time, name any
Beneficiary or Beneficiaries (who may be named contingently or
successfully) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all
of such benefit. Each such designation shall revoke all prior
designations by the same Grantee, shall be in a form prescribed
by the Company, and will be effective
24
only when filed by the Grantee in writing with the Company
during the Grantees lifetime. In the absence of any such
designation, the Grantees estate shall be the
Grantees Beneficiary.
Section
17.
Withholding
17.1.
Required Withholding
.
(a) The Committee in its sole discretion may provide that
when taxes are to be withheld in connection with the exercise of
an Option or a SAR, upon the lapse of Restrictions on an Award
or upon payment of any benefit or right under the Plan (the
Exercise Date, the date such Restrictions lapse or such payment
of any other benefit or right occurs hereinafter referred to as
the
Tax Date
), the Grantee may be required or
may be permitted to elect to make payment for the withholding of
federal, state and local taxes, including Social Security and
Medicare (
FICA
) taxes, by one or a
combination of the following methods:
(i) payment of an amount in cash equal to the amount to be
withheld;
(ii) requesting the Company to withhold from those Shares
that would otherwise be received upon exercise of an Option or a
SAR, upon the lapse of Restrictions on, or upon settlement of,
any other Award, a number of Shares having a Fair Market Value
on the Tax Date equal to the amount to be withheld; or
(iii) withholding from any compensation otherwise due to
the Grantee.
The Committee in its sole discretion may provide that the
maximum amount of tax withholding upon exercise of an Option or
a SAR or in connection with the settlement of any other Award to
be satisfied by withholding Shares pursuant to
clause 17.1(a)(iii) above shall not exceed the minimum
amount of taxes, including FICA taxes, required to be withheld
under federal, state and local law. An election by Grantee under
this Section 17.1(a) is irrevocable. Any fractional share
amount and any additional withholding not paid by the
withholding or surrender of Shares must be paid in cash. If no
timely election is made, the Grantee must deliver cash to
satisfy all tax withholding requirements, unless otherwise
provided in the Award Agreement.
(b) Any Grantee who makes a Disqualifying Disposition (as
defined in Section 6.5(f)) or an election under Code
Section 83(b) shall remit to the Company an amount
sufficient to satisfy all resulting tax withholding requirements
in the same manner as set forth in Section 17.1(a).
(c) No Award shall be settled, whether in cash or in
Shares, unless the applicable tax withholding requirements have
been met to the satisfaction of the Committee.
17.2.
Notification under Code
Section 83(b)
.
If the Grantee, in
connection with the exercise of any Option, or the grant of
Restricted Stock, makes the election permitted under Code
Section 83(b) to include in such Grantees gross
income in the year of transfer the amounts specified in Code
Section 83(b), then such Grantee shall notify the Company
of such election within ten (10) days of filing the notice
of the election with the Internal Revenue Service, in addition
to any filing and notification required pursuant to regulations
issued under Code Section 83(b). The Committee may, in
connection with the grant of an Award or at any time thereafter,
prohibit a Grantee from making the election described above.
Section
18.
General
Provisions
18.1.
Governing Law
.
The
validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in
accordance with the laws of the State of Wisconsin, other than
its law respecting choice of laws and applicable federal law.
18.2.
Severability
.
If any
provision of this Plan or any Award Agreement is or becomes or
is deemed to be invalid, illegal or unenforceable in any
jurisdiction, or as to any Person or Award, or would disqualify
the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed
or deemed amended without, in the determination of the
Committee, materially altering the intent of the
25
Plan or the Award, it shall be stricken and the remainder of the
Plan and any such Award shall remain in full force and effect.
18.3.
Successors
.
All
obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business
and/or
assets of the Company.
18.4.
Requirements of
Law
.
The granting of Awards and the delivery
of Shares under the Plan shall be subject to all applicable
laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges or
markets as may be required. Notwithstanding any provision of the
Plan or any Award Agreement, Grantees shall not be entitled to
exercise, or receive benefits under, any Award, and the Company
(or any Subsidiary) shall not be obligated to deliver any Shares
or deliver benefits to a Grantee, if such exercise or delivery
would constitute a violation by the Grantee, the Company or a
Subsidiary of any applicable law or regulation.
18.5.
Securities Law
Compliance
.
If the Committee deems it
necessary to comply with any applicable securities law, or the
requirements of any securities exchange or market upon which
Shares may be listed, the Committee may impose any restriction
on Awards or Shares acquired pursuant to Awards under the Plan
as it may deem advisable. All evidence of Share ownership
delivered pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations or
other requirements of the SEC, any securities exchange or market
upon which Shares are then listed, and any applicable securities
law. If so requested by the Company, the Grantee shall make a
written representation and warranty to the Company that he or
she will not sell or offer to sell any Shares unless a
registration statement shall be in effect with respect to such
Shares under the Securities Act of 1933, as amended, and any
applicable state securities law or unless he or she shall have
furnished to the Company an opinion of counsel, in form and
substance satisfactory to the Company, that such registration is
not required.
If the Committee determines that the exercise or
non-forfeitability of, or delivery of benefits pursuant to, any
Award would violate any applicable provision of securities laws
or the listing requirements of any national securities exchange
or national market system on which any of the Companys
equity securities are listed, then the Committee may postpone
any such exercise, non-forfeitability or delivery to comply with
all such provisions at the earliest practicable date.
18.6.
Code
Section 409A
.
To the extent applicable
and notwithstanding any other provision of the Plan, the Plan
and Award Agreements hereunder shall be administered, operated
and interpreted in accordance with Code Section 409A,
including, without limitation, any regulations or other guidance
that may be issued after the date on which the Board approves
the Plan;
provided
,
however
, in the event that the
Committee determines that any amounts payable hereunder may be
taxable to a Grantee under Code Section 409A prior to the
payment
and/or
delivery to such Grantee of such amount, the Company may
(a) adopt such amendments to the Plan and related Award,
and appropriate policies and procedures, including amendments
and policies with retroactive effect, that the Committee
determines necessary or appropriate to preserve the intended tax
treatment of the benefits provided by the Plan and Awards
hereunder,
and/or
(b) take such other actions as the Committee determines
necessary or appropriate to comply with or exempt the Plan
and/or
Awards from the requirements of Code Section 409A,
including Department of Treasury guidance and other interpretive
materials as may be issued after the date on which the Board
approves the Plan. The Company and its Subsidiaries make no
guarantees to any Person regarding the tax treatment of Awards
or payments made under the Plan, and, notwithstanding the above
provisions and any agreement or understanding to the contrary,
if any Award, payments or other amounts due to a Grantee (or his
or her beneficiaries, as applicable) results in, or causes in
any manner, the application of any adverse tax consequence under
Code Section 409A or otherwise to be imposed, then the
Grantee (or his or her Beneficiaries, as applicable) shall be
solely liable for the payment of, and the Company and its
Subsidiaries shall have no obligation or liability to pay or
reimburse (either directly or otherwise) the Grantee (or his or
her Beneficiaries, as applicable) for, any such adverse tax
consequences.
26
In the case of any Deferred Compensation Award (in addition to
Deferred Stock), the provisions of Section 10.4 relating to
permitted times of settlement shall apply to such Award. If any
Deferred Compensation Award is payable to a specified
employee (within the meaning of Treasury
Regulation Section 1.409A-1(i)),
then such payment, to the extent payable due to the
Grantees Termination of Service and not otherwise exempt
from Code Section 409A, shall not be paid before the date
that is six (6) months after the date of such Termination
of Service (or, if earlier, such Grantees death).
18.7.
Mitigation of Excise
Tax
.
If any payment or right accruing to a
Grantee under the Plan (without the application of this
Section 18.7), either alone or together with other payments
or rights accruing to the Grantee from an Employer
(
Total Payments
), would constitute a
parachute payment (as defined in Code
Section 280G), such payment or right shall be reduced to
the largest amount or greatest right that will result in no
portion of the amount payable or right accruing under the Plan
being subject to an excise tax under Code Section 4999 or
being disallowed as a deduction under Code Section 280G.
The determination of whether any reduction in the rights or
payments under the Plan is to apply shall be made by the
Committee in good faith after consultation with the Grantee, and
such determination shall be conclusive and binding on the
Grantee. The Grantee shall cooperate in good faith with the
Committee in making such determination and providing the
necessary information for this purpose. The foregoing provisions
of this Section 18.7 shall apply with respect to any person
only if, after reduction for any applicable federal excise tax
imposed by Code Section 4999 and federal income tax imposed
by the Code, the Total Payments accruing to such person would be
less than the amount of the Total Payments as reduced, if
applicable, under the foregoing provisions of the Plan and after
reduction for only federal income taxes. Notwithstanding the
foregoing, in the event a Grantee is a party to a Employment
Agreement with the Company or a Subsidiary that provides for
more favorable treatment for the Grantee regarding Code
Section 280G, including, but not limited to, the right to
receive a
gross-up
payment for the excise tax under Code Section 4999, such
agreement shall be controlling.
18.8.
No Rights as a
Shareholder
.
No Grantee shall have any rights
as a shareholder of the Company with respect to the Shares
(except as provided in Section 8.7 with respect to
Restricted Stock) that may be deliverable upon exercise or
payment of such Award until such Shares have been delivered to
him or her.
18.9.
Awards Not Taken into Account for Other
Benefits
.
Awards shall be special incentive
payments to the Grantee and shall not be taken into account in
computing the amount of salary or compensation of the Grantee
for purposes of determining any pension, retirement, death or
other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan
of an Employer, except as such plan shall otherwise expressly
provide, or (b) any Employment Agreement between an
Employer and the Grantee, except as such agreement shall
otherwise expressly provide.
18.10.
Employment Agreement Supersedes Award
Agreement
.
In the event a Grantee is a party
to an Employment Agreement with the Company or a Subsidiary that
provides for vesting or extended exercisability of equity
compensation Awards on terms more favorable to the Grantee than
the Grantees Award Agreement or this Plan, the Employment
Agreement shall be controlling;
provided
that (a) if
the Grantee is a Section 16 Person, any terms in the
Employment Agreement requiring Compensation Committee of the
Board, Board or shareholder approval in order for an exemption
from Section 16(b) of the Exchange Act to be available
shall have been approved by the Compensation Committee of the
Board, the Board or the shareholders, as applicable, and
(b) the Employment Agreement shall not be controlling to
the extent the Grantee and Grantees Employer agree it
shall not be controlling, and (c) an Employment Agreement
or modification to an Employment Agreement shall be deemed to
modify the terms of any pre-existing Award only if the terms of
the Employment Agreement expressly so provide.
18.11.
Non-Exclusivity of
Plan
.
Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the
power of the Board to adopt such other compensatory arrangements
for employees as it may deem desirable.
18.12.
No Trust or
Fund Created
.
Neither the Plan nor any
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
or any Subsidiary and a Grantee or any other Person. To the
extent that any Person acquires a right to receive
27
payments from the Company or any Subsidiary pursuant to an
Award, such right shall be no greater than the right of any
unsecured general creditor of the Company or any Subsidiary.
18.13.
No Right to Continued Employment or
Awards
.
No employee shall have the right to
be selected to receive an Award under this Plan or, having been
so selected, to be selected to receive a future Award. The grant
of an Award shall not be construed as giving a Grantee the right
to be retained in the employ of the Company or any Subsidiary or
to be retained as a director of the Company or any Subsidiary.
Further, the Company or a Subsidiary may at any time terminate
the employment of a Grantee free from any liability, or any
claim under the Plan, unless otherwise expressly provided in the
Plan or in any Award Agreement.
18.14.
Military
Service
.
Awards shall be administered in
accordance with Code Section 414(u) and the Uniformed
Services Employment and Reemployment Rights Act of 1994.
18.15.
Construction
.
The
following rules of construction will apply to the Plan:
(a) the word or is disjunctive but not
necessarily exclusive and (b) words in the singular include
the plural, words in the plural include the singular, and words
in the neuter gender include the masculine and feminine genders
and words in the masculine or feminine genders include the
neuter gender. The headings of sections and subsections are
included solely for convenience of reference, and if there is
any conflict between such headings and the text of this Plan,
the text shall control.
18.16.
No Fractional
Shares
.
No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any
fractional Shares, or whether such fractional Shares or any
rights thereto shall be canceled, terminated or otherwise
eliminated.
18.17.
Plan Document
Controls
.
This Plan and each Award Agreement
constitute the entire agreement with respect to the subject
matter hereof and thereof;
provided
,
however
, that
in the event of any inconsistency between the Plan and such
Award Agreement, the terms and conditions of the Plan shall
control.
18.18.
Compensation
Limitations
.
Notwithstanding anything in the
Plan to the contrary, (a) no payment or benefit hereunder
will be provided to a Grantee if any such payment or benefit
would violate any applicable Compensation Limitations and
(b) the Board or Committee (as applicable in accordance
with Section 15) may amend the Plan or an Award
Agreement at any time, without the consent of the Grantee, to
the extent it determines necessary to comply with any applicable
Compensation Limitations.
28