EXHIBIT 4.1
US
AIRWAYS GROUP, INC.
2011 INCENTIVE AWARD PLAN
ARTICLE 1.
PURPOSE
The purpose of the US Airways Group, Inc. 2011 Incentive Award
Plan (as it may be amended or restated from time to time, the
Plan
) is to promote the success and enhance
the value of US Airways Group, Inc. (the
Company
) by linking the individual interests
of the members of the Board, Employees, and Consultants to those
of Company stockholders and by providing such individuals with
an incentive for outstanding performance to generate superior
returns to Company stockholders. The Plan is further intended to
provide flexibility to the Company in its ability to motivate,
attract, and retain the services of members of the Board,
Employees, and Consultants upon whose judgment, interest, and
special effort the successful conduct of the Companys
operation is largely dependent.
ARTICLE 2.
DEFINITIONS
AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall
have the meanings specified below, unless the context clearly
indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.
2.1
Administrator
shall mean the
entity that conducts the general administration of the Plan as
provided in Article 13. With reference to the duties of the
Committee under the Plan which have been delegated to one or
more persons pursuant to Section 13.6, or as to which the
Board has assumed, the term Administrator shall
refer to such person(s) unless the Committee or the Board has
revoked such delegation or the Board has terminated the
assumption of such duties.
2.2
Affiliate
shall mean
(a) any Subsidiary; and (b) any domestic eligible
entity that is disregarded, under Treasury
Regulation Section 301.7701-3,
as an entity separate from either (i) the Company or
(ii) any Subsidiary.
2.3
Applicable Accounting
Standards
shall mean Generally Accepted Accounting
Principles in the United States, International Financial
Reporting Standards or such other accounting principles or
standards as may apply to the Companys financial
statements under United States federal securities laws from time
to time.
2.4
Award
shall mean an Option, a
Restricted Stock award, a Restricted Stock Unit award, a
Performance Award, a Dividend Equivalents award, a Deferred
Stock award, a Deferred Stock Unit award, a Stock Payment award
or a Stock Appreciation Right, which may be awarded or granted
under the Plan (collectively,
Awards
).
2.5
Award Agreement
shall mean
any written notice, agreement, terms and conditions, contract or
other instrument or document evidencing an Award, including
through electronic medium, which shall contain such terms and
conditions with respect to an Award as the Administrator shall
determine consistent with the Plan.
2.6
Award Limit
shall mean with
respect to Awards that shall be payable in Shares or in cash, as
the case may be, the respective limit set forth in
Section 3.3.
2.7
Board
shall mean the Board of
Directors of the Company.
2.8
Change in Control
shall mean
the occurrence of any of the following:
(a) within any
12-month
period, the individuals who constitute the Board at the
beginning of such period (the
Incumbent
Board
) cease for any reason to constitute at least a
majority of the Board;
provided
,
however
, that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Companys
stockholders, was approved by a vote of at least two-thirds of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board; or
(b) any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, other
than the Company, acquires (directly or indirectly) the
beneficial ownership (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of more than 50% of the
combined voting power of the then outstanding voting securities
of the Company or US Airways entitled to vote generally in the
election of directors (
Voting Power
); or
(c) the Company or US Airways consummates a merger,
consolidation or reorganization of the Company or US Airways or
any other similar transaction or series of related transactions
(collectively, a
Transaction
) other than
(A) a Transaction in which the voting securities of the
Company or US Airways outstanding immediately prior thereto
become (by operation of law), or are converted into or exchanged
for, voting securities of the surviving corporation or its
parent corporation immediately after such Transaction that are
owned by the same person or entity or persons or entities as
immediately prior thereto and possess at least 50% of the Voting
Power held by the voting securities of the surviving corporation
or its parent corporation, or (B) a Transaction effected to
implement a recapitalization of the Company or US Airways (or
similar transaction) in which no person (excluding the Company
or US Airways or any person who held more than 50% of the
Voting Power immediately prior to such Transaction) acquires
more than 50% of the Voting Power; or
(d) the Company or US Airways sells or otherwise disposes
of, or consummates a transaction or series of related
transactions providing for the sale or other disposition of, all
or substantially all of the stock or assets of US Airways, or
enters into a plan for the complete liquidation of either the
Company or US Airways.
Notwithstanding the foregoing, if a Change in Control
constitutes a payment event with respect to any Award which
provides for the deferral of compensation and is subject to
Section 409A of the Code, the transaction or event
described in subsection (a), (b), (c) or (d) with
respect to such Award must also constitute a change in
control event, as defined in Treasury Regulation
§ 1.409A-3(i)(5) to the extent required by
Section 409A.
The Committee shall have full and final authority, which shall
be exercised in its sole discretion, to determine conclusively
whether a Change in Control has occurred pursuant to the above
definition, and the date of the occurrence of such Change in
Control and any incidental matters relating thereto.
2.9
Code
shall mean the Internal
Revenue Code of 1986, as amended from time to time, together
with the regulations and official guidance promulgated
thereunder.
2.10
Committee
shall mean the
Compensation and Human Resources Committee of the Board, another
committee or subcommittee of the Board, appointed as provided in
Section 13.1;
provided
, that if any member of the
Compensation and Human Resources Committee does not qualify as
(i) an outside director for purposes of Section 162(m)
of the Code, (ii) a non-employee director for purposes of
Rule 16b-3,
and (iii) an independent director for purposes of the rules
of the exchange on which the Shares are traded, the remaining
members of the Compensation and Human Resources Committee (but
not less than two members) shall be constituted as a
subcommittee to act as the Committee for purposes of the Plan.
2.11
Common Stock
shall mean the
common stock of the Company, par value $0.01 per share.
2.12
Company
shall have the
meaning set forth in Article 1.
2.13
Consultant
shall mean any
consultant or adviser engaged to provide services to the Company
or any Affiliate that qualifies as a consultant under the
applicable rules of the Securities and Exchange Commission for
registration of shares on a
Form S-8
Registration Statement.
2.14
Covered Employee
shall mean
any Employee who is, or could be, a covered employee
within the meaning of Section 162(m) of the Code.
2.15
Deferred Stock
shall mean a
right to receive Shares awarded under Section 10.4.
2.16
Deferred Stock Unit
shall
mean a right to receive Shares awarded under Section 10.5.
2.17
Director
shall mean a member
of the Board, as constituted from time to time.
2.18
Dividend Equivalent
shall
mean a right to receive the equivalent value (in cash or Shares)
of dividends paid on Shares, awarded under Section 10.2.
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2.19
DRO
shall mean a domestic
relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended from
time to time, or the rules thereunder.
2.20
Effective Date
shall mean
the date the Plan is approved by the Companys stockholders.
2.21
Eligible Individual
shall
mean any person who is an Employee, a Consultant or a
Non-Employee Director, as determined by the Committee.
2.22
Employee
shall mean any
officer or other employee (as determined in accordance with
Section 3401(c) of the Code and the Treasury Regulations
thereunder) of the Company or of any Affiliate.
2.23
Equity Restructuring
shall
mean a nonreciprocal transaction between the Company and its
stockholders, such as a stock dividend, stock split, spin-off,
rights offering or recapitalization through a large,
nonrecurring cash dividend, that affects the number or kind of
Shares (or other securities of the Company) or the share price
of Common Stock (or other securities) and causes a change in the
per share value of the Common Stock underlying outstanding
Awards.
2.24
Exchange Act
shall mean the
Securities Exchange Act of 1934, as amended from time to time.
2.25
Fair Market Value
shall
mean, as of any given date, the value of a Share determined as
follows:
(a) If the Common Stock is listed on any
(i) established securities exchange (such as the New York
Stock Exchange, the NASDAQ Global Market and the NASDAQ Global
Select Market), (ii) national market system or
(iii) automated quotation system on which the Shares are
listed, quoted or traded, its Fair Market Value shall be the
closing sales price for a Share as quoted on such exchange or
system for such date or, if there is no closing sales price for
a Share on the date in question, the closing sales price for a
Share on the last preceding date for which such quotation
exists, as reported in
The Wall Street Journal
or such
other source as the Administrator deems reliable;
(b) If the Common Stock is not listed on an established
securities exchange, national market system or automated
quotation system, but the Common Stock is regularly quoted by a
recognized securities dealer, its Fair Market Value shall be the
mean of the high bid and low asked prices for such date or, if
there are no high bid and low asked prices for a Share on such
date, the high bid and low asked prices for a Share on the last
preceding date for which such information exists, as reported in
The Wall Street Journal
or such other source as the
Administrator deems reliable; or
(c) If the Common Stock is neither listed on an established
securities exchange, national market system or automated
quotation system nor regularly quoted by a recognized securities
dealer, its Fair Market Value shall be established by the
Administrator in good faith.
2.26
Full Value Award
shall mean
any Award other than (i) an Option, (ii) a Stock
Appreciation Right or (iii) any other Award for which the
Holder pays the intrinsic value existing as of the date of grant
(whether directly or by forgoing a right to receive a payment
from the Company or any Affiliate).
2.27
Greater Than 10% Stockholder
shall mean an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or
any subsidiary corporation (as defined in Section 424(f) of
the Code) or parent corporation thereof (as defined in
Section 424(e) of the Code).
2.28
Holder
shall mean a person
who has been granted an Award.
2.29
Incentive Stock Option
shall
mean an Option that is intended to qualify as an incentive stock
option and conforms to the applicable provisions of
Section 422 of the Code.
2.30
Non-Employee Director
shall
mean a Director of the Company who is not an Employee.
2.31
Non-Employee Director Equity Compensation
Policy
shall have the meaning set forth in
Section 4.6.
2.32
Non-Qualified Stock Option
shall mean an Option that is not an Incentive Stock Option.
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2.33
Option
shall mean a right to
purchase Shares at a specified exercise price, granted under
Article 6. An Option shall be either a Non-Qualified Stock
Option or an Incentive Stock Option;
provided
,
however
, that Options granted to Non-Employee Directors
and Consultants shall only be Non-Qualified Stock Options.
2.34
Option Term
shall have the
meaning set forth in Section 6.4.
2.35
Parent
shall mean any entity
(other than the Company), whether domestic or foreign, in an
unbroken chain of entities ending with the Company if each of
the entities other than the Company beneficially owns, at the
time of the determination, securities or interests representing
at least 50% of the total combined voting power of all classes
of securities or interests in one of the other entities in such
chain.
2.36
Performance Award
shall mean
a cash bonus award, stock bonus award, performance award or
incentive award that is paid in cash, Shares or a combination of
both, awarded under Section 10.1.
2.37
Performance-Based
Compensation
shall mean any compensation that is
intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of
the Code.
2.38
Performance Criteria
shall
mean the criteria (and adjustments) that the Committee selects
for an Award for purposes of establishing the Performance Goal
or Performance Goals for a Performance Period, determined as
follows:
(a) The Performance Criteria that shall be used to
establish Performance Goals are limited to the following:
(i) earnings before interest, taxes, depreciation, rent and
amortization expenses (
EBITDAR
);
(ii) earnings before interest, taxes, depreciation and
amortization (
EBITDA
); (iii) earnings
before interest and taxes (
EBIT
);
(iv) EBITDAR, EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the
annual budget or as a ratio to revenue or return on total
capital; (v) net earnings; (vi) earnings per share;
(vii) net income (before or after taxes);
(viii) profit margin; (ix) operating margin;
(x) operating income; (xi) net operating income;
(xii) net operating income after taxes; (xiii) growth;
(xiv) net worth; (xv) cash flow; (xvi) cash flow
per share; (xvii) total stockholder return;
(xviii) return on capital, assets, equity or investment;
(xix) stock price performance; (xx) revenues;
(xxi) revenues per available seat mile; (xxii) costs;
(xxiii) costs per available seat mile; (xxiv) working
capital; (xxv) capital expenditures;
(xxvi) improvements in capital structure;
(xxvii) economic value added; (xxviii) industry
indices; (xxix) regulatory ratings; (xxx) customer
satisfaction ratings; (xxxi) expenses and expense ratio
management; (xxxii) debt reduction;
(xxxiii) profitability of an identifiable business unit or
product; (xxxiv) levels of expense, cost or liability by
category, operating unit or any other delineation;
(xxxv) implementation or completion of projects or
processes; (xxxvi) combination of airline operating
certificates within a specified period; (xxxvii) measures
of operational performance (including, without limitation,
U.S. Department of Transportation performance rankings in
operational areas), quality, safety, productivity or process
improvement; (xxxviii) measures of employee satisfaction or
employee engagement, any of which may be measured either in
absolute terms or as compared to any incremental increase or
decrease or as compared to results of a peer group or to market
performance indicators or indices or, where applicable, on a
per-share or per
seat-mile
basis.
(b) The Administrator may, in its sole discretion, provide
that one or more objectively determinable adjustments shall be
made to one or more of the Performance Goals. Such adjustments
may include one or more of the following: (i) items related
to a change in accounting principle; (ii) items relating to
financing activities; (iii) expenses for restructuring or
productivity initiatives; (iv) other non-operating items;
(v) items related to acquisitions; (vi) items
attributable to the business operations of any entity acquired
by the Company during the Performance Period; (vii) items
related to the disposal of a business or segment of a business;
(viii) items related to discontinued operations that do not
qualify as a segment of a business under Applicable Accounting
Standards; (ix) items attributable to any stock dividend,
stock split, combination or exchange of stock occurring during
the Performance Period; (x) any other items of significant
income or expense which are determined to be appropriate
adjustments; (xi) items relating to unusual or
extraordinary corporate transactions, events or developments,
(xii) items related to amortization of acquired intangible
assets; (xiii) items that are outside the scope of the
Companys core, on-going business activities;
(xiv) items related to acquired in-process research and
development; (xv) items relating to changes in tax laws;
(xvi) items
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relating to major licensing or partnership arrangements;
(xvii) items relating to asset impairment charges;
(xviii) items relating to gains or losses for litigation,
arbitration and contractual settlements; or (xix) items
relating to any other unusual or nonrecurring events or changes
in applicable laws, accounting principles or business
conditions. For all Awards intended to qualify as
Performance-Based Compensation, such determinations shall be
made within the time prescribed by, and otherwise in compliance
with, Section 162(m) of the Code.
2.39
Performance Goals
shall
mean, for a Performance Period, one or more goals established in
writing by the Administrator for the Performance Period based
upon one or more Performance Criteria. Depending on the
Performance Criteria used to establish such Performance Goals,
the Performance Goals may be expressed in terms of overall
Company performance or the performance of a Subsidiary,
division, business unit, or an individual. The achievement of
each Performance Goal shall be determined, to the extent
applicable, with reference to Applicable Accounting Standards.
2.40
Performance Period
shall
mean one or more periods of time, which may be of varying and
overlapping durations, as the Administrator may select, over
which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Holders right
to, and the payment of, an Award.
2.41
Performance Stock Unit
shall
mean a Performance Award awarded under Section 10.1 which
is denominated in units of value including dollar value of
Shares.
2.42
Permitted Transferee
shall
mean, with respect to a Holder, any family member of
the Holder, as defined under the instructions to use the
Form S-8
Registration Statement under the Securities Act, after taking
into account any state, federal, local or foreign tax and
securities laws applicable to transferable Awards.
2.43
Plan
shall have the meaning
set forth in Article 1.
2.44
Prior Plans
shall mean the
US Airways Group, Inc. 2008 Equity Incentive Plan and the
US Airways Group, Inc. 2005 Equity Incentive Plan, as such
plans may be amended from time to time.
2.45
Program
shall mean any
program adopted by the Administrator pursuant to the Plan
containing the terms and conditions intended to govern a
specified type of Award granted under the Plan and pursuant to
which such type of Award may be granted under the Plan.
2.46
Restricted Stock
shall mean
Common Stock awarded under Article 8 that is subject to
certain restrictions and may be subject to risk of forfeiture or
repurchase.
2.47
Restricted Stock Units
shall
mean the right to receive Shares awarded under Article 9.
2.48
Returned Awards
shall mean
equity awards granted under the Prior Plans which are forfeited
or lapse unexercised and which following June 10, 2011 are
not issued under the Prior Plans.
2.49
Securities Act
shall mean
the Securities Act of 1933, as amended.
2.50
Shares
shall mean shares of
Common Stock.
2.51
Stock Appreciation Right
shall mean a stock appreciation right granted under
Article 11.
2.52
Stock Appreciation Right
Term
shall have the meaning set forth in
Section 11.4.
2.53
Stock Payment
shall mean
(a) a payment in the form of Shares, or (b) an option
or other right to purchase Shares, as part of a bonus, deferred
compensation or other arrangement, awarded under
Section 10.3.
2.54
Subsidiary
shall mean any
entity (other than the Company), whether domestic or foreign, in
an unbroken chain of entities beginning with the Company if each
of the entities other than the last entity in the unbroken chain
beneficially owns, at the time of the determination, securities
or interests representing at least 50% of the total combined
voting power of all classes of securities or interests in one of
the other entities in such chain.
2.55
Substitute Award
shall mean
an Award granted under the Plan upon the assumption of, or in
substitution for, outstanding equity awards previously granted
by a company or other entity in connection with a corporate
transaction, such as a merger, combination, consolidation or
acquisition of property or stock;
provided
,
5
however
, that in no event shall the term Substitute
Award be construed to refer to an award made in connection
with the cancellation and repricing of an Option or Stock
Appreciation Right.
2.56
Termination of Service
shall
mean:
(a) As to a Consultant, the time when the engagement of a
Holder as a Consultant to the Company or an Affiliate is
terminated for any reason, with or without cause, including,
without limitation, by resignation, discharge, death or
retirement, but excluding terminations where the Consultant
simultaneously commences or remains in employment or service
with the Company or any Affiliate.
(b) As to a Non-Employee Director, the time when a Holder
who is a Non-Employee Director ceases to be a Director for any
reason, including, without limitation, a termination by
resignation, failure to be elected, death or retirement, but
excluding terminations where the Holder simultaneously commences
or remains in employment or service with the Company or any
Affiliate.
(c) As to an Employee, the time when the employee-employer
relationship between a Holder and the Company or any Affiliate
is terminated for any reason, including, without limitation, a
termination by resignation, discharge, death, disability or
retirement; but excluding terminations where the Holder
simultaneously commences or remains in employment or service
with the Company or any Affiliate.
The Administrator, in its sole discretion, shall determine the
effect of all matters and questions relating to any Termination
of Service, including, without limitation, the question of
whether a Termination of Service resulted from a discharge for
cause and all questions of whether particular leaves of absence
constitute a Termination of Service;
provided
,
however
, that, with respect to Incentive Stock Options,
unless the Administrator otherwise provides in the terms of the
Program, the Award Agreement or otherwise, a leave of absence,
change in status from an employee to an independent contractor
or other change in the employee-employer relationship shall
constitute a Termination of Service only if, and to the extent
that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2)
of the Code and the then applicable regulations and revenue
rulings under said Section. For purposes of the Plan, a
Holders employee-employer relationship or consultancy
relations shall be deemed to be terminated in the event that the
Affiliate employing or contracting with such Holder ceases to
remain an Affiliate following any merger, sale of stock or other
corporate transaction or event (including, without limitation, a
spin-off).
2.57
US Airways
shall mean US
Airways, Inc., a Delaware corporation.
ARTICLE 3.
SHARES SUBJECT
TO THE PLAN
3.1
Number of Shares
.
(a) Subject to adjustment as provided in
Section 3.1(b) and Section 14.2, the aggregate number
of Shares which may be issued or transferred pursuant to Awards
under the Plan is (i) 15,000,000, plus (ii) any Shares
which as of June 10, 2011 are available for issuance under
the Prior Plans, plus (iii) any Shares that are subject to
the Returned Awards;
provided
,
however
,
that no more than a total of (y) 12,500,000 Shares
plus (z) the number of Shares that are subject to Returned
Awards that are full value awards shall be authorized for grant
as Full Value Awards;
provided
,
further
, that, no
more than a total of 15,000,000 Shares may be issued upon
the exercise of Incentive Stock Options.
(b) The following Shares shall not be added to the Shares
authorized for grant under Section 3.1(a) and will not be
available for future grants of Awards: (i) Shares tendered
by a Holder or withheld by the Company in payment of the
exercise price of an Option; (ii) Shares tendered by the
Holder or withheld by the Company to satisfy any tax withholding
obligation with respect to an Award; (iii) Shares subject
to a Stock Appreciation Right that are not issued in connection
with the stock settlement of the Stock Appreciation Right on
exercise thereof; and (iv) Shares purchased on the open
market with the cash proceeds from the exercise of Options.
Notwithstanding anything to the contrary contained herein, if
any Shares subject to an Award are forfeited or expire or an
Award is settled for cash (in whole or in part) shall again be
available for Awards under the Plan. Any Shares of Restricted
Stock repurchased by
6
the Company under Section 8.4 at the same price paid by the
Holder will again be available for Awards. The payment of
Dividend Equivalents in cash in conjunction with any outstanding
Awards shall not be counted against the Shares available for
issuance under the Plan. Notwithstanding the provisions of this
Section 3.1(b), no Shares may again be optioned, granted or
awarded if such action would cause an Incentive Stock Option to
fail to qualify as an incentive stock option under
Section 422 of the Code.
(c) Substitute Awards shall not reduce the Shares
authorized for grant under the Plan. Additionally, in the event
that a company acquired by the Company or any Affiliate or with
which the Company or any Affiliate combines has shares available
under a pre-existing plan approved by stockholders and not
adopted in contemplation of such acquisition or combination, the
shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using
the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the
entities party to such acquisition or combination) may be used
for Awards under the Plan and shall not reduce the Shares
authorized for grant under the Plan;
provided
, that
Awards using such available Shares shall not be made after the
date awards or grants could have been made under the terms of
the pre-existing plan, absent the acquisition or combination,
and shall only be made to individuals who were not employed by
or providing services to the Company or its Affiliates
immediately prior to such acquisition or combination.
3.2
Stock Distributed
.
Any Shares
distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Common Stock, treasury Common
Stock or Common Stock purchased on the open market.
3.3
Limitation on Number of Shares Subject to
Awards
.
Notwithstanding any provision in the
Plan to the contrary, and subject to Section 14.2, the
maximum aggregate number of Shares with respect to one or more
Awards that may be granted to any one person during any calendar
year shall be 2,200,000 and the maximum aggregate amount of cash
that may be paid in cash to any one person during any calendar
year with respect to one or more Awards payable in cash shall be
$5,000,000.
3.4
Full Value Award Vesting
Limitations
.
Notwithstanding any other
provision of the Plan to the contrary, Full Value Awards made to
Eligible Individuals shall become vested in one or more
installments over an aggregate period of not less than three
years (or, in the case of vesting based upon the attainment of
Performance Goals or other performance-based objectives, over a
period of not less than one year measured from the commencement
of the period over which performance is evaluated) following the
date the Award is made;
provided
,
however
, that,
notwithstanding the foregoing, (a) the Administrator may
provide that such vesting restrictions may lapse or be waived
upon the Holders death, disability, retirement, any other
specified Termination of Service or the consummation of a Change
in Control, (b) Full Value Awards may be granted as part of
Non-Employee Director retainers without respect to such minimum
vesting provisions and (c) Full Value Awards that result in
the issuance of an aggregate of up to 10% of the Shares
available pursuant to Section 3.1(a) may be granted to any
one or more Holders without respect to such minimum vesting
provisions.
ARTICLE 4.
GRANTING OF
AWARDS
4.1
Participation
.
The
Administrator may, from time to time, select from among all
Eligible Individuals, those to whom an Award shall be granted
and shall determine the nature and amount of each Award, which
shall not be inconsistent with the requirements of the Plan.
Except as provided in Section 4.6 regarding the grant of
Awards pursuant to the Non-Employee Director Equity Compensation
Policy, no Eligible Individual shall have any right to be
granted an Award pursuant to the Plan.
4.2
Award Agreement
.
Each Award
shall be evidenced by an Award Agreement that sets forth the
terms, conditions and limitations for such Award, which may
include the term of the Award, the provisions applicable in the
event of the Holders Termination of Service, and the
Companys authority to unilaterally or bilaterally amend,
modify, suspend, cancel or rescind an Award. Award Agreements
evidencing Awards intended to qualify as Performance-Based
Compensation shall contain such terms and conditions as may be
necessary to meet the applicable provisions of
Section 162(m) of the Code. Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions
as may be necessary to meet the applicable provisions of
Section 422 of the Code.
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4.3
Limitations Applicable to
Section 16 Persons
.
Notwithstanding
any other provision of the Plan, the Plan, and any Award granted
or awarded to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including
Rule 16b-3
of the Exchange Act and any amendments thereto) that are
requirements for the application of such exemptive rule. To the
extent permitted by applicable law, the Plan and Awards granted
or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.
4.4
At-Will Employment; Voluntary
Participation
.
Nothing in the Plan or in any
Program or Award Agreement hereunder shall confer upon any
Holder any right to continue in the employ of, or as a Director
or Consultant for, the Company or any Affiliate, or shall
interfere with or restrict in any way the rights of the Company
and any Affiliate, which rights are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever,
with or without cause, and with or without notice, or to
terminate or change all other terms and conditions of employment
or engagement, except to the extent expressly provided otherwise
in a written agreement between the Holder and the Company or any
Affiliate. Participation by each Holder in the Plan shall be
voluntary and nothing in the Plan shall be construed as
mandating that any Eligible Individual shall participate in the
Plan.
4.5
Foreign
Holders
.
Notwithstanding any provision of the
Plan to the contrary, in order to comply with the laws in
countries other than the United States in which the Company and
its Affiliates operate or have Employees, Non-Employee Directors
or Consultants, or in order to comply with the requirements of
any foreign securities exchange, the Administrator, in its sole
discretion, shall have the power and authority to:
(a) determine which Affiliates shall be covered by the
Plan; (b) determine which Eligible Individuals outside the
United States are eligible to participate in the Plan;
(c) modify the terms and conditions of any Award granted to
Eligible Individuals outside the United States to comply with
applicable foreign laws or listing requirements of any such
foreign securities exchange; (d) establish subplans and
modify exercise procedures and other terms and procedures, to
the extent such actions may be necessary or advisable (any such
subplans
and/or
modifications shall be attached to the Plan as appendices);
provided
,
however
, that no such subplans
and/or
modifications shall increase the Share limitations contained in
Sections 3.1 and 3.3; and (e) take any action, before
or after an Award is made, that it deems advisable to obtain
approval or comply with any necessary local governmental
regulatory exemptions or approvals or listing requirements of
any such foreign securities exchange. Notwithstanding the
foregoing, the Administrator may not take any actions hereunder,
and no Awards shall be granted, that would violate the Code, the
Exchange Act, the Securities Act, any other securities law or
governing statute, the rules of the securities exchange or
automated quotation system on which the Shares are listed,
quoted or traded or any other applicable law. For purposes of
the Plan, all references to foreign laws, rules, regulations or
taxes shall be references to the laws, rules, regulations and
taxes of any applicable jurisdiction other than the United
States or a political subdivision thereof.
4.6
Non-Employee Director
Awards
.
The Administrator may, in its sole
discretion, provide that Awards granted to Non-Employee
Directors shall be granted pursuant to a written
non-discretionary formula established by the Administrator (the
Non-Employee Director Equity Compensation
Policy
), subject to the limitations of the Plan. The
Non-Employee Director Equity Compensation Policy shall set forth
the type of Award(s) to be granted to Non-Employee Directors,
the number of Shares to be subject to Non-Employee Director
Awards, the conditions on which such Awards shall be granted,
become exercisable
and/or
payable and expire, and such other terms and conditions as the
Administrator shall determine in its sole discretion. The
Non-Employee Director Equity Compensation Policy may be modified
by the Administrator from time to time in its sole discretion.
4.7
Stand-Alone and Tandem
Awards
.
Awards granted pursuant to the Plan
may, in the sole discretion of the Administrator, be granted
either alone, in addition to, or in tandem with, any other Award
granted pursuant to the Plan. Awards granted in addition to or
in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other
Awards.
8
ARTICLE 5.
PROVISIONS
APPLICABLE TO AWARDS INTENDED TO QUALIFY AS
PERFORMANCE-BASED
COMPENSATION.
5.1
Purpose
.
The Committee, in its
sole discretion, may determine at the time an Award is granted
or at any time thereafter whether such Award is intended to
qualify as Performance-Based Compensation. If the Committee, in
its sole discretion, decides to grant an Award to an Eligible
Individual that is intended to qualify as Performance-Based
Compensation, then the provisions of this Article 5 shall
control over any contrary provision contained in the Plan. The
Administrator may in its sole discretion grant Awards to
Eligible Individuals that are based on Performance Criteria or
Performance Goals but that do not satisfy the requirements of
this Article 5 and that are not intended to qualify as
Performance-Based Compensation. Unless otherwise specified by
the Administrator at the time of grant, the Performance Criteria
with respect to an Award intended to be Performance-Based
Compensation payable to a Covered Employee shall be determined
on the basis of Applicable Accounting Standards.
5.2
Applicability
.
The grant of an
Award to an Eligible Individual for a particular Performance
Period shall not require the grant of an Award to such
Individual in any subsequent Performance Period and the grant of
an Award to any one Eligible Individual shall not require the
grant of an Award to any other Eligible Individual in such
period or in any other period.
5.3
Types of
Awards
.
Notwithstanding anything in the Plan
to the contrary, the Committee may grant any Award to an
Eligible Individual intended to qualify as Performance-Based
Compensation, including, without limitation, Restricted Stock
the restrictions with respect to which lapse upon the attainment
of specified Performance Goals, Restricted Stock Units that vest
and become payable upon the attainment of specified Performance
Goals and any Performance Awards described in Article 10
that vest or become exercisable or payable upon the attainment
of one or more specified Performance Goals.
5.4
Procedures with Respect to Performance-Based
Awards
.
To the extent necessary to comply
with the requirements of Section 162(m)(4)(C) of the Code,
with respect to any Award granted to one or more Eligible
Individuals which is intended to qualify as Performance-Based
Compensation, no later than 90 days following the
commencement of any Performance Period or any designated fiscal
period or period of service (or such earlier time as may be
required under Section 162(m) of the Code), the Committee
shall, in writing, (a) designate one or more Eligible
Individuals, (b) select the Performance Criteria applicable
to the Performance Period, (c) establish the Performance
Goals, and amounts of such Awards, as applicable, which may be
earned for such Performance Period based on the Performance
Criteria, and (d) specify the relationship between
Performance Criteria and the Performance Goals and the amounts
of such Awards, as applicable, to be earned by each Covered
Employee for such Performance Period. Following the completion
of each Performance Period, the Committee shall certify in
writing whether and the extent to which the applicable
Performance Goals have been achieved for such Performance
Period. In determining the amount earned under such Awards, the
Committee shall have the right to reduce or eliminate (but not
to increase) the amount payable at a given level of performance
to take into account additional factors that the Committee may
deem relevant, including the assessment of individual or
corporate performance for the Performance Period.
5.5
Payment of Performance-Based
Awards
.
Unless otherwise provided in the
applicable Program or Award Agreement and only to the extent
otherwise permitted by Section 162(m)(4)(C) of the Code, as
to an Award that is intended to qualify as Performance-Based
Compensation, the Holder must be employed by the Company or an
Affiliate throughout the Performance Period. Unless otherwise
provided in the applicable Performance Goals, Program or Award
Agreement, a Holder shall be eligible to receive payment
pursuant to such Awards for a Performance Period only if and to
the extent the Performance Goals for such period are achieved.
5.6
Additional
Limitations
.
Notwithstanding any other
provision of the Plan and except as otherwise determined by the
Administrator, any Award which is granted to an Eligible
Individual and is intended to qualify as Performance-Based
Compensation shall be subject to any additional limitations set
forth in Section 162(m) of the Code or any regulations or
rulings issued thereunder that are requirements for
9
qualification as Performance-Based Compensation, and the Plan,
the applicable Program and Award Agreement shall be deemed
amended to the extent necessary to conform to such requirements.
ARTICLE 6.
GRANTING OF
OPTIONS
6.1
Granting of Options to Eligible
Individuals
.
The Administrator is authorized
to grant Options to Eligible Individuals from time to time, in
its sole discretion, on such terms and conditions as it may
determine which shall not be inconsistent with the Plan.
6.2
Qualification of Incentive Stock
Options
.
No Incentive Stock Option shall be
granted to any person who is not an Employee of the Company or
any subsidiary corporation (as defined in Section 424(f) of
the Code) of the Company. No person who qualifies as a Greater
Than 10% Stockholder may be granted an Incentive Stock Option
unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code. Any Incentive Stock
Option granted under the Plan may be modified by the
Administrator, with the consent of the Holder, to disqualify
such Option from treatment as an incentive stock
option under Section 422 of the Code. To the extent
that the aggregate Fair Market Value of stock with respect to
which incentive stock options (within the meaning of
Section 422 of the Code, but without regard to
Section 422(d) of the Code) are exercisable for the first
time by a Holder during any calendar year under the Plan, and
all other plans of the Company and any parent or subsidiary
corporation thereof (each as defined in Section 424(e) and
(f) of the Code, respectively), exceeds $100,000, the
Options shall be treated as Non-Qualified Stock Options to the
extent required by Section 422 of the Code. The rule set
forth in the immediately preceding sentence shall be applied by
taking Options and other incentive stock options
into account in the order in which they were granted and the
Fair Market Value of stock shall be determined as of the time
the respective options were granted.
6.3
Option Exercise Price
.
The
exercise price per Share subject to each Option shall be set by
the Administrator, but shall not be less than 100% of the Fair
Market Value of a Share on the date the Option is granted (or,
as to Incentive Stock Options, on the date the Option is
modified, extended or renewed for purposes of Section 424(h) of
the Code). In addition, in the case of Incentive Stock Options
granted to a Greater Than 10% Stockholder, such price shall not
be less than 110% of the Fair Market Value of a Share on the
date the Option is granted (or the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the
Code).
6.4
Option Term
.
The term of each
Option (the
Option Term
) shall be set by the
Administrator in its sole discretion;
provided
,
however
, that the Option Term shall not be more than
10 years from the date the Option is granted, or five years
from the date an Incentive Stock Option is granted to a Greater
Than 10% Stockholder. The Administrator shall determine the time
period, including the time period following a Termination of
Service, during which the Holder has the right to exercise the
vested Options, which time period may not extend beyond the last
day of the Option Term. Except as limited by the requirements of
Section 409A or Section 422 of the Code and
regulations and rulings thereunder, the Administrator may extend
the Option Term of any outstanding Option, and may extend the
time period during which vested Options may be exercised, in
connection with any Termination of Service of the Holder, and
may amend, subject to Section 14.1, any other term or
condition of such Option relating to such a Termination of
Service.
6.5
Option Vesting
.
(a) The period during which the right to exercise, in whole
or in part, an Option vests in the Holder shall be set by the
Administrator and the Administrator may determine that an Option
may not be exercised in whole or in part for a specified period
after it is granted. Such vesting may be based on service with
the Company or any Affiliate, any of the Performance Criteria,
or any other criteria selected by the Administrator. Except as
limited by the Plan, at any time after grant of an Option, the
Administrator may, in its sole discretion and subject to
whatever terms and conditions it selects, accelerate the period
during which an Option vests.
(b) No portion of an Option which is unexercisable at a
Holders Termination of Service shall thereafter become
exercisable, except as may be otherwise provided by the
Administrator either in the applicable Program, the
10
Award Agreement evidencing the grant of an Option, or by action
of the Administrator following the grant of the Option.
6.6
Substitute
Awards
.
Notwithstanding the foregoing
provisions of this Article 6 to the contrary, in the case
of an Option that is a Substitute Award, the price per share of
the Shares subject to such Option may be less than the Fair
Market Value per share on the date of grant;
provided
that the excess of: (a) the aggregate Fair Market Value (as
of the date such Substitute Award is granted) of the shares
subject to the Substitute Award, over (b) the aggregate
exercise price thereof does not exceed the excess of:
(x) the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the
Substitute Award, such fair market value to be determined by the
Administrator) of the shares of the predecessor entity that were
subject to the grant assumed or substituted for by the Company,
over (y) the aggregate exercise price of such shares.
6.7
Substitution of Stock Appreciation
Rights
.
The Administrator may provide in the
applicable Program or the Award Agreement evidencing the grant
of an Option that the Administrator, in its sole discretion,
shall have the right to substitute a Stock Appreciation Right
for such Option at any time prior to or upon exercise of such
Option;
provided
that such Stock Appreciation Right shall
be exercisable with respect to the same number of Shares for
which such substituted Option would have been exercisable, and
shall also have the same exercise price, vesting schedule and
remaining Option Term as the substituted Option.
ARTICLE 7.
EXERCISE OF
OPTIONS
7.1
Partial Exercise
.
An
exercisable Option may be exercised in whole or in part.
However, an Option shall not be exercisable with respect to
fractional Shares and the Administrator may require that, by the
terms of the Option, a partial exercise must be with respect to
a minimum number of Shares.
7.2
Manner of Exercise
.
All or a
portion of an exercisable Option shall be deemed exercised upon
delivery of all of the following to the Secretary of the
Company, the stock administrator of the Company or such other
person or entity designated by the Administrator, or his, her or
its office, as applicable:
(a) A written or electronic notice complying with the
applicable rules established by the Administrator stating that
the Option, or a portion thereof, is exercised. The notice shall
be signed by the Holder or other person then entitled to
exercise the Option or such portion of the Option;
(b) Such representations and documents as the
Administrator, in its sole discretion, deems necessary or
advisable to effect compliance with all applicable provisions of
the Securities Act and any other federal, state or foreign
securities laws or regulations, the rules of any securities
exchange or automated quotation system on which the Shares are
listed, quoted or traded or any other applicable law. The
Administrator may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents
and registrars;
(c) In the event that the Option shall be exercised
pursuant to Section 12.3 by any person or persons other
than the Holder, appropriate proof of the right of such person
or persons to exercise the Option, as determined in the sole
discretion of the Administrator; and
(d) Full payment of the exercise price and applicable
withholding taxes to the stock administrator of the Company for
the Shares with respect to which the Option, or portion thereof,
is exercised, in a manner permitted by Section 12.1 and
12.2.
7.3
Notification Regarding
Disposition
.
The Holder shall give the
Company prompt written or electronic notice of any disposition
of Shares acquired by exercise of an Incentive Stock Option
which occurs within (a) two years from the date of granting
(including the date the Option is modified, extended or renewed
for purposes of Section 424(h) of the Code) such Option to
such Holder, or (b) one year after the transfer of such
Shares to such Holder.
11
ARTICLE 8.
AWARD OF
RESTRICTED STOCK
8.1
Award of Restricted Stock
.
(a) The Administrator is authorized to grant Restricted
Stock to Eligible Individuals, and shall determine the terms and
conditions, including the restrictions applicable to each award
of Restricted Stock, which terms and conditions shall not be
inconsistent with the Plan, and may impose such conditions on
the issuance of such Restricted Stock as it deems appropriate.
(b) The Administrator shall establish the purchase price,
if any, and form of payment for Restricted Stock;
provided
,
however
, that if a purchase price is
charged, such purchase price shall be no less than the par
value, if any, of the Shares to be purchased, unless otherwise
permitted by applicable law. In all cases, legal consideration
shall be required for each issuance of Restricted Stock.
8.2
Rights as
Stockholders
.
Subject to Section 8.4,
upon issuance of Restricted Stock, the Holder shall have, unless
otherwise provided by the Administrator, all the rights of a
stockholder with respect to said Shares, subject to the
restrictions in the applicable Program or in each individual
Award Agreement, including the right to receive all dividends
and other distributions paid or made with respect to the Shares;
provided
,
however
, that, in the sole discretion of
the Administrator, any extraordinary distributions with respect
to the Shares shall be subject to the restrictions set forth in
Section 8.3. In addition, with respect to a share of
Restricted Stock with performance-based vesting, dividends which
are paid prior to vesting shall only be paid out to the Holder
to the extent that the performance-based vesting conditions are
subsequently satisfied and the share of Restricted Stock vests.
8.3
Restrictions
.
All shares of
Restricted Stock (including any shares received by Holders
thereof with respect to shares of Restricted Stock as a result
of stock dividends, stock splits or any other form of
recapitalization) shall, in the terms of the applicable Program
or in each individual Award Agreement, be subject to such
restrictions and vesting requirements as the Administrator shall
provide. Such restrictions may include, without limitation,
restrictions concerning voting rights and transferability and
such restrictions may lapse separately or in combination at such
times and pursuant to such circumstances or based on such
criteria as selected by the Administrator, including, without
limitation, criteria based on the Holders duration of
employment, directorship or consultancy with the Company, the
Performance Criteria, Company performance, individual
performance or other criteria selected by the Administrator. By
action taken after the Restricted Stock is issued, the
Administrator may, on such terms and conditions as it may
determine to be appropriate, accelerate the vesting of such
Restricted Stock by removing any or all of the restrictions
imposed by the terms of the applicable Program or Award
Agreement. Restricted Stock may not be sold or encumbered until
all restrictions are terminated or expire.
8.4
Repurchase or Forfeiture of Restricted
Stock
.
Except as otherwise determined by the
Administrator at the time of the grant of the Award or
thereafter, if no price was paid by the Holder for the
Restricted Stock, upon a Termination of Service during the
applicable restriction period, the Holders rights in
unvested Restricted Stock then subject to restrictions shall
lapse, and such Restricted Stock shall be surrendered to the
Company and cancelled without consideration. If a price was paid
by the Holder for the Restricted Stock, upon a Termination of
Service during the applicable restriction period, the Company
shall have the right to repurchase from the Holder the unvested
Restricted Stock then subject to restrictions at a cash price
per share equal to the price paid by the Holder for such
Restricted Stock or such other amount as may be specified in the
applicable Program or Award Agreement. Notwithstanding the
foregoing, except as otherwise provided by Section 3.4, the
Administrator in its sole discretion may provide that upon
certain events, including a Change in Control, the Holders
death, retirement or disability or any other specified
Termination of Service or any other event, the Holders
rights in unvested Restricted Stock shall not lapse, such
Restricted Stock shall vest and, if applicable, the Company
shall not have a right of repurchase.
8.5
Certificates for Restricted
Stock
.
Restricted Stock granted pursuant to
the Plan may be evidenced in such manner as the Administrator
shall determine. Certificates or book entries evidencing shares
of Restricted Stock shall include an appropriate legend
referring to the terms, conditions, and restrictions applicable
to such Restricted Stock. The Company may, in its sole
discretion, (a) retain physical possession of any stock
certificate evidencing shares of Restricted Stock until the
restrictions thereon shall have lapsed
and/or
(b) require that the stock certificates evidencing shares
of Restricted Stock be held in custody by a designated escrow
agent (which may but need not be
12
the Company) until the restrictions thereon shall have lapsed,
and that the Holder deliver a stock power, endorsed in blank,
relating to such Restricted Stock.
8.6
Section 83(b)
Election
.
If a Holder makes an election under
Section 83(b) of the Code to be taxed with respect to the
Restricted Stock as of the date of transfer of the Restricted
Stock rather than as of the date or dates upon which the Holder
would otherwise be taxable under Section 83(a) of the Code,
the Holder shall be required to deliver a copy of such election
to the Company promptly after filing such election with the
Internal Revenue Service along with proof of the timely filing
thereof with the Internal Revenue Service.
ARTICLE 9.
AWARD OF
RESTRICTED STOCK UNITS
9.1
Grant of Restricted Stock
Units
.
The Administrator is authorized to
grant Awards of Restricted Stock Units to any Eligible
Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the
Administrator.
9.2
Term
.
Except as otherwise
provided herein, the term of a Restricted Stock Unit award shall
be set by the Administrator in its sole discretion.
9.3
Purchase Price
.
The
Administrator shall specify the purchase price, if any, to be
paid by the Holder to the Company with respect to any Restricted
Stock Unit award;
provided
,
however
, that value of
the consideration shall not be less than the par value of a
Share, unless otherwise permitted by applicable law.
9.4
Vesting of Restricted Stock
Units
.
At the time of grant, the
Administrator shall specify the date or dates on which the
Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it
deems appropriate, including, without limitation, vesting based
upon the Holders duration of service to the Company or any
Affiliate, one or more Performance Criteria, Company
performance, individual performance or other criteria, in each
case on a specified date or dates or over any period or periods,
as determined by the Administrator, subject to Section 3.4.
9.5
Maturity and Payment
.
At the
time of grant, the Administrator shall specify the maturity date
applicable to each grant of Restricted Stock Units which shall
be no earlier than the vesting date or dates of the Award and
may be determined at the election of the Holder (if permitted by
the applicable Award Agreement);
provided
that, except as
otherwise determined by the Administrator, set forth in any
applicable Award Agreement, and subject to compliance with
Section 409A of the Code, in no event shall the maturity
date relating to each Restricted Stock Unit occur following the
later of (a) the 15th day of the third month following the
end of calendar year in which the Restricted Stock Unit vests;
or (b) the 15th day of the third month following the end of
the Companys fiscal year in which the Restricted Stock
Unit vests. On the maturity date, the Company shall, subject to
Section 12.4(e), transfer to the Holder one unrestricted,
fully transferable Share for each Restricted Stock Unit
scheduled to be paid out on such date and not previously
forfeited, or in the sole discretion of the Administrator, an
amount in cash equal to the Fair Market Value of such Shares on
the maturity date or a combination of cash and Common Stock as
determined by the Administrator.
9.6
Payment upon Termination of
Service
.
An Award of Restricted Stock Units
shall only be payable while the Holder is an Employee, a
Consultant or a member of the Board, as applicable;
provided
,
however
, that the Administrator, in its
sole and absolute discretion may provide (in an Award Agreement
or otherwise) that a Restricted Stock Unit award may be paid
subsequent to a Termination of Service in certain events,
including a Change in Control, the Holders death,
retirement or disability or any other specified Termination of
Service.
9.7
No Rights as a
Stockholder
.
Unless otherwise determined by
the Administrator, a Holder who is awarded Restricted Stock
Units shall possess no incidents of ownership with respect to
the Shares represented by such Restricted Stock Units, unless
and until the same are transferred to the Holder pursuant to the
terms of this Plan and the Award Agreement.
9.8
Dividend Equivalents
.
Subject
to Section 10.2, the Administrator may, in its sole
discretion, provide that Dividend Equivalents shall be earned by
a Holder of Restricted Stock Units based on dividends declared
on the
13
Common Stock, to be credited as of dividend payment dates during
the period between the date an Award of Restricted Stock Units
is granted to a Holder and the maturity date of such Award.
ARTICLE 10.
AWARD OF
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS,
DEFERRED
STOCK, DEFERRED STOCK UNITS
10.1
Performance Awards
.
(a) The Administrator is authorized to grant Performance
Awards, including Awards of Performance Stock Units, to any
Eligible Individual and to determine whether such Performance
Awards shall be Performance-Based Compensation. The value of
Performance Awards, including Performance Stock Units, may be
linked to any one or more of the Performance Criteria or other
criteria determined by the Administrator, in each case on a
specified date or dates or over any period or periods determined
by the Administrator. Performance Awards, including Performance
Stock Unit awards may be paid in cash, Shares, or a combination
of cash and Shares, as determined by the Administrator.
(b) Without limiting Section 10.1(a), the
Administrator may grant Performance Awards to any Eligible
Individual in the form of a cash bonus payable upon the
attainment of objective Performance Goals, or such other
criteria, whether or not objective, which are established by the
Administrator, in each case on a specified date or dates or over
any period or periods determined by the Administrator. Any such
bonuses paid to a Holder which are intended to be
Performance-Based Compensation shall be based upon objectively
determinable bonus formulas established in accordance with the
provisions of Article 5.
10.2
Dividend Equivalents
.
(a) Dividend Equivalents may be granted by the
Administrator based on dividends declared on the Common Stock,
to be credited as of dividend payment dates during the period
between the date an Award is granted to a Holder and the date
such Award vests, is exercised, is distributed or expires, as
determined by the Administrator. Such Dividend Equivalents shall
be converted to cash or additional Shares by such formula and at
such time and subject to such limitations as may be determined
by the Administrator. In addition, Dividend Equivalents with
respect to an Award with performance-based vesting that are
based on dividends paid prior to the vesting of such Award shall
only be paid out to the Holder to the extent that the
performance-based vesting conditions are subsequently satisfied
and the Award vests.
(b) Notwithstanding the foregoing, no Dividend Equivalents
shall be payable with respect to Options or Stock Appreciation
Rights.
10.3
Stock Payments
.
The
Administrator is authorized to make Stock Payments to any
Eligible Individual. The number or value of shares of any Stock
Payment shall be determined by the Administrator and may be
based upon one or more Performance Criteria or any other
criteria, including service to the Company or any Affiliate,
determined by the Administrator. Shares underlying a Stock
Payment which is subject to a vesting schedule or other
conditions or criteria set by the Administrator shall not be
issued until those conditions have been satisfied. Unless
otherwise provided by the Administrator, a Holder of a Stock
Payment shall have no rights as a Company stockholder with
respect to such Stock Payment until such time as the Stock
Payment has vested and the Shares underlying the Award have been
issued to the Holder. Stock Payments may, but are not required
to, be made in lieu of base salary, bonus, fees or other cash
compensation otherwise payable to such Eligible Individual.
10.4
Deferred Stock
.
The
Administrator is authorized to grant Deferred Stock to any
Eligible Individual. The number of shares of Deferred Stock
shall be determined by the Administrator and may (but is not
required to) be based on one or more Performance Criteria or
other criteria, including service to the Company or any
Affiliate, as the Administrator determines, in each case on a
specified date or dates or over any period or periods determined
by the Administrator. Shares underlying a Deferred Stock award
which is subject to a vesting schedule or other conditions or
criteria set by the Administrator will be issued on the vesting
date(s) or date(s) that those conditions and criteria have been
satisfied, as applicable. Unless otherwise provided by the
Administrator, a Holder of Deferred Stock shall have no rights
as a Company stockholder with respect to such Deferred Stock
until such time as
14
the Award has vested and any other applicable conditions
and/or
criteria have been satisfied and the Shares underlying the Award
have been issued to the Holder.
10.5
Deferred Stock Units
.
The
Administrator is authorized to grant Deferred Stock Units to any
Eligible Individual. The number of Deferred Stock Units shall be
determined by the Administrator and may (but is not required to)
be based on one or more Performance Criteria or other criteria,
including service to the Company or any Affiliate, as the
Administrator determines, in each case on a specified date or
dates or over any period or periods determined by the
Administrator. Each Deferred Stock Unit shall entitle the Holder
thereof to receive one Share on the date the Deferred Stock Unit
becomes vested or upon a specified settlement date thereafter
(which settlement date may (but is not required to) be the date
of the Holders Termination of Service). Shares underlying
a Deferred Stock Unit award which is subject to a vesting
schedule or other conditions or criteria set by the
Administrator will not be issued until on or following the date
that those conditions and criteria have been satisfied. Unless
otherwise provided by the Administrator, a Holder of Deferred
Stock Units shall have no rights as a Company stockholder with
respect to such Deferred Stock Units until such time as the
Award has vested and any other applicable conditions
and/or
criteria have been satisfied and the Shares underlying the Award
have been issued to the Holder.
10.6
Term
.
The term of a
Performance Award, Dividend Equivalent award, Stock Payment
award, Deferred Stock award
and/or
Deferred Stock Unit award shall be established by the
Administrator in its sole discretion.
10.7
Purchase Price
.
The
Administrator may establish the purchase price of a Performance
Award, Shares distributed as a Stock Payment award, Shares of
Deferred Stock or Shares distributed pursuant to a Deferred
Stock Unit award;
provided
,
however
, that value of
the consideration shall not be less than the par value of a
Share, unless otherwise permitted by applicable law.
10.8
Termination of Service
.
A
Performance Award, Stock Payment award, Dividend Equivalent
award, Deferred Stock award
and/or
Deferred Stock Unit award is distributable only while the Holder
is an Employee, Director or Consultant, as applicable. The
Administrator, however, in its sole discretion may provide that
the Performance Award, Dividend Equivalent award, Stock Payment
award, Deferred Stock award
and/or
Deferred Stock Unit award may be distributed subsequent to a
Termination of Service in certain events, including a Change in
Control, the Holders death, retirement or disability or
any other specified Termination of Service.
ARTICLE 11.
AWARD OF
STOCK APPRECIATION RIGHTS
11.1
Grant of Stock Appreciation Rights
.
(a) The Administrator is authorized to grant Stock
Appreciation Rights to Eligible Individuals from time to time,
in its sole discretion, on such terms and conditions as it may
determine which shall not be inconsistent with the Plan.
(b) A Stock Appreciation Right shall entitle the Holder (or
other person entitled to exercise the Stock Appreciation Right
pursuant to the Plan) to exercise all or a specified portion of
the Stock Appreciation Right (to the extent then exercisable
pursuant to its terms) and to receive from the Company an amount
determined by multiplying the difference obtained by subtracting
the exercise price per share of the Stock Appreciation Right
from the fair market value at the time of exercise of the Stock
Appreciation Right by the number of Shares with respect to which
the Stock Appreciation Right shall have been exercised, subject
to any limitations the Administrator may impose. Except as
described in (c) below, the exercise price per Share
subject to each Stock Appreciation Right shall be set by the
Administrator, but shall not be less than 100% of the Fair
Market Value on the date the Stock Appreciation Right is granted.
(c) Notwithstanding the foregoing provisions of
Section 11.1(b) to the contrary, in the case of an Stock
Appreciation Right that is a Substitute Award, the price per
share of the Shares subject to such Stock Appreciation Right may
be less than the Fair Market Value per share on the date of
grant;
provided
that the excess of: (i) the
aggregate Fair Market Value (as of the date such Substitute
Award is granted) of the shares subject to the Substitute Award,
over (ii) the aggregate exercise price thereof does not
exceed the excess of: (x) the aggregate fair market value
(as of the time immediately preceding the transaction giving
rise to the Substitute Award, such fair market
15
value to be determined by the Administrator) of the shares of
the predecessor entity that were subject to the grant assumed or
substituted for by the Company, over (y) the aggregate
exercise price of such shares.
11.2
Stock Appreciation Right Vesting
.
(a) The period during which the right to exercise, in whole
or in part, a Stock Appreciation Right vests in the Holder shall
be set by the Administrator and the Administrator may determine
that a Stock Appreciation Right may not be exercised in whole or
in part for a specified period after it is granted. Such vesting
may be based on service with the Company or any Affiliate, any
of the Performance Criteria, or any other criteria selected by
the Administrator. Except as limited by the Plan, at any time
after grant of a Stock Appreciation Right, the Administrator
may, in its sole discretion and subject to whatever terms and
conditions it selects, accelerate the period during which a
Stock Appreciation Right vests.
(b) No portion of a Stock Appreciation Right which is
unexercisable at a Holders Termination of Service shall
thereafter become exercisable, except as may be otherwise
provided by the Administrator either in the applicable Program,
the Award Agreement evidencing the grant of a Stock Appreciation
Right, or by action of the Administrator following the grant of
the Stock Appreciation Right.
11.3
Manner of Exercise
.
All or a
portion of an exercisable Stock Appreciation Right shall be
deemed exercised upon delivery of all of the following to the
Secretary of the Company, the stock plan administrator of the
Company, or such other person or entity designated by the
Administrator, or his, her or its office, as applicable:
(a) A written or electronic notice complying with the
applicable rules established by the Administrator stating that
the Stock Appreciation Right, or a portion thereof, is
exercised. The notice shall be signed by the Holder or other
person then entitled to exercise the Stock Appreciation Right or
such portion of the Stock Appreciation Right;
(b) Such representations and documents as the
Administrator, in its sole discretion, deems necessary or
advisable to effect compliance with all applicable provisions of
the Securities Act and any other federal, state or foreign
securities laws or regulations, the rules of any securities
exchange or automated quotation system on which the Shares are
listed, quoted or traded or any other applicable law. The
Administrator may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents
and registrars;
(c) In the event that the Stock Appreciation Right shall be
exercised pursuant to this Section 11.3 by any person or
persons other than the Holder, appropriate proof of the right of
such person or persons to exercise the Stock Appreciation Right,
as determined in the sole discretion of the
Administrator; and
(d) Full payment of the exercise price and applicable
withholding taxes to the stock administrator of the Company for
the Shares with respect to such the Stock Appreciation Rights,
or portion thereof, is exercised, in a manner permitted by
Section 12.1 and 12.2.
11.4
Stock Appreciation Right
Term
.
The term of each Stock Appreciation
Right (the
Stock Appreciation Right
Term
) shall be set by the Administrator in its sole
discretion;
provided
,
however
, that the Stock
Appreciation Right Term shall not be more than 10 years
from the date the Stock Appreciation Right is granted. The
Administrator shall determine the time period, including the
time period following a Termination of Service, during which the
Holder has the right to exercise the vested Stock Appreciation
Rights, which time period may not extend beyond the last day of
the Stock Appreciation Right Term. Except as limited by the
requirements of Section 409A of the Code and regulations
and rulings thereunder, the Administrator may extend the Stock
Appreciation Right Term of any outstanding Stock Appreciation
Right, and may extend the time period during which vested Stock
Appreciation Rights may be exercised, in connection with any
Termination of Service of the Holder, and may amend, subject to
Section 14.1, any other term or condition of such Stock
Appreciation Right relating to such a Termination of Service.
11.5
Payment
.
Payment of the
amounts payable with respect to Stock Appreciation Rights
pursuant to this Article 11 shall be in cash, Shares (based
on its fair market value as of the time the Stock Appreciation
Right is exercised), or a combination of both, as determined by
the Administrator.
16
ARTICLE 12.
ADDITIONAL
TERMS OF AWARDS
12.1
Payment
.
The Administrator
shall determine the methods by which payments by any Holder with
respect to any Awards granted under the Plan shall be made,
including, without limitation: (a) cash or check,
(b) Shares (including, in the case of payment of the
exercise price of an Award, Shares issuable pursuant to the
exercise of the Award) or Shares held for such period of time as
may be required by the Administrator in order to avoid adverse
accounting consequences, in each case, having a fair market
value at the time of delivery equal to the aggregate payments
required, (c) delivery of a written or electronic notice
that the Holder has placed a market sell order with a broker
with respect to Shares then issuable upon exercise or vesting of
an Award, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the aggregate payments required;
provided
that payment of such proceeds is then made to
the Company upon settlement of such sale, or (d) other form
of legal consideration acceptable to the Administrator in its
sole discretion. The Administrator shall also determine the
methods by which Shares shall be delivered or deemed to be
delivered to Holders. Notwithstanding any other provision of the
Plan to the contrary, no Holder who is a Director or an
executive officer of the Company within the meaning
of Section 13(k) of the Exchange Act shall be permitted to
make payment with respect to any Awards granted under the Plan,
or continue any extension of credit with respect to such
payment, with a loan from the Company or a loan arranged by the
Company in violation of Section 13(k) of the Exchange Act.
12.2
Tax Withholding
.
The Company
or any Affiliate shall have the authority and the right to
deduct or withhold, or require a Holder to remit to the Company,
an amount sufficient to satisfy federal, state, local and
foreign taxes (including the Holders FICA, employment tax
or other social security contribution obligation) required by
law to be withheld with respect to any taxable event concerning
a Holder arising as a result of the Plan. The Administrator may
in its sole discretion and in satisfaction of the foregoing
requirement allow a Holder to elect to have the Company withhold
Shares otherwise issuable under an Award (or allow the surrender
of Shares). The number of Shares which may be so withheld or
surrendered shall be limited to the number of Shares which have
a fair market value at the time of withholding or repurchase
equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local
and foreign income tax and payroll tax purposes that are
applicable to such supplemental taxable income. The
Administrator shall determine the fair market value of the
Shares, consistent with applicable provisions of the Code, for
tax withholding obligations due in connection with a
broker-assisted cashless Option or Stock Appreciation Right
exercise involving the sale of Shares to pay the Option or Stock
Appreciation Right exercise price or any tax withholding
obligation.
12.3
Transferability of Awards
.
(a) Except as otherwise provided in Section 12.3(b):
(i) No Award under the Plan may be sold, pledged, assigned
or transferred in any manner other than by will or the laws of
descent and distribution or, subject to the consent of the
Administrator, pursuant to a DRO, unless and until such Award
has been exercised, or the Shares underlying such Award have
been issued, and all restrictions applicable to such Shares have
lapsed;
(ii) No Award or interest or right therein shall be liable
for the debts, contracts or engagements of the Holder or his
successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, hypothecation,
encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law
by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the
preceding sentence; and
(iii) During the lifetime of the Holder, only the Holder
may exercise an Award (or any portion thereof) granted to him
under the Plan, unless it has been disposed of pursuant to a
DRO; after the death of the Holder, any exercisable portion of
an Award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Program or Award
Agreement, be exercised by his personal representative or by any
person empowered to do so under the deceased Holders will
or under the then applicable laws of descent and distribution.
17
(b) Notwithstanding Section 12.3(a), the
Administrator, in its sole discretion, may determine to permit a
Holder to transfer an Award other than an Incentive Stock Option
to any one or more Permitted Transferees, subject to the
following terms and conditions: (i) an Award transferred to
a Permitted Transferee shall not be assignable or transferable
by the Permitted Transferee other than by will or the laws of
descent and distribution; (ii) an Award transferred to a
Permitted Transferee shall continue to be subject to all the
terms and conditions of the Award as applicable to the original
Holder (other than the ability to further transfer the Award);
(iii) any transfer of a Non-Qualified Stock Option to a
Permitted Transferee shall be without consideration, except as
required by applicable law and (iv) the Holder and the
Permitted Transferee shall execute any and all documents
requested by the Administrator, including, without limitation
documents to (A) confirm the status of the transferee as a
Permitted Transferee, (B) satisfy any requirements for an
exemption for the transfer under applicable federal, state and
foreign securities laws and (C) evidence the transfer.
(c) Notwithstanding Section 12.3(a), a Holder may, in
the manner determined by the Administrator, designate a
beneficiary to exercise the rights of the Holder and to receive
any distribution with respect to any Award upon the
Holders death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to
the Plan is subject to all terms and conditions of the Plan and
any Program or Award Agreement applicable to the Holder, except
to the extent the Plan, the Program and the Award Agreement
otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Administrator. If the Holder is
married and resides in a community property state, a designation
of a person other than the Holders spouse as his or her
beneficiary with respect to more than 50% of the Holders
interest in the Award shall not be effective without the prior
written or electronic consent of the Holders spouse. If no
beneficiary has been designated or survives the Holder, payment
shall be made to the person entitled thereto pursuant to the
Holders will or the laws of descent and distribution.
Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Holder at any time;
provided
that
the change or revocation is filed with the Administrator prior
to the Holders death.
12.4
Conditions to Issuance of Shares
.
(a) Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or deliver any
certificates or make any book entries evidencing Shares pursuant
to the exercise of any Award, unless and until the Board or the
Committee has determined, with advice of counsel, that the
issuance of such Shares is in compliance with all applicable
laws, regulations of governmental authorities and, if
applicable, the requirements of any exchange on which the Shares
are listed or traded, and the Shares are covered by an effective
registration statement or applicable exemption from
registration. In addition to the terms and conditions provided
herein, the Board or the Committee may require that a Holder
make such reasonable covenants, agreements, and representations
as the Board or the Committee, in its discretion, deems
advisable in order to comply with any such laws, regulations, or
requirements.
(b) All Share certificates delivered pursuant to the Plan
and all Shares issued pursuant to book entry procedures are
subject to any stop-transfer orders and other restrictions as
the Administrator deems necessary or advisable to comply with
federal, state, or foreign securities or other laws, rules and
regulations and the rules of any securities exchange or
automated quotation system on which the Shares are listed,
quoted, or traded. The Administrator may place legends on any
Share certificate or book entry to reference restrictions
applicable to the Shares.
(c) The Administrator shall have the right to require any
Holder to comply with any timing or other restrictions with
respect to the settlement, distribution or exercise of any
Award, including a window-period limitation, as may be imposed
in the sole discretion of the Administrator.
(d) No fractional Shares shall be issued and the
Administrator shall determine, in its sole discretion, whether
cash shall be given in lieu of fractional Shares or whether such
fractional Shares shall be eliminated by rounding down.
(e) Notwithstanding any other provision of the Plan, unless
otherwise determined by the Administrator or required by any
applicable law, rule or regulation, the Company shall not
deliver to any Holder certificates evidencing Shares issued in
connection with any Award and instead such Shares shall be
recorded in the books of the Company (or, as applicable, its
transfer agent or stock plan administrator).
18
12.5
Forfeiture and Claw-Back
Provisions
.
Pursuant to its general authority
to determine the terms and conditions applicable to Awards under
the Plan, the Administrator shall have the right to provide, in
an Award Agreement or otherwise, or to require a Holder to agree
by separate written or electronic instrument, that:
(a) (i) Any proceeds, gains or other economic benefit
actually or constructively received by the Holder upon any
receipt or exercise of the Award, or upon the receipt or resale
of any Shares underlying the Award, must be paid to the Company,
and (ii) the Award shall terminate and any unexercised
portion of the Award (whether or not vested) shall be forfeited,
if (x) a Termination of Service occurs prior to a specified
date, or within a specified time period following receipt or
exercise of the Award, or (y) the Holder at any time, or
during a specified time period, engages in any activity in
competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by
the Administrator or (z) the Holder incurs a Termination of
Service for cause (as such term is defined in the
sole discretion of the Administrator, or as set forth in a
written agreement relating to such Award between the Company and
the Holder); and
(b) All Awards (including any proceeds, gains or other
economic benefit actually or constructively received by the
Holder upon any receipt or exercise of any Award or upon the
receipt or resale of any Shares underlying the Award) shall be
subject to the provisions of any claw-back obligation imposed by
applicable law or any policy implemented by the Company,
including, without limitation, any claw-back policy adopted to
comply with the requirements of the Dodd-Frank Wall Street
Reform and Consumer Protection Act and any rules or regulations
promulgated thereunder, to the extent set forth in such
claw-back policy
and/or
in
the applicable Award Agreement.
12.6
Prohibition on
Repricing
.
Subject to Section 14.2, the
Administrator shall not, without the approval of the
stockholders of the Company, (i) authorize the amendment of
any outstanding Option or Stock Appreciation Right to reduce its
price per share, or (ii) cancel any Option or Stock
Appreciation Right in exchange for cash or another Award when
the Option or Stock Appreciation Right price per share exceeds
the Fair Market Value of the underlying Shares. Subject to
Section 14.2, the Administrator shall have the authority,
without the approval of the stockholders of the Company, to
amend any outstanding Award to increase the price per share or
to cancel and replace an Award with the grant of an Award having
a price per share that is greater than or equal to the price per
share of the original Award.
ARTICLE 13.
ADMINISTRATION
13.1
Administrator
.
The Committee
(or another committee or a subcommittee of the Board assuming
the functions of the Committee under the Plan) shall administer
the Plan (except as otherwise permitted herein) and, unless
otherwise determined by the Board, shall consist solely of two
or more Non-Employee Directors appointed by and holding office
at the pleasure of the Board, each of whom is intended to
qualify as both a non-employee director as defined
by
Rule 16b-3
of the Exchange Act or any successor rule, an outside
director for purposes of Section 162(m) of the Code
and an independent director under the rules of any
securities exchange or automated quotation system on which the
Shares are listed, quoted or traded;
provided
that any
action taken by the Committee shall be valid and effective,
whether or not members of the Committee at the time of such
action are later determined not to have satisfied the
requirements for membership set forth in this Section 13.l
or otherwise provided in any charter of the Committee. Except as
may otherwise be provided in any charter of the Committee,
appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any
time by delivering written or electronic notice to the Board.
Vacancies in the Committee may only be filled by the Board.
Notwithstanding the foregoing, (a) the full Board, acting
by a majority of its members in office, shall conduct the
general administration of the Plan with respect to Awards
granted to Non-Employee Directors and, with respect to such
Awards, the terms Administrator and
Committee as used in the Plan shall be deemed to
refer to the Board and (b) the Board or Committee may
delegate its authority hereunder to the extent permitted by
Section 13.6.
13.2
Duties and Powers of
Committee
.
It shall be the duty of the
Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the
power to interpret the Plan, the Program and the Award
Agreement, and to adopt such rules for the administration,
interpretation and
19
application of the Plan as are not inconsistent therewith, to
interpret, amend or revoke any such rules and to amend any
Program or Award Agreement;
provided
that the rights or
obligations of the Holder of the Award that is the subject of
any such Program or Award Agreement are not affected adversely
by such amendment, unless the consent of the Holder is obtained
or such amendment is otherwise permitted under
Section 14.10. Any such grant or award under the Plan need
not be the same with respect to each Holder. Any such
interpretations and rules with respect to Incentive Stock
Options shall be consistent with the provisions of
Section 422 of the Code. In its sole discretion, the Board
may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan except with
respect to matters which under
Rule 16b-3
under the Exchange Act or any successor rule, or Section 162(m)
of the Code, or any regulations or rules issued thereunder, or
the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded are
required to be determined in the sole discretion of the
Committee.
13.3
Action by the
Committee
.
Unless otherwise established by
the Board or in any charter of the Committee, a majority of the
Committee shall constitute a quorum and the acts of a majority
of the members present at any meeting at which a quorum is
present, and acts approved in writing by all members of the
Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good
faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the
Company or any Affiliate, the Companys independent
certified public accountants, or any executive compensation
consultant or other professional retained by the Company to
assist in the administration of the Plan.
13.4
Authority of
Administrator
.
Subject to the Companys
Bylaws, the Committees Charter and any specific
designation in the Plan, the Administrator has the exclusive
power, authority and sole discretion to:
(a) Designate Eligible Individuals to receive Awards;
(b) Determine the type or types of Awards to be granted to
each Eligible Individual;
(c) Determine the number of Awards to be granted and the
number of Shares to which an Award will relate;
(d) Determine the terms and conditions of any Award granted
pursuant to the Plan, including, but not limited to, the
exercise price, grant price, or purchase price, any performance
criteria, any restrictions or limitations on the Award, any
schedule for vesting, lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and
accelerations or waivers thereof, and any provisions related to
non-competition and recapture of gain on an Award, based in each
case on such considerations as the Administrator in its sole
discretion determines;
(e) Determine whether, to what extent, and pursuant to what
circumstances an Award may be settled in, or the exercise price
of an Award may be paid in cash, Shares, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need
not be identical for each Holder;
(g) Decide all other matters that must be determined in
connection with an Award;
(h) Establish, adopt, or revise any rules and regulations
as it may deem necessary or advisable to administer the Plan;
(i) Interpret the terms of, and any matter arising pursuant
to, the Plan, any Program or any Award Agreement;
(j) Make all other decisions and determinations that may be
required pursuant to the Plan or as the Administrator deems
necessary or advisable to administer the Plan; and
(k) Accelerate wholly or partially the vesting or lapse of
restrictions of any Award or portion thereof at any time after
the grant of an Award, subject to whatever terms and conditions
it selects and Sections 3.4 and 14.2.
20
13.5
Decisions Binding
.
The
Administrators interpretation of the Plan, any Awards
granted pursuant to the Plan, any Program, any Award Agreement
and all decisions and determinations by the Administrator with
respect to the Plan are final, binding, and conclusive on all
parties.
13.6
Delegation of Authority
.
To
the extent permitted by applicable law or the rules of any
securities exchange or automated quotation system on which the
Shares are listed, quoted or traded, the Board or Committee may
from time to time delegate to a committee of one or more members
of the Board or one or more officers of the Company the
authority to grant or amend Awards or to take other
administrative actions pursuant to Article 13;
provided
,
however
, that in no event shall an
officer of the Company be delegated the authority to grant
awards to, or amend awards held by, the following individuals:
(a) individuals who are subject to Section 16 of the
Exchange Act, (b) Covered Employees, or (c) officers
of the Company (or Directors) to whom authority to grant or
amend Awards has been delegated hereunder;
provided
,
further
, that any delegation of administrative authority
shall only be permitted to the extent it is permissible under
Section 162(m) of the Code and applicable securities laws
or the rules of any securities exchange or automated quotation
system on which the Shares are listed, quoted or traded. Any
delegation hereunder shall be subject to the restrictions and
limits that the Board or Committee specifies at the time of such
delegation, and the Board may at any time rescind the authority
so delegated or appoint a new delegatee. At all times, the
delegatee appointed under this Section 13.6 shall serve in
such capacity at the pleasure of the Board and the Committee.
ARTICLE 14.
MISCELLANEOUS
PROVISIONS
14.1
Amendment, Suspension or Termination of the
Plan
.
Except as otherwise provided in this
Section 14.1, the Plan may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or
from time to time by the Board or the Committee. However,
without approval of the Companys stockholders given within
twelve (12) months before or after the action by the
Administrator, no action of the Administrator may, except as
provided in Section 14.2, (a) increase the limits
imposed in Section 3.1 on the maximum number of Shares
which may be issued under the Plan, or (b) reduce the price
per Share of any outstanding Option or Stock Appreciation Right
granted under the Plan or take any action prohibited under
Section 12.6, or (c) cancel any Option or Stock
Appreciation Right in exchange for cash or another Award when
the Option or Stock Appreciation Right price per Share exceeds
the Fair Market Value of the underlying Shares. Except as
provided in Sections 12.5 and 14.10, no amendment,
suspension or termination of the Plan shall, without the consent
of the Holder, impair any rights or obligations under any Award
theretofore granted or awarded, unless the Award itself
otherwise expressly so provides. No Awards may be granted or
awarded during any period of suspension or after termination of
the Plan, and in no event may any Award be granted under the
Plan after the tenth anniversary of the date the Plan was
approved by the Board.
14.2
Changes in Common Stock or Assets of the
Company, Acquisition or Liquidation of the Company and Other
Corporate Events
.
(a) In the event of any stock dividend, stock split,
combination or exchange of shares, merger, consolidation or
other distribution (other than normal cash dividends) of Company
assets to stockholders, or any other change affecting the shares
of the Companys stock or the share price of the
Companys stock other than an Equity Restructuring, the
Administrator shall make equitable adjustments, if any, to
reflect such change with respect to (i) the aggregate
number and kind of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations
in Section 3.1 on the maximum number and kind of shares
which may be issued under the Plan and adjustments of the Award
Limit); (ii) the number and kind of Shares (or other
securities or property) subject to outstanding Awards;
(iii) the number and kind of Shares (or other securities or
property) for which automatic grants are subsequently to be made
to new and continuing Non-Employee Directors pursuant to
Section 4.6 and the Non-Employee Director Equity
Compensation Policy; (iv) the terms and conditions of any
outstanding Awards (including, without limitation, any
applicable performance targets or criteria with respect
thereto); and (v) the grant or exercise price per Share for
any outstanding Awards under the Plan. Any adjustment affecting
an Award intended as Performance-Based Compensation shall be
made consistent with the requirements of Section 162(m) of
the Code.
21
(b) In the event of any transaction or event described in
Section 14.2(a) or any unusual or nonrecurring transactions
or events affecting the Company, any Affiliate of the Company,
or the financial statements of the Company or any Affiliate, or
of changes in applicable laws, regulations or accounting
principles, the Administrator, in its sole discretion, and on
such terms and conditions as it deems appropriate, either by the
terms of the Award or by action taken prior to the occurrence of
such transaction or event and either automatically or upon the
Holders request, is hereby authorized to take any one or
more of the following actions whenever the Administrator
determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to
any Award under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or
principles:
(i) To provide for either (A) termination of any such
Award in exchange for an amount of cash, if any, equal to the
amount that would have been attained upon the exercise of such
Award or realization of the Holders rights (and, for the
avoidance of doubt, if as of the date of the occurrence of the
transaction or event described in this Section 14.2 the
Administrator determines in good faith that no amount would have
been attained upon the exercise of such Award or realization of
the Holders rights, then such Award may be terminated by
the Company without payment) or (B) the replacement of such
Award with other rights or property selected by the
Administrator in its sole discretion having an aggregate value
not exceeding the amount that could have been attained upon the
exercise of such Award or realization of the Holders
rights had such Award been currently exercisable or payable or
fully vested;
(ii) To provide that such Award be assumed by the successor
or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices;
(iii) To make adjustments in the number and type of shares
of the Companys stock (or other securities or property)
subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock or Deferred Stock
and/or
in
the terms and conditions of (including the grant or exercise
price), and the criteria included in, outstanding Awards and
Awards which may be granted in the future;
(iv) To provide that such Award shall be exercisable or
payable or fully vested with respect to all Shares covered
thereby, notwithstanding anything to the contrary in the Plan or
the applicable Program or Award Agreement; and
(v) To provide that the Award cannot vest, be exercised or
become payable after such event.
(c) In connection with the occurrence of any Equity
Restructuring, and notwithstanding anything to the contrary in
Sections 14.2(a) and 14.2(b):
(i) The number and type of securities subject to each
outstanding Award and the exercise price or grant price thereof,
if applicable, shall be equitably adjusted; and/or
(ii) The Administrator shall make such equitable
adjustments, if any, as the Administrator in its sole discretion
may deem appropriate to reflect such Equity Restructuring with
respect to the aggregate number and kind of shares that may be
issued under the Plan (including, but not limited to,
adjustments of the limitations in Section 3.1 on the
maximum number and kind of shares which may be issued under the
Plan and adjustments of the Award Limit). The adjustments
provided under this Section 14.2(c) shall be
nondiscretionary and shall be final and binding on the affected
Holder and the Company.
(d) In the event of a Change in Control, or if the Company
is otherwise a party to a consolidation or a merger in which the
Company is not the surviving corporation, a transaction that
results in the acquisition of substantially all of the
Companys outstanding stock by a single person or entity,
or a sale or transfer of substantially all of the Companys
assets occurs (in any such case, a
Corporate
Event
), then the Committee (or, with respect to an
Award granted to a Non-Employee Director, the Board) may take
any actions with respect to outstanding Awards as it deems
appropriate, consistent with applicable provisions of the Code
and any applicable federal or state securities laws.
(e) Notwithstanding anything in the Plan to the contrary,
the Committee (or, with respect to an Award granted to a
Non-Employee Director, the Board) may take the foregoing actions
without the consent of any Participant, and its determination
shall be conclusive and binding on all persons and for all
purposes.
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(f) With respect to Awards which are granted to Covered
Employees and are intended to qualify as Performance-Based
Compensation, no adjustment or action described in this
Section 14.2 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would
cause such Award to fail to so qualify as Performance-Based
Compensation, unless the Administrator determines that the Award
should not so qualify. No adjustment or action described in this
Section 14.2 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would
cause the Plan to violate Section 422(b)(1) of the Code.
Furthermore, no such adjustment or action shall be authorized to
the extent such adjustment or action would result in short-swing
profits liability under Section 16 or violate the exemptive
conditions of
Rule 16b-3
unless the Administrator determines that the Award is not to
comply with such exemptive conditions.
(g) The existence of the Plan, the Program, the Award
Agreement and the Awards granted hereunder shall not affect or
restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the
Companys capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options,
warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior
to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar
character or otherwise.
(h) No action shall be taken under this Section 14.2
which shall cause an Award to fail to be exempt from or comply
with Section 409A of the Code or the Treasury Regulations
thereunder.
(i) In the event of any pending stock dividend, stock
split, combination or exchange of shares, merger, consolidation
or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting
the shares of Common Stock or the share price of the Common
Stock including any Equity Restructuring, for reasons of
administrative convenience, the Administrator in its sole
discretion may refuse to permit the exercise of any Award during
a period of up to 30 days prior to the consummation of any
such transaction.
14.3
Approval of Plan by
Stockholders
.
The Plan will be submitted for
the approval of the Companys stockholders within
12 months after the date of the Boards initial
adoption of the Plan.
14.4
No Stockholder Rights
.
Except
as otherwise provided herein, a Holder shall have none of the
rights of a stockholder with respect to Shares covered by any
Award until the Holder becomes the record owner of such Shares.
14.5
Paperless Administration
.
In
the event that the Company establishes, for itself or using the
services of a third party, an automated system for the
documentation, granting or exercise of Awards, such as a system
using an internet website or interactive voice response, then
the paperless documentation, granting or exercise of Awards by a
Holder may be permitted through the use of such an automated
system.
14.6
Effect of Plan upon Other Compensation
Plans
.
The adoption of the Plan shall not
affect any other compensation or incentive plans in effect for
the Company or any Affiliate. Nothing in the Plan shall be
construed to limit the right of the Company or any Affiliate:
(a) to establish any other forms of incentives or
compensation for Employees, Directors or Consultants of the
Company or any Affiliate, or (b) to grant or assume options
or other rights or awards otherwise than under the Plan in
connection with any proper corporate purpose including without
limitation, the grant or assumption of options in connection
with the acquisition by purchase, lease, merger, consolidation
or otherwise, of the business, stock or assets of any
corporation, partnership, limited liability company, firm or
association.
14.7
Compliance with Laws
.
The
Plan, the granting and vesting of Awards under the Plan and the
issuance and delivery of Shares and the payment of money under
the Plan or under Awards granted or awarded hereunder are
subject to compliance with all applicable federal, state, local
and foreign laws, rules and regulations (including but not
limited to state, federal and foreign securities law and margin
requirements), the rules of any securities exchange or automated
quotation system on which the Shares are listed, quoted or
traded, and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary
or desirable to assure compliance with all applicable legal
23
requirements. To the extent permitted by applicable law, the
Plan and Awards granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such laws, rules
and regulations.
14.8
Titles and Headings, References to Sections of
the Code or Exchange Act
.
The titles and
headings of the Sections in the Plan are for convenience of
reference only and, in the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control.
References to sections of the Code or the Exchange Act shall
include any amendment or successor thereto.
14.9
Governing Law
.
The Plan and
any agreements hereunder shall be administered, interpreted and
enforced under the internal laws of the State of Delaware
without regard to conflicts of laws thereof or of any other
jurisdiction.
14.10
Section 409A
.
To the
extent that the Administrator determines that any Award granted
under the Plan is subject to Section 409A of the Code, the
Program pursuant to which such Award is granted and the Award
Agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code. To the
extent applicable, the Plan, the Program and any Award
Agreements shall be interpreted in accordance with
Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other
guidance that may be issued after the Effective Date.
Notwithstanding any provision of the Plan to the contrary, in
the event that following the Effective Date the Administrator
determines that any Award may be subject to Section 409A of
the Code and related Department of Treasury guidance (including
such Department of Treasury guidance as may be issued after the
Effective Date), the Administrator may adopt such amendments to
the Plan and the applicable Program and Award Agreement or adopt
other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other
actions, that the Administrator determines are necessary or
appropriate to (a) exempt the Award from Section 409A
of the Code
and/or
preserve the intended tax treatment of the benefits provided
with respect to the Award, or (b) comply with the
requirements of Section 409A of the Code and related
Department of Treasury guidance and thereby avoid the
application of any penalty taxes under such Section.
14.11
No Rights to Awards
.
No
Eligible Individual or other person shall have any claim to be
granted any Award pursuant to the Plan, and neither the Company
nor the Administrator is obligated to treat Eligible
Individuals, Holders or any other persons uniformly.
14.12
Unfunded Status of
Awards
.
The Plan is intended to be an
unfunded plan for incentive compensation. With
respect to any payments not yet made to a Holder pursuant to an
Award, nothing contained in the Plan or any Program or Award
Agreement shall give the Holder any rights that are greater than
those of a general creditor of the Company or any Affiliate.
14.13
Indemnification
.
To the
extent allowable pursuant to applicable law, each member of the
Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or
she may be involved by reason of any action or failure to act
pursuant to the Plan and against and from any and all amounts
paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her;
provided
he or
she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled pursuant
to the Companys Certificate of Incorporation or Bylaws, as
a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
14.14
Relationship to other
Benefits
.
No payment pursuant to the Plan
shall be taken into account in determining any benefits under
any pension, retirement, savings, profit sharing, group
insurance, welfare or other benefit plan of the Company or any
Affiliate except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.
14.15
Expenses
.
The expenses of
administering the Plan shall be borne by the Company and its
Affiliates.
24