Exhibit 10.1
WABASH
NATIONAL CORPORATION
2007 OMNIBUS INCENTIVE PLAN
WABASH
NATIONAL CORPORATION
2007 OMNIBUS INCENTIVE PLAN
Wabash National Corporation, a Delaware corporation (the
Company), sets forth herein the terms of its 2007
Omnibus Incentive Plan (the Plan), as follows:
The Plan is intended to enhance the Companys and its
Affiliates (as defined herein) ability to attract and
retain highly qualified officers, directors, key employees, and
other persons, and to motivate such persons to serve the Company
and its Affiliates and to expend maximum effort to improve the
business results and earnings of the Company, by providing to
such persons an opportunity to acquire or increase a direct
proprietary interest in the operations and future success of the
Company. To this end, the Plan provides for the grant of stock
options, stock appreciation rights, restricted stock, stock
units, unrestricted stock, dividend equivalent rights and cash
awards. Any of these awards may, but need not, be made as
performance incentives to reward attainment of annual or
long-term performance goals in accordance with the terms hereof.
Stock options granted under the Plan may be non-qualified stock
options or incentive stock options, as provided herein.
For purposes of interpreting the Plan and related documents
(including Award Agreements), the following definitions shall
apply:
2.1
Affiliate
means, with respect
to the Company, any company or other trade or business that
controls, is controlled by or is under common control with the
Company within the meaning of Rule 405 of Regulation C
under the Securities Act, including, without limitation, any
Subsidiary.
2.2
Annual Incentive Award
means
an Award made subject to attainment of performance goals (as
described in
Section 14
) over a performance period
of up to one year (the Companys fiscal year, unless
otherwise specified by the Committee).
2.3
Award
means a grant of an
Option, Stock Appreciation Right, Restricted Stock, Unrestricted
Stock, Stock Unit, Dividend Equivalent Rights, or cash award
under the Plan.
2.4
Award Agreement
means the
written agreement between the Company and a Grantee that
evidences and sets out the terms and conditions of an Award.
2.5
Benefit Arrangement
shall have
the meaning set forth in
Section 15
hereof.
2.6
Board
means the Board of
Directors of the Company.
2.7
Cause
means, as determined by
the Board and unless otherwise provided in an applicable
agreement with the Company or an Affiliate, (i) gross
negligence or willful misconduct in connection with the
performance of duties; (ii) conviction of a criminal
offense (other than minor traffic offenses); or
(iii) material breach of any term of any employment,
consulting or other services, confidentiality, intellectual
property or non-competition agreements, if any, between the
Service Provider and the Company or an Affiliate.
2.8
Code
means the Internal
Revenue Code of 1986, as now in effect or as hereafter amended.
2.9
Committee
means a committee
of, and designated from time to time by resolution of, the
Board, which shall be constituted as provided in
Section 3.2.
2.10
Company
means Wabash National
Corporation.
2.11
Corporate Transaction
means
(i) the dissolution or liquidation of the Company or a
merger, consolidation, or reorganization of the Company with one
or more other entities in which the Company is not the surviving
entity, (ii) a sale of substantially all of the assets of
the Company to another person or entity, or (iii) any
transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity)
A-1
which results in any person or entity (other than persons who
are stockholders or Affiliates immediately prior to the
transaction) owning 50% or more of the combined voting power of
all classes of stock of the Company.
2.12
Covered Employee
means a
Grantee who is a covered employee within the meaning of
Section 162(m)(3) of the Code.
2.13
Disability
means the Grantee
is unable to perform each of the essential duties of such
Grantees position by reason of a medically determinable
physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous
period of not less than 12 months; provided, however, that,
with respect to rules regarding expiration of an Incentive Stock
Option following termination of the Grantees Service,
Disability shall mean the Grantee is unable to engage in any
substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months.
2.14
Dividend Equivalent Right
means a right, granted to a Grantee under
Section 13
hereof, to receive cash, Stock, other Awards or other
property equal in value to dividends paid with respect to a
specified number of shares of Stock, or other periodic payments.
2.15
Effective Date
means
May 24, 2007, the date the Plan is approved by the
Shareholders.
2.16
Exchange Act
means the
Securities Exchange Act of 1934, as now in effect or as
hereafter amended.
2.17
Fair Market Value
means the
value of a share of Stock, determined as follows: if on the
Grant Date or other determination date the Stock is listed on an
established national or regional stock exchange, is admitted to
quotation on The NASDAQ Stock Market or is publicly traded on an
established securities market, the Fair Market Value of a share
of Stock shall be the closing price of the Stock on such
exchange or in such market (if there is more than one such
exchange or market the Board shall determine the appropriate
exchange or market) on the Grant Date or such other
determination date (or if there is no such reported closing
price, the Fair Market Value shall be the mean between the
highest bid and lowest asked prices or between the high and low
sale prices on such trading day) or, if no sale of Stock is
reported for such trading day, on the next preceding day on
which any sale shall have been reported. If the Stock is not
listed on such an exchange, quoted on such system or traded on
such a market, Fair Market Value shall be the value of the Stock
as determined by the Board in good faith in a manner consistent
with Code Section 409A.
2.18
Family Member
means a person
who is a spouse, former spouse, child, stepchild, grandchild,
parent, stepparent, grandparent, niece, nephew,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother, sister,
brother-in-law,
or
sister-in-law,
including adoptive relationships, of the Grantee, any person
sharing the Grantees household (other than a tenant or
employee), a trust in which any one or more of these persons
have more than fifty percent of the beneficial interest, a
foundation in which any one or more of these persons (or the
Grantee) control the management of assets, and any other entity
in which one or more of these persons (or the Grantee) own more
than fifty percent of the voting interests.
2.19
Grant Date
means, as
determined by the Board, the latest to occur of (i) the
date as of which the Board approves an Award, (ii) the date
on which the recipient of an Award first becomes eligible to
receive an Award under
Section 6
hereof, or
(iii) such other date as may be specified by the Board.
2.20
Grantee
means a person who
receives or holds an Award under the Plan.
2.21
Incentive Stock Option
means
an incentive stock option within the meaning of
Section 422 of the Code, or the corresponding provision of
any subsequently enacted tax statute, as amended from time to
time.
2.22
Non-qualified Stock Option
means an Option that is not an Incentive Stock Option.
2.23
Option
means an option to
purchase one or more shares of Stock pursuant to the Plan.
2.24
Option Price
means the
exercise price for each share of Stock subject to an Option.
2.25
Other Agreement
shall have
the meaning set forth in
Section 15
hereof.
2.26
Outside Director
means a
member of the Board who is not an officer or employee of the
Company.
A-2
2.27
Performance Award
means an
Award made subject to the attainment of performance goals (as
described in
Section 14
) over a performance period
of up to ten (10) years.
2.28
Plan
means this Wabash
National Corporation 2007 Omnibus Incentive Plan.
2.29
Purchase Price
means the
purchase price for each share of Stock pursuant to a grant of
Restricted Stock or Unrestricted Stock.
2.30
Reporting Person
means a
person who is required to file reports under Section 16(a)
of the Exchange Act.
2.31
Restricted Stock
means shares
of Stock, awarded to a Grantee pursuant to
Section 10
hereof.
2.32
SAR Exercise Price
means the
per share exercise price of an SAR granted to a Grantee under
Section 9
hereof.
2.33
Securities Act
means the
Securities Act of 1933, as now in effect or as hereafter amended.
2.34
Service
means service as a
Service Provider to the Company or an Affiliate. Unless
otherwise stated in the applicable Award Agreement, a
Grantees change in position or duties shall not result in
interrupted or terminated Service, so long as such Grantee
continues to be a Service Provider to the Company or an
Affiliate. Subject to the preceding sentence, whether a
termination of Service shall have occurred for purposes of the
Plan shall be determined by the Board, which determination shall
be final, binding and conclusive.
2.35
Service Provider
means an
employee, officer or director of the Company or an Affiliate, or
a consultant or adviser currently providing services to the
Company or an Affiliate.
2.36
Stock
means the common stock,
par value $.01 per share, of the Company.
2.37
Stock Appreciation Right
or
SAR
means a right granted to a Grantee under
Section 9
hereof.
2.38
Stock Unit
means a
bookkeeping entry representing the equivalent of one share of
Stock awarded to a Grantee pursuant to
Section 10
hereof.
2.39
Subsidiary
means any
subsidiary corporation of the Company within the
meaning of Section 424(f) of the Code.
2.40
Substitute Awards
means
Awards granted upon assumption of, or in substitution for,
outstanding awards previously granted by a company or other
entity acquired by the Company or any Affiliate or with which
the Company or any Affiliate combines.
2.41
Termination Date
means the
date upon which an Option shall terminate or expire, as set
forth in
Section 8.3
hereof.
2.42
Ten Percent Stockholder
means
an individual who owns more than ten percent (10%) of the total
combined voting power of all classes of outstanding stock of the
Company, its parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.
2.43
Unrestricted Stock
means an
Award pursuant to
Section 11
hereof.
|
|
3.
|
ADMINISTRATION
OF THE PLAN
|
3.1. Board
The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the
Companys certificate of incorporation and by-laws and
applicable law. The Board shall have full power and authority to
take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement,
and shall have full power and authority to take all such other
actions and make all such other determinations not inconsistent
with the specific terms and provisions of the Plan that the
Board deems to be necessary or appropriate to the administration
of the Plan, any Award or any Award Agreement. All such actions
and determinations shall be by the affirmative vote of a
majority of the members of the Board present at a meeting or by
unanimous consent of the Board executed in writing in accordance
with the Companys certificate of incorporation
A-3
and by-laws and applicable law. The interpretation and
construction by the Board of any provision of the Plan, any
Award or any Award Agreement shall be final, binding and
conclusive.
3.2. Committee.
The Board from time to time may delegate to the Committee such
powers and authorities related to the administration and
implementation of the Plan, as set forth in
Section 3.1
above and other applicable provisions, as the Board shall
determine, consistent with the certificate of incorporation and
by-laws of the Company and applicable law.
(i) Except as provided in
Subsection (ii) and except as the Board may otherwise
determine, the Committee, if any, appointed by the Board to
administer the Plan shall consist of two or more Outside
Directors of the Company who: (a) qualify as outside
directors within the meaning of Section 162(m) of the
Code and who (b) meet such other requirements as may be
established from time to time by the Securities and Exchange
Commission for plans intended to qualify for exemption under
Rule 16b 3 (or its successor) under the
Exchange Act and who (c) comply with the independence
requirements of the stock exchange on which the Common Stock is
listed.
(ii) The Board may also appoint one or more separate
committees of the Board, each composed of one or more directors
of the Company who need not be Outside Directors, who may
administer the Plan with respect to employees or other Service
Providers who are not officers or directors of the Company, may
grant Awards under the Plan to such employees or other Service
Providers, and may determine all terms of such Awards.
In the event that the Plan, any Award or any Award Agreement
entered into hereunder provides for any action to be taken by or
determination to be made by the Board, such action may be taken
or such determination may be made by the Committee if the power
and authority to do so has been delegated to the Committee by
the Board as provided for in this Section. Unless otherwise
expressly determined by the Board, any such action or
determination by the Committee shall be final, binding and
conclusive. To the extent permitted by law, the Committee may
delegate its authority under the Plan to a member of the Board.
3.3. Terms
of Awards.
Subject to the other terms and conditions of the Plan, the Board
shall have full and final authority to:
(i) designate Grantees,
(ii) determine the type or types of Awards to be made
to a Grantee,
(iii) determine the number of shares of Stock to be
subject to an Award,
(iv) establish the terms and conditions of each Award
(including, but not limited to, the exercise price of any
Option, the nature and duration of any restriction or condition
(or provision for lapse thereof) relating to the vesting,
exercise, transfer, or forfeiture of an Award or the shares of
Stock subject thereto, and any terms or conditions that may be
necessary to qualify Options as Incentive Stock Options),
(v) prescribe the form of each Award Agreement
evidencing an Award, and
(vi) amend, modify, or supplement the terms of any
outstanding Award. Such authority specifically includes the
authority, in order to effectuate the purposes of the Plan but
without amending the Plan, to modify Awards to eligible
individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in
local law, tax policy, or custom. Notwithstanding the foregoing,
no amendment, modification or supplement of any Award shall,
without the consent of the Grantee, impair the Grantees
rights under such Award.
The Company may retain the right in an Award Agreement to cause
a forfeiture of the gain realized by a Grantee on account of
actions taken by the Grantee in violation or breach of or in
conflict with any employment agreement, non-competition
agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any
confidentiality obligation with
A-4
respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the
extent specified in such Award Agreement applicable to the
Grantee. Furthermore, the Company may annul an Award if the
Grantee is an employee of the Company or an Affiliate thereof
and is terminated for Cause as defined in the applicable Award
Agreement or the Plan, as applicable.
Notwithstanding the foregoing, no amendment or modification may
be made to an outstanding Option or SAR which reduces the Option
Price or SAR Exercise Price, either by lowering the Option Price
or SAR Exercise Price or by canceling the outstanding Option or
SAR and granting a replacement Option or SAR with a lower
exercise price or other form of equity award without the
approval of the stockholders of the Company, provided, that,
appropriate adjustments may be made to outstanding Options and
SARs pursuant to
Section 17
.
3.4. Deferral
Arrangement.
The Board may permit or require the deferral of any award
payment into a deferred compensation arrangement, subject to
such rules and procedures as it may establish, which may include
provisions for the payment or crediting of interest or dividend
equivalents, including converting such credits into deferred
Stock equivalents. Any such deferrals shall be made in a manner
that complies with Code Section 409A.
3.5. No
Liability.
No member of the Board or of the Committee shall be liable for
any action or determination made in good faith with respect to
the Plan or any Award or Award Agreement.
3.6. Share
Issuance/Book-Entry
Notwithstanding any provision of this Plan to the contrary, the
issuance of the Stock under the Plan may be evidenced in such a
manner as the Board, in its discretion, deems appropriate,
including, without limitation, book-entry registration or
issuance of one or more Stock certificates.
|
|
4.
|
STOCK
SUBJECT TO THE PLAN
|
Subject to adjustment as provided in
Section 17
hereof, the number of shares of Stock available for issuance
under the Plan shall be two million five hundred thousand
(2,500,000) plus shares of Stock that are subject to outstanding
awards granted under the Companys 2004 Stock Incentive
Plan that expire or are forfeited, canceled or settled for cash
after the Effective Date without delivery of shares of Stock.
Notwithstanding the preceding sentence and also subject to
adjustment as provided in
Section 17
hereof, the
aggregate number of shares of Stock which cumulatively may be
available for issuance pursuant to Awards other than Awards of
Options or SARs shall not exceed one million two hundred fifty
thousand (1,250,000). Stock issued or to be issued under the
Plan shall be authorized but unissued shares; or, to the extent
permitted by applicable law, issued shares that have been
reacquired by the Company. If any shares covered by an Award are
not purchased or are forfeited, or if an Award otherwise
terminates without delivery of any Stock subject thereto, then
the number of shares of Stock counted against the aggregate
number of shares available under the Plan with respect to such
Award shall, to the extent of any such forfeiture or
termination, again be available for making Awards under the
Plan. The number of shares available for issuance under the Plan
shall be reduced by the number of shares subject to SARs.
The Board shall have the right to substitute or assume Awards in
connection with mergers, reorganizations, separations, or other
transactions to which Section 424(a) of the Code applies.
The number of shares of Stock reserved pursuant to
Section 4
may be increased by the corresponding
number of Awards assumed and, in the case of a substitution, by
the net increase in the number of shares of Stock subject to
Awards before and after the substitution.
|
|
5.
|
EFFECTIVE
DATE, DURATION AND AMENDMENTS
|
5.1. Effective
Date.
The Plan shall be effective as of the Effective Date, the date
the Plan is approved by the Shareholders.
A-5
5.2. Term.
The Plan shall terminate automatically ten (10) years after
its adoption by the Board and may be terminated on any earlier
date as provided in
Section 5.3.
5.3. Amendment
and Termination of the Plan
The Board may, at any time and from time to time, amend,
suspend, or terminate the Plan as to any shares of Stock as to
which Awards have not been made. An amendment shall be
contingent on approval of the Companys stockholders to the
extent stated by the Board, required by applicable law or
required by applicable stock exchange listing requirements. In
addition, an amendment will be contingent on approval of the
Companys stockholders if the amendment would:
(i) materially increase the benefits accruing to
participants under the Plan, (ii) materially increase the
aggregate number of shares of Stock that may be issued under the
Plan, or (iii) materially modify the requirements as to
eligibility for participation in the Plan. No Awards shall be
made after termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without the consent of the
Grantee, impair rights or obligations under any Award
theretofore awarded under the Plan.
|
|
6.
|
AWARD
ELIGIBILITY AND LIMITATIONS
|
6.1. Service
Providers and Other Persons
Subject to this
Section 6
, Awards may be made under
the Plan to: (i) any Service Provider to the Company or of
any Affiliate, including any Service Provider who is an officer
or director of the Company, or of any Affiliate, as the Board
shall determine and designate from time to time and
(ii) any other individual whose participation in the Plan
is determined to be in the best interests of the Company by the
Board.
6.2. Successive
Awards and Substitute Awards.
An eligible person may receive more than one Award, subject to
such restrictions as are provided herein. Notwithstanding
Sections 8.1
and
9.1
, the Option Price of an
Option or the grant price of an SAR that is a Substitute Award
may be less than 100% of the Fair Market Value of a share of
Common Stock on the original date of grant; provided, that, the
Option Price or grant price is determined in accordance with the
principles of Code Section 424 and the regulations
thereunder.
6.3. Limitation
on Shares of Stock Subject to Awards and Cash Awards.
During any time when the Company has a class of equity security
registered under Section 12 of the Exchange Act:
(i) the maximum number of shares of Stock subject to
Options or SARs that can be awarded under the Plan to any person
eligible for an Award under
Section 6
hereof is six
hundred twenty-five thousand (625,000) per calendar year;
(ii) the maximum number of shares that can be awarded
under the Plan, other than pursuant to an Option or SARs, to any
person eligible for an Award under
Section 6
hereof
is three hundred seventy-five thousand (375,000) per calendar
year; and
(iii) the maximum amount that may be earned as an
Annual Incentive Award or other cash Award in any calendar year
by any one Grantee shall be $1,500,000 and the maximum amount
that may be earned as a Performance Award or other cash Award in
respect of a performance period by any one Grantee shall be
$2,000,000.
The preceding limitations in this
Section 6.3
are
subject to adjustment as provided in
Section 17
hereof.
A-6
Each Award granted pursuant to the Plan shall be evidenced by an
Award Agreement, in such form or forms as the Board shall from
time to time determine. Award Agreements granted from time to
time or at the same time need not contain similar provisions but
shall be consistent with the terms of the Plan. Each Award
Agreement evidencing an Award of Options shall specify whether
such Options are intended to be Non-qualified Stock Options or
Incentive Stock Options, and in the absence of such
specification such options shall be deemed Non-qualified Stock
Options.
|
|
8.
|
TERMS AND
CONDITIONS OF OPTIONS
|
8.1. Option
Price
The Option Price of each Option shall be fixed by the Board and
stated in the Award Agreement evidencing such Option. The Option
Price of each Option shall be at least the Fair Market Value on
the Grant Date of a share of Stock;
provided
,
however
, that in the event that a Grantee is a Ten
Percent Stockholder, the Option Price of an Option granted to
such Grantee that is intended to be an Incentive Stock Option
shall be not less than 110 percent of the Fair Market Value
of a share of Stock on the Grant Date. In no case shall the
Option Price of any Option be less than the par value of a share
of Stock.
8.2. Vesting.
Subject to
Sections 8.3 and 17.3
hereof, each Option
granted under the Plan shall become exercisable at such times
and under such conditions as shall be determined by the Board
and stated in the Award Agreement. For purposes of this
Section 8.2
, fractional numbers of shares of Stock
subject to an Option shall be rounded down to the next nearest
whole number.
8.3. Term.
Each Option granted under the Plan shall terminate, and all
rights to purchase shares of Stock thereunder shall cease, upon
the expiration of ten years from the date such Option is
granted, or under such circumstances and on such date prior
thereto as is set forth in the Plan or as may be fixed by the
Board and stated in the Award Agreement relating to such Option
(the Termination Date);
provided
,
however
, that in the event that the Grantee is a Ten
Percent Stockholder, an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall not be
exercisable after the expiration of five years from its Grant
Date.
8.4. Termination
of Service.
Each Award Agreement shall set forth the extent to which the
Grantee shall have the right to exercise the Option following
termination of the Grantees Service. Such provisions shall
be determined in the sole discretion of the Board, need not be
uniform among all Options issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of
Service.
8.5. Limitations
on Exercise of Option.
Notwithstanding any other provision of the Plan, in no event may
any Option be exercised, in whole or in part, prior to the date
the Plan is approved by the stockholders of the Company as
provided herein or after the occurrence of an event referred to
in
Section 17
hereof which results in termination of
the Option.
8.6. Method
of Exercise.
An Option that is exercisable may be exercised by the
Grantees delivery to the Company of written notice of
exercise on any business day, at the Companys principal
office, on the form specified by the Company. Such notice shall
specify the number of shares of Stock with respect to which the
Option is being exercised and shall be accompanied by payment in
full of the Option Price of the shares for which the Option is
being exercised plus the amount (if any) of federal
and/or
other
taxes which the Company may, in its judgment, be required to
withhold with respect to an Award. The minimum number of shares
of Stock with respect to which an Option may be exercised, in
A-7
whole or in part, at any time shall be the lesser of
(i) 100 shares or such lesser number set forth in the
applicable Award Agreement and (ii) the maximum number of
shares available for purchase under the Option at the time of
exercise.
8.7. Rights
of Holders of Options
Unless otherwise stated in the applicable Award Agreement, an
individual holding or exercising an Option shall have none of
the rights of a stockholder (for example, the right to receive
cash or dividend payments or distributions attributable to the
subject shares of Stock or to direct the voting of the subject
shares of Stock ) until the shares of Stock covered thereby are
fully paid and issued to him. Except as provided in
Section 17
hereof, no adjustment shall be made for
dividends, distributions or other rights for which the record
date is prior to the date of such issuance.
|
|
|
|
8.8
|
Delivery of Stock Certificates.
|
Promptly after the exercise of an Option by a Grantee and the
payment in full of the Option Price, such Grantee shall be
entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject
to the Option.
8.9. Transferability
of Options
Except as provided in
Section 8.10
, during the
lifetime of a Grantee, only the Grantee (or, in the event of
legal incapacity or incompetency, the Grantees guardian or
legal representative) may exercise an Option. Except as provided
in
Section 8.10
, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.
8.10. Family
Transfers.
If authorized in the applicable Award Agreement, a Grantee may
transfer, not for value, all or part of an Option which is not
an Incentive Stock Option to any Family Member. For the purpose
of this
Section 8.10
, a not for value
transfer is a transfer which is (i) a gift, (ii) a
transfer under a domestic relations order in settlement of
marital property rights; or (iii) a transfer to an entity
in which more than fifty percent of the voting interests are
owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this
Section 8.10
, any such Option shall continue to be
subject to the same terms and conditions as were applicable
immediately prior to transfer. Subsequent transfers of
transferred Options are prohibited except to Family Members of
the original Grantee in accordance with this
Section 8.10
or by will or the laws of descent and
distribution. The events of termination of Service of
Section 8.4
hereof shall continue to be applied with
respect to the original Grantee, following which the Option
shall be exercisable by the transferee only to the extent, and
for the periods specified, in
Section 8.4.
8.11. Limitations
on Incentive Stock Options.
An Option shall constitute an Incentive Stock Option only
(i) if the Grantee of such Option is an employee of the
Company or any Subsidiary of the Company; (ii) to the
extent specifically provided in the related Award Agreement; and
(iii) to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the shares of
Stock with respect to which all Incentive Stock Options held by
such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the
Grantees employer and its Affiliates) does not exceed
$100,000. This limitation shall be applied by taking Options
into account in the order in which they were granted.
8.12. Notice
of Disqualifying Disposition.
If any Grantee shall make any disposition of shares of Stock
issued pursuant to the exercise of an Incentive Stock Option
under the circumstances described in Code Section 421(b)
(relating to certain disqualifying dispositions), such Grantee
shall notify the Company of such disposition within ten
(10) days thereof.
A-8
|
|
9.
|
TERMS AND
CONDITIONS OF STOCK APPRECIATION RIGHTS
|
9.1. Right
to Payment and Grant Price.
A SAR shall confer on the Grantee to whom it is granted a right
to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise
over (B) the grant price of the SAR as determined by the
Board. The Award Agreement for a SAR shall specify the grant
price of the SAR, which shall be at least the Fair Market Value
of a share of Stock on the date of grant. SARs may be granted in
conjunction with all or part of an Option granted under the Plan
or at any subsequent time during the term of such Option, in
conjunction with all or part of any other Award or without
regard to any Option or other Award; provided that an SAR that
is granted subsequent to the Grant Date of a related Option must
have an SAR Price that is no less than the Fair Market Value of
one share of Stock on the SAR Grant Date.
9.2. Other
Terms.
The Board shall determine at the date of grant or thereafter,
the time or times at which and the circumstances under which an
SAR may be exercised in whole or in part (including based on
achievement of performance goals
and/or
future service requirements), the time or times at which SARs
shall cease to be or become exercisable following termination of
Service or upon other conditions, the method of exercise, method
of settlement, form of consideration payable in settlement,
method by or forms in which Stock will be delivered or deemed to
be delivered to Grantees, whether or not an SAR shall be in
tandem or in combination with any other Award, and any other
terms and conditions of any SAR.
9.3. Term.
Each SAR granted under the Plan shall terminate, and all rights
thereunder shall cease, upon the expiration of ten years from
the date such SAR is granted, or under such circumstances and on
such date prior thereto as is set forth in the Plan or as may be
fixed by the Board and stated in the Award Agreement relating to
such SAR.
9.4. Transferability
of SARS.
Except as provided in
Section 9.5
, during the
lifetime of a Grantee, only the Grantee (or, in the event of
legal incapacity or incompetency, the Grantees guardian or
legal representative) may exercise a SAR. Except as provided in
Section 9.5
, no SAR shall be assignable or
transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.
9.5. Family
Transfers.
If authorized in the applicable Award Agreement, a Grantee may
transfer, not for value, all or part of a SAR to any Family
Member. For the purpose of this
Section 9.5
, a
not for value transfer is a transfer which is
(i) a gift, (ii) a transfer under a domestic relations
order in settlement of marital property rights; or (iii) a
transfer to an entity in which more than fifty percent of the
voting interests are owned by Family Members (or the Grantee) in
exchange for an interest in that entity. Following a transfer
under this
Section 9.5
, any such SAR shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers
of transferred SARs are prohibited except to Family Members of
the original Grantee in accordance with this
Section 9.5
or by will or the laws of descent and distribution.
|
|
10.
|
TERMS AND
CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS
|
10.1. Grant
of Restricted Stock or Stock Units.
Awards of Restricted Stock or Stock Units may be made for no
consideration (other than par value of the shares which is
deemed paid by Services already rendered).
A-9
10.2. Restrictions.
At the time a grant of Restricted Stock or Stock Units is made,
the Board may, in its sole discretion, establish a period of
time (a restricted period) applicable to such
Restricted Stock or Stock Units. Each Award of Restricted Stock
or Stock Units may be subject to a different restricted period.
The Board may, in its sole discretion, at the time a grant of
Restricted Stock or Stock Units is made, prescribe restrictions
in addition to or other than the expiration of the restricted
period, including the satisfaction of corporate or individual
performance objectives as described in
Article 14
,
which may be applicable to all or any portion of the Restricted
Stock or Stock Units. Notwithstanding the foregoing,
(i) Restricted Stock and Stock Units that vest solely by
the passage of time shall not vest in full in less than three
(3) years from the Grant Date, and (ii) Restricted
Stock and Stock Units for which vesting may be accelerated by
achieving performance targets shall not vest in full in less
than one (1) year from the Grant Date. Neither Restricted
Stock nor Stock Units may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the
restricted period or prior to the satisfaction of any other
restrictions prescribed by the Board with respect to such
Restricted Stock or Stock Units.
10.3. Restricted
Stock Certificates.
The Company shall issue, in the name of each Grantee to whom
Restricted Stock has been granted, stock certificates
representing the total number of shares of Restricted Stock
granted to the Grantee, as soon as reasonably practicable after
the Grant Date. The Board may provide in an Award Agreement that
either (i) the Secretary of the Company shall hold such
certificates for the Grantees benefit until such time as
the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be
delivered to the Grantee,
provided
,
however
, that
such certificates shall bear a legend or legends that comply
with the applicable securities laws and regulations and makes
appropriate reference to the restrictions imposed under the Plan
and the Award Agreement.
10.4. Rights
of Holders of Restricted Stock.
Unless the Board otherwise provides in an Award Agreement,
holders of Restricted Stock shall have the right to vote such
Stock and the right to receive any dividends declared or paid
with respect to such Stock. The Board may provide that any
dividends paid on Restricted Stock must be reinvested in shares
of Stock, which may or may not be subject to the same vesting
conditions and restrictions applicable to such Restricted Stock.
All distributions, if any, received by a Grantee with respect to
Restricted Stock as a result of any stock split, stock dividend,
combination of shares, or other similar transaction shall be
subject to the restrictions applicable to the original Grant.
10.5. Rights
of Holders of Stock Units.
10.5.1. Voting
and Dividend Rights.
Holders of Stock Units shall have no rights as stockholders of
the Company. The Board may provide in an Award Agreement
evidencing a grant of Stock Units that the holder of such Stock
Units shall be entitled to receive, upon the Companys
payment of a cash dividend on its outstanding Stock, a cash
payment for each Stock Unit held equal to the per-share dividend
paid on the Stock. Such Award Agreement may also provide that
such cash payment will be deemed reinvested in additional Stock
Units at a price per unit equal to the Fair Market Value of a
share of Stock on the date that such dividend is paid.
10.5.2. Creditors
Rights.
A holder of Stock Units shall have no rights other than those of
a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Award Agreement.
10.6. Termination
of Service.
Unless the Board otherwise provides in an Award Agreement or in
writing after the Award Agreement is issued, upon the
termination of a Grantees Service, any Restricted Stock or
Stock Units held by such Grantee that have not vested, or with
respect to which all applicable restrictions and conditions have
not lapsed, shall
A-10
immediately be deemed forfeited. Upon forfeiture of Restricted
Stock or Stock Units, the Grantee shall have no further rights
with respect to such Award, including but not limited to any
right to vote Restricted Stock or any right to receive dividends
with respect to shares of Restricted Stock or Stock Units.
10.7. Purchase
of Restricted Stock.
The Grantee shall be required, to the extent required by
applicable law, to purchase the Restricted Stock from the
Company at a Purchase Price equal to the greater of (i) the
aggregate par value of the shares of Stock represented by such
Restricted Stock or (ii) the Purchase Price, if any,
specified in the Award Agreement relating to such Restricted
Stock. The Purchase Price shall be payable in a form described
in
Section 12
or, in the discretion of the Board, in
consideration for past Services rendered to the Company or an
Affiliate.
10.8. Delivery
of Stock.
Upon the expiration or termination of any restricted period and
the satisfaction of any other conditions prescribed by the
Board, the restrictions applicable to shares of Restricted Stock
or Stock Units settled in Stock shall lapse, and, unless
otherwise provided in the Award Agreement, a stock certificate
for such shares shall be delivered, free of all such
restrictions, to the Grantee or the Grantees beneficiary
or estate, as the case may be. Neither the Grantee, nor the
Grantees beneficiary or estate, shall have any further
rights with regard to a Stock Unit once the share of Stock
represented by the Stock Unit has been delivered.
|
|
11.
|
TERMS AND
CONDITIONS OF UNRESTRICTED STOCK AWARDS
|
Notwithstanding the provisions of
Section 10.2
, the
Board may, in its sole discretion, grant (or sell at par value
or such other higher purchase price determined by the Board) an
Unrestricted Stock Award to any Grantee pursuant to which such
Grantee may receive shares of Stock free of any restrictions
(Unrestricted Stock) under the Plan in an aggregate
amount of up to 5% of the number of shares of Stock available
for issuance under the Plan. Unrestricted Stock Awards may be
granted or sold as described in the preceding sentence in
respect of past services and other valid consideration, or in
lieu of, or in addition to, any cash compensation due to such
Grantee.
|
|
12.
|
FORM OF
PAYMENT FOR OPTIONS AND RESTRICTED STOCK
|
12.1. General
Rule.
Payment of the Option Price for the shares purchased pursuant to
the exercise of an Option or the Purchase Price for Restricted
Stock shall be made in cash or in cash equivalents acceptable to
the Company.
12.2. Surrender
of Stock.
To the extent the Award Agreement so provides, payment of the
Option Price for shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock may be made
all or in part through the tender to the Company of shares of
Stock, which shall be valued, for purposes of determining the
extent to which the Option Price or Purchase Price has been paid
thereby, at their Fair Market Value on the date of exercise or
surrender.
12.3. Cashless
Exercise.
With respect to an Option only (and not with respect to
Restricted Stock), to the extent permitted by law and to the
extent the Award Agreement so provides, payment of the Option
Price for shares purchased pursuant to the exercise of an Option
may be made all or in part by delivery (on a form acceptable to
the Board) of an irrevocable direction to a licensed securities
broker acceptable to the Company to sell shares of Stock and to
deliver all or part of the sales proceeds to the Company in
payment of the Option Price and any withholding taxes described
in
Section 18.3.
A-11
12.4. Other
Forms of Payment.
To the extent the Award Agreement so provides, payment of the
Option Price for shares purchased pursuant to exercise of an
Option or the Purchase Price for Restricted Stock may be made in
any other form that is consistent with applicable laws,
regulations and rules.
|
|
13.
|
TERMS AND
CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS
|
13.1. Dividend
Equivalent Rights.
A Dividend Equivalent Right is an Award entitling the recipient
to receive credits based on cash distributions that would have
been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such
shares had been issued to and held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any Grantee. The
terms and conditions of Dividend Equivalent Rights shall be
specified in the grant. Dividend equivalents credited to the
holder of a Dividend Equivalent Right may be paid currently or
may be deemed to be reinvested in additional shares of Stock,
which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of
reinvestment. Dividend Equivalent Rights may be settled in cash
or Stock or a combination thereof, in a single installment or
installments, all determined in the sole discretion of the
Board. A Dividend Equivalent Right granted as a component of
another Award may provide that such Dividend Equivalent Right
shall be settled upon exercise, settlement, or payment of, or
lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other award. A
Dividend Equivalent Right granted as a component of another
Award may also contain terms and conditions different from such
other award.
13.2. Termination
of Service.
Except as may otherwise be provided by the Board either in the
Award Agreement or in writing after the Award Agreement is
issued, a Grantees rights in all Dividend Equivalent
Rights or interest equivalents shall automatically terminate
upon the Grantees termination of Service for any reason.
|
|
14.
|
TERMS AND
CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS
|
14.1. Performance
Conditions
The right of a Grantee to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject
to such performance conditions as may be specified by the Board.
The Board may use such business criteria and other measures of
performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to
reduce the amounts payable under any Award subject to
performance conditions, except as limited under
Sections 14.2
hereof in the case of a Performance
Award or Annual Incentive Award intended to qualify under Code
Section 162(m). If and to the extent required under Code
Section 162(m), any power or authority relating to a
Performance Award or Annual Incentive Award intended to qualify
under Code Section 162(m), shall be exercised by the
Committee and not the Board.
14.2. Performance
or Annual Incentive Awards Granted to Designated Covered
Employees
If and to the extent that the Committee determines that a
Performance or Annual Incentive Award to be granted to a Grantee
who is designated by the Committee as likely to be a Covered
Employee should qualify as performance-based
compensation for purposes of Code Section 162(m), the
grant, exercise
and/or
settlement of such Performance or Annual Incentive Award shall
be contingent upon achievement of pre-established performance
goals and other terms set forth in this
Section 14.2.
14.2.1. Performance
Goals Generally.
The performance goals for such Performance or Annual Incentive
Awards shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with
this
Section 14.2.
Performance goals shall be
objective and shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder including the
requirement that the level or levels
A-12
of performance targeted by the Committee result in the
achievement of performance goals being substantially
uncertain. The Committee may determine that such
Performance or Annual Incentive Awards shall be granted,
exercised
and/or
settled upon achievement of any one performance goal or that two
or more of the performance goals must be achieved as a condition
to grant, exercise
and/or
settlement of such Performance or Annual Incentive Awards.
Performance goals may differ for Performance or Annual Incentive
Awards granted to any one Grantee or to different Grantees.
14.2.2. Business
Criteria.
One or more of the following business criteria for the Company,
on a consolidated basis,
and/or
specified subsidiaries or business units of the Company (except
with respect to the total stockholder return and earnings per
share criteria), shall be used exclusively by the Committee in
establishing performance goals for such Performance or Annual
Incentive Awards: (1) total stockholder return;
(2) such total stockholder return as compared to total
return (on a comparable basis) of a publicly available index
such as, but not limited to, the Standard &
Poors 500 Stock Index; (3) net income;
(4) pretax earnings; (5) earnings before interest
expense, taxes, depreciation and amortization; (6) pretax
operating earnings after interest expense and before bonuses,
service fees, and extraordinary or special items;
(7) operating margin; (8) earnings per share;
(9) return on equity; (10) return on capital;
(11) return on investment; (12) operating earnings;
(13) working capital; (14) ratio of debt to
stockholders equity and (15) revenue. Business
criteria may be measured on an absolute basis or on a relative
basis (i.e., performance relative to peer companies) and on a
GAAP or non-GAAP basis. The Committee may provide, in a manner
that meets the requirements of Code Section 162(m) that any
evaluation of performance may include or exclude any of the
following events that occur during the applicable performance
period: (a) asset write-downs; (b) litigation or claim
judgments or settlements; (c) the effect of changes in tax
laws, accounting principles or other laws or provisions
affecting reported results; (d) any reorganization or
restructuring programs; (e) extraordinary nonrecurring
items; (f) acquisitions or divestitures; and
(g) foreign exchange gains and losses.
14.2.3. Timing
For Establishing Performance Goals.
Performance goals shall be established not later than
90 days after the beginning of any performance period
applicable to such Performance or Annual Incentive Awards, or at
such other date as may be required or permitted for
performance-based compensation under Code
Section 162(m).
14.2.4. Settlement
of Performance or Annual Incentive Awards; Other
Terms.
Settlement of such Performance or Annual Incentive Awards shall
be in cash, Stock, other Awards or other property, in the
discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be
made in connection with such Performance or Annual Incentive
Awards. The Committee shall specify the circumstances in which
such Performance or Annual Incentive Awards shall be paid or
forfeited in the event of termination of Service by the Grantee
prior to the end of a performance period or settlement of
Performance Awards.
14.3. Written
Determinations.
All determinations by the Committee as to the establishment of
performance goals, the amount of any potential Performance
Awards and as to the achievement of performance goals relating
to Performance Awards, and the amount of any potential
individual Annual Incentive Awards and the amount of final
Annual Incentive Awards, shall be made in writing in the case of
any Award intended to qualify under Code Section 162(m). To
the extent permitted by Section 162(m), the Committee may
delegate any responsibility relating to such Performance Awards
or Annual Incentive Awards.
14.4. Status
of Section 14.2 Awards Under Code
Section 162(m)
It is the intent of the Company that Performance Awards and
Annual Incentive Awards under
Section 14.2
hereof
granted to persons who are designated by the Committee as likely
to be Covered Employees within the meaning of Code
Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute
A-13
qualified performance-based compensation within the
meaning of Code Section 162(m) and regulations thereunder.
Accordingly, the terms of
Section 14.2
, including
the definitions of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with Code
Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with
certainty whether a given Grantee will be a Covered Employee
with respect to a fiscal year that has not yet been completed,
the term Covered Employee as used herein shall mean only a
person designated by the Committee, at the time of grant of
Performance Awards or an Annual Incentive Award, as likely to be
a Covered Employee with respect to that fiscal year. If any
provision of the Plan or any agreement relating to such
Performance Awards or Annual Incentive Awards does not comply or
is inconsistent with the requirements of Code
Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to
conform to such requirements.
|
|
15.
|
PARACHUTE
LIMITATIONS
|
Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter
entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding that expressly
addresses Section 280G of the Code (an Other
Agreement), and notwithstanding any formal or informal
plan or other arrangement for the direct or indirect provision
of compensation to the Grantee (including groups or classes of
Grantees or beneficiaries of which the Grantee is a member),
whether or not such compensation is deferred, is in cash, or is
in the form of a benefit to or for the Grantee (a Benefit
Arrangement), if the Grantee is a disqualified
individual, as defined in Section 280G(c) of the
Code, any Option, Restricted Stock or Stock Unit held by that
Grantee and any right to receive any payment or other benefit
under this Plan shall not become exercisable or vested
(i) to the extent that such right to exercise, vesting,
payment, or benefit, taking into account all other rights,
payments, or benefits to or for the Grantee under this Plan, all
Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be
considered a parachute payment within the meaning of
Section 280G(b)(2) of the Code as then in effect (a
Parachute Payment)
and
(ii) if, as a
result of receiving a Parachute Payment, the aggregate after-tax
amounts received by the Grantee from the Company under this
Plan, all Other Agreements, and all Benefit Arrangements would
be less than the maximum after-tax amount that could be received
by the Grantee without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt of
any such right to exercise, vesting, payment, or benefit under
this Plan, in conjunction with all other rights, payments, or
benefits to or for the Grantee under any Other Agreement or any
Benefit Arrangement would cause the Grantee to be considered to
have received a Parachute Payment under this Plan that would
have the effect of decreasing the after-tax amount received by
the Grantee as described in clause (ii) of the preceding
sentence, then the Grantee shall have the right, in the
Grantees sole discretion, to designate those rights,
payments, or benefits under this Plan, any Other Agreements, and
any Benefit Arrangements that should be reduced or eliminated so
as to avoid having the payment or benefit to the Grantee under
this Plan be deemed to be a Parachute Payment.
16.1. General.
The Company shall not be required to sell or issue any shares of
Stock under any Award if the sale or issuance of such shares
would constitute a violation by the Grantee, any other
individual exercising an Option, or the Company of any provision
of any law or regulation of any governmental authority,
including without limitation any federal or state securities
laws or regulations. If at any time the Company shall determine,
in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is
necessary or desirable as a condition of, or in connection with,
the issuance or purchase of shares hereunder, no shares of Stock
may be issued or sold to the Grantee or any other individual
exercising an Option pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Company, and any delay caused thereby shall in no way affect
the date of termination of the Award. Without limiting the
generality of the foregoing, in connection with the Securities
Act, upon the exercise of any Option or the delivery of any
shares of Stock underlying an Award, unless a registration
statement under such Act is in effect with respect to the shares
of Stock covered by such Award, the Company shall not be
required to sell or issue such shares unless the Board has
received
A-14
evidence satisfactory to it that the Grantee or any other
individual exercising an Option may acquire such shares pursuant
to an exemption from registration under the Securities Act. Any
determination in this connection by the Board shall be final,
binding, and conclusive. The Company may, but shall in no event
be obligated to, register any securities covered hereby pursuant
to the Securities Act. The Company shall not be obligated to
take any affirmative action in order to cause the exercise of an
Option or the issuance of shares of Stock pursuant to the Plan
to comply with any law or regulation of any governmental
authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable until the
shares of Stock covered by such Option are registered or are
exempt from registration, the exercise of such Option (under
circumstances in which the laws of such jurisdiction apply)
shall be deemed conditioned upon the effectiveness of such
registration or the availability of such an exemption.
16.2. Rule 16b-3.
During any time when the Company has a class of equity security
registered under Section 12 of the Exchange Act, it is the
intent of the Company that Awards pursuant to the Plan and the
exercise of Options granted hereunder will qualify for the
exemption provided by
Rule 16b-3
under the Exchange Act. To the extent that any provision of the
Plan or action by the Board does not comply with the
requirements of
Rule 16b-3,
it shall be deemed inoperative to the extent permitted by law
and deemed advisable by the Board, and shall not affect the
validity of the Plan. In the event that
Rule 16b-3
is revised or replaced, the Board may exercise its discretion to
modify this Plan in any respect necessary to satisfy the
requirements of, or to take advantage of any features of, the
revised exemption or its replacement.
|
|
17.
|
EFFECT OF
CHANGES IN CAPITALIZATION
|
17.1. Changes
in Stock.
If the number of outstanding shares of Stock is increased or
decreased or the shares of Stock are changed into or exchanged
for a different number or kind of shares or other securities of
the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution
payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company
occurring after the Effective Date, the number and kinds of
shares for which grants of Options and other Awards may be made
under the Plan shall be adjusted proportionately and accordingly
by the Company. In addition, the number and kind of shares for
which Awards are outstanding shall be adjusted proportionately
and accordingly so that the proportionate interest of the
Grantee immediately following such event shall, to the extent
practicable, be the same as immediately before such event. Any
such adjustment in outstanding Options or SARs shall not change
the aggregate Option Price or SAR Exercise Price payable with
respect to shares that are subject to the unexercised portion of
an outstanding Option or SAR, as applicable, but shall include a
corresponding proportionate adjustment in the Option Price or
SAR Exercise Price per share. The conversion of any convertible
securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution
to the Companys stockholders of securities of any other
entity or other assets (including an extraordinary dividend but
excluding a non-extraordinary dividend of the Company) without
receipt of consideration by the Company, the Company shall, in
such manner as the Company deems appropriate, adjust
(i) the number and kind of shares subject to outstanding
Awards
and/or
(ii) the exercise price of outstanding Options and Stock
Appreciation Rights to reflect such distribution.
|
|
|
|
17.2.
|
Reorganization in Which the Company Is the Surviving Entity
Which does not Constitute a Corporate Transaction.
|
Subject to
Section 17.3
hereof, if the Company shall
be the surviving entity in any reorganization, merger, or
consolidation of the Company with one or more other entities
which does not constitute a Corporate Transaction, any Option or
SAR theretofore granted pursuant to the Plan shall pertain to
and apply to the securities to which a holder of the number of
shares of Stock subject to such Option or SAR would have been
entitled immediately following such reorganization, merger, or
consolidation, with a corresponding proportionate adjustment of
the Option Price or SAR Exercise Price per share so that the
aggregate Option Price or SAR Exercise Price thereafter
A-15
shall be the same as the aggregate Option Price or SAR Exercise
Price of the shares remaining subject to the Option or SAR
immediately prior to such reorganization, merger, or
consolidation. Subject to any contrary language in an Award
Agreement evidencing an Award, any restrictions applicable to
such Award shall apply as well to any replacement shares
received by the Grantee as a result of the reorganization,
merger or consolidation. In the event of a transaction described
in this Section 17.2, Stock Units shall be adjusted so as
to apply to the securities that a holder of the number of shares
of Stock subject to the Stock Units would have been entitled to
receive immediately following such transaction.
17.3. Corporate
Transaction.
Subject to the exceptions set forth in the last sentence of this
Section 17.3
and the last sentence of
Section 17.4
, upon the occurrence of a Corporate
Transaction:
(i) all outstanding shares of Restricted Stock shall
be deemed to have vested, and all Stock Units shall be deemed to
have vested and the shares of Stock subject thereto shall be
delivered, immediately prior to the occurrence of such Corporate
Transaction, and
(ii) either of the following two actions shall be
taken:
(A) fifteen days prior to the scheduled consummation
of a Corporate Transaction, all Options and SARs outstanding
hereunder shall become immediately exercisable and shall remain
exercisable for a period of fifteen days, or
(B) the Board may elect, in its sole discretion, to
cancel any outstanding Awards of Options, Restricted Stock,
Stock Units,
and/or
SARs
and pay or deliver, or cause to be paid or delivered, to the
holder thereof an amount in cash or securities having a value
(as determined by the Board acting in good faith), in the case
of Restricted Stock or Stock Units, equal to the formula or
fixed price per share paid to holders of shares of Stock and, in
the case of Options or SARs, equal to the product of the number
of shares of Stock subject to the Option or SAR (the Award
Shares) multiplied by the amount, if any, by which
(I) the formula or fixed price per share paid to holders of
shares of Stock pursuant to such transaction exceeds
(II) the Option Price or SAR Exercise Price applicable to
such Award Shares. Award Shares for which the Option Price or
SAR Exercise Price exceeds the amount which are paid to holders
of shares of Stock pursuant to such transaction will be canceled
without receipt of any consideration.
With respect to the Companys establishment of an exercise
window, (i) any exercise of an Option or SAR during such
fifteen-day
period shall be conditioned upon the consummation of the event
and shall be effective only immediately before the consummation
of the event, and (ii) upon consummation of any Corporate
Transaction the Plan, and all outstanding but unexercised
Options and SARs shall terminate. The Board shall send written
notice of an event that will result in such a termination to all
individuals who hold Options and SARs not later than the time at
which the Company gives notice thereof to its stockholders. This
Section 17.3
shall not apply to any Corporate
Transaction to the extent that provision is made in writing in
connection with such Corporate Transaction for the assumption or
continuation of the Options, SARs, Stock Units and Restricted
Stock theretofore granted, or for the substitution for such
Options, SARs, Stock Units and Restricted Stock for new common
stock options and stock appreciation rights and new common stock
units and restricted stock relating to the stock of a successor
entity, or a parent or subsidiary thereof, with appropriate
adjustments as to the number of shares (disregarding any
consideration that is not common stock) and option and stock
appreciation right exercise prices, in which event the Plan,
Options, SARs, Stock Units and Restricted Stock theretofore
granted shall continue in the manner and under the terms so
provided.
17.4. Adjustments.
Adjustments under this
Section 17
related to shares
of Stock or securities of the Company shall be made by the
Board, whose determination in that respect shall be final,
binding and conclusive. No fractional shares or other securities
shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated
in each case by rounding downward to the nearest whole share.
The Board shall determine the
A-16
effect of a Corporate Transaction upon Awards other than
Options, SARs, Stock Units and Restricted Stock, and such effect
shall be set forth in the appropriate Award Agreement. The Board
may provide in the Award Agreements at the time of grant, or any
time thereafter with the consent of the Grantee, for different
provisions to apply to an Award in place of those described in
Sections 17.1, 17.2
and
17.3.
17.5. No
Limitations on Company.
The making of Awards pursuant to the Plan shall not affect or
limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of
its capital or business structure or to merge, consolidate,
dissolve, or liquidate, or to sell or transfer all or any part
of its business or assets.
18.1. Disclaimer
of Rights
No provision in the Plan or in any Award or Award Agreement
shall be construed to confer upon any individual the right to
remain in the employ or service of the Company or any Affiliate,
or to interfere in any way with any contractual or other right
or authority of the Company either to increase or decrease the
compensation or other payments to any individual at any time, or
to terminate any employment or other relationship between any
individual and the Company. In addition, notwithstanding
anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, no Award granted under
the Plan shall be affected by any change of duties or position
of the Grantee, so long as such Grantee continues to be a
director, officer, consultant or employee of the Company or an
Affiliate. The obligation of the Company to pay any benefits
pursuant to this Plan shall be interpreted as a contractual
obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein. The Plan
shall in no way be interpreted to require the Company to
transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any Grantee or
beneficiary under the terms of the Plan.
18.2. Nonexclusivity
of the Plan
Neither the adoption of the Plan nor the submission of the Plan
to the stockholders of the Company for approval shall be
construed as creating any limitations upon the right and
authority of the Board to adopt such other incentive
compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or
specifically to a particular individual or particular
individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of stock
options otherwise than under the Plan.
18.3. Withholding
Taxes
The Company or an Affiliate, as the case may be, shall have the
right to deduct from payments of any kind otherwise due to a
Grantee any federal, state, or local taxes of any kind required
by law to be withheld with respect to the vesting of or other
lapse of restrictions applicable to an Award or upon the
issuance of any shares of Stock upon the exercise of an Option
or pursuant to an Award. At the time of such vesting, lapse, or
exercise, the Grantee shall pay to the Company or the Affiliate,
as the case may be, any amount that the Company or the Affiliate
may reasonably determine to be necessary to satisfy such
withholding obligation. Subject to the prior approval of the
Company or the Affiliate, which may be withheld by the Company
or the Affiliate, as the case may be, in its sole discretion,
the Grantee may elect to satisfy such obligations, in whole or
in part, (i) by causing the Company or the Affiliate to
withhold shares of Stock otherwise issuable to the Grantee or
(ii) by delivering to the Company or the Affiliate shares
of Stock already owned by the Grantee. The shares of Stock so
delivered or withheld shall have an aggregate Fair Market Value
equal to such withholding obligations. The Fair Market Value of
the shares of Stock used to satisfy such withholding obligation
shall be determined by the Company or the Affiliate as of the
date that the amount of tax to be withheld is to be determined.
A Grantee who has made an election pursuant to this
Section 18.3
may satisfy his or her withholding
obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar
requirements. The maximum number of shares of Stock that may be
withheld from any Award to satisfy any federal, state or local
tax withholding requirements upon the exercise, vesting, lapse
of restrictions applicable to such Award or payment of shares
pursuant to such Award, as
A-17
applicable, cannot exceed such number of shares having a Fair
Market Value equal to the minimum statutory amount required by
the Company to be withheld and paid to any such federal, state
or local taxing authority with respect to such exercise,
vesting, lapse of restrictions or payment of shares.
18.4. Captions
The use of captions in this Plan or any Award Agreement is for
the convenience of reference only and shall not affect the
meaning of any provision of the Plan or such Award Agreement.
18.5. Other
Provisions
Each Award granted under the Plan may contain such other terms
and conditions not inconsistent with the Plan as may be
determined by the Board, in its sole discretion.
18.6. Number
and Gender
With respect to words used in this Plan, the singular form shall
include the plural form, the masculine gender shall include the
feminine gender, etc., as the context requires.
18.7. Severability
If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in
any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their
terms, and all provisions shall remain enforceable in any other
jurisdiction.
18.8. Governing
Law
The validity and construction of this Plan and the instruments
evidencing the Awards hereunder shall be governed by the laws of
the State of Delaware, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or
interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other
jurisdiction.
18.9. Section 409A
of the Code
The Board intends to comply with Section 409A of the Code
(Section 409A), or an exemption to
Section 409A, with regard to Awards hereunder that
constitute nonqualified deferred compensation within the meaning
of Section 409A. To the extent that the Board determines
that a Grantee would be subject to the additional 20% tax
imposed on certain nonqualified deferred compensation plans
pursuant to Section 409A as a result of any provision of
any Award granted under this Plan, such provision shall be
deemed amended to the minimum extent necessary to avoid
application of such additional tax. The nature of any such
amendment shall be determined by the Board.
* * *
A-18
To record adoption of the Plan by the Board as of
February 12, 2007, and approval of the Plan by the
stockholders on May 24, 2007, the Company has caused its
authorized officer to execute the Plan.
WABASH NATIONAL CORPORATION
Title: Vice President, General Counsel and Secretary
A-19