As filed with the Securities and Exchange Act on May 20, 2009
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
PIPER JAFFRAY COMPANIES
(Exact name of Registrant as Specified in Its Charter)
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Delaware
(State or other Jurisdiction of
Incorporation or Organization)
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30-0168701
(I.R.S. Employer
Identification Number)
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800 Nicollet Mall, Suite 800
Minneapolis, Minnesota
(Address of Principal Executive Offices)
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55402
(Zip Code)
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PIPER JAFFRAY COMPANIES AMENDED AND RESTATED
2003 ANNUAL AND LONG-TERM INCENTIVE PLAN
(as amended May 7, 2009)
(Full title of the plan)
James L. Chosy
General Counsel and Secretary
Piper Jaffray Companies
800 Nicollet Mall, Suite 800
Minneapolis, Minnesota 55402
(Name and address of agent for service)
(612) 303-6000
(Telephone number, including area code, of agent for service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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Large
accelerated
filer:
þ
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Accelerated
filer:
o
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Non-accelerated
filer:
o
(Do not check if a smaller reporting company)
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Smaller reporting company:
o
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CALCULATION OF REGISTRATION FEE
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Title of Each
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Amount to be
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Proposed Maximum
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Proposed Maximum
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Amount of
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Class of Securities
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Registered
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Offering Price
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Aggregate
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Registration
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to be Registered
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(No. of Shares)
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Per Share (1)
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Offering Price
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Fee
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Common Stock, par
value $.01 per
share (and its
associated
Preferred Share
Purchase Rights)
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1,960,354
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$
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29.99
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$
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58,781,215
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$
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3,280
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(1)
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Estimated solely for purposes of calculating the registration fee, pursuant to Rule
457(h), based on the average of the high and low prices of the Registrant’s Common Stock on
May 15, 2009, as reported on the New York Stock Exchange.
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EXPLANATORY NOTE
This Registration Statement on Form S-8 is being filed for the purpose of registering an
additional 1,500,000 shares of the Registrant’s Common Stock authorized for issuance under the
Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan (as amended
May 7, 2009) (the “Plan”) and 460,354 shares of the Registrant’s Common Stock forfeited by Plan
participants or used to satisfy tax obligations of Plan participants and again available for
issuance pursuant to the terms of the Plan. Previously, (i) 2,000,000 shares were registered under
the Plan pursuant to Registration Statement No. 333-111665, (ii) an additional 2,100,000 shares
were registered under the Plan pursuant to Registration Statement No. 333-122494, (iii) an
additional 400,000 shares were registered under the Plan pursuant to Registration Statement No.
333-142699 and (iv) an additional 1,000,000 shares were registered under the Plan pursuant to
Registration Statement No. 333-150962. In accordance with Section E. of the General Instructions
to Form S-8, Registration Statements No. 333-111665, No. 333-122494, No. 333-142699 and No.
333-150962 are incorporated herein by reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have been filed by Piper Jaffray Companies (hereinafter the
“Company” or the “Registrant”) with the Securities and Exchange Commission (the “Commission”)
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are incorporated
by reference herein and shall be deemed to be a part hereof:
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(a)
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The Registrant’s Annual Report on Form 10-K for the fiscal year ended December
31, 2008, filed with the Commission on March 2, 2009;
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(b)
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All other reports filed by the Registrant pursuant to Section 13(a) and 15(d)
of the Exchange Act since the end of the fiscal year referred to in (a) above; and
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(c)
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the description of the Registrant’s common stock and associated preferred share
purchase rights contained in the Registrant’s Registration Statement on Form 10 (File
No. 001-31720), as amended (declared effective on December 19, 2003), filed pursuant to
the Exchange Act and in any registration statement or report filed by the Company under
the Securities Act of 1933, as amended (the “Securities Act”) or in any report filed
under the Exchange Act, including any amendment or report filed for the purpose of
updating such description.
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All other documents filed by the Company with the Commission pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement that indicates
that all securities offered hereunder have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents. In this
Registration Statement, the Company refers to these documents, and the documents enumerated
above, as the “incorporated documents.”
Any statement contained in an incorporated document will be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a statement contained
herein or in any other subsequently filed incorporated document modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant is incorporated under the laws of the State of Delaware. Section 145 of the
General Corporation Law of the State of Delaware provides in relevant part as follows:
A corporation shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in or not opposed
to the best interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that the person’s
conduct was unlawful.
A corporation shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of the fact
that the person is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise against
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expenses (including attorneys’ fees) actually and reasonably incurred by the person in
connection with the defense or settlement of such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made in respect to
any claim, issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
As permitted by Delaware law, the Registrant has included in its certificate of incorporation
a provision to eliminate the personal liability of its directors to the fullest extent permitted by
law. In addition, its certificate of incorporation and bylaws provide that the Registrant is
required to indemnify its officers and directors under certain circumstances, including those
circumstances in which indemnification would otherwise be discretionary and the Registrant is
required to advance expenses to its officers and directors as incurred in connection with
proceedings against them for which they may be indemnified.
The Registrant maintains directors and officers liability insurance for the benefit of its
directors and officers.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
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Method of
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Exhibit No.
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Description
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Filing
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4.1
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Form of Specimen Certificate for Piper Jaffray
Companies Common Stock
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(1
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4.2
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Amended and Restated Certificate of Incorporation
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(2
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4.3
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Amended and Restated Bylaws
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(3
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4.4
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Rights Agreement dated as of December 31, 2003
between Piper Jaffray Companies and Mellon
Investor Services LLC, as Rights Agent
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(4
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4.5
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Piper Jaffray Companies Amended and Restated
2003 Annual and Long-Term Incentive Plan (as
amended May 7, 2009)
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Filed
Herewith
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5.1
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Opinion of Faegre & Benson LLP, independent
legal counsel, regarding the due authorization
and valid issuance of the shares of common
stock, with consent to use
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Filed
Herewith
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3
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Method of
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Exhibit No.
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Description
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Filing
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23.1
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Consent of Ernst & Young LLP
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Filed
Herewith
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23.2
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Consent of Company Counsel (see Exhibit 5.1)
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Filed
Herewith
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24.1
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Power of Attorney
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Filed
Herewith
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(1)
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Filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2003, filed with the Commission on March 8, 2004, and incorporated
herein by reference.
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(2)
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Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2007, filed with the Commission on August 3, 2007, and incorporated
herein by reference.
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(3)
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Filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2007, filed with the Commission on August 3, 2007, and incorporated
herein by reference.
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(4)
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Filed as Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2003, filed with the Commission on March 8, 2004, and incorporated
herein by reference.
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Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the
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changes in volume and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) of this section do not apply if the
information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
* * *
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
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(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, Piper Jaffray Companies certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the County of Hennepin, and the State of Minnesota, on this 20th day
of May, 2009.
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PIPER JAFFRAY COMPANIES
(Registrant)
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By:
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/s/ Andrew S. Duff
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Name:
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Andrew S. Duff
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Title:
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Chairman and Chief Executive Officer
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Pursuant to the requirements of the Securities Act, this Registration Statement has been
signed by the following persons in the capacities indicated on May 20, 2009.
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Signature
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Title
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Chairman and Chief Executive Officer
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Andrew S. Duff
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(Principal Executive Officer)
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Chief Financial Officer
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Debbra. L. Schoneman
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(Principal Financial and Accounting Officer)
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Director
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Michael R. Francis
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Director
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B. Kristine Johnson
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Signature
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Title
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Director
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Samuel L. Kaplan
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Director
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Addison L. Piper
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Director
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Lisa K. Polsky
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Director
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Frank L. Sims
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Director
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Jean M. Taylor
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*
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James L. Chosy, by signing his name hereto, does sign this document on behalf of the above
noted individuals, pursuant to powers of attorney duly executed by such individuals which have
been filed as an exhibit to this Registration Statement.
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/s/ James L. Chosy
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By: James L. Chosy
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Attorney-in-Fact
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7
EXHIBIT INDEX
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Method of
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Exhibit No.
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Description
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Filing
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4.1
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Form of Specimen Certificate for Piper Jaffray Companies Common Stock
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(1
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4.2
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Amended and Restated Certificate of Incorporation
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(2
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4.3
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Amended and Restated Bylaws
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(3
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4.4
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Rights Agreement dated as of December 31, 2003
between Piper Jaffray Companies and Mellon
Investor Services LLC, as Rights Agent
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(4
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4.5
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Piper Jaffray Companies Amended and Restated
2003 Annual and Long-Term Incentive Plan (as
amended May 7, 2009)
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Filed
Herewith
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5.1
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Opinion of Faegre & Benson LLP, independent
legal counsel, regarding the due authorization
and valid issuance of the shares of common
stock, with consent to use
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Filed
Herewith
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23.1
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Consent of Ernst & Young LLP
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Filed
Herewith
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23.2
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Consent of Company Counsel (see Exhibit 5.1)
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Filed
Herewith
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24.1
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Power of Attorney
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Filed
Herewith
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(1)
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Filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2003, filed with the Commission on March 8, 2004, and incorporated
herein by reference.
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(2)
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Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2007, filed with the Commission on August 3, 2007, and incorporated
herein by reference.
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(3)
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Filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2007, filed with the Commission on August 3, 2007, and incorporated
herein by reference.
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(4)
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Filed as Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2003, filed with the Commission on March 8, 2004, and
incorporated herein by reference.
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Exhibit 4.5
PIPER JAFFRAY COMPANIES
AMENDED AND RESTATED
2003 ANNUAL AND LONG-TERM INCENTIVE PLAN
(as amended and restated effective May 7, 2009)
SECTION 1. Purpose
The purpose of the Plan is to promote the interests of the Company and its stockholders by
giving the Company a competitive advantage in attracting, retaining and motivating employees,
officers, consultants and Directors capable of assuring the future success of the Company, to offer
such persons incentives that are directly linked to the profitability of the Company’s businesses
and increases in stockholder value, and to afford such persons an opportunity to acquire a
proprietary interest in the Company.
SECTION 2. Definitions
As used in the Plan, the following terms shall have the meanings set forth below.
(a) “
Affiliate
” means any entity in which the Company has, directly or indirectly
through one or more intermediaries, a controlling interest or which has, directly or indirectly
through one or more intermediaries, a controlling interest in the Company, within the meaning of
Treasury Regulation § 1.409A-1(b)(5)(iii)(E).
(b) “
Award
” means any Stock Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Award, Dividend Equivalent, Other Stock Grant, Other Stock-Based
Award or Tax Offset Bonus granted under the Plan.
(c) “
Award Agreement
” means any written agreement, contract or other instrument or
document evidencing any Award granted under the Plan. Each Award Agreement shall be subject to the
applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent
with the Plan) determined by the Committee.
(d) “
Board
” means the Board of Directors of the Company.
(e) “
Code
” means the Internal Revenue Code of 1986, as amended from time to time, and
any regulations promulgated thereunder.
(f) “
Change in Control
” has the meaning set forth in Section 7.
(g) “
Committee
” means a committee of Directors designated by the Board to administer
the Plan, which initially shall be the Compensation Committee of the Board. The Committee shall be
comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3 and Section
162(m) of the Code, and each member of the Committee shall be an Outside Director.
(h) “
Company
” means Piper Jaffray Companies, a Delaware corporation.
(i) “
Covered Employee
” means a Participant designated prior to the grant of Restricted
Stock, Restricted Stock Units or Performance Awards by the Committee who is or
may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which any such Award
is expected to be taxable to such Participant.
(j) “
Director
” means a member of the Board, including any Outside Director.
(k) “
Dividend Equivalent
” means any right granted under Section 6(e) of the Plan.
(l) “
Effective Date
” has the meaning set forth in Section 11 of the Plan.
(m) “
Eligible Individual
” means any employee, officer, Director or consultant
providing services to the Company or any Affiliate, and prospective employees and consultants who
have accepted offers of employment or consultancy from the Company or any Affiliate, whom the
Committee determines to be an Eligible Individual.
(n) “
Exchange Act
” means the Securities Exchange Act of 1934, as amended from time to
time.
(o) “
Exercise Price
” has the meaning set forth in Section 6(a) of the Plan.
(p) “
Fair Market Value
” means, with respect to any property (including, without
limitation, any Shares or other securities), the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the Committee in good faith
and in a manner consistent with Code Section 409A. Notwithstanding the foregoing and except as
otherwise provided by the Committee, the Fair Market Value of a Share as of a given date shall be
the closing sales price for one Share on the New York Stock Exchange or such other established
securities market as may at the time be the principal market for the Shares, or if the Shares were
not traded on such national securities market or exchange on such date, then on the next preceding
date on which the Shares are traded, all as reported by such source as the Committee may select.
(q) “
Non-Qualified Stock Option
” means any Stock Option that is not designated as, or
is not intended to qualify as, an “incentive stock option” within the meaning of Section 422 of the
Code.
(r) “
Outside Director
” means any Director who qualifies as an “outside director”
within the meaning of Section 162(m) of the Code, as a “non-employee director” within the meaning
of Rule 16b-3 and as an “independent director” pursuant to the requirements of the New York Stock
Exchange.
(s) “
Participant
” means an Eligible Individual designated to be granted an Award under
the Plan.
(t) “
Performance Award
” means any right granted under Section 6(d) of the Plan.
(u) “
Performance Goals
” means the performance goals established by the Committee in
connection with the grant of an Award. In the case of Qualified Performance-Based Awards, (i) such
goals shall be based on the attainment of specified levels of one or more of the following measures
with respect to the Company or such subsidiary, division or department of the Company for or within
which the Participant performances services: revenue growth; earnings before interest, taxes,
depreciation, and amortization; earnings before interest and taxes;
2
operating income; pre- or after- tax income; earnings per share; cash flow; cash flow per share; return on equity; return on
tangible equity; return on invested capital; return on assets; economic value added (or an
equivalent metric); share price performance; total shareholder return; improvement in or attainment
of expense levels; improvement in or attainment of working capital levels and (ii) such Performance
Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code
and related regulations. Such Performance Goals also may be based upon the attaining of specified
levels of Company performance under one or more of the measures described above relative to the
performance of other companies.
(v) “
Plan
” means this Piper Jaffray Companies Amended and Restated 2003 Annual and
Long-Term Incentive Plan, as set forth herein and as hereinafter amended from time to time.
(w) “
Qualified Performance-Based Award
” means an Award of Restricted Stock, Restricted
Stock Units or Performance Awards designated as such by the Committee at the time of grant, based
upon a determination that (i) the recipient is or may be a Covered Employee in the year in which
the Company would expect to be able to claim a tax deduction with respect to such Restricted Stock
or Performance Awards and (ii) the Committee wishes such Award to qualify for the Section 162(m)
Exemption.
(x) “
Restricted Stock
” means any Share granted under Section 6(c) of the Plan.
(y) “
Restricted Stock Unit
” means any unit granted under Section 6(c) of the Plan
evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a
Share) at some future date.
(z) “
Rule 16b-3
” means Rule 16b-3, as promulgated by the Securities and Exchange
Commission under Section 16(b) of the Exchange Act, as amended from time to time.
(aa) “
Section 162(m) Exemption
” means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of
the Code.
(bb) “
Share
” or “
Shares
” means a share or shares of common stock, par value
$.01 per share, of the Company.
(cc) “
Stock Appreciation Right
” means any right granted under Section 6(b) of the
Plan.
(dd) “
Stock Option
” means a Non-Qualified Stock Option granted under Section 6(a) of
the Plan.
SECTION 3. Administration
(a)
Power and Authority of the Committee
. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and to applicable law, the Committee shall have full
power and authority to:
(i) designate Participants;
3
(ii) determine whether and to what extent any type (or types) of Award is to be granted
hereunder;
(iii) determine the number of Shares to be covered by (or the method by which payments
or other rights are to be determined in connection with) each Award;
(iv) determine the terms and conditions of any Award or Award Agreement;
(v) subject to Section 9 hereof, amend the terms and conditions of any Award or Award
Agreement and accelerate the vesting and/or exercisability of any Stock Option or waive any
restrictions relating to any Award;
provided
,
however
,
that (A) except for
adjustments pursuant to Section 4(c) of the Plan, in no event may any Stock Option granted
under this Plan be (x) amended to decrease the Exercise Price thereof, (y) cancelled in
conjunction with the grant of any new Stock Option with a lower Exercise Price, or (z)
otherwise subject to any action that would be treated, for accounting purposes, as a
“repricing” of such Stock Option, unless such amendment, cancellation, or action is approved
by the stockholders of the Company to the extent required by applicable law and stock
exchange rules and (B) the Committee may not adjust upwards the amount payable to a Covered
Employee with respect to a Qualified Performance-Based Award or waive or alter the
Performance Goals associated therewith in a manner that would violate Section 162(m) of the
Code.
(vi) determine whether, to what extent and under what circumstances the exercise price
of Awards may be paid in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited or suspended;
(vii) determine whether, to what extent and under what circumstances cash, Shares,
other securities, other Awards, other property and other amounts payable with respect to an
Award under the Plan shall be deferred either automatically or at the election of the holder
thereof or the Committee;
(viii) interpret and administer the Plan and any instrument or agreement, including an
Award Agreement, relating to the Plan;
(ix) adopt, alter, suspend, waive or repeal such rules, guidelines and practices and
appoint such agents as it shall deem advisable or appropriate for the proper administration
of the Plan; and
(x) make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations
and other decisions under or with respect to the Plan or any Award or Award Agreement shall be
within the sole discretion of the Committee, may be made at any time and shall be final, conclusive
and binding upon all persons, including without limitation, the Company, its Affiliates,
subsidiaries, shareholders, Eligible Individuals and any holder or beneficiary of any Award.
(b)
Action by the Committee; Delegation
. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may delegate all or
4
any part of its duties and powers under the Plan to one or more persons, including Directors or a
committee of Directors, subject to such terms, conditions and limitations as the Committee may
establish in its sole discretion;
provided
,
however
, that the Committee shall not
delegate its powers and duties under the Plan (i) with regard to officers or directors of the
Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in a manner that
would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to
cease to qualify for, the Section 162(m) Exemption; and
provided
,
further
, that any
such delegation may be revoked by the Committee at any time.
(c)
Power and Authority of the Board
. Notwithstanding anything to the contrary
contained herein, except to the extent that the grant or exercise of such authority would cause any
Award or transaction to become subject to (or lose an exemption under) the short-swing profit
recovery provisions of Section 16 of the Exchange Act or cause an Award designated as a Qualified
Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m)
Exemption, the Board may, at any time and from time to time, without any further action of the
Committee, exercise the powers and duties of the Committee under the Plan. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board
action shall control.
SECTION 4. Shares Available for Awards
(a)
Shares Available
. Subject to adjustment as provided in Section 4(c) of the Plan,
the aggregate number of Shares that may be issued under the Plan shall be 7,000,000. Shares that
may be issued under the Plan may be authorized but unissued Shares or Shares re-acquired and held
in treasury.
(b)
Accounting for Awards
. For purposes of this Section 4, if an Award entitles the
holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to
which such Award relates shall be counted on the date of grant of such Award against the aggregate
number of Shares available for granting Awards under the Plan. Any Shares that are used by a
Participant as full or partial payment to the Company of the purchase price relating to an Award,
including in connection with the satisfaction of tax obligations relating to an Award, shall again
be available for granting Awards under the Plan. In addition, if any Shares covered by an Award or
to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates
without delivery of any Shares, then the number of Shares counted against the aggregate number of
Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or
termination, shall again be available for granting Awards under the Plan.
(c)
Adjustments
. In the event of any change in corporate capitalization (including,
but not limited to, a change in the number of Shares outstanding), such as a stock split or a
corporate transaction, such as any merger, consolidation, separation, including a spin-off, or
other distribution of stock or property of the Company (including any extraordinary cash or stock
dividend), any reorganization (whether or not such reorganization comes within the definition of
such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the
Committee or Board shall make such substitution or adjustments in the aggregate number and kind of
shares reserved for issuance under the Plan, and the maximum limitation upon Stock Options and
Stock Appreciation Rights and other Awards to be granted to any Participant, in the number, kind
and Exercise Price of shares subject to outstanding Stock Options and Stock Appreciation Rights, in
the number and kind of shares subject to other
5
outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may determine to be appropriate in its sole
discretion (including, without limitation, the provision of an amount in cash in consideration for
any such Awards);
provided
,
however
, that the number of shares subject to any Award
shall always be a whole number. Without limiting the generality of the foregoing, in connection
with any Disaffiliation of a subsidiary of the Company, the Committee shall have the authority to
arrange for the assumption or replacement of Awards with new awards based on shares of the affected
subsidiary or by an affiliate of an entity that controls the subsidiary following the
Disaffiliation. For purposes hereof, “Disaffiliation” of a subsidiary shall mean the subsidiary’s
ceasing to be a subsidiary of the Company for any reason (including, without limitation, as a result of a public offering, spin-off, sale or other distribution or transfer
by the Company of the stock of the subsidiary). Notwithstanding the foregoing, to the extent that
any Award is otherwise considered to be deferred compensation under Section 409A of the Code, any
adjustment to such Award will comply with Section 409A of the Code (including current and future
guidance issued by the Department of Treasury and or the Internal Revenue Service).
(d)
Award Limitations
. No more than 250,000 shares of Common Stock may be subject to
Qualified Performance-Based Awards granted to any Eligible Individual in any fiscal year of the
Company.
SECTION 5. Eligibility
Any Eligible Individual shall be eligible to be designated a Participant. In determining
which Eligible Individuals shall receive an Award and the terms of any Award, the Committee may
take into account the nature of the services rendered by the respective Eligible Individuals, their
present and potential contributions to the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant.
SECTION 6. Awards
(a)
Stock Options
. The Committee is hereby authorized to grant Stock Options (which
may only be Non-Qualified Stock Options) to Eligible Individuals with the following terms and
conditions and with such additional terms and conditions not inconsistent with the provisions of
the Plan as the Committee shall determine:
(i)
Exercise Price
. The purchase price per Share purchasable under a Stock
Option (the “
Exercise Price
”) shall be determined by the Committee;
provided
,
however
, that such Exercise Price shall not be less than 100% of
the Fair Market Value of a Share on the date of grant of such Stock Option.
(ii)
Option Term
. The term of each Stock Option shall be fixed by the
Committee at the time of grant, but in no event shall be more than 10 years from the date of
grant.
(iii)
Time and Method of Exercise
. The Committee shall determine the time or
times at which a Stock Option may be exercised in whole or in part and the method or methods
by which, and the form or forms (including, without limitation, cash, Shares, other
securities, other Awards or other property, or any combination thereof, having a Fair Market
Value on the exercise date equal to the applicable Exercise Price) in which,
6
payment of the Exercise Price with respect thereto may be made or deemed to have been made.
(b)
Stock Appreciation Rights
. The Committee is hereby authorized to grant Stock
Appreciation Rights to Eligible Individuals subject to the terms of the Plan. Each Stock Appreciation Right granted under the Plan shall confer on the holder upon exercise the
right to receive, as determined by the Committee, cash or a number of Shares whose Fair Market
Value is equal to the excess of (A) the Fair Market Value of one Share on the date of exercise (or,
if the Committee shall so determine in accordance with the requirements of Code Section 409A, at
any time during a specified period not more than 30 days before or after the date of exercise) over
(B) the grant price of the Stock Appreciation Right as determined by the Committee, which grant
price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right. Subject to the terms of the Plan, the grant price, term, methods of
exercise, dates of exercise, methods of settlement and any other terms and conditions (including
conditions or restrictions on the exercise thereof) of any Stock Appreciation Right shall be as
determined by the Committee,
provided
that in no event shall the term of a Stock
Appreciation Right be longer than ten years.
(c)
Restricted Stock and Restricted Stock Units
. The Committee is hereby authorized
to grant Restricted Stock and Restricted Stock Units to Eligible Individuals with the following
terms and conditions and with such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine:
(i)
Restrictions
. Shares of Restricted Stock and Restricted Stock Units shall
be subject to such restrictions as the Committee may impose (including, without limitation,
limitation on transfer, forfeiture conditions, limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other right or property with
respect thereto), which restrictions may lapse separately or in combination at such time or
times, in such installments or otherwise as the Committee may deem appropriate. The grant
or vesting of Restricted Stock and Restricted Stock Units may be performance-based or
time-based or both. Restricted Stock and Restricted Stock Units may be Qualified
Performance-Based Awards, in which event the grant or vesting, as applicable, of such
Restricted Stock or Restricted Stock Units shall be conditioned upon the attainment of
Performance Goals.
(ii)
Stock Certificates; Delivery of Shares
.
(A) Any Restricted Stock granted under the Plan shall be evidenced in such
manner as the Committee may deem appropriate, including book-entry registration or
issuance of one or more stock certificates. Any certificate issued in respect of
shares of Restricted Stock shall be registered in the name of such Participant and
shall bear an appropriate legend referring to the applicable Award Agreement and
possible forfeiture of such shares of Restricted Stock. The Committee may require
that the certificates evidencing such shares be held in custody by the Company until
the restrictions thereon shall have lapsed and that, as a condition of any Award of
Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by
such Award.
7
(B) In the case of Restricted Stock Units, no Shares or other property shall be
issued at the time such Awards are granted. Upon the lapse or waiver of
restrictions and the restricted period relating to Restricted Stock Units (or at
such later time as may be determined by the Committee), Shares or other cash or
property shall be issued to the holder of the Restricted Stock Units and evidenced
in such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates.
(iii)
Forfeiture
. Except as otherwise determined by the Committee, upon a
Participant’s termination of employment (as determined under criteria established by the
Committee) during the applicable restriction period, all applicable Shares of Restricted
Stock and Restricted Stock Units at such time subject to restriction shall be forfeited and
reacquired by the Company;
provided
,
however
, that the Committee may, when
it finds that a waiver would be in the best interest of the Company, waive in whole or in
part any or all remaining restrictions with respect to Shares of Restricted Stock or
Restricted Stock Units.
(d)
Performance Awards
. The Committee is hereby authorized to grant Performance
Awards to Eligible Individuals subject to the terms of the Plan. A Performance Award granted under
the Plan (i) may be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities, other Awards or other property and
(ii) shall confer on the holder thereof the right to receive payments, in whole or in part, upon
the achievement of such performance goals during such performance periods as the Committee shall
establish. Subject to the terms of the Plan, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any Performance Award
granted, the amount of any payment or transfer to be made pursuant to any Performance Award and any
other terms and conditions of any Performance Award shall be determined by the Committee. The
Committee may, prior to or at the time of the grant, designate Performance Awards as Qualified
Performance-Based Awards, in which event it shall condition the settlement thereof upon the
attainment of Performance Goals. Performance Awards denominated in cash that are payable to any
individual Participant with respect to any calendar year will be limited to a maximum of
$7,500,000.
(e)
Dividend Equivalents
. The Committee is hereby authorized to grant Dividend
Equivalents to Eligible Individuals under which the Participant shall be entitled to receive
payments (in cash, Shares, other securities, other Awards or other property as determined in the
discretion of the Committee) equivalent in value to the amount of cash dividends paid by the
Company to holders of Shares with respect to a number of Shares determined by the Committee.
Subject to the terms of the Plan, such Dividend Equivalents may have such terms and conditions as
the Committee shall determine, but no right to a Dividend Equivalent shall be contingent, directly or indirectly, upon the
exercise of a Stock Option or Stock Appreciation Right.
(f)
Other Stock Grants
. The Committee is hereby authorized, subject to the terms of
the Plan, to grant to Eligible Individuals Shares without restrictions thereon as are deemed by the
Committee to be consistent with the purpose of the Plan.
(g)
Other Stock-Based Awards
. The Committee is hereby authorized to grant to Eligible
Individuals, subject to the terms of the Plan, such other Awards that are denominated or payable
in, valued in whole or in part by reference to, or otherwise based on or related to,
8
Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee
to be consistent with the purpose of the Plan. Shares or other securities delivered pursuant to a
purchase right granted under this Section 6(g) shall be purchased for such consideration, which may
be paid by such method or methods and in such form or forms (including, without limitation, cash,
Shares, other securities, other Awards or other property or any combination thereof), as the
Committee shall determine, the value of which consideration, as established by the Committee, shall
not be less than 100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.
(h)
Tax Offset Bonus.
The Committee may grant to a Participant, at the time of
granting an Award or at any time thereafter, the right to receive a cash payment in an amount
specified by the Committee, to be paid at such time or times (if ever) as the Award results in
compensation income to the Participant, for the purpose of assisting the Participant to pay the
resulting taxes, all as determined by the Committee and on such other terms and conditions as the
Committee shall determine (a “
Tax Offset Bonus
”). Payment of a Tax Offset Bonus shall be
made no later than the end of the Participant’s taxable year next following the taxable year in
which the Participant remits the resulting taxes.
(i)
General
.
(i)
Consideration for Awards
. Awards may be granted for no cash consideration
or for any cash or other consideration as determined by the Committee and required by
applicable law.
(ii)
Awards May Be Granted Separately or Together
. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in tandem with or in
substitution for any other Award or any award granted under any plan of the Company or any
Affiliate. Awards granted in addition to or in tandem with other Awards or in addition to
or in tandem with awards granted under any such other plan of the Company or any Affiliate
may be granted either at the same time as or at a different time from the grant of such
other Awards or awards.
(iii)
Forms of Payment Under Awards
. Subject to the terms of the Plan,
payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or settlement of an Award may be made in such form or forms as the Committee
shall determine (including cash, Shares, other securities, other Awards or other property or
any combination thereof);
provided
,
however
, that such payments or transfers
shall not be in the form of promissory notes. Such payments or transfers may be made in a
single payment or transfer, in installments or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents with respect to installment or deferred payments.
(iv)
Limits on Transfer of Awards
. No Award (other than Other Stock Grants)
and no right under any such Award shall be transferable by a Participant otherwise than by
will or by the laws of descent and distribution and the Company shall not be required to
recognize any attempted assignment of such rights by any Participant;
provided
,
however
, that, if so determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or
9
beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award
upon the death of the Participant; and
provided
,
further
, that, if so
determined by the Committee, a Participant may transfer a Non-Qualified Stock Option to any
Family Member (as such term is defined in the General Instructions to Form S-8 (or successor
to such Instructions or such Form)) at any time that such Participant holds such Stock
Option, whether directly or indirectly or by means of a trust or partnership or otherwise,
provided
that the Participant may not receive any consideration for such transfer,
the Family Member may not make any subsequent transfers other than by will or by the laws of
descent and distribution and the Company receives written notice of such transfer. Except
as otherwise determined by the Committee, each Award or right under any such Award shall be
exercisable during the Participant’s lifetime only by the Participant or, if permissible
under applicable law, by the Participant’s guardian or legal representative. Except as
otherwise determined by the Committee, no Award or right under any such Award may be
pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation,
attachment or other encumbrance thereof shall be void and unenforceable against the Company
or any Affiliate.
(v)
Term of Awards
. Subject to Section 6(a)(ii) of the Plan, the term of each
Award shall be for such period as may be determined by the Committee.
(vi)
Restrictions
. All Shares or other securities delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan, applicable
federal or state securities laws and regulatory requirements, and the Committee may direct
appropriate stop transfer orders and cause other legends to be placed on the certificates for such Shares or other securities to reflect
such restrictions.
SECTION 7. Change in Control
(a)
Impact of Event
. Notwithstanding any other provision of the Plan to the contrary,
unless otherwise provided by the Committee in any Award Agreement, in the event of a Change in
Control:
(i) Any Stock Options and Stock Appreciation Rights outstanding as of the date of such Change
in Control, and which are not then exercisable and vested, shall become fully exercisable and
vested.
(ii) The restrictions applicable to any Restricted Stock and Restricted Stock Units shall
lapse, and such Restricted Stock and Restricted Stock Units shall become free of all restrictions
and become fully vested.
(iii) All Performance Awards shall be considered to be earned and payable in full, and any
restriction shall lapse and such Performance Awards shall be settled in cash or Shares, as
determined by the Committee, as promptly as is practicable.
(iv) All restrictions on other Awards shall lapse and such Awards shall become free of all
restrictions and become fully vested.
10
(b)
Definition of Change in Control
. For purposes of the Plan, and unless otherwise
provided in an applicable Award Agreement, a “Change in Control” shall mean the happening of any of
the following events:
(i) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “
Person
”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding
shares of common stock of the Company (the “
Outstanding Company Common Stock
”) or (2) the
combined voting power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “
Outstanding Company Voting Securities
”);
excluding, however, the following: (1) Any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Company, (2) Any acquisition by the Company, (3)
Any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company, or (4) Any acquisition pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this Section 7(b); or
(ii) A change in the composition of the Board such that the individuals who, as of the
Effective Date, constitute the Board (such Board shall be hereinafter referred to as the
“
Incumbent Board
”) cease for any reason to constitute at least a majority of the Board;
provided
,
however
, for purposes of this Section 7(b), that any individual who
becomes a member of the Board subsequent to the Effective Date, whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but,
provided
,
further
, that any such individual
whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company (“
Corporate Transaction
”);
excluding, however, such a Corporate Transaction pursuant to which (1) all or substantially all of
the individuals and entities who are the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the
outstanding shares of common stock, and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (other
than the Company, any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 20% or
more of, respectively, the outstanding shares of common stock of the corporation resulting from
such Corporate
11
Transaction or the combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of directors except to the extent that
such ownership existed prior to the Corporate Transaction, and (3) individuals who were members of
the Incumbent Board will constitute at least a majority of the members of the board of directors of
the corporation resulting from such Corporate Transaction; or
(iv) The approval by the shareholders of the Company of a complete liquidation or dissolution
of the Company.
SECTION 8. Income Tax Withholding
No later than the date as of which an amount first becomes includible in the gross income of a
Participant for federal or foreign income tax purposes with respect to any Award under the Plan,
the Participant shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. The obligations
of the Company under the Plan shall be conditional on such payment or arrangements, and the Company
and its Affiliates shall, to the extent permitted by law, be entitled to take such action and
establish such procedures as it deems appropriate to withhold or collect all applicable payroll,
withholding, income or other taxes from such Participant, including without limitation withholding
applicable tax from Participant’s cash compensation paid by the Company or an Affiliate. In order
to assist a Participant in paying all or a portion of the federal, state, local and foreign taxes
to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to)
an Award, the Committee, in its discretion and subject to such additional terms and conditions as
it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the
Company withhold a portion of the Shares or other property otherwise to be delivered upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal
to the amount of such taxes or (ii) delivering to the Company Shares or other property other than
Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes,
provided
that, in either case,
not more than the legally required minimum withholding may be settled with Shares. Any such
election must be made on or before the date that the amount of tax to be withheld is determined.
SECTION 9. Amendment and Termination
(a)
Amendments to the Plan
. The Board may amend, alter, suspend, discontinue or
terminate the Plan at any time;
provided
,
however
, that, notwithstanding any other
provision of the Plan or any Award Agreement, without the approval of the stockholders of the
Company, no amendment, alteration, suspension, discontinuation or termination shall be made that,
absent such approval:
(i) requires stockholder approval under the rules or regulations of the New York Stock
Exchange, any other securities exchange or the National Association of Securities Dealers,
Inc. that are applicable to the Company; or
(ii) increases the number of Shares authorized under the Plan as specified in Section
4(a) of the Plan.
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(b)
Amendments to Awards
. The Committee may waive any conditions of or rights of the
Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided
herein or in an Award Agreement, the Committee may not amend, alter, suspend, discontinue or
terminate any outstanding Award, prospectively or retroactively, if such action would adversely
affect the rights of the holder of such Award, without the consent of the Participant or holder or
beneficiary thereof or such amendment would cause a Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption. The Committee may unilaterally amend any Award, and it
will be conclusively presumed that such action will not adversely affect the rights of the holder
of such Award, if such amendment is determined by the Committee to be necessary to cause the Award to be exempt from the application of, or to comply with, Code
Section 409A.
(c)
Correction of Defects, Omissions and Inconsistencies
. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the
manner and to the extent it shall deem desirable to carry the Plan into effect.
SECTION 10. General Provisions
(a)
No Rights to Awards
. No Eligible Individual or other person shall have any claim
to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of
Eligible Individuals or holders or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to any Participant or with respect to
different Participants.
(b)
Award Agreements
. No Participant will have rights under an Award granted to such
Participant unless and until an Award Agreement shall have been duly executed on behalf of the
Company and, if requested by the Company, signed by the Participant. In the event that any
provision of an Award Agreement conflicts with or is inconsistent in any respect with the terms of
the Plan as set forth herein or subsequently amended, the terms of the Plan shall control.
(c)
No Rights of Stockholders
. Except with respect to Shares of Restricted Stock as
to which the Participant has been granted the right to vote, neither a Participant nor the
Participant’s legal representative shall be, or have any of the rights and privileges of, a
stockholder of the Company with respect to any Shares issuable to such Participant upon the
exercise or payment of any Award, in whole or in part, unless and until such Shares have been
issued in the name of such Participant or such Participant’s legal representative without
restrictions thereto.
(d)
No Limit on Other Compensation Plans or Arrangements
. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or
additional compensation arrangements, and such arrangements may be either generally applicable or
applicable only in specific cases.
(e)
No Right to Employment
. The Plan shall not constitute a contract of employment,
and adoption of the Plan or the grant of an Award shall not be construed as giving a Participant
the right to be retained as an employee of the Company or an Affiliate, or a non-employee Director
to be retained as a Director, nor shall it affect in any way the right of the Company or an
Affiliate to terminate such employment at any time, with or without cause. In addition, the
Company or an Affiliate may at any time dismiss a Participant from
13
employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan
or in any Award Agreement.
(f)
Governing Law
. The Plan and all Awards granted and actions taken thereunder shall
be governed by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws thereof.
(g)
Severability
. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose or intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the
remainder of the Plan or any such Award shall remain in full force and effect.
(h)
Application to Participants Outside the United States
. In the event an Award is
granted to a Participant who is employed or providing services outside the United States and who is
not compensated from a payroll maintained in the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan as they pertain to such individual to comply with
applicable foreign law.
(i)
No Trust or Fund Created
. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and an Eligible Individual or any other person. To the extent that any
person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award,
such right shall be no greater than the right of any unsecured general creditor of the Company or
any Affiliate.
(j)
Other Benefits
. No compensation or benefit awarded to or realized by any
Participant under the Plan shall be included for the purpose of computing such Participant’s
compensation under any compensation-based retirement, disability, or similar plan of the Company
unless required by law or otherwise provided by such other plan.
(k)
No Fractional Shares
. No fractional Shares shall be issued or delivered pursuant
to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of
any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled,
terminated or otherwise eliminated.
(l)
Headings
. Headings are given to the Sections and subsections of the Plan solely
as a convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.
(m)
Section 16 Compliance; Section 162(m) Administration
. The Plan is intended to
comply in all respects with Rule 16b-3 or any successor provision, as in effect from time to time,
and in all events the Plan shall be construed in accordance with the requirements of Rule 16b-3.
If any Plan provision does not comply with Rule 16b-3 as hereafter amended or interpreted, the provision shall be deemed inoperative. The Board, in
its absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of
any provision of the Plan with respect to persons who are officers or directors subject to Section
16 of the Exchange Act
14
without so restricting, limiting or conditioning the Plan with respect to
other Eligible Individuals. The Company intends that all Stock Options and Stock Appreciation
Rights granted under the Plan to individuals who are or who the Committee believes will be Covered
Employees will constitute “qualified performance-based compensation” within the meaning of Section
162(m) of the Code.
(n)
Conditions Precedent to Issuance of Shares
. Shares shall not be issued pursuant
to the exercise or payment of the Exercise Price or purchase price relating to an Award unless such
exercise or payment and the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities Act of 1933, as
amended from time to time, the Exchange Act, the rules and regulations promulgated thereunder, the
requirements of any applicable stock exchange and the Delaware General Corporation Law. As a
condition to the exercise or payment of the Exercise Price or purchase price relating to such
Award, the Company may require that the person exercising or paying the Exercise Price or purchase
price represent and warrant that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation and warranty is required by law.
(o)
Conformance to Section 409A of the Code
. To the extent that any Award constitutes
a deferral of compensation subject to Section 409A of the Code, the following provisions shall
apply notwithstanding any other provision of the Plan:
(i) If such Award provides for a change in the time or form of payment of such Award upon a
Change in Control of the Company, no Change in Control shall be deemed to have occurred upon an
event described in Section 7(b) of the Plan unless such event would also constitute a change in
ownership or effective control of, or a change in the ownership of a substantial portion of the
assets of, the Company under Section 409A of the Code.
(ii) If any amount is payable under such Award upon a termination of employment or other
service, a termination of employment or other service will be deemed to have occurred only at such
time as the Participant has experienced a “separation from service” as such term is defined for
purposes of Code Section 409A.
(iii) If any amount shall be payable with respect to any such Award as a result of a
Participant’s “separation from service” at such time as the Participant is a “specified employee,”
then no payment shall be made, except as permitted under Code Section 409A, prior to the first day
of the seventh (7th) calendar month beginning after the Participant’s separation from service (or
the date of his or her earlier death). The Company may adopt a “specified employee identification
policy” which specifies the identification date, the effective date of any change in the key
employee group, compensation definition and other variables that are relevant in identifying
specified employees, and which may include an alternative method of identifying specified employees
consistent with the regulations under Code Section 409A. In the absence of any such policy or
policy provision, for purposes of the above, the “identification date” is each December 31st, and
an employee who satisfies the above conditions will be considered to be a “specified employee” from
April 1st following the identification date to March 31st of the following year, and the
compensation and other variables, and special rules for corporate events and special rules relating
to nonresident aliens, that is necessary in identifying specified employees will be determined and
applied in accordance with the defaults specified in the regulations under Code Section 409A. Any
Specified Employee Identification
15
Policy will apply uniformly to all nonqualified deferred
compensation plans subject to Code Section 409A that are maintained by the Company or an Affiliate.
To the extent the Committee elects to exercise its discretion to permit or require a Participant to
defer receipt of cash or Shares that would otherwise be due to him or her under the Plan upon the
vesting or settlement of any Award, such deferral shall occur in accordance with a written plan,
rules or procedures adopted for that purpose by the Committee. Any such plan, rules or procedures
shall comply with the requirements of Code Section 409A, including those with respect to the time
when a deferral election may be made, the period of the deferral and the events that would result
in the payment of the deferred amount.
SECTION 11. Effective Date of Plan
Upon its adoption by the Board, the Plan shall be submitted for approval by the stockholders
of the Company and shall be effective as of the date of such approval (the “
Effective
Date
”).
SECTION 12. Term of the Plan
The Plan will terminate on the tenth anniversary of the Effective Date or any earlier date of
discontinuation or termination established pursuant to Section 9 of the Plan. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore
granted may extend beyond such date, and the authority of the Committee provided for hereunder with
respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend
beyond the termination of the Plan.
16