Exhibit
99.1
TRACTOR SUPPLY COMPANY
2009 STOCK INCENTIVE PLAN
Effective May ___, 2009
TABLE OF CONTENTS
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Section 1.
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Purpose
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1
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Section 2.
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Definitions
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1
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Section 3.
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Administration
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5
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4
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Section 4.
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Shares Available For Awards
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7
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5
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Section 5.
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Eligibility
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8
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7
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Section 6.
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Stock Options And Stock Appreciation Rights
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8
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7
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Section 7.
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Restricted Shares And Restricted Share Units
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10
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9
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Section 8.
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Performance Awards
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12
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11
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Section 9.
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Other Stock-Based Awards
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12
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11
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Section 10.
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Non-Employee Director And Outside Director Awards
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13
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11
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Section 11.
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Provisions Applicable To Covered Officers And Performance Awards
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13
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12
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Section 12.
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Termination Of Employment
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15
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14
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Section 13.
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Amendment And Termination
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15
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14
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Section 14.
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General Provisions
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16
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14
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TRACTOR SUPPLY COMPANY
2009 STOCK INCENTIVE PLAN
Section 1. Purpose.
This plan shall be known as the Tractor Supply Company 2009 Stock Incentive Plan (the
Plan). The purpose of the Plan is to promote the interests of Tractor Supply Company (the
Company) and its shareholders by (i) attracting and retaining key officers, employees and
directors of, and consultants to, the Company and its Subsidiaries and Affiliates; (ii) motivating
such individuals by means of performance-related incentives to achieve long-range performance
goals; (iii) enabling such individuals to participate in the long-term growth and financial success
of the Company; (iv) encouraging ownership of stock in the Company by such individuals; and (v)
linking their compensation to the long-term interests of the Company and its shareholders. With
respect to any awards granted under the Plan that are intended to comply with the requirements of
performance-based compensation under Section 162(m) of the Code, the Plan shall be interpreted in
a manner consistent with such requirements. The Plan shall be effective as of May ___, 2009,
provided it has been approved by the Board and by the Companys shareholders.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) Affiliate
shall mean (i) any entity that, directly or indirectly, is controlled by the
Company, (ii) any entity in which the Company has a significant equity interest, (iii) an affiliate
of the Company, as defined in Rule 12b-2 of the Exchange Act, and (iv) any entity in which the
Company has at least twenty percent (20%) of the combined voting power of the entitys outstanding
voting securities, in each case as designated by the Board as being a participating employer in the
Plan.
(b) Award
shall mean any Option, Stock Appreciation Right, Restricted Share Award,
Restricted Share Unit, Performance Award, Other Stock-Based Award or other award granted under the
Plan, whether singly, in combination or in tandem, to a Participant by the Committee (or the Board)
pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or
the Board) may establish.
(c) Award Agreement
shall mean any written agreement, contract or other instrument or
document evidencing any Award, which may, but need not, be executed or acknowledged by a
Participant.
(d) Board
shall mean the Board of Directors of the Company.
(e) Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.
(f) Committee
shall mean the committee of the Board described in
Section 3
of the
Plan.
(g) Consultant
shall mean any consultant to the Company or its Subsidiaries or Affiliates.
(h) Covered Officer
shall mean at any date (i) any individual who, with respect to the
previous taxable year of the Company, was a covered employee of the Company within the meaning of
Section 162(m); provided, however, that the term Covered Officer shall not include any such
individual who is designated by the Committee, in its discretion, at the time of any Award or at
any subsequent time, as reasonably expected not to be such a covered employee with respect to the
current taxable year of the Company and (ii) any individual who is designated by the Committee, in
its discretion, at the time of any Award or at any subsequent time, as reasonably expected to be
such a covered employee with respect to the current taxable year of the Company or with respect
to the taxable year of the Company in which any applicable Award will be paid or vested.
(i) Director
shall mean a member of the Board.
(j) Employee
shall mean a current or prospective officer or employee of the Company or of
any Subsidiary or Affiliate.
(k) Exchange Act
shall mean the Securities Exchange Act of 1934, as amended from time to
time.
(l) Fair Market Value
with respect to the Shares, shall mean, for purposes of a grant of an
Award as of any date, the applicable description below (unless the Committee determines in good
faith the fair market value of the Shares to be otherwise):
(i)
If the Shares are traded on a trading exchange (e.g., the New York Stock Exchange
or NASDAQ Stock Market) or are reported on an automated quotation system (e.g., the OTC
Bulletin Board System), Fair Market Value shall be determined by reference to the price of
the Stock on such exchange or system with respect to the date for which Fair Market Value is
being determined and, to the extent applicable, in a manner consistent with Sections 409A
and 422 of the Code.
(ii)
If the Shares are not traded on a recognized exchange or automated trading system,
Fair Market Value shall be the value determined in good faith by the Committee or the Board
and, to the extent applicable, in a manner consistent with Sections 409A and 422 of the
Code.
(m) Incentive Stock Option
shall mean an option to purchase Shares from the Company that is
granted under
Section 6
of the Plan and that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.
(n) Non-Employee Director
shall mean a member of the Board who is not an officer or employee
of the Company or any Subsidiary or Affiliate.
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(o) Non-Qualified Stock Option
shall mean an option to purchase Shares from the Company that
is granted under
Sections 6
or
10
of the Plan and is not intended to be an
Incentive Stock Option.
(p) Option
shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
(q) Option Price
shall mean the purchase price payable to purchase one Share upon the
exercise of an Option.
(r) Other Stock-Based Award
shall mean any Award granted under
Sections 9
or
10
of the Plan.
(s) Outside Director
means, with respect to the grant of an Award, a member of the Board
then serving on the Committee.
(t) Participant
shall mean any Employee, Director, Consultant or other person who receives
an Award under the Plan.
(u) Performance Award
shall mean any Award granted under
Section 8
of the Plan.
(v) Person
shall mean any individual, corporation, partnership, limited liability company,
association, joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
(w) Restricted Share
shall mean any Share granted under
Sections 7
to
10
of
the Plan.
(x) Restricted Share Unit
shall mean any unit granted under
Sections 7
to
10
of the Plan.
(y) SEC
shall mean the Securities and Exchange Commission or any successor thereto.
(z) Section 16
shall mean Section 16 of the Exchange Act and the rules promulgated
thereunder and any successor provision thereto as in effect from time to time.
(aa) Section 162(m)
shall mean Section 162(m) of the Code and the regulations promulgated
thereunder and any successor provision thereto as in effect from time to time.
(bb) Shares
shall mean shares of the common stock, $0.008 par value, of the Company.
(cc) Stock Appreciation Right
or
SAR
shall mean a stock appreciation right granted under
Sections 6
or
10
of the Plan that entitles the holder to receive, with respect to
each Share encompassed by the exercise of such SAR, the amount determined by the Committee and
specified in an Award Agreement. In the absence of such a determination, the holder shall be
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entitled to receive, with respect to each Share encompassed by the exercise of such SAR, the
excess of the Fair Market Value on the date of exercise over the Fair Market Value on the date of
grant.
(dd) Subsidiary
shall mean any Person (other than the Company) of which fifty percent (50%)
or more of its voting power or its equity securities or equity interest is owned directly or
indirectly by the Company. For Incentive Stock Options, the term shall have the meaning set forth
in Section 424(f) of the Code.
(ee) Substitute Awards
shall mean Awards granted solely in assumption of, or in substitution
for, outstanding awards previously granted by a company acquired by the Company or with which the
Company combines.
Section 3. Administration.
3.1
Committee.
The Plan shall be administered by the Compensation Committee of the Board,
such other committee as the Board may designate, or, at the discretion of the Board from time to
time, by the Board. The Committee shall be composed of at least two individuals or such number
that satisfies the minimum requirements of Section 162(m)(4)(C) of the Code, Rule 16b-3 of the
Exchange Act, and the member rules of any trading exchange (
e.g.
, the New York Stock Exchange or
NASDAQ Stock Market) or automated quotation system (e.g., the OTC Bulletin Board System) upon which
Stock is traded, whose members are not employees of the Company or any Subsidiary or Affiliate. The
members of the Committee shall be appointed by, and may be changed at any time and from time to
time in the discretion of, the Board. During any time the Board is acting as administrator of the
Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the
Committee (other than in this
Section 3.1
) shall include the Board.
3.2
Authority of the Committee.
Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority in its discretion to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the
number of Shares to be covered by, or with respect to which payments, rights or other matters are
to be calculated in connection with Awards; (iv) determine the timing, terms, and conditions of any
Award; (v) accelerate the time at which all or any part of an Award may be settled or exercised;
(vi) determine whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited
or suspended and the method or methods by which Awards may be settled, exercised, 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 shall be deferred either automatically or at the election of the holder thereof or of the
Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or
Award made under, the Plan; (ix) except to the extent prohibited by
Section 6.2
, amend or
modify the terms of any Award at or after grant with the consent of the holder of the Award; (x)
establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (xi) make any other determination
and take any other action that the Committee
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deems necessary or desirable for the administration of the Plan, subject to the exclusive
authority of the Board under
Section 13
hereunder to amend or terminate the Plan.
3.3
Committee Discretion Binding.
Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with respect to the
Plan or any Award 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 the Company, any Subsidiary or
Affiliate, any Participant and any holder or beneficiary of any Award.
3.4
Action by the Committee.
The Committee shall select one of its members as its Chairperson
and shall hold its meetings at such times and places and in such manner as it may determine. A
majority of its members shall constitute a quorum. All determinations of the Committee shall be
made by not less than a majority of its members. Any decision or determination reduced to writing
and signed by all of the members of the Committee shall be fully effective as if it had been made
by a majority vote at a meeting duly called and held. The exercise of an Option or receipt of an
Award shall be effective only if an Award Agreement shall have been duly executed and delivered on
behalf of the Company following the grant of the Option or other Award. The Committee may appoint
a Secretary and may make such rules and regulations for the conduct of its business, as it shall
deem advisable.
3.5
Delegation.
Subject to the terms of the Plan and applicable law, the Committee may
delegate to one or more officers or managers of the Company or of any Subsidiary or Affiliate, or
to a Committee of such officers or managers, the authority, subject to such terms and limitations
as the Committee shall determine, to grant Awards to or to cancel, modify or waive rights with
respect to, or to alter, discontinue, suspend or terminate Awards held by Participants who are not
officers or directors of the Company.
3.6
No Liability.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted hereunder.
Section 4. Shares Available For Awards.
4.1
Shares Available.
(a)
Basic Limitations
.
Subject to the provisions of
Section 4.2
hereof, the stock to be subject to Awards under the Plan shall be the Shares of the
Company
,
and the maximum aggregate number of Shares with respect to which Awards may be
granted under the Plan shall be
3,400,000, of which Shares with respect to which Awards other than
SARs and Options may be granted shall be no more than 1,500,000.
3,100,000.
Notwithstanding
the foregoing and subject to adjustment as provided in
Section 4.2
, the maximum number of
Shares with respect to which Awards may be granted under the Plan shall be increased by the number
of Shares with respect to which Options or other Awards were granted under the 2000 Stock Incentive
Plan (the 2000 Plan) or the 2006 Stock Incentive Plan (the 2006 Plan) as of the effective date
of this Plan, but which
terminate,
expire unexercised or are
settled for cash, forfeited, withheld
to satisfy withholding obligations or cancelled without the delivery of Shares under the terms of
the 2000 Plan or the 2006 Plan
forfeited
after the effective date of this Plan.
If, after
the effective date of the Plan, any Shares covered by an Award granted under this Plan, or to which
such an Award
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relates, are forfeited, or if such an Award is settled for cash or otherwise terminates,
expires unexercised or is canceled without the delivery of Shares, then the Shares covered by such
Award, or to which such Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Awards may be granted, to the extent of any such
settlement, forfeiture, termination, expiration or cancellation, shall again become Shares with
respect to which Awards may be granted
(b)
Share Count
. Shares issued pursuant to Awards other than SARs and Options
will count against the Shares available for issuance under the Plan as two Shares for every one
Share issued in connection with the Award. Shares issued pursuant to the exercise of Options will
count against the Shares available for issuance under the Plan as one Share for every one Share to
which such exercise relates. The total number of Shares subject to SARs that are settled in Shares
shall be counted in full against the number of Shares available for issuance under the Plan,
regardless of the number of Shares actually issued upon settlement of the SARs. If Awards are
settled in cash, the Shares that would have been delivered had there been no cash settlement shall
not be counted against the Shares available for issuance under the Plan. If Awards are forfeited
or are terminated for any reason before vesting or being exercised, then the Shares underlying such
Awards shall again become available for Awards under the Plan; provided that any one Share issued
pursuant to an Award other than a SAR or Option that is forfeited or terminated shall be credited
as two Shares when determining the number of Shares that shall again become available for Awards
under the Plan if, upon grant, the Shares underlying such forfeited or terminated Awards were
counted as two Shares against the Plan reserve. Shares that are exchanged by a Participant or
withheld by the Company as full or partial payment in connection with any Award under the Plan, as
well as any Shares exchanged by a Participant or withheld by the Company or one of its Subsidiaries
to satisfy the tax withholding obligations related to any Award, shall not be available for
subsequent Awards under the Plan.
(c)
Option and SAR Limits
. Notwithstanding the foregoing and subject to
adjustment as provided in
Section 4.2
hereof, no Participant may receive Options or SARs
under the Plan in any calendar year that,
taken together
in the aggregate
, relate to more
than 250,000 Shares.
Notwithstanding anything contained herein to the contrary, (i) the gross
number of Shares issued pursuant to an Award and not later forfeited shall be deducted from the
total number of Shares available for grant under this Plan, and (ii) Shares that are cancelled,
tendered or withheld in payment of all or part of the Option Price or exercise price of an Award or
in satisfaction of withholding tax obligations, and Shares that are reacquired with cash tendered
in payment of the Option Price or exercise price of an Award, shall not be included in or added to
the number of Shares available for grant under the Plan.
4.2
Adjustments.
In the event that any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of Shares or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company, or other similar corporate transaction or event
affects the Shares, then the Committee shall in an equitable and proportionate manner (and, with
respect to Incentive Stock Options, in such equitable and proportionate manner as is consistent
with Section 422 of the Code and the regulations thereunder and with respect to Awards to Covered
Officers, in such equitable and proportionate manner as is consistent with Section 162(m) of the
Code): (i) adjust any or all of (1) the aggregate number of Shares or other
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securities of the Company or its successor (or number and kind of other securities or property)
with respect to which Awards may be granted under the Plan; (2) the number of Shares or other
securities of the Company or its successor (or number and kind of other securities or property)
subject to outstanding Awards under the Plan, provided that the number of Shares subject to any
Award shall always be a whole number; (3) the grant or exercise price with respect to any Award
under the Plan; and (4) the limits on the number of Shares that may be granted to Participants
under the Plan in any calendar year; (ii) provide for an equivalent award in respect of securities
of the surviving entity of any merger, consolidation or other transaction or event having a similar
effect; or (iii) make provision for a cash payment to the holder of an outstanding Award.
4.3
Substitute Awards.
Any Shares issued by the Company as Substitute Awards in connection
with the assumption or substitution of outstanding grants from any acquired corporation shall not
reduce the Shares available for Awards under the Plan.
4.4
Sources of Shares Deliverable Under Awards.
Any Shares delivered pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been
reacquired by the Company.
Section 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a Participant;
provided, however, that Outside Directors shall only be eligible to receive Awards granted
consistent with
Section 10
.
Section 6. Stock Options And Stock Appreciation Rights.
6.1
Grant.
Subject to the provisions of the Plan, the Committee shall have sole and complete
authority to determine the Participants to whom Options and SARs shall be granted, the number of
Shares subject to each Award, the exercise price and the conditions and limitations applicable to
the exercise of each Option and SAR. An Option may be granted with or without a related SAR. An
SAR may be granted with or without a related Option. The Committee shall have the authority to
grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant both types of
Options. In the case of Incentive Stock Options, the terms and conditions of such grants shall be
subject to and comply with such rules as may be prescribed by Section 422 of the Code, as from time
to time amended, and any regulations implementing such statute. A person who has been granted an
Option or SAR under this Plan may be granted additional Options or SARs under the Plan if the
Committee shall so determine; provided, however, that to the extent the aggregate Fair Market Value
(determined at the time the Incentive Stock Option is granted) of the Shares with respect to which
all Incentive Stock Options are exercisable for the first time by an Employee during any calendar
year (under all plans described in subsection (d) of Section 422 of the Code of the Employees
employer corporation and its parent and Subsidiaries) exceeds $100,000, such Options shall be
treated as Non-Qualified Stock Options.
6.2
Price.
The Committee in its sole discretion shall establish the Option Price at the time
each Option is granted. The Option Price of an Option may not be less than one hundred percent
(100%) of the Fair Market Value of the Shares with respect to which the Option is granted on the
date of grant of such Option
. Notwithstanding the foregoing and except
, and SARs may not be
granted at a price less than the Fair Market Value of a Share on the date of
7
grant. Except
as permitted by the provisions
of
Section 4.2
and
Section
13
13.3
hereof, the Committee
and the Company
shall not have the power
to (i)
amend the terms of previously granted Options to
without the approval of the Companys
shareholders to (i) lower or
reduce the Option Price of
such
outstanding
Options
, or
(ii) cancel such Options and grant substitute Options with a lower Option Price than the cancelled
Options. SARs may not be granted at a price less than the Fair Market Value of a Share on the date
of grant
and/or the price of outstanding SARs for any Participant or (ii) purchase, cancel or
replace an Option or SAR with cash or a different type of Award
.
6.3
Term.
Subject to the Committees authority under
Section 3.1
and the provisions
of
Section 6.5
, each Option and SAR and all rights and obligations thereunder shall expire
on the date determined by the Committee and specified in the Award Agreement. The Committee shall
be under no duty to provide terms of like duration for Options or SARs granted under the Plan.
Notwithstanding the foregoing, no Option or SAR shall be exercisable after the expiration of ten
(10) years from the date such Option or SAR was granted. Incentive Stock Option Awards shall not be
made with respect to shares of Stock described in
Section 4.1
more than ten (10) years
after the earlier of the date that the Plan is adopted by the Board or the date that the Plan is
approved by shareholders.
6.4
Exercise.
(a) Each Option and SAR shall be exercisable at such times and subject to such terms
and conditions as the Committee may, in its sole discretion, specify in the applicable Award
Agreement or thereafter. The Committee shall have full and complete authority to determine,
subject to
Section 6.5
herein, whether an Option or SAR will be exercisable in full
at any time or from time to time during the term of the Option or SAR, or to provide for the
exercise thereof in such installments, upon the occurrence of such events and at such times
during the term of the Option or SAR as the Committee may determine.
(b) The Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal, state or foreign
securities laws or the Code, as it may deem necessary or advisable. The exercise of any
Option granted hereunder shall be effective only at such time as the sale of Shares pursuant
to such exercise will not violate any state or federal securities or other laws.
(c) An Option or SAR may be exercised in whole or in part at any time, with respect to
whole Shares only, within the period permitted thereunder for the exercise thereof, and
shall be exercised by written notice of intent to exercise the Option or SAR, delivered to
the Company at its principal office, and payment in full to the Company at the direction of
the Committee of the amount of the Option Price for the number of Shares with respect to
which the Option is then being exercised.
(d) Payment of the Option Price shall be made in cash or cash equivalents, or, at the
discretion of the Committee, (i) by transfer, either actually or by attestation, to the
Company of Shares that have been held by the Participant for at least six (6) months (or
such lesser period as may be permitted by the Committee), valued at the Fair Market Value of
such Shares on the date of exercise (or next succeeding trading date, if the date
8
of exercise is not a trading date), together with any applicable withholding taxes, such
transfer to be upon such terms and conditions as determined by the Committee, or (ii) by a
combination of such cash (or cash equivalents) and such Shares; provided, however, that the
optionee shall not be entitled to tender Shares pursuant to successive, substantially
simultaneous exercises of an Option or any other stock option of the Company. Subject to
applicable securities laws and Company policy, the Company may permit an Option to be
exercised by delivering a notice of exercise of the Option and simultaneously selling the
Shares thereby acquired, pursuant to a brokerage or similar agreement approved in advance by
proper officers of the Company, using the proceeds of such sale as payment of the Option
Price, together with any applicable withholding taxes. Until the optionee has been issued
the Shares subject to such exercise, he or she shall possess no rights as a shareholder with
respect to such Shares.
(e) At the Committees discretion, the amount payable as a result of the exercise of an
SAR may be settled in cash, Shares or a combination of cash and Shares. A fractional Share
shall not be deliverable upon the exercise of a SAR but a cash payment will be made in lieu
thereof.
6.5
Ten Percent Stock Rule.
Notwithstanding any other provisions in the Plan, if at the time
an Option is otherwise to be granted pursuant to the Plan, the optionee or rights holder owns
directly or indirectly (within the meaning of Section 424(d) of the Code) Shares of the Company
possessing more than ten percent (10%) of the total combined voting power of all classes of Stock
of the Company or its parent or Subsidiary or Affiliate corporations (within the meaning of Section
422(b)(6) of the Code), then any Incentive Stock Option to be granted to such optionee or rights
holder pursuant to the Plan shall satisfy the requirement of Section 422(c)(5) of the Code, and the
Option Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of the
Shares of the Company, and such Option by its terms shall not be exercisable after the expiration
of five (5) years from the date such Option is granted.
Section 7. Restricted Shares And Restricted Share Units.
7.1
Grant.
(a) Subject to the provisions of the Plan, the Committee shall have sole and complete
authority to determine the Participants to whom Restricted Shares and Restricted Share Units
shall be granted, the number of Restricted Shares and/or the number of Restricted Share
Units to be granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Shares and Restricted Share Units may be forfeited to
the Company, and the other terms and conditions of such Awards. The Restricted Share and
Restricted Share Unit Awards shall be evidenced by Award Agreements in such form as the
Committee shall from time to time approve, which agreements shall comply with and be subject
to the terms and conditions provided hereunder and any additional terms and conditions
established by the Committee that are consistent with the terms of the Plan.
(b) Each Restricted Share and Restricted Share Unit Award made under the Plan shall be
for such number of Shares as shall be determined by the Committee and set forth in the Award
Agreement containing the terms of such Restricted Share or Restricted
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Share Unit Award. Such agreement may set forth a period of time during which the grantee
must remain in the continuous employment of the Company in order for the forfeiture and
transfer restrictions to lapse. If the Committee so determines, the restrictions may lapse
during such restricted period in installments with respect to specified portions of the
Shares covered by the Restricted Share or Restricted Share Unit Award. The Award Agreement
may also, in the discretion of the Committee, set forth performance or other conditions that
will subject the Shares to forfeiture and transfer restrictions. The Committee may, at its
discretion, waive all or any part of the restrictions applicable to any or all outstanding
Restricted Share and Restricted Share Unit Awards.
7.2
Delivery of Shares and Transfer Restrictions.
At the time of a Restricted Share Award, a
certificate representing the number of Shares awarded thereunder shall be registered in the name of
the grantee. Such certificate shall be held by the Company or any custodian appointed by the
Company for the account of the grantee subject to the terms and conditions of the Plan, and shall
bear such a legend setting forth the restrictions imposed thereon as the Committee, in its
discretion, may determine. Unless otherwise provided in the applicable Award Agreement, the
grantee shall have all rights of a shareholder with respect to the Restricted Shares, including the
right to vote such Shares, and may receive dividends in accordance with
Section 14.2
,
subject to the following restrictions: (i) the grantee shall not be entitled to delivery of the
stock certificate until the expiration of the restricted period and the fulfillment of any other
restrictive conditions set forth in the Award Agreement with respect to such Shares; (ii) none of
the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or
disposed of during such restricted period or until after the fulfillment of any such other
restrictive conditions; and (iii) except as otherwise determined by the Committee at or after
grant, all of the Shares shall be forfeited and all rights of the grantee to such Shares shall
terminate, without further obligation on the part of the Company, unless the grantee remains in the
continuous employment of the Company for the entire restricted period in relation to which such
Shares were granted and unless any other restrictive conditions relating to the Restricted Share
Award are met. Unless otherwise provided in the applicable Award Agreement, any Shares, any other
securities of the Company and any other property (except for cash dividends) distributed with
respect to the Shares subject to Restricted Share Awards shall be subject to the same restrictions,
terms and conditions as such Restricted Shares.
7.3
Termination of Restrictions.
At the end of the restricted period and provided that any
other restrictive conditions of the Restricted Share Award are met, or at such earlier time as
otherwise determined by the Committee, all restrictions set forth in the Award Agreement relating
to the Restricted Share Award or in the Plan shall lapse as to the restricted Shares subject
thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and
restricted stock legend, shall be delivered to the Participant or the Participants beneficiary or
estate, as the case may be.
7.4
Payment of Restricted Share Units.
(a) Each Restricted Share Unit shall have a value equal to the Fair Market Value of a
Share. Restricted Share Units shall be paid in cash, Shares, other securities or other
property, as determined in the sole discretion of the Committee, upon the lapse of
10
the restrictions applicable thereto, or otherwise in accordance with the applicable
Award Agreement.
(b) A Participant may receive dividend rights in respect of any vested Restricted Stock
Units at the time of any payment of dividends to shareholders on Shares, as determined in
the sole discretion of the Committee, in accordance with
Section 14.2
. Unless
otherwise provided in the applicable Award Agreement, the following terms shall apply to the
grant of such dividend rights:
(i) The amount of any such dividend right shall equal the amount that would be payable
to the Participant as a shareholder in respect of a number of Shares equal to the number of
vested Restricted Stock Units then credited to the Participant.
(ii) Any such dividend right shall be paid in accordance with the Companys payment
practices as may be established from time to time and as of the date on which such dividend
would have been payable in respect of outstanding Shares. No dividend equivalents shall be
paid in respect of Restricted Share Units that are not yet vested.
(c) Except as otherwise determined by the Committee at or after grant, Restricted Share
Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered
or disposed of, and all Restricted Share Units and all rights of the grantee to such
Restricted Share Units shall terminate, without further obligation on the part of the
Company, unless the grantee remains in continuous employment of the Company for the entire
restricted period in relation to which such Restricted Share Units were granted and unless
any other restrictive conditions relating to the Restricted Share Unit Award are met.
11
Section 8. Performance Awards.
8.1
Grant.
The Committee shall have sole and complete authority to determine the Participants
who shall receive a Performance Award, which shall consist of a right that is (i) denominated in
cash or Shares (including but not limited to Restricted Shares and Restricted Share Units), (ii)
valued, as determined by the Committee, in accordance with the achievement of such performance
goals during such performance periods as the Committee shall establish, and (iii) payable at such
time and in such form as the Committee shall determine.
8.2
Terms and Conditions.
Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any Performance Award and
the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and
may amend specific provisions of the Performance Award; provided, however, that such amendment may
not adversely affect existing Performance Awards made within a performance period commencing prior
to implementation of the amendment.
8.3
Payment of Performance Awards.
Performance Awards may be paid in a lump sum or in
installments following the close of the performance period or, in accordance with the procedures
established by the Committee, on a deferred basis. Termination of employment prior to the end of
any performance period, other than for reasons of death or disability, will result in the
forfeiture of the Performance Award, and no payments will be made. A Participants rights to any
Performance Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of in any manner, except by will or the laws of descent and distribution,
and/or except as the Committee may determine at or after grant.
Section 9. Other Stock-Based Awards.
The Committee shall have the authority to determine the Participants who shall receive an
Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in
Sections 6
and
7
above and (ii) an Award of Shares or an Award denominated or
payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as deemed by the Committee to
be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of any such Other
Stock-Based Award.
Section 10. Non-Employee Director And Outside Director Awards.
10.1 The Board may provide that all or a portion of a Non-Employee Directors annual retainer,
meeting fees and/or other awards or compensation as determined by the Board, be payable (either
automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock
Options, Restricted Shares, Restricted Share Units and/or Other Stock-Based Awards, including
unrestricted Shares. The Board shall determine the terms and conditions of any such Awards,
including the terms and conditions which shall apply upon a termination of the Non-Employee Directors service as a member of the Board, and shall have full power and
12
authority in its discretion to administer such Awards, subject to the terms of the Plan and applicable law.
10.2 The Board may also grant Awards to Outside Directors pursuant to the terms of the Plan,
including any Award described in
Sections 6
,
7
and
9
above. With respect
to such Awards, all references in the Plan to the Committee shall be deemed to be references to the
Board.
Section 11. Provisions Applicable To Covered Officers And Performance Awards.
11.1 Notwithstanding anything in the Plan to the contrary, unless the Committee determines
that a Performance Award to be granted to a Covered Officer should not qualify as
performance-based compensation for purposes of Section 162(m), Performance Awards granted to
Covered Officers shall be subject to the terms and provisions of this
Section 11
.
11.2 The Committee may grant Performance Awards to Covered Officers based solely upon the
attainment of performance targets related to one or more performance goals that satisfy the
requirements of Section 162(m) and/or other terms and conditions selected by the Committee. For
the purposes of this
Section 11
, performance goals shall be limited to one or more of the
following Company, Subsidiary, operating unit, business segment or division financial performance
measures:
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(a)
|
|
earnings before interest, taxes, depreciation and/or
amortization;
|
|
|
(b)
|
|
operating income or profit;
|
|
|
(c)
|
|
operating efficiencies;
|
|
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(d)
|
|
return on equity, assets, capital, capital employed or
investment;
|
|
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(e)
|
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after tax operating income;
|
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(f)
|
|
net income;
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(g)
|
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earnings or book value per Share;
|
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(h)
|
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cash flow(s);
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(i)
|
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total sales or revenues or sales or revenues per employee;
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(j)
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production (separate work units or SWUs);
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(k)
|
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stock price or total shareholder return;
|
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(l)
|
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dividends;
|
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(m)
|
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debt reduction;
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13
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(n)
|
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strategic business objectives, consisting of one or more
objectives based on meeting specified cost targets, business expansion goals and
goals relating to acquisitions or divestitures; or
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(o)
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any combination thereof.
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Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise
employ comparisons based on internal targets, the past performance of the Company or any
Subsidiary, operating unit, business segment or division of the Company and/or the past or current
performance of other companies, and in the case of earnings-based measures, may use or employ
comparisons relating to capital, shareholders equity and/or Shares outstanding, or to assets or
net assets. The Committee may appropriately adjust any evaluation of performance under criteria
set forth in this
Section 11.2
to exclude any of the following events that occurs during a
performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii)
the effect of changes in tax law, accounting principles or other such laws or provisions affecting
reported results, (iv) accruals for reorganization and restructuring programs and (v) any
extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or
in managements discussion and analysis of financial condition and results of operations appearing
in the Companys annual report to shareholders for the applicable year.
11.3 With respect to any Covered Officer, the maximum annual number of Shares in respect of
which all Performance Awards may be granted under
Section 8
of the Plan is 250,000 and the
maximum amount of all Performance Awards that are settled in cash and that may be granted under
Section 8
of the Plan in any year is $5,000,000.
11.4 To the extent necessary to comply with Section 162(m), with respect to grants of
Performance Awards, no later than 90 days following the commencement of each performance period (or
such other time as may be required or permitted by Section 162(m)), the Committee shall, in
writing, (i) select the performance goal or goals applicable to the performance period, (ii)
establish the various targets and bonus amounts which may be earned for such performance period,
and (iii) specify the relationship between performance goals and targets and the amounts to be
earned by each Covered Officer for such performance period. Following the completion of each
performance period, the Committee shall certify in writing whether the applicable performance
targets have been achieved and the amounts, if any, payable to Covered Officers for such
performance period. In determining the amount earned by a Covered Officer for a given performance
period, subject to any applicable Award Agreement, the Committee shall have the right to reduce
(but not increase) the amount payable at a given level of performance to take into account
additional factors that the Committee may deem relevant in its sole discretion to the assessment of
individual or corporate performance for the performance period.
11.5 Unless otherwise expressly stated in the relevant Award Agreement, each Award granted to
a Covered Officer under the Plan is intended to be performance-based compensation within the
meaning of Section 162(m). Accordingly, unless otherwise determined by the Committee, if any
provision of the Plan or any Award Agreement relating to such an Award does not comply or is inconsistent with Section 162(m), such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements, and no provision shall be deemed
to confer upon the Committee discretion to increase the amount of compensation
14
otherwise payable to a Covered Officer in connection with any such Award upon the attainment of the performance criteria
established by the Committee.
Section 12. Termination of Employment.
The Committee shall have the full power and authority to determine the terms and conditions
that shall apply to any Award upon a termination of employment with the Company, its Subsidiaries
and Affiliates, including a termination by the Company with or without cause, by a Participant
voluntarily, by reason of death, disability or retirement, or pursuant to military, government or
other service or leave of absence. The Committee may provide such terms and conditions in the
Award Agreement or in such rules and regulations as it may prescribe.
Section 13. Amendment and Termination.
13.1
Amendments to the Plan.
The Board or the Committee may amend, alter, suspend,
discontinue or terminate the Plan or any portion thereof at any time without shareholder approval;
provided, however, that the Board or the Committee shall condition any amendment, alteration,
suspension, discontinuation or termination on the approval of shareholders if such approval is
necessary to comply with the requirements of Sections 422 or 162(m) of the Code or other applicable
law, or if such approval is deemed advisable with respect to tax, securities or other applicable
laws, policies or regulations.
13.2
Amendments to Awards.
Subject to the restrictions of
Section 6.2
, the Committee
may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel
or terminate, any Award theretofore granted, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant or any holder or beneficiary of any
Award theretofore granted shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
13.3
Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.
The
Committee is hereby authorized to make equitable and proportionate adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in
Section 4.2
) affecting the
Company, any Subsidiary or Affiliate, or the financial statements of the Company or any Subsidiary
or Affiliate, or of changes in applicable laws, regulations or accounting principals in accordance
with the Plan.
Section 14. General Provisions.
14.1
Limited Transferability of Awards.
Except as otherwise provided in the Plan, no Award
shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Participant, except by will or the laws of descent and distribution. No transfer of an Award by
will or by laws of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary or
appropriate to establish the validity of the transfer.
15
14.2
Dividend Equivalents.
In the sole and complete discretion of the Committee, an Award may
provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other
securities or other property on a current or deferred basis. All dividend or dividend equivalents
which are not paid currently may, at the Committees discretion, accrue interest, be reinvested
into additional Shares, or, in the case of dividends or dividend equivalents credited in connection
with Performance Awards, be credited as additional Performance Awards and paid to the Participant
if and when, and to the extent that, payment is made pursuant to such Award. The total number of
Shares available for grant under
Section 4
shall
not
be reduced
in a manner consistent
with Section 4.1(b)
to reflect any dividends or dividend equivalents that are reinvested into
additional Shares or credited as Performance Awards.
14.3.
Compliance with Section 409A of the Code.
No Award (or modification thereof) shall
provide for deferral of compensation that does not comply with Section 409A of the Code unless the
Committee, at the time of grant, specifically provides that the Award is not intended to comply
with Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, if one
or more of the payments or benefits received or to be received by a Participant pursuant to an
Award would cause the Participant to incur any additional tax or interest under Section 409A of the
Code, the Committee may reform such provision to maintain to the maximum extent practicable the
original intent of the applicable provision without violating the provisions of Section 409A of the
Code.
14.4
No Rights to Awards.
No Person shall have any claim to be granted any Award, and there
is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards.
The terms and conditions of Awards need not be the same with respect to each Participant.
14.5
Share Certificates.
All certificates for Shares or other securities of the Company or
any Subsidiary or Affiliate 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 or the rules, regulations and other requirements of the SEC or any state
securities commission or regulatory authority, any stock exchange or other market upon which such
Shares or other securities are then listed, and any applicable Federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
14.6
Withholding.
A Participant may be required to pay to the Company or any Subsidiary or
Affiliate and the Company or any Subsidiary or Affiliate shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made under any Award or
under the Plan, or from any compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, other Awards or other property) of any applicable withholding or
other tax-related obligations in respect of an Award, its exercise or any other transaction
involving an Award, or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. The Committee may provide for additional cash payments to holders of Options to defray or offset any tax arising from the grant, vesting,
exercise or payment of any Award.
16
14.7
Award Agreements.
Each Award hereunder shall be evidenced by an Award Agreement that
shall be delivered to the Participant and may specify the terms and conditions of the Award and any
rules applicable thereto. In the event of a conflict between the terms of the Plan and any Award
Agreement, the terms of the Plan shall prevail. The Committee shall, subject to applicable law,
determine the date an Award is deemed to be granted. The Committee or, except to the extent
prohibited under applicable law, its delegate(s) may establish the terms of agreements or other
documents evidencing Awards under this Plan and may, but need not, require as a condition to any
such agreements or documents effectiveness that such agreement or document be executed by the
Participant, including by electronic signature or other electronic indication of acceptance, and
that such Participant agree to such further terms and conditions as specified in such agreement or
document. The grant of an Award under this Plan shall not confer any rights upon the Participant
holding such Award other than such terms, and subject to such conditions, as are specified in this
Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in
the agreement or other document evidencing such Award.
14.8
No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent
the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of Options, Restricted Shares,
Restricted Share Units, Other Stock-Based Awards or other types of Awards provided for hereunder.
14.9
No Right to Employment.
The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any Subsidiary or Affiliate.
Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from
employment, free from any liability or any claim under the Plan, unless otherwise expressly
provided in an Award Agreement.
14.10
No Rights as Shareholder.
Subject to the provisions of the Plan and the applicable
Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a
shareholder with respect to any Shares to be distributed under the Plan until such person has
become a holder of such Shares. Notwithstanding the foregoing, in connection with each grant of
Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the
Participant shall not be entitled to the rights of a shareholder in respect of such Restricted
Shares.
14.11
Governing Law.
The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan and any Award Agreement shall be determined in accordance with the
laws of the State of Tennessee without giving effect to conflicts of laws principles.
14.12
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 as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to
such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in
full force and effect.
17
14.13
Other Laws.
The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance or
transfer of such Shares or such other consideration might violate any applicable law or regulation
(including applicable non-U.S. laws or regulations) or entitle the Company to recover the same
under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant,
other holder or beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary.
14.14
No Trust or Fund Created.
Neither the Plan nor any Award shall create or be construed
to create a trust or separate fund of any kind or a fiduciary relationship between the Company or
any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an
Award, such right shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary or Affiliate.
14.15
No Fractional Shares.
No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine whether cash, other securities or other
property shall be paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
14.16
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.
18