EXHIBIT
4.1
As
amended May 27, 2010
ANTARES
PHARMA, INC.
2008 EQUITY COMPENSATION
PLAN
The Antares Pharma, Inc. 2008 Equity
Compensation Plan (the “
Plan
”) was
established effective as of May 14, 2008 as a successor to the 1993 Stock Option
Plan (the “
1993
Plan
”), 1996 Stock Option Plan (the “
1996 Plan
”), Amended
and Restated 2001 Stock Option Plan for Non-Employee Directors and Consultants
(the “
2001 Directors
and Consultants Plan
”), Amended and Restated 2001 Incentive Stock Option
Plan for Employees (the “
2001 Employees Plan
”)
and 2006 Equity Incentive Plan (the “
2006 Plan
”) (the 1993
Plan, 1996 Plan, 2001 Directors and Consultants Plan, 2001 Employees Plan and
the 2006 Plan collectively, the “
Prior
Plans
”). The Prior Plans were merged with and into this Plan
as of May 14, 2008, and no additional grants shall be made thereafter under the
Prior Plans. Outstanding grants under the Prior Plans shall continue
in effect according to their terms as in effect before the Plan merger (subject
to such amendments as the Committee (as defined below) determines, consistent
with the Prior Plans, as applicable), and the shares with respect to outstanding
grants under the Prior Plans shall be issued or transferred under this
Plan.
The purpose of the Plan is to provide
(i) employees of Antares Pharma, Inc. (the “
Company
”) and its
subsidiaries, (ii) certain consultants and advisors who perform services for the
Company or its subsidiaries and (iii) non-employee members of the Board of
Directors of the Company with the opportunity to receive grants of incentive
stock options, nonqualified stock options, stock appreciation rights, stock
awards, stock units and other stock-based awards. The Company
believes that the Plan will encourage the participants to contribute materially
to the growth of the Company, thereby benefiting the Company’s stockholders, and
will align the economic interests of the participants with those of the
stockholders. The Plan was originally effective as of May 14, 2008
upon approval by the stockholders of the Company. This amendment and
restatement is effective as of February 23, 2010; provided that the share
increase contemplated under Section 4(a) will be effective May 27, 2010, subject
to approval by the stockholders of the Company.
Section
1.
Definitions
The
following terms shall have the meanings set forth below for purposes of the
Plan:
(a)
“
Board
” shall mean the
Board of Directors of the Company.
(b)
“
Cause
” shall mean,
except to the extent specified otherwise by the Committee, a finding by the
Committee that the Grantee (i) has breached his or her employment or service
contract with the Employer, (ii) has engaged in disloyalty to the Employer,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty, (iii) has disclosed trade secrets or confidential
information of the Employer to persons not entitled to receive such information,
(iv) has breached any written non-competition, non-solicitation or
confidentiality agreement between the Grantee and the Employer or (v) has
engaged in such other behavior detrimental to the interests of the Employer as
the Committee determines.
(c)
“
Change of Control
”
shall be deemed to have occurred if:
(i)
Any
“person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act)
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 50%
of the voting power of the then outstanding securities of the Company; provided
that a Change of Control shall not be deemed to occur as a result of a
transaction in which the Company becomes a subsidiary of another corporation and
in which the stockholders of the Company, immediately prior to the transaction,
will beneficially own, immediately after the transaction, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the
parent corporation would be entitled in the election of directors.
(ii)
The
consummation of (A) a merger or consolidation of the Company with another
corporation where the stockholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the merger
or consolidation, shares entitling such stockholders to more than 50% of all
votes to which all stockholders of the surviving corporation would be entitled
in the election of directors, or where the members of the Board, immediately
prior to the merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the surviving
corporation, (B) a sale or other disposition of all or substantially all of the
assets of the Company, or (C) a liquidation or dissolution of the
Company.
(d)
“
Code
” shall mean the
Internal Revenue Code of 1986, as amended.
(e)
“
Committee
” shall mean
the committee, consisting of members of the Board, designated by the Board to
administer the Plan.
(f)
“
Company
” shall mean
Antares Pharma, Inc. and shall include its successors.
(g)
“
Company Stock
” shall
mean common stock of the Company.
(h)
“
Disability
” or “
Disabled
” shall mean
a Grantee’s becoming disabled within the meaning of section 22(e)(3) of the
Code, within the meaning of the Employer’s long-term disability plan applicable
to the Grantee or as otherwise determined by the Committee.
(i)
“
Dividend Equivalent
”
shall mean an amount determined by multiplying the number of shares of Company
Stock subject to a Grant by the per-share cash dividend paid by the Company on
its outstanding Company Stock, or the per-share fair market value (as determined
by the Committee) of any dividend paid on its outstanding Company Stock in
consideration other than cash.
(j)
“
Employee
” shall mean
an employee of the Company or a subsidiary of the Company.
(k)
“
Employed by, or providing
service to, the Employer
” shall mean employment or service as an
Employee, Key Advisor or member of the Board (so that, for purposes of
exercising Options and SARs and satisfying conditions with respect to Stock
Awards and Performance Units, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to be both an
Employee, Key Advisor and member of the Board).
(l)
“
Employer
” shall mean
the Company and each of its subsidiaries.
(m)
“
Exchange Act
” shall
mean the Securities Exchange Act of 1934, as amended.
(n)
“
Exercise Price
” shall
mean the purchase price of Company Stock subject to an Option.
(o)
“
Fair Market Value
”
shall mean:
(i)
If the
Company Stock is publicly traded, then the Fair Market Value per share shall be
determined as follows: (A) if the principal trading market for the Company Stock
is a national securities exchange, the last reported sale price during regular
trading hours thereof on the relevant date or (if there were no trades on that
date) the last reported sales price during regular trading hours on the latest
preceding date upon which a sale was reported, or (B) if the Company Stock is
not principally traded on any such exchange, the last reported sale price of a
share of Company Stock during regular trading hours on the relevant date, as
reported by the OTC Bulletin Board or, if shares are not reported on the OTC
Bulletin Board, as determined by the Committee through any reasonable valuation
method authorized under the Code.
(ii)
If the
Company Stock is not publicly traded or, if publicly traded, is not subject to
reported transactions as set forth above, the Fair Market Value per share shall
be as determined by the Committee through any reasonable valuation method
authorized under the Code.
(p)
“
Grant
” shall mean a
grant of Options, SARs, Stock Awards, Stock Units or Other Stock-Based Awards
under the Plan.
(q)
“
Grant Instrument
”
shall mean the agreement that sets forth the terms of a Grant, including any
amendments.
(r)
“
Grantee
” shall mean
an Employee, Key Advisor or Non-Employee Director who receives a Grant under the
Plan.
(s)
“
Incentive Stock
Option
” shall mean an option to purchase Company Stock that is intended
to meet the requirements of section 422 of the Code.
(t)
“
Key Advisor
” shall
mean a consultant or advisor of an Employer
(u)
“
Non-Employee
Director
” shall mean a member of the Board who is not an
Employee.
(v)
“
Nonqualified Stock
Option
” shall mean an option to purchase Company Stock that is not
intended to meet the requirements of section 422 of the Code.
(w)
“
Option
” shall mean an
Incentive Stock Option or Nonqualified Stock Option granted under the
Plan.
(x)
“
Other Stock-Based
Award
” shall mean any Grant based on, measured by or payable in Company
Stock, as described in Section 10.
(y)
“
SAR
” shall mean a
stock appreciation right with respect to a share of Company Stock.
(z)
“
Stock Award
” shall
mean an award of Company Stock, with or without restrictions.
(aa)
“
Stock Unit
” shall
mean a unit that represents a hypothetical share of Company Stock.
Section
2.
Administration
(a)
Committee
. The
Plan shall be administered and interpreted by the Board or by a Committee
appointed by the Board. The Committee, if applicable, should consist
of two or more persons who are “outside directors” as defined under section
162(m) of the Code, and related Treasury regulations, and “non-employee
directors” as defined under Rule 16b-3 under the Exchange Act. The
Board shall approve and administer all grants made to Non-Employee
Directors. The Committee may delegate authority to one or more
subcommittees, as it deems appropriate. To the extent that the Board
or a subcommittee administers the Plan, references in the Plan to the “
Committee
” shall be
deemed to refer to the Board or such subcommittee. In the absence of
a specific designation by the Board to the contrary, the Plan shall be
administered by the Committee of the Board or any successor Board committee
performing substantially the same functions.
(b)
Committee
Authority
. The Committee shall have the sole authority to (i)
determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, subject to the provisions of Section
18 below, and (v) deal with any other matters arising under the
Plan.
(c)
Committee
Determinations
. The Committee shall have full power and
express discretionary authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The
Committee’s interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall be conclusive and
binding on all persons having any interest in the Plan or in any awards granted
hereunder. All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals.
Section
3.
Grants
Awards
under the Plan may consist of grants of Options as described in Section 6, Stock
Awards as described in Section 7, Stock Units as described in Section 8, SARs as
described in Section 9 and Other Stock-Based Awards as described in Section
10. All Grants shall be subject to the terms and conditions set forth
herein and to such other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the Committee to
the individual in the Grant Instrument. All Grants shall be made
conditional upon the Grantee’s acknowledgement, in writing or by acceptance of
the Grant, that all decisions and determinations of the Committee shall be final
and binding on the Grantee, his or her beneficiaries and any other person having
or claiming an interest under such Grant. Grants under a particular
Section of the Plan need not be uniform as among the Grantees.
Section
4.
Shares
Subject to the Plan
(a)
Shares
Authorized
. Subject to adjustment as described below, the
aggregate number of shares of Company Stock that may be issued or transferred
under the Plan shall be equal to the sum of the following: (i) 1,500,000 shares,
plus (ii) the number of shares of Company Stock subject to outstanding grants
under the Plan as of May 27, 2010, plus (iii) the number of shares of Company
Stock remaining available for issuance under the Plan but not subject to
previously exercised, vested or paid grants as of May 27, 2010; provided that in
no event shall the maximum aggregate numbers of shares that may be issued or
transferred under the Plan exceed 11,500,000 shares. Shares issued or
transferred under the Plan may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the
extent Options or SARs granted under the Plan (including options granted under
the Prior Plans) terminate, expire or are canceled, forfeited, exchanged or
surrendered without having been exercised or if any Stock Awards, Stock Units or
Other Stock-Based Awards (including Stock Awards granted under the Prior Plans)
are forfeited, terminated or otherwise not paid in full, the shares subject to
such Grants shall again be available for purposes of the Plan. Shares
of Company Stock surrendered in payment of the Exercise Price of an Option, and
shares of Company Stock withheld or surrendered for payment of taxes, shall not
be available for re-issuance under the Plan. Upon the exercise of an
Option through the net exercise procedure under Section 6(g)(iv) or upon the
exercise of a SAR, then both for purposes of calculating the number of shares of
Company Stock remaining available for issuance under the Plan and the number of
shares of Company Stock remaining available for exercise under such Option or
SAR, the number of such shares shall be reduced by the gross number of shares
for which the Option or SAR is exercised and without regard to any cash
settlement of a SAR. Except as provided with respect to cash settlement of SARs,
to the extent that any Grants are paid in cash and not in shares of Company
Stock, any shares previously subject to such Grants shall again be available for
issuance or transfer under the Plan and shall not count against the share limits
in this Section 4(a).
(b)
Individual
Limits
. All Grants under the Plan shall be expressed in shares
of Stock. The maximum aggregate number of shares of Company Stock
that shall be subject to Grants made under the Plan to any individual during any
calendar year shall be 1,000,000 shares, subject to adjustment as described
below.
(c)
Adjustments
. If
there is any change in the number or kind of shares of Company Stock outstanding
by reason of (i) a stock dividend, spinoff, recapitalization, stock split, or
combination or exchange of shares, (ii) a merger, reorganization or
consolidation, (iii) a reclassification or change in par value, or (iv) any
other extraordinary or unusual event affecting the outstanding Company Stock as
a class without the Company’s receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spinoff
or the
Company’s payment of an extraordinary dividend or distribution, the maximum
number of shares of Company Stock available for issuance under the Plan, the
maximum number of shares of Company Stock for which any individual may receive
Grants in any year, the kind and number of shares covered by outstanding Grants,
the kind and number of shares issued and to be issued under the Plan, and the
price per share or the applicable market value of such Grants shall be equitably
adjusted by the Committee to reflect any increase or decrease in the number of,
or change in the kind or value of, the issued shares of Company Stock to
preclude, to the extent practicable, the enlargement or dilution of rights and
benefits under the Plan and such outstanding Grants; provided, however, that any
fractional shares resulting from such adjustment shall be
eliminated. In addition, in the event of a Change of Control of the
Company, the provisions of Section 16 of the Plan shall apply. Any
adjustments to outstanding Grants shall be consistent with section 409A or 424
of the Code, to the extent applicable. Any adjustments determined by
the Committee shall be final, binding and conclusive.
Section
5.
Eligibility
for Participation
(a)
Eligible
Persons
. All Employees (including, for all purposes of the
Plan, an Employee who is a member of the Board) and Non-Employee Directors shall
be eligible to participate in the Plan. Key Advisors shall be
eligible to participate in the Plan if the Key Advisors render bona fide
services to the Employer, the services are not in connection with the offer and
sale of securities in a capital-raising transaction and the Key Advisors do not
directly or indirectly promote or maintain a market for the Company’s
securities.
(b)
Selection of
Grantees
. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines.
Section
6.
Options
The
Committee may grant Options to an Employee, Non-Employee Director or Key Advisor
upon such terms as the Committee deems appropriate. The following
provisions are applicable to Options:
(a)
Number of
Shares
. The Committee shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors.
(b)
Type of Option and
Price
.
(i)
The
Committee may grant Incentive Stock Options or Nonqualified Stock Options or any
combination of the two, all in accordance with the terms and conditions set
forth herein. Incentive Stock Options may be granted only to
employees of the Company or its parent or subsidiary corporations, as defined in
section 424 of the Code. Nonqualified Stock Options may be granted to
Employees, Non-Employee Directors and Key Advisors.
(ii)
The
Exercise Price of Company Stock subject to an Option shall be determined by the
Committee and shall be equal to or greater than the Fair Market Value of a share
of Company Stock on the date the Option is granted. However, an
Incentive Stock Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, or any parent or subsidiary corporation of
the Company, as defined in section 424 of the Code, unless the Exercise Price
per share is not less than 110% of the Fair Market Value of a share of Company
Stock on the date of grant.
(c)
Option
Term
. The Committee shall determine the term of each
Option. The term of any Option for US Employees shall not exceed ten
years from the date of grant. The term of any Option for Swiss
Employees shall not excess eleven years from the date of
grant. Notwithstanding the foregoing, the term of any Incentive Stock
Option that is granted to an Employee who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, or any parent or subsidiary
corporation
of the Company, as defined in section 424 of the Code, shall not have a term
that exceeds five years from the date of grant.
(d)
Exercisability of
Options
. Options shall become exercisable in accordance with
such terms and conditions, consistent with the Plan, as may be determined by the
Committee and specified in the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options at any time for
any reason.
(e)
Grants to Non-Exempt
Employees
. Notwithstanding the foregoing, Options granted to
persons who are non-exempt employees under the Fair Labor Standards Act of 1938,
as amended, may not be exercisable for at least six months after the date of
grant (except that such Options may become exercisable, as determined by the
Committee, upon the Grantee’s death, Disability or retirement, or upon a Change
of Control or other circumstances permitted by applicable
regulations).
(f)
Termination of Employment,
Disability or Death
.
(i)
Except as
provided below, an Option may only be exercised while the Grantee is employed
by, or providing service to, the Employer as an Employee, member of the Board or
Key Advisor.
(ii)
In the
event that a Grantee ceases to be employed by, or provide service to, the
Employer for any reason other than Disability, death or termination for Cause,
any Option which is otherwise exercisable by the Grantee shall terminate unless
exercised within 90 days after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of
time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Except as otherwise provided
by the Committee, any of the Grantee’s Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
provide service to, the Employer shall terminate as of such date.
(iii)
In the
event the Grantee ceases to be employed by, or provide service to, the Company
on account of a termination for Cause by the Employer, any Option held by the
Grantee shall terminate as of the date the Grantee ceases to be employed by, or
provide service to, the Employer. In addition, notwithstanding any
other provisions of this Section 6, if the Committee determines that the Grantee
has engaged in conduct that constitutes Cause at any time while the Grantee is
employed by, or providing service to, the Employer or after the Grantee’s
termination of employment or service, any Option held by the Grantee shall
immediately terminate and the Grantee shall automatically forfeit all shares
underlying any exercised portion of an Option for which the Company has not yet
delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares. Upon any exercise of an
Option, the Company may withhold delivery of share certificates pending
resolution of an inquiry that could lead to a finding resulting in a
forfeiture.
(iv)
In the
event the Grantee ceases to be employed by, or provide service to, the Employer
because the Grantee is Disabled, any Option which is otherwise exercisable by
the Grantee shall terminate unless exercised within one year after the date on
which the Grantee ceases to be employed by, or provide service to, the Employer
(or within such other period of time as may be specified by the Committee), but
in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the
Grantee’s Options which are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by, or provide service to, the Employer shall
terminate as of such date.
(v)
If the
Grantee dies while employed by, or providing service to, the Employer or within
90 days after the date on which the Grantee ceases to be employed or provide
service on account of a termination specified in Section 6(e)(ii) above (or
within such other period of time as may be specified by the Committee), any
Option that is otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of
time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Except as otherwise provided
by the Committee, any of the Grantee’s Options that
are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide service to, the Employer shall terminate as of such
date.
(g)
Exercise of
Options
. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company. The Grantee shall pay the Exercise Price for an Option as
specified by the Committee (i) in cash, (ii) unless the Committee determines
otherwise, by delivering shares of Company Stock owned by the Grantee and having
a Fair Market Value on the date of exercise at least equal to the Exercise Price
or by attestation (on a form prescribed by the Committee) to ownership of shares
of Company Stock having a Fair Market Value on the date of exercise at least
equal to the Exercise Price, (iii) by payment through a broker in accordance
with procedures permitted by Regulation T of the Federal Reserve Board, (iv)
through a net exercise of the Option whereby the Grantee instructs the Company
to withhold that number of shares of Company Stock having a Fair Market Value on
the date of exercise equal to the aggregate Exercise Price of the Option being
exercised and deliver to the Grantee the remainder of the shares subject to such
exercise, or (v) by such other method as the Committee may
approve. Shares of Company Stock used to exercise an Option in (ii)
above shall have been held by the Grantee for the requisite period of time
necessary to avoid adverse accounting consequences to the Company with respect
to the Option. Payment for the shares to be issued or transferred
pursuant to the Option, and any required withholding taxes, must be received by
the Company by the time specified by the Committee depending on the type of
payment being made, but in all cases prior to the issuance or transfer of such
shares.
(h)
Limits on Incentive Stock
Options
. Each Incentive Stock Option shall provide that, if
the aggregate Fair Market Value of the Company Stock on the date of the grant
with respect to which Incentive Stock Options are exercisable for the first time
by a Grantee during any calendar year, under the Plan or any other stock option
plan of the Company or a parent or subsidiary, exceeds $100,000, then the
Option, as to the excess, shall be treated as a Nonqualified Stock
Option. An Incentive Stock Option shall not be granted to any person
who is not an Employee of the Company or a parent or subsidiary corporation
(within the meaning of section 424(f) of the Code) of the Company.
Section
7.
Stock
Awards
The
Committee may issue or transfer shares of Company Stock to an Employee,
Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the
Committee deems appropriate. The following provisions are applicable
to Stock Awards:
(a)
General
Requirements
. Shares of Company Stock issued or transferred
pursuant to Stock Awards may be issued or transferred for consideration or for
no consideration, and subject to restrictions or no restrictions, as determined
by the Committee. The Committee may, but shall not be required to,
establish conditions under which restrictions on Stock Awards shall lapse over a
period of time or according to such other criteria as the Committee deems
appropriate, including, without limitation, restrictions based upon the
achievement of specific performance goals. The period of time during
which the Stock Awards will remain subject to restrictions will be designated in
the Grant Instrument as the “Restriction Period.”
(b)
Number of
Shares
. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.
(c)
Requirement of Employment or
Service
. If the Grantee ceases to be employed by, or provide
service to, the Employer during a period designated in the Grant Instrument as
the Restriction Period, or if other specified conditions are not met, the Stock
Award shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and those shares of Company Stock must be
immediately returned to the Company. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.
(d)
Restrictions on Transfer and
Legend on Stock Certificate
. During the Restriction Period, a
Grantee may not sell, assign, transfer, pledge or otherwise dispose of the
shares of a Stock Award except under Section 15(a) below. Unless
otherwise determined by the Committee, the Company will retain possession of
certificates for shares of Stock Awards until all restrictions on such shares
have lapsed. Each certificate for a Stock
Award,
unless held by the Company, shall contain a legend giving appropriate notice of
the restrictions in the Grant. The Grantee shall be entitled to have
the legend removed from the stock certificate covering the shares subject to
restrictions when all restrictions on such shares have lapsed. The
Committee may determine that the Company will not issue certificates for Stock
Awards until all restrictions on such shares have lapsed.
(e)
Right to Vote and to Receive
Dividends
. Unless the Committee determines otherwise, during
the Restriction Period, the Grantee shall have the right to vote shares of Stock
Awards and to receive any dividends or other distributions paid on such shares,
subject to any restrictions deemed appropriate by the Committee, including,
without limitation, the achievement of specific performance goals.
(f)
Lapse of
Restrictions
. All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions, if any, imposed by the Committee. The
Committee may determine, as to any or all Stock Awards, that the restrictions
shall lapse without regard to any Restriction Period.
Section
8.
Stock
Units
The
Committee may grant Stock Units, each of which shall represent one hypothetical
share of Company Stock, to an Employee, Non-Employee Director or Key Advisor
upon such terms and conditions as the Committee deems
appropriate. The following provisions are applicable to Stock
Units:
(a)
Crediting of
Units
. Each Stock Unit shall represent the right of the
Grantee to receive a share of Company Stock or an amount of cash based on the
value of a share of Company Stock, if and when specified conditions are
met. All Stock Units shall be credited to bookkeeping accounts
established on the Company’s records for purposes of the Plan.
(b)
Terms of Stock
Units
. The Committee may grant Stock Units that are payable if
specified performance goals or other conditions are met, or under other
circumstances. Stock Units may be paid at the end of a specified
performance period or other period, or payment may be deferred to a date
authorized by the Committee. The Committee shall determine the number
of Stock Units to be granted and the requirements applicable to such Stock
Units.
(c)
Requirement of Employment or
Service
. If the Grantee ceases to be employed by, or provide
service to, the Employer prior to the vesting of Stock Units, or if other
conditions established by the Committee are not met, the Grantee’s Stock Units
shall be forfeited. The Committee may, however, provide for complete
or partial exceptions to this requirement as it deems appropriate.
(d)
Payment With Respect to
Stock Units
. Payments with respect to Stock Units shall be
made in cash, Company Stock or any combination of the foregoing, as the
Committee shall determine.
Section
9.
Stock
Appreciation Rights
The
Committee may grant SARs to an Employee, Non-Employee Director or Key Advisor
separately or in tandem with any Option. The following provisions are
applicable to SARs:
(a)
General
Requirements
. The Committee may grant SARs to an Employee or
Non-Employee Director separately or in tandem with any Option (for all or a
portion of the applicable Option). Tandem SARs may be granted either
at the time the Option is granted or at any time thereafter while the Option
remains outstanding; provided, however, that, in the case of an Incentive Stock
Option, SARs may be granted only at the time of the Grant of the Incentive Stock
Option. The Committee shall establish the base amount of the SAR at
the time the SAR is granted. The base amount of each SAR shall be
equal to the per share Exercise Price of the related Option or, if there is no
related Option, an amount equal to or greater than the Fair Market Value of a
share of Company Stock as of the date of Grant of the SAR.
(b)
Tandem
SARs
. In the case of tandem SARs, the number of SARs granted
to a Grantee that shall be exercisable during a specified period shall not
exceed the number of shares of Company Stock that the Grantee may purchase upon
the exercise of the related Option during such period. Upon the
exercise of an Option, the SARs relating to the Company Stock covered by such
Option shall terminate. Upon the exercise of SARs, the related Option
shall terminate to the extent of an equal number of shares of Company
Stock.
(c)
Exercisability
. An
SAR shall be exercisable during the period specified by the Committee in the
Grant Instrument and shall be subject to such vesting and other restrictions as
may be specified in the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding SARs at any time for any
reason. SARs may only be exercised while the Grantee is employed by,
or providing service to, the Employer or during the applicable period after
termination of employment or service as described in Section 6(e)
above. A tandem SAR shall be exercisable only during the period when
the Option to which it is related is also exercisable.
(d)
Grants to Non-Exempt
Employees
. Notwithstanding the foregoing, SARs granted to
persons who are non-exempt employees under the Fair Labor Standards Act of 1938,
as amended, may not be exercisable for at least six months after the date of
grant (except that such SARs may become exercisable, as determined by the
Committee, upon the Grantee’s death, Disability or retirement, or upon a Change
of Control or other circumstances permitted by applicable
regulations).
(e)
Value of
SARs
. When a Grantee exercises SARs, the Grantee shall receive
in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised. The stock appreciation
for an SAR is the amount by which the Fair Market Value of the underlying
Company Stock on the date of exercise of the SAR exceeds the base amount of the
SAR as described in subsection (a).
(f)
Form of
Payment
. The appreciation in an SAR shall be paid in shares of
Company Stock, cash or any combination of the foregoing, as the Committee shall
determine. For purposes of calculating the number of shares of
Company Stock to be received, shares of Company Stock shall be valued at their
Fair Market Value on the date of exercise of the SAR.
Section
10.
Other
Stock-Based Awards
The
Committee may grant Other Stock-Based Awards, which are awards (other than those
described in Sections 6, 7, 8 and 9 of the Plan) that are based on or measured
by Company Stock, to any Employee, Non-Employee Director or Key Advisor, on such
terms and conditions as the Committee shall determine. Other
Stock-Based Awards may be awarded subject to the achievement of performance
goals or other conditions and may be payable in cash, Company Stock or any
combination of the foregoing, as the Committee shall determine.
Section
11.
Dividend
Equivalents
The
Committee may grant Dividend Equivalents in connection Stock Units or Other
Stock-Based Awards. Dividend Equivalents may be paid currently or
accrued as contingent cash obligations and may be payable in cash or shares of
Company Stock, and upon such terms as the Committee may establish, including,
without limitation, the achievement of specific performance goals.
Section
12.
Qualified
Performance-Based Compensation
The
Committee may determine that Stock Awards, Stock Units, Other Stock-Based Awards
and Dividend Equivalents granted to an Employee shall be considered “qualified
performance-based compensation” under section 162(m) of the Code. The
following provisions shall apply to Grants of Stock Awards, Stock Units, Other
Stock-Based Awards and Dividend Equivalents that are to be considered “qualified
performance-based compensation” under section 162(m) of the Code:
(a)
Performance
Goals
.
(i)
When
Stock Awards, Stock Units, Other Stock-Based Awards or Dividend Equivalents that
are to be considered “qualified performance-based compensation” are granted, the
Committee shall establish in writing (A) the objective performance goals that
must be met, (B) the performance period during which the performance will be
measured, (C) the threshold, target and maximum amounts that may be paid if the
performance goals are met, and (D) any other conditions that the Committee deems
appropriate and consistent with the Plan and Section 162(m) of the
Code.
(ii)
The
business criteria may relate to the Grantee’s business unit or the performance
of the Company and its parents and subsidiaries as a whole, or any combination
of the foregoing. The Committee shall use objectively determinable performance
goals based on one or more of the following criteria: stock price, earnings per
share, net earnings, operating earnings, earnings before income taxes, EBITDA
(earnings before income tax expense, interest expense, and depreciation and
amortization expense), return on assets, stockholder return, return on equity,
growth in assets, unit volume, sales or market share, or strategic business
criteria consisting of one or more objectives based on meeting specified revenue
goals, market penetration goals, geographic business expansion goals, cost
targets or goals relating to acquisitions or divestitures.
(b)
Establishment of
Goals
. The Committee shall establish the performance goals in
writing either before the beginning of the performance period or during a period
ending no later than the earlier of (i) 90 days after the beginning of the
performance period or (ii) the date on which 25% of the performance period has
been completed, or such other date as may be required or permitted under
applicable regulations under section 162(m) of the Code. The
performance goals shall satisfy the requirements for “qualified
performance-based compensation,” including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the goals be established in such a way that a third party with knowledge of
the relevant facts could determine whether and to what extent the performance
goals have been met. The Committee shall not have discretion to
increase the amount of compensation that is payable upon achievement of the
designated performance goals.
(c)
Announcement of
Grants
. The Committee shall certify and announce the results
for each performance period to all Grantees after the announcement of the
Company’s financial results for the performance period. If and to the
extent that the Committee does not certify that the performance goals have been
met, the grants of Stock Awards, Stock Units, Other Stock-Based Awards and
Dividend Equivalents for the performance period shall be forfeited or shall not
be made, as applicable. If Dividend Equivalents are granted as
“qualified performance-based compensation” under section 162(m) of the Code, a
Grantee may not accrue more than $1,000,000 of such Dividend Equivalents during
any calendar year.
(d)
Death, Disability or Other
Circumstances
. The Committee may provide that Stock Awards,
Stock Units, Other Stock-Based Awards and Dividend Equivalents shall be payable
or restrictions on such Grants shall lapse, in whole or in part, in the event of
the Grantee’s death or Disability during the performance period, or under other
circumstances consistent with the Treasury regulations and rulings under section
162(m) of the Code.
Section
13.
Deferrals
The
Committee may permit or require a Grantee to defer receipt of the payment of
cash or the delivery of shares that would otherwise be due to such Grantee in
connection with any Stock Units or Other Stock-Based Awards. If any
such deferral election is permitted or required, the Committee shall establish
rules and procedures for such deferrals and may provide for interest or other
earnings to be paid on such deferrals. The rules and procedures for
any such deferrals shall be consistent with applicable requirements of section
409A of the Code.
Section
14.
Withholding
of Taxes
(a)
Required
Withholding
. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Employer may require that the Grantee or other
person receiving or exercising Grants pay to the Employer the amount of any
federal, state or local taxes that the Employer is required to withhold with
respect to such Grants, or the Employer may deduct from other wages and
compensation paid by the Employer the amount of any withholding taxes due with
respect to such Grants.
(b)
Election to Withhold
Shares
. If the Committee so permits, a Grantee may elect to
satisfy the Employer’s tax withholding obligation with respect to Grants paid in
Company Stock by having shares withheld up to an amount that does not exceed the
Grantee’s minimum applicable withholding tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and
manner prescribed by the Committee and may be subject to the prior approval of
the Committee.
Section
15.
Transferability
of Grants
(a)
Nontransferability of
Grants
. Except as provided below, only the Grantee may
exercise rights under a Grant during the Grantee’s lifetime. A
Grantee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to Grants other than Incentive
Stock Options, pursuant to a domestic relations order. When a Grantee
dies, the personal representative or other person entitled to succeed to the
rights of the Grantee may exercise such rights. Any such successor
must furnish proof satisfactory to the Company of his or her right to receive
the Grant under the Grantee’s will or under the applicable laws of descent and
distribution.
(b)
Transfer of Nonqualified
Stock Options
. Notwithstanding the foregoing, the Committee may provide,
in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to
family members, or one or more trusts or other entities for the benefit of or
owned by family members, consistent with the applicable securities laws,
according to such terms as the Committee may determine; provided that the
Grantee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.
Section
16.
Consequences
of a Change of Control
(a)
Notice and
Acceleration
. Unless the Committee determines otherwise,
effective upon the date of the Change of Control, (i) all outstanding Options
and SARs shall automatically accelerate and become fully exercisable, (ii) the
restrictions and conditions on all outstanding Stock Awards shall immediately
lapse, and (iii) all Stock Units, Other Stock-Based Awards and Dividend
Equivalents shall become fully vested and shall be paid at their target values,
or in such greater amounts as the Committee may determine.
(b)
Other
Alternatives
. Notwithstanding the foregoing, in the event of a
Change of Control, the Committee may take one or more of the following actions
with respect to any or all outstanding Grants: the Committee may (i) require
that Grantees surrender their outstanding Options and SARs in exchange for one
or more payments by the Company, in cash or Company Stock as determined by the
Committee, in an amount equal to the amount by which the then Fair Market Value
of the shares of Company Stock subject to the Grantee’s unexercised Options and
SARs exceeds the Exercise Price of the Options or the base amount of the SARs,
as applicable, (ii) after giving Grantees an opportunity to exercise their
outstanding Options and SARs, terminate any or all unexercised Options and SARs
at such time as the Committee deems appropriate, or (iii) determine that
outstanding Options and SARs that are not exercised shall be assumed by, or
replaced with comparable options or rights by, the surviving corporation, (or a
parent or subsidiary of the surviving corporation), and other outstanding Grants
that remain in effect after the Change of Control shall be converted to similar
grants of the surviving corporation (or a parent or subsidiary of the surviving
corporation). Such surrender or termination shall take place as of
the date of the Change of Control or such other date as the Committee may
specify.
Section
17.
Requirements
for Issuance or Transfer of Shares
No
Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance or
transfer of such Company Stock have been complied with to the satisfaction of
the Committee. The Committee shall have the right to condition any
Grant on the Grantee’s undertaking in writing to comply with such restrictions
on his or her subsequent disposition of the shares of Company Stock as the
Committee shall deem necessary or advisable, and certificates representing such
shares may be legended to reflect any such restrictions. Certificates
representing shares of Company Stock issued or transferred under the Plan may be
subject to such stop-transfer orders and other restrictions as the Committee
deems appropriate to comply with applicable laws, regulations and
interpretations, including any requirement that a legend be placed
thereon.
Section
18.
Amendment
and Termination of the Plan
(a)
Amendment
. The
Board may amend or terminate the Plan at any time; provided, however, that the
Board shall not amend the Plan without stockholder approval if such approval is
required in order to comply with the Code or other applicable law, or to comply
with applicable stock exchange requirements.
(b)
No Repricing Without
Stockholder Approval
. Notwithstanding anything in the Plan to
the contrary, the Committee may not reprice Options, nor may the Board amend the
Plan to permit repricing of Options, unless the stockholders of the Company
provide prior approval for such repricing. An adjustment to an Option
pursuant to Section 4(c) above shall not constitute a repricing of the
Option.
(c)
Stockholder Re-Approval
Requirement
. If Stock Awards, Stock Units, Other Stock-Based
Awards or Dividend Equivalents are granted as “qualified performance-based
compensation” under Section 12 above, the Plan must be reapproved by the
stockholders no later than the first stockholders meeting that occurs in the
fifth year following the year in which the stockholders previously approved the
provisions of Section 12, if required by section 162(m) of the Code or the
regulations thereunder.
(d)
Termination of
Plan
. The Plan shall terminate on May 13, 2018, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the stockholders.
(e)
Termination and Amendment of
Outstanding Grants
. A termination or amendment of the Plan
that occurs after a Grant is made shall not materially impair the rights of a
Grantee unless the Grantee consents or unless the Committee acts under Section
19(f) below. The termination of the Plan shall not impair the power
and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant
may be terminated or amended under Section 19(f) below or may be amended by
agreement of the Company and the Grantee consistent with the Plan.
Section
19.
Miscellaneous
(a)
Grants in Connection with
Corporate Transactions and Otherwise
. Nothing contained in the
Plan shall be construed to (i) limit the right of the Committee to make Grants
under the Plan in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation, firm
or association, including Grants to employees thereof who become Employees, or
(ii) limit the right of the Company to grant stock options or make other awards
outside of the Plan. The Committee may make a Grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company, in substitution for a stock option or stock awards grant
made by such corporation. Notwithstanding anything in the Plan to the
contrary, the Committee may establish such terms and conditions of the new
Grants as it deems appropriate, including setting the Exercise Price of Options
or the base price of SARs at a price necessary to retain for the Grantee the
same economic value as the prior options or rights.
(b)
Governing
Document
. The Plan shall be the controlling
document. No other statements, representations, explanatory materials
or examples, oral or written, may amend the Plan in any manner. The
Plan shall be binding upon and enforceable against the Company and its
successors and assigns.
(c)
Funding of the
Plan
. The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under the
Plan.
(d)
Rights of
Grantees
. Nothing in the Plan shall entitle any Employee,
Non-Employee Director, Key Advisor or other person to any claim or right to be
granted a Grant under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any individual any rights to be retained
by or in the employ of the Employer or any other employment rights.
(e)
No Fractional
Shares
. No fractional shares of Company Stock shall be issued
or delivered pursuant to the Plan or any Grant. Except as otherwise
provided under the Plan, the Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
(f)
Compliance with
Law
. The Plan, the exercise of Options and SARs and the
obligations of the Company to issue or transfer shares of Company Stock under
Grants shall be subject to all applicable laws and regulations, and to approvals
by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent
of the Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange
Act. In addition, it is the intent of the Company that Incentive
Stock Options comply with the applicable provisions of section 422 of the Code,
that Grants of “qualified performance-based compensation” comply with the
applicable provisions of section 162(m) of the Code and that, to the extent
applicable, Grants comply with the requirements of section 409A of the
Code. To the extent that any legal requirement of section 16 of the
Exchange Act or section 422, 162(m) or 409A of the Code as set forth in the Plan
ceases to be required under section 16 of the Exchange Act or section 422,
162(m) or 409A of the Code, that Plan provision shall cease to
apply. To the extent applicable, if on the date of a Grantee’s
“separation from service” (as such term is defined under section 409A of the
Code), Company Stock (or stock of any other company required to be aggregated
with the Company for purposes of section 409A of the Code and its corresponding
regulations) is publicly-traded on an established securities market or otherwise
and the Grantee is a “specified employee” (as such term is defined in section
409A(a)(2)(B)(i) of the Code and its corresponding regulations) as determined by
the Committee (or its delegate) in its discretion in accordance with the
requirements of sections 409A and 416 of the Code, then all Grants that are
deemed to be deferred compensation subject to the requirements of section 409A
of the Code and payable within six months following such Grantee’s “separation
from service” shall be postponed for a period of six months following the
Grantee’s “separation from service” with the Company. The Committee
may revoke any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation. The Committee
may, in its sole discretion, agree to limit its authority under this
Section.
(g)
Employees Subject to
Taxation Outside the United States
. With respect to Grantees
who are believed by the Committee to be subject to taxation in countries other
than the United States, the Committee may make Grants on such terms and
conditions, consistent with the Plan, as the Committee deems appropriate to
comply with the laws of the applicable countries, and the Committee may create
such procedures, addenda and subplans and make such modifications as may be
necessary or advisable to comply with such laws.
(h)
Governing
Law
. The validity, construction, interpretation and effect of
the Plan and Grant Instruments issued under the Plan shall be governed and
construed by and determined in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions
thereof.