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o
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Preliminary Proxy Statement
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¨
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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þ
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Definitive Proxy Statement
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o
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §240.14a-12
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(1)
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The election of the seven directors named in the accompanying proxy statement to our Board of Directors to serve for a term of one year or until their successors are duly elected and qualified;
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(2)
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The ratification of the appointment of Ernst & Young LLP as our independent registered public accountants for the fiscal year ended March 31, 2014;
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(3)
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The approval of an increase in the number of authorized shares of our common stock;
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(4)
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The approval of our Second Amended and Restated 2010 Incentive Award Plan;
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(5)
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The approval of our 2014 Non-Employee Director Incentive Award Plan;
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(6)
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The approval, on a non-binding advisory basis, of the compensation of our named executive officers (say on pay); and
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(7)
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The transaction of such other business as may come properly before the meeting or any meetings held upon adjournment or postponement of the meeting.
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By order of the Board of Directors
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Michael M. Umansky,
Secretary
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Notice of Annual Meeting of Stockholders
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1
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2
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3
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12
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22
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25
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27
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AUDIT COMMITTEE REPORT | 27 |
28
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29
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36
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42
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42
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42
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43
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43
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43
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43
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43
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• | for our Board of Directors’ slate of nominees; |
• | to ratify the appointment of Ernst & Young LLP as our independent registered public accountants for the fiscal year ended March 31, 2014; |
• | for the approval of an increase in the number of authorized shares of our common stock; |
• | for the approval of our Second Amended and Restated 2010 Incentive Award Plan; |
• | for the approval of our 2014 Non-Employee Director Incentive Award Plan; |
• | for the approval on a non-binding advisory basis of the compensation of our named executive officers; and |
• | as recommended by our Board of Directors with regard to all other matters, in its discretion. |
Name
|
Age
|
Position with the Company
|
Selwyn Joffe
|
56
|
Chairman of the Board of Directors, President and Chief Executive Officer
|
Mel Marks
|
86
|
Director and Consultant
|
Scott J. Adelson
|
53
|
Director
|
Rudolph J. Borneo
|
72
|
Director, Chairman of the Compensation Committee and member of the Audit, Ethics and Nominating and Corporate Governance Committees
|
Philip Gay
|
56
|
Director, Chairman of the Audit Committee and Ethics Committee, and member of the Compensation and Nominating and Corporate Governance Committees
|
Duane Miller
|
66
|
Director, member of the Audit, Compensation, Ethics and Nominating and Corporate Governance Committees
|
Jeffrey Mirvis
|
50
|
Director, member of the Audit, Compensation Committees
|
Name
|
Age
|
Position with the Company
|
Kevin Daly
|
54
|
Chief Accounting Officer
|
Steve Kratz
|
59
|
Chief Operating Officer
|
David Lee
|
44
|
Chief Financial Officer
|
Michael Umansky
|
72
|
Vice President, Secretary and General Counsel
|
· | Provide appropriate incentives to our executive officers to implement our strategic business objectives and achieve the desired company performance; |
· | Reward our executive officers for their contribution to our success in building long-term shareholder value; and |
· | Provide compensation that will attract and retain superior talent and reward performance. |
· | Provide timely and accurate services and information to our management, Board of Directors and other stakeholders |
· |
Improve top-level financial knowledge and accounting controls and maintain regulatory compliance
with accounting standards and practices |
· | Keep abreast of all financial accounting pronouncements that may affect our financial reporting or financial strategies |
· | Monitor all metrics that may have an impact on our financial performance |
· | Maintain an effective treasury function, including budgeting and forecasting |
· | Manage our cash flows |
· | Minimize the loan and interest expenses we incur |
· | Manage our shareholder relations |
· | Evaluate and manage the key operating metrics for us |
· | Increase quality of our product |
· | Implement strategies aimed at reducing our product costs and warranty rates |
· | Manage our recovery operations |
· | Improve our customer support services |
· | Manage and improve the performance of our information technology systems |
· | Maximize all manufacturing efficiencies to ensure fill rates to our customers |
· | Ensure the quality of our products through the manufacturing process |
· | Maintain appropriate levels of offshore production volume and capacity |
· | Maintain a global manufacturing and multifunctional support group |
· | Reorganize special order department to maintain ability of changing unit technology |
· | Complete the reorganization of the production shop |
· | Maintain our recovery remanufacturing process |
· | Improve product costs |
· | Limit our legal and other risk exposure |
· | Manage any litigation |
· | Control our legal and insurance costs |
· | Maintain our compliance standards, including compliance with SEC rules and regulations |
· | Manage our investor relations communications |
· | Develop and protect intellectual property for our business processes |
· |
Advise on and implement any transactional business opportunities, including acquisitions, financings,
SEC correspondence and customer contracts |
· | Oversee certain administrative functions, including human resource functions |
· | Determine and negotiate all required insurance |
· | Supervise contractual obligations |
Name
|
Non-OGSM Bonus
|
OGSM Bonus
|
||||||
|
|
|
||||||
David Lee
|
$
|
31,267
|
$
|
65,000
|
||||
Kevin Daly
|
$
|
16,767
|
$
|
65,000
|
||||
Steve Kratz
|
$
|
37,267
|
$
|
95,000
|
||||
Michael Umansky
|
$
|
22,433
|
$
|
80,000
|
||||
Doug Schooner
|
$
|
71,767
|
$
|
80,000
|
· | Overall responsibility for the financial results of the Company |
· | Develop key strategies in all areas aimed at driving our Company value |
· | Strengthen our relationships with key customers through long-term arrangements |
· | Ensure appropriate information is communicated to our Board of Directors |
· | Ensure that the appropriate management team and corporate focus is in place |
· | Develop an appropriate succession plan |
· | Maintain the appropriate financial structure for our Company, including, but not limited to, budgets and operating focus |
· | Make decisions on all key initiatives proposed by senior management |
· | Build sales |
· | Evaluate and propose systems and initiatives for continuous improvement in all disciplines of our business |
· | Identify and drive any acquisitions |
· | Integrate acquired businesses |
· | Prepare the infrastructure and develop plans to grow the Company |
Name & Principal Position
|
Salary
|
Bonus (1)
|
Stock Awards
|
Option Awards (2)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings (3)
|
All Other Compensation (4)
|
Total
|
|||||||||||||||||||||
Selwyn Joffe, Chairman of the Board, President and CEO
|
$
|
586,923
|
$
|
1,387,707
|
$
|
330,539
|
$
|
682,556
|
$
|
-
|
$
|
565,442
|
$
|
3,553,167
|
||||||||||||||
David Lee,
Chief Financial Officer
|
$
|
220,000
|
$
|
96,267
|
$
|
-
|
$
|
90,442
|
$
|
-
|
$
|
56,977
|
$
|
463,686
|
||||||||||||||
Kevin Daly,
Chief Accounting Officer
|
$
|
208,000
|
$
|
81,767
|
$
|
-
|
$
|
48,294
|
$
|
-
|
$
|
22,334
|
$
|
360,395
|
||||||||||||||
Steve Kratz,
Chief Operating Officer
|
$
|
350,000
|
$
|
132,267
|
$
|
-
|
$
|
108,003
|
$
|
-
|
$
|
19,448
|
$
|
609,718
|
||||||||||||||
Michael Umansky, Vice President, Secretary and General Counsel
|
$
|
506,000
|
$
|
102,433
|
$
|
-
|
$
|
64,977
|
$
|
35,977
|
$
|
52,063
|
$
|
761,450
|
||||||||||||||
Doug Schooner, Vice President, Manufacturing
|
$
|
250,000
|
$
|
151,767
|
$
|
-
|
$
|
62,929
|
$
|
189
|
$
|
58,377
|
$
|
523,262
|
(1) | Bonus amounts for each named executive officer represent the OGSM and Non-OGSM bonuses earned for fiscal year 2013, a signing bonus for Mr. Joffe made pursuant to the terms of his employment agreement, and an additional bonus for Mr. Joffe to cover his tax withholding obligations arising in connection with a stock option granted to him in December 2012. Amounts also include a $100 bonus paid to each of the Company’s employees during December of each year, including the named executive officers. |
(2) | Option award amounts represent the aggregate grant date fair value of options granted. Information regarding the assumptions used to calculate the value of the option awards is included in note 2 to our consolidated financial statements included in our Report on 10-K for the fiscal year ended March 31, 2013. |
(3) | All amounts represent nonqualified deferred compensation earnings. |
(4) | The following chart is a summary of the items that are included in the “All Other Compensation” totals: |
Name
|
Automobile Expenses
|
Health Insurance Premiums
|
401K Employer’s Contribution
|
Deferred Compensation Plan Employer’s Contribution
|
Other (1)
|
Total
|
||||||||||||||||||
Selwyn Joffe
|
$
|
20,586
|
$
|
77,830
|
$
|
4,717
|
$
|
-
|
$
|
462,310
|
$
|
565,442
|
||||||||||||
David Lee
|
$
|
-
|
$
|
53,830
|
$
|
3,147
|
$
|
-
|
$
|
-
|
$
|
56,977
|
||||||||||||
Kevin Daly
|
$
|
-
|
$
|
18,884
|
$
|
3,450
|
$
|
-
|
$
|
-
|
$
|
22,334
|
||||||||||||
Steve Kratz
|
$
|
-
|
$
|
18,884
|
$
|
564
|
$
|
-
|
$
|
-
|
$
|
19,448
|
||||||||||||
Michael Umansky
|
$
|
2,190
|
$
|
37,557
|
$
|
4,090
|
$
|
8,226
|
$
|
-
|
$
|
52,063
|
||||||||||||
Doug Schooner
|
$
|
-
|
$
|
53,830
|
$
|
4,547
|
$
|
-
|
$
|
-
|
$
|
58,377
|
(1) |
$462,310 of other compensation paid to Mr. Joffe consists of $454,675, which is the net purchase price of options held by him that were purchased by the Company in January 2013 pursuant to an option purchase agreement and $7,635 is the compensation expense in connection with the 1,500 options exercised in April 2012.
|
Name
|
Grant Date
|
All Other Stock Awards: Number of Shares of Stock or Units
|
All Other Option Awards: Number of Securities Underlying Options (1)
|
Exercise or Base Price of Option Awards (2)
|
Grant Date Fair Value of Stock and Option Awards
|
||||||||||||
Selwyn Joffe
|
12/28/2012
|
51,167
|
-
|
$
|
-
|
$
|
330,539
|
||||||||||
Selwyn Joffe
|
12/28/2012
|
-
|
109,100
|
$
|
6.46
|
$
|
319,326
|
||||||||||
Selwyn Joffe
|
12/28/2012
|
-
|
124,100
|
$
|
6.46
|
$
|
363,230
|
||||||||||
David Lee
|
12/28/2012
|
-
|
30,900
|
$
|
6.46
|
$
|
90,442
|
||||||||||
Kevin Daly
|
12/28/2012
|
-
|
16,500
|
$
|
6.46
|
$
|
48,294
|
||||||||||
Steve Kratz
|
12/28/2012
|
-
|
36,900
|
$
|
6.46
|
$
|
108,003
|
||||||||||
Michael Umansky
|
12/28/2012
|
-
|
22,200
|
$
|
6.46
|
$
|
64,977
|
||||||||||
Doug Schooner
|
12/28/2012
|
-
|
21,500
|
$
|
6.46
|
$
|
62,929
|
(1) | The options vest in three equal installments beginning each anniversary from the grant date, December 28, 2012, subject to continued employment. |
(2) | The exercise prices of the options are the closing prices of our common stock as quoted on Nasdaq on the respective grant dates. |
Name
|
Number of Securities Underlying Unexercised Options (#) Exercisable vested
|
Number of Securities Underlying Unexcercised Options (#) Unexercisable unvested
|
Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price ($)(2)
|
Option Expiration Date
|
|||||||||||||||
Selwyn Joffe
|
||||||||||||||||||||
100,000
|
-
|
-
|
$
|
6.345
|
01/13/2014
|
|||||||||||||||
200,000
|
-
|
-
|
$
|
9.270
|
07/20/2014
|
|||||||||||||||
150,000
|
-
|
-
|
$
|
10.010
|
11/02/2015
|
|||||||||||||||
250,000
|
-
|
-
|
$
|
12.000
|
08/29/2016
|
|||||||||||||||
109,100
|
-
|
-
|
$
|
6.460
|
12/27/2022
|
|||||||||||||||
41,367
|
-
|
82,733
|
(1)
|
|
$
|
6.460
|
12/27/2022
|
|||||||||||||
David Lee
|
||||||||||||||||||||
5,000
|
-
|
-
|
$
|
10.10
|
11/02/2015
|
|||||||||||||||
2,500
|
-
|
-
|
$
|
12.00
|
08/29/2016
|
|||||||||||||||
10,300
|
-
|
20,600
|
(1)
|
|
$
|
6.46
|
12/27/2022
|
|||||||||||||
Kevin Daly
|
||||||||||||||||||||
5,000
|
-
|
-
|
$
|
10.15
|
01/03/2016
|
|||||||||||||||
2,500
|
-
|
-
|
$
|
12.00
|
08/29/2016
|
|||||||||||||||
5,500
|
-
|
11,000
|
(1)
|
|
$
|
6.460
|
12/27/2022
|
|||||||||||||
Steve Kratz
|
||||||||||||||||||||
2,5000
|
-
|
-
|
$
|
8.70
|
5/11/2014
|
|||||||||||||||
6,000
|
-
|
-
|
$
|
10.10
|
11/02/2015
|
|||||||||||||||
10,000
|
-
|
-
|
$
|
12.00
|
08/29/2016
|
|||||||||||||||
12,300
|
-
|
24,600
|
(1)
|
|
$
|
6.460
|
12/27/2022
|
|||||||||||||
Michael Umansky
|
||||||||||||||||||||
25,000
|
-
|
-
|
$
|
10.01
|
11/02/2015
|
|||||||||||||||
20,000
|
-
|
-
|
$
|
12.00
|
08/29/2016
|
|||||||||||||||
7,400
|
-
|
14,800
|
(1)
|
|
$
|
6.460
|
12/27/2022
|
|||||||||||||
Doug Schooner
|
||||||||||||||||||||
12,000
|
-
|
-
|
$
|
8.70
|
05/11/2014
|
|||||||||||||||
12,000
|
-
|
-
|
$
|
10.01
|
11/02/2015
|
|||||||||||||||
20,000
|
-
|
-
|
$
|
12.00
|
08/29/2016
|
|||||||||||||||
7,167
|
-
|
14,333
|
(1)
|
|
6.46
|
12/27/2022
|
(1) | This award vests in three equal installments beginning each anniversary from the grant date, December 28, 2012, subject to continued employment. |
(2) | All options in this table other than the options expiring on 12/27/2022 are fully-vested. The exercise prices of all options in this table are the closing prices of our common stock as quoted on Nasdaq on the respective grant dates. |
Option Awards
|
Stock Awards
|
|||||||||||||||
Name
|
Number of Shares Acquired on Exercise
|
Value Realized on Exercise (1)
|
Number of Shares Acquired on Vesting
|
Value Realized on Vesting (2)
|
||||||||||||
Selwyn Joffe
|
103,000
|
$
|
462,310
|
51,167
|
$
|
330,539
|
(1) | Value realized on exercise is the excess of the fair market value of the shares acquired on exercise over the exercise price of the options to which such shares were subject. |
(2) | Value realized on vesting is the fair market value of the shares acquired on vesting. |
Name
|
Executive Contributions in Last FY (1)
|
Registrant Contributions in Last FY(2)
|
Aggregate Earnings in Last FY
|
Aggregate Withdrawals/Distributions
|
Aggregate Balance at Last FY
|
|||||||||||||||
Michael Umansky
|
$
|
32,904
|
$
|
8,226
|
$
|
27,751
|
$
|
-
|
$
|
409,128
|
||||||||||
Doug Schooner
|
$
|
-
|
$
|
-
|
$
|
189
|
$
|
-
|
$
|
1,862
|
(1) | The amounts set forth in this column are included in the “Salary” and “Bonus” columns, as applicable, in our “Summary Compensation Table.” |
(2) | See description of the Non-Qualified Deferred Compensation Plan in the “Grants of Plan Based Awards” section. The following table shows our contribution to each named executive officer’s account: |
Name
|
Contribution
|
Interest(1)
|
Total
|
|||||||||
Michael Umansky
|
$
|
8,226
|
$
|
-
|
$
|
8,226
|
(1) | No interest is paid by the Company. |
Benefit
|
Termination by Company for Cause (1)
|
Death (2)
|
Disability (3)
|
Voluntary Termination by Mr. Joffe for Good Reason or Termination by Company w/o Cause (4)
|
Change in Control
|
After Change in Control: Voluntary Termination by Mr. Joffe (5)
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Salary Contribution
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,000,000
|
$
|
-
|
$
|
500,000
|
||||||||||||
Bonus (6)
|
$
|
150,000
|
$
|
150,000
|
$
|
150,000
|
$
|
850,200
|
$
|
-
|
$
|
425,100
|
||||||||||||
Stock Options (7)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
Healthcare
|
$
|
-
|
$
|
-
|
$
|
24,000
|
$
|
48,000
|
$
|
-
|
$
|
24,000
|
||||||||||||
Transaction Fee (8)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
Sale Bonus (9)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,850,200
|
$
|
-
|
||||||||||||
Automobile Allowance (10)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
36,000
|
$
|
-
|
$
|
18,000
|
||||||||||||
Accrued Vacation Payments
|
$
|
126,133
|
$
|
126,133
|
$
|
126,133
|
$
|
203,056
|
$
|
-
|
$
|
126,133
|
(1) | Upon a termination for cause, Mr. Joffe will be entitled to his accrued salary, bonus, if any, reimbursable expenses, and benefits owing to him through the day of his termination. |
(2) | Mr. Joffe’s employment term will end on the date of his death. Upon such event, Mr. Joffe’s estate will be entitled to receive his accrued salary, bonus, if any, and benefits, owing to Mr. Joffe through the date of his death. In addition, Mr. Joffe’s estate will assume certain of Mr. Joffe’s rights as specified in the New Employment Agreement. |
(3) | If during the employment term, Mr. Joffe becomes disabled and is terminated by us, Mr. Joffe will be entitled to receive his accrued salary, bonus, if any, reimbursable expenses, and benefits owing to Mr. Joffe through the date of termination. In addition, Mr. Joffe will be entitled to receive the benefits payable pursuant to a disability insurance policy, which we pay Mr. Joffe $24,000 annually to be used by Mr. Joffe to purchase the same for his benefit. |
(4) | Upon a termination by Mr. Joffe for good reason or by us without cause, Mr. Joffe will be entitled to receive through the later of the date which is two years after the termination date or August 31, 2015: (i) his salary as in effect immediately prior to the termination date; (ii) his average bonus earned for the two years immediately prior to the year in which his employment agreement is terminated (or if such termination occurs within the first three months of our fiscal year, for the second and third years preceding the year in which such termination occurs); and (iii) the benefits. |
(5) | If a change in control occurs and Mr. Joffe voluntarily terminates his employment agreement for good reason or Mr. Joffe’s employment is terminated by us without cause within two years following a change in control, then Mr. Joffe will be entitled to receive either the severance benefit as described in the next sentence of this footnote or the benefits described in the immediately preceding footnote, whichever is more favorable to Mr. Joffe, and we will pay Mr. Joffe any reimbursable expenses owed to him through the termination date. The severance benefit will be equal to (i) two times Mr. Joffe’s salary at the annual rate in effect immediately prior to the date of the change in control plus (ii) two times Mr. Joffe’s average bonus earned for the two years immediately prior to the year in which the change in control occurs. |
(6) | Excludes a $250,000 signing bonus and $500,000 guaranteed bonus paid to Mr. Joffe pursuant to his employment agreement. |
(7) | Upon the termination of his employment agreement, for any reason other than termination by us for cause or termination by Mr. Joffe without good reason, any Executive Awards under our 2010 Incentive Plan which are not fully vested will immediately vest and remain exercisable by Mr. Joffe for a period of two years or, if shorter, until the ten year anniversary of the date of grant of each such Executive Award. The inherent value shown in the table is the additional compensation expense we would have recorded upon the immediate vesting of all Executive Awards which were not fully vested at March 31, 2013. |
(8) | Mr. Joffe is entitled to receive an automobile allowance until March 31, 2012 in the amount of $1,500 per month, payable monthly. In addition, all costs of operating the automobile, including fuel, oil, insurance, repairs, maintenance and other expenses, are our responsibility. |
Name
|
Fees Earned or Paid in Cash
|
Stock Awards
|
Option Awards (1)
|
All Other Compensation
|
Total
|
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Philip Gay
|
$
|
90,000
|
$
|
-
|
$
|
9,006
|
$
|
-
|
$
|
99,006
|
||||||||||
Rudolph Borneo
|
$
|
65,500
|
$
|
-
|
$
|
9,004
|
$
|
-
|
$
|
74,504
|
||||||||||
Scott J. Adelson
|
$
|
48,000
|
$
|
-
|
$
|
12,501
|
$
|
-
|
$
|
60,501
|
||||||||||
Duane Miller
|
$
|
71,000
|
$
|
-
|
$
|
5,730
|
$
|
-
|
$
|
76,730
|
||||||||||
Jeffrey Mirvis
|
$
|
67,000
|
$
|
-
|
$
|
9,325
|
$
|
-
|
$
|
76,325
|
||||||||||
Mel Marks
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,000,000
|
$
|
1,000,000
|
(1) | Option award amounts reflect the aggregate grant date fair value of option awards. Information regarding the assumptions used to calculate the value of option awards is included in note 2 to our consolidated financial statements included in our Report on Form 10-K for the year ended March 31, 2013. The table below sets forth as of March 31, 2013 the aggregate number of outstanding stock awards and outstanding option awards granted to our non-employee directors. |
|
Number of Stock Awards
|
Number of Option Awards
|
||||||
Scott Adelson
|
0
|
37,000
|
||||||
Rudolph Borneo
|
0
|
49,000
|
||||||
Philip Gay
|
0
|
49,000
|
||||||
Duane Miller
|
0
|
37,000
|
||||||
Jeffrey Mirvis
|
0
|
37,000
|
||||||
|
||||||||
Totals
|
0
|
209,000
|
(1) | The listed shareholders, unless otherwise indicated in the footnotes below, have direct ownership over the amount of shares indicated in the table. |
(2) | Based on information contained in filings made by such stockholders with the SEC as reported in each such stockholder's most recent Schedule 13F filing, there were no beneficial shareholders owning over 5%. Since there may have been subsequent purchases or sales of securities, this information may not reflect the current holdings by these stockholders. |
(3) | Includes 400,000 shares issuable upon exercise of options under the 2003 Long Term Incentive Plan; 191,833 shares issuable upon exercise of options under the 2010 Long Term Incentive Plan; and 46,600 shares of unvested Restricted Stock issued under the 2010 Long Term Incentive Plan. |
(4) | Includes 37,000 shares issuable upon exercise of currently exercisable options granted under the 2004 Non-Employee Director Stock Option Plan. |
(5) | Includes 24,000 shares issuable upon exercise of currently exercisable options granted under the 2004 Non-Employee Director Stock Option Plan. |
(6) | Represents 49,000 shares issuable upon exercise of currently exercisable options granted under the 2004 Non-Employee Director Stock Option Plan. |
(7) | Represents 37,000 shares issuable upon exercise of currently exercisable options granted under the 2004 Non-Employee Director Stock Option Plan. |
(8) | Includes 37,000 shares issuable upon exercise of currently exercisable options granted under the 2004 Non-Employee Director Stock Option Plan. |
(9) | Represents 15,000 shares issuable upon exercise of currently exercisable options under the 2003 Long Term Incentive Plan; 14,333 shares issuable upon exercise of options under the 2010 Long Term Incentive Plan; 8,100 shares of unvested Retricted Stock issued under the 2010 Long Term Incentive Plan; and includes 92 shares of common stock held by The Schooner 2003 Family Trust. Mr. Schooner expressly disclaims ownership of the shares held by The Schooner 2003 Family Trust. |
|
2013
|
2012
|
2011
|
|||||||||
Audit Fees
|
$
|
2,519,000
|
$
|
3,553,000
|
$
|
1,143,000
|
||||||
Audit Related Fees
|
13,000
|
-
|
-
|
|||||||||
Tax Fees
|
283,000
|
346,000
|
126,000
|
|||||||||
All Other Fees
|
-
|
85,000
|
300,000
|
|||||||||
|
||||||||||||
Total
|
$
|
2,815,000
|
$
|
3,984,000
|
$
|
1,569,000
|
|
Total
|
|||
Stock options outstanding, all plans (1)
|
1,476,883
|
|||
Full-value equity awards outstanding, all plans (2)
|
138,000
|
|||
Shares available for awards, all plans (3)
|
544,983
|
(1) | As of February 19, 2014 the range of exercise prices of stock options outstanding under all of our equity compensation plans was $4.17 to $19.94 with a weighted average exercise price of $9.13. The weighted average remaining contractual life of stock options outstanding under all of our equity compensation plans as of February 19, 2014 was 6.02 years. |
(2) | Full-value equity awards have been granted under the Amended and Restated 2010 Plan. The number of authorized shares under the 2010 Plan will be reduced by 2.5 shares for each share subject to a “full-value” equity award. |
(3) | Represents shares of our Common Stock reserved for issuance under all of our equity compensation plans as of February 19, 2014. |
• | Stock Options . Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other Code requirements are satisfied. The exercise price of a stock option may not be less than 100% of the fair market value of the underlying share on the date of grant (110% in the case of ISOs granted to certain significant shareholders), except with respect to certain substitute options granted in connection with a corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant shareholders). Vesting conditions determined by the plan administrator may apply to stock options, may include continued service, performance and/or other conditions. |
• | Stock Appreciation Rights . SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to SARs, and may include continued service, performance and/or other conditions. |
• | Restricted Stock; Deferred Stock; RSUs; Performance Awards . Restricted stock is an award of nontransferable shares of our common stock that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price. For shares of restricted stock with performance-based vesting, dividends which are paid prior to vesting will only be paid to the extent that the performance-based vesting conditions are subsequently satisfied and the shares vest. Deferred stock and RSUs are contractual promises to deliver shares of our common stock in the future, which may also remain forfeitable unless and until specified conditions are met. Delivery of the shares underlying these awards may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral. Performance awards are contractual rights to receive a range of shares of our common stock, cash, or a combination of cash and shares, in the future based on the attainment of specified performance goals, in addition to other conditions which may apply to these awards. Conditions applicable to restricted stock, deferred stock, RSUs and performance shares may be based on continuing service with us or our affiliates, the attainment of performance goals and/or such other conditions as the plan administrator may determine. |
• | Stock Payments . Stock payments are awards of fully vested shares of our common stock that may, but need not be, made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. |
• | Dividend Equivalent Rights . Dividend equivalent rights represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of dividend payments dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the plan administrator. Dividend equivalents with respect to an award with performance-based vesting that are based on dividends paid prior to the vesting of such award will only be paid to the extent that the performance-based vesting conditions are subsequently satisfied and the award vests. |
Name and Position
|
Number of
Shares Underlying Option Grants |
.Number of
Restricted Stock Grants |
||||||
Selwyn Joffe
|
316,900
|
97,767
|
||||||
David Lee
|
51,800
|
11,600
|
||||||
Kevin Daly
|
27,700
|
9,200
|
||||||
Steve Kratz
|
61,800
|
13,900
|
||||||
Michael Umansky
|
27,200
|
8,300
|
||||||
Doug Schooner
|
36,000
|
8,100
|
||||||
All Current Executive Officers as a Group
|
544,700
|
154,067
|
||||||
All Employees Who Are Not Executive Officers as a Group
|
229,400
|
35,100
|
(1) | the number of securities to be issued upon the exercise of outstanding options, warrants and rights: |
(2) | the weighted-average exercise price of such outstanding options, warrants and rights; and |
(3) | other than securities to be issued upon the exercise of such outstanding options, warrants and rights, the number of securities remaining available for future issuance under the plan. |
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(a) |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
(b) |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(1)
(c) |
|||||||||
Equity compensation plans approved by shareholders
|
1,970,084
|
$
|
8.73
|
1,135,033
|
||||||||
Equity compensation plans not approved by shareholders
|
N/
|
A
|
N/
|
A
|
N/
|
A
|
||||||
Total
|
1,970,084
|
$
|
8.73
|
1,135,033
|
(1) | Consists of options issued pursuant to our 1994 Employee Stock Option Plan, 1996 Employee Stock Option Plan, 1994 Non-Employee Director Stock Option Plan, 2003 Long-Term Incentive Plan, 2004 Non-Employee Director Stock Option Plan and Amended and Restated 2010 Plan. |
(2) | Consists of options available for issuance under our Amended and Restated 2010 Plan and 2004 Non-Employee Director Stock Option Plan. |
• | Stock Options . Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. The exercise price of a stock option may not be less than 100% of the fair market value of the underlying share on the date of grant, except with respect to certain substitute options granted in connection with a corporate transaction. The term of a stock option may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to stock options, may include continued service, performance and/or other conditions. |
• | Stock Appreciation Rights . SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to SARs, and may include continued service, performance and/or other conditions. |
• | Restricted Stock; Deferred Stock; RSUs; Performance Awards . Restricted stock is an award of nontransferable shares of our common stock that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price. For shares of restricted stock with performance-based vesting, dividends which are paid prior to vesting will only be paid to the extent that the performance-based vesting conditions are subsequently satisfied and the shares vest. Deferred stock and RSUs are contractual promises to deliver shares of our common stock in the future, which may also remain forfeitable unless and until specified conditions are met. Delivery of the shares underlying these awards may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral. Performance awards are contractual rights to receive a range of shares of our common stock, cash, or a combination of cash and shares, in the future based on the attainment of specified performance goals, in addition to other conditions which may apply to these awards. Conditions applicable to restricted stock, deferred stock, RSUs and performance shares may be based on continuing service with us or our affiliates, the attainment of performance goals and/or such other conditions as the plan administrator may determine. |
• | Stock Payments . Stock payments are awards of fully vested shares of our common stock that may, but need not be, made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. |
• | Dividend Equivalent Rights . Dividend equivalent rights represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of dividend payments dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the plan administrator. Dividend equivalents with respect to an award with performance-based vesting that are based on dividends paid prior to the vesting of such award will only be paid to the extent that the performance-based vesting conditions are subsequently satisfied and the award vests. |
Name
|
Dollar Value ($)
|
Number of Shares/Units
Covered by Awards |
||||||
Scott Adelson
|
$
|
50,000
|
8,156
|
|||||
Rudolph Borneo
|
$
|
50,000
|
8,156
|
|||||
Philip Gay
|
$
|
50,000
|
8,156
|
|||||
Mel Marks
|
$
|
50,000
|
8,156
|
|||||
Jeffrey Mirvis
|
$
|
50,000
|
8,156
|
|||||
Duane Miller
|
$
|
50,000
|
8,156
|
|||||
All current directors who are not executive officers as a group
|
$
|
600,000
|
48,936
|
|||||
|
By order of the Board of Directors
|
|
|
|
Michael M. Umansky,
|
|
Secretary
|
(a) | any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company or an affiliate of the Company) becomes, directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities representing 30% or more of the combined voting power for election of members of the Board of the then outstanding voting securities of the Company or any successor of the Company; |
(b) | during any period of two (2) consecutive years or less, individuals who at the beginning of such period constituted the Board of the Company cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new member of the Board was approved by a vote of at least two-thirds of the members of the Board then still in office who were members of the Board at the beginning of the period; |
(c) | the equity holders of the Company approve any merger or consolidation to which the Company is a party as a result of which the persons who were equity holders of the Company immediately prior to the effective date of the merger or consolidation (and excluding, however, any shares held by any party to such merger or consolidation and their affiliates) shall have beneficial ownership of less than 50% of the combined voting power for election of members of the Board (or equivalent) of the surviving entity following the effective date of such merger or consolidation; or |
(d) | the equity holders of the Company approve any merger or consolidation as a result of which the equity interests in the Company shall be changed, converted or exchanged (other than a merger with a wholly owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of 50% or more of the assets or earnings power of the Company; provided however, that no Change in Control shall be deemed to have occurred if, prior to such time as a Change in Control would otherwise be deemed to have occurred, the Board determines otherwise. |
(a) | If the Common Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market system or (iii) automated quotation system on which the Shares are listed, quoted or traded, its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Common Stock on the date in question, the closing sales price for a share of Common Stock on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; |
(b) | If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share of Common Stock on such date, the high bid and low asked prices for a share of Common Stock on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or |
(c) | If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith. |
(a) | The Performance Criteria that shall be used to establish Performance Goals are limited to the following: (i) net earnings (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization); (ii) gross or net sales or revenue; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating earnings or profit; (vi) cash flow (including, but not limited to, operating cash flow and free cash flow); (vii) return on assets; (viii) return on capital; (ix) return on stockholders’ equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin; (xiii) costs; (xiv) funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings per share; (xviii) adjusted earnings per share; (xix) price per share of Common Stock; (xx) regulatory body approval for commercialization of a product; (xxi) implementation or completion of critical projects; (xxii) market share; and (xxiii) economic value, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices. |
(b) | The Administrator may, in its sole discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments may include one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xix) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions. For all Awards intended to qualify as Performance-Based Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code. |
(a) | Subject to Section 14.2 and Section 3.1(b) hereof, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan is 2,750,000 (the “ Share Limit ”); provided , however , that the Share Limit shall be reduced by 2.5 shares for each Share delivered in settlement of any Full Value Award. After the Approval Date, no awards may be granted under the Prior Plan, however, any awards under the Prior Plan that are outstanding as of the Approval Date shall continue to be subject to the terms and conditions of the Prior Plan. |
(b) | If any Shares subject to an Award are forfeited or expire or an Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grant of Awards under the Plan and shall be added back to the Share Limit in the same number of Shares as were debited from the Share Limit in respect of the grant of such Award (as may be adjusted in accordance with Section 14.2 hereof). Notwithstanding anything to the contrary contained herein, the following Shares shall not be added back to the Share Limit and will not be available for future grants of Awards: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options. Any Shares repurchased by the Company under Section 8.4 at the same price paid by the Holder so that such Shares are returned to the Company will again be available for Awards. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code. |
(c) | Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided , that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination. |
(a) | The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator. |
(b) | No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the Program, the Award Agreement or by action of the Administrator following the grant of the Option. |
(a) | A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option; |
(b) |
Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations, the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other applicable law. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;
|
(c) | In the event that the Option shall be exercised pursuant to Section 12.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and |
(d) | Full payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 12.1 and 12.2. |
(a) | The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate. |
(b) | The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided , however , that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by applicable law. In all cases, legal consideration shall be required for each issuance of Restricted Stock. |
(a) | The Administrator is authorized to grant Performance Awards, including Awards of Performance Stock Units, to any Eligible Individual and to determine whether such Performance Awards shall be Performance-Based Compensation. The value of Performance Awards, including Performance Stock Units, may be linked to any one or more of the Performance Criteria or other specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. Performance Awards, including Performance Stock Unit awards may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator. |
(b) | Without limiting Section 10.1(a), the Administrator may grant Performance Awards to any Eligible Individual in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. Any such bonuses paid to a Holder which are intended to be Performance-Based Compensation shall be based upon objectively determinable bonus formulas established in accordance with the provisions of Article 5. |
(a) | Dividend Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Administrator. In addition, Dividend Equivalents with respect to an Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests. |
(b) | Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights. |
(a) | The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine consistent with the Plan. |
(b) | A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. Except as described in (c) below, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted. |
(c) | Notwithstanding the foregoing provisions of Section 11.1(b) to the contrary, in the case of an Stock Appreciation Right that is a Substitute Award, the price per share of the shares subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share on the date of grant; provided that the excess of: (i) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares. |
(a) | The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, or any other criteria selected by the Administrator. At any time after grant of a Stock Appreciation Right, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which a Stock Appreciation Right vests. |
(b) | No portion of a Stock Appreciation Right which is unexercisable at Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the applicable Program or Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right. |
(a) | A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right; |
(b) | Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance; and |
(c) | In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 11.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right. |
(a) | Except as otherwise provided in Section 12.3(b): |
(i) |
No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;
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(ii) | No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and |
(iii) | During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Holder’s will or under the then applicable laws of descent and distribution. |
(b) | Notwithstanding Section 12.3(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an Award other than an Incentive Stock Option to any one or more Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer. |
(c) | Notwithstanding Section 12.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married and resides in a community property state, a designation of a person other than the Holder’s spouse as his or her beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is filed with the Administrator prior to the Holder’s death. |
(a) | Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded, and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements, and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. |
(b) | All Share certificates delivered pursuant to the Plan and all shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares. |
(c) | The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator. |
(d) | No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding down. |
(e) | Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). |
(a) | (i) Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, must be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or as set forth in a written agreement relating to such Award between the Company and the Holder); and |
(b) | All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement. |
(a) | Designate Eligible Individuals to receive Awards; |
(b) | Determine the type or types of Awards to be granted to each Eligible Individual; |
(c) | Determine the number of Awards to be granted and the number of Shares to which an Award will relate; |
(d) | Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any performance criteria, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines; |
(e) | Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; |
(f) | Prescribe the form of each Award Agreement, which need not be identical for each Holder; |
(g) | Decide all other matters that must be determined in connection with an Award; |
(h) | Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; |
(i) | Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement; |
(j) | Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and |
(k) | Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Sections 3.4 and 14.2(d). |
(a) | In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the Plan, adjustments of the Award Limit, and adjustments of the manner in which shares subject to Full Value Awards will be counted); (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (iv) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code. |
(b) | In the event of any transaction or event described in Section 14.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations or accounting principles, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles: |
(i) | To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 14.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested; |
(ii) | To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; |
(iii) | To make adjustments in the number and type of shares of the Company’s stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future; |
(iv) | To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and |
(v) | To provide that the Award cannot vest, be exercised or become payable after such event. |
(c) | In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 14.2(a) and 14.2(b): |
(i) | The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or |
(ii) | The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the Plan, adjustments of the Award Limit, and adjustments of the manner in which shares subject to Full Value Awards will be counted). The adjustments provided under this Section 14.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company. |
(d) | Notwithstanding any other provision of the Plan, in the event of a Change in Control, each outstanding Award shall continue in effect or be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event an Award continues in effect or is assumed or an equivalent Award substituted, and a Holder has a Termination of Service by reason of Involuntary Termination or Good Reason upon or within two (2) years following the Change in Control, then such Holder shall be fully vested in such continued, assumed or substituted Award. |
(e) | In the event that the successor corporation in a Change in Control refuses to assume or substitute for the Award, the Administrator may cause any or all of such Awards to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Awards to lapse. If an Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and the Award shall terminate upon the expiration of such period. |
(f) | For the purposes of this Section 14.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided , however , that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each share of Common Stock subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control. |
(g) | The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan. |
(h) | With respect to Awards which are granted to Covered Employees and are intended to qualify as Performance-Based Compensation, no adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator determines that the Award should not so qualify. No adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions. |
(i) | The existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. |
(j) | No action shall be taken under this Section 14.2 which shall cause an Award to fail to comply with Section 409A of the Code or the Treasury Regulations thereunder, to the extent applicable to such Award. |
(k) | In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of thirty (30) days prior to the consummation of any such transaction. |
(e) | any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company or an affiliate of the Company) becomes, directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities representing 30% or more of the combined voting power for election of members of the Board of the then outstanding voting securities of the Company or any successor of the Company; |
(f) | during any period of two (2) consecutive years or less, individuals who at the beginning of such period constituted the Board of the Company cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new member of the Board was approved by a vote of at least two-thirds of the members of the Board then still in office who were members of the Board at the beginning of the period; |
(g) | the equity holders of the Company approve any merger or consolidation to which the Company is a party as a result of which the persons who were equity holders of the Company immediately prior to the effective date of the merger or consolidation (and excluding, however, any shares held by any party to such merger or consolidation and their affiliates) shall have beneficial ownership of less than 50% of the combined voting power for election of members of the Board (or equivalent) of the surviving entity following the effective date of such merger or consolidation; or |
(h) | the equity holders of the Company approve any merger or consolidation as a result of which the equity interests in the Company shall be changed, converted or exchanged (other than a merger with a wholly owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of 50% or more of the assets or earnings power of the Company; provided however, that no Change in Control shall be deemed to have occurred if, prior to such time as a Change in Control would otherwise be deemed to have occurred, the Board determines otherwise. |
(d) | If the Common Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market system or (iii) automated quotation system on which the Shares are listed, quoted or traded, its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Common Stock on the date in question, the closing sales price for a share of Common Stock on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; |
(e) | If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share of Common Stock on such date, the high bid and low asked prices for a share of Common Stock on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or |
(f) | If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith. |
(c) | Subject to Section 13.2 and Section 3.1(b) hereof, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan is 342,000 (the “ Share Limit ”); provided , however , that the Share Limit shall be reduced by 1.7 shares for each Share delivered in settlement of any Full Value Award. |
(d) | If any Shares subject to an Award that is not a Full Value Award are forfeited or expire or an Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grant of Awards under the Plan. To the extent that a Full Value Award is forfeited or expires or such Full Value Award is settled for cash (in whole or in part), the Shares available under the Plan shall be increased by 1.7 Shares subject to such Full Value Award that is forfeited, expired or settled in cash. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added back to the Share Limit and will not be available for future grants of Awards: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (iii) Shares purchased on the open market with the cash proceeds from the exercise of Options. Any Shares repurchased by the Company under Section 7.4 at the same price paid by the Holder so that such Shares are returned to the Company will again be available for Awards. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares available for issuance under the Plan. |
(e) | Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided , that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination. |
(c) | The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator. |
(d) | No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the Program, the Award Agreement or by action of the Administrator following the grant of the Option. |
(e) | A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option; |
(f) | Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations, the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other applicable law. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars; |
(g) | In the event that the Option shall be exercised pursuant to Section 11.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and |
(h) | Full payment of the exercise price to the stock administrator of the Company for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 11.1 and 11.2. |
(c) | The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate. |
(d) | The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided , however , that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by applicable law. In all cases, legal consideration shall be required for each issuance of Restricted Stock. |
9.1 | Performance Awards . The Administrator is authorized to grant Performance Awards, including Awards of Performance Stock Units, to any Eligible Individual on. The value of Performance Awards, including Performance Stock Units, may be linked to any one or more specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. Performance Awards, including Performance Stock Unit awards shall be paid in Shares. |
(c) | Dividend Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Administrator. In addition, Dividend Equivalents with respect to an Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests. |
(d) | Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights. |
(d) | The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine consistent with the Plan. |
(e) | A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. Except as described in (c) below, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted. |
(f) | Notwithstanding the foregoing provisions of Section 10.1(b) to the contrary, in the case of an Stock Appreciation Right that is a Substitute Award, the price per share of the shares subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share on the date of grant; provided that the excess of: (i) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares. |
(c) | The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, or any other criteria selected by the Administrator. At any time after grant of a Stock Appreciation Right, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which a Stock Appreciation Right vests. |
(d) | No portion of a Stock Appreciation Right which is unexercisable at Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the applicable Program or Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right. |
(d) | A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right; |
(e) | Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance; and |
(f) | In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 10.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right. |
(d) | Except as otherwise provided in Section 11.2(b): |
(iv) | No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed; |
(v) | No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and |
(vi) | During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Holder’s will or under the then applicable laws of descent and distribution. |
(e) | Notwithstanding Section 11.2(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an Award to any one or more Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer. |
(f) | Notwithstanding Section 11.2(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married and resides in a community property state, a designation of a person other than the Holder’s spouse as his or her beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is filed with the Administrator prior to the Holder’s death. |
(a) | Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded, and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements, and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. |
(b) | All Share certificates delivered pursuant to the Plan and all shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares. |
(c) | The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator. |
(d) | No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding down. |
(e) | Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). |
(c) | (i) Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, must be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or as set forth in a written agreement relating to such Award between the Company and the Holder); and |
(d) | All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement. |
(l) | Designate Eligible Individuals to receive Awards; |
(m) | Determine the type or types of Awards to be granted to each Eligible Individual; |
(n) | Determine the number of Awards to be granted and the number of Shares to which an Award will relate; |
(o) | Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any performance criteria, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines; |
(p) | Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; |
(q) | Prescribe the form of each Award Agreement, which need not be identical for each Holder; |
(r) | Decide all other matters that must be determined in connection with an Award; |
(s) | Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; |
(t) | Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement; |
(u) | Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and |
(v) | Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Sections 3.4 and 13.2(d). |
(l) | In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the Plan, adjustments of the Award Limit, and adjustments of the manner in which shares subject to Full Value Awards will be counted); (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (iv) the grant or exercise price per share for any outstanding Awards under the Plan. |
(m) | In the event of any transaction or event described in Section 13.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations or accounting principles, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles: |
(vi) | To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 13.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested; |
(vii) | To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; |
(viii) | To make adjustments in the number and type of shares of the Company’s stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future; |
(ix) | To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and |
(x) | To provide that the Award cannot vest, be exercised or become payable after such event. |
(n) | In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 13.2(a) and 13.2(b): |
(iii) | The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or |
(iv) | The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the Plan, adjustments of the Award Limit, and adjustments of the manner in which shares subject to Full Value Awards will be counted). The adjustments provided under this Section 13.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company. |
(o) | Notwithstanding any other provision of the Plan, in the event of a Change in Control, each outstanding Award shall continue in effect or be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event an Award continues in effect or is assumed or an equivalent Award substituted, and a Holder has a Termination of Service upon or within two (2) years following the Change in Control, then such Holder shall be fully vested in such continued, assumed or substituted Award. |
(p) | In the event that the successor corporation in a Change in Control refuses to assume or substitute for the Award, the Administrator may cause any or all of such Awards to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Awards to lapse. If an Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and the Award shall terminate upon the expiration of such period. |
(q) |
For the purposes of this Section 13.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares);
provided
,
however
, that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each share of Common Stock subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.
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(r) | The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan. |
(s) | No adjustment or action described in this Section 13.2 or in any other provision of the Plan shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions. |
(t) | The existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. |
(u) | No action shall be taken under this Section 13.2 which shall cause an Award to fail to comply with Section 409A of the Code or the Treasury Regulations thereunder, to the extent applicable to such Award. |
(v) | In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of thirty (30) days prior to the consummation of any such transaction. |
COMMON STOCK
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PROXY
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BOARD OF DIRECTORS
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MOTORCAR PARTS OF AMERICA, INC.
2929 California Street Torrance, CA 90503 |
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Votes must be indicated (x) in black or blue ink
The Directors recommend a vote FOR all Nominees listed in Proposal 1, FOR approval of Proposal 2, FOR approval of Proposal No. 3, FOR approval of Proposal No. 4, FOR approval of Proposal No. 5 and FOR approval of Proposal No 6. |
Please Mark
your votes like this |
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x
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FOR
all
nominees
listed below
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WITHHOLD
AUTHORITY
to vote for
all nominees
listed herein
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EXCEPTIONS
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AGAINST
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ABSTAIN
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1.
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Election of Directors
Nominees: Selwyn Joffe, Mel Marks, Scott Adelson, Rudolph Borneo, Philip Gay, Duane Miller and Jeffrey Mirvis. |
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2.
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Proposal to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accountants for the fiscal year ending March 31, 2014.
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FOR
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AGAINST
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ABSTAIN
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FOR
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AGAINST
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ABSTAIN
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3.
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Proposal to approve an increase in the number of authorized shares of our common stock.
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Proposal to approve our Second Amended and Restated 2010 Incentive Award Plan.
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AGAINST
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ABSTAIN
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AGAINST
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ABSTAIN
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5. |
Proposal to approve our 2014 Non-Employee Director Incentive Award Plan
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6. |
Advisory vote on the compensation of our named executive officers.
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ABSTAIN
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7.
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Such other matters as may properly come before the Meeting.
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