Exhibit
99.1
PRECISION
OPTICS CORPORATION, INC.
2006
EQUITY INCENTIVE PLAN
1.
DEFINED
TERMS
Exhibit
A, which is incorporated by reference, defines the terms used in the Plan and
sets forth certain operational rules related to those terms.
2.
PURPOSE
The
Plan
has been established to advance the interests of the Company by providing for
the grant to Participants of Stock-based Awards.
3.
ADMINISTRATION
The
Administrator has discretionary authority, subject only to the express
provisions of the Plan, to interpret the Plan; determine eligibility for and
grant Awards; determine, modify or waive the terms and conditions of any Award;
prescribe forms, rules and procedures; and otherwise do all things necessary
to
carry out the purposes of the Plan. In the case of any Award intended to be
eligible for the performance-based compensation exception under Section 162(m),
the Administrator will exercise its discretion consistent with qualifying the
Award for that exception. Determinations of the Administrator made under the
Plan will be conclusive and will bind all parties.
4.
LIMITS
ON AWARDS UNDER THE PLAN
(a)
Number
of Shares
.
The
number of shares of Stock available for delivery in satisfaction of Awards
under
the Plan shall be determined in accordance with this Section 4(a).
(1)
Subject
to Section 7(b), the maximum number of shares of Stock that may be delivered
in
satisfaction of Awards under the Plan shall be 3,000,000 plus the number (not
to
exceed 500,000) of unused Prior Plan Shares. The number of shares of Stock
delivered in satisfaction of Awards shall be, for purposes of the first sentence
of this Section 4(a)(1), the number of shares of Stock subject to an Award
reduced by the number of shares of Stock (a) withheld by the Company in
payment of the exercise price of the Award or in satisfaction of tax withholding
requirements with respect to the Award, or (b) awarded under the Plan as
Restricted Stock but thereafter forfeited, or (c) made subject to an Award
that
is exercised or satisfied, or that terminates or expires, without the delivery
of such shares.
(2)
To
the
extent consistent with the requirements of Section 422 and with other applicable
legal requirements (including applicable stock exchange requirements), Stock
issued under awards of an acquired company that are converted, replaced, or
adjusted in connection with the acquisition shall not reduce the number of
shares available for Awards under the Plan.
(b)
Type
of Shares
.
Stock
delivered by the Company under the Plan may be authorized but unissued Stock
or
previously issued Stock acquired by the Company. No fractional shares of Stock
will be delivered under the Plan.
(c)
Section
162(m) Limits
.
The
maximum number of shares of Stock for which Stock Options may be granted to
any
person in any calendar year and the maximum number of shares of Stock subject
to
SARs granted to any person in any calendar year will each be 1,000,000. The
maximum number of shares subject to other Awards granted to any person in any
calendar year will be 1,000,000 shares. The foregoing provisions will be
construed in a manner consistent with Section 162(m).
5.
ELIGIBILITY
AND PARTICIPATION
The
Administrator will select Participants from among those key Employees and
directors of, and consultants and advisors to, the Company or its Affiliates
who, in the opinion of the Administrator, are in a position to make a
significant contribution to the success of the Company and its Affiliates.
Eligibility for ISOs is limited to employees of the Company or of a “parent
corporation” or “subsidiary corporation” of the Company as those terms are
defined in Section 424 of the Code.
6.
RULES
APPLICABLE TO AWARDS
(a)
All
Awards
(1)
Award
Provisions
.
The
Administrator will determine the terms of all Awards, subject to the limitations
provided herein. By accepting (or, under such rules as the Administrator may
prescribe, being deemed to have accepted) an Award, the Participant agrees
to
the terms of the Award and the Plan. Notwithstanding any provision of this
Plan
to the contrary, awards of an acquired company that are converted, replaced
or
adjusted in connection with the acquisition may contain terms and conditions
that are inconsistent with the terms and conditions specified herein, as
determined by the Administrator.
(2)
Term
of Plan
.
No
Awards may be made after October 10, 2016 but previously granted Awards may
continue beyond that date in accordance with their terms.
(3)
Transferability
.
ISOs
may not be transferred other than by will or the laws of descent and
distribution and may be exercised, during the lifetime of the Participant to
whom they were awarded, only by that Participant. Other Awards may be
transferred during a Participant’s lifetime only on a gratuitous basis and then
only to the extent, if any, determined by the Administrator.
(4)
Vesting,
Etc.
The
Administrator may determine the time or times at which an Award will vest or
become exercisable and the terms on which an Award requiring exercise will
remain exercisable. Without limiting the foregoing, the Administrator may at
any
time accelerate the vesting or exercisability of an Award, regardless of any
adverse or potentially adverse tax consequences resulting from such
acceleration. Unless the Administrator expressly provides otherwise, however,
the following rules will apply: immediately upon the cessation of the
Participant’s Employment, each Award requiring exercise that is then held by the
Participant or by the Participant’s permitted transferees, if any, will cease to
be exercisable and will terminate, and all other Awards that are then held
by
the Participant or by the Participant’s permitted transferees, if any, to the
extent not already vested will be forfeited, except that:
(A)
subject to (B) and (C) below, all Stock Options and SARs held by the Participant
or the Participant’s permitted transferees, if any, immediately prior to the
cessation of the Participant’s Employment, to the extent then exercisable, will
remain exercisable for the lesser of (i) a period of three months or (ii) the
period ending on the latest date on which such Stock Option or SAR could have
been exercised without regard to this Section 6(a)(4), and will thereupon
terminate;
(B)
all
Stock Options and SARs held by a Participant or the Participant’s permitted
transferees, if any, immediately prior to the Participant’s death, to the extent
then exercisable, will remain exercisable for the lesser of (i) the one year
period ending with the first anniversary of the Participant’s death or (ii) the
period ending on the latest date on which such Stock Option or SAR could have
been exercised without regard to this Section 6(a)(4), and will thereupon
terminate; and
(C)
all
Stock Options and SARs held by a Participant or the Participant’s permitted
transferees, if any, immediately prior to the cessation of the Participant’s
Employment will immediately terminate upon such cessation if the Administrator
in its sole discretion determines that such cessation of Employment has resulted
for reasons which cast such discredit on the Participant as to justify immediate
termination of the Award.
(5)
Taxes
.
The
Administrator will make such provision for the withholding of taxes as it deems
necessary. The Administrator may, but need not, hold back shares of Stock from
an Award or permit a Participant to tender previously owned shares of Stock
in
satisfaction of tax withholding requirements (but not in excess of the minimum
withholding required by law).
(6)
Dividend
Equivalents, Etc.
The
Administrator may provide for the payment of amounts in lieu of cash dividends
or other cash distributions with respect to Stock subject to an Award.
Any
entitlement to dividend equivalents or similar entitlements shall be established
and administered consistent either with exemption from, or compliance with,
the
requirements of Section 409A to the extent applicable.
(7)
Rights
Limited
.
Nothing
in the Plan will be construed as giving any person the right to continued
employment or service with the Company or its Affiliates, or any rights as
a
stockholder except as to shares of Stock actually issued under the Plan. The
loss of existing or potential profit in Awards will not constitute an element
of
damages in the event of termination of Employment for any reason, even if the
termination is in violation of an obligation of the Company or Affiliate to
the
Participant.
(8)
Section
162(m)
.
This
Section 6(a)(8) applies to any Performance Award intended to qualify as
performance-based for the purposes of Section 162(m) other than a Stock Option
or SAR. In the case of any Performance Award to which this Section 6(a)(8)
applies, the Plan and such Award will be construed to the maximum extent
permitted by law in a manner consistent with qualifying the Award for such
exception. With respect to such Performance Awards, the Administrator will
preestablish, in writing, one or more specific Performance Criteria no later
than 90 days after the commencement of the period of service to which the
performance relates (or at such earlier time as is required to qualify the
Award
as performance-based under Section 162(m)). Prior to grant, vesting or payment
of the Performance Award, as the case may be, the Administrator will certify
whether the applicable Performance Criteria have been attained and such
determination will be final and conclusive. No Performance Award to which this
Section 6(a)(8) applies may be granted after the first meeting of the
stockholders of the Company held in 2011 until the listed performance measures
set forth in the definition of “Performance Criteria” (as originally approved or
as subsequently amended) have been resubmitted to and reapproved by the
stockholders of the Company in accordance with the requirements of Section
162(m) of the Code, unless such grant is made contingent upon such
approval.
(9)
Section
409A
.
Except
as the Administrator expressly determines in any case, each Award shall contain
such terms, and shall be construed and administered, such that the Award either
(i) qualifies for an exemption from the requirements of Section 409A, or (ii)
satisfies such requirements.
(10)
Certain
Requirements of Corporate Law
.
Awards
shall be granted and administered consistent with the applicable requirements
of
Massachusetts law relating to the issuance of stock and the consideration to
be
received therefor and with the applicable requirements of Nasdaq (if, at such
time, the Company’s Stock is listed on a Nasdaq market).
(b)
Awards
Requiring Exercise
(1)
Time
And Manner Of Exercise
.
Unless
the Administrator expressly provides otherwise, an Award requiring exercise
by the holder will not be deemed to have been exercised until the Administrator
receives a notice of exercise (in form acceptable to the Administrator) signed
by the appropriate person and accompanied by any payment required under the
Award. If the Award is exercised by any person other than the Participant,
the
Administrator may require satisfactory evidence that the person exercising
the
Award has the right to do so.
(2)
Exercise
Price
.
The
exercise price (or the base value from which appreciation is to be measured)
of
each Award requiring exercise shall be not less than 100% of the fair market
value of the Stock subject to the Award, determined as of the date of grant.
Fair market value shall be determined by the Administrator consistent with
the
requirements of Section 422 and Section 409A, as applicable.
No
such
Award, once granted, may be repriced other than in accordance with the
applicable stockholder approval requirements of Nasdaq, if, at such time, the
Company’s Stock is listed on a Nasdaq market.
(3)
Payment
Of Exercise Price
.
Where
the exercise of an Award is to be accompanied by payment, payment shall be
made
by delivery of cash or check acceptable to the Administrator, or, if so
permitted by the Administrator and if legally permissible, (i) through the
delivery of shares of Stock that have been outstanding for at least six months
(unless the Administrator approves a shorter period) and that have a fair market
value equal to the exercise price, (ii) through a broker-assisted exercise
program acceptable to the Administrator, (iii) by other means acceptable to
the
Administrator, or (iv) by any combination of the foregoing permissible forms
of
payment. The delivery of shares in payment of the exercise price under clause
(i) above may be accomplished either by actual delivery or by constructive
delivery through attestation of ownership, subject to such rules as the
Administrator may prescribe.
7.
EFFECT
OF CERTAIN TRANSACTIONS
(a)
Mergers,
etc.
Except
as otherwise provided in an Award, the following provisions shall apply in
the
event of a Covered Transaction:
(1)
Assumption
or Substitution
.
If the
Covered Transaction is one in which there is an acquiring or surviving entity,
the Administrator may provide for the assumption of some or all outstanding
Awards or for the grant of new awards in substitution therefor by the acquiror
or survivor or an affiliate of the acquiror or survivor. Any substitution or
assumption of a Stock Option or SAR exempt from the requirements of Section
409A
shall be accomplished on a basis that preserves such exemption.
(2)
Cash-Out
of Awards
.
If the
Covered Transaction is one in which holders of Stock will receive upon
consummation a payment (whether cash, non-cash or a combination of the
foregoing), the Administrator may provide for payment (a “cash-out”), with
respect to some or all Awards or portions thereof, equal in the case of each
affected Award or portion thereof to the excess, if any, of (A) the fair market
value of one share of Stock (as determined by the Administrator in its
reasonable discretion) times the number of shares of Stock subject to the Award
or such portion, over (B) the aggregate exercise or purchase price, if any,
under the Award or such portion (in the case of an SAR, the aggregate base
price
above which appreciation is measured), in each case on such payment terms (which
need not be the same as the terms of payment to holders of Stock) and other
terms, and subject to such conditions, as the Administrator determines;
provided
,
that
the Administrator shall not exercise its discretion under this Section 7(a)(2)
with respect to an Award providing for “nonqualified deferred compensation”
subject to Section 409A in a manner that would constitute an extension or
acceleration or, or other change in, payment terms if such change would be
inconsistent with the requirements of Section 409A.
(3)
Acceleration
of Certain Awards
.
If the
Covered Transaction (whether or not there is an acquiring or surviving entity)
is one in which there is no assumption, substitution or cash-out, each Award
requiring exercise will become fully exercisable, and the delivery of shares
of
Stock deliverable under each outstanding Award of Stock Units (including
Restricted Stock Units and Performance Awards to the extent consisting of Stock
Units) will be accelerated and such shares will be delivered, prior to the
Covered Transaction, in each case on a basis that gives the holder of the Award
a reasonable opportunity, as determined by the Administrator, following exercise
of the Award or the delivery of the shares, as the case may be, to participate
as a stockholder in the Covered Transaction;
provided
,
that to
the extent acceleration pursuant to this Section 7(a)(3) of an Award subject
to
Section 409A would cause the Award to fail to satisfy the requirements of
Section 409A, the Award shall not be accelerated and the Administrator in lieu
thereof shall take such steps as it deems necessary or appropriate to ensure
that payment of the Award is made in a medium other than Stock and on terms
that
as nearly as possible, but taking into account adjustments required or permitted
by this Section 7, mirror the prior terms of the Award.
(4)
Termination
of Awards Upon Consummation of Covered Transaction
.
Each
Award will terminate upon consummation of the Covered Transaction, other than
the following: (i) Awards assumed pursuant to Section 7(a)(1) above; (ii) Awards
converted pursuant to the proviso in Section 7(a)(3) above into an ongoing
right
to receive payment other than Stock; and (iii) outstanding shares of Restricted
Stock (which shall be treated in the same manner as other shares of Stock,
subject to Section 7(a)(5) below).
(5)
Additional
Limitations
.
Any
share of Stock delivered pursuant to Section 7(a)(2) or Section 7(a)(3)
above with respect to an Award may, in the discretion of the Administrator,
contain such restrictions, if any, as the Administrator deems appropriate to
reflect any performance or other vesting conditions to which the Award was
subject. In the case of Restricted Stock, the Administrator may require that
any
amounts delivered, exchanged or otherwise paid in respect of such Stock in
connection with the Covered Transaction be placed in escrow or otherwise made
subject to such restrictions as the Administrator deems appropriate to carry
out
the intent of the Plan.
(b)
Change
in and Distributions With Respect to Stock
(1)
Basic
Adjustment Provisions
.
In the
event of a stock dividend, stock split or combination of shares (including
a
reverse stock split), recapitalization or other change in the Company’s capital
structure, the Administrator shall make appropriate adjustments to the maximum
number of shares specified in Section 4(a) that may be delivered under the
Plan
and to the maximum share limits described in Section 4(c), and shall also make
appropriate adjustments to the number and kind of shares of stock or securities
subject to Awards then outstanding or subsequently granted, any exercise prices
relating to Awards and any other provision of Awards affected by such change.
(2)
Certain
Other Adjustments
.
The
Administrator may also make adjustments of the type described in Section 7(b)(1)
above to take into account distributions to stockholders other than those
provided for in Section 7(a) and 7(b)(1), or any other event, if the
Administrator determines that adjustments are appropriate to avoid distortion
in
the operation of the Plan and to preserve the value of Awards made hereunder,
having due regard for the qualification of ISOs under Section 422
,
the
requirements of Section 409
A,
and
the performance-based compensation rules of Section 162(m), where
applicable.
(3)
Continuing
Application of Plan Terms
.
References in the Plan to shares of Stock will be construed to include any
stock
or securities resulting from an adjustment pursuant to this Section
7.
8.
LEGAL
CONDITIONS TO DELIVERY OF STOCK
The
Company will not be obligated to deliver any shares of Stock pursuant to the
Plan or to remove any restriction from shares of Stock previously delivered
under the Plan until: (i) the Company is satisfied that all legal matters in
connection with the issuance and delivery of such shares have been addressed
and
resolved; (ii) if the outstanding Stock is at the time of delivery listed on
any
stock exchange or national market system, the shares to be delivered have been
listed or authorized to be listed on such exchange or system upon official
notice of issuance; and (iii) all conditions of the Award have been satisfied
or
waived. If the sale of Stock has not been registered under the Securities Act
of
1933, as amended, the Company may require, as a condition to exercise of the
Award, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act. The Company may require
that certificates evidencing Stock issued under the Plan bear an appropriate
legend reflecting any restriction on transfer applicable to such Stock, and
the
Company may hold the certificates pending lapse of the applicable restrictions.
9.
AMENDMENT
AND TERMINATION
The
Administrator may at any time or times amend the Plan or any outstanding Award
for any purpose which may at the time be permitted by law, and may at any time
terminate the Plan as to any future grants of Awards;
provided
,
that
except as otherwise expressly provided in the Plan the Administrator may not,
without the Participant’s consent, alter the terms of an Award so as to affect
adversely the Participant’s rights under the Award, unless the Administrator
expressly reserved the right to do so at the time of the Award. Any amendments
to the Plan shall be conditioned upon stockholder approval only to the extent,
if any, such approval is required by law (including the Code and applicable
stock exchange requirements), as determined by the Administrator.
10.
OTHER
COMPENSATION ARRANGEMENTS
The
existence of the Plan or the grant of any Award will not in any way affect
the
Company’s right to Award a person bonuses or other compensation in addition to
Awards under the Plan.
11.
MISCELLANEOUS
(a)
Waiver
of Jury Trial
.
By
accepting an Award under the Plan, each Participant waives any right to a trial
by jury in any action, proceeding or counterclaim concerning any rights under
the Plan and any Award, or under any amendment, waiver, consent, instrument,
document or other agreement delivered or which in the future may be delivered
in
connection therewith, and agrees that any such action, proceedings or
counterclaim shall be tried before a court and not before a jury. By accepting
an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or
otherwise, that the Company would not, in the event of any action, proceeding
or
counterclaim, seek to enforce the foregoing waivers
(b)
Limitation
of Liability
.
Notwithstanding anything to the contrary in the Plan, neither the Company,
any
Affiliate, nor the Administrator, nor any person acting on behalf of any of
them, shall be liable to any Participant or to the estate or beneficiary of
any
Participant or to any other holder of an Award by reason of any acceleration
of
income, or any additional tax, asserted by reason of the failure of an Award
to
satisfy the requirements of Section 422 or Section 409A or by reason of Section
4999 of the Code;
provided
,
that
nothing in this Section 11(b) shall limit the ability of the Administrator
or the Company to provide by separate express written agreement with a
Participant for a gross-up payment other payment in connection with any such
tax
or additional tax.
EXHIBIT
A
Definition
of Terms
The
following terms, when used in the Plan, will have the meanings and be subject
to
the provisions set forth below:
“Administrator”:
The
Board, except that the Board may delegate (i) to one or more of its members
such
of its duties, powers and responsibilities as it may determine; (ii) to such
Employees or other persons as it determines such ministerial tasks as it deems
appropriate
;
and
(iii) to the compensation committee of the Board, if the Board shall have
constituted such a committee, some or all of its powers with respect to the
Plan, in which event, except as the context otherwise clearly requires, all
references in this Plan to the Board shall be deemed to refer to the
compensation committee.
In the
event of any delegation described in clause (i) or (ii) of the preceding
sentence, the term “Administrator” shall include the person or persons so
delegated to the extent of such delegation.
“Affiliate”:
Any
corporation or other entity that stands in a relationship to the Company that
would result in the Company and such corporation or other entity being treated
as one employer under Section 414(b) or Section 414(c) of the Code, except
that
in determining eligibility for the grant of a Stock Option or SAR by reason
of
service for an Affiliate, Sections 414(b) and 414(c) of the Code shall be
applied by substituting “at least 50%” for “at least 80%” under Section
1563(a)(1), (2) and (3) of the Code and Treas. Regs. § 1.414(c)-2;
provided
,
that to
the extent permitted under Section 409A, “at least 20%” shall be used in lieu of
“at least 50%”;
and
further provided
,
that
the lower ownership threshold described in this definition (50% or 20% as the
case may be) shall apply only if the same definition of affiliation is used
consistently with respect to all compensatory stock options or stock awards
(whether under the Plan or another plan). The Company may at any time by
amendment provide that different ownership thresholds (consistent with Section
409A) shall apply. Notwithstanding the foregoing provisions of this definition,
except as otherwise determined by the Administrator, a corporation or other
entity shall be treated as an Affiliate only if its employees would be treated
as employees of the Company for purposes of the rules promulgated under the
Securities Act of 1933, as amended, with respect to the use of Form
S-8.
“Award”:
Any or a
combination of the following:
(i)
Stock
Options.
(ii)
SARs.
(iii)
Restricted Stock.
(iv)
Unrestricted Stock.
(v)
Stock
Units, including Restricted Stock Units.
(vi)
Performance Awards.
(vii)
Awards (other than Awards described in (i) through (vi) above) that are
convertible into or otherwise based on Stock.
“Board”:
The
Board of Directors of the Company.
“Code”:
The U.S.
Internal Revenue Code of 1986 as from time to time amended and in effect, or
any
successor statute as from time to time in effect.
“Company”:
Precision Optics Corporation, Inc.
“Covered
Transaction”:
Any
of
(i) a consolidation, merger, or similar transaction or series of related
transactions, including a sale or other disposition of stock, in which the
Company is not the surviving corporation or which results in the acquisition
of
all or substantially all of the Company’s then outstanding common stock by a
single person or entity or by a group of persons and/or entities acting in
concert, (ii) a sale or transfer of all or substantially all the Company’s
assets, or (iii) a dissolution or liquidation of the Company.
Where
a
Covered Transaction involves a tender offer that is reasonably expected to
be
followed by a merger described in clause (i) (as determined by the
Administrator), the Covered Transaction shall be deemed to have occurred upon
consummation of the tender offer.
“Effective
Date”:
The
time
and date of the Plan’s approval by Company shareholders.
“Employee”:
Any
person who is employed by the Company or an Affiliate.
“Employment”:
A
Participant’s employment or other service relationship with the Company and its
Affiliates. Employment will be deemed to continue, unless the Administrator
expressly provides otherwise, so long as the Participant is employed by, or
otherwise is providing services in a capacity described in Section 5 to the
Company or its Affiliates. If a Participant’s employment or other service
relationship is with an Affiliate and that entity ceases to be an Affiliate,
the
Participant’s Employment will be deemed to have terminated when the entity
ceases to be an Affiliate unless the Participant transfers Employment to the
Company or its remaining Affiliates.
“ISO”:
A Stock
Option intended to be an “incentive stock option” within the meaning of Section
422. Each option granted pursuant to the Plan will be treated as providing
by
its terms that it is to be a non-incentive stock option unless, as of the date
of grant, it is expressly designated as an ISO.
“Participant”:
A person
who is granted an Award under the Plan.
“Performance
Award”:
An Award
subject to Performance Criteria. The Administrator in its discretion may grant
Performance Awards that are intended to qualify for the performance-based
compensation exception under Section 162(m) and Performance Awards that are
not
intended so to qualify.
“Performance
Criteria”:
Specified criteria, other than the mere continuation of Employment or the mere
passage of time, the satisfaction of which is a condition for the grant,
exercisability, vesting or full enjoyment of an Award. For purposes of Awards
that are intended to qualify for the performance-based compensation exception
under Section 162(m), a Performance Criterion will mean an objectively
determinable measure of performance relating to any or any combination of the
following (measured either absolutely or by reference to an index or indices
and
determined either on a consolidated basis or, as the context permits, on a
divisional, subsidiary, line of business, project or geographical basis or
in
combinations thereof): sales; revenues; assets; expenses; earnings before or
after deduction for all or any portion of interest, taxes, depreciation, or
amortization, whether or not on a continuing operations or an aggregate or
per
share basis; return on equity, investment, capital or assets; one or more
operating ratios; borrowing levels, leverage ratios or credit rating; market
share; capital expenditures; cash flow; stock price; stockholder return; sales
of particular products or services; customer acquisition or retention;
acquisitions and divestitures (in whole or in part); joint ventures and
strategic alliances; spin-offs, split-ups and the like; reorganizations; or
recapitalizations, restructurings, financings (issuance of debt or equity)
or
refinancings. A Performance Criterion and any targets with respect thereto
determined by the Administrator need not be based upon an increase, a positive
or improved result or avoidance of loss. To the extent consistent with the
requirements for satisfying the performance-based compensation exception under
Section 162(m), the Administrator may provide in the case of any Award
intended to qualify for such exception that one or more of the Performance
Criteria applicable to such Award will be adjusted in an objectively
determinable manner to reflect events (for example, but without limitation,
acquisitions or dispositions) occurring during the performance period that
affect the applicable Performance Criterion or Criteria.
“Plan”:
Precision Optics Corporation, Inc. 2006 Equity Incentive Plan, as from time
to
time amended and in effect.
“Prior
Plan”:
Precision
Optics Corporation, Inc. Amended and Restated 1997 Incentive Plan, as amended
and in effect immediately prior to the Effective Date.
“Prior
Plan Shares”:
(i)
shares of Stock available for issuance under the Prior Plan immediately prior
to
the Effective Date, (ii) shares of Stock subject to awards under the Prior
Plan,
other than restricted stock awards, outstanding immediately prior to the
Effective Date to the extent such Prior Plan awards are exercised or are
satisfied, or terminate or expire, on or after the Effective Date without the
delivery of such shares, and (iii) shares of Stock outstanding immediately
prior
to the Effective Date constituting restricted stock awards under the Prior
Plan
and thereafter forfeited.
“Restricted
Stock”:
Stock
subject to restrictions requiring that it be redelivered or offered for sale
to
the Company if specified conditions are not satisfied.
“Restricted
Stock Unit”:
A Stock
Unit that is, or as to which the delivery of Stock or cash in lieu of Stock
is,
subject to the satisfaction of specified performance or other vesting
conditions.
“SAR”:
A
right
entitling the holder upon exercise to receive an amount (payable in shares
of
Stock of equivalent value) equal to the excess of the fair market value of
the
shares of Stock subject to the right over the fair market value of such shares
at the date of grant.
“Section
409A”:
Section
409A of the Code.
“Section
422”:
Section
422 of the Code.
“Section
162(m)”:
Section
162(m) of the Code.
“Stock”:
Common
Stock of the Company, par value $ .01 per share.
“Stock
Option”:
An
option entitling the holder to acquire shares of Stock upon payment of the
exercise price.
“Stock
Unit”:
An
unfunded and unsecured promise, denominated in shares of Stock, to deliver
Stock
or cash measured by the value of Stock in the future.
“Unrestricted
Stock”:
Stock
not
subject to any restrictions under the terms of the Award.