EXECUTION
COPY
PERCEPTRON,
INC.
FIRST
AMENDED AND RESTATED
2004
STOCK INCENTIVE PLAN
I.
GENERAL
PROVISION
S
1.1
Establishment
.
On
October 22, 2004, the Board of Directors (“
Board
”)
of
Perceptron, Inc., a Michigan corporation (“
Corporation
”),
adopted the 2004 Stock Incentive Plan (“
Plan
”).
On
October 2, 2008, the Plan was amended and restated.
1.2
Purpose
.
The
purpose of the Plan is (i) to promote the best interests of the Corporation
and
its shareholders by encouraging Employees, Consultants and non-employee
directors of the Corporation and its Subsidiaries to acquire an ownership
interest in the Corporation through Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Share Awards, Director
Stock Purchase Rights and Deferred Stock Units, thus identifying their interests
with those of shareholders, and (ii) to enhance the ability of the Corporation
to attract and retain qualified Employees, Consultants and non-employee
directors. It is the further purpose of the Plan to permit the granting of
Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units
and
Performance Share Awards that will constitute performance based compensation,
as
described in Section 162(m) of the Code, and regulations promulgated thereunder.
After the Effective Date, the Corporation shall no longer issue any awards
under
the 1992 Stock Option Plan and the Directors Stock Option Plan.
1.3
Definitions
.
As used
in this Plan, the following terms have the meaning described below:
(a)
“
Agreement
”
means
the written agreement that sets forth the terms of a Participant’s Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
Share Award, Director Stock Purchase Right or Deferred Stock Unit.
(b)
“
Approval
Date
”
means
October 22, 2004, the date the Plan was approved by the Board.
(c)
“
Award
”
means
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Share Awards, Deferred Stock Units and Director Stock Purchase
Rights.
(d)
“
Board
”
means
the Board of Directors of the Corporation.
(e)
“
Change
in Control
”
means
(i)
a
merger involving the Corporation in which the Corporation is not the surviving
corporation (other than a merger with a wholly-owned subsidiary of the
Corporation formed for the purpose of changing the Corporation's corporate
domicile); (ii) a share exchange in which the shareholders of the Corporation
exchange their stock in the Corporation for stock of another corporation (other
than a share exchange in which all or substantially all of the holders of the
voting stock of the Corporation, immediately prior to the transaction, exchange,
on a pro rata basis, their voting stock of the Corporation for more than 50%
of
the voting stock of such other corporation); (iii) the sale of all or
substantially all of the assets of the Corporation; or (iv) any person or group
of persons (as defined by Section 13(d) of the Securities Exchange Act of 1934,
as amended) (other than any employee benefit plan or employee benefit trust
benefitting the employees of the Corporation) becoming a beneficial owner,
directly or indirectly, of securities of the Corporation representing more
than
fifty (50%) percent of either the then outstanding Common Stock of the
Corporation, or the combined voting power of the Corporation's then outstanding
voting securities.
Notwithstanding
any other provision in this Plan to the contrary, to the extent that Awards
under the Plan subject to Code Section 409A are payable upon a Change in
Control, an event shall not be considered to be a Change in Control under the
Plan with respect to such Awards unless such event is also a “change in
ownership,” a “change in effective control” or a “change in the ownership of a
substantial portion of the assets” of the Corporation within the meaning of Code
Section 409A.
(f)
“
Code
”
means
the Internal Revenue Code of 1986, as amended.
(g)
“Code
Section 409A” means Code Section 409A of the Code and the applicable guidance
issued thereunder.
(h)
“
Committee
”
means
the Management Development, Compensation and Stock Option Committee of the
Corporation or other committee of the Board duly appointed to administer the
Plan and having such powers as shall be specified by the Board. If no committee
of the Board has been appointed to administer the Plan, the Board shall exercise
all of the powers of the Committee granted herein, and, in any event, the Board
may in its discretion exercise any or all of such powers. The Committee shall
be
comprised of two or more members of the Board.
(i)
“
Common
Stock
”
means
shares of the Corporation’s authorized common stock.
(j)
“
Consultant
”
means
a
person engaged to provide consulting or advisory services (other than as an
Employee or a member of the Board) to the Corporation, provided that the
identity of such person, the nature of such services or the entity to which
such
services are provided would not preclude the Corporation from offering or
selling securities to such person pursuant to the Plan in reliance on a Form
S-8
Registration Statement under the Securities Act.
(k)
“
Corporation
”
means
Perceptron, Inc. a Michigan corporation.
(l)
“
Deferred
Stock Unit
”
means
a
bookkeeping entry representing a right granted to a Participant pursuant to
Article
VII
of the
Plan to receive a share of Common Stock on a date determined in accordance
with
the provisions of
Article
VII
of the
Plan.
(m)
“
Director
”
means
a
member of the Corporation’s Board of Directors.
(n)
“
Director
Fee Payment Date
”
shall
mean each March 1, June 1, September 1 and December 1.
(o)
“
Director
Stock Purchase Right
”
means
an election by a Director to purchase Common Stock in accordance with
Article
VI
of the
Plan.
(p)
“
Disability
”
means
total and permanent disability, as defined in Code
Section 22(e).
(q)
“
Dividend
Equivalent
”
means
a
credit, made at the discretion of the Committee or as otherwise provided by
the
Plan, to the account of a Participant in an amount equal to the cash dividends
paid on one share of Common Stock for each share of Common Stock represented
by
an Award held by such Participant.
(r)
“
Effective
Date
”
means
the day after the Plan is approved by shareholders of the Corporation.
(s)
“
Employee
”
means
an individual who has an “employment relationship” with the Corporation or a
Subsidiary, as defined in Treasury Regulation 1.421-7(h), and the term
“employment” means employment with the Corporation, or a Subsidiary of the
Corporation.
(t)
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended from time to time and any
successor thereto.
(u)
“
Fair
Market Value
”
means
for purposes of determining the value of Common Stock on the Grant
Date:
(i)
the
final
reported sales price (or, if there is no reported sale on such date, the final
reported sales price on the last preceding date for which such reported sales
price exists) of the Common Stock on the principal United States securities
exchange on which the Common Stock may at the time be listed on the Grant Date;
or
(ii)
if
the
Common Stock is not listed on any domestic stock exchange, the closing bid
quotation with respect to a share as reported by the OTC Bulletin Board on
the
Grant Date; or
(iii)
if
none
of the foregoing clauses apply, the value as determined by the Committee in
accordance with Code Section 409A.
Unless
otherwise specified in the Plan, “Fair Market Value” for purposes of determining
the value of Common Stock on the date of exercise means the applicable
definitions under (i)-(iii) above, substituting the date of exercise for the
Grant Date, unless otherwise required by applicable law.
(v)
“
Grant
Date
”
means
the date on which the Committee authorizes an individual Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
Share Award, or a Director Fee Payment Date in the case of a Director Stock
Purchase Right, or such later date as shall be designated by the
Committee.
(w)
“
Incentive
Stock Option
”
means
an Option that is intended to meet the requirements of Section 422 of the
Code.
(x)
“
Nonqualified
Stock Option
”
means
an Option that is not intended to constitute an Incentive Stock
Option.
(y)
“
Option
”
means
either an Incentive Stock Option, a Nonqualified Stock Option.
(z)
“
Participant
”
means
an Employee or non-employee director or Consultant designated by the Committee
to participate in the Plan.
(aa)
“
Performance
Measures
”
shall
mean the measures of performance of the Corporation and its Subsidiaries used
to
determine a Participant’s entitlement to an award under the Plan. Performance
Measures shall have the same meanings as used in the Corporation’s financial
statements, or, if such terms are not used in the Corporation’s financial
statements, they shall have the meaning applied pursuant to generally accepted
accounting principles, or as used generally in the Corporation’s industry.
Performance Measures shall be calculated with respect to the Corporation and
each Subsidiary consolidated therewith for financial reporting purposes or
such
division or other business unit as may be selected by the Committee. For
purposes of the Plan, the Performance Measures shall be calculated in accordance
with generally accepted accounting principles, but, unless otherwise determined
by the Committee, prior to the accrual or payment of any award under this Plan
for the same performance period and excluding the effect (whether positive
or
negative) of any change in accounting standards or any extraordinary, unusual
or
nonrecurring item, as determined by the Committee, occurring after the
establishment of the performance goals. Performance Measures may be one or
more
of the following, or a combination of the any of the following, as determined
by
the Committee:
(i)
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revenue;
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(ii)
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gross
margin;
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(iii)
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operating
margin;
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(iv)
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operating
income;
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(v)
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pre-tax
profit;
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(vi)
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earnings
before interest, taxes and depreciation;
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(vii)
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net
income;
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(viii)
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cash
flow;
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(ix)
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expenses;
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(x)
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the
market price of the Common Stock;
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(xi)
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earnings
per share;
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(xii)
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operating
income per share
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(xiii)
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return
on stockholder equity;
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(xiv)
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return
on capital;
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(xv)
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return
on net assets;
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(xvi)
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economic
value added;
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(xvii)
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market
share;
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(xviii)
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return
on investment;
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(xix)
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profit
after tax;
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(xx)
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product
approval;
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(xxi)
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market
capitalization;
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(xxii)
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new
products; and
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(xxiii)
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research
and development
activity.
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Performance
measures are required to be reapproved by shareholders of the Corporation,
to
the extent required by Section 162(m) of the Code, which currently requires
such
reapproval at the first shareholders meeting that occurs in the fifth year
following the Effective Date.
(bb)
“
Performance
Share Award
”
means
a
performance share award that is granted in accordance with
Article
V
of the
plan.
(cc)
“
Performance
Share Award Unit
”
means
a
Performance Share Award described in
Section
5.2(d)(ii)
.
(dd)
“
Plan
”
means
the First Amended and Restated Perceptron, Inc. 2004 Stock Incentive Plan,
the
terms of which are set forth herein, and amendments thereto.
(ee)
“
Restriction
Period
”
means
the period of time during which a Participant’s Restricted Stock or Restricted
Stock Unit grant is subject to restrictions and is nontransferable.
(ff)
“
Restricted
Stock
”
means
Common Stock that is subject to restrictions.
(gg)
“
Restricted
Stock Unit
”
means
a
right granted pursuant to
Article
IV
to
receive Restricted Stock or an equivalent value in cash pursuant to the terms
of
the Plan and the related Agreement.
(hh)
“
Retirement
”
means
termination of employment on or after the attainment of age 65 and completion
of
three (3) years of service with the Corporation.
(ii)
“
Securities
Act
”
means
the Securities Act of 1933, as amended.
(jj)
“
Stock
Appreciation Right
”
means
the right to receive a cash or Common Stock payment from the Corporation, in
accordance with
Article
III
of the
Plan.
(kk)
“
Subsidiary
”
means
a
corporation or other entity defined in Code Section 424(f).
(ll)
“
Tandem
Stock Appreciation Right
”
means
a
Stock Appreciation Right granted in tandem with an Option.
(mm)
“
Vested
”
means
the extent to which an Option or Stock Appreciation Right granted hereunder
has
become exercisable in accordance with this Plan and the terms of the respective
Agreement pursuant to which such Option or Stock Appreciation Right was
granted.
1.4
Administration
.
(a)
The
Plan
shall be administered by the Committee. At all times it is intended that the
directors appointed to serve on the Committee shall be “disinterested persons”
(within the meaning of Rule 16b-3 promulgated under the Exchange Act) and
“outside directors” (within the meaning of Code Section 162(m)); however, the
mere fact that a Committee member shall fail to qualify under either of these
requirements shall not invalidate any award made by the Committee if the award
is otherwise validly made under the Plan. The members of the Committee shall
be
appointed by, and may be changed at any time and from time to time, at the
discretion of the Board.
(b)
The
Committee shall interpret the Plan, prescribe, amend, and rescind rules and
regulations relating to the Plan, and make all other determinations necessary
or
advisable for its administration. The decision of the Committee on any question
concerning the interpretation of the Plan or its administration with respect
to
any Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Unit, Performance Share Award or Deferred Stock Unit granted under the Plan
or
any Director Stock Purchase Right shall be final and binding upon all
Participants. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any grant or award
hereunder.
(c)
In
addition to any other powers set forth in the Plan and subject to the provisions
of the Plan, but, in the case of Options, Stock Appreciation Rights and other
Awards designated as Awards under Code Section 162(m), subject to the
requirements of Code Section 162(m), the Committee shall have the full and
final
power and authority, in its discretion:
(i)
to
the
extent permitted under Code Section 409A, to amend, modify, extend, cancel
or
renew any Option, Stock Appreciation Right, Restricted Stock grant, Restricted
Stock Unit, Performance Share Award, Deferred Stock Unit or Director Stock
Purchase Right or to waive any restrictions or conditions applicable to any
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Unit,
Performance Share Award, Deferred Stock Unit or Director Stock Purchase Right
or
any shares acquired pursuant thereto;
(ii)
to
the
extent permitted under Code Section 409A, to accelerate, continue, extend or
defer the exercisability or vesting of any Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Unit, Performance Share Award, Deferred
Stock Unit or Director Stock Purchase Right or any shares acquired pursuant
thereto, including with respect to the period following a Participant's
termination of employment with the Corporation;
(iii)
to
the
extent permitted under Code Section 409A, to authorize, in conjunction with
any
applicable deferred compensation plan of the Corporation, that the receipt
of
cash or Common Stock subject to any Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Unit, Performance Share Award, Deferred Stock
Unit
or Director Stock Purchase Right under this Plan may be deferred under the
terms
and conditions of such deferred compensation plan;
(d)
To
the
extent permitted under Code Section 409A and other applicable law, the Committee
may delegate to one or more officers of the Corporation or a committee of such
officers, the authority, subject to such terms and limitations as the Committee
shall determine, to grant Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Share Awards and Deferred Stock Units to,
or
to cancel, modify, waive rights with respect to, alter, discontinue or terminate
any of the foregoing, held by Participants who are not officers or directors
of
the Corporation for purposes of Section 16 of the Exchange Act.
1.5
Participants
.
Participants
in the Plan shall be such Employees (including Employees who are directors),
non-employee directors of, or Consultants to, the Corporation and its
Subsidiaries as the Committee in its sole discretion may select from time to
time. The Committee may grant Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Share Awards and Deferred Stock
Units
to an individual upon the condition that the individual become an Employee
of
the Corporation or of a Subsidiary, provided that the Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Share Award or
Deferred Stock Unit shall be deemed to be granted only on the date that the
individual becomes an Employee. Awards covered by Code Section 162(m) shall
be
made to key Employees designated by the Committee.
1.6
Stock
.
The
Corporation has reserved 600,000 shares of the Corporation’s Common Stock for
issuance in conjunction with all Options and other stock-based awards to be
granted under the Plan. All of the 600,000 shares of the Corporation’s Common
Stock so reserved may be granted as ISOs. Shares subject to any unexercised
portion of a terminated, cancelled or expired Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Unit, or Performance Share Award
granted hereunder may again be subjected to grants and awards under the Plan.
In
the event that an Option granted under the Plan is exercised by delivering
shares of Common Stock that previously were acquired by exercising Options
granted under the Plan, such shares of previously-acquired Common Stock so
delivered to the Corporation may again be subject to grants under the Plan.
Shares of Common Stock shall not be deemed to have been granted pursuant to
the
Plan (a) with respect to any portion of an Award that is settled in cash or
(b)
to the extent such shares are withheld in satisfaction of tax withholding
obligations pursuant to Section 10.6. Upon payment in shares of Common Stock
pursuant to the exercise of a Stock Appreciation Right, the number of shares
available for grant under the Plan shall be reduced only by the number of shares
actually issued in such payment. All provisions in this
Section
1.6
shall be
adjusted, as applicable, in accordance with
Article
VIII
.
1.7
No
Repricing
.
Without
the affirmative vote of holders of a majority of the shares of Common Stock
cast
in person or by proxy at a meeting of the shareholders of the Corporation at
which a quorum representing a majority of all outstanding shares of Common
Stock
is present or represented by proxy, and without complying with the requirements
of Code Section 409A, the Board shall not approve a program providing for either
(a) the cancellation of outstanding Options and/or Stock Appreciation Rights
and
the grant in substitution therefore of any new awards under the Plan having
a
lower exercise price or (b) the amendment of outstanding Options and/or Stock
Appreciation Rights to reduce the exercise price thereof. This paragraph shall
not be construed to apply to “issuing or assuming a stock option in a
transaction to which section 424(a) applies,” within the meaning of Section 424
of the Code.
II.
STOCK
OPTIONS
2.1
Grant
of Options
.
The
Committee, at any time and from time to time, subject to the terms and
conditions of the Plan, may grant Options to such Participants and for such
number of shares of Common Stock (whole or fractional) as it shall designate;
provided, however, that no Participant may be granted Options during any one
fiscal year of the Corporation to purchase more than 200,000 shares of Common
Stock. Any Participant may hold more than one Option under the Plan and any
other Plan of the Corporation or Subsidiary. The Committee shall determine
the
general terms and conditions of exercise, including any applicable vesting
requirements, which shall be set forth in a Participant’s Option Agreement. The
Committee may designate any Option granted as either an Incentive Stock Option
or a Nonqualified Stock Option, or the Committee may designate a portion of
an
Option as an Incentive Stock Option or a Nonqualified Stock Option. At the
discretion of the Committee, an Option may be granted in tandem with a Stock
Appreciation Right. Options are intended to satisfy the requirements of Code
Section 162(m) and the regulations promulgated thereunder, to the extent
applicable. No Option shall be granted with an exercise term that extends beyond
ten (10) years from the Grant Date.
2.2
Incentive
Stock Options
.
Any
Option intended to constitute an Incentive Stock Option shall comply with the
requirements of this
Section
2.2
.
An
Incentive Stock Option may only be granted to an Employee. No Incentive Stock
Option shall be granted with an exercise price below the Fair Market Value
of
Common Stock on the Grant Date nor with an exercise term that extends beyond
ten
(10) years from the Grant Date. An Incentive Stock Option shall not be granted
to any Participant who owns (within the meaning of Code Section 424(d)) stock
of
the Corporation or any Subsidiary possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation or a Subsidiary unless,
at the Grant Date, the exercise price for the Option is at least 110% of the
Fair Market Value of the shares subject to the Option and the Option, by its
terms, is not exercisable more than five (5) years after the Grant Date. The
aggregate Fair Market Value of the underlying Common Stock (determined at the
Grant Date) as to which Incentive Stock Options granted under the Plan
(including a plan of a Subsidiary) may first be exercised by a Participant
in
any one calendar year shall not exceed $100,000. To the extent that an Option
intended to constitute an Incentive Stock Option shall violate the foregoing
$100,000 limitation (or any other limitation set forth in Code Section 422),
the
portion of the Option that exceeds the $100,000 limitation (or violates any
other Code Section 422 limitation) shall be deemed to constitute a Nonqualified
Stock Option.
2.3
Option
Price
.
The
Committee shall determine the per share exercise price for each Option granted
under the Plan; provided, however, that the option price of an option shall
not
be less than 100% of the Fair Market Value of the shares of Common Stock covered
by the Option on the Grant Date. Notwithstanding the foregoing, an Option may
be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under Code Section 424(a) and/or Code
Section 409A. The option price will be subject to adjustment in accordance
with
the provisions of
Section
9.1
of this
Plan.
2.4
Payment
for Option Shares
.
The
purchase price for shares of Common Stock to be acquired upon exercise of an
Option granted hereunder shall be paid in full in cash or by personal check,
bank draft or money order at the time of exercise; provided that the Committee
may (but is not obligated to) permit payment to be made by (a) delivery to
the
Corporation of outstanding shares of Common Stock on such terms and conditions
as may be specified in the optionee’s Agreement, (b) by delivery to the
Corporation of a properly executed exercise notice, acceptable to the
Corporation, together with irrevocable instructions to the Participant’s broker
to deliver to the Corporation sufficient cash to pay the exercise price and
any
applicable income and employment withholding taxes, in accordance with a written
agreement between the Corporation and the brokerage firm (“cashless exercise
procedure”), (c) other means determined by the Committee, or (d) any combination
of the foregoing. Shares of Common Stock surrendered upon exercise shall be
valued at Fair Market Value as of the date of exercise, and the certificate(s)
for such shares, duly endorsed for transfer or accompanied by appropriate stock
powers, shall be surrendered to the Corporation. Participants who are subject
to
short swing profit restrictions under the Exchange Act and who exercise an
Option by tendering previously-acquired shares shall do so only in accordance
with the provisions of Rule 16b-3 of the Exchange Act. Notwithstanding the
foregoing, an Option may not be exercised by delivery to the Corporation of
shares of Common Sock to the extent such delivery would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Corporation’s stock. Until the optionee has been issued a certificate or
certificates for the shares of Common Stock so purchased, he or she shall
possess no rights as a record holder with respect to any such shares. In the
event any Common Stock is delivered to or retained by the Corporation to satisfy
all or any part of the purchase price, the part of the purchase price deemed
to
have been satisfied by such Common Stock shall be equal to the product derived
by multiplying the Fair Market Value as of the date of exercise times the number
of shares of Common Stock delivered to or retained by the Corporation. The
number of shares of Common Stock delivered to or retained by the Corporation
in
satisfaction of the purchase price shall not be a number which when multiplied
by the Fair Market Value as of the date of exercise would result in a product
greater than the purchase price. No fractional shares of Common Stock shall
be
delivered to or retained by the Corporation in satisfaction of the purchase
price. In the event that an optionee exercises both an Incentive Stock Option
and a Nonqualified Stock Option, separate share certificates shall be issued
for
shares acquired pursuant to the Incentive Stock Option and for shares acquired
pursuant to the Nonqualified Stock Option.
III.
STOCK
APPRECIATION RIGHTS
3.1
Grant
of Stock Appreciation Rights
.
Stock
Appreciation Rights may be granted, held and exercised in such form and upon
such general terms and conditions as determined by the Committee on an
individual basis. A Stock Appreciation Right may be granted to a Participant
with respect to such number of shares of Common Stock of the Corporation as
the
Committee may determine; provided, however, that no Participant may be granted
a
Stock Appreciation Right during any one fiscal year of the Corporation for
more
than 200,000 shares of Common Stock. A Stock Appreciation Right may be granted
on a stand-alone basis or as a Tandem Stock Appreciation Right. If a Tandem
Stock Appreciation Right, the number of shares covered by the Stock Appreciation
Right shall not exceed the number of shares of stock which the Participant
could
purchase upon the exercise of the related Option. Stock Appreciation Rights
are
intended to satisfy the requirements of Code Section 162(m) and the regulations
promulgated thereunder, to the extent applicable. No Stock Appreciation Right
shall be granted with an exercise term that extends beyond ten (10) years from
the Grant Date.
3.2
Exercise
Price
.
The
Committee shall determine the per share exercise price for each Stock
Appreciation Right granted under the Plan; provided, however, that (i) the
exercise price of a Stock Appreciation Right shall not be less than 100% of
the
Fair Market Value of the shares of Common Stock covered by the Stock
Appreciation Right on the Date such Stock Appreciation Right is granted; and
(ii) the per share exercise price subject to a Tandem Stock Appreciation Right
shall be the per share exercise price under the related Option.
3.3
Exercise
of Stock Appreciation Rights
.
A Stock
Appreciation Right shall be deemed exercised upon receipt by the Corporation
of
written notice of exercise from the Participant. Except as permitted under
Rule
16b-3, notice of exercise of a Stock Appreciation Right by a Participant subject
to the insider trading restrictions of Section 16(b) of the Securities Exchange
Act of 1934, shall be limited to a period determined by the Committee or, if
no
period is so determined, the period beginning on the second day following the
release of the Corporation’s quarterly or annual summary of earnings and ending
on the 15
th
day of
the third month of the calendar quarter in which such release is made. The
exercise term of each Stock Appreciation Right shall be limited to such period
as set by the Committee or in a related Option. If a Tandem Stock Appreciation
Right, a Stock Appreciation Right shall be exercisable only at such times and
in
such amounts as the related Option may be exercised. A Tandem Stock Appreciation
Right shall terminate and cease to be exercisable no later than the date on
which the related Option expires or is terminated or canceled. Upon the exercise
of a Tandem Stock Appreciation Right with respect to some or all of the shares
subject to such Stock Appreciation Right, the related Option shall be canceled
automatically as to the number of shares with respect to which the Tandem Stock
Appreciation Right was exercised. Upon the exercise of an Option related to
a
Tandem Stock Appreciation Right as to some or all of the shares subject to
such
Option, the related Tandem Stock Appreciation Right shall be canceled
automatically as to the number of shares with respect to which the related
Option was exercised.
3.4
Stock
Appreciation Right Entitlement
.
Upon
exercise of a Stock Appreciation Right, a Participant shall be entitled to
payment from the Corporation, in cash, shares of Common Stock, or partly in
each
(as determined by the Committee in accordance with any applicable terms of
the
Agreement), of an amount equal to the difference between the aggregate Fair
Market Value on the date of exercise for the specified number of shares being
exercised and the aggregate exercise price of the Stock Appreciation Right
being
exercised. If the Stock Appreciation Right is granted in tandem with an Option,
the payment shall be equal to the difference between:
(a)
the
Fair
Market Value of the number of shares subject to the Stock Appreciation Right
on
the exercise date; and
(b)
the
option price of the associated Option multiplied by the number of shares
available under the Option.
3.5
Maximum
Stock Appreciation Right Amount Per Share
.
The
Committee may, at its sole discretion, establish (at the time of grant) a
maximum amount per share which shall be payable upon the exercise of a Stock
Appreciation Right, expressed as a dollar amount or as a percentage or multiple
of the Option price of a related Option.
IV.
RESTRICTED
STOCK GRANTS AND UNITS
4.1
Grant
of Restricted Stock and Restricted Stock Units
.
Subject
to the terms and conditions of the Plan, the Committee, at any time and from
time to time, may grant shares of Restricted Stock and Restricted Stock Units
under this Plan to such Participants and in such amounts as it shall determine.
4.2
Restricted
Stock Agreement
.
Each
grant of Restricted Stock or Restricted Stock Units shall be evidenced by an
Agreement that shall specify the terms of the restrictions, including the
Restriction Period, or periods, the number of Common Stock shares subject to
the
grant or units, the purchase price for the shares of Restricted Stock, if any,
the form of consideration that may be used to pay the purchase price of the
Restricted Stock, including those specified in
Section
2.4
,
and
such other general terms and conditions, including performance goals, as the
Committee shall determine.
4.3
Transferability
.
Except
as provided in this
Article
X,
Section
10.4
or
Section
10.5
of the
Plan, the shares of Common Stock subject to a Restricted Stock grant or
Restricted Stock Unit hereunder may not be transferred, pledged, assigned,
or
otherwise alienated or hypothecated until the termination of the applicable
Restriction Period or for such period of time as shall be established by the
Committee and as shall be specified in the applicable Agreement, or upon the
earlier satisfaction of other conditions as specified by the Committee in its
sole discretion and as set forth in the applicable Agreement.
4.4
Other
Restrictions
.
The
Committee shall impose such other restrictions on any shares of Common Stock
subject to a Restricted Stock grant or Restricted Stock Unit under the Plan
as
it may deem advisable including, without limitation, restrictions under
applicable federal or state securities laws, and may legend the certificates
representing such shares to give appropriate notice of such
restrictions.
4.5
Certificate
Legend
.
In
addition to any legends placed on certificates pursuant to
Sections
4.3 and 4.4
,
each
certificate representing shares of Common Stock subject to a Restricted Stock
grant or Restricted Stock Unit shall bear the following legend:
The
sale
or other transfer of the shares of stock represented by this certificate,
whether voluntary, involuntary or by operation of law, is subject to certain
restrictions on transfer set forth in the First Amended and Restated Perceptron,
Inc. 2004 Stock Incentive Plan (“Plan”), rules and administrative guidelines
adopted pursuant to such Plan and an Agreement dated
.
A copy
of the Plan, such rules and such Agreement may be obtained from the Secretary
of
Perceptron, Inc.
4.6
Removal
of Restrictions
.
Except
as otherwise provided in this
Article
IV
of the
Plan, and subject to applicable federal and state securities laws, shares of
Common Stock subject to a Restricted Stock grant or Restricted Stock Unit under
the Plan shall become freely transferable by the Participant after the last
day
of the Restriction Period. Once the shares are released from the restrictions,
the Participant shall be entitled to have the legend required by
Section
4.5
of the
Plan removed from the applicable Common Stock certificate. Provided further,
except as set forth in
Section
4.9
,
the
Committee shall have the discretion to waive the applicable Restriction Period
with respect to all or any part of the Common Stock subject to a Restricted
Stock grant or Restricted Stock Unit.
4.7
Voting
Rights
.
(a)
During
the Restriction Period, Participants holding shares of Common Stock subject
to a
Restricted Stock grant hereunder may exercise full voting rights with respect
to
the Restricted Stock.
(b)
Participants
shall have no voting rights with respect to shares of Common Stock represented
by Restricted Stock Units until the date of the issuance of such shares (as
evidenced by the appropriate entry on the books of the Corporation or of a
duly
authorized transfer agent of the Corporation).
4.8
Dividends
and Other Distributions
.
(a)
Except
as
otherwise provided in
Section
4.9
or in
the Participant’s Agreement, during the Restriction Period, a Participant shall
be entitled to receive all dividends and other distributions paid with respect
to shares of Common Stock subject to a Restricted Stock grant. If any dividends
or distributions are paid in shares of Common Stock during the Restriction
Period, the dividend or other distribution shares shall be subject to the same
restrictions on transferability as the shares of Common Stock with respect
to
which they were paid.
(b)
The
Committee, in its discretion, may provide in the Agreement evidencing any
Restricted Stock Unit that the Participant shall be entitled to receive Dividend
Equivalents with respect to the payment of cash dividends on Common Stock having
a record date prior to date on which Restricted Stock Units held by such
Participant are settled. Such Dividend Equivalents, if any, shall be paid by
crediting the Participant with additional whole Restricted Stock Units as of
the
date of payment of such cash dividends on Common Stock. The number of additional
Restricted Stock Units (rounded to the nearest whole number) to be so credited
shall be determined by dividing (a) the amount of cash dividends paid on such
date with respect to the number of shares of Common Stock represented by the
Restricted Stock Units previously credited to the Participant by (b) the Fair
Market Value per share of Common Stock on such date. Such additional Restricted
Stock Units shall be subject to the same terms and conditions and shall be
settled in the same manner and at the same time (or as soon thereafter as
practicable) as the Restricted Stock Units originally subject to the Restricted
Stock Unit. In the event of a dividend or distribution paid in shares of Common
Stock or any other adjustment made upon a change in the capital structure of
the
Corporation as described in
Section
9.1
,
appropriate adjustments shall be made in the Participant's Restricted Stock
Unit
so that it represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than normal cash
dividends) to which the Participant would be entitled by reason of the shares
of
Common Stock issuable upon settlement of the Restricted Stock Unit, and all
such
new, substituted or additional securities or other property shall be immediately
subject to the same restrictions as are applicable to the Restricted Stock
Unit.
4.9
Restricted
Stock Grants and Units Under Code Section 162(m
).
The
Committee, at its discretion, may designate certain Restricted Stock grants
or
Restricted Stock Units as being granted pursuant to Code Section 162(m). Such
Restricted Stock and Restricted Stock Units must comply with the following
additional requirements, which override any other provision set forth in this
Article
IV
:
(a)
Each
Code
Section 162(m) Restricted Stock Award or Restricted Stock Unit shall be based
upon pre-established, objective performance goals that are intended to satisfy
the performance-based compensation requirements of Code Section 162(m) and
the
regulations promulgated thereunder. Further, at the discretion of the Committee,
a Restricted Stock Award or Restricted Stock Unit also may be subject to goals
and restrictions in addition to the performance requirements.
(b)
Each
Code
Section 162(m) Restricted Stock Award or Restricted Stock Unit shall be based
upon the attainment of specified levels of Corporation or Subsidiary performance
during a specified performance period, as measured by any or all of the
Performance Measures.
(c)
For
each
designated performance period, the Committee shall (i) select those Employees
who shall be eligible to receive a Restricted Stock Award or Restricted Stock
Unit, (ii) determine the performance period, which may be a one to five fiscal
year period, (iii) determine the target levels of Corporation or Subsidiary
performance, and (iv) determine the number of shares subject to a Restricted
Stock Award or Restricted Stock Unit to be paid to each selected Employee.
Unless otherwise permitted in compliance with the requirements under Section
162(m) with respect to “performance-based compensation,” the Committee shall
establish the performance goal(s) applicable to each Restricted Stock grant
or
Restricted Stock Unit no later than the earlier of (a) the date ninety (90)
days
after the commencement of the applicable performance period or (b) the date
on
which 25% of the performance period has elapsed, and, in any event, at a time
when the outcome of the performance goals remains substantially uncertain,
or
such other period as is permitted by Code Section 162(m).
(d)
For
each
performance period, the Committee shall certify, in writing: (i) if the
Corporation has attained the performance targets, and (ii) the number of shares
pursuant to the Code Section 162(m) Restricted Stock Award or Restricted Stock
Unit that are to become freely transferable. The Committee shall have no
discretion to waive all or part of the conditions, goals and restrictions
applicable to the receipt of full or partial payment of a Code Section 162(m)
Restricted Stock Award or Restricted Stock Unit. Any certificate for shares
under a Code Section 162(m) Restricted Stock Unit shall be issued only after
the
Committee certifies in writing that the performance goals and restrictions
have
been satisfied.
(e)
No
shares
under a Code Section 162(m) Restricted Stock Award or Restricted Stock Unit
shall become transferable until the Committee certifies in writing that the
performance goals and restrictions have been satisfied. Any dividends paid
during the Restriction Period automatically shall be reinvested on behalf of
the
Employee in additional shares of Common Stock under the Plan, and such
additional shares shall be subject to the same performance goals and
restrictions as the other shares under the Code Section 162(m) Restricted Stock
Award or Restricted Stock Unit.
(f)
Except
as
otherwise provided in this
Article
X,
Section
10.4
and
Section
10.5
of the
Plan, and subject to applicable federal and state securities laws, shares
covered by each Code Section 162(m) Restricted Stock Award or Restricted Stock
Unit made under the Plan may not be transferred, pledged, assigned, or otherwise
alienated or hypothecated until the applicable performance targets and other
restrictions are satisfied, as shall be certified in writing by the Committee.
At such time, shares covered by the Code Section 162(m) Restricted Stock Award
or Restricted Stock Unit shall become freely transferable by the Employee.
Once
the shares are released from the restrictions, the Employee shall be entitled
to
have the legend required by
Section 4.5
of the
Plan removed from the applicable Common Stock certificate.
(g)
No
Participant may be granted a Code Section 162(m) Restricted Stock Award or
Restricted Stock Units during any one fiscal year of the Corporation for more
than 200,000 shares of Common Stock.
4.10
Settlement
of Restricted Stock Unit Awards
.
If a
Restricted Stock Unit is payable in Common Stock, the Corporation shall issue
to
a Participant on the date on which Restricted Stock Units subject to the
Participant's Restricted Stock Unit vest, one (1) share of Common Stock (and/or
any other new, substituted or additional securities or other property pursuant
to an adjustment described in
Section
4.8
or
Section
9.1
)
for
each Restricted Stock Unit then becoming vested or otherwise to be settled
on
such date, subject to the withholding of applicable taxes.
V.
PERFORMANCE
SHARE AWARDS
5.1
Grant
of Performance Share Awards
.
The
Committee, at its discretion, may grant Performance Share Awards to Participants
and may determine, on an individual or group basis, the performance goals to
be
attained pursuant to each Performance Share Award.
5.2
Terms
of Performance Share Awards
.
(a)
Performance
Share Awards shall consist of rights to receive cash, Common Stock or a
combination of each, if designated performance goals are achieved.
(b)
The
terms
of a Participant’s Performance Share Award shall be set forth in his or her
individual Performance Share Agreement. Each Agreement shall specify the
performance goals applicable to a particular Participant or group of
Participants, the period over which the targeted goals are to be attained,
the
payment schedule if the goals are attained, and any other general terms and
conditions applicable to an individual Performance Share Award as the Committee
shall determine.
(c)
Except
as
set forth in
Section
5.3
of the
Plan, the Committee, at its discretion, may waive all or part of the conditions,
goals and restrictions applicable to the receipt of full or partial payment
of a
Performance Share Award.
(d)
Performance
Share Awards may be granted in two different forms, at the discretion of the
Committee as follows:
(i)
Under
one
form, the Participant shall receive a Performance Share Award that consists
of a
legended certificate of Common Stock, restricted from transfer prior to the
satisfaction of the designated performance goals and restrictions, as determined
by the Committee and specified in the Participant’s Performance Share Agreement.
(ii)
Under
the
second form (a “Performance Share Award Unit”), the Participant shall receive a
Performance Share Agreement from the Committee that specifies the performance
goals and restrictions that must be satisfied before the Corporation shall
issue
the payment, which may be cash, a designated number of shares of Common Stock
or
a combination of the two.
(e)
Each
certificate representing shares under a Performance Share Award shall bear
the
following legend:
The
sale
or other transfer of the shares of stock represented by this certificate,
whether voluntary, involuntary or by operation of law, is subject to certain
restrictions on transfer set forth in the First Amended and Restated Perceptron,
Inc. 2004 Stock Incentive Plan (“Plan”), rules and administrative guidelines
adopted pursuant to such Plan and a Performance Share Agreement dated
. A copy
of the Plan, such rules and such Performance Share Agreement may be obtained
from the Secretary of Perceptron, Inc.
(f)
In
its
discretion, the Committee may, either at the time it grants a Performance Share
Award or at any time thereafter, provide for the positive or negative adjustment
of the performance goals applicable to a Performance Share Award granted to
any
Participant whose Performance Share Award has not been designated as a Code
Section 162(m) Performance Share Award to reflect such Participant's individual
performance in his or her position with the Corporation or such other factors
as
the Committee may determine.
(g)
Notwithstanding
any other provision in this Plan, including Section 5.3, the Performance Share
Award shall be paid to the Participant within thirty (30) days after the
Committee certifies that the performance goals and restrictions relating to
the
Performance Share Award have been satisfied.
(h)
If
payment is to be made in shares of Common Stock, the number of such shares
shall
be determined by dividing the final value of the Performance Share Award by
the
value of a share of Common Stock determined by the method specified in the
Agreement.
(i)
Participants
holding Performance Share Awards or Performance Share Award Units shall have
the
same voting rights and rights to dividends and other distributions as would
Participants holding Restricted Stock or Restricted Stock Units under
Article
IV
.
5.3
Performance
Share Awards Granted Under Code Section 162(m
).
The
Committee, at its discretion, may designate certain Performance Share Awards
as
granted pursuant to Code Section 162(m). Such Performance Share Awards must
comply with the following additional requirements, which, except for Section
5.2(g), override any other provision set forth in this
Article
V
:
(a)
The
Committee, at its discretion, may grant Code Section 162(m) Performance Share
Awards based upon pre-established, objective performance goals that are intended
to satisfy the performance-based compensation requirements of Code Section
162(m) and the regulations promulgated thereunder. Further, at the discretion
of
the Committee, a Performance Share Award also may be subject to goals and
restrictions in addition to the performance requirements.
(b)
Each
Code
Section 162(m) Performance Share Award shall be based upon the attainment of
specified levels of Corporation or Subsidiary performance during a specified
performance period, as measured by any or all of the Performance Measures.
(c)
For
each
designated performance period, the Committee shall (i) select those Employees
who shall be eligible to receive a Code Section 162(m) Performance Share Award,
(ii) determine the performance period, which may be a one to five fiscal year
period, (iii) determine the target levels of Corporation or Subsidiary
performance, and (iv) determine the Performance Share Award to be paid to each
selected Employee. Unless otherwise permitted in compliance with the
requirements under Section 162(m) with respect to “performance-based
compensation,” the Committee shall establish the performance goal(s) applicable
to each Performance Share Award no later than the earlier of (a) the date ninety
(90) days after the commencement of the applicable performance period or (b)
the
date on which 25% of the performance period has elapsed, and, in any event,
at a
time when the outcome of the performance goals remains substantially uncertain,
or such other period as is permitted by Code Section 162(m).
(d)
For
each
performance period, the Committee shall certify, in writing: (i) if the
Corporation has attained the performance targets; and (ii) the cash or number
of
shares (or combination thereof) pursuant to the Code Section 162(m) Performance
Share Award that shall be paid to each selected Employee (or the number of
shares that are to become freely transferable, if a Code Section 162(m)
Performance Share Award is granted subject to attainment of the designated
performance goals). The Committee shall have no discretion to waive all or
part
of the conditions, goals and restrictions applicable to the receipt of full
or
partial payment of a Code Section 162(m) Performance Share Award. Any
certificate for shares under a Code Section 162(m) Performance Share Award
Unit
shall be issued only after the Committee certifies in writing that the
performance goals and restrictions have been satisfied.
(e)
No
shares
under a Code Section 162(m) Performance Share Award shall become transferable
until the Committee certifies in writing that the performance goals and
restrictions have been satisfied.
(f)
Except
as
otherwise provided in this
Article
V
or
Section
10.4
of the
Plan, and subject to applicable federal and state securities laws, shares
covered by each Code Section 162(m) Performance Share Award made under the
Plan
may not be transferred, pledged, assigned, or otherwise alienated or
hypothecated until the applicable performance targets and other restrictions
are
satisfied, as shall be certified in writing by the Committee. At such time,
shares covered by the Code Section 162(m) Performance Share Award shall become
freely transferable by the Participant. Once the shares are released from the
restrictions, the Employee shall be entitled to have the legend required by
Section
5.2(e)
removed
from the applicable Common Stock certificate.
(g)
Participants
holding Code Section 162(m) Performance Awards or Performance Share Award Units
shall have the same voting rights and rights to dividends and other
distributions as would Participants holding Code Section 162(m) Restricted
Stock
or Restricted Stock Units under
Article
IV
.
(h)
No
Participant may be granted a Code Section 162(m) Performance Share Award during
any one fiscal year for more than 200,000 shares of Common Stock, except that
if
a Performance Share Award Unit payout is not based upon a set number of shares
of Common Stock for achievement of the performance goals, then no Employee
may
receive a Code Section 162(m) Performance Share Award Unit which could result
in
such Employee receiving more than Five Hundred Thousand Dollars ($500,000)
for
each fiscal year of the Corporation contained in the performance period for
such
Award. No Employee may be granted more than one Performance Share Award for
the
same performance period.
(i)
If
permitted under the Employee’s Agreement, the Committee shall have the
discretion, on the basis of such criteria as may be established by the
Committee, to reduce some or all of the value of the Code Section 162(m)
Performance Share Award that would otherwise be paid to the Employee upon its
settlement notwithstanding the attainment of any performance goal. No such
reduction may result in an increase in the amount payable upon settlement of
another Participant's Code Section 162(m) Performance Share Award.
VI.
DIRECTOR
STOCK PURCHASE RIGHTS
6.1
Eligibility
.
A
Director of the Corporation may elect to purchase shares of Common Stock under
the Plan using all or a portion of his or her cash fees received for services
as
a director of the Corporation for which the Director has not yet received
payment (including but not limited to, quarterly retainer and Board/Committee
meeting fees).
6.2
Elections
.
Elections to purchase Common Stock under the Plan in lieu of cash compensation
may be submitted to the Corporation annually, prior to the end of December
of
each calendar year or such other period established by the Committee. An
election shall cover director cash compensation payable in the next calendar
year.
6.3
Purchase
Price
.
Common
Stock purchased by a Director hereunder shall have a purchase price equal to
100% of the Fair Market Value of the Corporation’s Common Stock on the first day
of the month in which the quarterly Director Fee Payment Date
falls.
6.4
Termination
of Services
.
If a
Director ceases to remain on the Board for any reason, including but not limited
to, voluntary or forced resignation, removal, failure to be re-elected as a
director, death, Disability or retirement, the Director (or executor,
administrator or legal representative, if applicable) shall receive share
certificates for all cash director fees earned prior to the Director’s departure
from the Board for which the Director elected to receive Common Stock pursuant
to this
Article
VI
,
but for
which the Director has not yet received a share certificate. Such share
certificates shall be issued following the next quarterly Director Fee Payment
Date.
6.5
Non-Assignability
.
Any
Common Stock purchase right granted hereunder shall be exercised by the Director
only and is nontransferable. Upon the death of a Director, any earned, but
unpaid cash director fees for which the Director elected to receive Common
Stock
pursuant to this
Article
VI
,
shall
be paid in the form of share certificates to the Director’s executor,
administrator or legal representative in accordance with
Section
6.4
above.
6.6
Adjustments
.
The
total amount of Common Stock to be received by a Director at the time of any
issuance of a share certificate shall be appropriately adjusted for any increase
or decrease in the number of outstanding shares of Common Stock resulting from
stock dividends, stock splits, recapitalizations, reorganizations, mergers,
combinations, exchanges or other relevant changes in the capital structure
of
the Corporation occurring from the Director Fee Payment Date on which such
shares of Common Stock were earned to the date of issuance of the share
certificate for such shares. The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined by the Board in
its
sole discretion.
6.7
Rule
16b-3 Requirements
.
Notwithstanding any provision of the Plan, the Committee may impose such
conditions on the purchase of shares of Common Stock hereunder as may be
required to satisfy the requirements of Rule 16b-3 of the Exchange Act, as
amended from time to time (or any successor rule). Notwithstanding any provision
in the Plan to the contrary, the Committee shall have no discretion with respect
to the terms of purchase made pursuant to this
Article
VI
,
except
to the extent such discretion would not result in the purchase or the Plan
failing to qualify for the exemption provided under Rule 16b-3.
6.8
Delivery
of Shares; Rights Prior to Delivery of Shares
.
By
December 15
th
of each
year, Directors electing to receive Common Stock will receive share certificates
for shares earned during the year. A Director may request to receive Common
Stock at any or each quarterly Director Fee Payment Date for the year in which
the shares were earned. No Participant shall have any rights as a shareholder
with respect to shares of Common Stock covered by a purchase right until the
issuance of a stock certificate. No adjustment shall be made for dividends
or
other rights with respect to such shares for which the record date is prior
to
the date the certificate is issued.
VII.
DEFERRED
STOCK UNITS
7.1
Establishment
of Deferred Stock Unit Program
.
The
Committee, in its discretion and upon such terms and conditions as it may
determine, may establish one or more programs pursuant to the Plan under which,
subject to the requirements of Code Section 409A, Participants designated by
the
Committee who are among a select group of management or highly compensated
Employees may irrevocably elect, prior to a date specified by the Committee
but
no later than the close of the Corporation’s taxable year immediately preceding
the first taxable year of the Corporation in which any services are performed
for which such compensation is payable, to reduce such Participant's
compensation otherwise payable in cash (subject to any minimum or maximum
reductions imposed by the Committee) and to be granted automatically at such
time or times as specified by the Committee one or more awards of Deferred
Stock
Units with respect to such numbers of shares of Common Stock as determined
in
accordance with the rules of the program established by the Committee and having
such other terms and conditions as established by the Committee.
7.2
Terms
and Conditions of Deferred Stock Units
.
Deferred
Stock Units granted pursuant to this
Section
7.2
shall be
evidenced by Agreements in such form as the Committee shall from time to time
establish. No such Deferred Stock Unit or purported Deferred Stock Unit shall
be
a valid and binding obligation of the Corporation unless evidenced by a fully
executed Agreement. Agreements evidencing Deferred Stock Units may incorporate
all or any of the terms of the Plan by reference and shall comply with and
be
subject to the following terms and conditions:
(a)
Deferred
Stock Units shall not be subject to any vesting conditions.
(b)
Participants
shall have no voting rights with respect to shares of Common Stock represented
by Deferred Stock Units until the date of the issuance of such shares (as
evidenced by the appropriate entry on the books of the Corporation or of a
duly
authorized transfer agent of the Corporation). However, a Participant shall
be
entitled to receive Dividend Equivalents with respect to the payment of cash
dividends on Common Stock having a record date prior to date on which Deferred
Stock Units held by such Participant are settled. Such Dividend Equivalents
shall be paid by crediting the Participant with additional whole and/or
fractional Deferred Stock Units as of the date of payment of such cash dividends
on Common Stock. The method of determining the number of additional Deferred
Stock Units to be so credited shall be specified by the Committee and set forth
in the Agreement. Such additional Deferred Stock Units shall be subject to
the
same terms and conditions and shall be settled in the same manner and at the
same time (or as soon thereafter as practicable) as the Deferred Stock Units
originally subject to the Deferred Stock Unit award. In the event of a dividend
or distribution paid in shares of Common Stock or any other adjustment made
upon
a change in the capital structure of the Corporation as described in
Section
9.1
,
appropriate adjustments shall be made in the Participant's Deferred Stock Unit
so that it represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than normal cash
dividends) to which the Participant would be entitled by reason of the shares
of
Common Stock issuable upon settlement of the award.
(c)
A
Participant electing to receive an award of Deferred Stock Units pursuant to
this
Section
7.2
,
shall
specify at the time of such election that is made in accordance with the
requirements of Section 7.1(a), a payment date with respect to such Deferred
Stock Unit. The Corporation shall issue to the Participant within sixty (60)
days following the earlier of the payment date elected by the Participant or
the
date of termination of the Participant's employment (as long as the termination
of employment qualifies as a “separation from service” under Code Section 409A)
a number of whole shares of Common Stock equal to the number of whole Deferred
Stock Units subject to the Deferred Stock Unit Award. Such shares of Common
Stock shall be fully vested, and the Participant shall not be required to pay
any additional consideration (other than applicable tax withholding) to acquire
such shares. Any fractional Deferred Stock Unit subject to the Deferred Stock
Unit Award shall be settled by the Corporation by payment in cash of an amount
equal to the Fair Market Value as of the payment date of such fractional
share.
(d)
If
the
Participant makes a subsequent election to defer or change the form of payment
of his or her Deferred Stock Units (1) such election shall not take effect
until
at least twelve (12) months after the date on which the election is made and
(ii) the payment of Deferred Stock Units that are subject to this subsequent
election to defer or change in form of payment shall be paid no earlier than
five (5) years from the date such payment would otherwise have been paid (or
in
the case of an installment payment, five (5) years from the date the first
amount was scheduled to be paid).
VIII.
TERMINATION
OF EMPLOYMENT OR SERVICES
8.1
Options
and Stock Appreciation Rights
.
(a)
If,
prior
to the date that an Option or Stock Appreciation Right first becomes Vested,
a
Participant terminates employment or services for any reason, the Participant’s
right to exercise the Option or Stock Appreciation Right shall terminate and
all
rights thereunder shall cease.
(b)
If,
on or
after the date that an Option or Stock Appreciation Right first becomes Vested,
a Participant terminates employment or services for any reason other than death
or Disability, the Participant shall have the right within the period specified
in the Participant’s Agreement to exercise the Option or Stock Appreciation
Right to the extent that it was exercisable and unexercised on the date of
the
Participant’s termination of employment or services, subject to any other
limitation on the exercise of the Option or Stock Appreciation Right in effect
on the date of exercise; provided, however, that the beneficial tax treatment
of
an Incentive Stock Option may be forfeited if the Option is exercised more
than
three months after a Participant’s termination of employment.
(c)
If,
on or
after the date that an Option or Stock Appreciation Right first becomes Vested,
a Participant terminates employment or services due to death while an Option
or
Stock Appreciation Right is still exercisable, the person or persons to whom
the
Option or Stock Appreciation Right shall have been transferred by will or by
the
laws of descent and distribution, shall have the right within the exercise
period specified in the Participant’s Agreement to exercise the Option or Stock
Appreciation Right to the extent that it was exercisable and unexercised on
the
Participant’s date of death, subject to any other limitation on exercise in
effect on the date of exercise; provided, however, that the beneficial tax
treatment of an Incentive Stock Option may be forfeited if the Option is
exercised more than one year after a Participant’s date of death. If the
Participant dies after termination of employment or services while the Option
or
Stock Appreciation Right is still exercisable, the Option or Stock Appreciation
Right shall be exercisable in accordance with the terms of
paragraph
(c)
above.
(d)
If,
on or
after the date that an Option or Stock Appreciation Right first becomes Vested,
a Participant terminates employment or services due to Disability, the
Participant shall have the right, within the exercise period specified in the
Participant’s Agreement to exercise the Option or Stock Appreciation Right to
the extent that it was exercisable and unexercised on the date of the
Participant’s termination of employment or services, subject to any other
limitation on the exercise of the Option or Stock Appreciation Right in effect
on the date of exercise; provided, however, that the beneficial tax treatment
of
an Incentive Stock Option may be forfeited if the Option is exercised more
than
one year after a Participant’s termination of employment due to
Disability.
(e)
Subject
to Code Section 409A, the Committee may designate in a Participant’s Agreement
that an Option or Stock Appreciation Right shall terminate at an earlier or
later time than set forth above.
(f)
Subject
to Code Section 409A, the Committee, at the time of a Participant’s termination
of employment or services, may accelerate a Participant’s right to exercise an
Option or extend the exercise period of an Option or Stock Appreciation Right
(but in no event past the tenth anniversary of the Grant Date of such Option
or
Stock Appreciation Right); provided, however that the extension of the exercise
period for an Incentive Stock Option may cause such Option to forfeit its
preferential tax treatment.
(g)
Shares
subject to Options and Stock Appreciation Rights that are not exercised in
accordance with the provisions of
paragraph
(a) through (f)
above
shall expire and be forfeited by the Participant as of their expiration date
and, subject to
Section
1.6
,
shall
become available for new grants and awards under the Plan as of such
date.
8.2
Restricted
Stock Grants and Units
.
If a
Participant terminates employment or services for any reason, the Participant’s
rights to shares of Common Stock subject to a Restricted Stock grant or
Restricted Stock Unit that are still subject to the Restriction Period
automatically shall terminate and be forfeited by the Participant (or, if the
Participant was required to pay a purchase price for the Restricted Stock,
other
than the performance of services, the Corporation shall have the option to
repurchase for the purchase price paid by the Participant any shares acquired
by
the Participant which are still subject to the Restriction Period) and, subject
to
Section
1.6
,
said
shares shall be available for new grants and awards under the Plan as of such
termination date; provided, however, that the Committee, in its sole discretion
and in accordance with Code Section 409A, may include a provision in a
Participant’s Restricted Stock or Restricted Stock Unit Agreement providing for
the continuation of a Restricted Stock grant or Restricted Stock Unit after
a
Participant terminates employment or services or waiving or changing the
remaining restrictions or adding additional restrictions with respect to any
Restricted Stock grant or Restricted Stock Unit that would otherwise be
forfeited, as it deems appropriate, or may otherwise waive or change all or
part
of the remaining restrictions or add additional restrictions to any such
Restricted Stock grant or Restricted Stock Unit. Notwithstanding the foregoing,
the Committee shall not waive any restrictions on a Code Section 162(m)
Restricted Stock Award or Restricted Stock Unit, but the Committee may include
a
provision in an Employee’s Code Section 162(m) Restricted Stock or Restricted
Stock Unit Agreement stating that upon the Employee’s termination of employment
due to (i) death or (ii) Disability prior to the attainment of the associated
performance goals and the termination of the Restriction Period, that the
performance goals and restrictions shall be deemed to have been satisfied on
terms determined by the Committee.
8.3
Performance
Shares
.
Performance Share Awards shall expire and be forfeited by a Participant upon
the
Participant’s termination of employment or services for any reason, and, subject
to
Section
1.6
,
such
shares shall be available for new grants and awards under the Plan as of such
termination date; provided, however, that the Committee, in its discretion
and
in accordance with Code Section 409A, may include a provision in a Participant’s
Performance Share Award Agreement providing for the continuation of a
Performance Share Award after a Participant terminates employment or services
or
waiving or changing all or part of the conditions, goals and restrictions
applicable to the receipt of full or partial payment of a Performance Share
Award or may otherwise waive or change all or part of the conditions, goals
and
restrictions applicable to such Performance Share Award. Notwithstanding the
foregoing, the Committee shall not waive any restrictions on a Code Section
162(m) Performance Share Award, but the Committee may include a provision in
an
Employee’s Code Section 162(m) Performance Share Agreement stating that upon the
Employee’s termination of employment due to (i) death or (ii) Disability prior
to the attainment of the associated performance goals and restrictions, that
the
performance goals and restrictions shall be deemed to have been satisfied on
terms determined by the Committee.
8.4
Other
Provisions
.
The
transfer of an Employee from one corporation to another among the Corporation
and any of its Subsidiaries, or a leave of absence under the leave policy of
the
Corporation or any of its Subsidiaries, shall not be a termination of employment
for purposes of the Plan, unless a provision to the contrary is expressly stated
by the Committee in a Participant’s Agreement issued under the
Plan.
IX.
ADJUSTMENTS
AND CHANGE IN CONTROL
9.1
Adjustments
.
(a)
The
total
amount of Common Stock for which Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Share Awards, Director Stock Purchase
Rights and Deferred Stock Units may be issued under the Plan, the number of
shares subject to any such grants, awards or purchases (both as to the number
of
shares of Common Stock and exercise price), and the limit on the number of
shares that can be included in an Award under
Sections
2.1, 3.1, 4.9(g) and 5.3(h),
shall be
adjusted pro rata for any increase or decrease in the number of outstanding
shares of Common Stock resulting from payment of a stock dividend on Common
Stock, a subdivision or combination of shares of Common Stock, a
reclassification of Common Stock or other similar transaction determined by
the
Committee to be covered by this
Section
9.1(a)
;
provided, however, in each case, that, with respect to Incentive Stock Options,
any such adjustment shall be made in accordance with Section 422 of the Code
or
any successor provision thereto to the extent that such Option is intended
to
remain an Incentive Stock Option. Such adjustment shall be made by the Committee
or the Board, whose determination in that respect shall be final, binding and
conclusive.
(b)
In
the
event of a proposed dissolution or liquidation of the Corporation, the Committee
shall notify each Participant as soon as practicable prior to the effective
date
of such proposed transaction. The Committee in its discretion may provide for
a
Participant to have the right to exercise his or her Option, Stock Appreciation
Right, Restricted Stock grant, Restricted Stock Units, Performance Share Award
or Deferred Stock Unit in full for a period specified by the Committee as to
all
of the shares of Common Stock covered thereby, including shares as to which
the
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Unit,
Performance Share Award or Deferred Stock Unit would not otherwise be
exercisable, subject to the proposed dissolution or liquidation taking place
at
the time and in the manner contemplated. In addition, the Committee may provide
that any re-purchase option of the Corporation applicable to the shares
purchased upon exercise of an Option, Stock Appreciation Right, Restricted
Stock
grant, Restricted Stock Unit, Performance Share Award, Director Stock Purchase
Rights or Deferred Stock Unit shall lapse as to all such shares, provided that
the proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously exercised, an
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Unit,
Performance Share Award or Deferred Stock Unit shall terminate immediately
prior
to the consummation of the proposed dissolution or liquidation.
(c)
In
the
event of a merger of the Corporation with or into another corporation where
the
Corporation is not the surviving corporation, a reverse triangular merger where
the Corporation is the surviving corporation, but its stock is exchanged for
stock of the parent company of the other party to the merger, the sale of
substantially all of the assets of the Corporation, the reorganization of the
Corporation or other similar transaction determined by the Committee to be
covered by this
Section
9.1(c)
,
it is
intended that each outstanding Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Unit, Performance Share Award, Director Stock
Purchase Right or, if permitted under Code Section 409A, a Deferred Stock Unit
shall be assumed or an equivalent option or right substituted by the successor
corporation, the parent or a subsidiary of the successor corporation or the
parent of the Corporation following a reverse triangular merger. In the event
that such successor corporation (or the parent or a subsidiary thereof or the
parent of the Corporation following a reverse triangular merger) refuses to
assume or substitute for the Option, Stock Appreciation Right, Restricted Stock
grant, Restricted Stock Unit, Performance Share Award, Deferred Stock Unit,
or
Director Stock Purchase Right, the Participant shall fully vest in and/or have
the right to exercise the Option, Stock Appreciation Right, Restricted Stock
grant, Restricted Stock Unit or Performance Share Award, including shares which
would not otherwise be vested or exercisable, and the Participant shall have
his
or her Director Stock Purchase Right and, if permitted under Code Section 409A,
a Deferred Stock Unit paid in full in Common Stock for services through the
date
of the consummation of the transaction. If an Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Unit or Performance Share Award becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger, sale of assets, reorganization or other transaction, the Committee
shall notify the Participant in writing or electronically that the Option,
Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit or Performance
Share Award shall be fully vested and exercisable for a period specified by
the
Committee from the date of such notice, provided that if such period expires
prior to the consummation of the merger, sale of assets, reorganization or
other
transaction, any exercise shall be subject to the proposed merger, sale of
assets or other transaction taking place, and the Option, Stock Appreciation
Right, Restricted Stock grant, Restricted Stock Unit or Performance Share Award
shall terminate upon the expiration of such period (or the consummation of
the
merger, sale of assets, reorganization or other transaction, if later). For
the
purposes of this paragraph, the Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Unit, Performance Share Award, Director Stock
Purchase Right or, if permitted under Code Section 409A, Deferred Stock Unit
shall be considered assumed if, following the merger, sale of assets,
reorganization or other transaction, the option or right confers the right
to
purchase or receive, for each share covered by the Participant’s Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
Share Award, Director Stock Purchase Right or Deferred Stock Unit immediately
prior to such transaction, the consideration (whether stock, cash, or other
securities or property) received in the merger, sale of assets, reorganization,
or other transaction, 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 determined by the Committee); provided,
however, that if such consideration received in the merger, sale of assets,
reorganization, or other transaction, is not solely common stock of the
successor corporation (or the parent or a subsidiary thereof), the Committee
may, with the consent of the successor corporation, provide for the
consideration to be received upon the payment under the Deferred Stock Unit
or
Director Stock Purchase Right or exercise and/or vesting of the Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit or Performance
Share Award for each share of Common Stock subject to the Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
Share, Director Stock Purchase Right or Deferred Stock Unit Award to be solely
(i) common stock of the successor corporation (or the parent or a subsidiary
thereof) equal in Fair Market Value to the per share consideration received
by
holders of Common Stock in the merger, sale of assets, reorganization or other
transaction, or (ii) cash.
(d)
In
the
event of a proposed spin-off or a transfer by the Corporation of a portion
of
its assets resulting in the employment of certain Participants by the spin-off
entity or the entity acquiring assets of the Corporation, the Committee may
make
whatever adjustments it determines appropriate with respect to such terminating
Participants.
(e)
The
foregoing adjustments shall be made by the Committee. Any such adjustment may
provide for the elimination of any fractional share which might otherwise become
subject to an Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right
or
Deferred Stock Unit. The Committee need not make the same adjustments for each
Participant.
9.2
Change
in Control
.
(a)
The
Committee in its discretion may provide in a Participant’s Agreement or
otherwise, notwithstanding anything contained herein to the contrary, that
in
the event of a Change in Control, or the occurrence of a Change in Control,
any
or all of the following will occur: (i) any outstanding Option or Stock
Appreciation Right granted to such Participant hereunder immediately shall
become fully Vested and exercisable in full, regardless of any installment
provision applicable to such Option or Stock Appreciation Right; (ii) the
remaining Restriction Period on any shares of Common Stock subject to a
Restricted Stock grant or Restricted Stock Unit hereunder immediately shall
lapse and the shares shall become fully transferable, subject to any applicable
federal or state securities laws; (iii) all performance goals and conditions
shall be deemed to have been satisfied and all restrictions shall lapse on
any
outstanding Performance Share Awards granted to such Participant hereunder,
and
such Awards shall become payable in full; (iv), for purposes of any Deferred
Stock Unit granted to such Participant hereunder, payments due under the
Deferred Stock Unit should become immediately payable; or (v) such other
treatment as the Committee may determine.
(b)
The
Committee may, in its sole discretion and without the consent of any
Participant, determine that, upon the occurrence of a Change in Control, each
or
any Option or Stock Appreciation Right outstanding immediately prior to the
Change in Control shall be canceled in exchange for a payment with respect
to
each vested share of Common Stock subject to such canceled Option or Stock
Appreciation Right in (i) cash, (ii) stock of the Corporation or of a
corporation or other business entity a party to the Change in Control, or (iii)
other property which, in any such case, shall be in an amount having a Fair
Market Value equal to the excess of the Fair Market Value of the consideration
to be paid per share of Common Stock in the Change in Control over the exercise
price per share under such Option or Stock Appreciation Right (the “Spread”). In
the event such determination is made by the Committee, the Spread (reduced
by
applicable withholding taxes, if any) shall be paid to Participants in respect
of their canceled Options and Stock Appreciation Rights as soon as practicable
following the date of the Change in Control.
X.
MISCELLANEOUS
10.1
Partial
Exercise/Fractional Shares
.
The
Committee may permit, and shall establish procedures for, the partial exercise
of Options and Stock Appreciation Rights granted under the Plan. No fractional
shares shall be issued in connection with the exercise of an Option, a Stock
Appreciation Right or Director Stock Purchase Right or payment of a Restricted
Stock award, Restricted Stock Unit, Performance Share Award or Deferred Stock
Unit; instead, the Fair Market Value of the fractional shares shall be paid
in
cash, or at the discretion of the Committee, the number of shares shall be
rounded down to the nearest whole number of shares and any fractional shares
shall be disregarded, and, in the case of an Option, the number of shares
subject to the Option shall be rounded down to the nearest whole number of
shares and any fractional shares shall be disregarded.
10.2
Rule
16b-3 Requirements
.
Notwithstanding any other provision of the Plan, the Committee may impose such
conditions on the exercise of an Option or Stock Appreciation Right (including,
without limitation, the right of the Committee to limit the time of exercise
to
specified periods), the grant of Restricted Stock or Restricted Stock Unit,
the
payment of a Performance Share Award or Deferred Stock Unit, or a Director
Stock
Purchase Right, as may be required to satisfy the requirements of Rule 16b-3
of
the Exchange Act.
10.3
Rights
Prior to Issuance of Shares
.
No
Participant shall have any rights as a shareholder with respect to shares
covered by an Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right,
or Deferred Stock Unit until the issuance of a stock certificate for such
shares. Except as otherwise provided in the Plan, no adjustment shall be made
for dividends or other rights with respect to such shares for which the record
date is prior to the date the certificate is issued.
10.4
Non-Assignability
.
Except
as otherwise determined by the Committee in its discretion, the following
restrictions on assignability of any award under the Plan shall apply to all
Participants: (i) no Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right
or
Deferred Stock Unit shall be transferable by a Participant except by will or
the
laws of descent and distribution; (ii) during the lifetime of a Participant,
an
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Unit,
Director Stock Purchase Right or Deferred Stock Unit shall be exercised only
by
the Participant, except in the event of the Participant’s Disability, in which
case the Participant’s legal guardian or the individual designated in the
Participant’s durable power of attorney may exercise the Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Director
Stock Purchase Right or Deferred Stock Unit; and (iii) any transferee of the
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Unit,
Performance Share Award, Director Stock Purchase Right or Deferred Stock Unit
shall take the same subject to the terms and conditions of this Plan. No
transfer of an Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right
or
Deferred Stock Unit by will or the laws of descent and distribution, or as
otherwise permitted by the Committee, shall be effective to bind the Corporation
unless the Corporation shall have been furnished with written notice thereof
and
a copy of the will and/or such evidence as the Corporation may deem necessary
to
establish the validity of the transfer and the acceptance by the transferee
or
transferees of the terms and conditions of the Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Unit, Performance Share Award, Director
Stock Purchase Right or Deferred Stock Unit.
10.5
Securities
Laws
.
(a)
Anything
to the contrary herein notwithstanding, the Corporation’s obligation to sell and
deliver Common Stock pursuant to the exercise of an Option or Stock Appreciation
Right or deliver Common Stock pursuant to a Restricted Stock grant, Restricted
Stock Unit, Performance Share Award, Director Stock Purchase Rights or Deferred
Stock Unit is subject to such compliance with federal and state laws, rules
and
regulations applying to the authorization, issuance or sale of securities as
the
Corporation deems necessary or advisable. The Corporation shall not be required
to sell and deliver or issue Common Stock unless and until it receives
satisfactory assurance that the issuance or transfer of such shares shall not
violate any of the provisions of the Securities Act of 1933 or the Securities
Exchange Act of 1934, or the rules and regulations of the Securities Exchange
Commission promulgated thereunder or those of The Nasdaq Stock Market or any
stock exchange, recognized trading market or quotation system on which the
Common Stock may be listed or traded, or the provisions of any state securities
laws, or that there has been compliance with the provisions of such acts, rules,
regulations and laws.
(b)
The
Committee may impose such restrictions on any shares of Common Stock acquired
pursuant to the exercise of an Option, Stock Appreciation Right or a Deferred
Stock Unit, the grant of Restricted Stock or a Restricted Stock Unit, the
payment of a Performance Share Award or pursuant to a Director Stock Purchase
Right under the Plan as it may deem advisable, including, without limitation,
restrictions (i) under applicable federal securities laws, (ii) under the
requirements of The Nasdaq Stock Market or any other securities exchange,
recognized trading market or quotation system upon which such shares of Common
Stock are then listed or traded, and (iii) under any state securities laws
applicable to such shares. No shares shall be issued until counsel for the
Corporation has determined that the Corporation has complied with all
requirements under appropriate securities laws.
10.6
Withholding
Taxes
.
(a)
The
Corporation shall have the right to withhold from a Participant’s compensation
or require a Participant to remit sufficient funds to satisfy applicable
withholding for income and employment taxes upon the exercise of an Option
or
Stock Appreciation Right, the lapse of the Restriction Period on shares of
Common Stock subject to a Restricted Stock grant or Restricted Stock Unit or
the
payment of a Performance Share Award, Director Stock Purchase Right or Deferred
Stock Unit, to the extent the Corporation is required to withhold such taxes.
The Committee may permit a Participant to make a written election to tender
previously-acquired shares of Common Stock or have shares of stock withheld
from
the exercise to satisfy applicable withholding for income and employment taxes
associated with an Award under this Plan; provided that the shares have an
aggregate Fair Market Value sufficient to satisfy in whole or in part the
applicable withholding taxes. The Committee may permit a Participant to use
the
cashless exercise procedure of
Section
2.4
to
satisfy the withholding requirements related to the exercise of an Option.
At no
point shall the Corporation withhold more shares than are necessary to meet
the
established tax withholding requirements of federal, state and local
obligations.
(b)
A
Participant subject to the insider trading restrictions of Section 16(b) of
the
Exchange Act may use Common Stock to satisfy the applicable withholding
requirements only if such disposition is approved in accordance with Rule 16b-3
of the Exchange Act. Any election by a Participant to utilize Common Stock
for
withholding purposes is further subject to the discretion of the
Committee.
10.7
Termination
and Amendment
.
(a)
The
Plan
shall continue in effect until the earlier of October 22, 2014, its termination
by the Board or the date on which all of the shares of Common Stock available
for issuance under the Plan have been issued and all restrictions on such shares
under the terms of the Plan and the agreements evidencing Awards granted under
the Plan have lapsed. The Board may terminate the Plan, the granting of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Share Awards or Deferred Stock Units under the Plan, or purchases of Common
Stock pursuant to the Director Stock Purchase Rights, at any time.
(b)
The
Board
may amend or modify the Plan at any time and from time to time, but no amendment
or modification shall, without the approval of the shareholders of the
Corporation and without complying with the requirements of Code Section 409A,
(i) materially increase the benefits accruing to Participants under the Plan;
(ii) increase the amount of Common Stock for which grants and awards may be
made
under the Plan, except as permitted under
Sections
1.6 and 9.1
;
(iii)
change the provisions relating to the eligibility of individuals to whom grants
and awards may be made under the Plan; (iv) permit the repricing of Options
or
Stock Appreciation Rights as prohibited by
Section
1.7
;
or (v)
permit the granting of Options with exercise prices less than Fair Market Value
on the date of grant. In addition, so long as the Corporation’s Common Stock is
listed on The Nasdaq Stock Market or another stock exchange, the Board may
not
amend the Plan in a fashion requiring approval of the shareholders of the
Corporation under the rules of The Nasdaq Stock Market or such other stock
exchange, without obtaining the approval of the shareholders.
(c)
No
amendment, modification, or termination of the Plan shall in any manner affect
(i) any Option, Stock Appreciation Right, Restricted Stock grant, Restricted
Stock Unit, Performance Share Award or Deferred Stock Unit granted under the
Plan without the consent of the Participant holding the Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
Share Award or Deferred Stock Unit, except as set forth in any Agreement
relating to such Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Unit, Performance Share Award or Deferred Stock Unit granted
under the Plan or (ii) any election to purchase Common Stock pursuant to a
Director Stock Purchase Right made prior to such amendment, modification or
termination of the Plan, without the consent of the Participant who made such
election.
(d)
Notwithstanding
anything in the Plan or Agreement, the Plan and any Agreements shall be subject
to amendment, with or without the advance notice to Participants and other
interested parties, and on a prospective and retroactive basis, including,
but
not limited to, amendment in a manner that adversely affects the rights of
Participants and other interested parties, to the extent necessary to effect
compliance with Code Section 409A.
10.8
Effect
on Employment
.
Neither
the adoption of the Plan nor the granting of any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Share Award,
Director Stock Purchase Right or Deferred Stock Unit pursuant to the Plan shall
be deemed to create any right in any individual to be retained or continued
in
the employment, or as a non-employee director or Consultant, of the Corporation
or a Subsidiary.
10.9
Use
of Proceeds
.
The
proceeds received from the sale of Common Stock pursuant to the Plan will be
used for general corporate purposes of the Corporation.
10.10
Repurchase
Rights
.
Subject
to the requirements of Code Section 409A, shares of Common Stock issued under
the Plan may be subject to one or more repurchase options, or other conditions
and restrictions, as determined by the Committee in its discretion at the time
the Award is granted. The Corporation shall have the right to assign at any
time
any repurchase right it may have, whether or not such right is then exercisable,
to one or more persons as may be selected by the Corporation. Upon request
by
the Corporation, each Participant shall execute any agreement evidencing such
transfer restrictions prior to the receipt of shares of Common Stock hereunder
and shall promptly present to the Corporation any and all certificates
representing shares of Common Stock acquired hereunder for the placement on
such
certificates of appropriate legends evidencing any such transfer
restrictions.
10.11
Severability
.
If any
one or more of the provisions (or any part thereof) of this Plan or of any
Agreement issued hereunder, shall be held to be invalid, illegal or
unenforceable in any respect, such provision shall be modified so as to make
it
valid, legal and enforceable, and the validity, legality and enforceability
of
the remaining provisions (or any part thereof) of the Plan or of any Agreement
shall not in any way be affected or impaired thereby. The Corporation may,
without the consent of any Participant, and in a manner determined necessary
solely in the discretion of the Corporation, amend the Plan and any outstanding
Agreement as the Corporation deems necessary to ensure the Plan and all Awards
remain valid, legal or enforceable in all respects.
10.12
Beneficiary
Designation
.
Subject
to local laws and procedures, each Participant may file with the Corporation
a
written designation of a beneficiary who is to receive any benefit under the
Plan to which the Participant is entitled in the event of such Participant's
death before he or she receives any or all of such benefit. Each designation
will revoke all prior designations by the same Participant, shall be in a form
prescribed by the Corporation, and will be effective only when filed by the
Participant in writing with the Corporation during the Participant's lifetime.
If a married Participant designates a beneficiary other than the Participant's
spouse, the effectiveness of such designation may be subject to the consent
of
the Participant's spouse. If a Participant dies without an effective designation
of a beneficiary who is living at the time of the Participant's death, the
Corporation will pay any remaining unpaid benefits to the Participant's legal
representative.
10.13
Unfunded
Obligation
.
Participants shall have the status of general unsecured creditors of the
Corporation. Any amounts payable to Participants pursuant to the Plan shall
be
unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974.
The
Corporation shall not be required to segregate any monies from its general
funds, or to create any trusts, or establish any special accounts with respect
to such obligations. The Corporation shall retain at all times beneficial
ownership of any investments, including trust investments, which the Corporation
may make to fulfill its payment obligations hereunder. Any investments or the
creation or maintenance of any trust or any Participant account shall not create
or constitute a trust or fiduciary relationship between the Committee or the
Corporation and a Participant, or otherwise create any vested or beneficial
interest in any Participant or the Participant's creditors in any assets of
the
Corporation. The Participants shall have no claim against the Corporation for
any changes in the value of any assets which may be invested or reinvested
by
the Corporation with respect to the Plan.
10.14
Approval
of Plan
.
Unless
this Plan has been approved by the shareholders of the Corporation within 12
months after adoption of the Plan by the Board, as required by Section 422
of
the Code, this Plan, and any grants or awards made hereunder, shall be of no
further force or effect.
10.15
Code
Section 409A
.
Each of
the Awards under this Plan and their respective Agreements are intended to
comply with the requirements of Code Section 409A or be exempt from Code Section
409A. Notwithstanding any provision of this Plan, if any amount payable under
this Plan is not exempt from Code Section 409A and if the Participant is a
“specified employee” (within the meaning of Treasury Regulation Section
1.409A-1(i)) on the date of the Participant’s “separation from service” (within
the meaning of Treasury Regulation Section 1.409A-1(h)), then the payment of
such amount shall not be made prior to, and shall, if necessary, be deferred
to
and paid on the first day of the seventh month following the Participant’s
separation from service or the date of the Participant’s death, if earlier.
Provided, however, that the Corporation does not by operation of this
requirement assume responsibility for compliance with Code Section 409A. The
Participant is responsible for any additional tax, interest or penalties under
Code Section 409A arising out of payments under this Plan.
IN
WITNESS WHEREOF, this First Amended and Restated 2004 Stock Incentive Plan
has
been executed on behalf of the Corporation on October 2, 2008.
|
PERCEPTRON,
INC.
|
|
|
|
By:
|
/s/
Harry T. Rittenour
|
|
|
Harry
T. Rittenour
|
|
President
and Chief Executive Officer
|
BOARD
OF
DIRECTORS APPROVAL: 10/22/04 and 10/02/08
SHAREHOLDER
APPROVAL: 12/6/04