As filed with the Securities and Exchange Commission on April 27, 2017
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NCS Multistage Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 46-1527455 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
19450 State Highway 249 Suite 200 Houston, TX |
77070 | |
(Address of Principal Executive Offices) | (Zip Code) |
NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan
NCS Multistage Holdings, Inc. (f/k/a Pioneer Super Holdings, Inc.) 2012 Equity Incentive Plan
Pioneer NCS Energy Holdco, LLC (f/k/a NCS Energy Holdings, LLC) 2011 Equity Incentive Plan
(Full Title of Plan)
P. Kevin Trautner
Executive Vice President, General Counsel and Secretary
19450 State Highway 249
Suite 200
Houston, TX 77070
(Name and address of agent for service)
(281) 453-2222
(Telephone number, including area code, of agent for service)
With a copy to:
Alexander D. Lynch, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8000 (Phone)
(212) 310-8007 (Fax)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☑ (Do not check if a smaller reporting company) | Smaller reporting company | ☐ | |||
Emerging growth company | ☑ |
If an emerging growth company, indicate by check mark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B). ☐
CALCULATION OF REGISTRATION FEE
|
||||||||
Title of Securities to be Registered(1) |
Amount to be
Registered |
Proposed Maximum Offering Price Per Share |
Proposed
Maximum
|
Amount of
Registration Fee |
||||
Common Stock, $0.01 par value per share, reserved for issuance pursuant to the NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan | 4,532,523(2) | $17.00(3) | $77,052,891 | $8,930.43 | ||||
Common Stock, $0.01 par value per share, reserved for issuance pursuant to stock option awards outstanding under the NCS Multistage Holdings, Inc. 2012 Equity Incentive Plan | 2,463,501 | $6.12(4) | $15,076,626 | $1,747.38 | ||||
Common Stock, $0.01 par value per share, reserved for issuance pursuant to stock option awards outstanding under the Pioneer NCS Energy Holdco, LLC 2011 Equity Incentive Plan | 649,047 | $1.24(5) | $804,819 | $93.28 | ||||
Total |
$10,772 | |||||||
|
||||||||
|
(1) | Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the Securities Act), this Registration Statement shall cover any additional securities as may issuable under the NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan (the 2017 Plan), the NCS Multistage Holdings, Inc. 2012 Equity Incentive Plan (the 2012 Plan) or the Pioneer NCS Energy Holdco, LLC 2011 Equity Incentive Plan (the 2011 Plan) by reason of any stock splits, stock dividends, recapitalizations or similar transactions. |
(2) | Represents Common Stock initially available for future issuance under the 2017 Plan. |
(3) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(h) of the Securities Act based on the initial public offering price for the Common Stock of $17.00 per share. |
(4) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(h) of the Securities Act based on the weighted average exercise price of stock option awards outstanding under the 2012 Plan of $6.12. |
(5) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(h) of the Securities Act based on the weighted average exercise price of stock option awards outstanding under the 2011 Plan of $1.24. |
EXPLANATORY NOTE
This registration statement registers shares of common stock, par value $0.01 per share (Common Stock), of NCS Multistage Holdings, Inc. (the Registrant) that may be issued and sold under the NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan (the 2017 Plan), the shares of Common Stock of the Registrant reserved for future issuance pursuant to stock option awards outstanding under the NCS Multistage Holdings, Inc. 2012 Equity Incentive Plan (the 2012 Plan) and the shares of Common Stock of the Registrant reserved for future issuance pursuant to stock option awards outstanding under the Pioneer NCS Energy Holdco, LLC 2011 Equity Incentive Plan (the 2011 Plan and together with the 2012 Plan and the 2017 Plan, the Plans).
PART I
SECTION 10(a) PROSPECTUS
The information specified in Items 1 and 2 of Part I of this Registration Statement on Form S-8 is omitted from this filing in accordance with the provisions of Rule 428 under the Securities Act and the introductory note to Part I of the Registration Statement. The documents containing the information specified in Part I will be delivered to the participants in the Plans covered by this Registration Statement as required by Rule 428(b)(1).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. | Incorporation of Documents by Reference. |
The Registrant hereby incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the Commission):
| The Registrants prospectus contained in the Registrants Registration Statement on Form S-1, as amended (Reg. No. 333-216580), in which there is set forth the Registrants audited financial statements for the latest fiscal year for which such statements have been filed; |
| The Registrants prospectus, dated April 27, 2017, to be filed with the Commission pursuant to Rule 424(b) under the Securities Act, relating to the Registration Statement on Form S-1, as amended (File No. 333-216580); and |
| The description of the Registrants common stock contained in the Registrants Registration Statement on Form S-1, as amended (Reg. No. 333-216580), which description is incorporated by reference into the Form 8-A filed with the Securities and Exchange Commission on April 26, 2017, pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act), and any amendment or report filed for the purpose of further updating such description. |
All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such documents; provided, however, that documents or information deemed to have been furnished and not filed in accordance with the rules of the Commission shall not be deemed incorporated by reference into this Registration Statement.
Any statement contained in a document incorporated or deemed to be incorporated by reference in this registration statement shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained in this registration statement, or in any other subsequently filed document that also is or is deemed to be incorporated by reference in this registration statement, modifies or supersedes such prior statement. Any statement contained in this registration statement shall be deemed to be modified or superseded to the extent that a statement contained in a subsequently filed document that is or is deemed to be incorporated by reference in this registration statement modifies or supersedes such prior statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.
Item 4. | Description of Securities. |
Not applicable. |
Item 5. | Interests of Named Experts and Counsel. |
None. |
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Item 6. | Indemnification of Directors and Officers. |
The Registrant is governed by the Delaware General Corporation Law, or DGCL. Section 145 of the DGCL provides that a corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was or is an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer, director, employee or agent acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the corporations best interest and, for criminal proceedings, had no reasonable cause to believe that such persons conduct was unlawful. A Delaware corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or contemplated action or suit by or in the right of such corporation, under the same conditions, except that such indemnification is limited to expenses (including attorneys fees) actually and reasonably incurred by such person, and except that no indemnification is permitted without judicial approval if such person is adjudged to be liable to such corporation. Where an officer or director of a corporation is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to above, or any claim, issue or matter therein, the corporation must indemnify that person against the expenses (including attorneys fees) which such officer or director actually and reasonably incurred in connection therewith.
The Registrants amended and restated bylaws will authorize the indemnification of its officers and directors, consistent with Section 145 of the DGCL, as amended. The Registrant intends to enter into indemnification agreements with each of its directors. These agreements, among other things, will require the Registrant to indemnify each director to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys fees, judgments, fines and settlement amounts incurred by the director in any action or proceeding, including any action or proceeding by or in right of the Registrant, arising out of the persons services as a director.
Reference is made to Section 102(b)(7) of the DGCL, which enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director for violations of the directors fiduciary duty, except (i) for any breach of the directors duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL, which provides for liability of directors for unlawful payments of dividends of unlawful stock purchase or redemptions or (iv) for any transaction from which a director derived an improper personal benefit.
The Registrant expects to maintain standard policies of insurance that provide coverage (i) to its directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (ii) to the Registrant with respect to indemnification payments that it may make to such directors and officers.
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Item 7. | Exemption from Registration Claimed. |
Not applicable. |
Item 8. | Exhibits. |
Exhibit No. |
Description |
|
4.1 | Form of Amended and Restated Certificate of Incorporation of NCS Multistage Holdings, Inc. to be in effect prior to the consummation of the initial public offering (incorporated herein by reference to Exhibit 3.4 to Amendment No. 1 to the Companys Registration Statement on Form S-1 (File No. 333-216580) filed on April 17, 2017). | |
4.2 | Form of Amended and Restated Bylaws of NCS Multistage Holdings, Inc. to be in effect prior to the consummation of the offering made under this Registration Statement (incorporated herein by reference to Exhibit 3.5 to Amendment No. 1 to the Companys Registration Statement on Form S-1 (File No. 333-216580) filed on April 17, 2017). | |
4.3 | NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan. | |
4.4 | NCS Multistage Holdings, Inc. (f/k/a Pioneer Super Holdings, Inc.) 2012 Equity Incentive Plan. | |
4.5 | Pioneer NCS Energy Holdco, LLC (f/k/a NCS Energy Holdings, LLC) 2011 Equity Incentive Plan. | |
5.1 | Legal Opinion of Weil, Gotshal & Manges LLP. | |
23.1 | Consent of PricewaterhouseCoopers LLP. | |
23.2 | Consent of Weil, Gotshal & Manges LLP (included in Exhibit No. 5.1). | |
24.1 | Power of Attorney (included on signature page). |
Item 9. | Undertakings. |
(a) | The undersigned Registrant hereby undertakes: |
(1) | to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; |
(a) | provided , however , that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the registration statement is on Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. |
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(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(b) | The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrants annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on April 27, 2017.
NCS Multistage Holdings, Inc. | ||
By: |
/s/ Robert Nipper |
|
Name: | Robert Nipper | |
Title: | Chief Executive Officer and Director |
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Kevin Trautner and Ryan Hummer, or any of them, each acting alone, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-8 (including all pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date |
||
/s/ R OBERT N IPPER Robert Nipper |
Chief Executive Officer and Director (Principal Executive Officer) |
April 27, 2017 | ||
/s/ M ARTY S TROMQUIST Marty Stromquist |
President and Director |
April 27, 2017 | ||
/s/ R YAN H UMMER Ryan Hummer |
Chief Financial Officer (Principal Financial Officer) |
April 27, 2017 | ||
/s/ W ADE B ITTER Wade Bitter |
Chief Accounting Officer and Treasurer (Principal Accounting Officer) |
April 27, 2017 | ||
/s/ M ICHAEL M C S HANE Michael McShane |
Chairman |
April 27, 2017 | ||
/s/ J OHN D EANE John Deane |
Director |
April 27, 2017 | ||
/s/ M ATTHEW F ITZGERALD Matthew Fitzgerald |
Director |
April 27, 2017 | ||
/s/ G URINDER G REWAL Gurinder Grewal |
Director |
April 27, 2017 | ||
/s/ D AVID M C K ENNA David McKenna |
Director |
April 27, 2017 | ||
/s/ F RANKLIN M YERS Franklin Myers |
Director |
April 27, 2017 | ||
/s/ W. M ATT R ALLS W. Matt Ralls |
Director |
April 27, 2017 |
EXHIBIT INDEX
Exhibit No. |
Description |
|
4.1 | Form of Amended and Restated Certificate of Incorporation of NCS Multistage Holdings, Inc. to be in effect prior to the consummation of the initial public offering (incorporated herein by reference to Exhibit 3.4 to Amendment No. 1 to the Companys Registration Statement on Form S-1 (File No. 333-216580) filed on April 17, 2017). | |
4.2 | Form of Amended and Restated Bylaws of NCS Multistage Holdings, Inc. to be in effect prior to the consummation of the offering made under this Registration Statement (incorporated herein by reference to Exhibit 3.5 to Amendment No. 1 to the Companys Registration Statement on Form S-1 (File No. 333-216580) filed on April 17, 2017). | |
4.3 | NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan. | |
4.4 | NCS Multistage Holdings, Inc. (f/k/a Pioneer Super Holdings, Inc.) 2012 Equity Incentive Plan. | |
4.5 | Pioneer NCS Energy Holdco, LLC (f/k/a NCS Energy Holdings, LLC) 2011 Equity Incentive Plan. | |
5.1 | Legal Opinion of Weil, Gotshal & Manges LLP. | |
23.1 | Consent of PricewaterhouseCoopers LLP. | |
23.2 | Consent of Weil, Gotshal & Manges LLP (included in Exhibit No. 5.1). | |
24.1 | Power of Attorney (included on signature page). |
Exhibit 4.3
NCS MULTISTAGE HOLDINGS, INC.
2017 EQUITY INCENTIVE PLAN
1. Purpose .
The purpose of the NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan is to further align the interests of eligible participants with those of the Companys stockholders by providing long-term incentive compensation opportunities tied to the performance of the Company and its Common Stock. The Plan is intended to advance the interests of the Company and increase stockholder value by attracting, retaining and motivating key personnel upon whose judgment, initiative and effort the successful conduct of the Companys business is largely dependent.
2. Definitions . Wherever the following capitalized terms are used in the Plan and/or Award Agreement (as defined below), they shall have the meanings specified below:
Award means an award of a Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Cash Performance Award or Stock Award granted under the Plan.
Award Agreement means a notice or an agreement entered into between the Company and a Participant setting forth the terms and conditions of an Award granted to a Participant as provided in Section 15.2 hereof.
Beneficial Owner shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
Board means the Board of Directors of the Company.
Cash Performance Award means an Award that is denominated by a cash amount to an Eligible Person under Section 10 hereof and payable based on or conditioned upon the attainment of pre-established business and/or individual Performance Goals over a specified performance period.
Cause shall have the meaning set forth in Section 13.2 hereof.
Change of Control shall have the meaning set forth in Section 12.2 hereof.
Code means the Internal Revenue Code of 1986, as amended.
Committee means (i) the Compensation Committee of the Board, (ii) such other committee of the Board appointed by the Board to administer the Plan or (iii) the Board, as determined by the Board.
Common Stock means the Companys common stock, par value $0.01 per share.
Company means NCS Multistage Holdings, Inc., a Delaware corporation or any successor thereto.
Date of Grant means the date on which an Award under the Plan is granted by the Committee or such later date as the Committee may specify to be the effective date of an Award.
Disability shall mean, unless otherwise defined in an individual Award Agreement, the Participant has been unable to perform the essential duties, responsibilities and functions of Participants position with the Company and its subsidiaries by reason of any medically determinable physical or mental impairment for 180 days in any one (1) year period and has qualified to receive long-term disability payments under the Companys long-term disability policy, as may be in effect from time to time. Participant shall cooperate in all respects with the Company if a question arises as to whether he has become subject to a Disability (including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists selected by the Company and authorizing such medical doctors and other health care specialists to discuss Participants condition with the Company). Notwithstanding the foregoing, in the event that a Participant is party to an employment, severance or similar agreement with the Company or any of its affiliates and such agreement contains a definition of Disability, the definition of Disability set forth above shall be deemed replaced and superseded, with respect to such Participant, by the definition of Disability used in such employment, severance or similar agreement.
Effective Date shall have the meaning set forth in Section 16.1 hereof.
Eligible Person means any person who is an employee, Non-Employee Director, consultant or other personal service provider of the Company or any of its Subsidiaries.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Excluded Persons means Advent International Corporation and its affiliates.
Fair Market Value means, with respect to a share of Common Stock as of a given date of determination hereunder, for purposes of determining the exercise price per share of a Stock Option and the base price of a Stock Appreciation Right, (i) the closing price as reported on the NASDAQ or other principal exchange on which the Common Stock is then listed on such date, or if the Common Stock was not traded on such date, then on the next preceding trading day that the Common Stock was traded on such exchange, as reported by such responsible reporting service as the Committee may select or (ii) the initial public offering price of a share of Common Stock for grants of such Awards made in connection with the Companys initial public offering. For all other purposes, Fair Market Value shall be such value as determined by the Board in its discretion and, to the extent necessary, shall be determined in a manner consistent with Section 409A of the Code and the regulations thereunder.
Incentive Stock Option means a Stock Option granted under Section 6 hereof that is intended to meet the requirements of Section 422 of the Code and the regulations thereunder.
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Non-Employee Director means a member of the Board who is not an employee of the Company or any of its Subsidiaries.
Nonqualified Stock Option means a Stock Option granted under Section 6 hereof that is not an Incentive Stock Option.
Participant means any Eligible Person who holds an outstanding Award under the Plan.
Performance Criteria shall have the meaning set forth in Section 10.3 hereof.
Performance Goals shall have the meaning set forth in Section 10.4 hereof.
Performance Stock Unit means a Restricted Stock Unit designated as a Performance Stock Unit under Section 9.1 hereof, to be paid or distributed based on or conditioned upon the attainment of pre-established business and/or individual Performance Goals over a specified performance period.
Person shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d) thereof.
Plan means the NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan as set forth herein, effective and as may be amended from time to time, as provided herein, and includes any sub-plan or appendix that may be created and approved by the Board to allow Eligible Persons of Subsidiaries to participate in the Plan.
Restricted Stock Award means a grant of shares of Common Stock to an Eligible Person under Section 8 hereof that are issued subject to such vesting and transfer restrictions as the Committee shall determine, and such other conditions, as are set forth in the Plan and the applicable Award Agreement.
Restricted Stock Unit means a contractual right granted to an Eligible Person under Section 9 hereof representing notional unit interests equal in value to a share of Common Stock to be paid or distributed at such times, and subject to such conditions, as set forth in the Plan and the applicable Award Agreement.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.
Service means a Participants employment with the Company or any Subsidiary or a Participants service as a Non-Employee Director, consultant or other service provider with the Company or any Subsidiary, as applicable.
Stock Appreciation Right means a contractual right granted to an Eligible Person under Section 7 hereof entitling such Eligible Person to receive a payment, representing the excess of the Fair Market Value of a share of Common Stock over the base price per share of the right, at such time, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
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Stock Award means a grant of shares of Common Stock to an Eligible Person under Section 11 hereof.
Stock Option means a contractual right granted to an Eligible Person under Section 6 hereof to purchase shares of Common Stock at such time and price, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
Subsidiary means an entity (whether or not a corporation) that is wholly or majority owned or controlled, directly or indirectly, by the Company or any other affiliate of the Company that is so designated, from time to time, by the Committee, during the period of such affiliated status; provided , however , that with respect to Incentive Stock Options, the term Subsidiary shall include only an entity that qualifies under Section 424(f) of the Code as a subsidiary corporation with respect to the Company.
3. Administration .
3.1 Committee Members . The Plan shall be administered by a Committee comprised of no fewer than two members of the Board who are appointed by the Board to administer the Plan. To the extent deemed necessary by the Board, each Committee member shall satisfy the requirements for (i) an independent director under rules adopted by the NASDAQ or other principal exchange on which the Common Stock is then listed, (ii) a nonemployee director within the meaning of Rule 16b-3 under the Exchange Act and (iii) an outside director under Section 162(m) of the Code. Notwithstanding the foregoing, the mere fact that a Committee member shall fail to qualify under any of the foregoing requirements shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. Neither the Company nor any member of the Committee shall be liable for any action or determination made in good faith by the Committee with respect to the Plan or any Award thereunder.
3.2 Committee Authority . The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (i) determine the Eligible Persons to whom Awards shall be granted under the Plan, (ii) prescribe the restrictions, terms and conditions of all Awards, (iii) interpret the Plan and terms of the Awards, (iv) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and interpret, amend or revoke any such rules, (v) make all determinations with respect to a Participants Service and the termination of such Service for purposes of any Award, (vi) correct any defect(s) or omission(s) or reconcile any ambiguity(ies) or inconsistency(ies) in the Plan or any Award thereunder, (vii) make all determinations it deems advisable for the administration of the Plan, (viii) decide all disputes arising in connection with the Plan and to otherwise supervise the administration of the Plan, (ix) subject to the terms of the Plan, amend the terms of an Award in any manner that is not inconsistent with the Plan, (x) accelerate the vesting or, to the extent applicable, exercisability of any Award at any time (including, but not limited to, upon a Change of Control or upon termination of Service under certain circumstances, as set forth in the Award Agreement or otherwise), and (xi) adopt such procedures, modifications or subplans as are necessary or
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appropriate to permit participation in the Plan by Eligible Persons who are foreign nationals or employed outside of the United States. The Committees determinations under the Plan need not be uniform and may be made by the Committee selectively among Participants and Eligible Persons, whether or not such persons are similarly situated. The Committee shall, in its discretion, consider such factors as it deems relevant in making its interpretations, determinations and actions under the Plan including, without limitation, the recommendations or advice of any officer or employee of the Company or board of directors of a Subsidiary or such attorneys, consultants, accountants or other advisors as it may select. All interpretations, determinations, and actions by the Committee shall be final, conclusive, and binding upon all parties.
3.3 Delegation of Authority . The Committee shall have the right, from time to time, to delegate in writing to one or more officers of the Company the authority of the Committee to grant and determine the terms and conditions of Awards granted under the Plan, subject to the requirements of Section 157(c) of the Delaware General Corporation Law (or any successor provision) or such other limitations as the Committee shall determine. In no event shall any such delegation of authority be permitted with respect to Awards granted to any member of the Board or to any Eligible Person who is subject to Rule 16b-3 under the Exchange Act or is a covered employee under Section 162(m) of the Code. The Committee shall also be permitted to delegate, to any appropriate officer or employee of the Company, responsibility for performing certain ministerial functions under the Plan. In the event that the Committees authority is delegated to officers or employees in accordance with the foregoing, all provisions of the Plan relating to the Committee shall be interpreted in a manner consistent with the foregoing by treating any such reference as a reference to such officer or employee for such purpose. Any action undertaken in accordance with the Committees delegation of authority hereunder shall have the same force and effect as if such action was undertaken directly by the Committee and shall be deemed for all purposes of the Plan to have been taken by the Committee.
4. Shares Subject to the Plan .
4.1 Number of Shares Reserved . Subject to adjustment as provided in Section 4.5 hereof, the total number of Shares of Common Stock that are reserved for issuance under the Plan (the Share Reserve ) shall equal 4,532,523 shares of Common Stock. Each share of Common Stock subject to an Award shall reduce the Share Reserve by one share; provided , however , that Awards that are required to be paid in cash pursuant to their terms shall not reduce the Share Reserve. Any shares of Common Stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares.
4.2 Share Replenishment . To the extent that an Award granted under this Plan is canceled, expired, forfeited, surrendered, settled by delivery of fewer shares of Common Stock than the number underlying the Award, as applicable, or otherwise terminated without delivery of the shares of Common Stock or payment of consideration to the Participant under the Plan, the shares of Common Stock retained by or returned to the Company will (i) not be deemed to have been delivered under the Plan, as applicable, (ii) be available for future Awards under the Plan, and (iii) increase the Share Reserve by one share for each share that is retained by or returned to the Company. Notwithstanding the foregoing, shares of Common Stock that are (a) withheld from an Award in payment of the exercise or purchase price or taxes relating to such an Award or (b) not issued or delivered as a result of the net settlement of an outstanding Stock Option or Stock Appreciation Right under the Plan, as applicable, will be deemed to have been delivered under the Plan and will not be available for future Awards under the Plan.
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4.3 Awards Granted to Eligible Persons Other Than Non-Employee Directors . For purposes of complying with the requirements of Section 162(m) of the Code, the maximum number of shares of Common Stock that may be subject to (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock Awards that vest in full or in part based on the attainment of Performance Goals, and (iv) Restricted Stock Units that vest in full or in part based on the attainment of Performance Goals, that are granted to any Eligible Person other than a Non-Employee Director during any calendar year shall be limited to 450,000 shares of Common Stock for each such Award type individually (subject to adjustment as provided in Section 4.5 hereof).
4.4 Awards Granted to Non-Employee Directors . No Non-Employee Director may be granted, during any calendar year, Awards having a fair value (determined on the date of grant) that, when added to all cash compensation paid to the Non-Employee Director during the same calendar year, exceeds $750,000.
4.5 Adjustments . If there shall occur any change with respect to the outstanding shares of Common Stock by reason of any recapitalization, reclassification, stock dividend, extraordinary dividend, stock split, reverse stock split or other distribution with respect to the shares of Common Stock or any merger, reorganization, consolidation, combination, spin-off or other similar corporate change or any other change affecting the Common Stock (other than regular cash dividends to stockholders of the Company), the Committee shall, in the manner and to the extent it considers appropriate and equitable to the Participants and consistent with the terms of the Plan, cause an adjustment to be made to (i) the maximum number and kind of shares of Common Stock provided in Sections 4.1, 4.3 and 4.4 hereof (including the maximum number of shares of Common Stock that may become payable to a Participant provided in Sections 4.3 and 4.4 hereof), (ii) the number and kind of shares of Common Stock, units or other rights subject to then outstanding Awards, (iii) the exercise or base price for each share or unit or other right subject to then outstanding Awards, (iv) the maximum amount that may become payable to a Participant under Cash Performance Awards provided in Section 10.1 hereof, (v) other value determinations applicable to the Plan and/or outstanding Awards, and (vi) any other terms of an Award that are affected by the event. Notwithstanding the foregoing, (a) any such adjustments shall, to the extent necessary, be made in a manner consistent with the requirements of Section 409A of the Code and (b) in the case of Incentive Stock Options, any such adjustments shall, to the extent practicable, be made in a manner consistent with the requirements of Section 424(a) of the Code.
5. Eligibility and Awards .
5.1 Designation of Participants . Any Eligible Person may be selected by the Committee to receive an Award and become a Participant. The Committee has the authority, in its discretion, to determine and designate from time to time those Eligible Persons who are to be granted Awards, the types of Awards to be granted, the number of shares of Common Stock or units subject to Awards to be granted and the terms and conditions of such Awards consistent with the terms of the Plan. In selecting Eligible Persons to be Participants, and in determining
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the type and amount of Awards to be granted under the Plan, the Committee shall consider any and all factors that it deems relevant or appropriate. Designation of a Participant in any year shall not require the Committee to designate such person to receive an Award in any other year or, once designated, to receive the same type or amount of Award as granted to such Participant in any other year.
5.2 Determination of Awards . The Committee shall determine the terms and conditions of all Awards granted to Participants in accordance with its authority under Section 3.2 hereof. An Award may consist of one type of right or benefit hereunder or of two or more such rights or benefits granted in tandem.
5.3 Award Agreements . Each Award granted to an Eligible Person shall be represented by an Award Agreement. The terms of all Awards under the Plan, as determined by the Committee, will be set forth in each individual Award Agreements as described in Section 15.2 hereof.
6. Stock Options .
6.1 Grant of Stock Options . A Stock Option may be granted to any Eligible Person selected by the Committee, except that an Incentive Stock Option may only be granted to an Eligible Person satisfying the conditions of Section 6.7(a) hereof. Each Stock Option shall be designated on the Date of Grant, in the discretion of the Committee, as an Incentive Stock Option or as a Nonqualified Stock Option. All Stock Options granted under the Plan to U.S. taxpayers are intended to comply with or be exempt from the requirements of Section 409A of the Code.
6.2 Exercise Price . The exercise price per share of a Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Date of Grant. The Committee may in its discretion specify an exercise price per share that is higher than the Fair Market Value of a share of Common Stock on the Date of Grant.
6.3 Vesting of Stock Options . The Committee shall, in its discretion, prescribe in an award agreement the time or times at which or the conditions upon which, a Stock Option or portion thereof shall become vested and/or exercisable. The requirements for vesting and exercisability of a Stock Option may be based on the continued Service of the Participant with the Company or a Subsidiary for a specified time period (or periods), on the attainment of a specified Performance Goal(s) designed to meet the requirements for exemption under Section 162(m) of the Code and/or on such other terms and conditions as approved by the Committee in its discretion. If the vesting requirements of a Stock Option are not satisfied, the Award shall be forfeited.
6.4 Term of Stock Options . The Committee shall in its discretion prescribe in an Award Agreement the period during which a vested Stock Option may be exercised; provided , however , that the maximum term of a Stock Option shall be ten (10) years from the Date of Grant. The Committee may provide that a Stock Option will cease to be exercisable upon or at the end of a specified time period following a termination of Service for any reason as set forth in the Award Agreement or otherwise. A Stock Option may be earlier terminated as specified by the Committee and set forth in an Award Agreement upon or following the termination of a
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Participants Service with the Company or any Subsidiary, including by reason of voluntary resignation, death, Disability, termination for Cause or any other reason. Subject to Section 409A of the Code and the provisions of this Section 6, the Committee may extend at any time the period in which a Stock Option may be exercised.
6.5 Stock Option Exercise; Tax Withholding . Subject to such terms and conditions as specified in an Award Agreement, a Stock Option may be exercised in whole or in part at any time during the term thereof by notice in the form required by the Company, together with payment of the aggregate exercise price and applicable withholding tax. Payment of the exercise price may be made: (i) in cash or by cash equivalent acceptable to the Committee, or, (ii) to the extent permitted by the Committee in its sole discretion in an Award Agreement or otherwise (A) in shares of Common Stock valued at the Fair Market Value of such shares on the date of exercise, (B) through an open-market, broker-assisted sales transaction pursuant to which the Company is promptly delivered the amount of proceeds necessary to satisfy the exercise price, (C) by reducing the number of shares of Common Stock otherwise deliverable upon the exercise of the Stock Option by the number of shares of Common Stock having a Fair Market Value on the date of exercise equal to the exercise price, (D) by a combination of the methods described above or (E) by such other method as may be approved by the Committee and set forth in the Award Agreement. In accordance with Section 15.11 hereof, and in addition to and at the time of payment of the exercise price, the Participant shall pay to the Company the full amount of any and all applicable income tax, employment tax and other amounts required to be withheld in connection with such exercise, payable under such of the methods described above for the payment of the exercise price as may be approved by the Committee and set forth in the Award Agreement.
6.6 Limited Transferability of Nonqualified Stock Options . All Stock Options shall be nontransferable except (i) upon the Participants death, in accordance with Section 15.3 hereof or (ii) in the case of Nonqualified Stock Options only, for the transfer of all or part of the Stock Option to a Participants family member (as defined for purposes of the Form S-8 registration statement under the Securities Act), or as otherwise permitted by the Committee, in each case as may be approved by the Committee in its discretion at the time of proposed transfer. The transfer of a Nonqualified Stock Option may be subject to such terms and conditions as the Committee may in its discretion impose from time to time. Subsequent transfers of a Nonqualified Stock Option shall be prohibited other than in accordance with Section 15.3 hereof.
6.7 Additional Rules for Incentive Stock Options .
(a) Eligibility . An Incentive Stock Option may only be granted to an Eligible Person who is considered an employee for purposes of Treasury Regulation Section 1.421-1(h) with respect to the Company or any Subsidiary that qualifies as a subsidiary corporation with respect to the Company for purposes of Section 424(f) of the Code.
(b) Annual Limits . No Incentive Stock Option shall be granted to a Participant as a result of which the aggregate Fair Market Value (determined as of the Date of Grant) of the Common Stock with respect to which incentive stock options under Section 422 of the Code are exercisable for the first time in any calendar year under the Plan and any other stock option plans of the Company or any Subsidiary or parent corporation, would exceed $100,000,
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determined in accordance with Section 422(d) of the Code. This limitation shall be applied by taking Stock Options into account in the order in which granted. Any Stock Option grant that exceeds such limit shall be treated as a non-qualified stock option.
(c) Additional Limitations . In the case of any Incentive Stock Option granted to an Eligible Person who owns, either directly or indirectly (taking into account the attribution rules contained in Section 424(d) of the Code), stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary, the exercise price shall not be less than one hundred ten percent (110%) of the Fair Market Value of a share of Common Stock on the Date of Grant and the maximum term shall be five (5) years.
(d) Termination of Service . An Award of an Incentive Stock Option may provide that such Stock Option may be exercised not later than (i) three (3) months following termination of Service of the Participant with the Company and all Subsidiaries (other than as set forth in clause (ii) of this Section 6.7(d)) or (ii) one year following termination of Service of the Participant with the Company and all Subsidiaries due to death or permanent and total disability within the meaning of Section 22(e)(3) of the Code, in each case as and to the extent determined by the Committee to comply with the requirements of Section 422 of the Code.
(e) Other Terms and Conditions; Nontransferability . Any Incentive Stock Option granted hereunder shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are deemed necessary or desirable by the Committee, which terms, together with the terms of the Plan, shall be intended and interpreted to cause such Incentive Stock Option to qualify as an incentive stock option under Section 422 of the Code. A Stock Option that is granted as an Incentive Stock Option shall, to the extent it fails to qualify as an incentive stock option under the Code, be treated as a Nonqualified Stock Option. An Incentive Stock Option shall by its terms be nontransferable other than by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of a Participant only by such Participant.
(f) Disqualifying Dispositions . If shares of Common Stock acquired by exercise of an Incentive Stock Option are disposed of within two years following the Date of Grant or one year following the transfer of such shares to the Participant upon exercise, the Participant shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Company may reasonably require.
6.8 Repricing Prohibited. Subject to the anti-dilution adjustment provisions contained in Section 4.5 hereof, without the prior approval of the Companys stockholders, neither the Committee nor the Board shall cancel a Stock Option when the exercise price per share exceeds the Fair Market Value of one share of Common Stock in exchange for cash or another Award (other than in connection with a Change of Control) or cause the cancellation, substitution or amendment of a Stock Option that would have the effect of reducing the exercise price of such a Stock Option previously granted under the Plan or otherwise approve any modification to such a Stock Option, that would be treated as a repricing under the then applicable rules, regulations or listing requirements adopted by the NASDAQ or other principal exchange on which the Common Stock is then listed.
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6.9 Dividend Equivalent Rights. Dividends shall not be paid with respect to Stock Options. Dividend equivalent rights shall be granted with respect to the shares of Common Stock subject to Stock Options to the extent permitted by the Committee and set forth in the Award Agreement.
6.10 No Rights as Stockholder . The Participant shall not have any rights as a stockholder with respect to the shares underlying a Stock Option until such time as shares or Common Stock are delivered to the Participant pursuant to the terms of the Award Agreement.
7. Stock Appreciation Rights .
7.1 Grant of Stock Appreciation Rights . Stock Appreciation Rights may be granted to any Eligible Person selected by the Committee. Stock Appreciation Rights may be granted on a basis that allows for the exercise of the right by the Participant or that provides for the automatic payment of the right upon a specified date or event. Stock Appreciation Rights shall be non-transferable, except as provided in Section 15.3 hereof. All Stock Appreciation Rights granted under the Plan to U.S. taxpayers are intended to comply with or otherwise be exempt from the requirements of Section 409A of the Code.
7.2 Stand-Alone and Tandem Stock Appreciation Rights . A Stock Appreciation Right may be granted without any related Stock Option, or may be granted in tandem with a Stock Option, either on the Date of Grant or at any time thereafter during the term of the Stock Option. The Committee shall in its discretion provide in an Award Agreement the time or times at which or the conditions upon which, a Stock Appreciation Right or portion thereof shall become vested and/or exercisable. The requirements for vesting and exercisability of a Stock Appreciation Right may be based on the continued Service of a Participant with the Company or a Subsidiary for a specified time period (or periods), on the attainment of a specified Performance Goal(s) designed to meet the requirements for exemption under Section 162(m) of the Code and/or on such other terms and conditions as approved by the Committee in its discretion. If the vesting requirements of a Stock Appreciation Right are not satisfied, the Award shall be forfeited. A Stock Appreciation Right will be exercisable or payable at such time or times as determined by the Committee; provided , however , that the maximum term of a Stock Appreciation Right shall be ten (10) years from the Date of Grant. The Committee may provide that a Stock Appreciation Right will cease to be exercisable upon or at the end of a period following a termination of Service for any reason. The base price of a Stock Appreciation Right granted without any related Stock Option shall be determined by the Committee in its discretion; provided , however , that the base price per share of any such stand-alone Stock Appreciation Right shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Date of Grant.
7.3 Payment of Stock Appreciation Rights . A Stock Appreciation Right will entitle the holder, upon exercise or other payment of the Stock Appreciation Right, as applicable, to receive an amount determined by multiplying: (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise or payment of the Stock Appreciation Right over the base price of such Stock Appreciation Right, by (ii) the number of shares as to which such Stock Appreciation Right is exercised or paid. Payment of the amount determined under the foregoing may be made, as approved by the Committee and set forth in the Award Agreement, in shares of Common Stock valued at their Fair Market Value on the date of exercise or payment, in cash or in a combination of shares of Common Stock and cash, subject to applicable tax withholding requirements.
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7.4 Repricing Prohibited . Subject to the anti-dilution adjustment provisions contained in Section 4.5 hereof, without the prior approval of the Companys stockholders, neither the Committee nor the Board shall cancel a Stock Appreciation Right when the base price per share exceeds the Fair Market Value of one share of Common Stock in exchange for cash or another Award (other than in connection with a Change of Control) or cause the cancellation, substitution or amendment of a Stock Appreciation Right that would have the effect of reducing the base price of such a Stock Appreciation Right previously granted under the Plan or otherwise approve any modification to such Stock Appreciation Right that would be treated as a repricing under the then applicable rules, regulations or listing requirements adopted by the NASDAQ or other principal exchange on which the Common Stock is then listed.
7.5 Dividend Equivalent Rights. Dividends shall not be paid with respect to Stock Appreciation Rights. Dividend equivalent rights shall be granted with respect to the shares of Common Stock subject to Stock Appreciation Rights to the extent permitted by the Committee and set forth in the Award Agreement.
8. Restricted Stock Awards .
8.1 Grant of Restricted Stock Awards . A Restricted Stock Award may be granted to any Eligible Person selected by the Committee. The Committee may require the payment by the Participant of a specified purchase price in connection with any Restricted Stock Award.
8.2 Vesting Requirements . The restrictions imposed on shares granted under a Restricted Stock Award shall lapse in accordance with the vesting requirements specified by the Committee in the Award Agreement. The requirements for vesting of a Restricted Stock Award may be based on the continued Service of the Participant with the Company or a Subsidiary for a specified time period (or periods), on the attainment of a specified Performance Goal(s) designed to meet the requirements for exemption under Section 162(m) of the Code and/or on such other terms and conditions as approved by the Committee in its discretion. If the vesting requirements of a Restricted Stock Award shall not be satisfied or, if applicable, the Performance Goal(s) with respect to such Restricted Stock Award are not attained, the Award shall be forfeited and the shares of Common Stock subject to the Award shall be returned to the Company.
8.3 Transfer Restrictions . Shares granted under any Restricted Stock Award may not be transferred, assigned or subject to any encumbrance, pledge or charge until all applicable restrictions are removed or have expired, except as provided in Section 15.3 hereof. Failure to satisfy any applicable restrictions shall result in the subject shares of the Restricted Stock Award being forfeited and returned to the Company. The Committee may require in an Award Agreement that certificates (if any) representing the shares granted under a Restricted Stock Award bear a legend making appropriate reference to the restrictions imposed, and that certificates (if any) representing the shares granted or sold under a Restricted Stock Award will remain in the physical custody of an escrow holder until all restrictions are removed or have expired.
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8.4 Rights as Stockholder . Subject to the foregoing provisions of this Section 8 and the applicable Award Agreement, the Participant shall have all rights of a stockholder with respect to the shares granted to the Participant under a Restricted Stock Award, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto, unless the Committee determines otherwise at the time the Restricted Stock Award is granted. The Committee may provide in an Award Agreement for the payment of dividends and distributions to the Participant at such times as paid to stockholders generally, at the times of vesting or other payment of the Restricted Stock Award or otherwise; provided that, dividends and other distributions made with respect to a Restricted Stock Award that is subject to performance-based vesting shall not be paid until, and only to the extent that the Award vests.
8.5 Section 83(b) Election . If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award, the Participant shall file, within thirty (30) days following the Date of Grant, a copy of such election with the Company and with the Internal Revenue Service, in accordance with the regulations under Section 83 of the Code. The Committee may provide in an Award Agreement that the Restricted Stock Award is conditioned upon the Participants making or refraining from making an election with respect to the Award under Section 83(b) of the Code.
9. Restricted Stock Units .
9.1 Grant of Restricted Stock Units . A Restricted Stock Unit may be granted to any Eligible Person selected by the Committee. The value of each Restricted Stock Unit is equal to the Fair Market Value of a share of Common Stock on the applicable date or time period of determination, as specified by the Committee. Restricted Stock Units shall be subject to such restrictions and conditions as the Committee shall determine. In addition, a Restricted Stock Unit may be designated as a Performance Stock Unit, the vesting requirements of which may be based, in whole or in part, on the attainment of pre-established business and/or individual Performance Goal(s) over a specified performance period designed to meet the requirements for exemption under Section 162(m) of the Code, or otherwise, as approved by the Committee in its discretion. Restricted Stock Units shall be non-transferable, except as provided in Section 15.3 hereof.
9.2 Vesting of Restricted Stock Units . The Committee shall, in its discretion, determine any vesting requirements with respect to Restricted Stock Units, which shall be set forth in the Award Agreement. The requirements for vesting of a Restricted Stock Unit may be based on the continued Service of the Participant with the Company or a Subsidiary for a specified time period (or periods) and/or on such other terms and conditions as approved by the Committee (including Performance Goal(s)) designed to meet the requirements for exemption under Section 162(m) of the Code and/or on such other terms and conditions as approved by the Committee in its discretion. If the vesting requirements of a Restricted Stock Unit Award are not satisfied, the Award shall be forfeited.
9.3 Payment of Restricted Stock Units . Restricted Stock Units shall become payable to a Participant at the time or times determined by the Committee and set forth in the Award Agreement, which may be upon or following the vesting of the Award. Payment of a Restricted Stock Unit may be made, as approved by the Committee and set forth in the Award Agreement,
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in cash or in shares of Common Stock or in a combination thereof, subject to applicable tax withholding requirements. Any cash payment of a Restricted Stock Unit shall be made based upon the Fair Market Value of a share of Common Stock, determined on such date or over such time period as determined by the Committee.
9.4 Dividend Equivalent Rights. Restricted Stock Units may be granted together with a dividend equivalent right with respect to the shares of Common Stock subject to the Award, which may be accumulated and may be deemed reinvested in additional Restricted Stock Units or may be accumulated in cash, as determined by the Committee in its discretion. Any payments made pursuant to dividend equivalent rights will be paid at such times as determined by the Committee in its discretion (including without limitation at the times paid to stockholders generally or at the times of vesting or payment of the Restricted Stock Unit); provided that, dividends and other distributions made with respect to a Restricted Stock Unit that is subject to performance-based vesting shall not be paid until, and only to the extent that, the Award vests. Dividend equivalent rights may be subject to forfeiture under the same conditions as apply to the underlying Restricted Stock Units.
9.5 No Rights as Stockholder . The Participant shall not have any rights as a stockholder with respect to the shares subject to a Restricted Stock Unit until such time as shares of Common Stock are delivered to the Participant pursuant to the terms of the Award Agreement.
10. Cash Performance Awards and Performance Criteria .
10.1 Grant of Cash Performance Awards . A Cash Performance Award may be granted to any Eligible Person selected by the Committee. The maximum amount that may become payable to any one Participant during any one calendar year under all Cash Performance Awards intended to qualify as performance-based compensation under Section 162(m) of the Code is limited to $15,000,000. Each Cash Performance Award shall be evidenced by an Award Agreement that shall specify the performance period and such other terms and conditions as the Committee, in its discretion, shall determine. The Committee may accelerate the vesting of a Cash Performance Award upon a Change of Control or termination of Service under certain circumstances, as set forth in the Award Agreement. Cash Performance Awards shall be non-transferable, except as provided in Section 15.3 hereof.
10.2 Payment . Payment amounts may be based on the attainment of specified levels of the Performance Goals, including, if applicable, specified threshold, target and maximum performance levels, and performance falling between such levels. The requirements for payment may be also based upon the continued Service of the Participant with the Company or a Subsidiary during the respective performance period and on such other conditions as determined by the Committee and set forth in the Award Agreement. With respect to Cash Performance Awards, Performance Stock Units and other Awards intended to qualify as performance-based compensation under Section 162(m) of the Code, before the 90th day of the applicable performance period (or, if the performance period is less than one year, no later than the number of days which is equal to 25% of such performance period), the Committee will determine the duration of the performance period, the Performance Criteria, the applicable Performance Goals relating to the Performance Criteria, and the amount and terms of payment and/or vesting upon achievement of the Performance Goals.
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10.3 Performance Criteria . For purposes of Cash Performance Awards, Performance Stock Units and other Awards intended to qualify as performance-based compensation under Section 162(m) of the Code, the Performance Criteria shall be one or any combination of the following, for the Company or any identified Subsidiary or business unit, as determined by the Committee at the time of the Award: (i) net earnings; (ii) earnings per share; (iii) net debt; (iv) revenue or sales growth; (v) net or operating income; (vi) net operating profit; (vii) return measures (including, but not limited to, return on assets, capital, equity or sales); (viii) cash flow (including, but not limited to, operating cash flow, distributable cash flow and free cash flow); (ix) earnings before or after taxes, interest, depreciation, amortization and/or rent; (x) share price (including, but not limited to growth measures and total stockholder return); (xi) expense control or loss management; (xii) market share; (xiii) economic value added; (xiv) working capital; (xv) the formation of joint ventures or the completion of other corporate transactions; (xvi) gross or net profit margins; (xvii) revenue mix; (xviii) operating efficiency; (xix) product diversification; (xx) market penetration; (xxi) measurable achievement in quality, technology, operation or compliance initiatives; (xxii) quarterly dividends or distributions; (xxiii) employee retention or turnover; (xxiv) operating income before depreciation, amortization and certain additional adjustments to operating income permitted under our senior secured credit facilities; and/or (xxv) any combination of or a specified increase or decrease, as applicable in any of the foregoing. Each of the Performance Criteria shall be applied and interpreted in accordance with an objective formula or standard established by the Committee at the time the applicable Award is granted including, without limitation, GAAP (or adjusted GAAP, as applicable), consistently applied on a business unit, divisional, subsidiary or consolidated basis or any combination thereof. The Performance Goals may be described in terms of objectives that are related to the individual Participant or objectives that are Company-wide or related to a Subsidiary, division, department, region, function or business unit and may be measured on an absolute or cumulative basis or on the basis of percentage of improvement over time, and may be measured in terms of Company performance (or performance of the applicable Subsidiary, division, department, region, function or business unit) or measured relative to selected peer companies or a market or other index.
10.4 Performance Goals . For purposes of Cash Performance Awards, Performance Stock Units and other Awards intended to qualify as performance-based compensation under Section 162(m) of the Code, the Performance Goals shall be the levels of achievement relating to the Performance Criteria selected by the Committee for the Award. The Performance Goals shall be written and shall be expressed as an objective formula or standard that precludes discretion to increase the amount of compensation payable that would otherwise be due upon attainment of the goal. The Performance Goals may be applied on an absolute basis or relative to an identified index, peer group, or one or more competitors or other companies (including particular business segments or divisions of such companies), as specified by the Committee. The Performance Goals need not be the same for all Participants.
10.5 Adjustments . At the time that an Award is granted, the Committee may provide for the Performance Goals or the manner in which performance will be measured against the Performance Goals to be adjusted in such objective manner as it deems appropriate, including, without limitation, adjustments to reflect charges for restructurings, non-operating income, the impact of corporate transactions or discontinued operations, events that are unusual in nature or infrequent in occurrence and other non-recurring items, currency fluctuations, litigation or claim judgements, settlements, and the cumulative effects of accounting or tax law changes. In
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addition, to the extent not inconsistent with Section 162(m) of the Code, with respect to a Participant hired or promoted following the beginning of a performance period, the Committee may determine to prorate the Performance Goals and/or the amount of any payment in respect of such Participants Cash Performance Awards for the partial performance period.
10.6 Negative Discretion . Notwithstanding anything else contained in the Plan to the contrary, in accordance with Section 162(m) of the Code, the Committee shall, to the extent provided in an Award Agreement, have the right, in its discretion, (i) to reduce or eliminate the amount otherwise payable to any Participant under an Award granted under this Section 10 and (ii) to establish rules or procedures that have the effect of limiting the amount payable to any Participant to an amount that is less than the amount that otherwise would be payable under an Award granted under this Section 10. The Committee may exercise such discretion in a non-uniform manner among Participants. The Committee shall not have discretion to increase the amount that otherwise would be payable to any Participant under a Cash Performance Award, Performance Stock Unit or other Award intended to qualify as performance-based compensation under Section 162(m) of the Code.
10.7 Certification . Following the conclusion of the performance period of a Cash Performance Award, Performance Stock Unit or other Award intended to qualify as performance-based compensation under Section 162(m) of the Code, the Committee shall certify in writing whether the Performance Goals for that performance period have been achieved, or certify the degree of achievement, if applicable.
10.8 Payment . Upon certification of the Performance Goals for a Cash Performance Award, Performance Stock Unit or other Award intended to qualify as performance-based compensation under Section 162(m) of the Code, the Committee shall determine the level of vesting or amount of payment to the Participant pursuant to the Award, if any. Notwithstanding the foregoing, Cash Performance Awards may be paid, at the discretion of the Committee, in any combination of cash or shares of Common Stock, based upon the Fair Market Value of such shares at the time of payment.
11. Stock Awards .
11.1 Grant of Stock Awards . A Stock Award may be granted to any Eligible Person selected by the Committee. A Stock Award may be granted for past Services, in lieu of bonus or other cash compensation, as directors compensation or for any other valid purpose as determined by the Committee. The Committee shall determine the terms and conditions of such Awards, and such Awards may be made without vesting requirements to the extent permissible under Section 5.2 hereof. In addition, the Committee may, in connection with any Stock Award, require the payment of a specified purchase price.
11.2 Rights as Stockholder . Subject to the foregoing provisions of this Section 11 and the applicable Award Agreement, upon the issuance of shares of Common Stock under a Stock Award the Participant shall have all rights of a stockholder with respect to the shares of Common Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto.
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12. Change of Control .
12.1 Effect on Awards . Upon the occurrence of a Change of Control, unless otherwise provided in the Award Agreement, the Committee is authorized (but not obligated) to make adjustments in the terms and conditions of outstanding Awards, including without limitation the following (or any combination thereof): (a) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving company or corporation) or by the surviving company or corporation or its parent; (b) substitution by the surviving company or corporation or its parent of awards with substantially the same terms for outstanding Awards (with appropriate adjustments to the type of consideration payable upon settlement of the Awards); (c) acceleration of exercisability, vesting and/or payment under outstanding Awards immediately prior to the occurrence of such event or upon a termination of Service following such event; and (d) if all or substantially all of the Companys outstanding shares of Common Stock are transferred in exchange for cash consideration in connection with such Change of Control: (i) upon written notice, provide that any outstanding Stock Options and Stock Appreciation Rights are exercisable during a reasonable period of time immediately prior to the scheduled consummation of the event or such other reasonable period as determined by the Committee (contingent upon the consummation of the event), and at the end of such period, such Stock Options and Stock Appreciation Rights shall terminate to the extent not so exercised within the relevant period; and (ii) cancel all or any portion of outstanding Awards for fair value (in the form of cash, shares of Common Stock, other property or any combination thereof) as determined in the sole discretion of the Committee; provided , however , that, in the case of Stock Options and Stock Appreciation Rights, the fair value may equal the excess, if any, of the value or amount of the consideration to be paid in the Change of Control transaction to holders of shares of Common Stock (or, if no such consideration is paid, Fair Market Value of the shares of Common Stock) over the aggregate exercise or base price, as applicable, with respect to such Awards or portion thereof being canceled, or if no such excess, zero; provided, further, that if any payments or other consideration are deferred and/or contingent as a result of escrows, earn outs, holdbacks or any other contingencies, payments under this provision may be made on substantially the same terms and conditions applicable to, and only to the extent actually paid to, the holders of Shares in connection with the Change of Control.
12.2 Definition of Change of Control. Unless otherwise defined in an Award Agreement, Change of Control shall mean the occurrence of one or more of the following events:
(a) Any Person becomes the Beneficial Owner, directly or indirectly, of more than fifty percent (50%) of the combined voting power, excluding any Excluded Persons or any person that is the Beneficial Owner, directly or indirectly, of more than fifty percent (50%) of the combined voting power on the Effective Date, of the then outstanding voting securities of the Company entitled to vote generally in the election of its directors (the Outstanding Company Voting Securities ) including by way of merger, consolidation or otherwise; provided , however , that for purposes of this definition, the following acquisitions shall not be taken into account in determining whether a Change of Control has occurred: (i) any acquisition of voting securities of the Company directly from the Company or (ii) any acquisition by the Company or any of its Subsidiaries of Outstanding Company Voting Securities, including an acquisition by any employee benefit plan or related trust sponsored or maintained by the Company, or any of its Subsidiaries.
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(b) The following individuals (the Incumbent Directors ) cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent or proxy solicitation, relating to the election of directors of the Company by or on behalf of a Person other than the Board) whose appointment or election by the Board or nomination for election by the Companys stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended.
(c) Consummation of a reorganization, merger, or consolidation to which the Company is a party or a sale or other disposition of all or substantially all of the assets of the Company (a Business Combination ), unless, following such Business Combination: (i) any individuals and entities that were the Beneficial Owners of Outstanding Company Voting Securities immediately prior to such Business Combination are the Beneficial Owners, directly or indirectly, of more than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (or election of members of a comparable governing body) of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns all or substantially all of the Company or all or substantially all of the Companys assets either directly or through one or more Subsidiaries) (the Successor Entity ) in substantially the same proportions as their ownership immediately prior to such Business Combination; (ii) no Person (excluding any Successor Entity, any Excluded Person, any person that is the Beneficial Owner, directly or indirectly, of more than thirty percent (30%) of the combined voting power on the Effective Date or any employee benefit plan or related trust of the Company, such Successor Entity, or any of their Subsidiaries) is the Beneficial Owner, directly or indirectly, of more than thirty percent (30%) of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or comparable governing body) of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors (or comparable governing body) of the Successor Entity were Incumbent Directors (including persons deemed to be Incumbent Directors) at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination.
Notwithstanding the foregoing, to the extent necessary to comply with Section 409A of the Code with respect to the payment of nonqualified deferred compensation, Change of Control shall be limited to a change in control event as defined under Section 409A of the Code.
13. Forfeiture Events .
13.1 General . The Committee may specify in an Award Agreement at the time of the Award that the Participants rights, payments and benefits with respect to an Award are subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified
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events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, without limitation, termination of Service for Cause, violation of material Company policies, breach of noncompetition, non-solicitation, confidentiality or other restrictive covenants that may apply to the Participant or other conduct by the Participant that is detrimental to the business or reputation of the Company.
13.2 Termination for Cause .
(a) Treatment of Awards . Unless otherwise provided by the Committee and set forth in an Award Agreement, if (i) a Participants Service with the Company or any Subsidiary shall be terminated for Cause or (ii) after termination of Service for any other reason, the Committee determines in its discretion either that, (1) during the Participants period of Service, the Participant engaged in an act which would have warranted termination of Service for Cause or (2) after termination, the Participant engaged in conduct that violated any continuing obligation or duty of the Participant in respect of the Company or any Subsidiary, such Participants rights, payments and benefits with respect to an Award shall be subject to cancellation, forfeiture and/or recoupment, as provided in Section 13.3 below. The Company shall have the power to determine whether the Participant has been terminated for Cause, the date upon which such termination for Cause occurs, whether the Participant engaged an act which would have warranted termination of Service for Cause or engaged in conduct that violated any continuing obligation or duty of the Participant in respect of the Company or any Subsidiary. Any such determination shall be final, conclusive and binding upon all Persons. In addition, if the Company shall reasonably determine that a Participant has committed or may have committed any act which could constitute the basis for a termination of such Participants Service for Cause or violates any continuing obligation or duty of the Participant in respect of the Company or any Subsidiary, the Company may suspend the Participants rights to exercise any Stock Option or Stock Appreciation Right, receive any payment or vest in any right with respect to any Award pending a determination by the Company of whether an act or omission could constitute the basis for a termination for Cause as provided in this Section 13.2.
(b) Definition of Cause . Unless otherwise defined in an Award Agreement, Cause shall mean: (i) the Participant has committed a deliberate act against the interests of the Company including, without limitation: an act of fraud, embezzlement, misappropriation or breach of fiduciary duty against the Company, including, but not limited to, the offer, payment, solicitation or acceptance of any unlawful bribe or kickback with respect to the Companys business; or (ii) the commission by a Participant of, or the plea of nolo contendere by such Participant with respect to, a felony or a crime involving moral turpitude,; or (iii) the Participant has failed to perform or neglected the material duties incident to his employment or other engagement with the Company on a regular basis, and such refusal or failure shall have continued for a period of twenty (20) days after written notice to the Participant specifying such refusal or failure in reasonable detail; or (iv) the Participant has been chronically absent from work (excluding vacations, illnesses, Disability or leaves of absence approved by the Board); or (v) the Participant has refused, after explicit written notice, to obey any lawful resolution of or direction by the Board which is consistent with the duties incident to his employment or other engagement with the Company and such refusal continues for more than twenty (20) days after written notice is given to the Participant specifying such refusal in reasonable detail; or (vi) the Participant has breached any of the material terms contained in any employment agreement, non-
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competition agreement, confidentiality agreement, restrictive covenants agreement or similar type of agreement to which such Participant is a party; or (vii) the Participants misappropriation of the Companys or any of its Subsidiarys assets or business opportunities; or (viii) the Participant has engaged in (x) the unlawful use (including being under the influence) or possession of illegal drugs on the Companys premises or (y) habitual drunkenness on the Companys premises.
Any voluntary termination of Service or other engagement by the Participant in anticipation of an involuntary termination of the Participants Service for Cause shall be deemed to be a termination for Cause. Notwithstanding the foregoing, in the event that a Participant is party to an employment, severance or similar agreement with the Company or any of its affiliates and such agreement contains a definition of Cause, the definition of Cause set forth above shall be deemed replaced and superseded, with respect to such Participant, by the definition of Cause used in such employment, severance or similar agreement.
13.3 Right of Recapture .
(a) General . If at any time within one (1) year (or such longer time specified in an Award Agreement or other agreement with a Participant or policy applicable to the Participant) after the date on which a Participant exercises a Stock Option or Stock Appreciation Right or on which a Stock Award, Restricted Stock Award or Restricted Stock Unit vests or becomes payable or on which a Cash Performance Award is paid to a Participant, or on which income otherwise is realized by a Participant in connection with an Award, (i) a Participants Service is terminated for Cause, (ii) the Committee determines in its discretion that the Participant is subject to any recoupment of benefits pursuant to the Companys compensation recovery, clawback or similar policy, as may be in effect from time to time, or (iii) after a Participants Service terminates for any other reason, the Committee determines in its discretion either that, (1) during the Participants period of Service, the Participant engaged in an act or omission which would have warranted termination of the Participants Service for Cause or (2) after a Participants termination of Service, the Participant engaged in conduct that materially violated any continuing obligation or duty of the Participant in respect of the Company or any Subsidiary, then, at the sole discretion of the Committee, any gain realized by the Participant from the exercise, vesting, payment or other realization of income by the Participant in connection with an Award, shall be paid by the Participant to the Company upon notice from the Company, subject to applicable law. Such gain shall be determined as of the date or dates on which the gain is realized by the Participant, without regard to any subsequent change in the Fair Market Value of a share of Common Stock. To the extent not otherwise prohibited by law, the Company shall have the right to offset such gain against any amounts otherwise owed to the Participant by the Company (whether as wages, vacation pay or pursuant to any benefit plan or other compensatory arrangement).
(b) Accounting Restatement . If a Participant receives compensation pursuant to an Award under the Plan (whether a Stock Option, Cash Performance Award or otherwise) based on financial statements that are subsequently required to be restated in a way that would decrease the value of such compensation, the Participant will, to the extent not otherwise prohibited by law, upon the written request of the Company, forfeit and repay to the Company the difference between what the Participant received and what the Participant should have
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received based on the accounting restatement, in accordance with (i) the Companys compensation recovery, clawback or similar policy, as may be in effect from time to time and (ii) any compensation recovery, clawback or similar policy made applicable by law including the provisions of Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Companys equity securities may be listed (the Policy ). By accepting an Award hereunder, the Participant acknowledges and agrees that the Policy shall apply to such Award, and all incentive-based compensation payable pursuant to such Award shall be subject to forfeiture and repayment pursuant to the terms of the Policy.
14. Transfer, Leave of Absence, Etc . For purposes of the Plan, except as otherwise determined by the Committee, the following events shall not be deemed a termination of Service: (a) a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or (b) an approved leave of absence for military service or sickness, a leave of absence where the employees right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted, a leave of absence for any other purpose approved by the Company or if the Committee otherwise so provides in writing.
15. General Provisions .
15.1 Status of Plan . The Committee may authorize the creation of trusts or other arrangements to meet the Companys obligations to deliver shares of Common Stock or make payments with respect to Awards.
15.2 Award Agreement . An Award under the Plan shall be evidenced by an Award Agreement in a written or electronic form approved by the Committee setting forth the number of shares of Common Stock or Restricted Stock Units subject to the Award, the exercise price, base price or purchase price of the Award, the time or times at which an Award will become vested, exercisable or payable and the term of the Award. The Award Agreement also may set forth the effect on an Award of a Change of Control and/or a termination of Service under certain circumstances. The Award Agreement shall be subject to and incorporate, by reference or otherwise, all of the applicable terms and conditions of the Plan, and also may set forth other terms and conditions applicable to the Award as determined by the Committee consistent with the limitations of the Plan. The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the Award Agreement. The Committee need not require the execution of an Award Agreement by a Participant, in which case, acceptance of the Award by the Participant shall constitute agreement by the Participant to the terms, conditions, restrictions and limitations set forth in the Plan and the Award Agreement as well as the administrative guidelines of the Company in effect from time to time. In the event of any conflict between the provisions of the Plan and any Award Agreement, the provisions of the Plan shall prevail.
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15.3 No Assignment or Transfer; Beneficiaries . Except as provided in Section 6.6 hereof or as otherwise determined by the Committee, Awards under the Plan shall not be assignable or transferable by the Participant, and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge. Notwithstanding the foregoing, in the event of the death of a Participant, except as otherwise provided by the Committee in an Award Agreement, an outstanding Award may be exercised by or shall become payable to the Participants beneficiary as determined under the Company 401(k) Retirement Plan or other applicable retirement or pension plan (the Retirement Plan ). In lieu of such determination, a Participant may, from time to time, name any beneficiary or beneficiaries to receive any benefit in case of the Participants death before the Participant receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant and will be effective only when filed by the Participant in writing (in such form or manner as may be prescribed by the Committee) with the Company during the Participants lifetime. In the absence of a valid designation under the Retirement Plan or as provided above, if no validly designated beneficiary survives the Participant or if each surviving validly designated beneficiary is legally impaired or prohibited from receiving the benefits under an Award, the Participants beneficiary shall be the legatee or legatees of such Award designated under the Participants last will or by such Participants executors, personal representatives or distributees of such Award in accordance with the Participants will or the laws of descent and distribution. The Committee may provide in the terms of an Award Agreement or in any other manner prescribed by the Committee that the Participant shall have the right to designate a beneficiary or beneficiaries who shall be entitled to any rights, payments or other benefits specified under an Award following the Participants death.
15.4 Deferrals of Payment . The Committee may in its discretion permit a Participant to defer the receipt of payment of cash or delivery of shares of Common Stock that would otherwise be due to the Participant by virtue of the exercise of a right or the satisfaction of vesting or other conditions with respect to an Award; provided , however , that such discretion shall not apply in the case of a Stock Option or Stock Appreciation Right. If any such deferral is to be permitted by the Committee, the Committee shall establish rules and procedures relating to such deferral in a manner intended to comply with the requirements of Section 409A of the Code, including, without limitation, the time when an election to defer may be made, the time period of the deferral and the events that would result in payment of the deferred amount, the interest or other earnings attributable to the deferral and the method of funding, if any, attributable to the deferred amount.
15.5 No Right to Employment or Continued Service . Nothing in the Plan, in the grant of any Award or in any Award Agreement shall confer upon any Eligible Person or any Participant any right to continue in the Service of the Company or any of its Subsidiaries or interfere in any way with the right of the Company or any of its Subsidiaries to terminate the employment or other service relationship of an Eligible Person or a Participant for any reason or no reason at any time.
15.6 Rights as Stockholder . A Participant shall have no rights as a holder of shares of Common Stock with respect to any unissued securities covered by an Award until the date the Participant becomes the holder of record of such securities. Except as provided in Section 4.5 hereof, no adjustment or other provision shall be made for dividends or other stockholder rights, except to the extent that the Award Agreement provides for dividend payments or dividend equivalent rights. The Committee may determine in its discretion the manner of delivery of
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Common Stock to be issued under the Plan, which may be by delivery of stock certificates, electronic account entry into new or existing accounts or any other means as the Committee, in its discretion, deems appropriate. The Committee may require that the stock certificates (if any) be held in escrow by the Company for any shares of Common Stock or cause the shares to be legended in order to comply with the securities laws or other applicable restrictions or should the shares of Common Stock be represented by book or electronic account entry rather than a certificate, the Committee may take such steps to restrict transfer of the shares of Common Stock as the Committee considers necessary or advisable.
15.7 Trading Policy and Other Restrictions . Transactions involving Awards under the Plan shall be subject to the Companys Insider Trading and Regulation FD Policy and other restrictions, terms and conditions, to the extent established by the Committee or by applicable law, including any other applicable policies set by the Committee, from time to time.
15.8 Section 409A Compliance . To the extent applicable, it is intended that the Plan and all Awards hereunder comply with, or be exempt from, the requirements of Section 409A of the Code and the Treasury Regulations and other guidance issued thereunder, and that the Plan and all Award Agreements shall be interpreted and applied by the Committee in a manner consistent with this intent in order to avoid the imposition of any additional tax under Section 409A of the Code. In the event that any (i) provision of the Plan or an Award Agreement, (ii) Award, payment, transaction or (iii) other action or arrangement contemplated by the provisions of the Plan is determined by the Committee to not comply with the applicable requirements of Section 409A of the Code and the Treasury Regulations and other guidance issued thereunder, the Committee shall have the authority to take such actions and to make such changes to the Plan or an Award Agreement as the Committee deems necessary to comply with such requirements; provided , however , that no such action shall adversely affect any outstanding Award without the consent of the affected Participant. No payment that constitutes deferred compensation under Section 409A of the Code that would otherwise be made under the Plan or an Award Agreement upon a termination of Service will be made or provided unless and until such termination is also a separation from service, as determined in accordance with Section 409A of the Code. Notwithstanding the foregoing or anything elsewhere in the Plan or an Award Agreement to the contrary, if a Participant is a specified employee as defined in Section 409A of the Code at the time of termination of Service with respect to an Award, then solely to the extent necessary to avoid the imposition of any additional tax under Section 409A of the Code, the commencement of any payments or benefits under the Award shall be deferred until the date that is six (6) months plus one (1) day following the date of the Participants termination of Service or, if earlier, the Participants death (or such other period as required to comply with Section 409A). In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on a Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.
15.9 Securities Law Compliance . No shares of Common Stock will be issued or transferred pursuant to an Award unless and until all then applicable requirements imposed by Federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the shares of Common Stock may be listed, have been fully met. As a condition precedent to the issuance of shares of Common Stock pursuant to the grant or exercise of an Award, the Company may require the Participant to take
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any reasonable action that the Company determines is necessary or advisable to meet such requirements. The Committee may impose such conditions on any shares of Common Stock issuable under the Plan as it may deem advisable, including, without limitation, restrictions under the Securities Act under the requirements of any exchange upon which such shares of the same class are then listed, and under any blue sky or other securities laws applicable to such shares. The Committee may also require the Participant to represent and warrant at the time of issuance or transfer that the shares of Common Stock are being acquired solely for investment purposes and without any current intention to sell or distribute such shares.
15.10 Substitute Awards in Corporate Transactions . Nothing contained in the Plan shall be construed to limit the right of the Committee to grant Awards under the Plan in connection with the acquisition, whether by purchase, merger, consolidation or other corporate transaction, of the business or assets of any corporation or other entity. Without limiting the foregoing, the Committee may grant Awards under the Plan to an employee or director of another corporation who becomes an Eligible Person by reason of any such corporate transaction in substitution for awards previously granted by such corporation or entity to such person. The terms and conditions of the substitute Awards may vary from the terms and conditions that would otherwise be required by the Plan solely to the extent the Committee deems necessary for such purpose. Any such substitute awards shall not reduce the Share Reserve; provided , however , that such treatment is permitted by applicable law and the listing requirements of the NASDAQ or other exchange or securities market on which the Common Stock is listed.
15.11 Tax Withholding . The Participant shall be responsible for payment of any taxes or similar charges required by law to be paid or withheld from an Award or an amount paid in satisfaction of an Award. Any required withholdings shall be paid by the Participant on or prior to the payment or other event that results in taxable income in respect of an Award. The Award Agreement may specify the manner in which the withholding obligation shall be satisfied with respect to the particular type of Award, which may include permitting the Participant to elect to satisfy the withholding obligation by tendering shares of Common Stock to the Company or having the Company withhold a number of shares of Common Stock having a value equal to the minimum statutory tax or as otherwise specified in an Award Agreement, or similar charge required to be paid or withheld.
15.12 Unfunded Plan . The adoption of the Plan and any reservation of shares of Common Stock or cash amounts by the Company to discharge its obligations hereunder shall not be deemed to create a trust or other funded arrangement. Except upon the issuance of shares of Common Stock pursuant to an Award, any rights of a Participant under the Plan shall be those of a general unsecured creditor of the Company, and neither a Participant nor the Participants permitted transferees or estate shall have any other interest in any assets of the Company by virtue of the Plan. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Companys creditors or otherwise, to discharge its obligations under the Plan.
15.13 Other Compensation and Benefit Plans . The adoption of the Plan shall not affect any other share incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of share incentive or other compensation or benefit program for employees of the Company or any
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Subsidiary. The amount of any compensation deemed to be received by a Participant pursuant to an Award shall not constitute includable compensation for purposes of determining the amount of benefits to which a Participant is entitled under any other compensation or benefit plan or program of the Company or a Subsidiary, including, without limitation, under any pension or severance benefits plan, except to the extent specifically provided by the terms of any such plan.
15.14 Plan Binding on Transferees . The Plan shall be binding upon the Company, its transferees and assigns, and the Participant, the Participants executor, administrator and permitted transferees and beneficiaries.
15.15 Severability . If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.
15.16 Governing Law; Jurisdiction . The Plan and all rights hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws, and to applicable federal laws. Any action to enforce any of the provisions of the Plan or any Award Agreement shall be brought in a court in the State of Texas located in Harris County or, if subject matter jurisdiction exists, in the Houston Division of the U.S. District Court for the Southern District of Texas. The Company and any Participant consent to the jurisdiction of such courts and to the service of process in any manner provided by applicable Texas or federal law. Each party irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such court and any claim that such suit, action, or proceeding brought in such court has been brought in an inconvenient forum and agrees that service of process in accordance with the foregoing sentences shall be deemed in every respect effective and valid personal service of process upon such party.
15.17 No Fractional Shares . No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional shares of Common Stock or whether such fractional shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
15.18 No Guarantees Regarding Tax Treatment . Neither the Company nor the Committee make any guarantees to any person regarding the tax treatment of Awards or payments made under the Plan. Neither the Company nor the Committee has any obligation to take any action to prevent the assessment of any tax on any person with respect to any Award under Section 409A of the Code, Section 4999 of the Code or otherwise and neither the Company nor the Committee shall have any liability to a person with respect thereto.
15.19 Data Protection . By participating in the Plan, each Participant consents to the collection, processing, transmission and storage by the Company, its Subsidiaries and any third party administrators of any data of a professional or personal nature for the purposes of administering the Plan.
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15.20 Awards to Non-U.S. Participants. To comply with the laws in countries other than the United States in which the Company or any of its Subsidiaries or affiliates operates or has employees, Non-Employee Directors or consultants, the Committee, in its sole discretion, shall have the power and authority to (i) modify the terms and conditions of any Award granted to Participants outside the United States to comply with applicable foreign laws, (ii) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals and (iii) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and procedures established under this Section 15.20 by the Committee shall be attached to this Plan document as appendices.
16. Term; Amendment and Termination; Stockholder Approval .
16.1 Term . The Plan shall be effective as of the date of its approval by the stockholders of the Company (the Effective Date ). Subject to Section 16.2 hereof, the Plan shall terminate on the tenth anniversary of the Effective Date.
16.2 Amendment and Termination . The Board may from time to time and in any respect, amend, modify, suspend or terminate the Plan; provided , however , that no amendment, modification, suspension or termination of the Plan shall materially and adversely affect any Award theretofore granted without the consent of the Participant or the permitted transferee of the Award. The Board may seek the approval of any amendment, modification, suspension or termination by the Companys stockholders to the extent it deems necessary in its discretion for purposes of compliance with Section 162(m) or Section 422 of the Code or for any other purpose, and shall seek such approval to the extent it deems necessary in its discretion to comply with applicable law or listing requirements of the NASDAQ or other exchange or securities market. Notwithstanding the foregoing, the Board shall have broad authority to amend the Plan or any Award under the Plan without the consent of a Participant to the extent it deems necessary or desirable in its discretion to comply with, take into account changes in, or interpretations of, applicable tax laws, securities laws, employment laws, accounting rules and other applicable laws, rules and regulations.
16.3 Re-Approval of Performance Criteria . At the discretion of the Board, for purposes of compliance with Section 162(m) of the Code, the Company may seek approval by the Companys stockholders of the Performance Criteria (or other designated performance goals) and such other provisions as determined by the Board no later than the annual general meeting of stockholders in the third year following the year in which an initial public offering first occurs.
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Exhibit 4.4
P IONEER S UPER H OLDINGS , I NC .
2012 E QUITY I NCENTIVE P LAN
Article 1. Establishment & Purpose
1.1 Establishment . Pioneer Super Holdings, Inc. (the Company ), hereby establishes the 2012 Equity Incentive Plan (the Plan ) as set forth herein.
1.2 Purpose of the Plan . The purpose of the Plan is to attract, retain and motivate the officers, directors, employees and consultants of the Company and its Subsidiaries and Affiliates, and to promote the success of the Companys business by providing them with appropriate incentives and rewards either through a proprietary interest in the long-term success of the Company and/or compensation based on fulfilling certain performance goals. The Plan is a compensatory benefit plan within the meaning of Rule 701 under the Securities Act of 1933 (the Securities Act ), as amended, and all Awards granted under the Plan are intended to qualify for an exemption from the registration requirements (i) under the Securities Act, pursuant to Rule 701 of the Securities Act and (ii) under applicable state securities laws.
Article 2. Definitions
Whenever capitalized in the Plan, the following terms shall have the meanings set forth below (unless otherwise specified).
2.1 Affiliate means, with respect to any specified Person, any other Person which, directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling , controlled by and under common control with ), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided , however, that, for purposes of the Plan, the Company and its Subsidiaries shall not be an Affiliate of any Stockholder or of any Stockholders Affiliates; and provided , further, that the natural persons designated by Advent International Corp. as operating partners shall not be Affiliates of any Advent Stockholder. Unless otherwise specifically indicated, when used herein the term Affiliate shall refer to an Affiliate of the Company.
2.2 Award means any Option, Stock Appreciation Right, Restricted Stock, Dividend Equivalent or Other Stock-Based Award that is granted under the Plan.
2.3 Award Agreement means either (a) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan, or (b) a written statement signed by an authorized officer of the Company to a Participant describing the terms and provisions of the actual grant of such Award.
2.4 Board means the Board of Directors of the Company.
2.5 Cause means Cause as defined in such Participants employment agreement with the Company or its Subsidiaries or, if such Participant does not have an employment agreement with the Company, its Affiliates or its Subsidiaries, Cause means: (a) a breach of such Participants covenants under such Participants Award Agreement or any other agreements between the Participant and the Company or its Subsidiaries and, if susceptible to cure, such breach shall not have been cured within ten (10) days after written notice to the Participant; provided , that, without limitation, a breach of any of the
Participants confidentiality, non-competition, non-solicitation or non-disparagement covenants contained in any agreement with the Company or its Subsidiaries shall not be subject to cure; (2) the commission by such Participant of, or the plea of nolo contendere by such Participant with respect to, a felony, a crime involving moral turpitude, or any act or omission involving dishonesty or fraud with respect to the Company or its Subsidiaries or any act or omission causing material harm to the standing or reputation of the Company or any of its members or Subsidiaries; (3) any act or omission by the Participant that causes the Company or any of its Subsidiaries to violate a local, state, federal, tribal or any other applicable statute, regulation or law; (4) the Participants negligence or willful misconduct in the conduct or management of the Company or its Subsidiaries; (5) the Participants misappropriation of the Companys or any of its Subsidiarys assets or business opportunities; (6) the Participants failure to comply with the reasonable and lawful directives of the Board; (7) the Participants misrepresentation to the Board of, or willful failure to disclose to the Board, information material to the Company, its business or its operations; or (7) the use of illegal drugs, or the abuse of legal drugs or alcohol in any manner which adversely affects such Participants ability to perform such Participants duties to the Company or any of its Subsidiaries.
2.6 Code means the U.S. Internal Revenue Code of 1986, as amended from time to time.
2.7 Committee means the Board, or any committee designated by the Board to administer the Plan in accordance with Article 3 of the Plan.
2.8 Company Sale means (a) any transaction or series of related transactions in which any Person or group of Persons other than the Advent Stockholders (as defined in the Stockholders Agreement) or their Affiliates shall (i) directly or indirectly, acquire, whether by purchase, exchange, tender offer, merger, consolidation, recapitalization or otherwise, or (ii) otherwise be the owner of (as a result of a redemption of Shares or otherwise), Shares or other equity in a successor entity (by merger, consolidation or otherwise) such that following such transaction or transactions, such Person or group of Persons and their respective Affiliates beneficially own fifty percent (50%) or more of the voting power at elections for the Board or any successor entity, or (b) the sale, transfer or other disposition of all or substantially all of the Companys assets, in one or a series of related transactions; provided , however, that in no event shall a Company Sale be deemed to include (x) any transaction effected for the purpose of (i) changing, directly or indirectly, the domicile or form of organization or the organizational structure of the Company or any of its Subsidiaries or (ii) contributing assets or equity to entities controlled by the Company (or owned by the stockholders of the Company in substantially the same proportions as the stockholders own of the Company immediately prior to such contribution, or (y) an initial Public Offering (as defined in the Stockholders Agreement) or other primary issuance of Shares; provided , further, that, to the extent necessary to comply with Section 409A with respect to the payment of deferred compensation, Company Sale shall be limited to a change in control event as defined under Section 409A.
2.9 Consultant means any person (other than an Employee or a Director) who is engaged by the Company, a Subsidiary or an Affiliate to render consulting or advisory services to the Company or such Subsidiary or Affiliate.
2.10 Director means a member of the Board who is not an Employee.
2.11 Dividend Equivalent means any right to a dividend equivalent granted from time to time under Article 9 of the Plan.
2.12 Effective Date means the date set forth in Section 15.15 of the Plan.
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2.13 Employee means an officer or other employee of the Company or any Subsidiary or Affiliate, including a member of the Board who is such an employee or any individual who has accepted a written offer of employment with the Company or any Subsidiary or Affiliate.
2.14 Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.
2.15 Fair Market Value means the per Share value determined as follows:
(a) | if the Shares are neither (i) immediately and freely tradable on a stock exchange or in an over-the-counter market nor (ii) otherwise liquid and can be readily be sold to the general public for cash, the fair value per share of the applicable Shares as of the applicable date on the basis of a sale of such Shares in an arms length private sale between a willing buyer and a willing seller, neither acting under compulsion. In determining such Fair Market Value, no discount shall be taken for constituting a minority interest or for the illiquidity of such Shares and no upward adjustment or discount shall be taken relating to the fact that the Shares in question are subject to the restrictions and entitled to the rights provided hereunder. Such Fair Market Value shall be determined in good faith by the Board and, to the extent applicable, in compliance with Section 409A of the Code; and |
(b) | if the Shares are (i) immediately and freely tradable on a stock exchange or in an over-the-counter market or (ii) otherwise liquid and can readily be sold to the general public for cash, the average of the daily average of the high and low sales price of such Shares for the ten (10) trading days preceding the applicable date, unless the Board determines that due to lack of trading, market disruption, trading halt or other unusual circumstance that this methodology is not appropriate, in which case, as may be determined in good faith by the Board and, to the extent applicable, in compliance with Section 409A of the Code. |
2.16 Incentive Stock Option means an Option intended to meet the requirements of an incentive stock option as defined in Section 422 of the Code and designated as an Incentive Stock Option in accordance with Article 6 of the Plan.
2.17 Nonqualified Stock Option means an Option that is not an Incentive Stock Option.
2.18 Option means any stock option granted from time to time under Article 6 of the Plan.
2.19 Option Price means the purchase price per Share subject to an Option, as determined pursuant to Section 6.2 of the Plan.
2.20 Other Stock-Based Award means any right granted under Article 10 of the Plan.
2.21 Participant means any eligible person as set forth in Section 4.1 of the Plan to whom an Award is granted.
2.22 Person means any individual, partnership, corporation, association, limited liability company, trust, joint venture, unincorporated organization or entity, or any government, governmental department or agency or political subdivision thereof.
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2.23 Restricted Stock means any Award granted under Article 8 of the Plan.
2.24 Restriction Period means the period during which Restricted Stock awarded under Article 8 of the Plan is subject to forfeiture.
2.25 Section 409A means Section 409A of the Code together with all regulations, guidance, compliance programs, and other interpretative authority thereunder.
2.26 Securities Act means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.
2.27 Service means service as an Employee, Director or Consultant.
2.28 Share means a share of common stock of the Company, par value $0.01 per share, or such other class or kind of shares or other securities resulting from the application of Article 12 of the Plan.
2.29 Stock Appreciation Right means any right granted under Article 7 of the Plan.
2.30 Stockholders Agreement means that certain Stockholders Agreement dated December 20, 2012, among the Company and its stockholders, as may be amended from time to time.
2.31 Subsidiary with respect to any entity (the parent), means, any corporation, limited liability company, company, firm, association or trust of which such parent, at the time in respect of which such term is used, (i) owns directly or indirectly more than fifty percent (50%) of the equity, membership interest or beneficial interest, on a consolidated basis, or (ii) owns directly or controls with power to vote, directly or indirectly through one or more Subsidiaries, shares of the equity, membership interest or beneficial interest having the power to elect more than fifty percent (50%) of the directors, trustees, managers or other officials having powers analogous to that of directors of a corporation. Unless otherwise specifically indicated, when used herein the term Subsidiary shall refer to a direct or indirect Subsidiary of the Company.
2.32 Ten Percent Stockholder means a person who on any given date owns, either directly or indirectly (taking into account the attribution rules contained in Section 424(d) of the Code), stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or a Subsidiary or Affiliate.
Article 3. Administration
3.1 Authority of the Committee. The Plan shall be administered by the Committee, which shall have full power to interpret and administer the Plan and Award Agreements and full authority to select the Directors, Employees and Consultants to whom Awards will be granted and determine the type and amount of Awards to be granted to each such Director, Employee or Consultant, the terms and conditions of Awards granted under the Plan and the terms of Award Agreements. Without limiting the generality of the foregoing, the Committee may, in its sole discretion, interpret, clarify, construe or resolve any ambiguity in any provision of the Plan or any Award Agreement, accelerate or waive vesting of Awards and exercisability of Awards, extend the term or period of exercisability of any Awards (subject to the requirements of Section 409A), modify the purchase price under any Award, or waive any terms or conditions applicable to any Award, subject to the limitations set forth in Section 13.2 of the Plan. Awards may, in the sole discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or its Affiliates or a company
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acquired by the Company or with which the Company combines. The Committee shall have full and exclusive discretionary power to adopt rules, forms, instruments and guidelines for administering the Plan as the Committee deems necessary or proper. All actions taken and all interpretations and determinations made by the Committee or by the Board (or any other committee or sub-committee thereof), as applicable, shall be final and binding upon the Participants, the Company and all other interested parties.
3.2 Delegation . The Committee may delegate to one or more of its members, one or more officers of the Company or any Subsidiary, and one or more agents or advisors such administrative duties or powers as it may deem advisable.
Article 4. Eligibility and Participation
4.1 Eligibility. Participants will consist of such Employees, Directors and Consultants as the Committee in its sole discretion determines and whom the Committee may designate from time to time to receive Awards under the Plan. Designation of a Participant in any year shall not require the Committee to designate such person to receive an Award in any other year or, once designated, to receive the same type or amount of Award as granted to the Participant in any other year.
4.2 Type of Awards. Awards under the Plan may be granted in any one or a combination of: (a) Options; (b) Stock Appreciation Rights; (c) Restricted Stock; (d) Dividend Equivalents and (e) Other Stock-Based Awards. Awards granted under the Plan shall be evidenced by Award Agreements (which need not be identical) that provide additional terms and conditions associated with such Awards, as determined by the Committee in its sole discretion; provided , that in the event of any conflict between the provisions of the Plan and any such Award Agreement, the provisions of the Plan shall prevail.
Article 5. Shares Subject to the Plan and Maximum Awards
5.1 | Number of Shares Available for Awards . |
(a) | Shares . Subject to adjustment as provided in this Article 5 and Article 12 of the Plan, the maximum number of Shares available for issuance to Participants pursuant to Awards under the Plan shall be 808,707 Shares. The number of Shares available for granting Incentive Stock Options under the Plan shall not exceed 808,707 Shares, subject to adjustments provided in Article 12 hereof and subject to the provisions of Sections 422 or 424 of the Code or any successor provisions. The Shares available for issuance under the Plan may consist, in whole or in part, of authorized and unissued Shares or treasury Shares. Any Shares tendered to or withheld by the Company as part or full payment for the purchase price, Option Price or grant price of an Award or to satisfy all or part of the Companys tax withholding obligation with respect to an Award shall not be available for the issuance of additional Awards. |
(b) | Additional Shares . In the event that any outstanding Award expires, is forfeited, cancelled or otherwise terminated without consideration (i.e., Shares or cash) therefor, the Shares subject to such Award, to the extent of any such forfeiture, cancellation, expiration, or termination, shall again be available for Awards under the Plan. If the Committee authorizes the assumption under the Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, of awards granted under another plan, such assumption shall not reduce the maximum number of Shares available for issuance under the Plan. |
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Article 6. Stock Options
6.1 Grant of Options . The Committee is hereby authorized to grant Options to Participants. Each Option shall permit a Participant to purchase from the Company a stated number of Shares at an Option Price established by the Committee, subject to the terms and conditions described in this Article 6 and to such additional terms and conditions, as established by the Committee, in its sole discretion, that are consistent with the provisions of the Plan. Options shall be designated as either Incentive Stock Options or shall be Nonqualified Stock Options; provided , that Options granted to Directors and Consultants shall be Nonqualified Stock Options. An Option granted as an Incentive Stock Option shall, to the extent it fails to qualify as an Incentive Stock Option, be treated as a Nonqualified Stock Option. Neither the Committee, the Company, any of its Subsidiaries or Affiliates, nor any of their employees or representatives shall be liable to any Participant or to any other Person if it is determined that an Option intended to be an Incentive Stock Option does not qualify as an Incentive Stock Option. Options shall be evidenced by Award Agreements which shall state the number of Shares covered by such Option. Such agreements shall conform to the requirements of the Plan, and may contain such other provisions, as the Committee shall deem advisable.
6.2 Option Price . The Option Price shall be determined by the Committee at the time of grant, but shall not be less than one-hundred percent (100%) of the Fair Market Value of a Share on the date of grant. In the case of any Incentive Stock Option granted to a Ten Percent Stockholder, the Option Price shall not be less than one-hundred-ten percent (110%) of the Fair Market Value of a Share on the date of grant.
6.3 Option Term . The term of each Option shall be determined by the Committee at the time of grant and shall be stated in the Award Agreement, but in no event shall such term be greater than ten (10) years (or, in the case on an Incentive Stock Option granted to a Ten Percent Stockholder, five (5) years).
6.4 Time of Exercise . Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve as set forth in each Award Agreement, which terms and restrictions need not be the same for each grant or for each Participant.
6.5 Method of Exercise . Except as otherwise provided in an Award Agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes of this Article 6 , the exercise date of an Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date full payment is received by the Company pursuant to clauses (a), (b), (c), (d), or (e) of the following sentence (plus payment of the applicable tax withholding pursuant to Section 15.3 of the Plan). The aggregate Option Price for the Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise at the election of the Participant: (a) in cash or its equivalent (e.g., by cashiers check); (b) to the extent permitted by the Committee in its sole discretion, in Shares (whether or not previously owned by the Participant) having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee; (c) partly in cash and, to the extent permitted by the Committee, partly in such Shares (as described in (b) above); (d) to the extent permitted by the Committee, by reducing the number of Shares otherwise deliverable upon the exercise of the Option by the number of Shares having a Fair Market Value equal to the Option Price; or (e) if there is a public market for the Shares at such time, subject to such requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased. The Committee may prescribe any other method of payment that it determines to be consistent with applicable law and the purpose of the Plan.
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6.6 Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to employees of the Company or of a parent corporation or subsidiary corporation (as such terms are defined in Section 424 of the Code) at the date of grant. The aggregate Fair Market Value (generally determined as of the time the Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year (under all plans of the Company and of any parent corporation or subsidiary corporation) shall not exceed one hundred thousand dollars ($100,000). For purposes of the preceding sentence, Incentive Stock Options will be taken into account generally in the order in which they are granted. No Incentive Stock Option may be exercised later than ten (10) years after the date it is granted. Each provision of the Plan and each Award Agreement relating to an Incentive Stock Option shall be construed so that each Incentive Stock Option shall be an incentive stock option as defined in Section 422 of the Code, and any provisions of the Award Agreement thereof that cannot be so construed shall be disregarded.
Article 7. Stock Appreciation Rights
7.1 Grant of Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants, including a grant of Stock Appreciation Rights in tandem with any Option at the same time such Option is granted (a Tandem SAR ). Stock Appreciation Rights shall be evidenced by Award Agreements that shall conform to the requirements of the Plan and may contain such other provisions, as the Committee shall deem advisable. Subject to the terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of: (a) the Fair Market Value of a specified number of Shares on the date of exercise over (b) the grant price of the right as specified by the Committee on the date of the grant. Such payment may be in the form of cash, Shares, other property or any combination thereof, as the Committee shall determine in its sole discretion.
7.2 Terms of Stock Appreciation Right. Each Stock Appreciation Right grant shall be evidenced by an Award Agreement which shall state the grant price (which shall not be less than one-hundred percent (100%) of the Fair Market Value of a Share on the date of grant), term, methods of exercise, methods of settlement, and such other provisions as the Committee shall determine. No Stock Appreciation Right shall have a term of more than ten (10) years from the date of grant.
7.3 Tandem Stock Appreciation Rights and Options . A Tandem SAR shall be exercisable only to the extent that the related Option is exercisable and shall expire no later than the expiration of the related Option. Upon the exercise of all or a portion of a Tandem SAR, a Participant shall be required to forfeit the right to purchase an equivalent portion of the related Option (and, when a Share is purchased under the related Option, the Participant shall be required to forfeit an equivalent portion of the Stock Appreciation Right).
Article 8. Restricted Stock
8.1 Grant of Restricted Stock. The Committee is hereby authorized to grant Restricted Stock to Participants. An Award of Restricted Stock is a grant by the Committee of a specified number of Shares to the Participant, which Shares may be subject to forfeiture upon the occurrence of specified events. Participants shall be awarded Restricted Stock in exchange for consideration not less than the minimum consideration required by applicable law. Restricted Stock shall be evidenced by an Award Agreement, which shall conform to the requirements of the Plan and may contain such other provisions, as the Committee shall deem advisable.
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8.2 Terms of Restricted Stock Awards. Each Award Agreement evidencing a Restricted Stock grant shall specify the Restriction Period(s), the number of Shares of Restricted Stock subject to the Award, the purchase price, if any, of the Restricted Stock, the performance, employment, or other conditions (including the termination of a Participants Service whether due to death, disability or other reason) under which the Restricted Stock may become vested or may be forfeited to the Company and such other provisions as the Committee shall determine. Any Restricted Stock granted under the Plan shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates (in which case, the certificate(s) representing such Shares shall be legended as to sale, transfer, assignment, pledge or other encumbrances during the Restriction Period and deposited by the Participant, together with a stock power endorsed in blank, with the Company, to be held in escrow during the Restriction Period). At the end of the Restriction Period, the restrictions imposed hereunder and under the Award Agreement shall lapse with respect to the number of Shares of Restricted Stock as determined by the Committee, and the legend shall be removed and such number of Shares delivered to the Participant (or, where appropriate, the Participants legal representative).
8.3 Voting and Dividend Rights. Unless otherwise determined by the Committee and set forth in a Participants Award Agreement, Participants holding Restricted Stock granted hereunder shall not have the right to exercise voting rights with respect to the Restricted Stock during the Restriction Period and shall have the right to receive dividends on the Restricted Stock during the Restriction Period.
8.4 Performance Goals. The Committee may condition the grant of Restricted Stock or the expiration of the Restriction Period upon the Participants achievement of one or more performance goal(s) specified in the Award Agreement. If the Participant fails to achieve the specified performance goal(s), the Committee shall not grant the Restricted Stock to such Participant or the Participant shall forfeit the Award of Restricted Stock to the Company, as applicable, unless otherwise provided in the Participants Award Agreement.
8.5 Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of the Code concerning Restricted Stock, the Participant shall be required to promptly file a copy of such election with the Company.
Article 9. Dividend Equivalents
The Committee may grant Dividend Equivalents to Participants based on the dividends declared on Shares that are subject to any Award. The grant of Dividend Equivalents shall be treated as a separate Award. Dividend Equivalents shall be credited to a notional account maintained by the Company, as of dividend payment dates during the period between the date the Award is granted and the date the Award is exercised, vested, expired, credited or paid, as applicable. Such Dividend Equivalents shall be converted to cash or Shares by such formula and at such time and subject to such limitations as may be determined by the Committee. Dividend Equivalents granted with respect to any Option or Stock Appreciation Right shall be payable regardless of whether such Option or Stock Appreciation Right is subsequently exercised.
Article 10. Other Stock-Based Awards
The Committee, in its sole discretion, may grant Awards of Shares and Awards that are valued, in whole or in part, by reference to, or are otherwise based on the Fair Market Value of, Shares (the Other Stock-Based Awards ), including without limitation, restricted stock units and other phantom awards. Such Other Stock-Based Awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive one or more Shares (or the
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equivalent cash value of such Shares) upon the completion of a specified period of Service, the occurrence of an event, and/or the attainment of performance objectives. Other Stock-Based Awards may be granted alone or in addition to any other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee shall determine to whom and when Other Stock-Based Awards will be made, the number of Shares to be awarded under (or otherwise related to) such Other Stock-Based Awards, whether such Other Stock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares, and all other terms and conditions of such Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable).
Article 11. Compliance with Section 409A
11.1 General . The Company intends that the Plan and all Awards be construed to avoid the imposition of additional taxes, interest, and penalties pursuant to Section 409A.
11.2 Payments to Specified Employees . Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of nonqualified deferred compensation (within the meaning of Section 409A) that are otherwise required to be made under the Plan or any Award Agreement to a specified employee (as defined under Section 409A) as a result of his or her separation from service (as defined below) (other than a payment that is not subject to Section 409A) shall be delayed for the first six (6) months following such separation from service and shall instead be paid (in a manner set forth in the Award Agreement) on the date that immediately follows the end of such six (6)-month period (or, if earlier, within ten (10) business days following the date of death of the specified employee) or as soon as administratively practicable thereafter.
11.3 Separation from Service . A termination of Service shall not be deemed to have occurred for purposes of any provision of the Plan or any Award Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of Service, unless such termination is also a separation from service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. For purposes of any such provision of the Plan or any Award Agreement relating to any such payments or benefits, references to a termination, termination of employment, termination of Service, or like terms shall mean separation from service.
Article 12. Adjustments
12.1 Adjustments in Capitalization . In the event of any corporate event or transaction involving the Company, a Subsidiary and/or an Affiliate (including, but not limited to, a change in the Shares of the Company or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off, combination of Shares, exchange of Shares, dividend in kind, extraordinary cash dividend, amalgamation, or other like change in capital structure (other than normal cash dividends to stockholders of the Company), or any similar corporate event or transaction, the Committee, to prevent dilution or enlargement of Participants rights under the Plan, shall substitute or adjust, subject to compliance with Section 409A and in its sole discretion, (a) the number and kind of Shares or other securities that may be issued under the Plan or under particular forms of Awards, (b) the number and kind of Shares or other securities subject to outstanding Awards, (c) the Option Price, grant price or purchase price applicable to outstanding Awards, (d) the grant of a Dividend Equivalent, and/or (e) other value determinations applicable to the Plan or outstanding Awards.
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12.2 Company Sale . Upon the occurrence of a Company Sale after the Effective Date, unless otherwise specifically prohibited under applicable laws or by the applicable rules and regulations of any governmental agencies or national securities exchanges, or unless the Committee shall determine otherwise in the Award Agreement, the Committee is authorized (but not obligated) to make adjustments in the terms and conditions of outstanding Awards as follows (or any combination thereof): (a) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving company or corporation) or by the surviving company or corporation or its parent company or corporation; (b) substitution by the surviving company or corporation or its parent company or corporation of awards with substantially the same terms for such outstanding Awards; (c) accelerated exercisability, vesting and/or lapse of restrictions under some or all then outstanding Awards immediately prior to the occurrence of such event; (d) cancellation of all or any portion of outstanding Awards for fair value as determined in the sole discretion of the Committee; provided , that, in the case of Options and Stock Appreciation Rights, the fair value shall equal the excess, if any, of the value of the consideration to be paid in the Company Sale to holders of the same number of Shares subject to such Awards (or, if no such consideration is paid, Fair Market Value of the Shares subject to such outstanding Awards or portion thereof being canceled) over the aggregate Option Price or grant price, as applicable, with respect to such Awards or portion thereof being canceled, or if no such excess, zero; and (e) cancellation of all or any portion of outstanding unvested and/or unexercisable Awards for no consideration.
Article 13. Forfeiture of Awards Upon Termination of Service
13.1 Termination of Service for Cause . Unless otherwise provided in an Award Agreement, in the event (a) a Participants Service is terminated for Cause or (b) the Committee determines that a Participants acts or omissions constitute Cause, all outstanding Awards held by the Participant shall terminate and be forfeited without consideration, effective as of the date the Participants Service is terminated for Cause or the date the act or omission constituting Cause is determined to have occurred, as applicable.
13.2 Termination of Service Due to Death or Disability . Unless otherwise provided in an Award Agreement, in the event a Participants Service is terminated due to death or Disability (and no acts or omissions constituting Cause are determined by the Committee to have occurred): (a) all unvested Awards held by the Participant shall terminate and be forfeited without consideration, effective as of the date the Participants Service is terminated and (b) all vested Options and Stock Appreciation Rights shall terminate on the earlier of (i) one (1) year following the termination of Service and (ii) the expiration of the term of such Options and Stock Appreciation Rights.
13.3 Termination of Service for Reason Other than Cause, Death or Disability . Unless otherwise provided in an Award Agreement, in the event a Participants Service is terminated for any reason other pursuant to Section 13.1 and Section 13.2 above (and no acts or omissions constituting Cause are determined by the Committee to have occurred): (a) all unvested Awards held by the Participant shall terminate and be forfeited without consideration, effective as of the date the Participants Service is terminated and (b) all vested Options and Stock Appreciation Rights shall terminate on the earlier of (i) ninety (90) days following the termination of Service and (ii) the expiration of the term of such Options and Stock Appreciation Rights.
Article 14. Duration, Amendment, Modification, Suspension, and Termination
14.1 Duration of Plan . Unless sooner terminated as provided in Section 14.2 , the Plan shall terminate on the tenth (10th) anniversary of the Effective Date. Upon a termination of the Plan Awards shall remain outstanding in accordance with the terms set forth in each applicable Award Agreement.
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14.2 Amendment, Modification, Suspension and Termination of Plan . Subject to the terms of the Plan, the Committee may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof or any Award (or Award Agreement) hereunder at any time, in its sole discretion; provided , that, no action taken by the Committee shall adversely affect in any material respect the rights granted to any Participant under any outstanding Awards (other than pursuant to Article 11 or Article 12 , or as the Committee deems necessary to comply with applicable law, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act) without the Participants written consent.
Article 15. General Provisions
15.1 No Right to Service or Award . The granting of an Award under the Plan shall impose no obligation on the Company, any Subsidiary or any Affiliate to continue the Service of a Participant and shall not lessen or affect any right that the Company, any Subsidiary or any Affiliate may have to terminate the Service of such Participant. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committees determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).
15.2 Settlement of Awards; Fractional Shares . Each Award Agreement shall establish the form in which the Award shall be settled. The Committee shall determine in its sole discretion whether cash, Awards, other securities or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be issued, rounded, forfeited, or otherwise eliminated.
15.3 Tax Withholding . The Company shall have the power and the right to deduct or withhold automatically from any amount deliverable under the Award or otherwise, or require a Participant to remit to the Company, the minimum statutory amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan. With respect to required withholding, Participants may elect (subject to the Companys automatic withholding right set out above), subject to the approval of the Committee in its sole discretion, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction.
15.4 No Guarantees Regarding Tax Treatment . Participants (or their beneficiaries) shall be responsible for all taxes with respect to any Awards under the Plan. Notwithstanding anything contained herein to the contrary, the Committee and the Company make no guarantees to any Person regarding the tax treatment of Awards or payments made under the Plan. Neither the Committee nor the Company has any obligation to take any action to prevent the assessment of any tax on any Person with respect to any Award under Section 409A, or Section 280G or Section 457A of the Code or otherwise and none of the Company, any of its Subsidiaries or Affiliates, or any of their employees, representatives, stockholders or members shall have any liability to a Participant with respect thereto.
15.5 Non-Transferability of Awards . Unless otherwise determined by the Committee in its sole discretion or set forth in an Award Agreement, an Award shall not be transferable or assignable by the Participant except in the event of his death (subject to the applicable laws of descent and distribution) and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate. No transfer shall be permitted for value or consideration. An award exercisable after the death of a Participant may be exercised by the heirs, legatees, personal representatives or distributees of the Participant. Any permitted transfer of the Awards
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to heirs, legatees, personal representatives or distributees of the Participant shall not be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.
15.6 Conditions and Restrictions on Shares . The Committee may impose such other conditions or restrictions on any Shares received in connection with an Award as it may deem advisable or desirable. These restrictions may include, but shall not be limited to, requirements that the Participant: (a) become a signatory to the Companys then-existing stockholders agreement; (b) hold the Shares received for a specified period of time; or (c) represent and warrant in writing that the Participant is acquiring the Shares for investment and without any present intention to sell or distribute such Shares. The certificates for Shares may include any legend which the Committee deems appropriate to reflect any conditions and restrictions applicable to such Shares.
15.7 Shares Not Registered . Shares and Awards shall not be issued under the Plan unless the issuance and delivery of such Shares and any Awards comply with (or are exempt from) all applicable requirements of law, including, without limitation, the Securities Act, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Companys securities may then be traded. The Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any Shares or any Awards under the Plan, and accordingly any certificates for Shares or documents granting Awards may have an appropriate legend or statement of applicable restrictions endorsed thereon. If the Company deems it necessary to ensure that the issuance of securities under the Plan is not required to be registered under any applicable securities laws, each Participant to whom such security would be purchased or issued shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company reasonably requires.
15.8 Awards to Non-U.S. Employees or Directors . To comply with the laws in countries other than the United States in which the Company or any Subsidiary or Affiliate operates or has Employees, Directors or Consultants, the Committee, in its sole discretion, shall have the power and authority to: (a) determine which Subsidiaries or Affiliates shall be covered by the Plan; (b) determine which Employees, Directors or Consultants outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Employees, Directors or Consultants outside the United States to comply with applicable foreign laws; (d) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals; and (e) establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable.
15.9 Rights as a Stockholder . Except as otherwise provided herein or in the applicable Award Agreement, a Participant shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.
15.10 Severability . If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.
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15.11 Unfunded Plan . Participants shall have no right, title, or interest whatsoever in or to any investments that the Company or any of its Subsidiaries or Affiliates may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any of its Subsidiaries under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or a Subsidiary, as applicable. All payments to be made hereunder shall be paid from the general funds of the Company or a Subsidiary, as applicable, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts. The Plan is not subject to the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.
15.12 No Constraint on Corporate Action . Nothing in the Plan shall be construed to: (a) limit, impair, or otherwise affect the Companys or any of its Subsidiaries right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or (b) limit the right or power of the Company or any of its Subsidiaries to take any action which such entity deems to be necessary or appropriate.
15.13 Successors . All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.
15.14 Governing Law . Except as otherwise provided in any Award Agreement, the Plan and each Award Agreement and all claims or causes of action or other matters (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to the Plan or any Award Agreement or the negotiation, execution or performance of the Plan or any Award Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding any conflict or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.
15.15 Effective Date . The Plan shall be effective as of the date of adoption by the Board, which date is set forth below (the Effective Date ).
15.16 Stockholder Approval . The Plan will be submitted for approval by the stockholders of the Company within twelve (12) months of the Effective Date. Any Incentive Stock Options granted under the Plan prior to such approval of stockholders shall be effective as of the date of grant, but no such Award may be exercised or settled and no restrictions relating to any Award may lapse prior to such stockholder approval, and if stockholders fail to approve the Plan as specified hereunder, the Plan and any Award shall be terminated and cancelled without consideration.
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The Plan was duly adopted and approved by the Board by written resolution on the 21st day of December, 2012.
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Exhibit 4.5
NCS ENERGY HOLDINGS, LLC
2011 Equity Incentive Plan
1. Definitions: As used in this Plan, the following definitions shall apply:
(a) Award shall mean any equity option, equity appreciation right, restricted equity, restricted phantom equity, performance equity award or other equity-based award granted under the Plan.
(b) Company shall mean NCS Energy Holdings, LLC, a Delaware limited liability company, or any successor thereof.
(c) Discretion shall mean in the sole discretion of the Company, with no requirement whatsoever that the Company follow past practices, act in a manner consistent with past practices, or treat a Participant (as defined below) in a manner consistent with the treatment afforded other Participants with respect to the Plan.
(d) Equity option shall mean an option to purchase a specified number of Units in the Company which meets the requirements set forth in the Plan.
(e) Other equity-based award shall mean any right granted under Paragraph 17 of the Plan.
(f) Participant shall mean any individual or class of individual or an entity designated by the Company under Paragraph 5 for participation in the Plan who is or becomes (1) a member holding Units in the Company, (2) a key employee of the Company or any Subsidiary, or (3) a key consultant or advisor of the Company or any Subsidiary.
(g) Performance equity shall mean a grant of a specified number of Units in the Company upon the attainment of one or more performance goals during a performance period established by the Company, as provided in Paragraph 16.
(h) Plan shall mean this NCS Energy Holdings, LLC 2011 Equity Incentive Plan.
(i) Restricted equity shall mean a grant of a specified number of Units in the Company which is subject to restrictions against transfer, forfeiture and such other terms and conditions determined by the Company, as provided in Paragraph 15.
(j) Restricted phantom equity shall mean a grant of a right to obtain the value of a specified number of Units in the Company which is subject to restrictions against transfer, forfeiture and such other terms and conditions determined by the Company, as provided in Paragraph 15.
(k) Equity appreciation right shall mean a right to receive the appreciation in value, or a portion of the appreciation in value, of a specified number of Units in the Company, as provided in Paragraph 10.
(l) Subsidiary shall mean any corporation, limited liability company, partnership or any other entity in which the Company owns, directly or indirectly, stock or other ownership interest therein, possessing more than fifty percent (50%) of the combined voting power of all classes of stock or other ownership interest.
(m) Units shall mean the common units of membership interest in the Company.
2. Purpose of Plan : The purpose of the Plan is to provide members holding Units in the Company and key employees, consultants and advisors of the Company and its Subsidiaries with incentives to make significant and extraordinary contributions to the long-term performance and growth of the Company and its Subsidiaries, to join the interests of members holding Units in the Company and key employees, consultants and advisors with the interests of the members of the Company, and to facilitate attracting and retaining members holding Units in the Company and key employees, consultants and advisors with exceptional abilities.
3. Administration : The Plan shall be administered by the Company. Subject to the provisions of the Plan, the Company shall determine, from those who are or become eligible to be Participants under the Plan, the persons or class of persons or entities to be granted Awards, the type of Awards and the number of Units in the Company covered by Awards to be granted to each such person or class of person or entity, and the terms and conditions of any Awards. Subject to the provisions of the Plan, the Company is authorized to interpret the Plan, to promulgate, amend and rescind rules and regulations relating to the Plan and to make all other determinations necessary or advisable for its administration. Interpretation and construction of any provision of the Plan by the Company shall be final and conclusive.
4. Maximum Number of Units of Company Subject to Plan : The maximum number of common Units in the Company which may be issued pursuant to Awards granted under the Plan or with respect to which Awards may be granted under the Plan shall not exceed in the aggregate 6,184.78452 common Units in the Company (subject to adjustments as provided in this Paragraph 4). Consistent with the purpose of the Plan and with a view to avoiding over or under counting, the Company shall, in its Discretion, determine the number of Units in the Company remaining available under the Plan as a result of the grant or settlement of Awards made under the Plan. If any Units in the Company covered by an Award or to which an Award relates is forfeited, or if an Award otherwise terminates without the delivery of Units in the Company or of other consideration, then the Units in the Company covered by such Award, or to which such Award relates, or the number of Units in the Company otherwise counted against the aggregate number of Units in the Company available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be, or shall become, available for granting Awards under the Plan.
5. Participants : The Company shall determine and designate from time to time, in its Discretion, those individuals or entities who are or who become members holding Units in the Company or key employees, consultants or advisors of the Company or any Subsidiary to receive Awards. Subject to the provisions of the Plan, the Company may authorize in advance the grant of Awards to individuals or classes of individuals or entities who are not at the time of Company authorization, but who subsequently become, members holding Units in the Company or key employees, consultants or advisors of the Company or any Subsidiary; provided, however,
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that (1) for all purposes of the Plan, the date of grant of any Award made to an individual or entity pursuant to such authorization shall be no earlier than the date on which such individual or entity becomes a member holding Units in the Company or an employee, consultant or advisor of the Company or any Subsidiary, and (2) such authorization shall prescribe the principal terms or range of terms of the Awards that may be made to such individuals or classes of individuals or entities, including, without limitation, the type or types of Awards and the number or maximum number of Units in the Company to be covered by such Awards.
6. Written Agreement: Each Award granted under the Plan shall be evidenced by a written agreement between the Company and the Participant which shall contain such provisions as may be approved by the Company. Such agreements shall constitute binding contracts between the Company and the Participant, and every Participant, upon acceptance of such agreement, shall be bound by the terms and restrictions of the Plan and of such agreement. The terms of each such agreement shall be in accordance with the Plan, but the agreements may include such additional provisions and restrictions determined by the Company, provided that such additional provisions and restrictions do not violate the terms of the Plan.
7. Allotment of Units in the Company: Subject to the terms of the Plan, including, without limitation, Paragraph 4 of the Plan, the Company shall determine and fix, in its Discretion, the number or maximum number of Units in the Company with respect to which each Participant may be granted Awards. The number of Units in the Company covered by an Award shall be specified in the written agreement evidencing the Award.
8. Equity Options: Subject to the terms of the Plan, the Company, in its Discretion, may grant to a Participant an equity option to purchase a specified number of Units in the Company. In its Discretion, the Company shall establish the price at which each Unit in the Company covered by the equity option may be purchased; provided, however, that such per unit option price shall not be less than 50% of the fair market value of a Unit in the Company on the date on which such option is granted. Fair market value of a Unit in the Company, for purposes of this Paragraph 8 and for all other purposes of this Plan, shall be determined by the Company, in its Discretion.
9. Payment of Equity Option Price: At the time of the exercise in whole or in part of any equity option granted under this Plan, payment of the option price in full in cash or, with the consent of the Company, in membership interests in the Company or by a promissory note payable to the order of the Company which is acceptable to the Company, shall be made by the Participant for all of the Units in the Company so purchased. Such payment may, with the consent of the Company, also consist of a cash down payment and delivery of such a promissory note in the amount of the unpaid exercise price. In the Discretion of, and subject to such conditions as may be established by, the Company, payment of the option price may also be made by the Company retaining from the Units in the Company to be delivered upon exercise of the equity option that number of Units in the Company having a fair market value on the date of exercise equal to the option price of the Units in the Company with respect to which the Participant exercises the option. Such payment may also be made in such other manner as the Company determines is appropriate, in its Discretion. No Participant shall have any of the rights of a member in the Company including, without limitation, rights to distributions made by the Company to its members, under any equity option until payment of the option price in a manner permitted under this Paragraph 9.
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10. Equity Appreciation Rights : Subject to the terms of the Plan, the Company may grant equity appreciation rights to Participants either in conjunction with, or independently of, any equity options granted under the Plan. An equity appreciation right granted in conjunction with an equity option may be an alternative right wherein the exercise of the equity option terminates the equity appreciation right to the extent of the number of Units in the Company purchased upon exercise of the equity option and, correspondingly, the exercise of the equity appreciation right terminates the equity option to the extent of the number of Units in the Company with respect to which the equity appreciation right is exercised. Alternatively, an equity appreciation right granted in conjunction with an equity option may be an additional right wherein both the equity appreciation right and the equity option may be exercised.
Upon exercise of an equity appreciation right, a Participant shall be entitled to receive, without payment to the Company (except for applicable withholding taxes), an amount equal to the excess of or, in the Discretion of the Company, a portion of the excess of (1) the then aggregate fair market value of the number of Units in the Company with respect to which the Participant exercises the equity appreciation right, over (2) the aggregate fair market value of such number of Units in the Company at the time the equity appreciation right was granted. This amount shall be payable by the Company, in its Discretion, in cash, in Units in the Company, in other property or any combination thereof.
11. Exercise of Equity Options and Equity Appreciation Rights : Subject to the provisions of this Paragraph 11, each equity option and equity appreciation right granted under this Plan shall be exercisable at any such time or times or in any such installments as may be determined by the Company. A Participant may exercise an equity option or equity appreciation right, if then exercisable, in whole or in part, by delivery to the Company of written notice of the exercise, in such form as the Company may prescribe, accompanied, in the case of an equity option, by payment for the number of Units in the Company with respect to which the equity option is exercised as provided in Paragraph 9 (unless the Company, in its Discretion, permits a cashless form of option exercise permitted by Paragraph 9). Except as provided in Paragraph 14, equity options and equity appreciation rights may be exercised only while the Participant is a member holding Units in the Company, an employee, a consultant or an advisor, as the case may be, of the Company or a Subsidiary. Successive equity options and equity appreciation rights may be granted to the same Participant, whether or not the equity option(s) and equity appreciation right(s) previously granted to such Participant remain unexercised. A Participant may exercise an equity option or equity appreciation right, if then exercisable, notwithstanding that equity options and equity appreciation rights previously granted to such Participant remain unexercised.
12. Non-transferability and Term of Equity Options and Equity Appreciation Rights: No equity option or equity appreciation right granted under the Plan to a Participant shall be transferable by such Participant otherwise than by will, or by the laws of descent and distribution, and equity options and equity appreciation rights shall be exercisable, during the lifetime of an individual Participant, only by the Participant. Notwithstanding the foregoing, in its Discretion and subject to such terms and conditions as it may prescribe, the Company may
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permit a Participant to transfer an equity option or equity appreciation right. If not sooner terminated, each equity option and equity appreciation right granted under this Plan shall expire not more than ten (10) years from the date of the granting of such equity option or equity appreciation right.
13. Continuation of Employment: The Company may require, in its Discretion, that any Participant under the Plan to whom an equity option or an equity appreciation right shall be granted shall agree in writing as a condition of the granting of such equity option or equity appreciation right to remain a member holding Units in the Company, an employee, a consultant, or an advisor of the Company or a Subsidiary, as the case may be, for a designated minimum period from the date of the granting of such equity option or equity appreciation right as shall be fixed by the Company, and the Company may further require, in its Discretion, that any Participant agree in writing to comply with any confidentiality, non-solicitation, non-competition and non-disparagement provisions and covenants that the Company may require as a condition precedent to the exercise of an equity option or an equity appreciation right.
14. Termination of Employment: If the employment of an employee Participant terminates or if the consultancy or advisorship of a consultant or advisor Participant terminates or if the membership of a member holding Units in the Company Participant terminates (collectively referred to in this Plan as a termination of employment ), the Company may, in its Discretion, permit the exercise of equity options and equity appreciation rights granted to such Participant for a period not to extend beyond the expiration date with respect to the equity options or equity appreciation rights. In no event, however, shall an equity option or an equity appreciation right be exercisable subsequent to its expiration date. An equity option or equity appreciation right may only be exercised after a Participants termination of employment to the extent exercisable on the date of termination of employment; provided, however, that if the termination of employment is due to the Participants death, permanent disability or retirement at a retirement age permitted under the Companys or Subsidiarys retirement plan or policies, or if the termination of employment results from action by the Company or a Subsidiary without cause or from an agreement between the Company or a Subsidiary and the Participant (collectively referred to in this Plan as a qualifying termination of employment ), the Company, in its Discretion, may permit all or part of the equity options and equity appreciation rights granted to such Participant to thereupon become exercisable in full or in part.
15. Restricted Equity or Restricted Phantom Equity: Subject to the terms of the Plan, the Company may award a Participant a specified number of Units in the Company that is restricted and/or the Company may grant a Participant a phantom specified number of Units in the Company that is restricted. All such restricted equity and restricted phantom equity granted to Participants under the Plan shall be subject to the following terms and conditions (and to such other terms and conditions prescribed by the Company):
(a) At the time of each award of restricted equity or restricted phantom equity, there shall be established a restricted period therefor, which period may differ among Participants and may have different expiration dates with respect to portions of restricted equity or restricted phantom equity covered by the same award.
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(b) An actual restricted specified number of Units in the Company or a phantom restricted specified number of Units in the Company awarded to a Participant may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered during the restricted period applicable to such Award. Except for such restrictions on transfer, a Participant may (but is not required to) be provided all of the rights of a member in respect of an actual restricted specified number of Units in the Company, including, but not limited to, the right to receive distributions on such Units. A Participant shall have no ownership interest in Units in the Company with respect to which restricted phantom equity is granted; provided, however, that the Company may, in its Discretion, permit payment to such Participant of distribution equivalents on such phantom restricted equity equal to the amount of distributions, if any, which are paid on that specified number of Units in the Company with respect to which the restricted phantom equity is granted.
(c) If there is a termination of employment of a Participant, all equity or phantom equity theretofore awarded to the Participant which is still subject to the restrictions imposed by Paragraph 15(b) shall upon such termination of employment be forfeited and transferred back to the Company, without payment of any consideration by the Company; provided, however, that in the event of a qualifying termination of employment, the Company may, in its Discretion, release some or all of the equity or phantom equity from the restrictions.
(d) At the expiration of the restricted period applicable to an actual restricted specified number of Units in the Company, the Participant or the legal representative of the Participants estate shall become the outright owner of the membership interest, free of the restrictions imposed pursuant to Paragraph 15(b).
(e) At the expiration of the restricted period applicable to restricted phantom equity, or, in the Discretion of the Company, on a specified date after expiration of the restricted period applicable to the restricted phantom equity, the Company shall pay to the Participant an amount equal to the then fair market value of the actual specified number of Units in the Company with respect to which the restricted phantom equity was granted. In the Discretion of the Company, such amount may be paid in cash, in Units in the Company, other property or any combination of the foregoing. Moreover, in the Discretion of the Company, such amount may be paid in a lump sum or in installments, currently upon expiration of the restricted period or on such other specified date or on a deferred basis, with provision for the payment or crediting of a distribution equivalent or reasonable rate of interest on installment or deferred payments in the Discretion of the Company.
16. Performance Equity: The Company may grant to a Participant the right to obtain a performance-based specified number of Units in the Company subject to the following terms and conditions:
(a) The Participants right to obtain such performance equity shall be subject to attainment of one or more performance goals over a performance period prescribed by the Company.
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(b) The performance goal applicable to an award to a Participant of the right to obtain such performance equity shall be based upon free cash flow, cash flow return on investment, market share, sales, revenues, return on equity, total member return, costs, net income, working capital turnover, inventory or receivable turnover and/or margins of the Company, a Subsidiary, or a division or unit thereof, or such other business or financial criteria determined by the Company, in its Discretion. The specific targets and other details of the performance goal shall be established by the Company in its Discretion. A performance goal must, however, be objective so that a third party with knowledge of the relevant facts could determine whether the goal has been attained.
(c) The performance goal applicable to an award to a Participant of the right to obtain such performance equity shall be established by the Company in writing at any time during the period beginning on the date of the award and ending on ninety (90) days after commencement of the performance period applicable to the award; provided, however, that there must be substantial uncertainty whether a performance goal will be attained at the time it is established by the Company.
(d) The performance goal established by the Company must prescribe an objective formula or standard, that could be applied by a third party having knowledge of the relevant performance results, to compute the number of Units in the Company issuable to the Participant if the goal is attained. In the discretion of the Company, awards may be structured so that the number of Units issuable to a Participant varies based upon achievement of different performance goal targets.
(e) Unless otherwise determined by the Company in the case of a qualifying termination of employment of a Participant, a performance-based specified number of Units in the Company shall be issued to a Participant only after (1) expiration of the performance period and attainment of the performance goal applicable to the award, and (2) issuance of a written certification by the Company (including approved minutes of the meeting of the Company at which the certification is made) that the performance goal and any other material terms of the Award have been attained or satisfied.
(f) No Participant shall have any of the rights of a member of the Company in respect of a performance-based specified number of Units in the Company until the actual issuance of the interest to said Participant.
(g) In the Discretion of the Company, in lieu of settling a performance equity award by issuance of the performance-based specified number of Units in the Company to a Participant, all or a portion of the award may be settled by payment of cash or other property to the Participant in an amount or having a fair market value equal to the then fair market value of the otherwise issuable interest.
(h) Unless otherwise determined by the Company, a performance-based specified number of Units in the Company or rights therein awarded to a Participant may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered by the Participant at any time before actual issuance of the interest to the Participant.
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(i) In its Discretion, the Company may subject a performance-based specified number of Units in the Company awarded to a Participant to any other terms or conditions not inconsistent with the foregoing, including, without limitation, a requirement that the Participant remain an employee of the Company or a Subsidiary (including at or above a specified salary grade), or that the Participant remain a consultant or advisor of the Company or a Subsidiary, or that the Participant remain a member holding Units in the Company for the entire performance period applicable to the Award.
17. Other Equity-Based Awards: The Company may grant to Participants such other awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, a specified number of Units in the Company as are deemed by the Company, in its Discretion, to be consistent with the purposes of the Plan; provided, however, that such grants must comply with applicable law. Without limitation, the Company may permit a Participant to make a current, outright purchase of a specified number of Units in the Company, which interest may or may not be subject to any restrictions or conditions, for a price equal to, less than or greater than the then fair market value of the interest, with the price payable by the Participant in such form and manner and at such time as determined by the Company in its Discretion.
18. Investment purpose: If the Company, in its Discretion, determines that as a matter of law such procedure is or may be desirable, it may require a Participant, upon and as a condition to any acquisition of Units in the Company under this Plan, to execute and deliver to the Company a written statement in form satisfactory to the Company, representing and warranting that the Participants acquisition of Units in the Company shall be for such persons own account, for investment and not with a view to the resale or distribution of such Units and that any subsequent offer for sale or sale of any such interest shall be made either pursuant to (1) a Registration Statement on an appropriate form under the Securities Act of 1933, as amended (the Securities Act ), which Registration Statement has become effective and is current with respect to the Units being offered and sold, or (2) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale or sale of such interest, obtain a favorable written opinion from counsel for or approved by the Company as to the availability of such exemption.
19. Rights to Continued Employment: Nothing contained in the Plan or in any Award granted pursuant to the Plan, nor any action taken by the Company under this Plan, shall confer upon any Participant any right with respect to continuation of employment or service as an employee, consultant, or advisor of the Company or a Subsidiary or continuation of membership as a holder of Units in the Company nor interfere in any way with the right of the Company or a Subsidiary to terminate such persons employment, service or membership at any time with or without cause.
20. Withholding Payments: If, upon the grant, exercise, release of restrictions or settlement of or in respect of an Award, or upon any other event or transaction under or relating to the Plan, there shall be payable by the Company or a Subsidiary any amount for income or employment tax withholding, in the Companys Discretion, either the Company shall appropriately reduce the amount of the Units in the Company or the cash or other property to be paid to the Participant or the Participant shall pay such amount to the Company or Subsidiary to enable it to pay or to reimburse it for paying such income or employment tax withholding. The Company may, in its Discretion, permit Participants to satisfy such withholding obligations, in whole or in part, by
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electing to have the amount of the Units in the Company delivered or deliverable by the Company in respect of an Award appropriately reduced, or by electing to tender an appropriate portion of the Units in the Company back to the Company subsequent to receipt of such interest in respect of an Award. The Company or any of its Subsidiaries shall also have the right to withhold the amount of such taxes from any other sums or property due or to become due from the Company or any of its Subsidiaries to the Participant upon such terms and conditions as the Company shall prescribe. The Company may also defer issuance of Units in the Company under the Plan until payment by the Participant to the Company or any of its Subsidiaries of the amount of any such tax. The Company may make such other arrangements with respect to income or employment tax withholding as it shall determine.
21. Change in Control: Notwithstanding any other provision of the Plan or any provision of a grant or award agreement, in the event the Company determines that there has been or will be a change in control of the Company or of any Subsidiary, the Company may, without the consent of the holder, provide for any treatment of outstanding Awards which it determines, in its Discretion, to be appropriate. Such treatment may include, without limitation, acceleration of vesting of equity options and equity appreciation rights, release of restrictions applicable to restricted equity or restricted phantom equity, or deeming performance-based equity awards to have been earned. In determining whether there has been or will be a change in control of the Company or of any Subsidiary, the Company may utilize a definition it deems appropriate of a change in control, including any such definition contained in any existing agreement between the Company or a Subsidiary and one of its senior executives.
22. Effectiveness of Plan: The Plan shall be effective on the date the Company adopts the Plan, provided that, if required by applicable federal or state law, the members of the Company approve the Plan within twelve (12) months of that date. If member approval of the Plan is required by applicable federal or state law, Awards may be granted prior to such member approval, but each such Award shall be subject to member approval of the Plan. Without limitation, no equity option or equity appreciation right may be exercised and no membership interest in the Company underlying any performance-based equity or other equity-based award may be issued prior to member approval required by applicable federal or state law, and any restricted equity or restricted phantom equity awarded are subject to forfeiture if such member approval is not obtained.
23. Termination, Duration and Amendments of Plan: The Plan may be abandoned or terminated at any time by the Company. Unless sooner terminated by the Company, the Plan shall terminate on the date ten (10) years after its adoption by the Company, and no Awards may be granted after such termination. The termination of the Plan shall not affect the validity of any Award outstanding on the date of termination.
For the purpose of conforming to any changes in applicable law or governmental regulations, or for any other lawful purpose, the Company shall have the right, without approval of the members of the Company, to amend or revise the terms of the Plan at any time; provided, however, that no such amendment or revision shall (1) with respect to the Plan, increase the maximum specified number of Units in the Company in the aggregate which are subject to the Plan, materially change the class of persons eligible to be Participants under the Plan, or materially increase the
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benefits accruing to Participants under the Plan, without approval or ratification of the members of the Company; or (2) with respect to an Award previously granted under the Plan, except as otherwise specifically provided in the Plan, alter or impair any such Award without the consent of the holder of such Award.
24. Section 409A of the Internal Revenue Code: It is intended that Awards granted under the Plan either be excluded from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code), and the guidance and regulations issued thereunder and, accordingly, to the maximum extent permitted, the Plan and agreements granting Awards shall be interpreted consistent with such intent. In the event that any Award is subject to but fails to comply with Code Section 409A, the Company may revise the terms of the grant to correct such noncompliance to the extent permitted under any guidance, procedure or other method promulgated by the Internal Revenue Service now or in the future or otherwise available that provides for such correction as a means to avoid or mitigate any taxes, interest or penalties that would otherwise be incurred by the Participant on account of such noncompliance. Provided, however, that in no event whatsoever shall the Company be liable for any additional tax, interest or penalty imposed or other detriment suffered by a Participant under Code Section 409A or damages for failing to comply with Code Section 409A.
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Exhibit 5.1
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767 Fifth Avenue
New York, NY 10153-0119 +1 212 310 8000 tel +1 212 310 8007 fax |
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April 27, 2017 |
NCS Multistage Holdings, Inc.
19450 State Highway 249
Suite 200
Houston, TX 77070
Ladies and Gentlemen:
We have acted as counsel to NCS Multistage, Inc., a Delaware corporation (the Company), in connection with the preparation and filing with the Securities and Exchange Commission of the Companys Registration Statement on Form S-8 (the Registration Statement), under the Securities Act of 1933, as amended, relating to the registration of the offer, issuance and sale by the Company of up to 4,532,523 shares of common stock, par value $0.01 per share, of the Company (the 2017 Plan Shares), which may be issued pursuant to the NCS Multistage Holdings, Inc. 2017 Equity Incentive Plan (the 2017 Plan), which is filed as Exhibit 4.1 to the Registration Statement, up to 2,463,501 shares of common stock, par value $0.01 per share, of the Company (the 2012 Plan Shares), which may be issued pursuant to the NCS Multistage Holdings, Inc. (f/k/a Pioneer Super Holdings, Inc.) 2012 Equity Incentive Plan (the 2012 Plan), which is filed as Exhibit 4.2 to the Registration Statement and up to 649,047 shares of common stock, par value $0.01 per share, of the Company (the 2011 Plan Shares and together with the 2012 Plan Shares and 2017 Plan Shares, the Shares), which may be issued pursuant to the Pioneer NCS Energy Holdco, LLC (f/k/a NCS Energy Holdings, LLC) 2011 Equity Incentive Plan (the 2011 Plan and together with the 2012 Plan and 2017 Plan, the Plans) which is filed as Exhibit 4.3 to the Registration Statement.
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of (i) the Amended and Restated Certificate of Incorporation of the Company; (ii) the Amended and Restated Bylaws of the Company; (iii) the 2017 Plan; (iv) the 2012 Plan, (v) the 2011 Plan, (vi) the Registration Statement; and (vii) such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies, and the authenticity of the originals of such latter documents. As to all questions of fact material to this opinion that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company.
April 27, 2017 Page 2 |
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Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that the Shares, when issued and delivered upon the receipt of consideration constituting lawful consideration under Delaware law in accordance with the Plans, will be validly issued, fully paid and non-assessable.
The opinions expressed herein are limited to the corporate laws of the State of Delaware and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction.
We hereby consent to the filing of this letter as an exhibit to the Registration Statement and any reference to our firm in the Registration Statement. In giving such consent we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated March 9, 2017 relating to the financial statements, except for the effect of the stock split described in Note 17 to the consolidated financial statements, for which the date is April 17, 2017 relating to the consolidated financial statements of NCS Multistage Holdings, Inc., which appears in Amendment No. 2 to the Registration Statement on Form S-1 (No. 333-216580). We also consent to the reference to us under the heading Experts in Amendment No. 2 to the Registration Statement on Form S-1 (No. 333-216580).
/s/ PricewaterhouseCoopers LLP
Houston, Texas
April 27, 2017