Exhibit 10.1
CONCHO RESOURCES INC.
2015 STOCK INCENTIVE PLAN
I.
PURPOSE OF THE STOCK INCENTIVE
PLAN; PRIOR Plans
The purpose of the
CONCHO RESOURCES INC.
2015 STOCK INCENTIVE PLAN
(the “Stock Incentive Plan”) is to provide a
means through which
CONCHO RESOURCES INC.
, a Delaware corporation (the
“Company”), and its Affiliates may attract and retain able persons to serve as
Directors or Consultants or to enter the employ of the Company and its
Affiliates and to provide a means whereby those individuals upon whom the
responsibilities of the successful administration and management of the Company
and its Affiliates rest, and whose present and potential contributions to the
Company and its Affiliates are of importance, can acquire and maintain stock
ownership or other awards, thereby strengthening their concern for the welfare
of the Company and its Affiliates and their desire to remain employed by, or
continue providing services to, the Company and its Affiliates. A further
purpose of the Stock Incentive Plan is to provide such individuals with
additional incentive and reward opportunities designed to enhance the
profitable growth of the Company and its Affiliates. Accordingly, the Stock
Incentive Plan provides for granting Incentive Stock Options, Options that do
not constitute Incentive Stock Options, Restricted Stock Awards, Performance
Awards, or any combination of the foregoing, as is best suited to the
circumstances of the particular employee, Consultant, or Director as provided
herein.
The Stock Incentive Plan as set forth herein
constitutes an amendment and restatement of the Company’s 2006 Stock Incentive
Plan as amended and restated effective as of April 19, 2012 (the “Prior
Plan”). The Prior Plan constituted an amendment and restatement of the Company’s
2006 Stock Incentive Plan as originally adopted in 2006 (the “2006 Plan”),
which originally adopted plan constituted an amendment and restatement of the
Concho Equity Holdings Corp. 2004 Stock Option Plan (the “2004 Plan”). Except
as provided in the following sentence, the Stock Incentive Plan shall supersede
and replace in its entirety the Prior Plan. Notwithstanding any provisions
herein to the contrary, (a) each stock option granted under the 2004 Plan
prior to June 1, 2006, shall be subject to the terms and provisions
applicable to such stock option under the 2004 Plan, as in effect immediately
prior to June 1, 2006, subject to adjustments in the number and class of shares
of capital stock subject to each such stock option, and in the exercise price
thereof, in connection with the Company’s assumption of the 2004 Plan and such
stock option, as provided in the 2006 Plan, and (b) each other award
granted under the Prior Plan prior to the Effective Date shall be subject to
the terms and provisions applicable to such award under the Prior Plan as in
effect immediately prior to the Effective Date, except that any such award that
is an Option shall also be subject to the provisions of Paragraph VII(f) of the
Plan.
II.
DEFINITIONS
The following definitions shall be applicable
throughout the Stock Incentive Plan unless specifically modified by any
paragraph:
“Affiliate”
means
any corporation, partnership, limited liability company or partnership,
association, trust, or other organization which, directly or indirectly,
controls, is controlled by, or is under common control with, the Company. For
purposes of the preceding sentence, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”), as used
with respect to any entity or organization, shall mean the possession, directly
or indirectly, of the power (i) to vote more than 50% of the securities having
ordinary voting power for the election of directors of the controlled entity or
organization or (ii) to direct or cause the direction of the management and
policies of the controlled entity or organization, whether through the
ownership of voting securities or by contract or otherwise.
“Award”
means, individually or
collectively, any Option, Restricted Stock Award, or Performance Award.
“Board”
means the Board of
Directors of the Company.
“Code”
means the Internal
Revenue Code of 1986, as amended. Reference in the Stock Incentive Plan to any
section of the Code shall be deemed to include any amendments or successor
provisions to such section and any regulations under such section.
“Committee”
means a committee of
the Board that is selected by the Board as provided in Paragraph IV(a).
“Common Stock”
means the common
stock, par value $0.001 per share, of the Company, or any security into which
such common stock may be changed by reason of any transaction or event of the
type described in Paragraph X.
“Company”
means Concho Resources
Inc., a Delaware corporation.
“Consultant”
means any person
who is not an employee or a Director and who is providing advisory or
consulting services to the Company or any Affiliate.
“Corporate Change”
shall have
the meaning assigned to such term in Paragraph X(c) of the Stock Incentive
Plan.
“Director”
means an individual
who is a member of the Board.
“Effective Date”
means April 14,
2015.
An
“employee”
means any person
(including a Director) in an employment relationship with the Company or any
Affiliate.
“Exchange Act”
means the
Securities Exchange Act of 1934, as amended.
“Fair Market Value”
means, as of
any specified date, the mean of the high and low sales prices of the Common
Stock, if the Common Stock is listed on a national stock exchange registered
under section 6(a) of the Exchange Act, reported on the stock exchange
composite tape on that date (or such other reporting service approved by the
Committee); or, if no prices are reported on that date, on the last preceding
date on which such prices of the Common Stock are
so
reported. If the Common Stock is traded over the counter at the time a
determination of its fair market value is required to be made hereunder, its
fair market value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of Common Stock on the
most recent date on which Common Stock was publicly traded. In the event
Common Stock is not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its fair market value shall
be made by the Committee in such manner as it deems appropriate and as is
consistent with the requirements of section 409A of the Code.
“Incentive Stock Option”
means
an incentive stock option within the meaning of section 422 of the Code.
“Option”
means an Award granted
under Paragraph VII of the Stock Incentive Plan and includes both Incentive
Stock Options to purchase Common Stock and Options that do not constitute
Incentive Stock Options to purchase Common Stock.
“Option Agreement”
means a
written agreement between the Company and a Participant with respect to an
Option.
“Participant”
means an employee, Consultant,
or Director who has been granted an
Award.
“Performance Award”
means an
Award granted under Paragraph IX of the Stock Incentive Plan.
“Performance Award Agreement”
means
a written agreement between the Company and a Participant with respect to a
Performance Award.
“Performance
Measure”
means one or more
performance measures established by the Committee that are based on (i) the
price of a share of Common Stock, (ii) earnings per share, (iii) market
share, (iv) revenues or sales, (v) net income or net income margin
(before or after taxes), (vi) cash flow, cash flow from operations or
return on investment, (vii) earnings or earnings margin before or after
interest, taxes, depreciation, amortization, exploration and/or abandonment
costs, (viii) economic value added, (ix) return on capital, assets,
net assets or equity, (x) operating income, operating income margin or
operating margin, (xi) debt level or debt reduction, (xii) cost
reduction targets, (xiii) the amount of oil and/or gas reserves, (xiv) oil
and/or gas reserve additions and/or replacements, (xv) costs of finding and/or
developing oil and/or gas reserves, (xvi) oil and/or gas replacement ratios,
(xvii) oil and/or gas production or production growth, (xviii) total
stockholders’ return, (xix) capital expenditures, (xx) lease operating
expenses, (xxi) general and administrative expenses, (xxii) net asset value,
(xxiii) operating costs, or (xxiv) any combination of the foregoing. The
performance measures described in the preceding sentence may be absolute,
relative to one or more other companies, relative to one or more indexes, or
measured by reference to the Company alone, one or more business units or
Affiliates of the Company alone, or the Company together with one or more of
its business units or Affiliates. In addition, subject to any limitations
under section 162(m) of the Code, such performance measures may be subject
to adjustment by the Committee for
changes in
accounting principles, to satisfy regulatory requirements and other specified
extraordinary, unusual or infrequent items or events.
“Restricted Stock Agreement”
means
a written agreement between the Company and a Participant with respect to a
Restricted Stock Award.
“Restricted Stock Award”
means
an Award granted under Paragraph VIII of the Stock Incentive Plan.
“Rule 16b-3”
means Securities
Exchange Commission Rule 16b-3 promulgated under the Exchange Act, as such may
be amended from time to time, and any successor rule, regulation, or statute
fulfilling the same or a similar function.
“Stock Incentive Plan”
means the
Concho Resources Inc. 2015 Stock Incentive Plan, as amended from time to time.
III.
EFFECTIVE DATE AND DURATION OF
THE STOCK INCENTIVE PLAN
This amendment and restatement of the Stock
Incentive Plan shall be effective as of the Effective Date, provided this
amendment and restatement is approved by the stockholders of the Company at the
2015 annual meeting of the Company’s stockholders. If this amendment and restatement
is not so approved by the stockholders, then this amendment and restatement
shall be void
ab initio
, and the Stock Incentive Plan shall continue in
effect as if this amendment and restatement had not occurred, and any awards
previously granted under the Stock Incentive Plan shall continue in effect
under the terms of the grant; provided, further, that thereafter awards may
continue to be granted pursuant to the terms of the Stock Incentive Plan, as in
effect prior to this amendment and restatement and as may be otherwise amended
hereafter. No further Awards may be granted under the Stock Incentive Plan
after 10 years from the Effective Date. The Stock Incentive Plan shall remain
in effect until all Options granted under the Stock Incentive Plan have been
exercised or expired, all Restricted Stock Awards granted under the Stock
Incentive Plan have vested or been forfeited, and all Performance Awards have
been satisfied or expired.
IV.
ADMINISTRATION
(a)
Composition of Committee
. The Stock Incentive
Plan shall be administered by a committee of, and appointed by, the Board that
shall be comprised solely of two or more Directors who are both (i) outside
Directors (within the meaning of section 162(m) of the Code and applicable
interpretive authority thereunder) and (ii) non-employee Directors (within the
meaning of Rule 16b-3).
(b)
Powers
. Subject to the express provisions of
the Stock Incentive Plan, the Committee shall have authority, in its
discretion, to determine which employees, Consultants, or Directors shall
receive an Award, the time or times when such Award shall be made, the type of
Award that shall be made, the number of shares of Common Stock to be subject to
each Option or Restricted Stock Award, and the number of shares of Common Stock
to be subject to or the value of each Performance Award. In making such
determinations, the Committee shall take into account the nature of the
services rendered by the respective employees, Consultants, or
Directors, their present and potential contribution to the
Company’s success, and such other factors as the Committee in its sole
discretion shall deem relevant.
(c)
Additional Powers
. The Committee shall have
such additional powers as are delegated to it by the other provisions of the
Stock Incentive Plan. Subject to the express provisions of the Stock Incentive
Plan, this shall include the power to construe the Stock Incentive Plan and the
respective agreements executed hereunder, to prescribe, amend, suspend or waive
rules and regulations relating to the Stock Incentive Plan, to determine the
terms, restrictions, and provisions of the agreement relating to each Award,
including such terms, restrictions, and provisions as shall be requisite in the
judgment of the Committee to cause designated Options to qualify as Incentive
Stock Options, and to make all other determinations necessary or advisable for
administering the Stock Incentive Plan. The Committee may correct any defect
or supply any omission or reconcile any inconsistency in the Stock Incentive
Plan or in any agreement relating to an Award in the manner and to the extent
the Committee shall deem expedient to carry the Stock Incentive Plan or any
such agreement into effect. All determinations and decisions made by the
Committee on the matters referred to in this Paragraph IV and in construing the
provisions of the Stock Incentive Plan shall be conclusive.
(d)
Delegation of Authority by the Committee
.
Notwithstanding the preceding provisions of this Paragraph IV or any other
provision of the Stock Incentive Plan to the contrary, subject to the
constraints of applicable law, the Committee may from time to time, in its sole
discretion, delegate to the Chief Executive Officer of the Company the
administration (or interpretation of any provision) of the Stock Incentive
Plan, and the right to grant Awards under the Stock Incentive Plan, insofar as
such administration (and interpretation) and power to grant Awards relates to
any person who is not then subject to section 16 of the Exchange Act (including
any successor section to the same or similar effect). Any such delegation may
be effective only so long as the Chief Executive Officer of the Company is a
member of the Board, and the Committee may revoke such delegation at any time.
The Committee may put any conditions and restrictions on the powers that may be
exercised by the Chief Executive Officer of the Company upon such delegation as
the Committee determines in its sole discretion. In the event of any conflict
in a determination or interpretation under the Stock Incentive Plan as between
the Committee and the Chief Executive Officer of the Company, the determination
or interpretation, as applicable, of the Committee shall be conclusive.
V.
SHARES SUBJECT TO THE STOCK
INCENTIVE PLAN; AWARD LIMITS; GRANT OF AWARDS
(a)
Shares Subject to
the Stock Incentive Plan and Award Limits
. Subject to
adjustment in the same manner as provided in
Paragraph X with respect to shares of Common Stock subject to Options then
outstanding, the aggregate maximum number of shares of Common Stock that may be
issued under the Stock Incentive Plan, and the aggregate maximum number of
shares of Common Stock that may be issued under the Stock Incentive Plan
through Incentive Stock Options, shall not exceed 10,500,000 shares (which
number includes the number of shares of Common Stock previously issued pursuant
to an award (or made subject to an award that has not expired or been
terminated) granted under the Prior Plan, the 2006 Plan or the 2004 Plan).
Shares shall be deemed to have been issued under the Stock Incentive Plan only
to the extent actually issued and delivered pursuant to an Award. To the
extent that an Award
lapses or the rights of its holder
terminate, any shares of Common Stock subject to such Award shall again be
available for the grant of an Award under the Stock Incentive Plan. In
addition, shares issued under the Stock Incentive Plan and forfeited back to
the Stock Incentive Plan, shares surrendered in payment of the exercise price
or purchase price of an Award, and shares withheld for payment of applicable
employment taxes and/or withholding obligations associated with an Award shall
again be available for the grant of an Award under the Stock Incentive Plan.
Notwithstanding any provision in the Stock Incentive Plan to the contrary, (i)
the maximum number of shares of Common Stock that may be subject to Awards
denominated in shares of Common Stock granted under the Stock Incentive Plan to
any one individual during the period beginning on the Effective Date and ending
on the last day of the term of the Stock Incentive Plan may not exceed 50% of
the number of additional shares made subject to the Stock Incentive Plan
effective as of the Effective Date (subject to adjustment from time to time in
accordance with the provisions of the Stock Incentive Plan) and (ii) the
maximum amount of compensation that may be paid under all Performance Awards
that are not denominated in shares of Common Stock (including the Fair Market
Value of any shares of Common Stock paid in satisfaction of such Performance
Awards) granted to any one individual during any calendar year may not exceed
$15,000,000, and any payment due with respect to a Performance Award shall be
paid no later than 10 years after the date of grant of such Performance Award.
The limitations set forth in the preceding sentence shall be applied in a
manner that will permit Awards that are intended to provide “performance-based”
compensation for purposes of section 162(m) of the Code to satisfy the
requirements of such section, including, without limitation, counting against
such maximum number of shares, to the extent required under section 162(m) of
the Code and applicable interpretive authority thereunder, any shares subject
to Awards granted to employees that are canceled or repriced. In addition, and
notwithstanding any provision herein to the contrary, the aggregate grant date
fair value (computed as of the date of grant in accordance with applicable
financial accounting rules) of all Awards granted to any individual,
non-employee Director during any single calendar year beginning on or after
January 1, 2015 shall not exceed $600,000; provided, however, that such
limitation shall be (x) $900,000 in the first year an individual becomes a
non-employee Director and (y) determined without regard to grants of
Awards, if any, made to a non-employee director during any period in which such
individual was an employee or Consultant.
(b)
Grant of Awards
. The Committee may from time
to time grant Awards to one or more employees, Consultants, or Directors
determined by it to be eligible for participation in the Stock Incentive Plan
in accordance with the terms of the Stock Incentive Plan.
(c)
Stock Offered
. Subject to the limitations set
forth in Paragraph V(a), the stock to be offered pursuant to the grant of an
Award may be authorized but unissued Common Stock or Common Stock previously
issued and outstanding and reacquired by the Company. Any of such shares that
remain unissued and that are not subject to outstanding Awards at the
termination of the Stock Incentive Plan shall cease to be subject to the Stock
Incentive Plan but, until termination of the Stock Incentive Plan, the Company
shall at all times make available a sufficient number of shares to meet the
requirements of the Stock Incentive Plan. The shares of the Company’s stock to
be issued pursuant to any Award may be represented by physical stock
certificates or may be uncertificated. Notwithstanding references in the Stock
Incentive Plan to
certificates, the Company may deliver
uncertificated shares of Common Stock in connection with any Award.
VI.
ELIGIBILITY
Awards
may be granted only to persons who, at the time of grant, are employees,
Consultants, or Directors. An Award may be granted on more than one occasion
to the same person, and, subject to the limitations set forth in the Stock
Incentive Plan, such Award may include an Incentive Stock Option, an Option
that is not an Incentive Stock Option, a Restricted Stock Award, a Performance
Award, or any combination thereof.
VII.
STOCK OPTIONS
(a)
Option Period
. The term of each Option shall
be as specified by the Committee at the date of grant, but in no event shall an
Option be exercisable after the expiration of 10 years from the date of grant.
(b)
Limitations on Exercise of Option
. An Option
shall be exercisable in whole or in such installments and at such times as
determined by the Committee.
(c)
Special Limitations on Incentive Stock Options
.
An Incentive Stock Option may be granted only to an individual who is employed
by the Company or any “parent corporation” or “subsidiary corporation” (as such
terms are defined in section 424 of the Code) of the Company at the time the
Option is granted. To the extent that the aggregate fair market value
(determined at the time the respective Incentive Stock Option is granted) of
stock with respect to which Incentive Stock Options are exercisable for the
first time by an individual during any calendar year under all incentive stock
option plans of the Company and its parent and subsidiary corporations, within
the meaning of section 424 of the Code, exceeds $100,000 or such other amount
as may be prescribed under section 422 of the Code or applicable regulations or
rulings from time to time, such Incentive Stock Options shall be treated as
Options that do not constitute Incentive Stock Options. The Committee shall
determine, in accordance with applicable provisions of the Code, Treasury
regulations, and other administrative pronouncements, which of a Participant’s
Incentive Stock Options will not constitute Incentive Stock Options because of
such limitation and shall notify the Participant of such determination as soon
as practicable after such determination. No Incentive Stock Option shall be
granted to an individual if, at the time the Option is granted, such individual
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiary corporation,
within the meaning of section 422(b)(6) of the Code, unless (i) at the time
such Option is granted, the option price is at least 110% of the Fair Market
Value of the Common Stock subject to the Option and (ii) such Option by its
terms is not exercisable after the expiration of five years from the date of
grant. Except as otherwise provided in sections 421 or 422 of the Code, an
Incentive Stock Option shall not be transferable otherwise than by will or the
laws of descent and distribution and shall be exercisable during the
Participant’s lifetime only by such Participant or the Participant’s guardian
or legal representative.
(d)
Option Agreement
. Each Option shall be
evidenced by an Option Agreement in such form and containing such provisions
not inconsistent with the provisions of the Stock Incentive Plan as the
Committee from time to time shall approve, including, without
limitation, provisions to qualify an Option as an
Incentive Stock Option under section 422 of the Code. Each Option Agreement
shall specify the effect of termination of (i) employment, (ii) the consulting
or advisory relationship, or (iii) membership on the Board, as applicable, on
the exercisability of the Option. An Option Agreement may provide for the
payment of the option price, in whole or in part, by the delivery of a number
of shares of Common Stock (plus cash if necessary) having a Fair Market Value
equal to such option price. Moreover, an Option Agreement may provide for a
“cashless exercise” of the Option by establishing procedures satisfactory to
the Committee with respect thereto. The terms and conditions of the respective
Option Agreements need not be identical. The Committee may, in its sole
discretion, amend an outstanding Option Agreement from time to time in any
manner that is not inconsistent with the provisions of the Stock Incentive Plan
(including, without limitation, an amendment that accelerates the time at which
the Option, or a portion thereof, may be exercisable), provided that, except as
otherwise provided in the Stock Incentive Plan or the applicable Option
Agreement, any such amendment shall not materially reduce the rights of a
Participant without the consent of such Participant.
(e)
Option Price and Payment
. The price at which a
share of Common Stock may be purchased upon exercise of an Option shall be
determined by the Committee but, subject to the special limitations on
Incentive Stock Options set forth in Paragraph VII(c) and to adjustment as
provided in Paragraph X, such purchase price shall not be less than the Fair
Market Value of a share of Common Stock on the date such Option is granted.
The Option or portion thereof may be exercised by delivery of an irrevocable
notice of exercise to the Company, as specified by the Committee. The purchase
price of the Option or portion thereof shall be paid in full in the manner
prescribed by the Committee. Separate stock certificates shall be issued by
the Company for those shares acquired pursuant to the exercise of an Incentive
Stock Option and for those shares acquired pursuant to the exercise of any
Option that does not constitute an Incentive Stock Option.
(f)
Restrictions on Repricing of Options
. Subject
to the provisions of Paragraph X, the terms of outstanding Option Agreements
may not be amended without the approval of the stockholders of the Company so
as to (i) reduce the option price of any outstanding Options, (ii) grant
a new Option or other Award in substitution for, or upon the cancellation of,
any previously granted Option that has the effect of reducing the exercise
price thereof, (iii) exchange any Option for shares of Common Stock, cash
or other consideration when the exercise price per share of Common Stock under
such Option exceeds the Fair Market Value of the underlying shares, or
(iv) take any other action that would be considered a “repricing” of an
Option under the listing standards of the New York Stock Exchange or, if the
Common Stock is not then-listed on such exchange, to the extent applicable, on
any other national securities exchange on which the Common Stock is listed.
Subject to Paragraph X and the last sentence of Paragraph VII(d), the
Committee shall have the authority, without the approval of the stockholders of
the Company, to amend any outstanding Award to increase the per share exercise
price of any outstanding Options or to cancel and replace any outstanding
Options with the grant of Options having a per share exercise price that is
equal to or greater than the per share exercise price of the original Options.
(g)
Stockholder Rights and Privileges
. The
Participant shall be entitled to all the privileges and rights of a stockholder
only with respect to such shares of Common Stock
as
have been purchased under the Option and for which shares of stock have been
delivered to the Participant.
(h)
Options in Substitution for Options Granted by Other
Employers
. Options may be granted under the Stock Incentive Plan from
time to time in substitution for options held by individuals providing services
to corporations or other entities who become employees, Consultants, or
Directors as a result of a merger or consolidation or other business
transaction with the Company or any Affiliate.
VIII.
RESTRICTED STOCK AWARDS
(a)
Forfeiture Restrictions to be Established by the
Committee
. Shares of Common Stock that are the subject of a Restricted
Stock Award shall be subject to restrictions on transferability by the
Participant and an obligation of the Participant to forfeit and surrender the
shares to the Company under certain circumstances (the “Forfeiture
Restrictions”). The Forfeiture Restrictions shall be determined by the
Committee in its sole discretion, and the Committee may provide that the
Forfeiture Restrictions shall lapse upon (i) the attainment of one or more
Performance Measures, (ii) the Participant’s continued employment with the
Company or one of its Affiliates or continued service as a Consultant or
Director for a specified period of time, (iii) the occurrence of any event or
the satisfaction of any other condition specified by the Committee in its sole
discretion, or (iv) a combination of any of the foregoing. Each Restricted
Stock Award may have different Forfeiture Restrictions, in the discretion of
the Committee.
(b)
Other Terms and Conditions
. Unless provided
otherwise in a Restricted Stock Agreement, the Participant shall have the right
to receive dividends with respect to Common Stock subject to a Restricted Stock
Award, to vote Common Stock subject thereto, and to enjoy all other stockholder
rights, except that (i) the Participant shall not be entitled to delivery of
the stock certificate until the Forfeiture Restrictions have expired, (ii) the
Company shall retain custody of the stock until the Forfeiture Restrictions
have expired, (iii) the Participant may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of or encumber the stock until the Forfeiture
Restrictions have expired, (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement shall
result in a forfeiture of the Restricted Stock Award, and (v) with respect to
the payment of any dividend with respect to shares of Common Stock subject to a
Restricted Stock Award directly to the Participant, each such dividend shall be
paid no later than the end of the calendar year in which the dividends are paid
to stockholders of such class of shares or, if later, the fifteenth day of the
third month following the date the dividends are paid to stockholders of such
class of shares. At the time a Restricted Stock Award is granted, the
Committee may, in its sole discretion, prescribe additional terms, conditions,
or restrictions relating to Restricted Stock Awards, including, but not limited
to, rules pertaining to the termination of employment or service as a
Consultant or Director (by retirement, disability, death, or otherwise) of a
Participant prior to expiration of the Forfeitures Restrictions. Such
additional terms, conditions, or restrictions shall be set forth in a
Restricted Stock Agreement made in conjunction with the Award.
(c)
Payment for Restricted Stock
. The Committee
shall determine the amount and form of any payment for Common Stock received
pursuant to a Restricted Stock Award, provided that in the absence of such a
determination, a Participant shall not be required
to
make any payment for Common Stock received pursuant to a Restricted Stock
Award, except to the extent otherwise required by law.
(d)
Committee’s Discretion to Accelerate Vesting of
Restricted Stock Awards
. Subject to any limitations imposed under
section 162(m) of the Code, the Committee may, in its discretion and as of a
date determined by the Committee, fully vest any or all Common Stock awarded to
a Participant pursuant to a Restricted Stock Award and, upon such vesting, all
Forfeiture Restrictions applicable to such Restricted Stock Award shall
terminate as of such date. Any action by the Committee pursuant to this Subparagraph
may vary among individual Participants and may vary among the Restricted Stock
Awards held by any individual Participant.
(e)
Restricted Stock Agreements
. At the time any
Award is made under this Paragraph VIII, the Company and the Participant shall
enter into a Restricted Stock Agreement setting forth each of the matters
contemplated hereby and such other matters as the Committee may determine to be
appropriate. The terms and provisions of the respective Restricted Stock
Agreements need not be identical. Subject to the restriction set forth in the
first sentence of Subparagraph (d) above, the Committee may, in its sole
discretion, amend an outstanding Restricted Stock Agreement from time to time
in any manner that is not inconsistent with the provisions of the Stock
Incentive Plan, provided that, except as otherwise provided in the Stock
Incentive Plan or the applicable Restricted Stock Agreement, any such amendment
shall not materially reduce the rights of a Participant without the consent of
such Participant.
IX.
PERFORMANCE AWARDS
(a)
Performance Period
. The Committee shall establish, with respect to
and at the
time of each Performance Award, the number of shares of
Common Stock subject to, or the maximum value of, the Performance Award and the
performance period over which the performance applicable to the Performance
Award shall be measured.
(b)
Performance Measures
. A Performance Award
shall be awarded to a Participant contingent upon future performance of the
Company or any Affiliate, division, or department thereof under a Performance
Measure during the performance period. With respect to Performance Awards that
are intended to constitute “performance-based” compensation under section
162(m) of the Code, the Committee shall establish the initial Performance
Measures applicable to such performance within any time period required under
section 162(m) of the Code and applicable authority thereunder. The Committee,
in its sole discretion, may provide for an adjustable Performance Award value
based upon the level of achievement of Performance Measures.
(c)
Awards Criteria
. In determining the value of
Performance Awards, the Committee shall take into account a Participant’s
responsibility level, performance, potential, other Awards, and such other
considerations as it deems appropriate. The Committee, in its sole discretion,
may provide for a reduction in the value of a Participant’s Performance Award
during the performance period.
(d)
Payment
. Following the end of the performance
period, the holder of a Performance Award shall be entitled to receive payment
of an amount not exceeding the number of shares of Common Stock subject to, or
the maximum value of, the Performance Award, based on the achievement of the
Performance Measures for such performance period, as determined and certified
in writing by the Committee. Payment of a Performance Award may be made in
cash, Common Stock, or a combination thereof, as determined by the Committee.
Payment shall be made in a lump sum or in installments as prescribed by the
Committee. If a Performance Award covering shares of Common Stock is to be
paid in cash, such payment shall be based on the Fair Market Value of the
Common Stock on the payment date or such other date as may be specified by the
Committee in the Performance Award Agreement. A Participant shall not be
entitled to the privileges and rights of a stockholder with respect to a
Performance Award covering shares of Common Stock until payment has been
determined by the Committee and such shares have been delivered to the
Participant.
(e)
Termination of Award
. A Performance Award
shall terminate if the Participant does not remain continuously in the employ
of the Company and its Affiliates or does not continue to perform services as a
Consultant or a Director for the Company and its Affiliates at all times during
the applicable performance period through the payment date, except as may be
determined by the Committee.
(f)
Performance Award Agreements
. At the time any
Award is made under this Paragraph IX, the Company and the Participant shall
enter into a Performance Award Agreement setting forth each of the matters
contemplated hereby and such additional matters as the Committee may determine
to be appropriate, including, in the discretion of the Committee, the payment
of dividend equivalents on any shares of Common Stock at the time of payment of
the Performance Award (or at such other time designated by the Committee) for
the period beginning on the date of grant and ending on the date of payment of
the Performance Award (or for such other period designated by the Committee).
The terms and provisions of the respective Performance Award Agreements need
not be identical.
X.
RECAPITALIZATION OR REORGANIZATION
(a)
No Effect on Right or Power
. The existence of
the Stock Incentive Plan and the Awards granted hereunder shall not affect in
any way the right or power of the Board or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization, or other
change in the Company’s or any Affiliate’s capital structure or its business,
any merger, consolidation or other business combination of the Company or any
Affiliate, any issue of debt or equity securities ahead of or affecting Common
Stock or the rights thereof, the dissolution or liquidation of the Company or
any Affiliate, any sale, lease, exchange, or other disposition of all or any
part of its assets or business, or any other corporate act or proceeding.
(b)
Subdivision or Consolidation of Shares; Stock Dividends
.
The shares with respect to which Awards may be granted are shares of Common
Stock as presently constituted, but if, and whenever, prior to the expiration
of an Award theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Company, the
number of shares of Common Stock with respect to which
such Award may thereafter be exercised or satisfied, as applicable, (i) in the
event of an increase in the number of outstanding shares, shall be
proportionately increased, and the purchase price per share, if any, shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced, and the purchase price
per share, if any, shall be proportionately increased. Any fractional share
resulting from such adjustment shall be rounded up to the next whole share.
(c)
Recapitalizations
and Corporate Changes
. If
the
Company recapitalizes, reclassifies its capital stock or otherwise changes its
capital structure or another change or event occurs that constitutes an “equity
restructuring” pursuant to Accounting Standards Codification Topic 718,
Compensation
— Stock Compensation
, or any successor accounting standard (a
“recapitalization”), (A) the Committee shall equitably adjust the number and
class of shares of Common Stock (or other securities or property) covered by
each outstanding Award and the terms and conditions, including the exercise
price and performance criteria (if any), of such Award to equitably reflect
such recapitalization and shall adjust the number and class of shares of Common
Stock (or other securities or property) with respect to which Awards may be
granted after such recapitalization and (B) the Committee shall make a
corresponding and proportionate adjustment with respect to the maximum number
of shares of Common Stock (or other securities) that may be delivered with
respect to Awards under the Plan as provided in Paragraph V(a), the individual
Award limitations set forth in Paragraph V(a) and the class of shares of Common
Stock (or other securities) available for grant under the Plan.
If (i) the Company shall not be the surviving
entity in any merger, consolidation or other business combination or
reorganization (or survives only as a subsidiary of an entity), (ii) the
Company sells, leases, or exchanges all or substantially all of its assets to
any other person or entity, (iii) the Company is dissolved and liquidated, (iv)
any person or entity, including a “group” as contemplated by section 13(d)(3)
of the Exchange Act, acquires or gains ownership or control (including, without
limitation, the power to vote) of more than 50% of the outstanding shares of
the Company’s voting stock (based upon voting power), or (v) the individuals
who, as of the Effective Date, constitute members of the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(provided, however, that any individual becoming a director subsequent to such
date whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered for purposes of this definition as though
such individual was a member of the Incumbent Board, but excluding, for these
purposes, any such individual whose initial assumption of office as a director
occurs as a result
of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of any individual, entity
or group other than the Board) (each such event in clauses (i) through (v)
above is referred to herein as a “Corporate Change”), then (x) no sooner than
effective as of the consummation by the Company of such merger, consolidation,
combination, reorganization, sale, lease, or exchange of assets or dissolution
and liquidation or such change in the Board or (y) no later than 30 days after
a Corporate Change of the type described in clause (iv), the Committee, acting
in its sole discretion without the consent or approval of any Participant,
shall effect one or more of the following alternatives in an equitable and
appropriate manner to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Stock Incentive
Plan, which alternatives may vary among individual Participants and which may
vary among Options
held by any individual Participant:
(1) accelerate the time at which Options then outstanding may be exercised so
that such Options may be exercised in full for a limited period of time on or
before a specified date fixed by the Committee, after which specified date all
such unexercised Options and all rights of Participants thereunder shall
terminate, (2) require the mandatory surrender to the Company by all or
selected Participants of some or all of the outstanding Options held by such
Participants (irrespective of whether such Options are then exercisable under
the provisions of the Stock Incentive Plan) as of a date specified by the
Committee, in which event the Committee shall thereupon cancel such Options,
and the Company shall pay (or cause to be paid) to each Participant an amount of
cash per share equal to the excess, if any, of the amount calculated in
Subparagraph (d) below (the “Change of Control Value”) of the shares subject to
such Options over the exercise price(s) under such Options for such shares, or
(3) make such adjustments to Options then outstanding as the Committee deems
appropriate to reflect such Corporate Change and to prevent the dilution or
enlargement of rights (provided, however, that the Committee may determine in
its sole discretion that no adjustment is necessary to such Options then
outstanding), including, without limitation, adjusting such an Option to
provide that the number and class of shares of Common Stock covered by such
Option shall be adjusted so that such Option shall thereafter cover securities
of the surviving or acquiring corporation or other property (including, without
limitation, cash) as determined by the Committee in its sole discretion.
(d)
Change of Control Value
. For the purposes of
clause (2) in Subparagraph (c) above, the “Change of Control Value” shall equal
the amount determined in the following clause (i), (ii) or (iii), whichever is
applicable: (i) the per share price offered to stockholders of the Company in
any such merger, consolidation, or other business combination, reorganization,
sale of assets or dissolution and liquidation transaction, (ii) the per share
price offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place, or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to stockholders of the Company in any
transaction described in this Subparagraph (d) or Subparagraph (c) above
consists of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is other than
cash.
(e)
Other Changes in the Common Stock
. In the
event of changes in the outstanding Common Stock by reason of
recapitalizations, reorganizations, mergers,
consolidations,
combinations, split-ups, split-offs, spin-offs, exchanges, or other relevant
changes in capitalization or distributions (other than ordinary dividends) to
the holders of Common Stock occurring after the date of the grant of any Award
and not otherwise provided for by this Paragraph X, such Award and any
agreement evidencing such Award shall be subject to adjustment by the Committee
at its sole discretion as to the number and price of shares of Common Stock or
other consideration subject to such Award in an equitable and appropriate
manner so as to prevent the dilution or enlargement of the benefits or
potential benefits intended to be made available under such Award. In the
event of any such change in the outstanding Common Stock or distribution to the
holders of Common Stock, or upon the occurrence of any other event described in
this Paragraph X, the aggregate maximum number of shares available
under the Stock Incentive Plan, the aggregate maximum
number of shares that may be issued under the Stock Incentive Plan through
Incentive Stock Options, and the maximum number of shares that may be subject
to Awards granted to any one individual shall be appropriately adjusted to the
extent, if any, determined by the Committee, whose determination shall be
conclusive.
(f)
Stockholder Action
. Any adjustment provided
for in the above Subparagraphs shall be subject to any stockholder action
required by applicable law or regulation or the Company’s certificate of
incorporation or bylaws.
(g)
No Adjustments Unless Otherwise Provided
.
Except as hereinbefore expressly provided, the issuance by the Company of
shares of stock of any class or securities convertible into shares of stock of
any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
of shares of Common Stock subject to Awards theretofore granted or the purchase
price per share, if applicable.
XI.
AMENDMENT AND TERMINATION OF THE STOCK
INCENTIVE PLAN
The Board in its discretion may terminate the
Stock Incentive Plan at any time with respect to any shares of Common Stock for
which Awards have not theretofore been granted. The Board shall have the right
to alter or amend the Stock Incentive Plan or any part thereof from time to
time; provided that no change in the Stock Incentive Plan may be made that
would materially impair the rights of a Participant with respect to an Award
theretofore granted without the consent of the Participant, and provided,
further, that the Board may not, without approval of the stockholders of the
Company, (a) amend the Stock Incentive Plan to increase the aggregate maximum
number of shares that may be issued under the Stock Incentive Plan, increase
the aggregate maximum number of shares that may be issued under the Stock
Incentive Plan through Incentive Stock Options, or change the class of
individuals eligible to receive Awards under the Stock Incentive Plan, or (b)
amend or delete Paragraph VII(f).
XII.
MISCELLANEOUS
(a)
No Right to an Award
. Neither the adoption of
the Stock Incentive Plan nor any action of the Board or of the Committee shall
be deemed to give any individual any right to be
granted an Award, or any other rights hereunder except as may be
evidenced by an Award agreement duly executed on behalf of the Company, and
then only to the extent and on the terms and conditions expressly set forth
therein. The Stock Incentive Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the performance of its obligations
under any Award.
(b)
No Employment/Membership Rights Conferred
.
Nothing contained in the Stock Incentive Plan shall (i) confer upon any
employee or Consultant any right with respect to continuation of employment or
of a consulting or advisory relationship with the Company or
any Affiliate or (ii) interfere in any way with the right
of the Company or any Affiliate to terminate his or her employment or
consulting or advisory relationship at any time. Nothing contained in the
Stock Incentive Plan shall confer upon any Director any right with respect to
continuation of membership on the Board.
(c)
Other Laws; Withholding
. The Company shall not
be obligated to issue any Common Stock pursuant to any Award granted under the
Stock Incentive Plan at any time when the shares covered by such Award have not
been registered under the Securities Act of 1933, as amended, and such other
state and federal laws, rules, and regulations as the Company or the Committee
deems applicable and, in the opinion of legal counsel for the Company, there is
no exemption from the registration requirements of such laws, rules, and
regulations available for the issuance and sale of such shares. No fractional
shares of Common Stock shall be delivered, nor shall any cash in lieu of
fractional shares be paid unless otherwise determined by the Committee. Unless
other arrangements have been made that are acceptable to the Company, the Company
shall have the right to deduct or withhold, or cause to be deducted or
withheld, or to permit a Participant to elect to have deducted or withheld,
from any Award, from any payment due or transfer made under any Award or from
any compensation or other amount owing to a Participant, the amount (in cash,
Common Stock (including Common Stock that would otherwise be issued with
respect to such Award) or other property) of any applicable taxes required by
law to be withheld, to require any payments required to enable it to satisfy
its withholding obligations and to take such other action as may be necessary
in the opinion of the Company to satisfy its withholding obligations with
respect to such Award.
(d)
No Restriction on Corporate Action
. Nothing
contained in the Stock Incentive Plan shall be construed to prevent the Company
or any Affiliate from taking any action which is deemed by the Company or such
Affiliate to be appropriate or in its best interest, whether or not such action
would have an adverse effect on the Stock Incentive Plan or any Award made
under the Stock Incentive Plan. No Participant, beneficiary or other person
shall have any claim against the Company or any Affiliate as a result of any
such action.
(e)
Restrictions on Transfer
. An Award (other than
an Incentive Stock Option, which shall be subject to the transfer restrictions
set forth in Paragraph VII(c)) shall not be transferable otherwise than (i) by
will or the laws of descent and distribution, (ii) pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder, or
(iii) with the consent of the Committee.
(f)
Clawback
. Notwithstanding any provisions in
the Stock Incentive Plan to the contrary, any portion of the payments and
benefits provided under the Stock Incentive Plan or the sale of shares of
Common Stock shall be subject to a clawback or other recovery by the Company to
the extent necessary to comply with applicable law including, without
limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 or any Securities and Exchange Commission rule.
(g)
Delayed Payment Restriction
. Notwithstanding
any provision in the Stock Incentive Plan or an Award agreement to the
contrary, if any payment or benefit provided for under an Award would be
subject to additional taxes and interest under section 409A of the
Code if the Participant’s receipt of such payment or
benefit is not delayed in accordance with the requirements of section
409A(a)(2)(B)(i) of the Code, then such payment or benefit shall not be
provided to the Participant (or the Participant’s estate, if applicable) until
the earlier of (i) the date of the Participant’s death or (ii) the date that is
six months after the date of the Participant’s separation from service with the
Company.
(h)
Governing Law
.
The Stock Incentive Plan
shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to conflicts of laws principles thereof.