|
|
•
|
Elect one Class II director to serve until the 2020 Annual Meeting of Stockholders or until such director's successor is elected and qualified;
|
•
|
Approve our Second Amended and Restated 2012 Stock Incentive Plan; and
|
•
|
Ratify the appointment of KPMG LLP as our independent registered public accounting firm for
2017
.
|
|
Page
|
|
|
•
|
Elect one Class II director to serve until the 2020 Annual Meeting of Stockholders or until his successor is elected and qualified;
|
•
|
Approve our Second Amended and Restated 2012 Stock Incentive Plan; and
|
•
|
Ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2017.
|
•
|
FOR
the director nominee;
|
•
|
FOR
the approval of our Second Amended and Restated 2012 Stock Incentive Plan; and
|
•
|
FOR
the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for
2017
.
|
•
|
Via Internet: Stockholders of record with internet access may submit proxies by following the internet voting instructions on their proxy cards.
|
•
|
By Telephone: Stockholders of record may submit proxies by following the telephone voting instructions on each proxy card.
|
•
|
In Writing: Stockholders of record may submit proxies by completing, signing and dating each proxy card received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy. If you return your signed proxy but do not indicate your voting preferences, your shares will be voted on your behalf “FOR” the election of the nominated director, "FOR" the approval of our Second Amended and Restated 2012 Stock Incentive Plan, and “FOR” the ratification of KPMG LLP as our independent registered public accounting firm for
2017
.
|
•
|
In Person at the Annual Meeting: Stockholders of record may vote by attending the Annual Meeting on
Tuesday
,
June 6, 2017
, at 10:00 AM, P.D.T., at the
Hilton Garden Inn located at 2801 Constitution Drive, Livermore, California, 94550
. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy or vote by telephone or the internet so that your vote will be counted if you later decide not to attend the Annual Meeting.
|
•
|
You may receive a separate voting instruction form from your bank, broker or other nominee holding your shares. You should follow the voting instructions provided by your broker or nominee in order to instruct your broker or other nominee on how to vote your shares. The availability of telephone or internet voting will depend on the voting process of the bank, broker or nominee. To vote in person at the Annual Meeting, you must obtain a proxy, executed in your favor, from the holder of record.
|
•
|
If you own shares in “street name” through a broker and do not instruct your broker how to vote, your broker may not vote your shares on proposals determined to be “non-routine.” Of the proposals included in this proxy statement, only the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2017
is considered to be “routine.” The election of the director nominee and the vote to approve our Second Amended and Restated 2012 Stock Incentive Plan are considered to be “non-routine” matters. Therefore, if you do not provide your bank, broker or other nominee holding your shares in “street name” with voting instructions, those shares will count for quorum purposes, but will not be voted on the election of the director nominee or the vote to approve our Second Amended and Restated 2012 Stock Incentive Plan. Therefore, it is important that you provide voting instructions to your bank, broker or other nominee.
|
•
|
FOR
the director nominee;
|
•
|
FOR
the approval of our Second Amended and Restated 2012 Stock Incentive Plan; and
|
•
|
FOR
the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for
2017
.
|
Name
|
Age
|
Position
|
Lisa C. Im
|
52
|
Chief Executive Officer and Board Chair
|
Harold T. Leach, Jr.
|
59
|
Chief Compliance Officer
|
Hakan L. Orvell
|
59
|
Vice President and Chief Financial Officer
|
Jeffrey R. Haughton
|
41
|
Chief Operating Officer
|
Ian A. Johnston
|
62
|
Vice President and Chief Accounting Officer
|
Simeon M. Kohl
|
50
|
Vice President of Healthcare
|
Todd R. Ford
(1)(2)(3)
|
50
|
Director
|
Brian P. Golson
|
46
|
Director
|
Bruce E. Hansen
(1)(3)
|
58
|
Director
|
William D. Hansen
(1)(2)
|
57
|
Director
|
Bradley M. Fluegel
(2)(3)
|
55
|
Director
|
Name
|
Fees Earned
or Paid in
Cash($)
|
Stock Awards($)
(1)(2)
|
Option
Awards
|
Total($)
|
Bruce E. Hansen
|
50,000
|
75,000
|
—
|
125,000
|
William D. Hansen
|
61,000
|
75,000
|
—
|
136,000
|
Todd R. Ford
|
61,000
|
75,000
|
—
|
136,000
|
Bradley M. Fluegel
|
47,000
|
75,000
|
—
|
122,000
|
Brian P. Golson
(3)
|
75,000
|
—
|
—
|
75,000
|
(1)
|
The value of this stock award is based on the fair value of the award as of the grant date calculated in accordance with Accounting Standards Codification 718, Stock Compensation (ASC 718) for financial reporting purposes. See Note 7(b) of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31,
2016
for a discussion of our assumptions in determining the ASC 718 values of our stock awards.
|
(2)
|
Each of our non-employee, independent directors were awarded restricted stock units valued at $75,000 on June 16, 2016 (which equated to 46,296 stock units), vesting in full on
June 6, 2017
, the date of the annual meeting of stockholders.
|
(3)
|
Mr. Golson's cash compensation is paid to Parthenon Capital Partners at Mr. Golson's direction. In lieu of an equity award, Mr. Golson receives a $75,000 cash award vesting under the same circumstances as director restricted stock units.
|
•
|
Our Class I directors are Todd R. Ford and Brian P. Golson and their terms will expire at the Annual Meeting of Stockholders in 2019;
|
•
|
Our Class III directors are Lisa C. Im, Bradley M. Fluegel and Bruce E. Hansen and their terms will expire at the Annual Meeting of Stockholders in 2018; and
|
•
|
Our Class II director is William D. Hansen and his term will expire at this Annual Meeting of Stockholders.
|
•
|
the name, age, business address and residence address of the proposed nominee;
|
•
|
the principal occupation of the proposed nominee;
|
•
|
the number of shares of our capital stock beneficially owned by the proposed nominee;
|
•
|
a description of all compensation and other relationships during the past three years between the stockholder and the proposed nominee;
|
•
|
any other information relating to the proposed nominee required to be disclosed pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, the Exchange Act; and
|
•
|
the proposed nominee’s written consent to serve as a director if elected.
|
•
|
to reward our named executive officers for sustained financial and operating performance and leadership excellence;
|
•
|
to align their interests with those of our stockholders; and
|
•
|
to encourage our named executive officers to remain with us for the long-term.
|
•
|
health, dental and vision insurance;
|
•
|
vacation, personal holidays and sick days;
|
•
|
life insurance and supplemental life insurance;
|
•
|
short-term and long-term disability; and
|
•
|
401(k) plan.
|
Name and Principal Position
|
Year
|
Salary($)
|
Bonus($)
|
|
Stock Awards($)
(1)
|
|
All other Compensation($)
|
Total($)
|
|
Lisa C. Im
|
2016
|
400,005
|
230,000
|
|
—
|
|
20,259
|
(2)
|
650,264
|
Chief Executive Officer and Chair of the Board of Directors
|
2015
|
418,467
|
—
|
|
—
|
|
23,787
|
(3)
|
442,254
|
|
|
|
|
|
|
|
|
||
Harold T. Leach, Jr.
|
2016
|
277,929
|
170,000
|
|
208,800
|
|
23,173
|
(4)
|
679,902
|
Chief Compliance Officer
|
2015
|
366,156
|
—
|
|
228,000
|
|
23,930
|
(5)
|
618,086
|
|
|
|
|
|
|
|
|
||
Hakan L. Orvell
|
2016
|
320,008
|
120,000
|
|
208,800
|
|
3,235
|
(6)
|
652,043
|
Vice President and Chief Financial Officer
|
2015
|
332,316
|
50,000
|
|
228,000
|
|
5,125
|
(6)
|
615,441
|
|
|
|
|
|
|
|
|
||
Jeffrey R. Haughton
|
2016
|
331,859
|
130,000
|
|
356,527
|
|
527
|
(6)
|
818,913
|
Chief Operating Officer
|
2015
|
311,558
|
50,000
|
|
439,030
|
|
442
|
(6)
|
801,030
|
(1)
|
The value of the equity awards is based on the fair value of the award as of the grant date calculated in accordance with ASC 718, excluding any estimate of future forfeitures. Our assumptions with respect to the calculation of these values are set forth in Note 7 “Stock-based Compensation” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for fiscal years ended December 31, 2016 and 2015. Regardless of the value on the grant date, the actual value that may be recognized by the executive officers will depend on the market value of our common stock on a date in the future when a stock award vests or a stock option is exercised.
|
(2)
|
Includes payments for vehicle allowance ($18,000) and life insurance benefits ($2,259).
|
(3)
|
Includes payments for vehicle allowance ($18,000) and life insurance benefits ($5,787).
|
(4)
|
Includes payments for vehicle allowance ($20,400) and life insurance benefits ($2,773).
|
(5)
|
Includes payments for vehicle allowance ($20,400) and life insurance benefits ($3,530).
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Name
|
Number of Securities Underlying
Unexercised Options(#) |
Option Exercise Price ($/share)
|
Expiration Date of Options
|
|
Number of Shares or Units of Stock that have not Vested(#)
|
|
Market Value of Shares or Units of Stock that have not Vested($)
(1)
|
||||||
Exercisable
|
|
|
Unexercisable
|
|
|||||||||
Lisa C. Im
|
131,250
|
|
|
—
|
|
0.50
|
1/24/2018
|
|
—
|
|
|
—
|
|
|
71,000
|
|
|
—
|
|
0.50
|
1/26/2018
|
|
—
|
|
|
—
|
|
|
200,000
|
|
|
—
|
|
1.18
|
9/15/2019
|
|
—
|
|
|
—
|
|
|
714,737
|
|
(2)
|
109,950
|
|
10.60
|
8/10/2022
|
|
—
|
|
|
—
|
|
|
45,000
|
|
(2)
|
15,000
|
|
13.55
|
3/7/2023
|
|
—
|
|
|
—
|
|
Harold T. Leach, Jr.
|
238,259
|
|
(2)
|
36,637
|
|
10.60
|
8/10/2022
|
|
26,500
|
|
(4)
|
62,275
|
|
|
22,500
|
|
(2)
|
7,500
|
|
13.55
|
3/7/2023
|
|
37,500
|
|
(5)
|
88,125
|
|
|
—
|
|
|
—
|
|
—
|
|
|
120,000
|
|
(7)
|
282,000
|
|
Hakan L. Orvell
|
103,197
|
|
|
—
|
|
0.50
|
1/18/2018
|
|
25,750
|
|
(4)
|
60,513
|
|
|
119,130
|
|
(2)
|
18,318
|
|
10.60
|
8/10/2022
|
|
37,500
|
|
(5)
|
88,125
|
|
|
—
|
|
|
—
|
|
—
|
|
|
120,000
|
|
(7)
|
282,000
|
|
Jeffrey R. Haughton
|
60,419
|
|
(3)
|
39,581
|
|
10.55
|
7/15/2024
|
|
20,000
|
|
(6)
|
47,000
|
|
|
47,371
|
|
(3)
|
56,249
|
|
3.57
|
3/17/2025
|
|
37,500
|
|
(5)
|
88,125
|
|
|
—
|
|
(3)
|
60,000
|
|
1.74
|
2/22/2026
|
|
90,000
|
|
(7)
|
211,500
|
|
|
—
|
|
|
—
|
|
—
|
|
|
82,270
|
|
(4)
|
193,335
|
|
(1)
|
The market value is based on $2.35 per share market price of our common stock on December 30, 2016.
|
(2)
|
The option award vests as to 1/5
th
of the total number of shares subject to the option 12 months after the vesting commencement date, and the remaining shares vest at a rate of 1/60
th
of the total number of shares subject to the option each month thereafter, provided that the holder remains in continuous service through each vest date.
|
(3)
|
The option award vests as to 1/4
th
of the total number of shares subject to the option 12 months after the vesting commencement date, and the remaining shares vest at a rate of 1/48
th
of the total number of shares subject to the option each month thereafter, provided that the holder remains in continuous service through each vest date.
|
(4)
|
The restricted stock award vests in four equal annual installments on each of the first four anniversaries of the grant date, provided that the holder remains in continuous service through each vest date.
|
(5)
|
The restricted stock award vests as to 50% of the covered shares on March 5, 2016 and as to 25% of the covered shares on each of March 5, 2017 and March 5, 2018, provided that the holder remains in continuous service through each vest date.
|
(6)
|
The restricted stock award vests in 10,000 unit increments on each of July 15, 2015, July 15, 2016, July 15, 2017, and July 15, 2018, provided that the holder remains in continuous service through each vest date.
|
(7)
|
Restricted Stock Unit Award vests as to 25% of the covered shares on March 7, 2017 and as to 25% the covered shares on each of the first, second and third anniversaries of the initial vest date, provided that the holder remains in continuous service through each vest date.
|
•
|
A
Change in control
occurs (i) if any person or group becomes the beneficial owner of 50% of the Company’s voting securities, (ii) if certain changes of the individuals who constitute the board of directors occur during any period of two consecutive years, (iii) upon consummation of a reorganization, merger or consolidation unless certain conditions are met, or (iv) upon stockholder approval of a complete liquidation of the Company.
|
•
|
Triggering termination
is defined as Ms. Im’s termination for any reason other than (i) her death, (ii) her disability that entitles her to receive long-term disability benefits from the Company, (iii) her retirement on or after the age of 65, (iv) her termination for cause, or (v) her resignation of employment for good reason.
|
•
|
Cause
is defined as (i) the criminal conviction for embezzlement from the Company, (ii) the violation of a felony committed in connection with employment, (iii) the willful refusal to perform the reasonable duties of her position with the Company, (iv) the willful violation of the policies of the Company which is determined in good faith by the board of directors to be materially injurious to the employees, directors, property, or financial condition of the Company, or (v) the willful violation of the provisions of a confidentiality or non-competition agreement with the Company.
|
•
|
Good reason
is defined as (i) a reduction in Ms. Im’s salary that was in effect immediately prior to a change of control, (ii) the relocation of the Company’s office that would add 35 miles or more to Ms. Im’s commute, or (iii) if the Company reduces certain benefits or vacation days that Ms. Im received prior to the change of control.
|
•
|
each person or group of persons known to us to be the beneficial owner of more than 5% of our Common Stock;
|
•
|
each of our current executive officers named under “Executive Compensation—Summary Compensation Table”;
|
•
|
each of our directors; and
|
•
|
all of our directors and executive officers as a group.
|
Name of Beneficial Owner
|
Shares Beneficially Owned
|
||
Number
(1)
|
|
Percentage
|
|
5% Stockholders:
|
|
|
|
Parthenon DCS Holdings, LLC
(2)
|
13,500,878
|
|
26.7%
|
Invesco Ltd.
(3)
|
9,607,230
|
|
19.0%
|
Prescott Group Capital Management, L.L.C.
(4)
|
4,564,105
|
|
9.0%
|
Philadelphia Financial Management of San Francisco, LLC
(5)
|
3,675,597
|
|
7.3%
|
Executive Officers and Directors:
|
|
|
|
Lisa C. Im
(6)
|
2,666,891
|
|
5.2%
|
Harold T. Leach, Jr.
(7)
|
636,563
|
|
1.3%
|
Hakan L. Orvell
(8)
|
300,386
|
|
*
|
Jeffrey R. Haughton
(9)
|
202,065
|
|
*
|
Bradley M. Fluegel
(10)
|
61,744
|
|
*
|
Todd R. Ford
(11)
|
139,586
|
|
*
|
Brian P. Golson
(2)
|
13,500,878
|
|
26.7%
|
Bruce E. Hansen
(12)
|
107,628
|
|
*
|
William D. Hansen
(13)
|
129,586
|
|
*
|
All Executive Officers and Directors as a group (9 persons)
(14)
|
17,745,327
|
|
33.6%
|
(1)
|
Unless otherwise indicated, includes shares owned by a spouse, minor children and relatives sharing the same home, as well as entities owned or controlled by the named person. Unless otherwise noted, shares are owned of record and beneficially by the named person.
|
(2)
|
Based on a Schedule 13G/A filed with the SEC on February 12, 2016 by Parthenon DCS Holdings, LLC (“DCS Holdings”). The reported shares are owned of record by DCS Holdings. Parthenon Investors II, L.P., as the manager of DCS Holdings; PCAP Partners II, LLC, as the general partner of Parthenon Investors II, L.P.; PCAP II, LLC, as the
|
(3)
|
Based on a Schedule 13G/A filed with the SEC on February 8, 2017 by Invesco Ltd. (“Invesco”), an investment adviser which is deemed to be the beneficial owner of 9,607,230 shares. Invesco has sole voting and dispositive power over all shares beneficially owned by it. The principal business address of Invesco is 1555 Peachtree Street NE, Atlanta, GA 30309.
|
(4)
|
Based on a Schedule 13G/A filed with the SEC on February 10, 2017 by Prescott Group Capital Management, L.L.C. (“PGC”), and certain entities affiliated or associated with Prescott, including Prescott Group Aggressive Small Cap, L.P., Prescott Group Aggressive Small Cap II, L.P. (collectively, the “Small Cap Funds”), and Phil Frohlich, the principal of Prescott, reflecting shared voting and dispositive power with respect to 4,564,105 shares of common stock of the Company purchased by the Small Cap Funds through the account of Prescott Group Aggressive Small Cap Master Fund, G.P., (“Prescott Master Fund”), of which the Small Cap Funds are general partners. Prescott serves as the general partner of the Small Cap Funds. The principal business address of PGC is 1924 South Utica Suite 1120, Tulsa, Oklahoma, 74104-6429.
|
(5)
|
Based on a Schedule 13D filed with the SEC on December 22, 2016 by Philadelphia Financial Management of San Francisco, LLC (PFM), PFM reported beneficial ownership of common stock held by PFM for the account of Boathouse Row I, L.P., Boathouse Row II, L.P., Boathouse Row Offshore Ltd. and Jordan Hymowitz. Mr. Hymowitz is the managing member of PFM and its majority owner. PFM has shared voting power and shared dispositive power over 3,675,597 shares of our common stock. The principal business address of PFM is c/o Philadelphia Financial Management of San Francisco, LLC, 450 Sansome Street, Suite 1500, San Francisco, CA 94111.
|
(6)
|
Includes 1,250,457 shares subject to options exercisable within 60 days of
April 17, 2017
.
|
(7)
|
Includes 291,251 shares subject to options exercisable within 60 days of
April 17, 2017
.
|
(8)
|
Includes 236,037 shares subject to options exercisable within 60 days of
April 17, 2017
.
|
(9)
|
Includes 145,838 shares subject to options exercisable within 60 days of
April 17, 2017
.
|
(10)
|
Includes 46,296 restricted stock units ("RSUs") scheduled to vest within 60 days of
April 17, 2017
.
|
(11)
|
Includes 50,000 shares subject to options exercisable within 60 days of
April 17, 2017
, and 46,296 shares underlying RSUs scheduled to vest within 60 days of
April 17, 2017
.
|
(12)
|
Includes 50,000 shares subject to options exercisable within 60 days of
April 17, 2017
, and 46,296 shares underlying RSUs scheduled to vest within 60 days of
April 17, 2017
.
|
(13)
|
Includes 50,000 shares subject to options exercisable within 60 days of
April 17, 2017
, and 46,296 shares underlying RSUs scheduled to vest within 60 days of
April 17, 2017
.
|
(14)
|
Includes 2,073,619 shares subject to options exercisable within 60 days of
April 17, 2017
and 185,184 shares underlying RSUs scheduled to vest within 60 days of
April 17, 2017
. Also includes 13,500,878 shares held by Parthenon DCS Holdings, LLC.
|
Year
|
Audit Fees
(1)
|
Audit-Related Fees
|
Tax Fees
|
All Other Fees
|
2016
|
$736,000
|
$ —
|
$ —
|
$ —
|
2015
|
$698,000
|
$ —
|
$ —
|
$ —
|
(1)
|
Audit fees are fees for the audit of the Company’s annual financial statements. Audit fees also include fees for the review of financial statements included in the Company’s quarterly reports on Form 10-Q, for services that are normally provided in connection with statutory and regulatory filings or engagements, and in connection with public equity offerings.
|
•
|
A common measure of potential dilution from outstanding equity awards is “overhang,” generally defined as equity awards outstanding but not exercised, plus equity awards available to be granted (together referred to as potential equity award shares), divided by the sum of total common shares outstanding plus potential equity award shares. As of December 31, 2016, our overhang was 12.2%, as compared with 13.7% as of December 31, 2015.
|
•
|
Another common measure of dilution is “burn rate”, which shows how rapidly a company is depleting the shares reserved for issuance under its equity compensation plans, but without taking into account award cancellations or forfeitures. Our annual burn rate was 2.5% in 2015 and was 3.2% in 2016.
|
•
|
In addition to our low annual burn rate, the amount of equity compensation granted to our executive officers has been limited. Our executive officers received no equity compensation in 2014. In 2015, our chief financial officer and chief operating officer each received performance-based restricted stock unit awards. Our chief executive officer did not receive any form of such restricted stock unit awards in 2015. In 2016, our chief financial officer and chief compliance officer each received restricted stock unit awards, and our chief operating officer received both a restricted stock unit award and stock option award. Our chief executive officer did not receive any form of equity compensation in 2016.
|
•
|
Further, our compensation committee and board of directors has worked with its independent compensation consultant and our management to design an equity award program for 2017 that includes the use of performance-based restricted stock unit awards to reduce dilution to stockholders and tie compensation to performance goals.
|
•
|
No Evergreen Feature - the 2012 Plan does not include an “evergreen” feature that would cause the number of authorized shares to automatically increase in future years.
|
•
|
No Discounted Options - stock options and stock appreciation rights may not be granted under the 2012 Plan with exercise prices lower than the fair market value of the underlying shares on the grant date.
|
•
|
No “Underwater” Option Repricings or Buyouts -stock options option and stock appreciation rights outstanding under the 2012 Plan may not be amended to reduce the exercise price thereof and stock options and stock appreciation rights outstanding under the 2012 Plan that have an exercise price in excess of the then-current fair market value per share may not be cancelled or substituted in exchange for a new award without stockholder approval.
|
•
|
Minimum Vesting Period - the proposed amended 2012 Plan provides that all future awards will not vest sooner than one year following the date of grant, subject to exceptions in the case of a participant who terminates employment due to his or her retirement, death, disability or a change in control of the Company. To address special circumstances that may arise, there is an exception for up to 5% of the available shares under the 2012 Plan, which will not be subject to the one-year minimum vesting requirement, as determined by the board (or a committee thereof) either at the time an award is granted or at a later date.
|
•
|
No Dividends on Unearned Awards - the proposed amended 2012 Plan provides that no dividends or other distributions may be paid with respect to an award unless and until the corresponding service and performance-
|
•
|
Stock options - A stock option is the right to purchase a certain number of shares of stock, at a certain exercise price, in the future. Under our 2012 Plan, incentive stock options and nonstatutory options must be granted with an exercise price of at least 100% of the fair market value of our common stock on the date of grant. Incentive stock options granted to any holder of more than 10% of the voting shares of our company must have an exercise price of at least 110% of the fair market value of our common stock on the date of grant. On December 31, 2016, the fair market value of our common stock was $2.35 per share based on the closing sales price reported on the NASDAQ Global Market. No incentive stock option can be granted to an employee if as a result of the grant, the employee would have the right in any calendar year to exercise for the first time one or more incentive stock options for shares having an aggregate fair market value in excess of $100,000. The stock option agreement specifies the date when all or any installment of the option is to become exercisable. We expect that 1/4th of the total number of shares subject to any options granted under the 2012 Plan will vest and become exercisable 12 months after the vesting commencement date for options granted, and the remaining options will vest and become exercisable at a rate of 1/48th of the total number of shares subject to the options each month thereafter. Each stock option agreement sets forth the term of the options, which is prohibited from exceeding ten years (five years in the case of an incentive stock option granted to any holder of more than 10% of our voting shares), and the extent to which the optionee will have the right to exercise the option following termination of the optionee’s service with the company. Payment of the exercise price may be made in cash or cash equivalents or, if provided for in the stock option agreement evidencing the award, (i) by surrendering, or attesting to the ownership of, shares which have already been owned by the optionee, (ii) by delivery of an irrevocable direction to a securities broker to sell shares and to deliver all or part of the sale proceeds to us in payment of the aggregate exercise price, (iii) by delivery of an irrevocable direction to a securities broker or lender to pledge shares and to deliver all or part of the loan proceeds to us in payment of the
|
•
|
Restricted stock - Restricted stock is a share award that may be subject to vesting conditioned upon continued service, the achievement of performance objectives or the satisfaction of any other condition as specified in a restricted stock agreement. Participants who are granted restricted stock awards generally have all of the rights of a stockholder with respect to such stock, other than the right to transfer such stock prior to vesting. However, a grant may require that any or all dividends or other distributions paid prior to vesting of the stock be automatically deferred and/or reinvested in additional shares of restricted stock (which may be subject to the same restrictions as the initial, underlying award of restricted stock) or be paid in cash on a deferred basis contingent on achievement of vesting. Subject to the terms of the 2012 Plan, our board or compensation committee will determine the terms and conditions of any restricted stock award, including any vesting arrangement, which will be set forth in a restricted stock agreement to be entered into between us and each recipient. Restricted stock may be awarded for such consideration as our board or compensation committee may determine, including without limitation cash, cash equivalents, full-recourse promissory notes, future services or services rendered prior to the award, without cash payment by the recipient.
|
•
|
Stock units - Stock units give recipients the right to acquire a specified number of shares of stock at a future date upon the satisfaction of certain conditions, including any vesting arrangement established by our board or compensation committee and as set forth in a stock unit agreement. Unlike restricted stock, the stock underlying stock units will not be issued until the stock units have vested and are settled, and recipients of stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied and the award is settled. Our board or compensation committee may elect to settle vested stock units in cash or in common stock or in a combination of cash and common stock. Subject to the terms of the 2012 Plan, our board or compensation committee will determine the terms and conditions of any stock unit award, which will be set forth in a stock unit agreement to be entered into between us and each recipient.
|
•
|
Stock appreciation rights - Stock appreciation rights typically will provide for payments to the recipient based upon increases in the price of our common stock over the exercise price of the stock appreciation right. The exercise price of a stock appreciation right will be determined by our board or compensation committee, which shall not be less than the fair market value of our common stock on the date of grant. Our board or compensation committee may elect to pay stock appreciation rights in cash or in common stock or in a combination of cash and common stock.
|
•
|
Cash-based awards - Cash-based awards may be granted in such number or amount and upon such terms, and subject to such conditions, as our board or compensation committee shall determine at the time of grant. Payment, if any, with respect to a cash-based award shall be made in accordance with the terms of the award agreement and may be made in cash or in shares, as our board or compensation committee determines.
|
•
|
Performance-based awards - Stock unit awards, restricted stock awards and cash-based awards may be granted under terms intended to qualify them as “performance-based compensation” exempt from the tax deduction limitations of Section 162(m) of the Code. Section 162(m) limits a publicly traded corporation’s income tax deduction for compensation paid to certain executive officers to $1.0 million per person per year unless the compensation qualifies as “performance-based compensation.” To qualify as “performance-based compensation,” the number of shares or other benefits granted, issued, retainable or vested under an award shall be subject to the attainment of pre-established, objective performance goals for a specified period of time relating to one or more of the performance criteria, either individually, alternatively or in any combination, applied to either the individual or to us as a whole or to a business unit or subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, or on the basis of any other specified period, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group or index, and subject to specified adjustments, in each case as specified by the board or compensation committee in the award: All such objective performance criteria must be specified in the 2012 Plan and must be approved by our stockholders. Stockholder approval of the proposed amendments to the 2012 Plan will constitute approval for purposes of Section 162(m) of the Code, including use of these qualifying performance criteria in designing such awards: cash flows, earnings per share, earnings before interest, taxes and depreciation and amortization, and such additional adjustments, if any, as may be approved by the board of directors or the compensation committee, return on equity, total stockholder return, share price performance, return on capital, return on assets or net assets, revenue,
|
Name and Position
|
Option Awards(#)
|
Restricted Stock Units(#)
|
Total
|
|
||
Named Executive Officers:
|
|
|
|
|||
Lisa C. Im, Chief Executive Officer
|
884,687
|
|
—
|
|
884,687
|
|
Harold T. Leach, Jr., Chief Compliance Officer
|
304,896
|
|
248,000
|
|
552,896
|
|
Hakan L. Orvell, Vice President and Chief Financial Officer
|
137,448
|
|
246,500
|
|
383,948
|
|
Jeffrey R. Haughton, Chief Operating Officer
|
260,000
|
|
287,270
|
|
547,270
|
|
All executive officers, as a group (4 persons)
|
1,587,031
|
|
781,770
|
|
2,368,801
|
|
All directors who are not executive officers, as a group (4 persons)
|
50,000
|
|
353,102
|
|
403,102
|
|
All employees, including officers who are not executive officers, as a group
|
1,789,178
|
|
1,799,950
|
|
3,589,128
|
|
|
Number of Securities to be Issued upon Exercise of Outstanding Options and Rights (a)
|
Weighted Average Exercise Price of Outstanding Options and Rights
(1)
(b)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
||
Equity compensation plans approved by security holders
(2)
|
4,640,208
|
|
$9.49
|
1,431,484
|
|
Equity compensation plans not approved by security holders
(3)
|
926,561
|
|
$1.28
|
—
|
|
Total
|
5,566,769
|
|
|
1,431,484
|
|
(1)
|
The calculation of the weighted average exercise price includes only stock options and does not include the outstanding restricted stock and restricted stock unit awards which do not have an exercise price.
|
(2)
|
Represents shares under the Company’s Amended and Restated 2012 Stock Incentive Plan.
|
(3)
|
Represents shares under the Company’s 2007 Stock Option Plan.
|
•
|
Audit Committee Charter
|
•
|
Compensation Committee Charter
|
•
|
Nominating and Governance Committee Charter
|
•
|
Conflict of Interest and Ethics Policy
|
•
|
Code of Ethics for Senior Financial Officers and Directors
|
|
Table of Contents
|
Page
|
|
SECTION 1.
|
ESTABLISHMENT AND PURPOSE.
|
1
|
|
SECTION 2.
|
DEFINITIONS.
|
1
|
|
(a)
|
“Affiliate”
|
1
|
|
(b)
|
“Award”
|
1
|
|
(c)
|
“Board of Directors”
|
1
|
|
(d)
|
“Cash-Based Award”
|
1
|
|
(e)
|
“Change in Control”
|
1
|
|
(f)
|
“Code”
|
2
|
|
(g)
|
“Committee”
|
2
|
|
(h)
|
“Company”
|
2
|
|
(i)
|
“Consultant”
|
3
|
|
(j)
|
“Employee”
|
3
|
|
(k)
|
“Exchange Act”
|
3
|
|
(l)
|
“Exercise Price”
|
3
|
|
(m)
|
“Fair Market Value”
|
3
|
|
(n)
|
“ISO”
|
3
|
|
(o)
|
“Nonstatutory Option”
|
3
|
|
(p)
|
“Offeree”
|
3
|
|
(q)
|
“Option”
|
3
|
|
(r)
|
“Optionee”
|
4
|
|
(s)
|
“Outside Director”
|
4
|
|
(t)
|
“Parent”
|
4
|
|
(u)
|
“Participant”
|
4
|
|
(v)
|
“Performance Based Award”
|
4
|
|
(w)
|
“Plan”
|
4
|
|
(x)
|
“Purchase Price”
|
4
|
|
(y)
|
“Restricted Share”
|
4
|
|
(z)
|
“Restricted Share Agreement”
|
4
|
|
(aa)
|
“SAR”
|
4
|
|
(bb)
|
“SAR Agreement”
|
4
|
|
(cc)
|
“Service”
|
4
|
|
(dd)
|
“Share”
|
4
|
|
(ee)
|
“Stock”
|
4
|
|
(ff)
|
“Stock Option Agreement”
|
5
|
|
(gg)
|
“Stock Unit”
|
5
|
|
(hh)
|
“Stock Unit Agreement”
|
5
|
|
(ii)
|
“Subsidiary”
|
5
|
|
(jj)
|
“Total and Permanent Disability”
|
5
|
|
SECTION 3.
|
ADMINISTRATION.
|
5
|
|
(a)
|
Committee Composition
|
5
|
|
(b)
|
Committee for Non-Officer Grants
|
5
|
|
(c)
|
Committee Procedures
|
5
|
|
(d)
|
Committee Responsibilities
|
6
|
|
(e)
|
Amendment or Cancellation and Re-grant of Stock Awards
|
7
|
|
SECTION 4.
|
ELIGIBILITY.
|
7
|
|
(a)
|
General Rule
|
7
|
|
(b)
|
Ten-Percent Stockholders
|
7
|
|
(c)
|
Attribution Rules
|
7
|
|
(d)
|
Outstanding Stock
|
7
|
|
SECTION 5.
|
STOCK SUBJECT TO PLAN.
|
7
|
|
(a)
|
Basic Limitation
|
8
|
|
(b)
|
Section 162(m) Award Limitation
|
8
|
|
(c)
|
Additional Shares
|
8
|
|
SECTION 6.
|
RESTRICTED SHARES.
|
8
|
|
(a)
|
Restricted Stock Agreement
|
8
|
|
(b)
|
Payment for Awards
|
9
|
|
(c)
|
Vesting; Minimum Vesting Period and Exceptions
|
9
|
|
(d)
|
Voting and Dividend Rights
|
9
|
|
(e)
|
Restrictions on Transfer of Shares
|
9
|
|
SECTION 7.
|
TERMS AND CONDITIONS OF OPTIONS.
|
9
|
|
(a)
|
Stock Option Agreement
|
9
|
|
(b)
|
Number of Shares
|
10
|
|
(c)
|
Exercise Price
|
10
|
|
(d)
|
Withholding Taxes
|
10
|
|
(e)
|
Vesting and Exercisability; Minimum Vesting Period and Exceptions; Maximum Term
|
10
|
|
(f)
|
Exercise of Options
|
11
|
|
(g)
|
Effect of Change in Control
|
11
|
|
(h)
|
No Rights as a Stockholder
|
11
|
|
(i)
|
Modification, Extension and Renewal of Options
|
11
|
|
(j)
|
Restrictions on Transfer of Shares
|
11
|
|
SECTION 8.
|
PAYMENT FOR SHARES.
|
11
|
|
(a)
|
General Rule
|
11
|
|
(b)
|
Surrender of Stock
|
11
|
|
(c)
|
Services Rendered
|
12
|
|
(d)
|
Cashless Exercise
|
12
|
|
(e)
|
Exercise/Pledge
|
12
|
|
(f)
|
Net Exercise
|
12
|
|
(g)
|
Promissory Note
|
12
|
|
(h)
|
Other Forms of Payment
|
12
|
|
(i)
|
Limitations under Applicable Law
|
12
|
|
SECTION 9.
|
STOCK APPRECIATION RIGHTS.
|
12
|
|
(a)
|
SAR Agreement
|
12
|
|
(b)
|
Number of Shares
|
13
|
|
(c)
|
Exercise Price
|
13
|
|
(d)
|
Vesting and Exercisability; Minimum Vesting Period and Exceptions; Maximum Term
|
13
|
|
(e)
|
Effect of Change in Control
|
13
|
|
(f)
|
Exercise of SARs
|
13
|
|
(g)
|
Modification or Assumption of SARs
|
14
|
|
(h)
|
No Rights as a Stockholder
|
14
|
|
SECTION 10.
|
STOCK UNITS.
|
14
|
|
(a)
|
Stock Unit Agreement
|
14
|
|
(b)
|
Payment for Awards
|
14
|
|
(c)
|
Vesting; Minimum Vesting Period and Exceptions
|
14
|
|
(d)
|
Voting and Dividend Rights
|
15
|
|
(e)
|
Form and Time of Settlement of Stock Units
|
15
|
|
(f)
|
Death of Recipient
|
15
|
|
(g)
|
Creditors’ Rights
|
15
|
|
SECTION 11.
|
CASH-BASED AWARDS
|
15
|
|
SECTION 12.
|
ADJUSTMENT OF SHARES.
|
16
|
|
(a)
|
Adjustments
|
16
|
|
(b)
|
Dissolution or Liquidation
|
16
|
|
(c)
|
Reorganizations
|
16
|
|
(d)
|
Reservation of Rights
|
17
|
|
SECTION 13.
|
DEFERRAL OF AWARDS.
|
17
|
|
(a)
|
Committee Powers
|
17
|
|
(b)
|
General Rules
|
18
|
|
SECTION 14.
|
AWARDS UNDER OTHER PLANS.
|
18
|
|
SECTION 15.
|
PAYMENT OF DIRECTOR’S FEES IN SECURITIES.
|
18
|
|
(a)
|
Effective Date
|
18
|
|
(b)
|
Elections to Receive NSOs, SARs, Restricted Shares or Stock Units
|
18
|
|
(c)
|
Number and Terms of NSOs, SARs, Restricted Shares or Stock Units
|
18
|
|
SECTION 16.
|
LEGAL AND REGULATORY REQUIREMENTS.
|
18
|
|
SECTION 17.
|
TAXES.
|
19
|
|
(a)
|
General
|
19
|
|
(b)
|
Share Withholding
|
19
|
|
(c)
|
Section 409A.
|
19
|
|
SECTION 18.
|
OTHER PROVISIONS APPLICABLE TO AWARDS.
|
19
|
|
(a)
|
Transferability
|
19
|
|
(b)
|
Substitution and Assumption of Awards
|
20
|
|
(c)
|
Qualifying Performance Criteria
|
20
|
|
SECTION 19.
|
NO EMPLOYMENT RIGHTS.
|
21
|
|
SECTION 20.
|
DURATION AND AMENDMENTS.
|
21
|
|
(a)
|
Term of the Plan
|
21
|
|
(b)
|
Right to Amend or Terminate the Plan
|
21
|
|
(c)
|
Effect of Termination
|
22
|
|
SECTION 21.
|
EXECUTION.
|
23
|
|
SECTION 1.
|
ESTABLISHMENT AND PURPOSE.
|
SECTION 2.
|
DEFINITIONS.
|
(i)
|
A change in the composition of the Board of Directors occurs, as a result of which fewer than one-half of the incumbent directors are directors who either:
|
(ii)
|
Any “person” (as defined below) who by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company; or
|
(iii)
|
The consummation of a merger or consolidation of the Company or a Subsidiary of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (A) the Company (or its successor) and (B) any direct or indirect parent corporation of the Company (or its successor); or
|
(iv)
|
The sale, transfer or other disposition of all or substantially all of the Company’s assets.
|
(i)
|
If the Stock was traded over-the-counter on the date in question, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the Pink Quote system;
|
(ii)
|
If the Stock was traded on any established stock exchange (such as the New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market) or national market system on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable exchange or system; and
|
(iii)
|
If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.
|
(a)
|
Committee Composition
. The Plan shall be administered by a Committee appointed by the Board of Directors or by the Board of Directors acting as the Committee. The Committee shall consist of two or more directors of the Company. In addition, to the extent required by the Board of Directors, the composition of the Committee shall satisfy (i) such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and (ii) such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code.
|
(b)
|
Committee for Non-Officer Grants
. The Board of Directors may also appoint one or more separate committees of the Board of Directors, each composed of one or more directors of the Company who need not satisfy the requirements of Section 3(a), who may administer the Plan with respect to Employees who are not considered officers or directors of the Company under Section 16 of the Exchange Act, may grant Awards under the Plan to such Employees and may determine all terms of such grants. Within the limitations of the preceding sentence, any reference in the Plan to the Committee shall include such committee or committees appointed pursuant to the preceding sentence. To the extent permitted by applicable laws, the Board of Directors may also authorize one or more officers of the Company to designate Employees, other than officers under Section 16 of the Exchange Act, to receive Awards and/or to determine the number of such Awards to be received by such persons; provided, however, that the Board of Directors shall specify the total number of Awards that such officers may so award.
|
(c)
|
Committee Procedures
. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at
|
(d)
|
Committee Responsibilities
. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions:
|
(i)
|
To interpret the Plan and to apply its provisions;
|
(ii)
|
To adopt, amend or rescind rules, procedures and forms relating to the Plan;
|
(iii)
|
To adopt, amend or terminate sub-plans established for the purpose of satisfying applicable foreign laws including qualifying for preferred tax treatment under applicable foreign tax laws;
|
(iv)
|
To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
|
(v)
|
To determine when Awards are to be granted under the Plan;
|
(vi)
|
To select the Offerees and Optionees;
|
(vii)
|
To determine the type of Award and the number of Shares or amount of cash to be made subject to each Award;
|
(viii)
|
To prescribe the terms and conditions of each Award, including (without limitation) the Exercise Price and Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), to determine whether an Option is to be classified as an ISO or as a Nonstatutory Option, and to specify the provisions of the agreement relating to such Award;
|
(ix)
|
To amend any outstanding Award agreement, subject to applicable legal restrictions and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired;
|
(x)
|
To prescribe the consideration for the grant of each Award or other right under the Plan and to determine the sufficiency of such consideration;
|
(xi)
|
To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage;
|
(xii)
|
To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business;
|
(xiii)
|
To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award agreement;
|
(xiv)
|
To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; and
|
(xv)
|
To take any other actions deemed necessary or advisable for the administration of the Plan.
|
(e)
|
Amendment or Cancellation and Re-grant of Stock Awards
. Notwithstanding any contrary provision of the Plan, neither the Board of Directors nor any Committee, nor their designees, shall have the authority to: (i) amend the terms of outstanding Options or SARs to reduce the Exercise Price thereof, or (ii) cancel outstanding Options or SARs with an Exercise Price above the current Fair Market Value per Share in exchange for another Option, SAR or other Award, unless the stockholders of the Company have previously approved such an action or such action relates to an adjustment pursuant to Section 12.
|
(c)
|
Attribution Rules
. For purposes of Section 4(b) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries.
|
(d)
|
Outstanding Stock
. For purposes of Section 4(b) above, “outstanding stock” shall include all stock actually issued and outstanding immediately after the grant. “Outstanding stock” shall not include shares authorized for issuance under outstanding options held by the Employee or by any other person.
|
(a)
|
Basic Limitation
. Shares offered under the Plan shall be authorized but unissued Shares or treasury Shares. The aggregate number of Shares authorized for issuance as Awards under the Plan shall not exceed 10,550,000 (the “Absolute Share Limit”). The number of Shares that may be delivered in the aggregate pursuant to the exercise of ISOs granted under the Plan shall not exceed the Absolute Share Limit plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Section 5(c). The limitations of this Section 5(a) shall be subject to adjustment pursuant to Section 12. The number of Shares that are subject to Options or other Awards outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.
|
(b)
|
Section 162(m) Award Limitation
. Notwithstanding any contrary provisions of the Plan, and subject to the provisions of Section 12, with respect to any Option or SAR that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code, no Participant may receive Options or SARs under the Plan in any calendar year that relate to an aggregate of more than 2,000,000 Shares. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitation with respect to a Participant, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number of Shares with respect to which Options and SARs may be granted to the Participant. For this purpose, the repricing of an Option or SAR shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.
|
(c)
|
Additional Shares
. If Restricted Shares or Shares issued upon the exercise of Options are forfeited, then such Shares shall again become available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any reason before being exercised or settled, or an Award is settled in cash without the delivery of Shares to the holder, then any Shares subject to the Award shall again become available for Awards under the Plan. Only the number of Shares (if any) actually issued in settlement of Awards (and not forfeited) shall reduce the number available in Section 5(a) and the balance shall again become available for Awards under the Plan. Any Shares withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available for Awards under the Plan. Notwithstanding the foregoing provisions of this Section 5(c), Shares that have actually been issued shall not again become available for Awards under the Plan, except for Shares that are forfeited and do not become vested.
|
(a)
|
Restricted Stock Agreement
. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical.
|
(b)
|
Payment for Awards
. Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services.
|
(c)
|
Vesting; Minimum Vesting Period and Exceptions
. Each Award of Restricted Shares shall vest, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement, which shall be consistent with the requirements of this Section 6(c). Awards of Restricted Shares granted under the Plan shall vest no earlier than the one (1) year anniversary of the Award’s date of grant;
provided
,
however
, that the Committee, in its sole discretion, may provide for an Award to vest earlier by reason of the Participant’s death, Total and Permanent Disability or retirement, or upon a major capital change of the Company (including without limitation upon the occurrence of a Change in Control, merger of the Company with or into another corporation or entity, or similar transaction);
provided
,
further
, that, notwithstanding the foregoing in this sentence Restricted Shares related to conversions under Sections 15 or 18(b) are not subject to such minimum vesting provisions; and
provided
,
further
, that, notwithstanding the foregoing in this sentence, Restricted Shares may be granted or outstanding Restricted Shares modified without regard to such minimum vesting provisions as long as such Restricted Shares (when combined with all other Awards not subject to one (1)-year minimum vesting or one of the preceding exceptions) result in issuance of an aggregate of no more than 5% of the Shares reserved for issuance under Section 5(a)-(c). For purposes of Awards to Outside Directors, a vesting period will be deemed to be one (1)-year from the date of grant if it runs from the date of one annual meeting of the Company’s stockholders to the next annual meeting of the Company’s stockholders.
|
(d)
|
Voting and Dividend Rights
. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. However, dividends payable in respect of Restricted Shares shall at all times be subject to restrictions and risk of forfeiture to the same extent as the underlying Restricted Share and shall not be paid unless and until the underlying Restricted Share vests.
|
(e)
|
Restrictions on Transfer of Shares
. Restricted Shares shall be subject to such rights of repurchase, rights of first refusal or other restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Restricted Stock Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.
|
(a)
|
Stock Option Agreement
. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.
|
(b)
|
Number of Shares
. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 12.
|
(c)
|
Exercise Price
. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the date of grant, except as otherwise provided in 4(c), and the Exercise Price of an NSO shall not be less 100% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, Options may be granted with an Exercise Price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. Subject to the foregoing in this Section 7(c), the Exercise Price under any Option shall be determined by the Committee in its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 8.
|
(d)
|
Withholding Taxes
. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.
|
(e)
|
Vesting and Exercisability; Minimum Vesting Period and Exceptions; Maximum Term
. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable, which terms shall be consistent with the requirements of this Section 7(e). Awards of Options granted under the Plan shall vest and become exercisable no earlier than the one (1) year anniversary of the Award’s date of grant;
provided
,
however
, that the Committee, in its sole discretion, may provide for an Award to vest and become exercisable earlier by reason of the Participant’s death, Total and Permanent Disability or retirement, or upon a major capital change of the Company (including without limitation upon the occurrence of a Change in Control, merger of the Company with or into another corporation or entity, or similar transaction);
provided
,
further
, that, notwithstanding the foregoing in this sentence Options related to conversions under Sections 15 or 18(b) are not subject to such minimum vesting provisions; and
provided
,
further
, that, notwithstanding the foregoing in this sentence, Options may be granted or outstanding Options modified without regard to such minimum vesting and exercisability provisions as long as such Options (when combined with all other Awards not subject to one (1)-year minimum vesting or one of the preceding exceptions) result in issuance of an aggregate of no more than 5% of the Shares reserved for issuance under Section 5(a)-(c). For purposes of Awards to Outside Directors, a vesting period will be deemed to be one (1)-year from the date of grant if it runs from the date of one annual meeting of the Company’s stockholders to the next annual meeting of the Company’s stockholders. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years from the date of grant (five years for ISOs granted to Employees described in Section 4(b)). Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited.
|
(f)
|
Exercise of Options
. Each Stock Option Agreement shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of the Optionee’s estate or any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.
|
(g)
|
Effect of Change in Control
. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Shares subject to such Option in the event that a Change in Control occurs with respect to the Company.
|
(h)
|
No Rights as a Stockholder
. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by his Option (including dividend rights) until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 12. No dividend equivalents shall be payable with respect to Options.
|
(i)
|
Modification, Extension and Renewal of Options
. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding options or may accept the cancellation of outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Shares. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, materially impair his or her rights or obligations under such Option.
|
(j)
|
Restrictions on Transfer of Shares
. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.
|
(a)
|
General Rule
. The entire Exercise Price or Purchase Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided in Section 8(b) through Section 8(g) below.
|
(b)
|
Surrender of Stock
. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by surrendering, or attesting to the ownership of, Shares which have already been owned by the Optionee or his representative. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation
|
(c)
|
Services Rendered
. At the discretion of the Committee, Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary. If Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the Award) of the value of the services rendered by the Offeree and the sufficiency of the consideration to meet the requirements of Section 6(b).
|
(d)
|
Cashless Exercise
. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.
|
(e)
|
Exercise/Pledge
. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price.
|
(g)
|
Promissory Note
. To the extent that a Stock Option Agreement or Restricted Stock Agreement so provides, payment may be made all or in part by delivering (on a form prescribed by the Company) a full-recourse promissory note.
|
(h)
|
Other Forms of Payment
. To the extent that a Stock Option Agreement or Restricted Stock Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations and rules.
|
(i)
|
Limitations under Applicable Law
. Notwithstanding anything herein or in a Stock Option Agreement or Restricted Stock Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion.
|
(a)
|
SAR Agreement
. Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical.
|
(b)
|
Number of Shares
. Each SAR Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 12.
|
(c)
|
Exercise Price
. Each SAR Agreement shall specify the Exercise Price. The Exercise Price of a SAR shall not be less than 100% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, SARs may be granted with an Exercise Price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. Subject to the foregoing in this Section 9(c), the Exercise Price under any SAR shall be determined by the Committee in its sole discretion.
|
(d)
|
Vesting and Exercisability; Minimum Vesting Period and Exceptions; Maximum Term
. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable, which terms shall be consistent with the requirements of this Section 9(d). Awards of SARs granted under the Plan shall vest and become exercisable no earlier than the one (1) year anniversary of the Award’s date of grant;
provided
,
however
, that the Committee, in its sole discretion, may provide for an Award to vest and become exercisable earlier by reason of the Participant’s death, Total and Permanent Disability or retirement, or upon a major capital change of the Company (including without limitation upon the occurrence of a Change in Control, merger of the Company with or into another corporation or entity, or similar transaction);
provided
,
further
, that, notwithstanding the foregoing in this sentence SARs related to conversions under Sections 15 or 18(b) are not subject to such minimum vesting provisions; and
provided
,
further
, that, notwithstanding the foregoing in this sentence, SARs may be granted or outstanding SARs modified without regard to such minimum vesting and exercisability provisions as long as such SARs (when combined with all other Awards not subject to one (1)-year minimum vesting or one of the preceding exceptions) result in issuance of an aggregate of no more than 5% of the Shares reserved for issuance under Section 5(a)-(c). For purposes of Awards to Outside Directors, a vesting period will be deemed to be one (1)-year from the date of grant if it runs from the date of one annual meeting of the Company’s stockholders to the next annual meeting of the Company’s stockholders. The SAR Agreement shall also specify the term of the SAR. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in an NSO at the time of grant or thereafter.
|
(e)
|
Effect of Change in Control
. The Committee may determine, at the time of granting a SAR or thereafter, that such SAR shall become fully exercisable as to all Common Shares subject to such SAR in the event that a Change in Control occurs with respect to the Company.
|
(f)
|
Exercise of SARs
. Upon exercise of a SAR, the Optionee (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Shares, (b) cash or (c) a combination of Shares and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price.
|
(g)
|
Modification or Assumption of SARs
. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of shares and at the same or a different exercise price, or in return for the grant of a different Award for the same or a different number of Shares. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, materially impair his or her rights or obligations under such SAR.
|
(h)
|
No Rights as a Stockholder
. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by his SAR (including dividend rights) unless and until the date of the issuance of a stock certificate (if any) for such SAR. No adjustments shall be made, except as provided in Section 12. No dividend equivalents shall be payable with respect to SARs.
|
(a)
|
Stock Unit Agreement
. Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the recipient and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical.
|
(b)
|
Payment for Awards
. Stock Units may be awarded under the Plan for such consideration as the Committee may determine. Cash payment need not be required.
|
(c)
|
Vesting; Minimum Vesting Period and Exceptions
. Each Award of Stock Units shall vest, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement, which shall be consistent with the requirements of this Section 10(c). Awards of Stock Unit granted under the Plan shall vest no earlier than the one (1) year anniversary of the Award’s date of grant;
provided
,
however
, that the Committee, in its sole discretion, may provide for an Award to vest earlier by reason of the Participant’s death, Total and Permanent Disability or retirement, or upon a major capital change of the Company (including without limitation upon the occurrence of a Change in Control, merger of the Company with or into another corporation or entity, or similar transaction),
provided
,
further
, that, notwithstanding the foregoing in this sentence Stock Units related to deferrals under Section 13 or conversions under Sections 15 or 18(b) are not subject to such minimum vesting provisions; and
provided
,
further
, that, notwithstanding the foregoing in this sentence, Stock Units may be granted or outstanding Stock Units modified without regard to such minimum vesting provisions as long as such Stock Units (when combined with all other Awards not subject to one (1)-year minimum vesting or one of the preceding exceptions) result in issuance of an aggregate of no more than 5% of the Shares reserved for issuance under Section 5(a)-(c). For purposes of Awards to Outside Directors, a vesting period will be deemed to be one (1)-year from the date of grant if it runs from the date of one annual meeting of the Company’s stockholders to the next annual meeting of the Company’s stockholders.
|
(d)
|
Voting and Dividend Rights
. The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of both. Dividends equivalents shall at all times be subject to restrictions and risk of forfeiture to the same extent as the underlying Stock Unit and shall not be paid unless and until the underlying Stock Unit vests.
|
(e)
|
Form and Time of Settlement of Stock Units
. Settlement of vested Stock Units may be made in the form of (a) cash, (b) Shares or (c) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. A Stock Unit Agreement may provide that vested Stock Units may be settled in a lump sum or in installments. A Stock Unit Agreement may provide that the distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date, subject to compliance with Section 409A. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section 12.
|
(f)
|
Death of Recipient
. Any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s estate.
|
(g)
|
Creditors’ Rights
. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.
|
(a)
|
Adjustments
. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make appropriate and equitable adjustments in:
|
(i)
|
The number of Shares available for future Awards under Section 5;
|
(ii)
|
The limitations set forth in Sections 5(a) and (b) and Section 18;
|
(iii)
|
The number of Shares covered by each outstanding Award; and
|
(iv)
|
The Exercise Price under each outstanding Award.
|
(b)
|
Dissolution or Liquidation
. To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.
|
(c)
|
Reorganizations
. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Subject to compliance with Section 409A of the Code, such agreement shall provide for:
|
(i)
|
The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation;
|
(ii)
|
The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary;
|
(iii)
|
The substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards;
|
(iv)
|
Immediate vesting, exercisability and settlement of outstanding Awards followed by the cancellation of such Awards upon or immediately prior to the effectiveness of such transaction; or
|
(v)
|
Settlement of the intrinsic value of the outstanding Awards (whether or not then vested or exercisable) in cash or cash equivalents or equity (including cash or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Awards or the underlying Shares) followed by the cancellation of such Awards (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment); in each case without the Participant’s consent. Any acceleration of payment of an amount that is subject to section 409A of the Code will be delayed, if necessary, until the earliest time that such payment would be permissible under Section 409A without triggering any additional taxes applicable under Section 409A.
|
(d)
|
Reservation of Rights
. Except as provided in this Section 12, a Participant shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. In the event of any change affecting the Shares or the Exercise Price of Shares subject to an Award, including a merger or other reorganization, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the occurrence of such event.
|
(a)
|
Committee Powers
. Subject to compliance with Section 409A of the Code, the Committee (in its sole discretion) may permit or require a Participant to:
|
(i)
|
Have cash that otherwise would be paid to such Participant as a result of the exercise of a SAR or the settlement of Stock Units credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books;
|
(ii)
|
Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Stock Units; or
|
(iii)
|
Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Stock Units converted into amounts credited to a deferred compensation account established for such
|
(b)
|
General Rules
. A deferred compensation account established under this Section 13 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 13.
|
(a)
|
Effective Date
. No provision of this Section 15 shall be effective unless and until the Board of Directors has determined to implement such provision.
|
(b)
|
Elections to Receive NSOs, SARs, Restricted Shares or Stock Units
. To the extent permitted by the Board of Directors, an Outside Director may elect to receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, SARs, Restricted Shares or Stock Units, or a combination thereof, as determined by the Board of Directors. Alternatively, the Board of Directors may mandate payment in any of such alternative forms. Such NSOs, SARs, Restricted Shares and Stock Units shall be issued under the Plan. An election under this Section 15 shall be filed with the Company on the prescribed form.
|
(c)
|
Number and Terms of NSOs, SARs, Restricted Shares or Stock Units
. If permitted or mandated by the Board of Directors, the number of NSOs, SARs, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board of Directors. The terms of such NSOs, SARs, Restricted Shares or Stock Units shall also be determined by the Board of Directors.
|
(a)
|
General
. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied.
|
(b)
|
Share Withholding
. The Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Shares withheld that would otherwise be issued to him or her in excess of the number necessary to satisfy the minimum legally required tax withholding.
|
(c)
|
Section 409A
.
|
(a)
|
Transferability
.
Unless the agreement evidencing an Award (or an amendment thereto authorized by the Committee) expressly provides otherwise, no Award granted under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to Shares issued under such Award), other than by will or the laws of descent and distribution; provided, however, that an ISO may be transferred or
|
(b)
|
Substitution and Assumption of Awards
. The Committee may make Awards under the Plan by assumption, substitution or replacement of stock options, stock appreciation rights, stock units or similar awards granted by another entity (including a Parent or Subsidiary), if such assumption, substitution or replacement is in connection with an asset acquisition, stock acquisition, merger, consolidation or similar transaction involving the Company (and/or its Parent or Subsidiary) and such other entity (and/or its affiliate). Notwithstanding any provision of the Plan (other than the maximum number of Shares that may be issued under the Plan), the terms of such assumed, substituted or replaced Awards shall be as the Committee, in its discretion, determines is appropriate.
|
(c)
|
Qualifying Performance Criteria
. The number of Shares or other benefits granted, issued, retainable and/or vested under an Award may be made subject to the attainment of performance goals. The Committee may utilize any performance criteria selected by it in its sole discretion to establish performance goals; provided, however, that in the case of any Performance Based Award, the following conditions shall apply:
|
(a)
|
Term of the Plan
. The Plan, as set forth herein, shall terminate automatically on April 5, 2027, and may be terminated on any earlier date pursuant to subsection (b) below.
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(b)
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Right to Amend or Terminate the Plan
. The Board of Directors may amend or terminate the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the Participant. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules.
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(c)
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Effect of Termination
. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect Awards previously granted under the Plan.
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Performant Financial Corporation
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By
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Name
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Hakan L. Orvell
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Title
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Chief Financial Officer
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