EXHIBIT 99.1
INTEK GLOBAL CORPORATION
1997 PERFORMANCE AND EQUITY INCENTIVE PLAN
INTEK GLOBAL CORPORATION
1997 PERFORMANCE AND EQUITY INCENTIVE PLAN
1.0 DEFINITIONS
The following terms shall have the following meanings unless the context
indicates otherwise:
1.1 "AWARD" shall mean either a Stock Option, an SAR, a Stock Award, a
Stock Unit, a Performance Share, a Performance Unit, or a Cash Award.
1.2 "AWARD AGREEMENT" shall mean a written agreement between the
Company and the Participant that establishes the terms, conditions,
restrictions and/or limitations applicable to an Award in addition to those
established by the Plan and by the Committee's exercise of its administrative
powers.
1.3 "BOARD" shall mean the Board of Directors of the Company.
1.4 "CASH AWARD" shall mean the grant by the Committee to a Participant
of an award of cash under Section 11 below.
1.5 "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
1.6 "COMMITTEE" shall mean (i) the Board or (ii) a committee or
subcommittee of the Board appointed by the Board from among its members. The
Committee may be the Board's Compensation Committee. Unless the Board
determines otherwise, the Committee shall be comprised solely of not less
than two members who each shall qualify as (x) a "Non-Employee Director"
within the meaning of Rule 16b-3(b)(3) (or any successor rule) under the
Exchange Act and (y) an "outside director" within the meaning of Section
162(m) of the Code and the Treasury Regulations thereunder.
1.7 "COMMON STOCK" shall mean the common stock, $.01 par value per
share, of the Company.
1.8 "COMPANY" shall mean Intek Global Corporation, a Delaware corporation.
1.9 "DIVIDEND EQUIVALENT RIGHT" shall mean the right to receive the
amount of any dividend paid on the share of Common Stock underlying a Stock
Unit or a Performance Unit, which shall be payable in cash, in Common Stock,
in the form of additional Stock Units or Performance Units (as the case may
be), or a combination of all of the foregoing.
1.10 "EFFECTIVE DATE" shall mean the date on which the Plan is adopted
by the Board.
1.11 "EMPLOYEE" shall mean an employee of the Company or any Subsidiary
as described in Treasury Regulation Section 1.421-7(h).
1.12 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time, including applicable regulations thereunder.
1.13 "FAIR MARKET VALUE OF THE COMMON STOCK" shall mean:
(a) if the Common Stock is readily tradeable on a national
securities exchange or other market system, the closing price of the
Common Stock on the date of calculation (or on the last preceding trading
date if Common Stock was not traded on such date), or
(b) if the Common Stock is not readily tradeable on a national
securities exchange or other market system:
(i) the book value of a share of Common Stock as of the last
day of the last completed fiscal quarter preceding the date of
calculation; or
(ii) any other value as otherwise determined in good faith by
the Board.
1.14 "INDEPENDENT CONTRACTOR" shall mean a person (who is not an Employee
or a Nonemployee Director) or an entity that renders services to the Company.
1.15 "ISO" shall mean an "incentive stock option" as such term is used in
Code Section 422.
1.16 "NONEMPLOYEE DIRECTOR" shall mean a member of the Board who is not an
Employee.
1.17 "NONQUALIFIED STOCK OPTION" shall mean a Stock Option that does not
qualify as an ISO.
1.18 "PARTICIPANT" shall mean any Employee, Nonemployee Director or
Independent Contractor to whom an Award has been granted by the Committee under
the Plan.
1.19 "PERFORMANCE-BASED AWARD" shall mean an Award subject to the
achievement of certain performance goal or goals as described in Section 12
below.
1.20 "PERFORMANCE SHARE" shall mean the grant by the Committee to a
Participant of an Award as described in Section 10.1 below.
1.21 "PERFORMANCE UNIT" shall mean the grant by the Committee to a
Participant of an Award as described in Section 10.2 below.
1.22 "PLAN" shall mean the Intek Global Corporation 1997 Performance and
Equity Incentive Plan.
1.23 "SAR" shall mean the grant by the Committee to a Participant of a
stock appreciation right as described in Section 8 below.
1.24 "STOCK AWARD" shall mean the grant by the Committee to a Participant
of an Award of Common Stock under Section 9.1 below.
1.25 "STOCK OPTION" shall mean the grant by the Committee to a Participant
of an option to purchase Common Stock under Section 7 below.
1.26 "STOCK UNIT" shall mean the grant by the Committee to a Participant
of an Award as described in Section 9.2 below.
1.27 "SUBSIDIARY" shall mean a corporation of which the Company directly
or indirectly owns more than 50 percent of the Voting Stock or any other
business entity in which the Company directly or indirectly has an ownership
interest of more than 50 percent.
1.28 "TREASURY REGULATIONS" shall mean the regulations promulgated under
the Code by the United States Department of the Treasury, as amended from time
to time.
1.29 "VEST" shall mean:
(a) with respect to Stock Options and SARs, when the Stock Option or
SAR (or a portion of such Stock Option or SAR) first becomes exercisable
and remains exercisable subject to the terms and conditions of such Stock
Option or SAR; or
(b) with respect to all Awards, when the Participant has:
(i) an unrestricted right, title and interest to receive the
compensation (whether payable in Common Stock, cash or a combination
of both) attributable to an Award (or a portion of such Award) or to
otherwise enjoy the benefits underlying such Award; and
(ii) a right to transfer an Award subject to no Company-imposed
restrictions or limitations other than restrictions and/or
limitations imposed by Section 14 below.
1.30 "VESTING DATE" shall mean the date or dates on which an Award Vests.
1.31 "VOTING STOCK" shall mean the capital stock of any class or classes
having general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
2.0 PURPOSE AND TERM OF PLAN
2.1 PURPOSE. The purpose of the Plan is to provide motivation to certain
Employees, Nonemployee Directors and Independent Contractors to put forth
maximum efforts toward the growth, profitability, and success of the Company and
Subsidiaries by providing incentives to such Employees, Nonemployee Directors
and Independent Contractors either through cash payments and/or through the
ownership and performance of the Common Stock. In addition, the Plan is intended
to provide incentives which will attract and retain highly qualified individuals
as Employees and Nonemployee Directors and to assist in aligning the interests
of such Employees and Nonemployee Directors with those of its stockholders.
2.2 TERM. The Plan shall be effective as of the Effective Date; PROVIDED,
HOWEVER, that the Plan shall be approved by the stockholders of the Company at
an annual meeting or any special meeting of stockholders of the Company within
12 months before or after the Effective Date, and such approval by the
stockholders of the Company shall be a condition to the right of each
Participant to receive Awards hereunder. Any Award granted under the Plan prior
to the approval by the stockholders of the Company shall be effective as of the
date of grant (unless the Committee specifies otherwise at the time of grant),
but no such Award may Vest, be paid out, or otherwise disposed of prior to such
stockholder approval. If the stockholders of the Company fail to approve the
Plan in accordance with this Section 2.2, any Award granted under the Plan shall
be cancelled. The Plan shall terminate on the 10th anniversary of the Effective
Date (unless sooner terminated by the Board).
3.0 ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY AND PARTICIPATION. All Employees of the Company, all
Nonemployee Directors and Independent Contractors shall be eligible to
participate in the Plan and to receive Awards. Participants shall consist of
such Employees, Nonemployee Directors and Independent Contractors as the
Committee in its sole discretion designates to receive Awards under the Plan.
Designation of a Participant in any year shall not require the Committee to
designate such person or entity to receive an Award in any other year or, once
designated, to receive the same type or amount of Award as granted to the
Participant in any other year. The Committee shall consider such factors as it
deems pertinent in selecting Participants and in determining the type and amount
of their respective Awards.
4.0 ADMINISTRATION
4.1 RESPONSIBILITY. The Committee shall have the responsibility, in its
sole discretion, to control, operate, manage and administer the Plan in
accordance with its terms.
4.2 AWARD AGREEMENT. Each Award granted under the Plan shall be evidenced
by an Award Agreement which shall be signed by the Committee and the
Participant; PROVIDED, HOWEVER, that in the event of any conflict between a
provision of the Plan and any provision of an Award Agreement, the provision of
the Plan shall prevail.
4.3 AUTHORITY OF THE COMMITTEE. The Committee shall have all the
discretionary authority that may be necessary or helpful to enable it to
discharge its responsibilities with respect to the Plan, including but not
limited to the following:
(a) to determine eligibility for participation in the Plan;
(b) to determine eligibility for and the type and size of an Award
granted under the Plan;
(c) to supply any omission, correct any defect, or reconcile any
inconsistency in the Plan in such manner and to such extent as it shall
deem appropriate in its sole discretion to carry the same into effect;
(d) to issue administrative guidelines as an aid to administer the
Plan and make changes in such guidelines as it from time to time deems
proper;
(e) to make rules for carrying out and administering the Plan and
make changes in such rules as it from time to time deems proper;
(f) to the extent permitted under the Plan, to grant waivers of Plan
terms, conditions, restrictions, and limitations;
(g) to accelerate the Vesting of any Award when such action or
actions would be in the best interest of the Company;
(h) to grant Award in replacement of Awards previously granted under
this Plan or any other executive compensation plan of the Company; and
(i) to take any and all other actions it deems necessary or advisable
for the proper operation or administration of the Plan.
4.4 ACTION BY THE COMMITTEE. The Committee may act only by a majority of
its members. Any determination of the Committee may be made, without a meeting,
by a writing or writings signed by all of the members of the Committee. In
addition, the Committee may authorize any one or more of its members to execute
and deliver documents on behalf of the Committee.
4.5 DELEGATION OF AUTHORITY. The Committee may delegate to one or more of
its members, or to one or more agents, such administrative duties as it may deem
advisable; PROVIDED, HOWEVER, that any such delegation shall be in writing. In
addition, the Committee, or any person to whom it has delegated duties under
this Section 4.5, may employ one or more persons to render advice with respect
to any responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel, consultant or agent.
Expenses incurred by the
Committee in the engagement of such counsel, consultant or agent shall be
paid by the Company, or the Subsidiary whose employees have benefitted from
the Plan, as determined by the Committee.
4.6 DETERMINATIONS AND INTERPRETATIONS BY THE COMMITTEE. All
determinations and interpretations made by the Committee shall be binding and
conclusive on all Participants and their heirs, successors, and legal
representatives.
4.7 LIABILITY. No member of the Board, no member of the Committee and no
employee of the Company shall be liable for any act or failure to act hereunder,
except in circumstances involving his or her bad faith, gross negligence or
willful misconduct, or for any act or failure to act hereunder by any other
member or employee or by any agent to whom duties in connection with the
administration of the Plan have been delegated.
4.8 INDEMNIFICATION. The Company shall indemnify members of the Committee
and any agent of the Committee who is an employee of the Company, against any
and all liabilities or expenses to which they may be subjected by reason of any
act or failure to act with respect to their duties on behalf of the Plan, except
in circumstances involving such person's bad faith, gross negligence or willful
misconduct.
5.0 SHARES SUBJECT TO PLAN
5.1 AVAILABLE SHARES. The aggregate number of shares of Common Stock
which shall be available for grants of Awards under the Plan during its term
shall be the sum of (i) 4,000,000 shares (which shall be subject to the
approval by the Company's stockholders in accordance with Section 2.2 above)
and (ii) the number of shares of Common Stock available for grants as of the
Effective Date under the Company's (x) 1988 Key Employee Stock Plan, as
amended, (y) 1994 Non-Employee Directors' Stock Option Plan, and (z) 1994
Stock Option Plan. Such shares of Common Stock available for issuance under
the Plan may be either authorized but unissued shares, shares of issued stock
held in the Company's treasury, or both, at the discretion of the Company,
and subject to any adjustments made in accordance with Section 5.2 below. Any
shares of Common Stock underlying Awards which terminate by expiration,
forfeiture, cancellation or otherwise without the issuance of such shares
shall again be available for grants of Awards under the Plan.
5.2 ADJUSTMENT TO SHARES. If there is any change in the Common Stock of
the Company, through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, dividend in kind or other like change
in capital structure or distribution (other than normal cash dividends) to
stockholders of the Company, an adjustment shall be made to each outstanding
Award so that each such Award shall thereafter be with respect to or exercisable
for such securities, cash and/or other property as would have been received in
respect of the Common Stock subject to such Award had such Award been paid,
distributed or exercised in full immediately prior to such change or
distribution. Such adjustment shall be made successively each
time any such change shall occur. In addition, in the event of any such
change or distribution, in order to prevent dilution or enlargement of
Participants' rights under the Plan, the Committee shall have the authority
to adjust, in an equitable manner, the number and kind of shares that may be
issued under the Plan, the number and kind of shares subject to outstanding
Awards, the exercise price applicable to outstanding Stock Options, and the
Fair Market Value of the Common Stock and other value determinations
applicable to outstanding Awards. Appropriate adjustments may also be made by
the Committee in the terms of any Awards granted under the Plan to reflect
such changes or distributions and to modify any other terms of outstanding
Awards on an equitable basis, including modifications of performance goals
and changes in the length of performance periods. In addition, the Committee
is authorized to make adjustments to the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
affecting the Company or the financial statements of the Company, or in
response to changes in applicable laws, regulations, or accounting
principles. Notwithstanding anything contained in the Plan, any adjustment
with respect to an ISO due to a change or distribution described in this
Section 5.2 shall comply with the rules of Code Section 424(a), and in no
event shall any adjustment be made which would render any ISO granted
hereunder other than an incentive stock option for purposes of Code Section
422.
6.0 MAXIMUM INDIVIDUAL AWARDS
6.1 MAXIMUM AGGREGATE NUMBER OF SHARES UNDERLYING STOCK-BASED AWARDS
GRANTED UNDER THE PLAN TO ANY SINGLE PARTICIPANT. The maximum aggregate number
of shares of Common Stock underlying all Awards measured in shares of Common
Stock (whether payable in Common Stock, cash or a combination of both) that may
be granted to any single Participant during the life of the Plan shall be
3,000,000 shares, subject to adjustment as provided in Section 5.2 above. For
purposes of the preceding sentence, such Awards that are cancelled or repriced
shall continue to be counted in determining such maximum aggregate number of
shares of Common Stock that may be granted to any single Participant during the
life of the Plan.
6.2 MAXIMUM DOLLAR AMOUNT UNDERLYING CASH-BASED AWARDS GRANTED UNDER THE
PLAN TO ANY SINGLE PARTICIPANT. The maximum dollar amount that may be paid to
any single Participant with respect to any single Award measured in cash
(whether payable in Common Stock, cash or a combination of both) during the life
of the Plan shall be $3,000,000, irrespective of the length of the performance
period with respect to such Award.
7.0 STOCK OPTIONS
7.1 IN GENERAL. The Committee may, in its sole discretion, grant Stock
Options to Employees, Nonemployee Directors and Independent Contractors on or
after the Effective Date. The Committee shall, in its sole discretion, determine
the Employees, the Nonemployee Directors and Independent Contractors who will
receive Stock Options and the number of shares of Common Stock underlying each
Stock Option. With respect to Employees who become Participants, the Committee
may grant such Participants ISOs or Nonqualified Stock Options or a combination
of both. With respect to Nonemployee Directors and Independent Contractors who
become Participants, the Committee may grant such Participants only
Nonqualified Stock Options. Each Stock Option shall be subject to such terms
and conditions consistent with the Plan as the Committee may impose from time
to time. In addition, each Stock Option shall be subject to the following
terms and conditions set forth in Sections 7.2 through 7.8 below.
7.2 EXERCISE PRICE. The Committee shall specify the exercise price of
each Stock Option in the Award Agreement; PROVIDED, HOWEVER, that (i) the
exercise price of any ISO shall not be less than 100 percent of the Fair Market
Value of the Common Stock on the date of grant, and (ii) the exercise price of
any Nonqualified Stock Option shall not be less than 100 percent of the Fair
Market Value of the Common Stock on the date of grant unless the Committee--in
its sole discretion and due to special circumstances--determines otherwise on
the date of grant.
7.3 TERM OF STOCK OPTION. The Committee shall specify the term of each
Stock Option in the Award Agreement; PROVIDED, HOWEVER, that (i) no ISO shall be
exercised after the 10th anniversary of the date of grant of such ISO and
(ii) no Nonqualified Stock Option shall be exercised after the 20th anniversary
of the date of grant of such Nonqualified Stock Option. Each Stock Option shall
terminate at such earlier times and upon such conditions or circumstances as the
Committee shall, in its sole discretion, set forth in the Award Agreement on the
date of grant.
7.4 VESTING DATE. The Committee shall specify the Vesting Date with
respect to each Stock Option in the Award Agreement. The Committee may grant
Stock Options that are Vested, either in whole or in part, on the date of grant.
If the Committee fails to specify a Vesting Date in the Award Agreement,
20 percent of such Stock Option shall become exercisable on each of the first 5
anniversaries of the date of grant and shall remain exercisable following such
anniversary date until the Stock Option expires in accordance with its terms
under the Award Agreement or under the terms of the Plan. The Vesting of a Stock
Option may be subject to such other terms and conditions as shall be determined
by the Committee, including, without limitation, accelerating the Vesting if
certain performance goals are achieved.
7.5 EXERCISE OF STOCK OPTIONS. The Stock Option exercise price may be
paid in cash or, in the sole discretion of the Committee, by the delivery of
shares of Common Stock then owned by the Participant, by the withholding of
shares of Common Stock for which a Stock Option is exercisable, or by a
combination of these methods. In the sole discretion of the Committee,
payment may also be made by delivering a properly executed exercise notice to
the Company together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay
the exercise price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms. The
Committee may prescribe any other method of paying the exercise price that it
determines to be consistent with applicable law and the purpose of the Plan,
including, without limitation, in lieu of the exercise of a Stock Option by
delivery of shares of Common Stock then owned by a Participant, providing the
Company with a notarized statement attesting to the number of shares owned by
the Participant, where, upon verification by the Company, the Company would
issue to the Participant only the number of incremental shares to which the
Participant is entitled upon exercise of the Stock Option. In determining
which methods a
Participant may utilize to pay the exercise price, the Committee may consider
such factors as it determines are appropriate; PROVIDED, HOWEVER, that with
respect to ISOs, all such discretionary determinations by the Committee shall
be made at the time of grant and specified in the Award Agreement.
7.6 RESTRICTIONS RELATING TO ISOS. In addition to being subject to the
terms and conditions of this Section 7, ISOs shall comply with all other
requirements under Code Section 422. Accordingly, ISOs may be granted only to
Participants who are employees (as described in Treasury Regulation Section
1.421-7(h)) of the Company or of any "Parent Corporation" (as defined in Code
Section 424(e)) or of any "Subsidiary Corporation" (as defined in Code Section
424(f)) on the date of grant. The aggregate market value (determined as of the
time the ISO is granted) of the Common Stock with respect to which ISOs (under
all option plans of the Company and of any Parent Corporation and of any
Subsidiary Corporation) are exercisable for the first time by a Participant
during any calendar year shall not exceed $100,000. For purposes of the
preceding sentence, (i) ISOs shall be taken into account in the order in which
they are granted and (ii) ISOs granted before 1987 shall not be taken into
account. ISOs shall not be transferable by the Participant otherwise than by
will or the laws of descent and distribution and shall be exercisable, during
the Participant's lifetime, only by such Participant. The Committee shall not
grant ISOs to any Employee who, at the time the ISO is granted, owns stock
possessing (after the application of the attribution rules of Code Section
424(d)) more than 10 percent of the total combined voting power of all classes
of stock of the Company or of any Parent Corporation or of any Subsidiary
Corporation unless the exercise price of the ISO is fixed at not less than 110
percent of the Fair Market Value of the Common Stock on the date of grant and
the exercise of such ISO is prohibited by its terms after the 5th anniversary of
the ISO's date of grant. In addition, no ISO shall be issued to a Participant in
tandem with a Nonqualified Stock Option issued to such Participant in accordance
with Treasury Regulation Section 14a.422A-1, Q/A-39.
7.7 ADDITIONAL TERMS AND CONDITIONS. The Committee may, by way of the
Award Agreements or otherwise, establish such other terms, conditions,
restrictions and/or limitations, if any, of any Stock Option, provided they are
not inconsistent with the Plan, including, without limitation, the requirement
that the Participant not engage in competition with the Company.
7.8 CONVERSION STOCK OPTIONS. The Committee may, in its sole discretion,
grant a Stock Option to any holder of an option (an "Original Option") to
purchase shares of the stock of any corporation (i) whose stock or assets were
acquired, directly or indirectly, by the Company or any Subsidiary, or
(ii) which was merged with and into the Company or a Subsidiary, so that the
Original Option is converted into a Stock Option (a "Conversion Stock Option");
PROVIDED, HOWEVER, that such Conversion Stock Option as of the date of grant of
such Conversion Stock Option (the "Conversion Stock Option Grant Date") shall
have the same economic value as the Original Option as of the Conversion Stock
Option Grant Date. In addition, unless the Committee, in its sole discretion,
determines otherwise, a Conversion Stock Option which is converting an Original
Option intended to qualify as an ISO shall have the same terms and conditions as
applicable to the Original Option in accordance with Code Section 424 and the
regulations thereunder so that the conversion (i) is treated as the issuance or
assumption of a
stock option under Code Section 424(a) and (ii) is not treated
as a modification, extension or renewal of a stock option under Code Section
424(h).
8.0 SARS
8.1 IN GENERAL. The Committee may, in its sole discretion, grant SARs
to Employees, Nonemployee Directors, and/or Independent Contractors. An SAR
is a right to receive a payment in cash, Common Stock or a combination of
both, in an amount equal to the excess of (x) the Fair Market Value of the
Common Stock, or other specified valuation, of a specified number of shares
of Common Stock on the date the SAR is exercised over (y) the Fair Market
Value of the Common Stock, or other specified valuation (which shall be no
less than the Fair Market Value of the Common Stock), of such shares of
Common Stock on the date the SAR is granted, all as determined by the
Committee; PROVIDED, HOWEVER, that if an SAR is granted retroactively in
tandem with or in substitution for a Stock Option, the designated Fair Market
Value of the Common Stock in the Award Agreement may be the Fair Market Value
of the Common Stock on the date such Stock Option was granted. Each SAR shall
be subject to such terms and conditions, including, but not limited to, a
provision that automatically converts an SAR into a Stock Option on a
conversion date specified at the time of grant, as the Committee shall impose
from time to time in its sole discretion and subject to the terms of the
Plan.
9.0 STOCK AWARDS AND STOCK UNITS
9.1 STOCK AWARDS. The Committee may, in its sole discretion, grant Stock
Awards to Employees, Nonemployee Directors, and/or Independent Contractors as
additional compensation or in lieu of other compensation for services to the
Company. A Stock Award shall consist of shares of Common Stock which shall be
subject to such terms and conditions as the Committee in its sole discretion
determines appropriate--including, without limitation, restrictions on the sale
or other disposition of such shares, the Vesting Date with respect to such
shares, and the right of the Company to reacquire such shares for no
consideration upon termination of the Participant's employment within specified
periods. The Committee may require the Participant to deliver a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by such
Stock Award and/or that the stock certificates evidencing such shares be held in
custody or bear restrictive legends until the restrictions thereon shall have
lapsed. With respect to the shares of Common Stock subject to a Stock Award, the
Participant shall have all of the rights of a holder of shares of Common Stock,
including the right to receive dividends and to vote the shares, unless the
Committee determines otherwise on the date of grant.
9.2 STOCK UNITS. The Committee may, in its sole discretion, grant to
Employees, Nonemployee Directors, and/or Independent Contractor Stock Units as
additional compensation or in lieu of other compensation for services to the
Company. A Stock Unit is a hypothetical share of Common Stock represented by a
notional account established and maintained (or caused to be established or
maintained) by the Company for such Participant who receives a grant of Stock
Units. Stock Units shall be subject to such terms and conditions as the
Committee, in its sole discretion, determines appropriate--including, without
limitation, determinations of the Vesting
Date with respect to such Stock Units and the criteria for the Vesting of
such Stock Units. A Stock Unit granted by the Committee shall provide for
payment in shares of Common Stock at such time or times as the Award
Agreement shall specify. The Committee shall determine whether a Participant
who has been granted a Stock Unit shall also be entitled to a Dividend
Equivalent Right.
9.3 PAYOUT OF STOCK UNITS. Subject to a Participant's election to defer
in accordance with Section 17.3 below, upon the Vesting of a Stock Unit, the
shares of Common Stock representing the Stock Unit shall be distributed to the
Participant, unless the Committee, in its sole discretion, provides for the
payment of the Stock Unit in cash (or partly in cash and partly in shares of
Common Stock) equal to the value of the shares of Common Stock which would
otherwise be distributed to the Participant.
10.0 PERFORMANCE SHARES AND PERFORMANCE UNITS
10.1 PERFORMANCE SHARES. The Committee may, in its sole discretion, grant
Performance Shares to Employees, Nonemployee Directors, and/or Independent
Contractors as additional compensation or in lieu of other compensation for
services to the Company. A Performance Share shall consist of a share or shares
of Common Stock which shall be subject to such terms and conditions as the
Committee, in its sole discretion, determines appropriate--including, without
limitation, determining the performance goal or goals which, depending on the
extent to which such goals are met, will determine the number and/or value of
the Performance Shares that will be paid out or distributed to the Participant
who has been granted Performance Shares. Performance goals may be based on,
without limitation, Company-wide, divisional and/or individual performance, as
the Committee, in its sole discretion, may determine, and may be based on the
performance measures listed in Section 12.3 below.
10.2 PERFORMANCE UNITS. The Committee may, in its sole discretion, grant
to Employees, Nonemployee Directors, and/or Independent Contractors Performance
Units as additional compensation or in lieu of other compensation for services
to the Company. A Performance Unit is a hypothetical share or shares of Common
Stock represented by a notional account which shall be established and
maintained (or caused to be established or maintained) by the Company for such
Participant who receives a grant of Performance Units. Performance Units shall
be subject to such terms and conditions as the Committee, in its sole
discretion, determines appropriate--including, without limitation, determining
the performance goal or goals which, depending on the extent to which such goals
are met, will determine the number and/or value of the Performance Units that
will be accrued with respect to the Participant who has been granted Performance
Units. Performance goals may be based on, without limitation, Company-wide,
divisional and/or individual performance, as the Committee, in its sole
discretion, may determine, and may be based on the performance measures listed
in Section 12.3 below.
10.3 ADJUSTMENT OF PERFORMANCE GOALS. With respect to those Performance
Shares or Performance Units that are not intended to qualify as
Performance-Based Awards (as described in Section 12 below), the Committee shall
have the authority at any time to make adjustments to
performance goals for any outstanding Performance Shares or Performance Units
which the Committee deems necessary or desirable unless at the time of
establishment of the performance goals the Committee shall have precluded its
authority to make such adjustments.
10.4 PAYOUT OF PERFORMANCE SHARES OR PERFORMANCE UNITS. Subject to a
Participant's election to defer in accordance with Section 17.3 below, upon the
Vesting of a Performance Share or a Performance Unit, the shares of Common Stock
representing the Performance Share or the Performance Unit shall be distributed
to the Participant, unless the Committee, in its sole discretion, provides for
the payment of the Performance Share or a Performance Unit in cash (or partly in
cash and partly in shares of Common Stock) equal to the value of the shares of
Common Stock which would otherwise be distributed to the Participant.
11.0 CASH AWARDS
11.1 IN GENERAL. The Committee may, in its sole discretion, grant Cash
Awards to Employees, Nonemployee Directors, and/or Independent Contractors as
additional compensation or in lieu of other compensation for services to the
Company. A Cash Award shall be subject to such terms and conditions as the
Committee, in its sole discretion, determines appropriate--including, without
limitation, determining the Vesting Date with respect to such Cash Award, the
criteria for the Vesting of such Cash Award, and the right of the Company to
require the Participant to repay the Cash Award (with or without interest) upon
termination of the Participant's employment within specified periods.
12.0 PERFORMANCE-BASED AWARDS
12.1 IN GENERAL. The Committee, in its sole discretion, may designate
Awards granted under the Plan as Performance-Based Awards (as defined below) if
it determines that such compensation might not be tax deductible by the Company
due to the deduction limitation imposed by Code Section 162(m). Accordingly, an
Award granted under the Plan may be granted in such a manner that the
compensation attributable to such Award is intended by the Committee to qualify
as "performance-based compensation" (as such term is used in Code Section 162(m)
and the regulations thereunder) and thus be exempt from the deduction limitation
imposed by Code Section 162(m) ("Performance-Based Awards").
12.2 QUALIFICATION OF PERFORMANCE-BASED AWARDS. Awards shall only qualify
as Performance-Based Awards under the Plan if:
(a) at the time of grant the Committee is comprised solely of two or
more "outside directors" (as such term is used in Code Section 162(m) and
the regulations thereunder);
(b) with respect to either the granting or Vesting of an Award (other
than (i) a Nonqualified Stock Option or (ii) an SAR, which are granted with
an exercise price at or above the Fair Market Value of the Common Stock on
the date of grant), such Award is
subject to the achievement of a performance goal or goals based on one or
more of the performance measures specified in Section 12.3 below;
(c) the Committee establishes in writing (i) the objective
performance-based goals applicable to a given performance period and (ii)
the individual employees or class of employees to which such
performance-based goals apply no later than 90 days after the commencement
of such performance period (but in no event after 25 percent of such
performance period has elapsed);
(d) no compensation attributable to a Performance-Based Award will be
paid to or otherwise received by a Participant until the Committee
certifies in writing that the performance goal or goals (and any other
material terms) applicable to such performance period have been satisfied;
and
(e) after the establishment of a performance goal, the Committee
shall not revise such performance goal or increase the amount of
compensation payable with respect to such Award (as determined in
accordance with Code Section 162(m)) upon the attainment of such
performance goal.
12.3 PERFORMANCE MEASURES. The Committee may use the following
performance measures (either individually or in any combination) to set
performance goals with respect to Awards intended to qualify as
Performance-Based Awards: net sales; pretax income before allocation of
corporate overhead and bonus; budget; cash flow; earnings per share; net income;
division, group or corporate financial goals; return on stockholders' equity;
return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Common Stock or any other
publicly traded securities of the Company; market share; gross profits; earnings
before interest and taxes; earnings before interest, taxes, depreciation and
amortization; economic value-added models; comparisons with various stock market
indices; increase in number of customers; and/or reductions in costs.
13.0 CHANGE IN CONTROL
13.1 ACCELERATED VESTING. Notwithstanding any other provision of this
Plan to the contrary, if there is a change in control of the Company, the
Committee, in its sole discretion, may take such actions as it deems appropriate
with respect to outstanding Awards, including, without limitation, accelerating
the Vesting Date and/or payout of such Awards.
13.2 CASHOUT. The Committee, in its sole discretion, may determine that,
upon the occurrence of a change in control of the Company, all or a portion of
certain outstanding Awards shall terminate within a specified number of days
after notice to the holders, and each such holder shall receive an amount equal
to the value of such Award on the date of the change in control, and with
respect to each share of Common Stock subject to a Stock Option or SAR, an
amount equal to the excess of the Fair Market Value of such shares of Common
Stock immediately prior to the occurrence of such change in control over the
exercise price per share of such Stock Option or
SAR. Such amount shall be payable in cash, in one or more kinds of property
(including the property, if any, payable in the transaction) or in a
combination thereof, as the Committee, in its sole discretion, shall
determine.
13.3 ASSUMPTION OR SUBSTITUTION OF AWARDS. Notwithstanding anything
contained in the Plan to the contrary, the Committee may, in its sole
discretion, provide that an Award may be assumed by any entity which acquires
control of the Company or may be substituted by a similar award under such
entity's compensation plans.
14.0 TERMINATION OF EMPLOYMENT IF PARTICIPANT IS AN EMPLOYEE
14.1 TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. Subject to any
written agreement between the Company and a Participant, if a Participant's
employment is terminated due to death or disability:
(a) all non-Vested portions of Awards held by the Participant on the
date of the Participant's death or the date of the termination of his or
her employment, as the case may be, shall immediately be forfeited by such
Participant as of such date; and
(b) all Vested portions of Stock Options and SARs held by the
Participant on the date of the Participant's death or the date of the
termination of his or her employment, as the case may be, shall remain
exercisable until the earlier of (i) the end of the 12-month period
following the date of the Participant's death or the date of the
termination of his or her employment, as the case may be, or (ii) the date
the Stock Option or SAR would otherwise expire.
14.2 TERMINATION OF EMPLOYMENT FOR CAUSE. Subject to any written
agreement between the Company and a Participant, if a Participant's employment
is terminated by the Company for cause, all Awards held by a Participant on the
date of the termination of his or her employment for cause, whether Vested or
non-Vested, shall immediately be forfeited by such Participant as of such date.
14.3 OTHER TERMINATIONS OF EMPLOYMENT. Subject to any written agreement
between the Company and a Participant, if a Participant's employment is
terminated for any reason other than for cause or other than due to death or
disability:
(a) all non-Vested portions of Awards held by the Participant on the
date of the termination of his or her employment shall immediately be
forfeited by such Participant as of such date; and
(b) all Vested portions of Stock Options and/or SARs held by the
Participant on the date of the termination of his or her employment shall
remain exercisable until the earlier of (i) the end of the 90-day period
following the date of the termination of the
Participant's employment or (ii) the date the Stock Option or SAR would
otherwise expire.
14.4 COMMITTEE DISCRETION. Notwithstanding anything contained in the Plan
to the contrary, the Committee may, in its sole discretion, provide that:
(a) any or all non-Vested portions of Stock Options and/or SARs held
by the Participant on the date of the Participant's death and/or the date
of the termination of his or her employment shall immediately become
exercisable as of such date and, except with respect to ISOs, shall remain
exercisable until a date that occurs on or prior to the date the Stock
Option or SAR is scheduled to expire;
(b) any or all Vested portions of Nonqualified Stock Options and/or
SARs held by the Participant on the date of the Participant's death and/or
the date of the termination of his or her employment shall remain
exercisable until a date that occurs on or prior to the date the Stock
Option or SAR is scheduled to expire; and/or
(c) any or all non-Vested portions of Stock Awards, Stock Units,
Performance Shares, Performance Units, and/or Cash Awards held by the
Participant on the date of the Participant's death and/or the date of the
termination of his or her employment shall immediately Vest or shall become
Vested on a date that occurs on or prior to the date the Award is scheduled
to vest.
14.5 ISOS. Notwithstanding anything contained in the Plan to the
contrary, (i) the provisions contained in this Section 14 shall be applied to an
ISO only if the application of such provision maintains the treatment of such
ISO as an ISO and (ii) the exercise period of an ISO in the event of a
termination of the Participant's employment due to disability provided in
Section 14.1 above shall be applied only if the Participant is "permanently and
totally disabled" (as such term is defined in Code Section 22(e)(3)).
15.0 TAXES
15.1 WITHHOLDING TAXES. With respect to Employees, the Company, or the
applicable Subsidiary, may require a Participant who has become vested in his
or her Stock Award, Stock Unit, Performance Share or Performance Unit granted
hereunder, or who exercises a Stock Option or SAR granted hereunder, to
reimburse the corporation which employs such Participant for any taxes
required by any governmental regulatory authority to be withheld or otherwise
deducted and paid by such corporation or entity in respect of the issuance or
disposition of such shares or the payment of any amounts. In lieu thereof,
the corporation or entity which employs such Participant shall have the right
to withhold the amount of such taxes from any other sums due or to become due
from such corporation or entity to the Participant upon such terms and
conditions as the Committee shall prescribe. The corporation or entity that
employs such Participant may, in its discretion, hold the stock certificate
to which such Participant is entitled upon the vesting of a Stock Award,
Stock Unit, Performance Share or Performance Unit or the
exercise of a Stock Option or SAR as security for the payment of such
withholding tax liability, until cash sufficient to pay that liability has
been accumulated.
15.2 USE OF COMMON STOCK TO SATISFY WITHHOLDING OBLIGATION. With respect
to Employees, at any time that the Company, Subsidiary or other entity that
employs such Participant becomes subject to a withholding obligation under
applicable law with respect to the vesting of a Stock Award, Stock Unit,
Performance Share or Performance Unit or the exercise of a Nonqualified Stock
Option (the "Tax Date"), except as set forth below, a holder of such Award may
elect to satisfy, in whole or in part, the holder's related personal tax
liabilities (an "Election") by (i) directing the Company, Subsidiary or other
entity that employs such Participant to withhold from shares issuable in the
related vesting or exercise either a specified number of shares or shares of
Common Stock having a specified value (in each case not in excess of the related
personal tax liabilities), (ii) tendering shares of Common Stock previously
issued pursuant to the exercise of a Stock Option or other shares of the Common
Stock owned by the holder, or (iii) combining any or all of the foregoing
Elections in any fashion. An Election shall be irrevocable. The withheld shares
and other shares of Common Stock tendered in payment shall be valued at their
Fair Market Value of the Common Stock on the Tax Date. The Committee may
disapprove of any Election, suspend or terminate the right to make Elections or
provide that the right to make Elections shall not apply to particular shares or
exercises. The Committee may impose any additional conditions or restrictions on
the right to make an Election as it shall deem appropriate, including conditions
or restrictions with respect to Section 16 of the Exchange Act.
15.3 NO GUARANTEE OF TAX CONSEQUENCES. No person connected with the
Plan in any capacity, including, but not limited to, the Company and any
Subsidiary and their directors, officers, agents and employees, makes any
representation, commitment, or guarantee that any tax treatment, including,
but not limited to, federal, state and local income, estate and gift tax
treatment, will be applicable with respect to amounts deferred under the
Plan, or paid to or for the benefit of a Participant under the Plan, or that
such tax treatment will apply to or be available to a Participant on account
of participation in the Plan.
16.0 AMENDMENT AND TERMINATION
16.1 TERMINATION OF PLAN. The Board may suspend or terminate the Plan at
any time with or without prior notice; PROVIDED, HOWEVER, that no action
authorized by this Section 16.1 shall reduce the amount of any outstanding Award
or change the terms and conditions thereof without the Participant's consent.
16.2 AMENDMENT OF PLAN. The Board may amend the Plan at any time with or
without prior notice; PROVIDED, HOWEVER, that no action authorized by this
Section 16.2 shall reduce the amount of any outstanding Award or change the
terms and conditions thereof without the Participant's consent. No amendment of
the Plan shall, without the approval of the stockholders of the Company:
(a) increase the total number of shares which may be issued under the
Plan;
(b) increase the maximum number of shares with respect to all Awards
measured in Common Stock that may be granted to any individual under the
Plan;
(c) increase the maximum dollar amount that may be paid with respect
to any single Award measured in cash; or
(d) modify the requirements as to eligibility for Awards under the
Plan.
In addition, the Plan shall not be amended without the approval of such
amendment by the Company's stockholders if such amendment (i) is required under
the rules and regulations of the stock exchange or national market system on
which the Common Stock is listed, or (ii) will disqualify any ISO granted
hereunder.
16.3 AMENDMENT OR CANCELLATION OF AWARD AGREEMENTS. The Committee may
amend or modify any Award Agreement at any time by mutual agreement between the
Committee and the Participant or such other persons as may then have an interest
therein. In addition, by mutual agreement between the Committee and a
Participant or such other persons as may then have an interest therein, Awards
may be granted to an Employee, Nonemployee Director or Independent Contractor in
substitution and exchange for, and in cancellation of, any Awards previously
granted to such Employee, Nonemployee Director or Independent Contractor under
the Plan, or any award previously granted to such Employee, Nonemployee Director
or Independent Contractor under any other present or future plan of the Company
or any present or future plan of an entity which (i) is purchased by the
Company, (ii) purchases the Company, or (iii) merges into or with the Company.
17.0 MISCELLANEOUS
17.1 OTHER PROVISIONS. Awards granted under the Plan may also be subject
to such other provisions (whether or not applicable to the Award granted to any
other Participant) as the Committee determines on the date of grant to be
appropriate, including, without limitation, for the installment purchase of
Common Stock under Stock Options, to assist the Participant in financing the
acquisition of Common Stock, for the forfeiture of, or restrictions on resale or
other disposition of, Common Stock acquired under any Stock Option, for the
acceleration of Vesting of Awards in the event of a change in control of the
Company, for the payment of the value of Awards to Participants in the event of
a change in control of the Company, or to comply with federal and state
securities laws, or understandings or conditions as to the Participant's
employment in addition to those specifically provided for under the Plan.
17.2 TRANSFERABILITY. Each Award granted under the Plan to a Participant
shall not be transferable otherwise than by will or the laws of descent and
distribution, and Stock Options and SARs shall be exercisable, during the
Participant's lifetime, only by the Participant. In the event of the death of a
Participant, each Stock Option or SAR theretofore granted to him or her shall be
exercisable during such period after his or her death as the Committee shall, in
its sole discretion, set forth in the Award Agreement on the date of grant and
then only by the executor or
administrator of the estate of the deceased Participant or the person or
persons to whom the deceased Participant's rights under the Stock Option or
SAR shall pass by will or the laws of descent and distribution.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
permit the transferability of a Stock Option (other than an ISO) by a
Participant solely to members of the Participant's immediate family or trusts
or family partnerships or other similar entities for the benefit of such
persons, and subject to such terms, conditions, restrictions and/or
limitations, if any, as the Committee may establish and include in the Award
Agreement.
17.3 ELECTION TO DEFER COMPENSATION ATTRIBUTABLE TO AWARD. The Committee
may, in its sole discretion, allow a Participant to elect to defer the receipt
of any compensation attributable to an Award under guidelines and procedures to
be established by the Committee after taking into account the advice of the
Company's tax counsel.
17.4 LISTING OF SHARES AND RELATED MATTERS. If at any time the Committee
shall determine that the listing, registration or qualification of the shares of
Common Stock subject to any Award on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of, or in connection with,
the granting of an Award or the issuance of shares of Common Stock thereunder,
such Award may not be exercised, distributed or paid out, as the case may be, in
whole or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
17.5 NO RIGHT, TITLE, OR INTEREST IN COMPANY ASSETS. Participants shall
have no right, title, or interest whatsoever in or to any investments which the
Company may make to aid it in meeting its obligations under the Plan. Nothing
contained in the Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Participant, beneficiary, legal
representative or any other person. To the extent that any person acquires a
right to receive payments from the Company under the Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts except as expressly
set forth in the Plan. The Plan is not intended to be subject to the Employee
Retirement Income Security Act of 1974, as amended.
17.6 NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE OR TO GRANTS. The
Participant's rights, if any, to continue to serve the Company as a director,
officer, employee, independent contractor or otherwise, shall not be enlarged or
otherwise affected by his or her designation as a Participant under the Plan,
and the Company or the applicable Subsidiary reserves the right to terminate the
employment of any Employee or the services of any Independent Contractor or
director at any time. The adoption of the Plan shall not be deemed to give any
Employee, Nonemployee Director, Independent Contractor or any other individual
any right to be selected as a Participant or to be granted an Award.
17.7 AWARDS SUBJECT TO FOREIGN LAWS. The Committee may grant Awards to
individual Participants who are subject to the tax laws of nations other than
the United States, and such Awards may have terms and conditions as determined
by the Committee as necessary to comply with applicable foreign laws. The
Committee may take any action which it deems advisable to obtain approval of
such Awards by the appropriate foreign governmental entity; PROVIDED, HOWEVER,
that no such Awards may be granted pursuant to this Section 16.6 and no action
may be taken which would result in a violation of the Exchange Act or any other
applicable law.
17.8 GOVERNING LAW. The Plan, all Awards granted hereunder, and all
actions taken in connection herewith shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws, except as superseded by applicable federal law.
17.9 OTHER BENEFITS. No Award granted under the Plan shall be considered
compensation for purposes of computing benefits under any retirement plan of the
Company or any Subsidiary nor affect any benefits or compensation under any
other benefit or compensation plan of the Company or any Subsidiary now or
subsequently in effect.
17.10 NO FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, Common Stock, Stock Options, or other property shall be
issued or paid in lieu of fractional shares or whether such fractional shares or
any rights thereto shall be forfeited or otherwise eliminated.
