2005 STOCK INCENTIVE PLANEquity Incentive Plan Agreement |
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EXHIBIT 10.16 AFFINIA GROUP HOLDINGS INC. 2005 STOCK INCENTIVE PLAN 1. Purpose of the Plan ------------------- The purpose of the Plan (as defined below) is to aid the Company (as defined below) and its Affiliates (as defined below) in recruiting and retaining key employees, directors or consultants of outstanding ability and to motivate such employees, directors or consultants to exert their best efforts on behalf of the Company and its Affiliates by providing incentives through the granting of Awards (as defined below). The Company expects that it will benefit from the added interest which such key employees, directors or consultants will have in the welfare of the Company as a result of their proprietary interest in the Company's success. 2. Definitions ----------- The following capitalized terms used in the Plan have the respective meanings set forth in this Section: (a) Act: The Securities Exchange Act of 1934, as amended, or any successor thereto. (b) Affiliate: With respect to any Person, any other Person, directly or indirectly, controlling, controlled by or under common control with such Person or any other Person designated by the Committee in which any Person has an interest. (c) Award: Any Option, Stock Appreciation Right, or Other Stock-Based Award granted pursuant to the Plan. (d) Award Agreement: Any written agreement, contract, or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant. (e) Board: The Board of Directors of the Company. (f) Change in Control: The occurrence of any of the following events (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any "person" or "group" (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act) other than Cypress or its controlled affiliates, (ii) any person or group, other than Cypress or its controlled affiliates, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise and Cypress does not have the power (by contract or otherwise) to appoint a majority of the members of the Board, or (iii) any person or group, other than Cypress or its controlled affiliates, is or becomes the "beneficial owner", directly or indirectly, of more than 20% of the total voting power of the voting stock of the Company directly or indirectly, such person or group acquires more voting power in the Company than Cypress or its controlled affiliates combined (including voting power held by contract) and Cypress does not have the power (by contract or otherwise) to appoint a majority of the members of the Board. 2 (g) Code: The Internal Revenue Code of 1986, as amended, or any successor thereto. (h) Committee: A committee of the Board designated by the Board. (i) Company: Affinia Group Holdings Inc. (j) Cypress: Cypress Merchant Banking Partners II L.P., Cypress Merchant Banking II C.V., 55th Street Partners II L.P. and Cypress Side-By-Side LLC. (k) Effective Date: The date the Board adopts the Plan. (l) Employment: (i) a Participant's employment if the Participant is an employee of the Company or any of its Affiliates, (ii) a Participant's services as a consultant, if the Participant is a consultant to the Company or any of its Affiliates and (iii) a Participant's services as an non-employee director, if the Participant is a non-employee member of the Board or the board of directors of an Affiliate; provided however that unless otherwise determined by the Committee, a change in a Participant's status from employee to non-employee (other than a director of the Company or an Affiliate) shall constitute a termination of employment hereunder. (m) Fair Market Value: On a given date, (a) if there is a public market for the Shares on such date, the average of the high and low closing bid prices of the Shares on such stock exchange on which the Shares are principally trading on the date in question, or, if there were no sales on such date, on the closest preceding date on which there were sales of Shares or (ii) if there is no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Board. (n) ISO: An Option that is also an incentive stock option granted pursuant to Section 6(d) of the Plan. (o) Operating Company. Affinia Group Inc. (p) Option: A stock option granted pursuant to Section 6 of the Plan. (q) Option Price: The purchase price per Share of an Option, as determined pursuant to Section 6(a) of the Plan. (r) Other Stock-Based Award: Any award granted under Section 8 of the Plan. (s) Participant: An employee, director or consultant of the Company or its Affiliates who is selected by the Committee to participate in the Plan. (t) Person: Any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. (u) Plan: Affinia Group Holdings Inc. 2005 Stock Incentive Plan. 3 (v) Restrictive Covenant Agreement. A Confidentiality, Non-Competition and Proprietary Information Agreement in form approved by the Board which, unless otherwise determined by the Board, shall be entered into by each Participant who is issued an Award hereunder. (w) Shares: Shares of common stock of the Company. (x) Stock Appreciation Right: Any right granted under Section 7 of the Plan. (y) Stockholders Agreement. A Management Stockholder's Agreement in form approved by the Board which, unless otherwise determined by the Board, shall be entered into by each Participant who is issued an Award hereunder. (z) Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the Code (or any successor section thereto), of the Company. 3. Shares Subject to the Plan -------------------------- The total number of Shares which may be issued under the Plan is 227,000. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares or the payment of cash upon the exercise of an Award shall reduce the total number of Shares available under the Plan, as applicable. Shares which are (i) subject to Awards (or portion thereof) that terminate or lapse or (ii) delivered by the Participant or withheld by the Company to pay the minimum statutory withholding rate in accordance with Section 4(d), in each case, may be granted again under the Plan. 4. Administration -------------- (a) The Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part as it determines; provided, however, that the Board may, in its sole discretion, take any action designated to the Committee under this Plan as it may deem necessary. (b) The Committee shall have the full power and authority to make, and establish the terms and conditions of, any Award to any person eligible to be a Participant, consistent with the provisions of the Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions or payment dates). Awards may, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or its Affiliates or a company acquired by the Company or with which the Company combines. The number of Shares underlying such substitute awards shall be counted against the aggregate number of Shares available for Awards under the Plan. (c) The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it, in good faith, deems necessary or desirable for the administration of the Plan, and may delegate such authority, as it deems appropriate. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent 4 the Committee deems necessary or desirable. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute good faith discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors). (d) The Committee shall require payment of any amount it may determine to be necessary to withhold for federal, state, local, or other taxes as a result of the exercise, grant or vesting of an Award. Unless the Committee specifies otherwise, the Participant may elect to pay a portion or all of such withholding taxes by (i) delivery in Shares or (ii) having Shares withheld by the Company with a Fair Market Value equal to the minimum statutory withholding rate from any Shares that would have otherwise been received by the Participant. 5. Limitations ----------- No Awards may be granted under the Plan after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date. 6. Options ------- Options granted under the Plan shall be, as determined by the Committee, non-qualified stock options or ISOs for federal income tax purposes, as evidenced by the related Award Agreements, and shall be subject to the foregoing and the following terms and conditions and to such other terms and conditions, not inconsistent therewith, as the Committee shall determine: (a) Option Price. The Option Price shall be determined by the Committee, but, with respect to ISOs, shall not be less than 100% of the Fair Market Value of the Shares on the date an Option is granted. (b) Exercisability. Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted. (c) Exercise of Options. Except as otherwise provided in the Plan or in an Award Agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes of this Section 6, the exercise date of an Option shall be the date a notice of exercise is received by the Company, together with payment (or to the extent permitted by applic






