Exhibit
10.1
APOLLO
COMMERCIAL REAL ESTATE FINANCE, INC.
2009
EQUITY INCENTIVE PLAN
1.
PURPOSE . The Plan is intended to provide incentives to
directors, officers, advisors, consultants, key employees, and
others expected to provide significant services to the Company and
its Subsidiaries, including the personnel, employees, officers and
directors of the other Participating Companies, to encourage a
proprietary interest in the Company, to encourage such key
personnel to remain in the service of the Company and the other
Participating Companies, to attract new personnel with outstanding
qualifications, and to afford additional incentive to others to
increase their efforts in providing significant services to the
Company and the other Participating Companies. In furtherance
thereof, the Plan permits awards of equity-based incentives to key
personnel, employees, officers and directors of, and certain other
providers of services to, the Company or any other Participating
Company.
2.
DEFINITIONS . As used in this Plan, the following
definitions apply:
“Act”
shall mean the Securities Act of 1933, as amended.
“Award
Agreement” shall mean a written agreement evidencing a Grant
pursuant to the Plan.
“Board”
shall mean the Board of Directors of the Company.
“Cause”
shall mean, unless otherwise provided in an applicable Award
Agreement, a termination of employment or service, based upon a
finding by the Company, acting in good faith, after the occurrence
of any of the following: (1) the Grantee is convicted or
charged with a criminal offense; (2) the Grantee’s
intentional violation of law in connection with any transaction
involving the purchase, sale, loan or other disposition of, or the
rendering of investment advice with respect to, any security,
futures or forward contract, insurance contract, debt instrument,
financial instrument or currency; (3) the Grantee’s
dishonesty, bad faith, gross negligence, willful misconduct, fraud
or willful or reckless disregard of duties in connection with the
performance of any services on behalf of the Company, the Manager
or any of their respective affiliates or the Grantee’s
engagement in conduct which is injurious to the Company, the
Manager or any of their respective affiliates, monetarily or
otherwise; (4) the Grantee’s intentional failure to
comply with any reasonable directive by a supervisor in connection
with the performance of any services on behalf of the Company, the
Manager or any of their respective affiliates; (5) the
Grantee’s intentional breach of any material provision of an
Award Agreement or any other agreements of the Company, the Manager
or any of their respective affiliates; (6) the Grantee’s
material violation of any written policies adopted by the Company,
the Manager or any of their respective affiliates governing the
conduct of persons performing services on behalf of the Company,
the Manager or any of their respective affiliates or the
Grantee’s non-adherence to Apollo’s policies and
procedures or other applicable Apollo compliance manuals;
(7) the taking of or omission to take any action that has
caused or substantially contributed to a material deterioration in
the business or reputation of the Company, the Manager or any of
their respective affiliates, or that was otherwise materially
disruptive of their business or affairs; provided, however,
that the term Cause shall not include for this purpose any mistake
of judgment made in good faith with respect to any transaction
respecting an investment made by the Company, the Manager or any of
their respective affiliates; (8) the failure by the Grantee to
devote a sufficient portion of time to performing services as an
agent of a Participating Company without the prior written consent
of such Participating Company, other than by reason of death or
Disability; (9) the obtaining by the Grantee of any material
improper personal benefit as a result of a breach by the Grantee of
any covenant or agreement (including, without limitation, a breach
by the Grantee of the Company’s code of ethics or a material
breach by the Grantee of other written policies furnished to the
Grantee relating to personal investment transactions or of any
covenant, agreement, representation or warranty contained in any
limited partnership agreement); or (10) the Grantee’s
suspension or other disciplinary
1
action against
the Grantee by an applicable regulatory authority; provided,
however, that if a failure, breach, violation or action or
omission described in any of clauses (4) to (7) is
capable of being cured, the Grantee has failed to do so after being
given notice and a reasonable opportunity to cure. As used in this
definition, “material” means “more than de
minimis .”
“Change
in control” means unless otherwise provided in an Award
Agreement the happening of any of the following:
|
|
(i)
|
|
any
“person,” including a “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but
excluding the Company, any entity controlling, controlled by or
under common control with the Company, any trustee, fiduciary or
other person or entity holding securities under any employee
benefit plan or trust of the Company or any such entity, and, with
respect to any particular Grantee, the Grantee and any
“group” (as such term is used in Section 13(d)(3)
of the Exchange Act) of which the Grantee is a member), is or
becomes the “beneficial owner” (as defined in Rule
13(d)(3) under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of either
(A) the combined voting power of the Company’s then
outstanding securities or (B) the then outstanding Shares (in
either such case other than as a result of an acquisition of
securities directly from the Company); or
|
|
|
(ii)
|
|
any
consolidation or merger of the Company where the shareholders of
the Company, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, shares representing in the
aggregate 50% or more of the combined voting power of the
securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any); or
|
|
|
(iii)
|
|
there shall
occur (A) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the
assets of the Company, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets
to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by “persons” (as
defined above) in substantially the same proportion as their
ownership of the Company immediately prior to such sale or
(B) the approval by shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;
or
|
|
|
(iv)
|
|
the members of
the Board at the beginning of any consecutive 24-calendar-month
period (the “Incumbent Directors”) cease for any reason
other than due to death to constitute at least a majority of the
members of the Board; provided that any Director whose election, or
nomination for election by the Company’s shareholders, was
approved or ratified by a vote of at least a majority of the
members of the Board then still in office who were members of the
Board at the beginning of such 24-calendar-month period, shall be
deemed to be an Incumbent Director.
|
Notwithstanding
the foregoing, no event or condition shall constitute a Change in
Control to the extent that, if it were, a 20% tax would be imposed
under Section 409A of the Code; provided that, in such a case,
the event or condition shall continue to constitute a Change in
Control to the maximum extent possible (e.g., if applicable, in
respect of vesting without an acceleration of distribution) without
causing the imposition of such 20% tax.
“Code”
shall mean the Internal Revenue Code of 1986, as
amended.
“Committee”
shall mean the Compensation Committee of the Company or any
subcommittee of the Board as appointed by the Board in accordance
with Section 4 of the Plan; provided , however ,
that the
2
Committee
shall at all times consist of two or more persons who, at the time
of their appointment, each qualified as a “Non-Employee
Director” under Rule 16b-3(b)(3)(i) promulgated under
the Exchange Act and, to the extent that relief from the limitation
of Section 162(m) of the Code is sought, as an “Outside
Director” under Section 1.162-27(e)(3)(i) of the
Treasury Regulations.
“Common
stock” shall mean the Company’s common stock, par value
$0.01 per share, either currently existing or authorized
hereafter.
“Company”
shall mean Apollo Commercial Real Estate Finance, Inc., a Maryland
corporation.
“DER”
shall mean a right awarded under Section 11 of the Plan to
receive (or have credited) the equivalent value (in cash or Shares)
of dividends paid on Common Stock.
“Disability”
shall mean, unless otherwise provided by the Committee in the
Grantee’s Award Agreement, the occurrence of an event which
would entitle the Grantee to the payment of disability income under
an approved long-term disability income plan or a long-term
disability as determined by the Committee in its absolute
discretion pursuant to any other standard as may be adopted by the
Committee. Notwithstanding the foregoing, no circumstances or
condition shall constitute a Disability to the extent that, if it
were, a 20% tax would be imposed under Section 409A of the
Code; provided that, in such a case, the event or condition shall
continue to constitute a Disability to the maximum extent possible
(e.g., if applicable, in respect of vesting without an acceleration
of distribution) without causing the imposition of such 20%
tax.
“Eligible
persons” shall mean officers, directors, advisors, personnel
and employees of the Participating Companies and other persons
expected to provide significant services (of a type expressly
approved by the Committee as covered services for these purposes)
to one or more of the Participating Companies. For purposes of the
Plan and to the extent consistent with applicable securities law, a
provider of significant services (such as a consultant or advisor)
to the Company or any other Participating Company shall be deemed
to be an Eligible Person, but will be eligible to receive Grants
(but in no event Incentive Stock Options), only after a finding by
the Committee in its discretion that the value of the services
rendered or to be rendered to the Participating Company is at least
equal to the value of the Grants being awarded.
“Employee”
shall mean an individual, including an officer of a Participating
Company, who is employed (within the meaning of Code
Section 3401 and the regulations thereunder) by the
Participating Company.
“Exchange
act” shall mean the Securities Exchange Act of 1934, as
amended.
“Exercise
price” shall mean the price per Share of Common Stock,
determined by the Board or the Committee, at which an Option may be
exercised.
“Fair
Market Value” shall mean the value of one share of Common
Stock, determined as follows:
|
|
(i)
|
|
If the Shares
are then listed on a national stock exchange, the closing sales
price per Share on the exchange on the date in question (or, if no
such price is available for such date, for the last preceding date
on which there was a sale of Shares on such exchange), as
determined by the Committee.
|
|
|
(ii)
|
|
If the Shares
are not then listed on a national stock exchange but are then
traded on an over-the-counter market, the average of the closing
bid and asked prices on the date in
|
3
|
|
question for
the Shares in such over-the-counter market (or, if no such average
is available for such date, for the last preceding date on which
there was a sale of Shares in such market), as determined by the
Committee.
|
|
|
(iii)
|
|
If neither
(i) nor (ii) applies, such value as the Committee in its
discretion may in good faith determine. Notwithstanding the
foregoing, where the Shares are listed or traded, the Committee may
make discretionary determinations in good faith where the Shares
have not been traded for 10 trading days.
|
Notwithstanding
the foregoing, with respect to any “stock right” within
the meaning of Section 409A of the Code, Fair Market Value
shall not be less than the “fair market value” of the
shares of Common Stock determined in accordance with the final
regulations promulgated under Section 409A of the
Code.
“Grant”
shall mean the issuance of an Incentive Stock Option, Non-qualified
Stock Option, Restricted Stock, Phantom Share, DER, or other
equity-based grant as contemplated herein or any combination
thereof as applicable to an Eligible Person. The Committee will
determine the eligibility of personnel, employees, officers,
directors and others expected to provide significant services to
the Participating Companies based on, among other factors, the
position and responsibilities of such individuals, the nature and
value to the Participating Company of such individuals’
accomplishments and potential contribution to the success of the
Participating Company whether directly or through its
subsidiaries.
“Grantee”
shall mean an Eligible Person to whom Options, Restricted Stock,
Phantom Shares, DERs, or other equity-based awards are granted
hereunder.
“Incentive
stock option” shall mean an Option of the type described in
Section 422(b) of the Code issued to an Employee of
(i) the Company, or (ii) a “subsidiary
corporation” or a “parent corporation” as defined
in Section 424(f) of the Code.
“Manager”
shall mean ACREFI Management, LLC, the Company’s
manager.
“Non-qualified
stock option” shall mean an Option not described in
Section 422(b) of the Code.
“Option”
shall mean any option, whether an Incentive Stock Option or a
Non-qualified Stock Option, to purchase, at a price and for the
term fixed by the Committee in accordance with the Plan, and
subject to such other limitations and restrictions in the Plan and
the applicable Award Agreement, a number of Shares determined by
the Committee.
“Optionee”
shall mean any Eligible Person to whom an Option is granted, or the
Successors of the Optionee, as the context so requires.
“Participating
companies” shall mean the Company, the Subsidiaries, the
Manager and, with the consent of the Committee, any of their
respective affiliates and any joint venture affiliate of the
Company.
“Performance
goals” has the meaning set forth in
Section 13.
“Phantom
share” shall mean a right, pursuant to the Plan, of the
Grantee to payment of the Phantom Share Value.
4
“Phantom
share value,” per Phantom Share, shall mean the Fair Market
Value of a Share or, if so provided by the Committee, such Fair
Market Value to the extent in excess of a base value established by
the Committee at the time of grant.
“Plan”
shall mean the Company’s 2009 Equity Incentive Plan, as set
forth herein, and as the same may from time to time be
amended.
“Purchase
price” shall mean the Exercise Price times the number of
Shares with respect to which an Option is exercised.
“Restricted
stock” shall mean an award of Shares that are subject to
restrictions hereunder.
“Shares”
shall mean shares of Common Stock of the Company, adjusted in
accordance with Section 15 of the Plan (if
applicable).
“Subsidiary”
shall mean any corporation, partnership, limited liability company
or other entity at least 50% of the economic interest in the equity
of which is owned, directly or indirectly, by the Company or by
another subsidiary.
“Successors
of the optionee” shall mean the legal representative of the
estate of a deceased Optionee or the person or persons who shall
acquire the right to exercise an Option by bequest or inheritance
or by reason of the death of the Optionee.
“Termination
of service” shall mean the time when the employee-employer
relationship or directorship, or other service relationship
(sufficient to constitute service as an Eligible Person), between
the Grantee and the Participating Companies is terminated for any
reason, with or without Cause, including, but not limited to, any
termination by resignation, discharge, death or retirement;
provided , however , Termination of Service shall not
include a termination where there is a simultaneous continuation of
service of the Grantee (sufficient to constitute service as an
Eligible Person) for a Participating Company. The Committee, in its
absolute discretion, shall determine the effects of all matters and
questions relating to Termination of Service, including, but not
limited to, the question of whether any Termination of Service was
for Cause and all questions of whether particular leaves of absence
constitute Terminations of Service. For this purpose, the service
relationship shall be treated as continuing intact while the
Grantee is on military leave, sick leave or other bona fide leave
of absence (to be determined in the discretion of the
Committee).
3.
EFFECTIVE DATE . The effective date of the Plan is September
23, 2009. The Plan shall not become effective unless and until it
is approved by the requisite percentage of the holders of the
Common Stock of the Company. The Plan shall terminate on, and no
award shall be granted hereunder on or after, the 10-year
anniversary of the earlier of the approval of the Plan by
(i) the Board or (ii) the shareholders of the Company;
provided, however, that the Board may at any time prior to that
date terminate the Plan.
4.
ADMINISTRATION .
(a)
Membership on Committee. The Plan shall be administered by the
Committee appointed by the Board. If no Committee is designated by
the Board to act for those purposes or the Board otherwise so
elects, the full Board shall have the rights and responsibilities
of the Committee hereunder and under the Award
Agreements.
5
(b) Committee
meetings. The acts of a majority of the members present at any
meeting of the Committee at which a quorum is present, or acts
approved in writing by a majority of the entire Committee, shall be
the acts of the Committee for purposes of the Plan. If and to the
extent applicable, no member of the Committee may act as to matters
under the Plan specifically relating to such member.
(c)
Grant of awards.
|
|
(i)
|
|
The Committee
shall from time to time at its discretion select the Eligible
Persons who are to be issued Grants and determine the number and
type of Grants to be issued under any Award Agreement to an
Eligible Person. In particular, the Committee shall
(A) determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Grants awarded hereunder (including,
but not limited to the performance goals and periods applicable to
the award of Grants); (B) determine the time or times when and
the manner and condition in which each Option shall be exercisable
and the duration of the exercise period; and (C) determine or
impose other conditions to the Grant or exercise of Options under
the Plan as it may deem appropriate. The Committee may establish
such rules, regulations and procedures for the administration of
the Plan as it deems appropriate, determine the extent, if any, to
which Options, Phantom Shares, Shares (whether or not Shares of
Restricted Stock), DERs or other equity-based awards shall be
forfeited (whether or not such forfeiture is expressly contemplated
hereunder), and take any other actions and make any other
determinations or decisions that it deems necessary or appropriate
in connection with the Plan or the administration or interpretation
thereof. The Committee shall also cause each Incentive Stock Option
to be designated as such, except that no Incentive Stock Options
may be granted to an Eligible Person who is not an Employee of the
Company or a “subsidiary corporation” or a
“parent corporation” as defined in Section 424(f)
of the Code. The Grantee shall take whatever additional actions and
execute whatever additional documents the Committee may in its
reasonable judgment deem necessary or advisable in order to carry
or effect one or more of the obligations or restrictions imposed on
the Grantee pursuant to the express provisions of the Plan and the
Award Agreement. DERs will be exercisable separately or together
with Options, and paid in cash or other consideration at such times
and in accordance with such rules, as the Committee shall determine
in its discretion. Unless expressly provided hereunder, the
Committee, with respect to any Grant, may exercise its discretion
hereunder at the time of the award or thereafter. The Committee
shall have the right and responsibility to interpret the Plan and
the interpretation and construction by the Committee of any
provision of the Plan or of any Grant thereunder, including,
without limitation, in the event of a dispute, shall be final and
binding on all Grantees and other persons to the maximum extent
permitted by law. Without limiting the generality of
Section 24, no member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan
or any Grant hereunder.
|
|
|
(ii)
|
|
Notwithstanding
clause (i) of this Section 4(c), unless otherwise
required by law or exchange listing rules, any award under the Plan
to an Eligible Person who is a member of the Committee shall be
made by the full Board, but for these purposes the directors of the
Corporation who are on the Committee shall be required to be
recused in respect of such awards and shall not be permitted to
vote.
|
6
(d)
Awards.
|
|
(i)
|
|
Agreements.
Grants to Eligible Persons shall be evidenced by written Award
Agreements in such form as the Committee shall from time to time
determine (which Award Agreements need not be in the same form as
any other Award Agreement evidencing Grants under the Plan and need
not contain terms and conditions identical to those applicable to
any other Grant under the Plan or to those applicable to any other
Eligible Persons). Such Award Agreements shall comply with and be
subject to the terms and conditions set forth below.
|
|
|
(ii)
|
|
Number of
shares. Each Grant issued to an Eligible Person shall state the
number of Shares to which it pertains or which otherwise underlie
the Grant and shall provide for the adjustment thereof in
accordance with the provisions of Section 15
hereof.
|
|
|
(iii)
|
|
Grants. Subject
to the terms and conditions of the Plan and consistent with the
Company’s intention for the Committee to exercise the
greatest permissible flexibility under Rule 16b-3 under the
Exchange Act in awarding Grants, the Committee shall have the
power:
|
|
|
(1)
|
to determine
from time to time the Grants to be issued to Eligible Persons under
the Plan and to prescribe the terms and provisions (which need not
be identical) of Grants issued under the Plan to such
persons;
|
|
|
(2)
|
to construe and
interpret the Plan and the Grants thereunder and to establish,
amend and revoke the rules, regulations and procedures established
for the administration of the Plan. In this connection, the
Committee may correct any defect or supply any omission, or
reconcile any inconsistency in the Plan, in any Award Agreement, or
in any related agreements, in the manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective. All
decisions and determinations by the Committee in the exercise of
this power shall be final and binding upon the Participating
Companies and the Grantees;
|
|
|
(3)
|
to amend any
outstanding Grant, subject to Section 17, and to accelerate or
extend the vesting or exercisability of any Grant (in compliance
with Section 409A of the Code, if applicable) and to waive
conditions or restrictions on any Grants, to the extent it shall
deem appropriate;
|
|
|
(4)
|
to determine
the circumstances, if any, upon which an award made under the Plan
shall be subject to forfeiture in whole or in part as a result of a
breach by the Grantee of a provision or covenant to which the
Grantee is subject; and
|
|
|
(5)
|
generally to
exercise such powers and to perform such acts as are deemed
necessary or expedient to promote the best interests of the Company
with respect to the Plan.
|
5.
PARTICIPATION .
(a)
Eligibility. Only Eligible Persons shall be eligible to receive
Grants under the Plan.
7
(b) Limitation
of ownership. No Grants shall be issued under the Plan to any
person who after such Grant would beneficially own more than 9.8%
of the outstanding shares of Common Stock of the Company, unless
the foregoing restriction is expressly and specifically waived by
action of the independent directors of the Board.
(c)
Stock ownership. For purposes of Section 5(b) above, in
determining stock ownership a Grantee shall be considered as owning
the stock owned, directly or indirectly, by or for his brothers,
sisters, spouses, ancestors and lineal descendants. Stock owned,
directly or indirectly, by or for a corporation, partnership,
estate or trust shall be considered as being owned proportionately
by or for its stockholders, partners or beneficiaries. Stock with
respect to which any person holds an Option shall be considered to
be owned by such person.
(d)
Outstanding stock. For purposes of Section 5(b) above,
“outstanding shares” shall include all stock actually
issued and outstanding immediately after the issue of the Grant to
the Grantee. With respect to the stock ownership of any Grantee,
“outstanding shares” shall include shares authorized
for issue under outstanding Options held by such Grantee, but not
options held by any other person.
6.
STOCK . Subject to adjustments pursuant to Section 15,
no Grant may cause the total number of shares of Common Stock
subject to all outstanding awards to exceed 7.5% of the issued and
outstanding shares of Common Stock on a fully diluted basis
(assuming, if applicable, the exercise of all outstanding Options
and the conversion of all warrants and convertible securities into
shares of Common Stock). Subject to adjustments pursuant to
Section 15, (i) the maximum number of Shares with respect
to which any Options may be granted in any one year to any Grantee
shall not exceed 262,500, (ii) the maximum number of Shares
that may underlie Grants, other than Grants of Options, in any one
year to any Grantee shall not exceed 262,500, and (iii) the
maximum number of Shares with respect to which Incentive Stock
Options may be granted over the life of the Plan shall not exceed
525,000. Notwithstanding the first sentence of this Section 6,
(i) Shares that have been granted as Restricted Stock or that
have been reserved for distribution in payment for Options or
Phantom Shares but are later forfeited or for any other reason are
not payable under the Plan; and (ii) Shares as to which an
Option is granted under the Plan that remains unexercised at the
expiration, forfeiture or other termination of such Option, may be
the subject of the issue of further Grants. Shares of Common Stock
issued hereunder may consist, in whole or in part, of authorized
and unissued shares, treasury shares or previously issued Shares
under the Plan. The certificates for Shares issued hereunder may
include any legend which the Committee deems appropriate to reflect
any restrictions on transfer hereunder or under the Award
Agreement, or as the Committee may otherwise deem appropriate.
Shares subject to DERs, other than DERs based directly on the
dividends payable with respect to Shares subject to Options or the
dividends payable on a number of Shares corresponding to the number
of Phantom Shares awarded, shall be subject to the limitation of
this Section 6. Notwithstanding the limitations above in this
Section 6, except in the case of Grants intended to qualify
for relief from the limitations of Section 162(m) of the Code,
there shall be no limit on the number of Phantom Shares or DERs to
the extent they are paid out in cash that may be granted under the
Plan. If any Phantom Shares or DERs are paid out in cash, the
underlying Shares may again be made the subject of Grants under the
Plan, notwithstanding the first sentence of this
Section 6.
7.
TERMS AND CONDITIONS OF OPTIONS .
(a)
Each award agreement with an eligible person shall state the
exercise price. The Exercise Price for any Option shall not be less
than the Fair Market Value on the date of Grant.
(b)
Medium and time of payment. Except as may otherwise be provided
below, the Purchase Price for each Option granted to an Eligible
Person shall be payable in full in United States dollars upon the
exercise of the Option. In the event the Company determines that it
is required to
8
withhold taxes
as a result of the exercise of an Option, as a condition to the
exercise thereof, an Employee may be required to make arrangements
satisfactory to the Company to enable it to satisfy such
withholding requirements in accordance with Section 21. If the
applicable Award Agreement so provides, or the Committee otherwise
so permits, the Purchase Price may be paid in one or a combination
of the following, taking into account the desired accounting
treatment and compliance with applicable law:
|
|
(i)
|
|
by a certified
or bank cashier’s check;
|
|
|
(ii)
|
|
by the
surrender of shares of Common Stock in good form for transfer,
owned by the person exercising the Option and having a Fair Market
Value on the date of exercise equal to the Purchase Price, or in
any combination of cash and shares of Common Stock, as long as the
sum of the cash so paid and the Fair Market Value of the shares of
Common Stock so surrendered equals the Purchase Price;
|
|
|
(iii)
|
|
by reduction of
the Shares issuable upon exercise of the Option;
|
|
|
(iv)
|
|
by cancellation
of indebtedness owed by the Company to the Grantee;
|
|
|
(v)
|
|
subject to
Section 17(e), by broker-assisted cashless exercise using a
broker reasonably acceptable to the Company, pursuant to which the
Grantee delivers to the Company, on or prior to the exercise date,
the Grantee’s instruction directing and obligating the broker
to (a) sell Shares (or a sufficient portion of the Shares)
acquired upon exercise of the Option and (b) remit to the
Company a sufficient portion of the sale proceeds to pay the
aggregate purchase price, no later than the third trading day after
the exercise date;
|
|
|
(vi)
|
|
subject to
Section 17(e), by a loan or extension of credit from the
Company evidenced by a full recourse promissory note executed by
the Grantee. The interest rate and other terms and conditions of
such note shall be determined by the Committee (in which case the
Committee may require that the Grantee pledge his or her Shares to
the Company for the purpose of securing the payment of such note,
and in no event shall the stock certificate(s) representing such
Shares be released to the Grantee until such note shall have been
paid in full); or
|
|
|
(vii)
|
|
by any
combination of such methods of payment or any other method
acceptable to the Committee in its discretion.
|
Except in the
case of Options exercised by certified or bank cashier’s
check, the Committee may impose such limitations and prohibitions
on the exercise of Options as it deems appropriate, including,
without limitation, any limitation or prohibition designed to avoid
accounting consequences which may result from the use of Common
Stock as payment upon exercise of an Option. Any fractional shares
of Common Stock resulting from a Grantee’s election that are
accepted by the Company shall in the discretion of the Committee be
paid in cash.
(c)
Term and nontransferability of grants and options.
|
|
(i)
|
|
Each Option
under this Section 7 shall state the time or times which all
or part thereof becomes exercisable, subject to the restrictions
set forth in clauses (ii) through (v) below.
|
9
|
|
(ii)
|
|
No Option shall
be exercisable except by the Grantee or a transferee permitted
hereunder.
|
|
|
(iii)
|
|
No Option shall
be assignable or transferable, except by will or the laws of
descent and distribution of the state wherein the Grantee is
domiciled at the time of his death; provided ,
however , that the Committee may (but need not) permit other
transfers, where the Committee concludes that such transferability
(i) does not result in accelerated taxation, (ii) does
not cause any Option intended to be an Incentive Stock Option to
fail to be described in Section 422(b) of the Code and
(iii) is otherwise appropriate and desirable.
|
|
|
(iv)
|
|
No Option shall
be exercisable until such time as set forth in the applicable Award
Agreement (but in no event after the expiration of such
Grant).
|
|
|
(v)
|
|
No modification
of an Option shall, without the consent of the Optionee or as
required by applicable law or regulation or to meet the
requirements of any accounting standard or to correct an
administrative error, materially impair the rights of an Optionee
under any Option previously granted.
|
(d)
Termination of service, other than by Death, Disability, or for
Cause. Unless otherwise provided in the applicable Award Agreement,
upon any Termination of Service for any reason other than his or
her death or Disability, an Optionee shall have the right, subject
to the restrictions of Section 4(c) above, to exercise his or
her Option at any time within 90 days after Termination of Service,
but only to the extent that, at the date of Termination of Service,
the Optionee’s right to exercise such Option had accrued
pursuant to the terms of the applicable Award Agreement and had not
previously been exercised or forfeited; provided ,
however , that, unless otherwise provided in the applicable
Award Agreement, if there occurs a Termination of Service by a
Participating Company for Cause, any Option not exercised in full
prior to such termination shall be canceled.
(e)
Death of optionee. Unless otherwise provided in the applicable
Award Agreement, if the Optionee of an Option dies while an
Eligible Person or within 90 days after any Termination of Service
other than for Cause, and has not fully exercised the Option,
subject to the restrictions of Section 4(c) above, the Option
may be exercised at any time within 12 months after the
Optionee’s death (or 12 months after the Optionee’s
Termination of Service, if sooner) by the Successor of the
Optionee, but only to the extent that, at the date of death, the
Optionee’s right to exercise such Option had accrued pursuant
to the terms of the applicable Award Agreement and had not
previously been exercised or forfeited.
(f)
Disability of optionee. Unless otherwise provided in the Award
Agreement, upon any T
