Exhibit 10.2
Amended and Restated
Corning Natural Gas Corporation
2007 Stock Plan
Section
1 General Purpose
of the Plan; Definitions.
-
- Purpose of the Plan . The name of the
plan is the Corning Natural Gas Corporation 2007 Stock Plan (the
"Plan"). The purpose of the Plan is to encourage and enable the
officers, employees and Directors of Corning Natural Gas
Corporation (the "Company") and its Affiliates upon whose judgment,
initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a
closer identification of their interests with those of the Company,
thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.
- Definitions. The following terms shall
be defined as set forth below:
-
-
- "409A Award" means an Award that provides for
a deferral of compensation from the date of grant, as determined
under Section 409A.
- "409A Change in Control" means the date on
which any one of the following occurs: (A) any one person, or more
than one person acting as a group (as determined under Section
409A), acquires (or has acquired during the twelve (12) month
period ending on the date of the most recent acquisition by that
person or persons) ownership of stock of the Company possessing 30%
or more of the total voting power of the stock of the Company; (B)
a majority of members of the Board is replaced during any twelve
(12) month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board before the date
of that appointment or election; (C) any one person, or more than
one person acting as a group (as determined under Section 409A),
acquires ownership of stock of the Company that, together with
stock held by that person or group, constitutes more than 50% of
the total fair market value or total voting power of the stock of
the Company; or (iv) any one person, or more than one person acting
as a group (as determined under Section 409A), acquires (or has
acquired during the twelve (12) month period ending on the date of
the most recent acquisition by that person or persons) assets from
the Company that have a total gross fair market value equal to more
than 40% of the total gross fair market value of all of the assets
of the Company before such acquisition or acquisitions. For this
purpose, "gross fair market value" means the value of the assets of
the Company, or the value of the assets being disposed of, without
regard to any liabilities associated with those assets.
- "Act" means the Securities Exchange Act of
1934, as amended.
- "Affiliate" means any entity other than the
Company and its Subsidiaries that is designated by the Board or the
Committee as a participating employer under the Plan, provided that
the Company directly or indirectly owns at least 20% of the
combined voting
- power of all classes of stock of such entity
or at least 20% of the ownership interests in such entity.
- "Award" or "Awards," except where referring
to a particular category of grant under the Plan, shall include,
but not be limited to, Incentive Options, Non-Qualified Options,
Restricted Stock Awards, Performance Stock Awards, Stock
Appreciation Rights, and Dividend Equivalents.
- "Award Agreement" shall mean any written
agreement, contract, or other instrument or document evidencing any
Award granted by the Committee hereunder and signed by both the
Company and the Award recipient.
- "Board" means the Board of Directors of the
Company.
- "Cause" means, and shall be limited to, a
vote of the Board to the effect that the participant should be
dismissed as a result of (A) any material breach by the participant
of any agreement to which the participant and the Company or an
Affiliate are parties, (B) any act (other than retirement, death or
disability) or omission to act by the participant, including
without limitation, the commission of any crime, which may have a
material and adverse effect on the business of the Company or any
Affiliate or on the participant's ability to perform services for
the Company or any Affiliate, or (C) any material misconduct or
neglect of duties by the participant in connection with the
business or affairs of the Company or any Affiliate.
- "Change of Control" is defined in Section
14.
- "Code" means the Internal Revenue Code of
1986, as amended, and any successor Code, and related rules,
regulations and interpretations.
- "Committee" means any Committee of the Board
referred to in Section 2.
- "Disability" means a disability determination
in which a Participant meets one of the following conditions:
(A)
The Participant is unable to engage in any substantial gainful
activity by reason of a medically determinable physical or mental
impairment that can be expected to last for a continuous period of
not less than 12 months.
(B)
The Participant is, by reason of any medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a
period of not less than three months under an accident and health
plan covering employees of the Company.
- "Director" means a member of the Board.
- "Dividend Equivalent" means a right, granted
under Section 9 hereof, to receive cash, Shares, or other property
equal in value to dividends paid with respect to a specified number
of Shares or the excess of dividends paid over a specified rate of
return. Dividend Equivalents may be awarded on a free-standing
basis or in connection with another Award, and may be paid
currently or on a deferred basis.
- "Effective Date" means the date on which the
Plan has both been adopted by the Board and approved by the
Shareholders as set forth in Section 16.
- "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and the related rules,
regulations and interpretations.
- "Fair Market Value" means, as of a given
date, the value of a Share determined as follows (in order of
applicability): (A) if on the Grant Date or other determination
date the Share is listed on an established national or regional
stock exchange, is admitted to quotation on The NASDAQ Stock
Market, Inc. or is publicly traded on an established securities
market, the Fair Market Value of a Share shall be the closing price
of the Share on that exchange or in that market (if there is more
than one such exchange or market the Committee shall determine the
appropriate exchange or market) on the Grant Date or such other
determination date (or if there is no such reported closing price,
the Fair Market Value shall be the mean between the highest bid and
lowest asked prices or between the high and low sale prices on that
trading day) or, (B) if no sale of Shares is reported for that
trading day, on the next preceding day on which any sale has been
reported. If the Share is not listed on such an exchange, quoted on
such system or traded on such a market, Fair Market Value shall be
the value of the Share as determined by the determined by such
methods or procedures as shall be established from time to time by
the Committee in good faith in a manner consistent with Section
409A. .
- "Grant Date" shall mean, as determined by the
Committee, the latest to occur of: (A) the date as of which the
Committee approves an Award, (B) the date on which the recipient of
an Award first becomes eligible to receive an Award under
Section 4 of this Plan, or (C) any other date as may be
specified by the Committee. The Grant Date for a substituted Award
is the Grant Date of the original Award.
- "Incentive Option" means any Option
designated and qualified as an "incentive stock option" as defined
in Section 422 of the Code.
- "Non-Employee Director" means a member of the
Board who: (i) is not currently an officer of the Company or any
Affiliate; and (ii) does not receive compensation for services
rendered to the Company or any Affiliate in any capacity other than
as a Director.
- "Non-Qualified Option" means any Option that
is not an Incentive Option.
- "Option" or "Stock Option" means any option
to purchase Shares granted pursuant to Section 5.
- "Parent" means a "parent corporation" as
defined in Section 424(e) of the Code.
- "Performance Stock Award" means Awards
granted pursuant to Section 7.
- "Restricted Stock Award" means Awards granted
pursuant to Section 6.
- "Section 409A" shall mean Section 409A of the
Code and the Department of Treasury regulations and other
interpretive guidance issued thereunder, each as in effect from
time to time.
- "Separation from Service" means a termination
of services provided by a participant to the Company, whether
voluntarily or involuntarily, as determined by the Committee in
accordance with Treas. Reg. Section 1.409A-1(h).
- "Share" means a share of common stock, $0.10
par value, of the Company, subject to adjustment pursuant to
Section 3.
- "Shareholder" means the holder of a
Share.
- "Specified Employee" means any participant
who is determined to be a "key employee" (as defined under Code
Section 416(i) without regard to paragraph (5) thereof) for the
applicable period, as determined by the Company under Section 409A
and in accordance with Treas. Reg. Section 1.409A-1(i).
- "Subsidiary" means a "subsidiary corporation"
as defined in Section 424(f) of the Code.
-
- Section 409A . This Plan and any
Awards granted hereunder are intended to comply with or be exempt
from the requirements of Section 409A, and shall be interpreted and
administered in a manner consistent with those intentions.
Section
2 Administration of
Plan; Committee Authority to Select Participants and Determine
Awards.
(a) Committee .
The Plan shall be administered by a committee of not less than two
Non-Employee Directors, as appointed by the Board from time to
time, or, in the absence of such a committee, the entire Board (the
"Committee").
(b) Powers of
Committee . The Committee shall have the power and authority,
subject to and within the limitations of the express provisions of
the Plan, to grant Awards consistent with the terms of the Plan,
including the power and authority:
(i) to select the
officers, employees and Directors of the Company and Affiliates to
whom Awards may from time to time be granted;
(ii) to determine the
time or times of grant, and the extent, if any, of Incentive
Options, Non-Qualified Options, Restricted Shares, Performance
Stock Awards and Dividend Equivalents, or any combination of the
foregoing, granted to any officer, employee or Director;
(iii) to determine the number
of Shares to be covered by any Award granted to an officer,
employee or Director;
(iv) to determine and modify
the terms and conditions, including restrictions, not inconsistent
with the terms of the Plan and the Code, of any Award granted to an
officer, employee or Director, which terms and conditions may
differ among individual Awards and participants, and to approve the
form of written instruments evidencing the Awards;
(v) to accelerate the
exercisability or vesting of all or any portion of any Award
granted to a participant, subject to and in accordance with the
requirements of Section 409A;
(vi) subject to the provisions
of Section 5(b) and the Code, to extend the period in which Options
granted may be exercised;
(vii) to
determine whether, to what extent and under what circumstances
Shares and other amounts payable with respect to an Award granted
to a participant shall be deferred either automatically or at the
election of the participant and whether and to what extent the
Company shall pay or credit amounts equal to interest (at rates
determined by the Committee) or dividends or deemed dividends on
such deferrals; and
(viii)
to adopt, alter and repeal such rules, guidelines and practices in
accordance with and subject to the requirements of Section 409A for
the administration of the Plan and for its own acts and proceedings
as it shall deem advisable; to interpret the terms and provisions
of the Plan and any Award (including related written instruments)
granted to a participant; and to decide all disputes arising in
connection with and make all determinations it deems advisable for
the administration of the Plan.
All decisions, interpretations and constructions made by the
Committee in good faith shall not be subject to review by any
person and shall be final, binding and conclusive on all persons,
including the Company and Plan participants.
-
- Award Agreements . Any Award granted
by the Committee under the Plan shall be evidenced by a written
agreement, contract, or other instrument or document in such form
as the Committee may from time to time approve and signed by both
the Company and the Award recipient.
Section
3 Shares Issuable
under the Plan; Mergers; Substitution.
(a) Shares
Issuable . Subject to the provisions of Sections 3(b) and (c),
the maximum number of Shares reserved and available for issuance
under the Plan shall be 100,000. For purposes of this limitation,
the Shares underlying any Awards which are forfeited, canceled,
reacquired by the Company, satisfied without the issuance of Shares
or otherwise terminated (other than by exercise) shall be added
back to the Shares available for issuance under the Plan so long as
the participants to whom such Awards had been previously granted
receive no benefits of ownership of the underlying Shares to which
the Award related. Shares issued under the Plan may be authorized
but unissued Shares or Shares reacquired by the Company.
(b) Share
Dividends, Mergers, etc . In the event of any recapitalization,
reclassification, split-up or consolidation of Shares, separation
(including a spin-off), dividend on Shares payable in Shares, or
other similar change in capitalization of the Company or a merger
or consolidation of the Company or sale by the Company of all or a
portion of its assets or other similar event, the Committee shall
make such appropriate adjustments in the exercise prices of Awards,
including Awards then outstanding, in the number and kind of
securities, cash or other property which may be issued pursuant to
Awards under the Plan, including Awards then outstanding, and in
the number of Shares with respect to which Awards may be granted
(in the aggregate and to individual participants) as the Committee
deems equitable with a view toward maintaining the proportionate
interest of the participant and preserving the value of the Awards.
Notwithstanding the foregoing, no adjustment shall be made under
this Section 3(b) which will result in an Award becoming subject to
the terms and conditions of Section 409A, unless agreed upon by the
Committee and the participant.
(c) Evergreen Share
Reserve Increase . Notwithstanding Section 3(a), and subject to
the provisions of Section 3(b), on the day of each annual meeting
of the Shareholders of the Company, for a period of nine (9) years,
commencing with the annual meeting of Shareholders in 2008, the
aggregate number of Shares available for issuance under the Plan
shall automatically be increased to the number of Shares equal to
15% of the Shares outstanding, if greater than the number of Shares
then available for issuance under the Plan.
(d) Substitute
Awards . The Committee may grant Awards under the Plan in
substitution for Share and Share-based awards held by employees of
another corporation who concurrently become employees of the
Company or an Affiliate as the result of a merger or consolidation
of the employing corporation with the Company or an Affiliate or
the acquisition by the Company or an Affiliate of property or
shares of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as
the Committee considers appropriate in the circumstances.
Section
4
Eligibility.
Participants in the Plan will be Directors and such full or
part-time officers and other employees of the Company and its
Affiliates who are responsible for or contribute to the management,
growth or profitability of the Company and its Affiliates and who
are selected from time to time by the Committee, in its sole
discretion.
Section
5 Options.
-
- Grant of Options. Any Option granted
under the Plan shall be in such form as the Committee may from time
to time approve. Options granted under the Plan may be either
Incentive Options or Non-Qualified Options. To the extent that any
option does not qualify as an Incentive Option, it shall constitute
a Non-Qualified Option. No officer, employee or Director shall be
granted together Incentive Options and Non-Qualified Options under
the Plan if the right to exercise one type of option is dependent
upon or affects the right to exercise the other ("Tandem
Incentive/Non-Qualified Options"). No Incentive Option may be
granted under the Plan after the tenth (10th) anniversary of the
Effective Date. The Committee in its discretion may grant Options
to officers, employees or Directors of the Company or any
Affiliate; provided, however, that Incentive Options may only be
granted to employees of the Company, as that relationship is
defined in Treasury Regulation 31.3401(c)-1. Options granted to
officers, employees or Directors pursuant to this Section 5 shall
be subject to the terms and conditions set forth in this Section 5
and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall
deem desirable.
(b) Exercise
Price . The per share exercise price of an Option granted
pursuant to this Section 5 shall be determined by the Committee at
the time of grant. In no event shall the per share exercise price
of an Option be less than 100% of Fair Market Value on the date of
grant. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of shares of
the Company or any Subsidiary or Parent and an Incentive Option is
granted to such employee, the option price shall be not less than
110% of Fair Market Value on the grant date.
(c) Option Term
. The term of each Option shall be fixed by the Committee, but no
Incentive Option shall be exercisable more than ten (10) years
after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d)
of the Code) more than 10% of the combined voting power of all
classes of shares of the Company or any Subsidiary or Parent and an
Incentive Option is granted to such employee, the term of such
option shall be no more than five (5) years from the date of
grant.
(d) Exercisability;
Rights of a Shareholder . Options shall become exercisable at
such time or times, whether or not in installments, and shall be
subject to such terms and conditions as shall be determined by the
Committee at or after the grant date. The Committee may at any time
accelerate the exercisability of all or any portion of any Option;
provided, however, that any such acceleration of the exercisability
of all or any portion of an Option is subject to the limitations of
Section 409A. If any Option is exercisable only in installments,
the Committee may waive, in whole or in part, such installment
exercise provisions, at any time at or after grant, based on those
factors as the Committee shall determine in its sole discretion;
provided, however, that any such waiver of installment exercise
provisions of the Option is subject to the limitations of Section
409A and, unless otherwise determined by the Committee, any waiver
of installment exercise provisions under this Section 5(d) shall
comply with Section 409A. An optionee shall have the rights of a
Shareholder only as to Shares acquired upon the exercise of an
Option and not as to unexercised Options.
-
- Section 409A . Notwithstanding the
foregoing, to ensure compliance with Section 409A each of the
following shall apply to the exercise of any Option:
-
-
- No amendment or modification shall be made to
the Plan or any Award which will result in an Award becoming
subject to the terms and conditions of Section 409A or otherwise
constitute an impermissible acceleration, unless agreed upon by the
Committee and the participant.
- Any acceleration of the exercisability or
vesting of all or any portion of any Award is subject to the
limitations of Section 409A and, unless otherwise determined by the
Committee, any acceleration of the exercisability or vesting of all
or any portion of any Award shall comply with Section 409A.
- With respect to extensions that were not
included in the original terms of the Option but were provided by
the Committee after the date of grant, if at the time of any such
extension, the exercise price per Share of the Option is less than
the Fair Market Value of a Share, the extension shall, unless
otherwise determined by the Committee, be limited to the earlier of
(a) the maximum term of the Option as set by its original terms or
(b) ten (10) years from the Grant Date. Unless otherwise determined
by the Committee and agreed upon by the Committee and the
participant, any extension of the period in which any Option
granted may be exercised shall comply with Section 409A to the
extent applicable.
- No Share or other amount payable with respect
to an Option Award granted to a participant shall be deferred if
such deferral constitutes a "deferral of compensation" within the
meaning of Section 409A or otherwise causes the Share or other
amount payable with respect to an Award to be subject to the
requirements of Section 409A.
-
- Method of Exercise . Options may be
exercised in whole or in part, by giving written notice of exercise
to the Company, specifying the number of Shares to be purchased.
Payment of the purchase price may be made by one or more of the
following methods:
(i) In cash, by
certified or bank check or other instrument acceptable to the
Committee;
(ii) In the form of
Shares that are not then subject to restrictions under any Company
plan, if permitted by the Committee in its discretion. Such
surrendered Shares shall be valued at Fair Market Value on the
exercise date; or
(iii) By the optionee
delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to
the Company to pay the purchase price; provided that in the event
the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection.
Notwithstanding the foregoing, no payment of the purchase price
under this Section 5(f) shall be made if such form of payment
constitutes a deferral of compensation within the meaning of
Section 409A or otherwise causes the Option to be subject to the
requirements of Section 409A. The delivery of certificates
representing Shares to be purchased pursuant to the exercise of the
Option will be contingent upon receipt from the optionee (or a
purchaser acting in his stead in accordance with the provisions of
the Option) by the Company of the full purchase price for such
Shares and the fulfillment of any other requirements contained in
the Option or applicable provisions of laws.
(g)
Non-transferability of Options . No Option shall be
transferable by the optionee other than by will or by the laws of
descent and distribution.
(h) Termination by
Death . If any optionee's service with the Company and its
Affiliates terminates by reason of death, the Option may thereafter
be exercised, to the extent exercisable at the date of death, by
the legal representative or legatee of the optionee, for a period
of six (6) months (or such longer period as the Committee shall
specify at any time) from the date of death, or until the
expiration of the stated term of the Option, if earlier.
(i) Termination
by Reason of Disability .
(i) Any Option held
by an optionee whose service with the Company and its Affiliates
has terminated by reason of Disability may thereafter be exercised,
to the extent it was exercisable at the time of such termination,
for a period of twelve (12) months (or such longer period as the
Committee shall specify at any time) from the date of such
termination of service, or until the expiration of the stated term
of the Option, if earlier.
(ii) The Committee shall
have sole authority and discretion to determine whether a
participant's service has been terminated by reason of
Disability.
(iii) Except as otherwise
provided by the Committee at the time of grant or otherwise, the
death of an optionee during a period provided in this Section 5(i)
for the exercise of a Non-Qualified Option, shall extend such
period for six (6) months from the date of death, subject to
termination on the expiration of the stated term of the Option, if
earlier.
(j)
Termination for Cause . If any optionee's service with the
Company and its Affiliates has been terminated for Cause, any
Option held by such optionee shall immediately terminate and be of
no further force and effect; provided, however, that the Committee
may, in its sole discretion, provide that such Option can be
exercised for a period of up to thirty (30) days from the date of
termination of service or until the expiration of the stated term
of the Option, if earlier.
(k) Other
Termination . Unless otherwise determined by the Committee, if
an optionee's service with the Company and its Affiliates
terminates for any reason other than death, Disability, or for
Cause, any Option held by such optionee may thereafter be
exercised, to the extent it was exercisable on the date of
termination of service, for three (3) months (or such longer period
as the Committee shall specify at any time) from the date of
termination of service or until the expiration of the stated term
of the Option, if earlier.
(l) Annual
Limit on Incentive Options . To the extent required for
"incentive stock option" treatment under Section 422 of the Code,
the aggregate Fair Market Value (determined as of the time of
grant) of the Share with respect to
