Pennichuck Corporation
2009 Equity Incentive Plan
(formerly the Amended and Restated 2000 Stock Option Plan;
amendment and restatement approved by the shareholders on
May 6, 2009)
1.
Purpose of Plan . The purpose of the Pennichuck Corporation
2009 Equity Incentive Plan (the “Plan”) is to attract
and retain the best available personnel for positions of
substantial responsibility and to provide additional incentive to
Employees of Pennichuck Corporation or any present or future Parent
or Subsidiary of Pennichuck Corporation and Directors of Pennichuck
Corporation to promote the success of the business by providing for
or increasing the proprietary interests of such Employees and
Directors in the Company.
2.
Definitions . As used herein, the following definitions
shall apply:
“Award” means, individually or
collectively, a grant under this Plan of Incentive Stock Options,
Nonstatutory Stock Options or Restricted Stock.
“Board” means the Board of Directors
of the Company provided that at least a majority of the Directors
are Independent Directors, and if a majority of the Board is not
Independent Directors, then Board shall mean a committee comprised
solely of Independent Directors.
“Common
Stock” means the common stock of the Company, par value $1.00
per share.
“Company” means Pennichuck
Corporation, a business corporation organized under the laws of the
State of New Hampshire.
“Code” means the Internal Revenue
Code of 1986, as amended.
“Committee” means the Committee
appointed by the Board in accordance with Section 4
hereof.
“Continuous Employment” or
“Continuous Status as an Employee” means the absence of
any interruption or termination of service as an Employee.
Continuous Employment or Continuous Status as an Employee shall not
be considered interrupted in the case of sick leave, military leave
or any other leave of absence approved by the Board, or in the case
of transfers between locations of the Company or any Subsidiary or
its Parent.
“Continuous Status as a Director”
means the absence of any interruption or termination of service as
a Director. Continuous Status as a Director shall not be considered
interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Board. With respect to a
Participant who is both an Employee and a Director, Continuous
Status as a Director shall not be considered interrupted solely
because such Participant terminates service as an Employee so long
as such Participant continues to be a Director without
interruption.
“Director” means any member of the
Board of Directors of the Company.
“Disinterested Persons” means an
administrator of this Plan who is not at the time he or she
exercises discretion in administering this Plan eligible, has not
at any time within one year prior thereto been eligible, and for
one year after so serving will not be eligible, for selection as a
person to whom an Award may be granted pursuant to this Plan or any
other plan of the Company entitling the participants therein to
acquire stock or stock options of the Company.
“Employee” means any person employed
on a full-time basis by the Company or any present or future Parent
or Subsidiary of the Company.
“Fiscal
Year” means the Company’s fiscal year, which as of the
Effective Date was the year ending December 31.
“Effective Date” has the meaning
given to such phrase in Section 6(a) of this Plan.
“Incentive Stock Option” means an
Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations
promulgated thereunder.
“Independent Director” means an
independent director as defined in Rule 4200(a)(15) of the
Nasdaq Marketplace Rules.
“Nasdaq” means the Nasdaq Global
Market (or any successor stock exchange on which the Common Stock
is principally traded).
“Nonstatutory Stock Option” means an
Option not intended to qualify as an Incentive Stock
Option.
“Option” means an Incentive Stock
Option or a Nonstatutory Stock Option granted pursuant to this
Plan.
“Optioned
Stock” means Common Stock subject to an Option.
“Optionee” means a Participant who
receives an Option.
“Overall
Share Limit” has the meaning given to such phrase in Section
3(a) of this Plan.
“Parent” means any present or future
corporation which would be a “parent corporation” as
defined in Subsections 424(e) and (g) of the Code.
“Participant” means a person
selected by the Board to receive an Award under this
Plan.
“Plan” means this 2009 Equity
Incentive Plan.
“Restricted Period” means the period
of time selected by the Board during which an award of Restricted
Stock may be forfeited to the Company.
“Restricted Stock” means shares of
Common Stock awarded to a Participant under Section 9 that are
subject to forfeiture.
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“Sale of
the Company” shall mean the sale of the Company to an
independent third party or group of independent third parties
pursuant to which such party or parties acquire (i) a majority
of the shares of Common Stock; (ii) capital stock of the
Company possessing the voting power under normal circumstances to
elect a majority of the Board (whether by merger, consolidation or
sale or transfer of the capital stock); or (iii) all or a
majority of the Company’s assets determined on a consolidated
basis.
“Share” means a share of Common
Stock, as adjusted in accordance with Section 10(b) of this
Plan.
“Shareholder Approval” has the
meaning given to such phrase in Section 6(a) of this
Plan.
“Subsidiary” means any present or
future corporation which would be a “subsidiary
corporation” as defined in Subsection 424 (f) and
(g) of the Code.
3.
Shares Subject to Plan .
(a) Except as otherwise required by the
provisions of Section 10(b) hereof, the maximum number of Shares of
Common Stock that in the aggregate may be delivered under or in
satisfaction of Awards under this Plan (the “Overall Share
Limit”) shall not exceed 500,000.
(b) If any share of Common Stock subject to
an Award granted under this Plan should be cancelled, expire,
become unexercisable without having been exercised in full or be
forfeited, as a result of the termination of the
Participant’s employment, voluntary surrender of the Option
or Restricted Stock or otherwise, the Shares which were subject
thereto shall, unless this Plan shall have been terminated, be
immediately added to the Overall Share Limit and shall be available
for future Awards under this Plan.
4.
Administration of Plan .
(a) Committee . This Plan shall be
administered by a Committee consisting of not less than three
Disinterested Persons appointed by the Board.
(b) Powers of the Committee . Subject to
the provisions of this Plan, the Committee shall have the
authority, in its sole discretion: (i) to determine, upon
review of relevant information and in accordance with
Section 8(b)(i) of this Plan, the fair market value of the
Common Stock; (ii) to consider and make recommendations to the
Board concerning the persons to whom, and the time or times at
which, Awards shall be granted, the type or combination of types of
Awards to be granted, the number of Shares to be represented by
each Award and the conditions and provisions, if any, of each
Award, including the purchase price (if any) of any Restricted
Stock and the duration of the Restricted Period during which, and
the conditions under which, Restricted Stock may be forfeited to or
repurchased by the Company; (iii) to interpret this Plan;
(iv) to prescribe, amend and rescind rules and regulations
relating to this Plan; (v) except as limited by this Plan, or
otherwise determined by the Board, to determine the terms,
restrictions and provisions of each Award (which need not be
identical), including without limitation any restriction on
transferability of the Common Stock subject to any Award;
(vi) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Award
previously granted by the Board; (vii) to accept the surrender
of Options and the substitution of new Options in exchange
therefor; (viii) to recommend to the Board that the time or
times at which any Option may be exercised be accelerated or
deferred (with the consent of the Optionee) but in no event beyond
the term of the Option under Section 8(a); and (ix) to
make all other determinations deemed necessary or advisable for the
administration of this Plan and to exercise such other power and
authority as may be delegated to it by the Board from time to
time.
(c) Effect of the Committee’s
Decision . All decisions, determinations and interpretations of
the Committee shall be final and binding on all
Participants.
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(a) Incentive Stock Options shall be
granted by the Board and may be granted only to Employees who are
in positions in which their decisions, actions and counsel
significantly impact the profitability of the Company. In
determining the Employees to whom Incentive Stock Options shall be
granted, and the number of Shares to be covered by each Incentive
Stock Option, the Board shall consider current position, current
salary and other compensation, value of services rendered and
expected to be rendered, recommendations of senior management and
other relevant factors. No Employee who owns Shares possessing more
than 10% of the total combined voting power of all classes of stock
of the Company, or of any Parent or Subsidiary of the Company, may
receive an Incentive Stock Option.
The maximum aggregate fair market value
(determined at the time the Option is granted) of the Shares with
respect to which Incentive Stock Options are exercisable for the
first time during any calendar year by an Employee under all
Incentive Stock Option Plans, as defined in Section 422 of the
Code, of the Company or of any present or future Parent or
Subsidiary of the Company, shall not exceed $100,000; to the extent
the aggregate fair market value of the Shares exceeds such limit,
such Options or portions thereof shall be treated as Nonstatutory
Stock Options.
(b) Nonstatutory Stock Options shall be
granted by the Board and may be granted to Employees and
Directors.
(c) Restricted Stock shall be granted by
the Board and may be granted to Employees and Directors.
(d) A person who has been granted an Award
may, if otherwise eligible, be granted one or more additional
Awards.
(e) Notwithstanding any other provision of
this Plan, including without limitation paragraphs (a),
(b) and (c) of this Section 5, each Award must be
approved by a majority of Independent Directors, provided however,
that if a majority of the Board is not comprised of Independent
Directors, then each Award shall be approved by a committee
comprised solely of Independent Directors.
(f) This Plan shall not confer upon any
Participant any right with respect to continuation of employment,
nor shall it interfere in any way with his or her right or the
Company’s or, where applicable, its Parent’s or a
Subsidiary’s right to terminate his or her employment at any
time, which right is hereby reserved. Selection for participation
in this Plan in one year does not necessarily imply selection in
another year.
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(a) This Plan, as amended and restated,
became effective on March 11, 2009, the date of its adoption
by the Board (“Effective Date”), subject to the
approval of this Plan by the shareholders of the Company within
12 months after the Effective Date. This Plan, as amended and
restated, shall continue in effect for a term of 10 years
(i.e., until March 11, 2019) unless sooner terminated under
Section 11 of this Plan. No Option shall be granted after
10 years from the Effective Date. Shareholder approval of this
Plan (“Shareholder Approval”) shall be evidenced by the
affirmative vote of the holders of a majority of the shares of
Common Stock present in person or by proxy and voting on this Plan
at a regular or special meeting of shareholders of the Company. If
Shareholder Approval is not obtained within twelve (12) months
after the Effective Date, this Plan shall automatically terminate,
and the Company’s 2000 Stock Option Plan, as amended and
restated through but not including the Effective Date, shall remain
in full force and effect to the same extent and with the same
effect as though this Plan had never been adopted.
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