Exhibit 10.1
salesforce.com,
inc.
2006 Inducement Equity Incentive
Plan
(Amended and Restated
March 29, 2009)
1. E
STABLISHMENT
, P
URPOSE
AND
T
ERM
OF
P
LAN
.
1.1 Establishment .
The salesforce.com, inc. 2006 Inducement Equity Incentive Plan (the
“ Plan ” ) was established effective as
of April 25, 2006, the date of its approval by the Board (the
“ Effective Date ” ) and is hereby
amended and restated as of the date set forth above.
1.2 Purpose . The
purposes of the Plan are to provide a material inducement for the
best available employees to join the Company, and to promote the
success of the Company’s business. The Plan seeks to achieve
these purposes by providing for Awards in the form of Nonstatutory
Stock Options, Stock Appreciation Rights, Restricted Stock Purchase
Rights, Performance Shares, Performance Units, or Restricted Stock
Units.
1.3 Term of Plan. The Plan
became effective upon its adoption by the Board on the Effective
Date and shall continue in effect for a term of ten (10) years
unless terminated earlier under Section 15 of the
Plan.
2. D
EFINITIONS
AND
C
ONSTRUCTION
.
2.1 Definitions. Whenever
used herein, the following terms shall have their respective
meanings set forth below:
(a) “ Affiliate
” means (i) an entity, other than a Parent
Corporation, that directly, or indirectly through one or more
intermediary entities, controls the Company or (ii) an entity,
other than a Subsidiary Corporation, that is controlled by the
Company directly, or indirectly through one or more intermediary
entities. For this purpose, the term “control”
(including the term “controlled by”) means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the relevant entity,
whether through the ownership of voting securities, by contract or
otherwise; or shall have such other meaning assigned such term for
the purposes of registration on Form S-8 under the Securities
Act.
(b) “ Award
” means any Nonstatutory Stock Option, SAR, Restricted
Stock Purchase Right, Performance Share, Performance Unit, or
Restricted Stock Unit granted under the Plan.
(c) “ Award
Agreement ” means a written agreement between the
Company and a Participant setting forth the terms, conditions and
restrictions of the Award granted to the Participant. An Award
Agreement may be an “Option Agreement,” a “SAR
Agreement,” a “Restricted Stock Purchase
Agreement,” a “Performance Share Agreement,” a
“Performance Unit Agreement,” or a “Restricted
Stock Unit Agreement.”
(d) “ Board
” means the Board of Directors of the Company.
(e) “ Cause
” means, unless otherwise defined by the
Participant’s Award Agreement or contract of employment or
service, any of the following: (i) the Participant’s
theft, dishonesty, or falsification of any Participating Company
documents or records; (ii) the Participant’s improper
use or disclosure of a Participating Company’s confidential
or proprietary information; (iii) any action by the
Participant which has a detrimental effect on a Participating
Company’s reputation or business; (iv) the
Participant’s failure or inability to perform any reasonable
assigned duties after written notice from a Participating Company
of, and a reasonable opportunity to cure, such failure or
inability; (v) any material breach by the Participant of any
employment or service agreement between the Participant and a
Participating Company, which breach is not cured pursuant to the
terms of such agreement; or (vi) the Participant’s
conviction (including any plea of guilty or nolo contendere) of any
criminal act which impairs the Participant’s ability to
perform his or her duties with a Participating Company.
(f) “ Code
” means the Internal Revenue Code of 1986, as amended,
and any applicable regulations promulgated thereunder.
(g) “ Committee
” means the Compensation Committee or other committee of
the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. If no committee of the
Board has been appointed to administer the Plan, the Board shall
exercise all of the powers of the Committee granted herein, and, in
any event, the Board may in its discretion exercise any or all of
such powers.
(h) “ Company
” means salesforce.com, inc., a Delaware corporation, or
any successor corporation thereto.
(i) “ Director
” means a member of the Board.
(j) “ Disability
” means the permanent and total disability of the
Participant, within the meaning of Section 22(e)(3) of the
Code.
(k) “ Dividend
Equivalent ” means a credit, made at the discretion
of the Committee or as otherwise provided by the Plan, to the
account of a Participant in an amount equal to the cash dividends
paid on one share of Stock for each share of Stock represented by
an Award held by such Participant.
(l) “ Employee
” means any person treated as an employee (including an
Officer or a member of the Board who is also treated as an
employee) in the records of a Participating Company; provided,
however, that neither service as a member of the Board nor payment
of a director’s fee shall be sufficient to constitute
employment for purposes of the Plan. The Company shall determine in
good faith and in the exercise of its discretion whether an
individual has become or has ceased to be an Employee and the
effective date of such individual’s employment or termination
of employment, as the case may be. For purposes of an
individual’s rights, if any, under the Plan as of the time of
the Company’s determination, all such determinations by the
Company shall be final, binding and conclusive, notwithstanding
that the Company or any court of law or governmental agency
subsequently makes a contrary determination.
(m) “ Exchange Act
” means the Securities Exchange Act of 1934, as
amended.
(n) “ Fair Market
Value ” means, as of any date, the value of a share
of Stock or other property as determined by the Committee, in its
discretion, or by the Company, in its discretion, if such
determination is expressly allocated to the Company herein, subject
to the following:
(i) If, on such date, the Stock is
listed on a national or regional securities exchange or market
system, the Fair Market Value of a share of Stock shall be the
closing price of a share of Stock (or the mean of the closing bid
and asked prices of a share of Stock if the Stock is so quoted
instead) as quoted on the Nasdaq National Market, The Nasdaq
SmallCap Market or such other national or regional securities
exchange or market system constituting the primary market for the
Stock, as reported in The Wall Street Journal or such other
source as the Company deems reliable. If the relevant date does not
fall on a day on which the Stock has traded on such securities
exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on which the Stock was
so traded prior to the relevant date, or such other appropriate day
as shall be determined by the Committee, in its
discretion.
(ii) If, on such date, the Stock is
not listed on a national or regional securities exchange or market
system, the Fair Market Value of a share of Stock shall be as
determined by the Committee in good faith without regard to any
restriction other than a restriction which, by its terms, will
never lapse.
(o) “ Insider
” means an Officer, a member of the Board or any other
person whose transactions in Stock are subject to Section 16
of the Exchange Act.
(p) “ Nonstatutory Stock
Option ” means an Option not intended to be (as set
forth in the Award Agreement) an incentive stock option within the
meaning of Section 422(b) of the Code.
(q) “ Officer
” means any person designated by the Board as an officer
of the Company.
(r) “ Option
” means the right to purchase Stock at a stated price for
a specified period of time granted to a Participant pursuant to
Section 6 of the Plan. An Option may only be a Nonstatutory
Stock Option.
(s) “ Parent
Corporation ” means any present or future
“parent corporation” of the Company, as defined in
Section 424(e) of the Code.
(t) “ Participant
” means any eligible person who has been granted one or
more Awards.
(u) “ Participating
Company ” means the Company or any Parent
Corporation, Subsidiary Corporation or Affiliate.
(v) “ Participating
Company Group ” means, at any point in time, all
entities collectively which are then Participating
Companies.
(w) “ Performance
Award ” means an Award of Performance Shares or
Performance Units.
(x) “ Performance Award
Formula ” means, for any Performance Award, a formula
or table established by the Committee pursuant to Section 9.3
of the Plan which provides the basis for computing the value of a
Performance Award at one or more threshold levels of attainment of
the applicable Performance Goal(s) measured as of the end of the
applicable Performance Period.
(y) “ Performance
Goal ” means a performance goal established by the
Committee pursuant to Section 9.3 of the Plan.
(z) “ Performance
Period ” means a period established by the Committee
pursuant to Section 9.3 of the Plan at the end of which one or
more Performance Goals are to be measured.
(aa) “ Performance
Share ” means a bookkeeping entry representing a
right granted to a Participant pursuant to Section 9 of the
Plan to receive a payment equal to the value of a Performance
Share, as determined by the Committee, based on
performance.
(bb) “ Performance
Unit ” means a bookkeeping entry representing a right
granted to a Participant pursuant to Section 9 of the Plan to
receive a payment equal to the value of a Performance Unit, as
determined by the Committee, based upon performance.
(cc) “ Restricted Stock
Award ” means an Award of a Restricted Stock Purchase
Right.
(dd) “ Restricted Stock
Purchase Right ” means a right to purchase Stock
granted to a Participant pursuant to Section 8 of the
Plan.
(ee) “ Restricted Stock
Unit ” means a bookkeeping entry representing a right
granted to a Participant pursuant to Section 10 of the Plan to
receive a share of Stock on a date determined in accordance with
the provisions of Section 10 and the Participant’s Award
Agreement.
(ff) “ Restriction
Period ” means the period established in accordance
with Section 8.5 of the Plan during which shares subject to a
Restricted Stock Award are subject to Vesting
Conditions.
(gg) “ Rule 16b-3
” means Rule 16b-3 under the Exchange Act, as
amended from time to time, or any successor rule or
regulation.
(hh) “ SAR
” or “ Stock Appreciation Right
” means a bookkeeping entry representing, for each share
of Stock subject to such SAR, a right granted to a Participant
pursuant to Section 7 of the Plan to receive payment of an
amount equal to the excess, if any, of the Fair Market Value of a
share of Stock on the date of exercise of the SAR over the exercise
price.
(ii) “ Section
162(m) ” means Section 162(m) of the
Code.
(jj) “ Securities
Act ” means the Securities Act of 1933, as
amended.
(kk) “ Service
” means a Participant’s employment or service with
the Participating Company Group, in the capacity of an Employee. A
Participant’s Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Participant
renders such Service or a change in the Participating Company for
which the Participant renders such Service, provided that there is
no interruption or termination of the Participant’s Service.
Furthermore, a Participant’s Service shall not be deemed to
have terminated if the Participant takes any military leave, sick
leave, or other bona fide leave of absence approved by the Company.
Notwithstanding the foregoing, unless otherwise designated by the
Company or required by law, a leave of absence shall not be treated
as Service for purposes of determining vesting under the
Participant’s Award Agreement. A Participant’s Service
shall be deemed to have terminated either upon an actual
termination of Service or upon the entity for which the Participant
performs Service ceasing to be a Participating Company. Subject to
the foregoing, the Company, in its discretion, shall determine
whether the Participant’s Service has terminated and the
effective date of such termination.
(ll) “ Stock
” means the common stock of the Company, as adjusted from
time to time in accordance with Section 4.2 of the
Plan.
(mm) “ Subsidiary
Corporation ” means any present or future
“subsidiary corporation” of the Company, as defined in
Section 424(f) of the Code.
(nn) “ Vesting
Conditions ” mean those conditions established in
accordance with Section 8.5 or Section 10.3 of the Plan
prior to the satisfaction of which shares subject to a Restricted
Stock Award or Restricted Stock Unit Award, respectively, remain
subject to forfeiture or a repurchase option in favor of the
Company upon the Participant’s termination of
Service.
2.2 Construction. Captions
and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan.
Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.
3. A
DMINISTRATION
.
3.1 Administration by the
Committee. The Plan shall be administered by the Committee. All
questions of interpretation of the Plan or of any Award shall be
determined by the Committee, and such determinations shall be final
and binding upon all persons having an interest in the Plan or such
Award.
3.2 Authority of Officers.
Any Officer shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which
is allocated to the Company herein, provided the Officer has
apparent authority with respect to such matter, right, obligation,
determination or election. The Board may, in its discretion,
delegate to a committee comprised of one or more Officers the
authority to grant one or more Awards, without further approval of
the Board or the Committee, to any Employee, other than a person
who, at the time of such grant, is an Insider; provided, however,
that (a) such Awards shall not be granted for shares in excess
of the maximum aggregate number of shares of Stock authorized for
issuance pursuant to Section 4.1, (b) the exercise price
per share of each such Award which is an Option or Stock
Appreciation Right shall be not less than the Fair Market Value per
share of the Stock on the effective date of grant (or, if the Stock
has not traded on such date, on the last day preceding the
effective date of grant on which the Stock was traded), and
(c) each such Award shall be subject to the terms and
conditions of the appropriate standard form of Award Agreement
approved by the Board or the Committee and shall conform to the
provisions of the Plan and such other guidelines as shall be
established from time to time by the Board or the
Committee.
3.3 Administration with Respect
to Insiders. With respect to participation by Insiders in the
Plan, at any time that any class of equity security of the Company
is registered pursuant to Section 12 of the Exchange Act, the
Plan shall be administered in compliance with the requirements, if
any, of Rule 16b-3.
3.4 Powers of the Committee
. In addition to any other powers set forth in the Plan
and subject to the provisions of the Plan, the Committee shall have
the full and final power and authority, in its
discretion:
(a) to determine the persons to
whom, and the time or times at which, Awards shall be granted and
the number of shares of Stock or units to be subject to each
Award;
(b) to determine the type of Award
granted;
(c) to determine the Fair Market
Value of shares of Stock or other property;
(d) to determine the terms,
conditions and restrictions applicable to each Award (which need
not be identical) and any shares acquired pursuant thereto,
including, without limitation, (i) the exercise or purchase
price of shares purchased pursuant to any Award; (ii) the
method of payment for shares purchased pursuant to any Award;
(iii) the method for satisfaction of any tax withholding
obligation arising in connection with Award, including by the
withholding or delivery of shares of Stock; (iv) the timing,
terms and conditions of the exercisability or vesting of any Award
or any shares acquired pursuant thereto; (v) the Performance
Award Formula and Performance Goals applicable to any Award and the
extent to which such Performance Goals have been attained;
(vi) the time of the expiration of any Award, (vii) the
effect of the Participant’s termination of Service on any of
the foregoing; and (viii) all other terms, conditions and
restrictions applicable to any Award or shares acquired pursuant
thereto not inconsistent with the terms of the Plan;
(e) to determine whether an Award of
SARs, Performance Shares or Performance Units will be settled in
shares of Stock, cash, or in any combination thereof;
(f) to approve one or more forms of
Award Agreement;
(g) to amend, modify, extend, cancel
or renew any Award or to waive any restrictions or conditions
applicable to any Award or any shares acquired pursuant
thereto;
(h) to accelerate, continue, extend
or defer the exercisability or vesting of any Award or any shares
acquired pursuant thereto, including with respect to the period
following a Participant’s termination of Service;
(i) to prescribe, amend or rescind
rules, guidelines and policies relating to the Plan, or to adopt
sub-plans or supplements to, or alternative versions of, the Plan,
including, without limitation, as the Committee deems necessary or
desirable to comply with the laws or regulations of or to
accommodate the tax policy, accounting principles or custom of,
foreign jurisdictions whose citizens may be granted Awards;
and
(j) to correct any defect, supply
any omission or reconcile any inconsistency in the Plan or any
Award Agreement and to make all other determinations and take such
other actions with respect to the Plan or any Award as the
Committee may deem advisable to the extent not inconsistent with
the provisions of the Plan or applicable law.
3.5 Indemnification. In
addition to such other rights of indemnification as they may have
as members of the Board or the Committee or as officers or
employees of the Participating Company Group, members of the Board
or the Committee and any officers or employees of the Participating
Company Group to whom authority to act for the Board, the Committee
or the Company is delegated shall be indemnified by the Company
against all reasonable expenses, including attorneys’ fees,
actually and necessarily incurred in connection with the defense of
any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of
any action taken or failure to act under or in connection with the
Plan, or any right granted hereunder, and against all amounts paid
by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is
liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after
the institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at its own
expense to handle and defend the same.
4. S
HARES
S
UBJECT
TO
P
LAN
.
4.1 Maximum Number of Shares
Issuable. Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock
that may be issued under the Plan shall be seven hundred thousand
(700,000) and shall consist of authorized but unissued
or
reacquired shares of Stock or any
combination thereof. If an outstanding Award for any reason expires
or is terminated or canceled without having been exercised or
settled in full, or if shares of Stock acquired pursuant to an
Award subject to forfeiture or repurchase are forfeited or
repurchased by the Company at the Participant’s purchase
price, the shares of Stock allocable to the terminated portion of
such Award or such forfeited or repurchased shares of Stock shall
again be available for issuance under the Plan. Shares of Stock
shall not be deemed to have been issued pursuant to the Plan
(a) with respect to any portion of an Award that is settled in
cash or (b) to the extent such shares are withheld in
satisfaction of tax withholding obligations pursuant to
Section 14.2. Upon payment in shares of Stock pursuant to the
exercise of an SAR, the number of shares available for issuance
under the Plan shall be reduced only by the number of shares
actually issued in such payment. If the exercise price of an Option
is paid by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Participant, the number of shares
available for issuance under the Plan shall be reduced by the net
number of shares for which the Option is exercised.
4.2 Adjustments for Changes in
Capital Structure . Subject to any required action by
the stockholders of the Company, in the event of any change in the
Stock effected without receipt of consideration by the Company,
whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, or similar
change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the stockholders of the
Company in a form other than Stock (excepting normal cash
dividends) that has a material effect on the Fair Market Value of
shares of Stock, appropriate adjustments shall be made in the
number and class of shares subject to the Plan and to any
outstanding Awards, and in the exercise or purchase price per share
under any outstanding Award in order to prevent dilution or
enlargement of Participants’ rights under the Plan. For
purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without
receipt of consideration by the Company.” Any fractional
share resulting from an adjustment pursuant to this
Section 4.2 shall be rounded down to the nearest whole number,
and in no event may the exercise or purchase price under any Award
be decreased to an amount less than the par value, if any, of the
stock subject to such Award. The adjustments determined by the
Committee pursuant to this Section 4.2 shall be final, binding
and conclusive.
5. E
LIGIBILITY
AND
A
WARD
L
IMITATIONS
.
5.1 Persons Eligible for
Awards. Awards may be granted to Employees so long as the
following requirements are met: (a) the Employee was not
previously an Employee or Director, or the Employee is returning to
the employment of the Company following a bona-fide period of
non-employment, and (b) the grant of an Award under the Plan
is a material inducement to the Employee’s decision to enter
into the employment of the Company. Notwithstanding the foregoing,
an Employee may be granted an Award in connection with a merger,
acquisition or similar transaction, to the extent permitted by the
New York Stock Exchange rules governing stockholder approval of
inducement equity compensation plans.
5.2 Participation. Awards are
granted solely at the discretion of the Committee. Eligible persons
may be granted more than one (1) Award. However, eligibility
in accordance with this Section shall not entitle any person to be
granted an Award, or, having been granted an Award, to be granted
an additional Award.
6. T
ERMS
AND
C
ONDITIONS
OF
O
PTIONS
.
Options shall be evidenced by Award
Agreements specifying the number of shares of Stock covered
thereby, in such form as the Committee shall from time to time
establish. No Option or purported Option shall be a valid and
binding obligation of the Company unless evidenced by a fully
executed Award Agreement. Award Agreements evidencing Options may
incorporate all or any of the terms of the Plan by reference and
shall comply with and be subject to the following terms and
conditions:
6.1 Exercise Price .
The exercise price for each Option shall be established in the
discretion of the Committee; provided, however, that the exercise
price per share shall be not less than the Fair Market Value of a
share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option may be granted with an
exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or
substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.
6.2 Exercisability and Term of
Options . Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be
determined by the Committee and set forth in the Award Agreement
evidencing such Option; provided, however, that no Option shall be
exercisable after the expiration of five (5) years after the
effective date of grant of such Option. Subject to the foregoing,
unless otherwise specified by the Committee in the grant of an
Option, any Option granted hereunder shall terminate five
(5) years after the effective date of grant of the Option,
unless earlier terminated in accordance with its
provisions.
6.3 Payment of Exercise
Price.
(a) Forms of Consideration
Authorized. Except as otherwise provided below, payment of
the exercise price for the number of shares of Stock being
purchased pursuant to any Option shall be made (i) in cash, by
check or in cash equivalent; (ii) by tender to the Company, or
attestation to the ownership, of shares of Stock owned by the
Participant having a Fair Market Value not less than the exercise
price; (iii) by delivery of a properly executed notice of
exercise together with irrevocable instructions to a broker
providing for the assignment to the Company of the proceeds of a
sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a “ Cashless
Exercise ” ); (iv) by such other consideration
as may be approved by the Committee from time to time to the extent
permitted by applicable law; or (v) by any combination
thereof. The Committee may at any time or from time to time grant
Options which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or which
otherwise restrict one or more forms of consideration.
(b) Limitations on Forms of
Consideration.
(i) Tender of Stock.
Notwithstanding the foregoing, an Option may not be exercised by
tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute
a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock. Unless
otherwise provided by the Committee, an Option may not be exercised
by tender to the Company, or attestation to the ownership, of
shares of Stock unless such shares either have been owned by the
Participant for more than six (6) months (and not used for
another Option exercise by attestation during such period) or were
not acquired, directly or indirectly, from the Company.
(ii) Cashless Exercise. The
Company reserves, at any and all times, the right, in the
Company’s sole and absolute discretion, to establish, decline
to approve or terminate any program or procedures for the exercise
of Options by means of a Cashless Exercise, including with respect
to one or more Participants specified by the Company
notwithstanding that such program or procedures may be available to
other Participants.
6.4 Effect of Termination of
Service.
(a) Option Exercisability
. Subject to earlier termination of the Option as otherwise
provided herein and unless otherwise provided by the Committee in
the grant of an Option and set forth in the Award Agreement, an
Option shall be exercisable after a Participant’s termination
of Service only during the applicable time period determined in
accordance with this Section and thereafter shall
terminate:
(i) Disability. If the
Participant’s Service terminates because of the Disability of
the Participant, the Option, to the extent unexercised and
exercisable on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time
prior to the expiration of one (1) year (or such longer period
of time as determined by the Board, in its discretion) after the
date on which the Participant’s Service terminated, but in
any event no later than the date of expiration of the
Option’s term as set forth in the Award Agreement evidencing
such Option (the “ Option Expiration Date
” ).
(ii) Death. If the
Participant’s Service terminates because of the death of the
Participant, the Option, to the extent unexercised and exercisable
on the date on which the Participant’s Service terminated,
may be exercised by the Participant’s legal representative or
other person who acquired the right to exercise the Option by
reason of the Participant’s death at any time prior to the
expiration of one (1) year (or such longer period of time as
determined by the Board, in its discretion) after the date on which
the Participant’s Service terminated, but in any event no
later than the Option Expiration Date. The Participant’s
Service shall be deemed to have terminated on account of death if
the Participant dies within ninety (90) days (or such longer
period of time as determined by the Board, in its discretion) after
the Participant’s termination of Service.
(iii) Termination for Cause.
Notwithstanding any other provision of the Plan to the contrary, if
the Participant’s Service is terminated for Cause, the Option
shall terminate and cease to be exercisable immediately upon such
termination of Service.
(iv) Other Termination of
Service. If the Participant’s Service terminates for any
reason, except Disability, death or Cause, the Option, to the
extent unexercised and exercisable by the Participant on the date
on which the Participant’s Service terminated, may be
exercised by the Participant at any time prior to the expiration of
ninety (90) days (or such longer period of time as determined
by the Board, in its discretion) after the date on which the
Participant’s Service terminated, but in any event no later
than the Option Expiration Date.
(b) Extension if Exercise
Prevented by Law . Notwithstanding the foregoing, other
than termination of Service for Cause, if the exercise of an Option
within the applicable time periods set forth in Section 6.4(a)
is prevented by the provisions of Section 13 below, the Option
shall remain exercisable until ninety (90) days (or such
longer period of time as determined by the Board, in its
discretion) after the date the Participant is notified by the
Company that the Option is exercisable, but in any event no later
than the Option Expiration Date.
(c) Extension if Participant
Subject to Section 16(b ) . Notwithstanding the
foregoing, other than termination of Service for Cause, if a sale
within the applicable time periods set forth in Section 6.4(a)
of shares acquired upon the exercise of the Option would subject
the Participant to suit under Section 16(b) of the Exchange
Act, the Option shall remain exercisable until the earliest to
occur of (i) the tenth (10th) day following the date on
which a sale of such shares by the Participant would no longer be
subject to such suit; (ii) the one hundred and ninetieth
(190th) day after the Participant’s termination of
Service; or (iii) the Option Expiration Date.
6.5 Transferability of
Options. During the lifetime of the Participant, an Option
shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. Prior to the
issuance of shares of Stock upon the exercise of an Option, the
Option shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution. Notwithstanding the foregoing, to
the extent permitted by the Committee, in its discretion, and set
forth in the Award Agreement evidencing such Option, a Nonstatutory
Stock Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General
Instructions to Form S-8 Registration Statement under the
Securities Act.
7. T
ERMS
AND
C
ONDITIONS
OF
S
TOCK
A
PPRECIATION
R
IGHTS
.
Stock Appreciation Rights shall be
evidenced by Award Agreements specifying the number of shares of
Stock subject to the Award, in such form as the Committee shall
from time to time establish. No SAR or purported SAR shall be a
valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement. Award Agreements evidencing SARs
may incorporate all or any of the terms of the Plan by reference
and shall comply with and be subject to the following terms and
conditions:
7.1 Types of SARs Authorized.
SARs may be granted in tandem with all or any portion of a related
Option (a “ Tandem SAR ” ) or may be
granted independently of any Option (a “ Freestanding
SAR ” ). A Tandem SAR may be granted either
concurrently with the grant of the related Option or at any time
thereafter prior to the complete exercise, termination, expiration
or cancellation of such related Option.
7.2 Exercise Price. The
exercise price for each SAR shall be established in the discretion
of the Committee; provided, however, that (a) the exercise
price per share subject to a Tandem SAR shall be the exercise price
per share under the related Option, and (b) the exercise price
per share subject to a Freestanding SAR shall be not less than the
Fair Market Value of a share of Stock on the effective date of
grant of the SAR.
7.3 Exercisability and Term of
SARs.
(a) Tandem SARs.
Tandem SARs shall be exercisable only at the time and to the
extent, and only to the extent, that the related Option is
exercisable, subject to such provisions as the Committee may
specify where the Tandem SAR is granted with respect to less than
the full number of shares of Stock subject to the related Option.
The Committee may, in its discretion, provide in any Award
Agreement evidencing a Tandem SAR that such SAR may not be
exercised without the advance approval of the Company and, if such
approval is not given, then the Option shall nevertheless remain
exercisable in accordance with its terms. A Tandem SAR shall
terminate and cease to be exercisable no later than the date on
which the related Option expires or is terminated or canceled. Upon
the exercise of a Tandem SAR with respect to some or all of the
shares subject to such SAR, the related Option shall be canceled
automatically as to the number of shares with respect to which the
Tandem SAR was exercised. Upon the exercise of an Option related to
a Tandem SAR as to some or all of the shares subject to such
Option, the related Tandem SAR shall be canceled automatically as
to the number of shares with respect to which the related Option
was exercised.
(b) Freestanding SARs.
Freestanding SARs shall be exercisable at such time or times, or
upon such event or events, and subject to such terms, conditions,
performance criteria and restrictions as shall be determined by the
Committee and set forth in the Award Agreement evidencing such SAR;
provided, however, that no Freestanding SAR shall be exercisable
after the expiration of five (5) years after the effective
date of grant of such SAR.
7.4 Exercise of SARs. Upon
the exercise (or deemed exercise pursuant to Section 7.5) of
an SAR, the Participant (or the Participant’s legal
representative or other person who acquired the right to exercise
the SAR by reason of the Participant’s death) shall be
entitled to receive payment of an amount for each share with
respect to which the SAR is exercised equal to the excess, if any,
of the Fair Market Value of a share of Stock on the date of
exercise of the SAR over the exercise price. Payment of such amount
shall be made in cash, shares of Stock, or any combination thereof
as determined by the Committee. Unless otherwise provided in the
Award Agreement evidencing such SAR, payment shall be made in a
lump sum as soon as practicable following the date of exercise of
the SAR. The Award Agreement evidencing any
SAR may provide for deferred payment
in a lump sum or in installments. When payment is to be made in
shares of Stock, the number of shares to be issued shall be
determined on the basis of the Fair Market Value of a share of
Stock on the date of exercise of the SAR. For purposes of
Section 7, an SAR shall be deemed exercised on the date on
which the Company receives notice of exercise from the
Participant.
7.5 Deemed Exercise of SARs.
If, on the date on which an SAR would otherwise terminate or
expire, the SAR by its terms remains exercisable immediately prior
to such termination or expiration and, if so exercised, would
result in a payment to the holder of such SAR, then any portion of
such SAR which has not previously been exercised shall
automatically be deemed to be exercised as of such date with
respect to such portion.
7.6 Effect of Termination of
Service. Subject to earlier termination of the SAR as otherwise
provided herein and unless otherwise provided by the Committee in
the grant of an SAR and set forth in the Award Agreement, an SAR
shall be exercisable after a Participant’s termination of
Service only during the applicable time period determined in
accordance with Section 6.4 (treating the SAR as if it were an
Option) and thereafter shall terminate.
7.7 Nontransferability of
SARs. During the lifetime of the Participant, an SAR shall be
exercisable only by the Participant or the Participant’s
guardian or legal representative. Prior to the exercise of an SAR,
the SAR shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution.
8. T
ERMS
AND
C
ONDITIONS
OF
R
ESTRICTED
S
TOCK
A
WARDS
.
Restricted Stock Awards shall be
evidenced by Award Agreements specifying the number of shares of
Stock subject to the Award, in such form as the Committee shall
from time to time establish. No Restricted Stock Award or purported
Restricted Stock Award shall be a valid and binding obligation of
the Company unless evidenced by a fully executed Award Agreement.
Award Agreements evidencing Restricted Stock Awards may incorporate
all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and
conditions:
8.1 Types of Restricted Stock
Awards Authorized. Restricted Stock Awards may be in the form
of a Restricted Stock Purchase Right. Restricted Stock Awards may
be granted upon such conditions as the Committee shall determine,
including, without limitation, upon the attainment of one or more
Performance Goals described in Section 9.4. If either the
grant of a Restricted Stock Award or the lapsing of the Restriction
Period is to be contingent upon the attainment of one or more
Performance Goals, the Committee shall follow procedures
substantially equivalent to those set forth in Sections 9.3
through
9.5(a).
8.2 Purchase Price. The
purchase price for shares of Stock issuable under each Restricted
Stock Purchase Right shall be established by the Committee in its
discretion. Notwithstanding the foregoing, the Participant shall
furnish consideration in the form of cash or past services rendered
to a Participating Company or for its benefit having a value not
less than the par value of the shares of Stock subject to such
Restricted Stock Award.
8.3 Purchase Period. A
Restricted Stock Purchase Right shall be exercisable within a
period established by the Committee, which shall in no event exceed
thirty (30) days from the effective date of the grant of the
Restricted Stock Purchase Right; provided, however, that no
Restricted Stock Purchase Right granted to a prospective Employee
may become exercisable prior to the date on which such person
commences Service.
8.4 Payment of Purchase
Price. Except as otherwise provided below, payment of the
purchase price for the number of shares of Stock being purchased
pursuant to any Restricted Stock Purchase Right shall be made
(a) in cash, by check, or in cash equivalent, (b) by such
other consideration as may be approved by the Committee from time
to time to the extent permitted by applicable law, or (c) by
any combination thereof. The Committee may at any time or from time
to time grant Restricted Stock Purchase Rights which do not permit
all of the foregoing forms of consideration to be used in payment
of the purchase price or which otherwise restrict one or more forms
of consideration.
8.5 Vesting and Restrictions on
Transfer. Shares issued pursuant to any Restricted Stock Award
may or may not be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions
or performance criteria, including, without limitation, Performance
Goals as described in Section 9.4, as shall be established by
the Committee and set forth in the Award Agreement evidencing such
Award. During any Restriction Period in which shares acquired
pursuant to a Restricted Stock Award remain subject to Vesting
Conditions, such shares may not be sold, exchanged, transferred,
pledged, assigned or otherwise disposed of other than pursuant to
an Ownership Change Event, as defined in Section 12.1, or as
provided in Section 8.8. Upon request by the Company, each
Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Company any and all certificates
representing shares of Stock acquired hereunder for the placement
on such certificates of appropriate legends evidencing any such
transfer restrictions.
8.6 Voting Rights; Dividends and
Distributions. Except as provided in this Section,
Section 8.5 and any Award Agreement, during the Restriction
Period applicable to shares subject to a Restricted Stock Award,
the Participant shall have all of the rights of a stockholder of
the Company holding shares of Stock, including the right to vote
such shares and to receive all dividends and other distributions
paid with respect to such shares. However, in the event of a
dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the
Company as described in Section 4.2, then any and all new,
substituted or additional securities or other property (other than
normal cash dividends) to which the Participant is entitled by
reason of the Participant’s Restricted Stock Award shall be
immediately subject to the same Vesting Conditions as the shares
subject to the Restricted Stock Award with respect to which such
dividends or distributions were paid or adjustments were
made.
8.7 Effect of Termination of
Service. Unless otherwise provided by the Committee in the
grant of a Restricted Stock Award and set forth in the Award
Agreement, if a Participant’s Service terminates for any
reason, whether voluntary or involuntary (including the
Participant’s death or disability), then the Company shall
have the option to repurchase for the purchase price paid by the
Participant any shares acquired by the Participant pursuant to a
Restricted Stock Purchase Right which remain subject to Vesting
Conditions as of the date of the Participant’s termination of
Service. The Company shall have the right to assign at any time any
repurchase right it may have, whether or not such right is then
exercisable, to one or more persons as may be selected by the
Company.
8.8 Nontransferability of
Restricted Stock Award Rights. Prior to the issuance of shares
of Stock pursuant to a Restricted Stock Award, rights to acquire
such shares shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge,
encumbrance or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or the
laws of descent and distribution. All rights with respect to a
Restricted Stock Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or
the Participant’s guardian or legal
representative.
9. T
ERMS
AND
C
ONDITIONS
OF
P
ERFORMANCE
A
WARDS
.
Performance Awards shall be
evidenced by Award Agreements in such form as the Committee shall
from time to time establish. No Performance Award or purported
Performance Award shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award
Agreements evidencing Performance Awards may incorporate all or any
of the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:
9.1 Types of Performance Awards
Authorized. Performance Awards may be in the form of either
Performance Shares or Performance Units. Each Award Agreement
evidencing a Performance Award shall specify the number of
Performance Shares or Performance Units subject thereto, the
Performance Award Formula, the Performance Goal(s) and Performance
Period applicable to the Award, and the other terms, conditions and
restrictions of the Award.
9.2 Initial Value of Performance
Shares and Performance Units. Unless otherwise provided by the
Committee in granting a Performance Award, each Performance Share
shall have an initial value equal to the Fair Market Value of one
(1) share of Stock, subject to adjustment as provided in
Section 4.2, on the effective date of grant of the Performance
Share, and each Performance Unit shall have an initial value of an
amount determined by the Committee on the effective date of the
grant of the unit. The final value payable to the Participant in
settlement of a Performance Award determined on the basis of the
applicable Performance Award Formula will depend on the extent to
which Performance Goals established by the Committee are attained
within the applicable Performance Period established by the
Committee.
9.3 Establishment of Performance
Period, Performance Goals and Performance Award Formula. In
granting each Performance Award, the Committee shall establish in
writing the applicable Performance Period, Performance Award
Formula and one or more Performance Goals which, when measured at
the end of the Performance Period, shall
determine on the basis of the
Performance Award Formula the final value of the Performance Award
to be paid to the Participant. The Committee shall establish the
Performance Goal(s) and Performance Award Formula applicable to
each Performance Award no later than the earlier of (a) the
date ninety (90) days after the commencement of the applicable
Performance Period or (b) the date on which twenty-five
percent (25%) of the Performance Period has elapsed, and, in
any event, at a time when the outcome of the Performance Goals
remains substantially uncertain. Once established, the Performance
Goals and Performance Award Formula shall not be changed during the
Performance Period. The Company shall notify each Participant
granted a Performance Award of the terms of such Award, including
the Performance Period, Performance Goal(s) and Performance Award
Formula.
9.4 Measurement of Performance
Goals. Performance Goals shall be established by the Committee
on the basis of targets to be attained ( “ Performance
Targets ” ) with respect to one or more measures of
business or financial performance (each, a “
Performance Measure ” ), subject to the
following:
(a) Performance
Measures. Performance Measures shall have the same meanings
as used in the Company’s financial statements, or, if such
terms are not used in the Company’s financial statements,
they shall have the meaning applied pursuant to generally accepted
accounting principles, or as used generally in the Company’s
industry. Performance Measures shall be calculated with respect to
the Company and each Subsidiary Corporation consolidated therewith
for financial reporting purposes or such division or other business
unit as may be selected by the Committee. For purposes of the Plan,
the Performance Measures applicable to a Performance Award shall be
calculated in accordance with generally accepted accounting
principles, but prior to the accrual or payment of any Performance
Award for the same Performance Period and excluding the effect
(whether positive or negative) of any change in accounting
standards or any extraordinary, unusual or nonrecurring item, as
determined by the Committee, occurring after the establishment of
the Performance Goals applicable to the Performance Award.
Performance Measures may be one or more of the following, as
determined by the Committee:
|
|
(vi)
|
earnings before
interest, taxes and depreciation;
|
|
|
(x)
|
the market
price of the Stock;
|
|
|
(xii)
|
return on
stockholder equity;
|
|
|
(xiii)
|
return on
capital;
|
|
|
(xiv)
|
return on net
assets;
|
|
|
(xv)
|
economic value
added;
|
|
|
(xvi)
|
number of
customers; and
|
(b) Performance
Targets. Performance Targets may include a minimum,
maximum, target level and intermediate levels of performance, with
the final value of a Performance Award determined under the
applicable Performance Award Formula by the level attained during
the applicable Performance Period. A Performance Target may be
stated as an absolute value or as a value determined relative to a
standard selected by the Committee.
9.5 Settlement of Performance
Awards.
(a) Determination of Final
Value. As soon as practicable following the completion of
the Performance Period applicable to a Performance Award, the
Committee shall certify in writing the extent to which the
applicable Performance Goals have been attained and the resulting
final value of the Award earned by the Participant and to be paid
upon its settlement in accordance with the applicable Performance
Award Formula.
(b) Effect of Leaves of
Absence. Unless otherwise required by law, payment of the
final value, if any, of a Performance Award held by a Participant
who has taken in excess of thirty (30) days in leaves of
absence during a Performance Period shall be prorated on the basis
of the number of days of the Participant’s Service during the
Performance Period during which the Participant was not on a leave
of absence.
(c) Notice to
Participants. As soon as practicable following the
Committee’s determination and certification in accordance
with Section 9.5(a), the Company shall notify each Participant
of the determination of the Committee.
(d) Payment in Settlement of
Performance Awards. As soon as practicable following the
Committee’s determination and certification in accordance
with Sections 9.5(a), payment shall be made to each eligible
Participant (or such Participant’s legal representative or
other person who acquired the right to receive such payment by
reason of the Participant’s death) of the final value of the
Participant’s Performance Award. Payment of such amount shall
be made in cash, shares of Stock, or a combination thereof as
determined by the Committee. Unless otherwise provided in the Award
Agreement evidencing a Performance Award, payment shall be made in
a lump sum. An Award Agreement may provide for deferred payment in
a lump sum or in installments. If any payment is to be made on a
deferred basis, the Committee may, but shall not be obligated to,
provide for the payment during the deferral period of Dividend
Equivalents or interest.
(e) Provisions Applicable to
Payment in Shares. If payment is to be made in shares of
Stock, the number of such shares shall be determined by dividing
the final value of the Performance Award by the value of a share of
Stock determined by the method specified in the Award Agreement.
Such methods may include, without limitation, the closing market
price on a specified date (such as the settlement date) or an
average of market prices over a series of trading days. Shares of
Stock issued in payment of any Performance Award may be fully
vested and freely transferable shares or may be shares of Stock
subject to Vesting Conditions as provided in Section 8.5. Any
shares subject to Vesting Conditions shall be evidenced by an
appropriate Award Agreement and shall be subject to the provisions
of Sections 8.5 through 8.8 above.
9.6 Voting Rights; Dividend
Equivalent Rights and Distributions. Participants shall have no
voting rights with respect to shares of Stock represented by
Performance Share Awards until the date of the issuance of such
shares, if any (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the
Company). However, the Committee, in its discretion, may provide in
the Award Agreement evidencing any Performance Share Award that the
Participant shall be entitled to receive Dividend Equivalents with
respect to the payment of cash dividends on Stock having a record
date prior to the date on which the Performance Shares are settled
or forfeited. Such Dividend Equivalents, if any, shall be credited
to the Participant in the form of additional whole Performance
Shares as of the date of payment of such cash dividends on Stock.
The number of additional Performance Shares (rounded to the nearest
whole number) to be so credited shall be determined by dividing
(a) the amount of cash dividends paid on such date with
respect to the number of shares of Stock represented by the
Performance Shares previously credited to the Participant by
(b) the Fair Market Value per share of Stock on such date.
Dividend Equivalents may be paid currently or may be accumulated
and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee. Settlement of
Dividend Equivalents may be made in cash, shares of Stock, or a
combination thereof as determined by the Committee, and may be paid
on the same basis as settlement of the related Performance Share as
provided in Section 9.5. Dividend Equivalents shall not be
paid with respect to Performance Units. In the event of a dividend
or distribution paid in shares of Stock or any other adjustment
made upon a change in the capital structure of the Company as
described in Section 4.2, appropriate adjustments shall be
made in the Participant’s Performance Share Award so that it
represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than
normal cash dividends) to which the Participant would entitled by
reason of the shares of Stock issuable upon settlement of the
Performance Share Award, and all such new, substituted or
additional securities or other property shall be immediately
subject to the same Performance Goals as are applicable to the
Award.
9.7 Effect of Termination of
Service. Unless otherwise provided by the Committee in the
grant of a Performance Award and set forth in the Award Agreement,
the effect of a Participant’s termination of Service on the
Performance Award shall be as follows:
(a) Death or
Disability. If the Participant’s Service terminates
because of the death or Disability of the Participant before the
completion of the Performance Period applicable to the Performance
Award, the final value of the Participant’s Performance Award
shall be determined by the extent to which the applicable
Performance Goals have been attained with respect to the entire
Performance Period and shall be prorated based on the number of
months of the Participant’s Service during the Performance
Period. Payment shall be made following the end of the Performance
Period in any manner permitted by Section 9.5.
(b) Other Termination of
Service. If the Participant’s Service terminates for
any reason except death or Disability before the completion of the
Performance Period applicable to the Performance Award, such Award
shall be forfeited in its entirety; provided, however, that in the
event of an involuntary termination of the Participant’s
Service, the Committee, in its sole discretion, may waive the
automatic forfeiture of all or any portion of any such
Award.
9.8 Nontransferability of
Performance Awards. Prior to settlement in accordance with the
provisions of the Plan, no Performance Award shall be subject in
any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participant’s beneficiary, except transfer
by will or by the laws of descent and distribution. All rights with
respect to a Performance Award granted to a Participant hereunder
shall be exercisable during his or her lifetime only by such
Participant or the Participant’s guardian or legal
representative.
10. T
ERMS
AND
C
ONDITIONS
OF
R
ESTRICTED
S
TOCK
U
NIT
A
WARDS
.
Restricted Stock Unit Awards shall
be evidenced by Award Agreements specifying the number of
Restricted Stock Units subject to the Award, in such form as the
Committee shall from time to time establish. No Restricted Stock
Unit Award or purported Restricted Stock Unit Award shall be a
valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement. Award Agreements evidencing
Restricted Stock Units may incorporate all or any of the terms of
the Plan by reference and shall comply with and be subject to the
following terms and conditions:
10.1 Grant of Restricted Stock
Unit Awards. Restricted Stock Unit Awards may be granted upon
such conditions as the Committee shall determine, including,
without limitation, upon the attainment of one or more Performance
Goals described in Section 9.4. If either the grant of a
Restricted Stock Unit Award or the Vesting Conditions with respect
to such Award is to be contingent upon the attainment of one or
more Performance Goals, the Committee shall follow procedures
substantially equivalent to those set forth in Sections 9.3
through 9.5(a).
10.2 Purchase Price. No
monetary payment (other than applicable tax withholding, if any)
shall be required as a condition of receiving a Restricted Stock
Unit Award, the consideration for which shall be services actually
rendered to a Participating Company or for its benefit.
10.3 Vesting. Restricted
Stock Units may or may not be made subject to Vesting Conditions
based upon the satisfaction of such Service requirements,
conditions, restrictions or performance criteria, including,
without limitation, Performance Goals as described in
Section 9.4, as shall be established by the Committee and set
forth in the Award Agreement evidencing such Award.
10.4 Voting Rights, Dividend
Equivalent Rights and Distributions. Participants shall have no
voting rights with respect to shares of Stock represented by
Restricted Stock Units until the date of the issuance of such
shares (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company).
However, the Committee, in its discretion, may provide in the Award
Agreement evidencing any Restricted Stock Unit Award that the
Participant shall be entitled to receive Dividend Equivalents with
respect to the payment of cash dividends on Stock having a record
date prior to date on which Restricted Stock Units held by such
Participant are settled. Such Dividend Equivalents, if any, shall
be paid by crediting the Participant with additional whole
Restricted Stock Units as of the date of payment of such cash
dividends on Stock. The number of additional Restricted Stock Units
(rounded to the nearest whole number) to be so credited shall be
determined by dividing (a) the amount of cash dividends paid
on such date with respect to the number of shares of Stock
represented by the Restricted Stock Units previously credited to
the Participant by (b) the Fair Market Value per share of
Stock on such date. Such additional Restricted Stock Units shall be
subject to the same terms and conditions and shall be settled in
the same manner and at the same time (or as soon thereafter as
practicable) as the Restricted Stock Units originally subject to
the Restricted Stock Unit Award. In the event of a dividend or
distribution paid in shares of Stock or any other adjustment made
upon a change in the capital structure of the Company as described
in Section 4.2, appropriate adjustments shall be made in the
Participant’s Restricted Stock Unit Award so that it
represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than
normal cash dividends) to which the Participant would entitled by
reason of the shares of Stock issuable upon settlement of the
Award, and all such new, substituted or additional securities or
other property shall be immediately subject to the same Vesting
Conditions as are applicable to the Award.
10.5 Effect of Termination of
Service. Unless otherwise provided by the Committee in the
grant of a Restricted Stock Unit Award and set forth in the Award
Agreement, if a Participant’s Service terminates for any
reason, whether voluntary or involuntary (including the
Participant’s death or disability), then the Participant
shall forfeit to the Company any Restricted Stock Units pursuant to
the Award which remain subject to Vesting Conditions as of the date
of the Participant’s termination of Service.
10.6 Settlement of Restricted
Stock Unit Awards. The Company shall issue to a Participant on
the date on which Restricted Stock Units subject to the
Participant’s Restricted Stock Unit Award vest or on such
other date determined by the Committee, in its discretion, and set
forth in the Award Agreement one (1) share of Stock (and/or
any other new, substituted or additional securities or other
property pursuant to an adjustment described in Section 10.4)
for each Restricted Stock Unit then becoming vested or otherwise to
be settled on such date, subject to the withholding of applicable
taxes. Notwithstanding the foregoing, if permitted by the Committee
and set forth in the Award Agreement, the Participant may elect in
accordance with terms specified in the Award Agreement to defer
receipt of all or any portion of the shares of Stock or other
property otherwise issuable to the Participant pursuant to this
Section.
10.7 Nontransferability of
Restricted Stock Unit Awards. Prior to the issuance of shares
of Stock in settlement of a Restricted Stock Unit Award, the Award
shall not be subject in any manner to anticipation, alienation,
sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution. All rights with respect to a
Restricted Stock Unit Award granted to a Participant hereunder
shall be exercisable during his or her lifetime only by such
Participant or the Participant’s guardian or legal
representative.
11. S
TANDARD
F
ORMS
OF
A
WARD
A
GREEMENT
.
11.1 Award Agreements
. Each Award shall comply with and be subject to the
terms and conditions set forth in the appropriate form of Award
Agreement approved by the Committee and as amended from time to
time. Any Award Agreement may consist of an appropriate form of
Notice of Grant and a form of Agreement incorporated therein by
reference, or such other form or forms as the Committee may approve
from time to time.
11.2 Authority to Vary Terms
. The Committee shall have the authority from time to
time to vary the terms of any standard form of Award Agreement
either in connection with the grant or amendment of an individual
Award or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of
any such new, revised or amended standard form or forms of Award
Agreement are not inconsistent with the terms of the
Plan.
12. C
HANGE
IN
C
ONTROL
.
12.1 Definitions.
(a) An “ Ownership
Change Event ” shall be deemed to have occurred if
any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company
of more than fifty percent (50%) of the voting stock of the
Company; (ii) a merger or consolidation in which the Company
is a party; (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company (other than a sale,
exchange or transfer to one or more subsidiaries of the Company);
or (iv) a liquidation or dissolution of the
Company.
(b) A “ Change in
Control ” shall mean an Ownership Change Event or
series of related Ownership Change Events (collectively, a
“ Transaction ” ) in which the
stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the
same proportions as their ownership of shares of the
Company’s voting stock immediately before the Transaction,
direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding
voting securities of the Company or, in the case of an Ownership
Change Event described in Section 12.1(a)(iii), the entity to
which the assets of the Company were transferred (the “
Transferee ” ), as the case may be. For purposes
of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership
of the
voting securities of one or more
corporations or other business entities which own the Company or
the Transferee, as the case may be, either directly or through one
or more subsidiary corporations or other business entities. The
Committee shall have the right to determine whether multiple sales
or exchanges of the voting securities of the Company or multiple
Ownership Change Events are related, and its determination shall be
final, binding and conclusive.
12.2 Effect of Change in Control
on Options and SARs .
(a) Accelerated
Vesting. Notwithstanding any other provision of the Plan to
the contrary, the Committee, in its sole discretion, may provide in
any Award Agreement or, in the event of a Change in Control, may
take such actions as it deems appropriate to provide for the
acceleration of the exercisability and vesting in connection with
such Change in Control of any or all outstanding Options and SARs
and shares acquired upon the exercise of such Options and SARs upon
such conditions and to such extent as the Committee shall
determine.
(b) Assumption or
Substitution. In the event of a Change in Control, the
surviving, continuing, successor, or purchasing entity or parent
thereof, as the case may be (the “ Acquiror
” ), may, without the consent of any Participant, either
assume the Company’s rights and obligations under outstanding
Options and SARs or substitute for outstanding Options and SARs
substantially equivalent options and SARs (as the case may be) for
the Acquiror’s stock. Any Options or SARs which are not
assumed by the Acquiror in connection with the Change in Control
nor exercised as of the time of consummation of the Change in
Control shall terminate and cease to be outstanding effective as of
the time of consummation of the Change in Control.
(c) Cash-Out of
Options. The Committee may, in its sole discretion and
without the consent of any Participant, determine that, upon the
occurrence of a Change in Control, each or any Option or SAR
outstanding immediately prior to the Change in Control shall be
canceled in exchange for a payment with respect to each vested
share of Stock subject to such canceled Option or SAR in
(i) cash; (ii) stock of the Company or of a corporation
or other business entity a party to the Change in Control; or
(iii) other property which, in any such case, shall be in an
amount having a Fair Market Value equal to the excess of the Fair
Market Value of the consideration to be paid per share of Stock in
the Change in Control over the exercise price per share under such
Option or SAR (the “ Spread ” ). In the
event such determination is made by the Committee, the Spread
(reduced by applicable withholding taxes, if any) shall be paid to
Participants in respect of their canceled Options and SARs as soon
as practicable following the date of the Change in
Control.
12.3 Effect of Change in Control
on Restricted Stock Awards. The Committee may, in its
discretion, provide in any Award Agreement evidencing a Restricted
Stock Award that, in the event of a Change in Control, the lapsing
of the Restriction Period applicable to the shares subject to the
Restricted Stock Award held by a Participant whose Service has not
terminated prior to the Change in Control shall be accelerated
effective immediately prior to the consummation of the Change in
Control to such extent as specified in such Award Agreement. Any
acceleration of the lapsing of the Restriction Period that was
permissible solely by reason of this Section 12.3 and the
provisions of such Award Agreement shall be conditioned upon the
consummation of the Change in Control.
12.4 Effect of Change in Control
on Performance Awards. The Committee may, in its discretion,
provide in any Award Agreement evidencing a Performance Award that,
in the event of a Change in Control, the Performance Award held by
a Participant whose Service has not terminated prior to the Change
in Control shall become payable effective as of the date of the
Change in Control to such extent as specified in such Award
Agreement.
12.5 Effect of Change in Control
on Restricted Stock Unit Awards. The Committee may, in its
discretion, provide in any Award Agreement evidencing a Restricted
Stock Unit Award that, in the event of a Change in Control, the
Restricted Stock Unit Award held by a Participant whose Service has
not terminated prior to such date shall be settled effective as of
the date of the Change in Control to such extent as specified in
such Award Agreement.
13. C
OMPLIANCE
WITH
S
ECURITIES
L
AW
.
The grant of Awards and the issuance
of shares of Stock pursuant to any Award shall be subject to
compliance with all applicable requirements of federal, state and
foreign law with respect to such securities and the requirements of
any stock exchange or market system upon which the Stock may then
be listed. In addition, no Award may be exercised or shares issued
pursuant to an Award unless (a) a registration statement under
the Securities Act shall at the time of such exercise or issuance
be in effect with respect to the shares issuable pursuant to the
Award or (b) in the opinion of legal counsel to the Company,
the shares issuable pursuant to the Award may be issued in
accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of
the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel
to be necessary to the lawful issuance and sale of any shares
hereunder shall relieve the Company of any liability in respect of
the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to issuance
of any Stock, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be
requested by the Company.
14. T
AX
W
ITHHOLDING
.
14.1 Tax Withholding in
General. The Company shall have the right to deduct from any
and all payments made under the Plan, or to require the
Participant, through payroll withholding, cash payment or
otherwise, including by means of a Cashless Exercise of an Option,
to make adequate provision for, the federal, state, local and
foreign taxes, if any, required by law to be withheld by the
Participating Company Group with respect to an Award or the shares
acquired pursuant thereto. The Company shall have no obligation to
deliver shares of Stock, to release shares of Stock from an escrow
established pursuant to an Award Agreement, or to make
an
