2008 EMPLOYEE LONG-TERM INCENTIVE
PLAN
Section
1. Establishment and Purpose
(a) Purpose . The purposes of
this e Plus inc. 2008 Long-Term Incentive Plan (the “
Employee Plan ”) are to encourage Employees of
e Plus inc. (together with any successor thereto, the
“ Company ”) and its Affiliates (as defined
below) to acquire a proprietary interest in the growth and
performance of the Company, to generate an increased incentive to
contribute to the Company’s future success and prosperity,
thus enhancing the value of the Company for the benefit of its
stockholders, and to enhance the ability of the Company and its
Affiliates to attract and retain exceptionally qualified
individuals upon whom, in large measure, the sustained progress,
growth and profitability of the Company depend.
(b) Effective Date; Shareholder Approval
. The Plan is effective September 15, 2008, subject to
approval by the Company’s shareholders.
Section
2. Definitions
As used in the
Employee Plan, the following terms shall have the meanings set
forth below:
(a) “
Affiliate ” shall mean (i) any entity that, directly
or through one or more intermediaries, is controlled by the Company
and (ii) any entity in which the Company has no less than a 50%
equity interest, as determined by the Committee. With
respect to Incentive Stock Options, “Affiliate” means
any entity, domestic or foreign, whether or not such entity now
exists or is hereafter organized or acquired by the Company or by
an Affiliate that is a “subsidiary corporation” within
the meaning of Code Section 424(d) and the rules
thereunder.
(b) “
Award ” shall mean any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Award,
Dividend Equivalent, or Other Stock-Based Award granted under the
Employee Plan.
(c) “
Award Agreement ” shall mean any written agreement,
contract, or other instrument or document, including an electronic
communication, evidencing any Award granted under the Employee
Plan.
(d) “
Board ” shall mean the Board of Directors of the
Company.
(e) “
Cause ” means (except as otherwise provided in an
Award Agreement) if the Committee, in its reasonable and good faith
discretion, determines that the employee (i) fails to substantially
perform his or her duties (other than as a result of Disability),
after the Board or the executive to which the Participant reports
delivers to the Participant a written demand for substantial
performance that specifically identifies the manner in which the
Participant has not substantially performed his or her duties; (ii)
engages in willful misconduct or gross negligence that is
materially injurious to the Company or a subsidiary; (iii) breaches
his or her duty of loyalty to the Company or a subsidiary;
(iv) removed without proper authorization from the
premises of the Company or a subsidiary of a document (of any media
or form) relating to the Company or a subsidiary or the customers
of the Company or a subsidiary; (v) breaches any confidentiality
and/or non-compete agreement between him or her and the Company; or
(vi) has committed a felony or a serious crime involving moral
turpitude.
(f) “
Change in Control ” means an event that is “a
change in the ownership or effective control of the corporation, or
in the ownership of a substantial portion of the assets of the
corporation" within the meaning of Section 409A and that also falls
within one of the following events with respect to the
Company:
(i) the consummation of any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which Common Stock would be
converted into cash, securities or other property, other than a
merger of the Company in which the holders of Common Stock
immediately prior to the merger own more than fifty percent (50%)
of the outstanding common stock of the surviving corporation
immediately after the merger; or
(ii) the consummation of any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets
of the Company, other than to a subsidiary or affiliate;
or
(iii) any action pursuant to which any person
(which term may include two or more persons consistent with Section
13(d)(3) of the Exchange Act), corporation or other entity shall
become the “beneficial owner” (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
shares of capital stock entitled to vote generally for the election
of directors of the Company (“ Voting Securities
”) representing more than fifty (50%) percent of the combined
voting power of the Company’s then outstanding Voting
Securities (calculated as provided in Rule 13d-3(d) in the case of
rights to acquire any such securities); or
(iv) the individuals (x) who, as of the
Effective Date, constitute the Board (the “ Original
Directors ”) and (y) who thereafter are elected to the
Board and whose election, or nomination for election, to the Board
was approved by a vote of a majority of the Original Directors then
still in office (such Directors being called “ Additional
Original Directors ”) and (z) who thereafter are elected
to the Board and whose election or nomination for election to the
Board was approved by a vote of a majority of the Original
Directors and Additional Original Directors then still in office,
cease for any reason to constitute a majority of the members of the
Board; or
(v) the dissolution or liquidation of the
Company.
(g) “
Code ” shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(h) “
Committee ” shall mean the Compensation Committee of
the Board of Directors of the Company, or such other committee as
may be designated by the Board. However, if a member of
the Compensation Committee is not an “outside director”
within the meaning of Section 162(m) of the Code or is not a
“non-employee director” as defined in Rule 16b-3 under
the Exchange Act, the Compensation Committee may from time to time
delegate some or all of its functions under the Employee Plan to a
committee or subcommittee composed of members that meet the
relevant requirements. The term “Committee”
includes any such committee or subcommittee, to the extent of the
Compensation Committee’s delegation.
(i) “
Common Stock ” shall mean shares of the
Company’s common stock, par value $0.01 per share.
(j) “
Disability ” shall mean any illness or other physical
or mental condition of a Participant which renders the Participant
incapable of performing his or her customary and usual duties for
the Company, or any medically determinable illness or other
physical or mental condition resulting from a bodily injury,
disease, or mental disorder that in the judgment of the Committee
is permanent and continuous in nature. The Committee may require
such medical or other evidence as it deems necessary to judge the
nature and permanency of the Participant’s
condition.
(k) “
Dividend Equivalent ” shall mean any right granted
under Section 6(e) of the Employee Plan.
(l) “
Employee ” means any person who is in the employ of
the Company or any Affiliate, subject to the control and direction
of the Company or any Affiliate as to both the work to be performed
and the manner and method of performance.
(m) “
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
(n) “
Fair Market Value ” shall mean, as of any date, the
value of Common Stock determined as follows:
(i) if the Common Stock is listed on any
established stock exchange or a national market system, including
without limitation the Nasdaq Global Market or The Nasdaq Capital
Market of The Nasdaq Stock Market, the Fair Market Value of a share
of Common Stock shall be the closing sales price of a share of
Common Stock as quoted on such exchange or system for such date (or
the most recent trading day preceding such date if there were no
trades on such date), as reported in The Wall Street Journal
or such other source as the Committee deems reliable;
(ii) if the Common Stock is regularly quoted by
a recognized securities dealer but is not listed in the manner
contemplated by clause (i) above, the Fair Market Value of a Share
of Common Stock shall be the mean between the high bid and low
asked prices for the Common Stock on the last market trading day
prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Committee deems
reliable; or
(iii) if neither clause (i) above nor clause
(ii) above applies, the Fair Market Value of a share of a share of
Common Stock shall be determined in good faith by the Committee
based on the reasonable application of a reasonable valuation
method.
(o) “
Incentive Stock Option ” shall mean an option granted
under Section 6(a) of the Employee Plan that is intended to meet
the requirements of Sections 422 of the Code, or any successor
provision thereto.
(p) “
Key Employee ” shall mean an Employee who is a
“covered employee” within the meaning of Section
162(m)(3) of the Code.
(q) “
Non-Qualified Stock Option ” shall mean an option
granted under Section 6(a) of the Employee Plan that is not an
Incentive Stock Option.
(r) “
Option ” shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
(s) “
Other Stock-Based Award ” shall mean any right granted
under Section 6(f) of the Employee Plan.
(t) “
Participant ” shall mean an Employee of the Company or
of any Affiliate designated to be granted an Award under the
Employee Plan.
(u) “
Performance Award ” shall mean any right granted under
Section 6(d) of the Employee Plan.
(v) “
Performance Criteria ” shall mean any quantitative
and/or qualitative measures, as determined by the Committee, which
may be used to measure the level of performance of the Company or
any individual Participant during a Performance Period, including
any Qualifying Performance Criteria. With respect
to any Award intended to satisfy the requirements of Code Section
162(m), performance criteria shall mean the Qualifying Performance
Criteria.
(w) “
Performance Period ” shall mean any period as
determined by the Committee in its sole discretion.
(x) “
Person ” shall mean any individual, corporation,
partnership, association, joint-stock company, trust,
unincorporated organization, or government or political subdivision
thereof.
(y) “
Qualifying Performance Criteria ” shall mean one or
more of the following performance criteria, either individually,
alternatively or in any combination, applied to either the company
as a whole or to a business unit or Affiliate, and measured either
annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to a previous
year’s results or to a designated comparison group, in each
case as specified by the Committee in the Award: revenue, sales,
net income, net earnings, earnings per share, return on total
capital, return on equity, cash flow, operating profit and margin
rate, subject to adjustment by the Committee to remove the effect
of charges for restructurings, discontinued operations,
extraordinary items and all items of gain, loss or expense
determined to be extraordinary or unusual in nature or infrequent
in occurrence, related to the disposal of a segment or a business,
or related to a change in accounting principle or
otherwise.
(z) “
Restricted Securities ” shall mean Awards of
Restricted Stock or other Awards under which issued and outstanding
Shares are held subject to certain restrictions.
(aa) “
Restricted Stock ” shall mean any award of Shares
granted under Section 6(c) of the Employee Plan.
(bb) “
Restricted Stock Unit ” shall mean any right granted
under Section 6(c) of the Employee Plan that is denominated in
Shares.
(cc) “
Retirement ” means retirement (i) at or after age 55
with ten years of service or (ii) at or after age 65.
(dd)
“Section 409A” means Section 409A of Code, and
the Treasury regulations and other authoritative guidance issued
thereunder.
(ee) “
Shares ” shall mean the Shares of Common Stock, and
such other securities as may become the subject of Awards, or
become subject to Awards, pursuant to an adjustment made under
Section 4(d) of the Employee Plan.
(ff) “
Stock Appreciation Right ” shall mean any right
granted under Section 6(b) of the Employee Plan.
Section
3. Administration
Except as
otherwise provided herein, the Employee Plan shall be administered
by the Committee, which shall have the power to interpret the
Employee Plan and to adopt such rules and guidelines for
implementing the terms of the Employee Plan as it may deem
appropriate. The Committee shall have the ability to
modify the Employee Plan provisions, to the extent necessary, to
accommodate any changes in laws and regulations in jurisdictions in
which Participants will receive Awards.
(a) Subject to
the terms of the Employee Plan and applicable law, the Committee
shall have full power and authority to:
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determine the
type or types of Awards to be granted to each Participant under the
Employee Plan;
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determine the
number of Shares to be covered by (or with respect to which
payments, rights, or other matters are to be calculated in
connection with) Awards;
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determine the
terms and conditions of any Award;
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determine
whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, Shares, other securities, or other
Awards, or canceled, forfeited, or suspended, and the method or
methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended;
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determine
whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, and other amounts payable with
respect to an Award under the Employee Plan shall be deferred
either automatically or at the election of the holder thereof or of
the Committee;
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interpret and
administer the Employee Plan and any instrument or agreement
relating to, or Award made under, the Employee Plan;
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establish,
amend, suspend, or waive such rules and guidelines;
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accelerate the
vesting, exercise or payment of an Award;
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make any other
determination and take any other action that the Committee deems
necessary or desirable for the administration of the Employee Plan;
and
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correct any
defect, supply any omission, or reconcile any inconsistency in the
Employee Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Employee Plan into effect.
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(b) Unless
otherwise expressly provided in the Employee Plan, all
designations, determinations, interpretations, and other decisions
under or with respect to the Employee Plan or any Award shall be
within the sole discretion of the Committee, may be made at any
time, and shall be final, conclusive, and binding upon all Persons,
including the Company, any Affiliate, any Participant, any holder
or beneficiary of any Award, any stockholder, and any employee of
the Company or of any Affiliate. In addition, actions of
the Committee may be taken by the Committee but with one or more
members abstaining or recusing himself or herself from acting on
the matter, so long as two or more members remain to act on the
matter. Such action, authorized by the Committee upon
the abstention or recusal of such members, shall be the action of
the Committee for purposes of the Employee Plan. The
Committee may designate the Secretary of the Company or other
employees of the Company to assist the Committee in the
administration and operation of the Employee Plan and may direct
such persons to execute documents on behalf of the
Committee.
Section
4. Shares Available for
Awards
(a) Shares
Available . Subject to adjustment as provided in Section
4(d),
The total
number of shares of Common Stock reserved and available for
delivery pursuant to Awards granted under the Employee Plan shall
be one million (1,000,000); of which no more than five hundred
thousand (500,000) may be available for Awards granted in any form
provided for under the Employee Plan other than Options or Stock
Appreciation Rights. If any Shares covered by an Award granted
under the Employee Plan, or to which such an Award relates, are
forfeited, or if an Award otherwise terminates without the delivery
of Shares or of other consideration, then the Shares covered by
such Award, or to which such Award relates, or the number of Shares
otherwise counted against the aggregate number of Shares available
under the Employee Plan with respect to such Award, to the extent
of any such forfeiture or termination, shall again be available for
granting Awards under the Employee Plan. Notwithstanding the
foregoing but subject to adjustment as provided in Section 4(d), no
more than three hundred thousand (300,000) Shares shall be
available for delivery pursuant to the exercise of Incentive Stock
Options.
Any Award made
under a previous e Plus incentive plan shall continue to be
subject to the terms and conditions of the plan under which it was
awarded and the applicable Award Agreement.
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Accounting
for Awards . For purposes
of this Section 4,
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if an Award
(other than a Dividend Equivalent) is denominated in Shares, the
number of Shares covered by such Award, or to which such Award
relates, shall be counted on the date of grant of such Award
against the aggregate number of Shares available for granting
Awards under the Employee Plan; and
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Dividend
Equivalents denominated in Shares and Awards not denominated in
Shares but potentially payable in Shares shall be counted against
the aggregate number of Shares available for granting Awards under
the Employee Plan in such amount and at such time as the Dividend
Equivalents and such Awards are settled in Shares, provided,
however , that Awards that operate in tandem with (whether
granted simultaneously with or at a different time from), or that
are substituted for, other Awards may only be counted once against
the aggregate number of Shares available, and the Committee shall
adopt procedures, as it deems appropriate, in order to avoid double
counting. Any Shares that are delivered by the Company, and any
Awards that are granted by, or become obligations of, the Company
through the assumption by the Company or an Affiliate of, or in
substitution for, outstanding awards previously granted by an
acquired company, shall not be counted against the Shares available
for granting Awards under this Plan.
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Notwithstanding
anything herein to the contrary, any Shares related to Awards which
terminate by expiration, forfeiture, cancellation, or otherwise
without the issuance of such Shares, are settled in cash in lieu of
Shares, or are exchanged with the Committee’s permission,
prior to the issuance of Shares, for Awards not involving Shares,
shall be available again for grant under this Plan. Shares subject
to an Award under the Employee Plan may not again be made available
for issuance under the Employee Plan if such Shares are: (x) Shares
that were subject to an Option or a stock-settled Stock
Appreciation Right and were not issued upon the net settlement or
net exercise of such Option or Stock Appreciation Right, (y) Shares
delivered to or withheld by the Company to pay the exercise price
or the withholding taxes under Options or Stock Appreciation
Rights, or (z) Shares repurchased on the open market with the
proceeds of an Option exercise.
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(c)
Sources of Shares Deliverable Under Awards . Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized but unissued Shares or of treasury Shares.
(d)
Adjustments .
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In the event
that the Committee shall determine that any stock dividend,
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities
of the Company, or other similar corporate transaction or event
constitutes an equity restructuring transaction, as that term is
defined in Statement of Financial Accounting Standards No. 123
(revised) or otherwise affects the Shares, then the Committee shall
adjust the following in a manner that is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Employee Plan:
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(A) the
number and type of Shares or other securities which thereafter may
be made the subject of Awards including the limit specified in
Section 4(a) regarding the number of shares that may be granted in
the form of Restricted Stock, Restricted Stock Units, Performance
Awards, or Other Stock-Based Awards;
(B) the
number and type of Shares or other securities subject to
outstanding Awards;
(C) the
number and type of Shares or other securities specified as the
annual per-participant limitation under Section 6(g)(v) and
(vi);
(D) the
grant, purchase, or exercise price with respect to any Award, or,
if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award; and
(E)
other value determinations applicable to outstanding
awards.
Provided,
however , in each case,
that with respect to Awards of Incentive Stock Options no such
adjustment shall be authorized to the extent that such authority
would cause the Employee Plan to violate Sections 422(b)(1) of the
Code or any successor provision thereto; and provided further,
however , that the number of Shares subject to any Award
denominated in Shares shall always be a whole
number. Notwithstanding the foregoing, no adjustments
shall be made with respect to Performance Awards granted to a Key
Employee to the extent such adjustment would cause the Award to
fail to qualify as performance-based compensation under Section
162(m) of the Code and no adjustment shall be required if the
Committee determines that such action could cause an Award to fail
to satisfy the conditions of an applicable exception from the
requirements of Section 409A of the Code or otherwise could subject
a Participant to the additional tax imposed under Section 409A in
respect of an outstanding Award.
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Consolidation, Merger or Sale of
Assets . Upon
the occurrence of (i) a merger, consolidation, acquisition of
property or stock, reorganization or otherwise involving the
Company in which the Company is not to be the surviving
corporation, (ii) a merger, consolidation, acquisition of property
or stock, reorganization or otherwise involving the Company in
which the Company is the surviving corporation but holders of
Shares receive securities of another corporation, or (iii) a sale
of all or substantially all of the Company’s assets (as an
entirety) or capital stock to another person, any Award granted
hereunder shall be deemed to apply to the securities, cash or other
property (subject to adjustment by cash payment in lieu of
fractional interests) to which a holder of the number of Shares
equal to the number of Shares the Participant would have been
entitled, and proper provisions shall be made to ensure that this
clause is a condition to any such transaction; provided,
however , that for an Award that is not subject to Section 409A
the Committee (or, if applicable, the board of directors of the
entity assuming the Company’s obligations under the Employee
Plan) shall, in its discretion, have the power to
either:
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(a) provide,
upon written notice to Participants, that all Awards that are
currently exercisable must be exercised within the time period
specified in the notice and that all Awards not exercised as of the
expiration of such period shall be terminated without
consideration; provided, however , that the Committee (or
successor board of directors) may provide, in its dis
