GREEN BANKSHARES, INC.
Amended and Restated
2004 LONG-TERM INCENTIVE PLAN
Originally Adopted April 22, 2004
Amended and Restated for
Section 409A and
Final Regulations Thereunder
Effective August 20, 2007
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1.
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Establishment, Purpose, and Types
of Awards .
Green Bankshares, Inc., a Tennessee corporation (the
“Company”), previously established this incentive
compensation plan to be known as the “Green Bankshares, Inc.
2004 Long-Term Incentive Plan” (hereinafter referred to as
the “Plan”) during 2004 for the purpose of attracting,
retaining and motivating employees, officers and directors for the
Company and its Affiliates and to provide incentives and awards for
superior performance. The Company, pursuant to action by its Board
dated August 20, 2007, hereby amends and restates the Plan in
order to ensure its compliance with new Code Section 409A and
Treasury regulations issued thereunder.
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The Plan
permits the granting of the following types of awards
(“Awards”), according to the Sections of the Plan
listed here:
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Options
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Share
Appreciation Rights
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Restricted
Shares and Restricted Share Units
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Deferred Share
Units
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Performance
Awards
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The Plan is not
intended to affect and shall not affect any stock options,
equity-based compensation, or other benefits that the Company or
its Affiliates may have provided, or may separately provide in the
future pursuant to any agreement, plan, or program that is
independent of this Plan.
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2.
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Compliance with Code
Section 409A . It is the intention of the Company
that this Plan, following its amendment and restatement, conform
now and in the future with the requirements of Code
Section 409A and any Treasury regulations issued thereunder,
and the provisions of this Plan shall be liberally construed to
achieve such intent; no right, power, or discretion granted the
Committee, a Participant, or any beneficiary of a Participant
hereunder, whether granted by the Plan or by law, shall be
exercisable, if at all, in a manner that would cause the deferral
which is the subject of this Plan to violate the provisions of Code
Section 409A or the Treasury regulations issued
thereunder.
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3.
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Defined Terms
. Terms in the Plan
that begin with an initial capital letter have the defined meaning
set forth in Exhibit A , unless defined elsewhere in
this Plan or the context of their use clearly indicates a different
meaning.
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4.
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Shares Subject to the
Plan .
Subject to the provisions of Section 15 of the Plan,
the maximum number of Shares that the Company may issue pursuant to
Awards is 500,000. These Shares shall be authorized but unissued
Shares.
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Shares that are
subject to an Award that for any reason expires, is forfeited, is
cancelled, or becomes unexercisable, and Shares that are for any
other reason not paid or delivered under the Plan shall again,
except to the extent prohibited by Applicable Law, be available for
subsequent Awards under the Plan. In addition, the Committee may
make future Awards with respect to Shares that the Company retains
from otherwise delivering pursuant to an Award either (i) as
payment of the exercise price of an Award, or (ii) in order to
satisfy the withholding or employment taxes due upon the grant,
exercise, vesting, or distribution of an Award. Notwithstanding the
foregoing, but subject to adjustments pursuant to
Section 15 below, the number of Shares that are
available for ISO Awards shall be determined, to the extent
required under applicable tax laws, by reducing the number of
Shares designated in the preceding paragraph by the number of
Shares granted pursuant to Awards (whether or not Shares are issued
pursuant to such Awards); provided that any Shares that are either
purchased under the Plan and forfeited back to the Plan, or
surrendered in payment of the Exercise Price for an Award shall be
available for issuance pursuant to ISO Awards.
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(a)
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General . The Committee shall administer the
Plan in accordance with its terms, provided that the Board may act
in lieu of the Committee on any matter. The Committee shall hold
meetings at such times and places as it may determine and make such
rules and regulations for the conduct of its business as it deems
advisable. In the absence of a duly appointed Committee or if the
Board otherwise chooses to act in lieu of a Committee, the Board
shall function as the Committee for all purposes of the
Plan.
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(b)
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Committee Composition
. The Board shall
appoint the members of the Committee. If and to the extent
permitted by Applicable Law, the Committee may authorize one or
more Reporting Persons (or other officers) to make Awards to
Eligible Persons who are not Reporting Persons (or other officers
whom the Committee has specifically authorized to make Awards). The
Board may at any time appoint additional members to the Committee,
remove and replace members of the Committee with or without Cause,
and fill vacancies on the Committee however caused.
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(c)
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Powers of the Committee
. Subject to the
provisions of the Plan, the Committee shall have the authority, in
its sole discretion:
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(i)
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to determine Eligible Persons to
whom Awards shall be granted from time to time and the number of
Shares, units, or SARs to be covered by each Award;
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(ii)
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to determine, from time to time,
the Fair Market Value of Shares;
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(iii)
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to determine, and to set forth in
Award Agreements, the terms and conditions of all Awards, including
any applicable exercise or purchase price, the installments and
conditions under which an Award shall become vested (which may be
based on performance), terminated, expired, cancelled, or replaced,
and the circumstances for vesting acceleration or waiver of
forfeiture restrictions, and other restrictions and
limitations;
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(iv)
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to approve the forms of Award
Agreements and all other documents, notices and certificates in
connection therewith which need not be identical either as to type
of Award or among Participants;
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(v)
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to construe and interpret the terms
of the Plan and any Award Agreement, to determine the meaning of
their terms, and to prescribe, amend, and rescind rules and
procedures relating to the Plan and its administration;
and
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(vi)
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in order to fulfill the purposes of
the Plan and without amending the Plan, modify, cancel, or waive
the Company’s rights with respect to any Awards, to adjust or
to modify Award Agreements for changes in Applicable Law, and to
recognize differences in foreign law, tax policies, or customs;
and
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(vii)
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to make all other interpretations
and to take all other actions that the Committee may consider
necessary or advisable to administer the Plan or to effectuate its
purposes.
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(d)
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Delegation . Subject to Applicable Law and any
restrictions set forth herein, the Committee may delegate
administrative functions to individuals who are Reporting Persons,
officers, or Employees of the Company or its Affiliates.
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(e)
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Deference to Committee
Determinations . The Committee shall have the
discretion to interpret or construe ambiguous, unclear, or implied
(but omitted) terms in any fashion it deems to be appropriate in
its sole discretion, and to make any findings of fact needed in the
administration of the Plan or Award Agreements. The
Committee’s prior exercise of its discretionary authority
shall not obligate it to exercise its authority in a like fashion
thereafter. The Committee’s interpretation and construction
of any provision of the Plan, or of any Award or Award Agreement,
shall be final, binding, and conclusive. The validity of any such
interpretation, construction, decision or finding of fact shall not
be given de novo review if challenged in court, by arbitration, or
in any other forum, and shall be upheld unless clearly arbitrary or
capricious.
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(f)
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No Liability;
Indemnification . Neither the Board nor any
Committee member, nor any Person acting at the direction of the
Board or the Committee, shall be liable for any act, omission,
interpretation, construction or determination made in good faith
with respect to the Plan, any Award or any Award Agreement. The
Company and its Affiliates shall pay or reimburse any member of the
Committee, as well as any Director, Employee, or Consultant who
takes action in connection with the Plan, for all expenses incurred
with respect to the Plan, and to the full extent allowable under
Applicable Law shall indemnify each and every one of them for any
claims, liabilities, and costs (including reasonable
attorney’s fees) arising out of their good faith performance
of duties under the Plan. The Company and its Affiliates may obtain
liability insurance for this purpose.
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(g)
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Payments to Specified
Employees .
Notwithstanding anything to the contrary in this Plan, in the event
that Participant is a “Specified Employee,” as that
term is defined by Code Section 409A(a)(2)(B)(i) (including
applicable regulations or other published IRS guidance),
distributions of any lifetime benefits to the Participant may not
and shall not be made before the date which is six (6) months
and one (1) day after the date of the Participant’s
termination of Continuous Service or, if earlier, any date allowed
under Code Section 409A and Treasury regulations issued
thereunder, or the date of the Participant’s
death.
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(h)
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Delays in Payments under the
Plan .
Consistent with regulations issued by Treasury pursuant to Code
Section 409A, the Company and/or the Committee may, in the
case of payments to a Participant, the deduction for which would be
limited or eliminated by the application of Code
Section 162(m), payments which would violate Federal
securities laws or other applicable laws, or payments which would
violate loan covenants or other contractual terms to which the
Company was a party where such violation would result in material
harm to the Company, unilaterally elect to delay such payments.
This amendment shall not become effective until the expiration of
twelve (12) months from the date such amendment is adopted by
the Company’s Board. Any payments delayed pursuant to this
provision must be reinstated and made in the first calendar year in
which the Company and/or the Committee reasonably anticipate that
the payment would not violate such loan covenant(s) or contractual
term(s), would not result in material harm to the Company, or would
not result in a violation of Federal securities laws or other
applicable laws.
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(i)
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Payments . Consistent with Treasury
regulations issued pursuant to Section 409A, individual
payments in a series of payments made to Participant pursuant to
this Agreement shall be treated for all purposes under the
Agreement as a series of separate payments.
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1.
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The Committee shall maintain
suitable records of each Participant’s Account which, among
other things, shall show separately deferrals and the earnings
credited thereon, as well as distributions and withdrawals
therefrom and records of its deliberations and
decisions.
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2.
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The Committee shall appoint a
secretary, and at its discretion, an assistant secretary, to keep
the record of proceedings, to transmit its decisions, instructions,
consents or directions to any interested party, to execute and
file, on behalf of the Committee, such documents, reports or other
matters as may be necessary or appropriate and to perform
ministerial acts.
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3.
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The Committee shall not be required
to maintain any records or accounts which duplicate any records or
accounts maintained by the Company.
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(k)
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Inspection of Records
. Copies of the Plan and records of a
Participant’s Account shall be open to inspection by the
Participant or the Participant’s duly authorized
representatives at the office of the Committee at any reasonable
business hour.
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(l)
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Identification of
Fiduciaries . The Committee shall be the named
fiduciary of the Plan and, as permitted or required by law, shall
have exclusive authority and discretion to operate and administer
the Plan.
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(m)
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Procedure for Allocation of
Fiduciary Responsibilities . Fiduciary responsibilities under the
Plan are allocated as follows:
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(i)
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The sole duties, responsibilities
and powers allocated to the Board, any Committee and any fiduciary
shall be those expressly provided in the relevant Sections of the
Plan.
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(ii)
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All fiduciary duties,
responsibilities, and powers not allocated to the Board, any
Committee or any fiduciary, are hereby allocated to such body,
subject to delegation.
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(iii)
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Fiduciary duties, responsibilities
and powers under the Plan may be reallocated among fiduciaries by
amending the Plan in the manner prescribed below, followed by the
fiduciaries’ acceptance of, or operation under, such amended
Plan.
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(i)
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Any Participant or beneficiary of a
Participant has the right to make a written claim for benefits
under the Plan. If such a written claim is made and the Committee
wholly or partially denies the claim, the Committee shall provide
the claimant with written notice of such denial, setting forth, in
a manner calculated to be understood by the claimant:
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the specific reason or reasons for
such denial;
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specific reference to pertinent
Plan provisions or pertinent legal and regulatory authority(ies)
upon which the denial is based;
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a description of any additional
material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is
necessary; and
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an explanation of the Plan’s
claims review procedure and time limits applicable to those
procedures.
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(ii)
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The written notice of any claim
denial pursuant to this Section 5(n) shall be
given not later than thirty (30) days after receipt of the
claim by the Committee, unless the Committee determines that
special circumstances require an extension of time for processing
the claim, in which event:
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written notice of the extension
shall be given by the Committee to the claimant prior to thirty
(30) days after receipt of the claim;
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the extension shall not exceed a
period of thirty (30) days from the end of the initial thirty
(30) day period for giving notice of a claim denial;
and
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the extension notice shall indicate
(A) the special circumstances requiring an extension of time
and (B) the date by which the Committee expects to render the
benefit determination.
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(iii)
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The decision of the Committee shall
be final unless the claimant, within sixty (60) days after
receipt of notice of the claims denial from the Committee, submits
a written request to the Board, or its delegate, for an appeal of
the denial. During that sixty (60) day period, the claimant
shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other
information relevant to the claim for benefits. The claimant shall
be provided the opportunity to submit written comments, documents,
records, and other information relating to the claim for benefits
as part of the claimant’s appeal. The claimant may act in
these matters individually, or through his/her authorized
representative.
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(iv)
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After receiving the written appeal,
the Board or its delegate shall issue a written decision notifying
the claimant of its decision on review not later than thirty
(30) days after receipt of the written appeal, unless the
Board or its delegate determines that special circumstances require
an extension of time for reviewing the appeal, in which
event:
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written notice of the extension
shall be given by the Board or its delegate prior to thirty
(30) days after receipt of the written appeal;
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the extension shall not exceed a
period of thirty (30) days from the end of the initial thirty
(30) day review period; and
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the extension notice shall indicate
(A) the special circumstances requiring an extension of time
and (B) the date by which the Board or its delegate expects to
render the appeal decision.
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(v)
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The period of time within which a
benefit determination on review is required to be made shall begin
at the time an appeal is received by the Board or its delegate,
without regard to whether all the information necessary to make a
benefit determination on review accompanies the filing of the
appeal. If the period of time for reviewing the appeal is extended
as permitted above due to a claimant’s failure to submit
information necessary to decide the claim on appeal, then the
period for making the benefit determination on review shall be
tolled from the date on which the notification of the extension is
sent to the claimant until the date on which the claimant responds
to the request for additional information.
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(vi)
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In conducting the review on appeal,
the Board or its delegate shall take into account all comments,
documents, records, and other information submitted by the claimant
relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination.
If the Board or its delegate upholds the denial, the written notice
of decision from the Board or its delegate shall set forth, in a
manner calculated to be understood by the claimant:
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the specific reason or reasons for
the denial;
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specific reference to pertinent
Plan provisions or pertinent legal and regulatory authority(ies)
upon which the denial is based; and
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a statement that the claimant is
entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other
information relevant to the claim for benefits.
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(vii)
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If the Plan or any of its
representatives fails to follow any of the above claims procedures,
the claimant shall be deemed to have duly exhausted the
administrative remedies available under the Plan and shall be
entitled to pursue any available remedies under applicable
law.
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(o)
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Arbitration .
Any controversy or
claim arising out of or relating to this Plan, or the breach of any
of its terms or of the terms of any Award Agreement, shall be
resolved by binding arbitration conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association by an arbitrator mutually acceptable to the parties. If
the parties cannot agree upon a single arbitrator, each shall
appoint a disinterested arbitrator and the two arbitrators so
chosen shall choose a third arbitrator. In such event, the decision
of a majority of the arbitrators shall be the decision of the
panel. The arbitrator shall be authorized to grant injunctive
relief and further shall be authorized to award the costs of
arbitration, including reasonable attorneys’ fees, to the
prevailing party in the arbitration. The arbitrator’s
decision may be enforced in any court having jurisdiction. The
parties intend that this arbitration agreement be enforceable under
the Tennessee Uniform Arbitration Act.
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(p)
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Conflicting Claims.
If the Committee is
confronted with conflicting claims concerning a Participant’s
Account, the Committee may interplead the claimants in an action at
law, or in an arbitration conducted in accordance with
Section 5(o) above and the rules of the American
Arbitration Association, as the Committee shall elect in its sole
discretion, and in either case, the attorneys’ fees, expenses
and costs reasonably incurred by the Committee in such proceeding
shall be paid from the Participant’s Account.
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(q)
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Service of Process
. The
Secretary of Green Bankshares, Inc. is hereby designated as agent
of the Plan for the service of legal process.
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(r)
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Fees .
Any fees associated
with ongoing plan administration shall be paid by the
Company.
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(a)
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General Rule
. The Committee may
grant ISOs only to Employees (including officers who are
Employees), and may grant all other Awards to any Eligible Person.
A Participant who has been granted an Award may be granted an
additional Award or Awards if the Committee shall so determine, if
such person is otherwise an Eligible Person and if otherwise in
accordance with the terms of the Plan.
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(b)
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Grant of Awards
. Subject to the
express provisions of the Plan, the Committee shall determine from
the class of Eligible Persons those individuals to whom Awards
under the Plan may be granted, the number of Shares subject to each
Award, the price (if any) to be paid for the Shares or the Award
and, in the case of Performance Awards, in addition to the matters
addressed in Section 12 below, the specific objectives,
goals and performance criteria that further define the Performance
Award. Each Award shall be evidenced by an Award Agreement signed
by the Company and, if required by the Committee, by the
Participant. The Award Agreement shall set forth the material terms
and conditions of the Award established by the
Committee.
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(c)
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Limits on Awards
. No Participant may
receive Options and SARs that relate to more than One Hundred
Twenty-Five Thousand (125,000) Shares. The Committee will adjust
these limitations subject to adjustment pursuant to
Section 15 below.
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(d)
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Replacement Awards
. The Committee may, in
its sole discretion and upon such terms as it deems appropriate,
require as a condition of the grant of an Award to a Participant
that the Participant surrender for cancellation some or all of the
Awards that have previously been granted to the Participant under
this Plan or otherwise. An Award that is conditioned upon such
surrender may or may not be the same type of Award, may cover the
same (or a lesser or greater) number of Shares as such surrendered
Award, may have other terms that are determined without regard to
the terms or conditions of such surrendered Award, and may contain
any other terms that the Committee deems appropriate. In the case
of Options, these other terms may not involve an Exercise Price
that is lower than the Exercise Price of the surrendered Option
unless either the new grant will not create any material financial
expense for the Company or the Company’s shareholders approve
the grant itself or the program under which it is made pursuant to
the Plan.
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7.
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Payment on Behalf of Minors,
Etc . In the
event any amount becomes payable under the Plan to a minor or a
person who, in the sole judgment of the Committee, is considered by
reason of physical or mental condition to be unable to give a valid
receipt therefor, the Committee may direct that such payment be
made to any person found by the Committee, in its sole judgment, to
have assumed the care of such minor or other person. Any payment
made pursuant to such determination shall constitute a full release
and discharge of the Company, the Board, the Committee and their
officers, directors and employees.
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(a)
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Types; Documentation
. The Committee may in
its discretion grant ISOs to any Employee and Non-ISOs to any
Eligible Person, and shall evidence any such grants in an Award
Agreement that is delivered to the Participant. Each Option shall
be designated in the Award Agreement as an IS0 or a Non-ISO. At the
sole discretion of the Committee, any Option may be exercisable, in
whole or in part, immediately upon the grant thereof, or only after
the occurrence of a specified event, or only in installments, which
installments may vary. Options granted under the Plan may contain
such terms and provisions not inconsistent with the Plan that the
Committee shall deem advisable in its sole and absolute
discretion.
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(b)
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ISO $100,000 Limitation
. To the extent that
the aggregate Fair Market Value of Shares with respect to which
Options designated as ISOs first become exercisable by a
Participant in any calendar year (under this Plan and any other
plan of the Company or any Affiliate) exceeds One Hundred Thousand
Dollars ($100,000), such excess Options shall be treated as
Non-ISOs. For purposes of determining whether the One Hundred
Thousand Dollar ($100,000) limit is exceeded, the Fair Market Value
of the Shares subject to an ISO shall be determined as of the Grant
Date. In reducing the number of Options treated as ISOs to meet the
One Hundred Thousand Dollar ($100,000) limit, the most recently
granted Options shall be reduced first. In the event that
Section 422 of the Code is amended to alter the limitation set
forth therein, the limitation of this Section 8(b)
shall be automatically adjusted accordingly.
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(c)
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Term of Options
. Each Award Agreement
shall specify a term at the end of which the Option automatically
expires, subject to earlier termination provisions contained in
Section 8(h) hereof; provided, that, the term of any
Option may not exceed ten (10) years from the Grant Date. In
the case of an ISO granted to an Employee who is a Ten Percent
Holder on the Grant Date, the term of the ISO shall not exceed five
(5) years from the Grant Date.
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(d)
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Exercise Price
. The exercise price of
an Option shall be determined by the Committee in its discretion
and shall be set forth in the Award Agreement, subject to the
following special rules:
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(i)
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ISOs . If an ISO is granted to an
Employee who on the Grant Date is a Ten Percent Holder, the per
Share exercise price shall not be less than 110% of the Fair Market
Value per Share on such Grant Date. If an ISO is granted to any
other Employee, the per Share exercise price shall not be less than
100% of the Fair Market Value per Share on the Grant
Date.
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(ii)
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Non-ISOs . The per Share exercise price for
the Shares to be issued pursuant to the exercise of a Non-ISO shall
not be less than one hundred percent (100%) of the Fair Market
Value per Share on the Grant Date, and may be offered pursuant to a
deferred compensation program on terms the Committee in its
discretion determines. Non-ISOs issued pursuant to a deferred
compensation program involving elective deferrals by participants
will be immediately exercisable.
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(iii)
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Named Executives
. The per Share
exercise price shall not be less than one hundred percent (100%) of
the Fair Market Value per Share on the Grant Date of an Option if
(A) on such Grant Date, the Participant is subject to the
limitations set forth in Section 162(m) of the Code, and
(B) the grant is intended to qualify as performance-based
compensation under Section 162(m) of the Code.
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(iv)
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Repricing . The Committee may at any time
unilaterally reduce the exercise price for any Option, but only if
(A) the reduction will not cause material financial expense
for the Company, and (B) the Committee promptly provides a
written notice to any Participant affected by the
reduction.
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(e)
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Exercise of Option
. The times,
circumstances and conditions under which an Option shall be
exercisable shall be determined by the Committee in its sole
discretion and set forth in the Award Agreement. The Committee
shall have the discretion to determine whether and to what extent
the vesting of Options shall be tolled during any unpaid leave of
absence; provided, however, that in the absence of such
determination, vesting of Options shall be tolled during any such
leave approved by the Company.
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(f)
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Minimum Exercise
Requirements . An Option may not be exercised
for a fraction of a Share. The Committee may require in an Award
Agreement that an Option be exercised as to a minimum number of
Shares, provided that such requirement shall not prevent a
Participant from purchasing the full number of Shares as to which
the Option is then exercisable.
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(g)
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Methods of Exercise
. Prior to its
expiration pursuant to the terms of the applicable Award Agreement,
each Option may be exercised, in whole or in part (provided that
the Company shall not be required to issue fractional shares), by
delivery of written notice of exercise to the secretary of the
Company accompanied by the full exercise price of the Shares being
purchased. In the case of an ISO, the Committee shall determine the
acceptable methods of payment on the Grant Date and it shall be
included in the applicable Award Agreement. The methods of payment
that the Committee may in its discretion accept or commit to accept
in an Award Agreement include:
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(i)
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cash or check payable to the
Company (in U.S. dollars);
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(ii)
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other Shares that (A) are
owned by the Participant who is purchasing Shares pursuant to an
Option, (B) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which the
Option is being exercised, (C) were not acquired by such
Participant pursuant to the exercise of an Option, unless such
Shares have been owned by such Participant for at least six
(6) months or such other longer period as the Committee may
determine, (D) are all, at the time of such surrender, free
and clear of any and all claims, pledges, liens and encumbrances,
or any restrictions which would in any manner restrict the transfer
of such shares to or by the Company (other than such restrictions
as may have existed prior to an issuance of such Shares by the
Company to such Participant), and (E) are duly endorsed for
transfer to the Company;
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(iii)
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a cashless exercise program that
the Committee may approve, from time to time in its discretion,
pursuant to which a Participant may concurrently provide
irrevocable instructions (A) to such Participant’s
broker or dealer to effect the immediate sale of the purchased
Shares and remit to the Company, out of the sale proceeds available
on the settlement date, sufficient funds to cover the exercise
price of the Option plus all applicable taxes required to be
withheld by the Company by reason of such exercise and (B) to
the Company to deliver the certificates for the purchased Shares
directly to such broker or dealer in order to complete the sale;
or
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(iv)
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any combination of the foregoing
methods of payment.
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The Company
shall not be required to deliver Shares pursuant to the exercise of
an Option until payment of the full exercise price therefore is
received by the Company.
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(h)
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Termination of Continuous
Service . The
Committee may establish and set forth in the applicable Award
Agreement the terms and conditions on which an Option shall remain
exercisable, if at all, following termination of a
Participant’s Continuous Service. The Committee may waive or
modify these provisions at any time. To the extent that a
Participant is not entitled to exercise an Option at the date of
his or her termination of Continuous Service, or if the Participant
(or other person entitled to exercise the Option) does not exercise
the Option to the extent so entitled within the time specified in
the Award Agreement or below (as applicable), the Option shall
terminate and the Shares underlying the unexercised portion of the
Option shall revert to the Plan and become available for future
Awards. In no event may any Option be exercised after the
expiration of the Option term as set forth in the Award
Agreement.
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The following
provisions shall apply to the extent an Award Agreement does not
specify the terms and conditions upon which an Option shall
terminate when there is a termination of a Participant’s
Continuous Service:
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(i)
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Termination other than Upon
Disability or Death or for Cause . In the event of termination of a
Participant’s Continuous Service (other than as a result of
Participant’s death, disability, retirement or termination
for Cause), the Participant shall have the right to exercise an
Option at any time within three (3) months following such
termination to the extent the Participant was entitled to exercise
such Option at the date of such termination.
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(ii)
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Disability . In the event of termination of a
Participant’s Continuous Service as a result of his or her
“disability” within the meaning of
Section 22(e)(3) of the Code, the Participant shall have the
right to exercise an Option at any time within one (1) year
following such termination to the extent the Participant was
entitled to exercise such Option at the date of such
termination.
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(iii)
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Retirement . In the event of termination of a
Participant’s Continuous Service as a result of
Participant’s retirement, the Participant shall have the
right to exercise the Option at any time within one (1) year
following such termination to the extent the Participant was
entitled to exercise such Option at the date of such
termination.
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(iv)
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Death . In the event of the death of a
Participant during the period of Continuous Service since the Grant
Date of an Option, or within thirty days following termination of
the Participant’s Continuous Service, the Option may be
exercised, at any time within one (1) year following the date
of the Participant’s death, by the Participant’s estate
or by a person who acquired the right to exercise the Option by
bequest or inheritance, but only to the extent the right to
exercise the Option had vested at the date of death or, if earlier,
the date the Participant’s Continuous Service
terminated.
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(v)
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Cause . If the Committee determines that a
Participant’s Continuous Service terminated due to Cause, the
Participant shall immediately forfeit the right to exercise any
Option, and it shall be considered immediately null and
void.
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(i)
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Reverse Vesting
. The Plan
Administrator in its discretion may allow a Participant to exercise
unvested Options, in which case the Shares then issued shall be
Restricted Share Units having analogous vesting restrictions to the
unvested Options.
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(j)
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Buyout Provisions
. The Committee may at
any time offer to buy out an Option, in exchange for a payment in
cash or Shares, based on such terms and conditions as the Committee
shall establish and communicate to the Participant at the time that
such offer is made. In addition, if the Fair Market Value for
Shares subject to an Option is more than thirty-three percent (33%)
below their exercise price for more than thirty
(30) consecutive business days, the Committee may unilaterally
terminate and cancel the Option either (i) by paying the
Participant, in cash or Shares, an amount not less than the
Black-Scholes value of the vested portion of the Option, or
(ii) by irrevocably committing to grant a new Option, on a
designated date more than six (6) months after such termination and
cancellation of such Option (but only if the Participant’s
Continuous Service has not terminated prior to such designated
date), on substantially the same terms as the cancelled Option,
provided that the per Share exercise price for the new Option shall
equal the per Share Fair Market Value of a Share on the date the
new grant occurs.
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9.
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Share Appreciate Rights
(SARs) .
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(a)
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Grants . The Committee may in its
discretion grant Share Appreciation Rights to any Eligible Person,
in any of the following forms:
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(i)
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SARs related to Options
. The Committee may
grant SARs either concurrently with the grant of an Option or with
respect to an outstanding Option, in which case the SAR shall
extend to all or a portion of the Shares covered by the related
Option. An SAR shall entitle the Participant who holds the related
Option, upon exercise of the SAR and surrender of the related
Option, or portion thereof, to the extent the SAR and related
Option each were previously unexercised, to receive payment of an
amount determined pursuant to Section 9(e) below. Any
SAR granted in connection with an ISO will contain such terms as
may be required to comply with the provisions of Section 422
of the Code and the regulations promulgated thereunder.
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(ii)
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SARs Independent of
Options .
The Committee may grant SARs which are independent of any Option
subject to such conditions as the Committee may in its discretion
determine which conditions will be set forth in the applicable
Award Agreement.
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(iii)
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Limited SARs
. The Committee may
grant SARs exercisable only upon or in respect of a Change in
Control or any other specified event, and such limited SARs may
relate to or operate in tandem or combination with or substitution
for Options or other SARs, or on a stand-alone basis, and may be
payable in cash or Shares based on the spread between the exercise
price of the SAR, and (A) a price based upon or equal to the
Fair Market Value of the Shares during a specified period, at a
specified time within a specified period before, after or including
the date of such event, or (B) a price related to
consideration payable
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