Exhibit 10.6
KADANT INC.
2001 EMPLOYEES EQUITY
INCENTIVE PLAN
The purpose of this 2001 Employees
Equity Incentive Plan (the “Plan”) is to secure for
Kadant Inc. (the “Company”) and its Stockholders the
benefits arising from capital stock ownership by employees and
consultants to the Company and its subsidiaries or other persons
who are expected to make significant contributions to the future
growth and success of the Company and its subsidiaries. The Plan is
intended to accomplish these goals by enabling the Company to offer
such persons equity-based interests, equity-based incentives or
performance-based stock incentives in the Company, or any
combination thereof (“Awards”).
The Plan will be administered by the
Board of Directors of the Company (the “Board”). The
Board shall have full power to interpret and administer the Plan,
to prescribe, amend and rescind rules and regulations relating to
the Plan and Awards, and full authority to select the persons to
whom Awards will be granted (“Participants”), determine
the type and amount of Awards to be granted to Participants
(including any combination of Awards), determine the terms and
conditions of Awards granted under the Plan (including terms and
conditions relating to events of merger, consolidation, dissolution
and liquidation, change of control, vesting, forfeiture,
restrictions, dividends and interest, if any, on deferred amounts),
waive compliance by a participant with any obligation to be
performed by him or her under an Award, waive any term or condition
of an Award, cancel an existing Award in whole or in part with the
consent of a Participant, grant replacement Awards, accelerate the
vesting or lapse of any restrictions of any Award, correct any
defect, supply any omission or reconcile any inconsistency in the
Plan or in any award and adopt the form of instruments evidencing
Awards under the Plan and change such forms from time to time. Any
interpretation by the Board of the terms and provisions of the Plan
or any Award thereunder and the administration thereof, and all
action taken by the Board, shall be final, binding and conclusive
on all parties and any person claiming under or through any party.
No Director shall be liable for any action or determination made in
good faith. The Board may, to the full extent permitted by law,
delegate any or all of its responsibilities under the Plan to a
committee (the “Committee”) appointed by the Board and
consisting of members of the Board. All references in the Plan to
the “Board” shall mean the Board or a Committee of the
Board to the extent that the Board’s powers or authority
under the Plan have been delegated to such Committee.
The Plan shall be effective as of
the date first approved by the Board.
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Shares
Subject to the Plan
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Subject to adjustment as provided in
Section 10.6, the total number of shares of common stock of
the Company, par value $.01 per share (the “Common
Stock”), reserved and available for distribution under the
Plan shall be 612,000 shares. Such shares may consist, in whole or
in part, of authorized and unissued shares or treasury
shares.
If any Award of shares of Common
Stock requiring exercise by the Participant for delivery of such
shares expires or terminates without having been exercised in full,
is forfeited or is otherwise terminated without a payment being
made to the Participant in the form of Common Stock, or if any
shares of Common Stock subject to restrictions are repurchased by
the Company pursuant to the terms of any Award or are otherwise
reacquired by the Company to satisfy obligations arising by virtue
of any Award, such shares shall be available for distribution in
connection with future Awards under the Plan.
Employees and consultants to the
Company and its subsidiaries, or other persons who are expected to
make significant contributions to the future growth and success of
the Company and its subsidiaries shall be eligible to receive
Awards under the Plan. Executive officers and directors shall not
be eligible to receive Awards under the Plan. The Board, or other
appropriate committee or person to the extent permitted pursuant to
the last sentence of Section 2, shall from time to time select
from among such eligible persons those who will receive Awards
under the Plan.
The Board may offer Awards under the
Plan in any form of equity-based interest, equity-based incentive
or performance-based stock incentive in Common Stock of the Company
or any combination thereof. The type, terms and conditions and
restrictions of an Award shall be determined by the Board at the
time such Award is made to a Participant.
An Award shall be made at the time
specified by the Board, shall be subject to such conditions or
restrictions as may be imposed by the Board and shall conform to
the general rules applicable under the Plan as well as any special
rules then applicable under federal tax laws or regulations or the
federal securities laws relating to the type of Award
granted.
Without limiting the foregoing,
Awards may take the following forms and shall be subject to the
following rules and conditions:
An option is an Award that entitles
the holder on exercise thereof to purchase Common Stock at a
specified exercise price. Options granted under the Plan are not
intended to meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the
“Code”).
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6.1.1 Option
Price . The price at
which Common Stock may be purchased upon exercise of an option
shall be determined by the Board.
6.1.2 Option
Grants . The granting
of an option shall take place at the time specified by the Board.
Options shall be evidenced by option agreements. Such agreements
shall conform to the requirements of the Plan, and may contain such
other provisions (including but not limited to vesting and
forfeiture provisions, acceleration, change of control, protection
in the event of merger, consolidations, dissolutions and
liquidations) as the Board shall deem advisable. Option agreements
shall expressly state whether an option grant is intended to
qualify as an incentive stock option or non-statutory
option.
6.1.3 Option
Period . An option
will become exercisable at such time or times (which may be
immediately or in such installments as the Board shall determine)
and on such terms and conditions as the Board shall specify. The
option agreements shall specify the terms and conditions applicable
in the event of an option holder’s termination of employment
during the option’s term.
Any exercise of an option must be in
writing, signed by the proper person and delivered or mailed to the
Company, accompanied by (1) any additional documents required
by the Board and (2) payment in full in accordance with
Section 6.1.4 for the number of shares for which the option is
exercised.
6.1.4 Payment of Exercise
Price . Stock
purchased on exercise of an option shall be paid for as follows:
(1) in cash or by check (subject to such guidelines as the
Company may establish for this purpose), bank draft or money order
payable to the order of the Company or (2) if so permitted by
the instrument evidencing the option (or in the case of a
non-statutory option, by the Board at or after grant of the
option), (i) through the delivery of shares of Common Stock
that have been outstanding for at least six months (unless the
Board expressly approves a shorter period) and that have a fair
market value (determined in accordance with procedures prescribed
by the Board) equal to the exercise price, (ii) by delivery of
a promissory note of the option holder to the Company, payable on
such terms as are specified by the Board, (iii) by delivery of
an unconditional and irrevocable undertaking by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price,
or (iv) by any combination of the foregoing permissible forms
of payment.
6.1.5 Buyout
Provision . The Board
may at any time offer to buy out for a payment in cash, shares of
Common Stock, deferred stock or restricted stock, an option
previously granted, based on such terms and conditions as the Board
shall establish and communicate to the option holder at the time
that such offer is made.
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6.2
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Restricted and Unrestricted
Stock
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An Award of restricted stock
entitles the recipient thereof to acquire shares of Common Stock
upon payment of the purchase price subject to restrictions
specified in the instrument evidencing the Award.
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6.2.1 Restricted Stock
Awards . Awards of
restricted stock shall be evidenced by restricted stock agreements.
Such agreements shall conform to the requirements of the Plan, and
may contain such other provisions (including restriction and
forfeiture provisions, change of control, protection in the event
of mergers, consolidations, dissolutions and liquidations) as the
Board shall deem advisable.
6.2.2
Restrictions .
Until the restrictions specified in a restricted stock agreement
shall lapse, restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of, and
upon certain conditions specified in the restricted stock
agreement, must be resold to the Company for the price, if any,
specified in such agreement. The restrictions shall lapse at such
time or times, and on such conditions, as the Board may specify.
The Board may at any time accelerate the time at which the
restrictions on all or any part of the shares shall
lapse.
6.2.3 Rights as a
Stockholder . A
Participant who acquires shares of restricted stock will have all
of the rights of a Stockholder with respect to such shares
including the right to receive dividends and to vote such shares.
Unless the Board otherwise determines, certificates evidencing
shares of restricted stock will remain in the possession of the
Company until such shares are free of all restrictions under the
Plan.
6.2.4 Purchase
Price . The purchase
price of shares of restricted stock shall be determined by the
Board, in its sole discretion.
6.2.5 Other Awards Settled
With Restricted Stock . The Board may provide that any or all the
Common Stock delivered pursuant to an Award will be restricted
stock.
6.2.6 Unrestricted
Stock . The Board
may, in its sole discretion, sell to any Participant shares of
Common Stock free of restrictions under the Plan for a price
determined by the Board, but which may not be less than the par
value per share of the Common Stock.
6.3.1 Deferred Stock
Award . A deferred
stock Award entitles the recipient to receive shares of deferred
stock, which is Common Stock to be delivered in the future.
Delivery of the Common Stock will take place at such time or times,
and on such conditions, as the Board may specify. The Board may at
any time accelerate the time at which delivery of all or any part
of the Common Stock will take place.
6.3.2 Other Awards Settled
with Deferred Stock .
The Board may, at the time any Award described in this
Section 6 is granted, provide that, at the time Common Stock
would otherwise be delivered pursuant to the Award, the Participant
will instead receive an instrument evidencing the right to future
delivery of deferred stock.
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6.4.1 Performance
Awards . A
performance Award entitles the recipient to receive, without
payment, an amount, in cash or Common Stock or a combination
thereof (such form to be determined by the Board), following the
attainment of performance goals. Performance goals may be related
to personal performance, corporate performance, departmental
performance or any other category of performance deemed by the
Board to be important to the success of the Company. The Board will
determine the performance goals, the period or periods during which
performance is to be measured and all other terms and conditions
applicable to the Award.
6.4.2 Other Awards Subject to
Performance Conditions . The Board may, at the time any Award described
in this Section 6 is granted, impose a condition or conditions
(in addition to any conditions specified or authorized in this
Section 6 of the Plan) that performance goals be met prior to
the Participant’s realization of any payme
