Exhibit 10.1
DORMAN PRODUCTS,
INC.
2008 STOCK OPTION AND STOCK
INCENTIVE PLAN
The purpose of
this 2008 Stock Option and Stock Incentive Plan (the
“Plan”) is to provide additional incentive to officers
and directors of, and other key employees of and important
consultants and/or advisors to, Dorman Products, Inc. (the
“Company”), and each present or future parent or
subsidiary corporation of the Company (“Affiliates”),
by encouraging them to invest in shares of the Company’s
common stock (the “Common Stock”) and providing for
awards in the form of options to purchase Common Stock and
restricted shares of Common Stock (collectively,
“Awards”) in order to promote a proprietary interest in
the Company and an increased personal interest in the
Company’s continued success and progress.
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Aggregate
Number of Shares
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A maximum of
1,000,000 shares of Common Stock may be issued under this
Plan either in the form of restricted shares or upon the exercise
of options issued pursuant to the Plan subject to the restrictions
described below. Up to 500,000 shares of Common
Stock may be issued upon the exercise of Incentive Stock Options
(as defined in Section 5(a) of the Plan).
Notwithstanding
the foregoing, in the event of any change in the outstanding shares
of Common Stock by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation,
transfer of assets, reorganization, conversion or what the
Committee (as defined in Section 4(a)), deems in its sole
discretion to be similar circumstances, the aggregate number of
shares which may be issued under this Plan shall be appropriately
adjusted in a manner determined in the sole discretion of the
Committee. Reacquired shares of Common Stock, as well as
unissued shares, may be used to grant Awards under this
Plan. Common Stock subject to options which have
terminated unexercised, either in whole or in part, and restricted
shares which are forfeited prior to vesting shall be available for
future grants under this Plan.
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Class of
Persons Eligible to Receive Awards
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All officers,
directors and key employees of and important consultants and/or
advisors to the Company and of or to any present or future Company
parent or subsidiary corporation are eligible to receive Awards
under this Plan. The individuals who shall, in fact,
receive Awards shall be selected by the Committee, in its sole
discretion, except as otherwise specified in Section 4 hereof, and
are referred to herein as participants. No outside
director may receive Awards under this Plan which in the aggregate
equal more than 50% of the total number of shares of Common Stock
authorized for issuance under this Plan and no officer, employee or
consultant may receive Awards under this Plan which in the
aggregate equal more than 90% of the total number of shares of
common stock authorized for issuance under this Plan. No
individual may receive Awards of more than 50% of the shares
reserved for issuance under the Plan in any calendar
year.
(a) This
Plan shall be administered either by the Company’s Board of
Directors or a Compensation Committee appointed by the
Company’s Board of Directors. The Compensation
Committee shall consist of a minimum of two and a maximum of five
members of the Board of Directors, each of whom shall be a
“Non-Employee Director” within the meaning of Rule
16b-3(b)(3) under the Securities Exchange Act of 1934, as amended,
or any future corresponding rule, and an “outside
director” within the meaning of Treasury Regulation §
1.162-27(e)(3) or any future corresponding regulation except that
the failure of the Compensation Committee for any reason to be
composed solely of Non-Employee Directors or “outside
directors” shall not prevent an Award from being considered
granted under this Plan. The term
“Committee,” as used herein, shall refer to either the
Company’s Board of Directors or such Compensation Committee,
depending upon who is administering the Plan. The
Committee shall, in addition to its other authority and subject to
the provisions of this Plan, determine which individuals shall in
fact be granted an option or options, whether the option shall be
an Incentive Stock Option or a Non-Qualified Stock Option (as such
terms are defined in Section 5(a)), the number of shares to be
subject to each of the options, the time or times at which the
options shall be granted, the rate of option exercisability, and,
subject to Section 5 hereof, the price at which each of the options
is exercisable and the duration of the option. The
Committee shall further have full and complete authority, subject
to the provisions of the Plan, to grant restricted shares and, in
addition to the terms and conditions contained in Sections 6 and 9
hereof, to provide such other terms and conditions (which need not
be identical among participants) with respect to such restricted
shares and the lapsing of restrictions thereon, as the Committee
shall determine in its sole discretion. The dollar value
of restricted shares granted under the Plan shall be calculated
based upon the fair market value of the Common Stock on the date of
the grant as such term is defined in Section 5(a) of the
Plan.
(b) The
Committee shall adopt such rules for the conduct of its business
and administration of this Plan as it considers
desirable. A majority of the members of the Committee
shall constitute a quorum for all purposes. The vote or
written consent of a majority of the members of the Committee on a
particular matter shall constitute the act of the Committee on such
matter. The Committee shall have the right to construe
the Plan and the Awards granted pursuant thereto, to correct
defects and omissions and to reconcile inconsistencies to the
extent necessary to effectuate the Plan and the Awards granted
pursuant thereto, and such action shall be final, binding and
conclusive upon all parties concerned. No member of the
Committee or the Board of Directors shall be liable for any act or
omission (whether or not negligent) taken or omitted in good faith,
or for the exercise of an authority or discretion granted in
connection with the Plan to a Committee or the Board of Directors,
or for the acts or omissions of any other members of a Committee or
the Board of Directors. Subject to the numerical
limitations on Committee membership set forth in Section 4(a)
hereof, the Board of Directors may at any time appoint additional
members of the Committee and may at any time remove any member of
the Committee with or without cause. Vacancies in the
Committee, however caused, may be filled by the Board of Directors,
if it so desires.
(c) Section
409A of the Code
Awards under the Plan are intended either to be
exempt from the rules of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”) and the regulations
thereunder, or to satisfy those rules and shall be construed
accordingly. However, the Company shall not be liable to
any participant or other holder of an Award with respect to any
Award-related adverse tax consequences arising under Section 409A
or other provision of the Code.
If any provision of the Plan or an Award
agreement contravenes any regulations or guidance promulgated under
Section 409A of the Code or could cause an Award to be subject to
the interest and penalties under Section 409A of the Code, such
provision of the Plan or Award shall be deemed automatically
modified to maintain, to the maximum extent practicable, the
original intent of the applicable provision without violating the
provisions of Section 409A of the Code. Moreover, any
discretionary authority that the Committee may have pursuant to the
Plan shall not be applicable to an Award that is subject to Section
409A of the Code to the extent such discretionary authority will
contravene Section 409A of the Code or the regulations or guidance
promulgated thereunder.
Notwithstanding any provisions of this Plan or
any Award granted hereunder to the contrary, no acceleration shall
occur with respect to any Award to the extent such acceleration
would cause the Plan or an Award granted hereunder to fail to
comply with Section 409A of the Code.
Notwithstanding any provisions of this Plan or
any applicable Award agreement to the contrary, no payment shall be
made with respect to any Award granted under this Plan to a
“specified employee” (as such term is defined for
purposes of Section 409A of the Code) prior to the six-month
anniversary of the employee’s separation of service to the
extent such six-month delay in payment is required to comply with
Section 409A of the Code.
In the case of an Award providing for the
payment of deferred compensation subject to Section 409A of the
Code, any payment of such deferred compensation by reason of a
Change in Control as defined in Section 9(h) of the Plan shall be
made only if the Change in Control is one described in subsection
(a)(2)(A)(v) of Section 409A of the Code and the guidance
thereunder and shall be paid consistent with the requirements of
Section 409A of the Code. If any deferred compensation
that would otherwise be payable by reason of a Change in Control
cannot be paid by reason of the immediately preceding sentence, it
shall be paid as soon as practicable thereafter consistent with the
requirements of Section 409A of the Code, as determined by the
Administrator.
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Incentive
Stock Options and Non-Qualified Stock Options
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(a) Options
issued pursuant to this Plan may be either Incentive Stock Options
granted pursuant to Section 5(b) hereof or Non-Qualified Stock
Options granted pursuant to Section 5(c) hereof, as determined by
the Committee. An “Incentive Stock Option”
is an option which satisfies all of the requirements of Section 422
of the Code and the regulations thereunder, and a
“Non-Qualified Stock Option” is an option which either
does not satisfy all of those requirements or the terms of the
option provide that it will not be treated as an Incentive Stock
Option. The Committee may grant both an Incentive Stock
Option and a Non-Qualified Stock Option to the same person, or more
than one of each type of option to the same person. The
option price for Incentive Stock Options issued under this Plan
shall be equal at least to the fair market value (as defined below)
of the Common Stock on the date of the grant of the
option. Options shall be granted at an option price
equal to at least 100% of the fair market value (as defined below)
of the common stock on the date of the grant of the
option. The fair market value of the Common Stock on any
particular date shall mean the closing price of a share of the
Common Stock on any stock exchange on which such stock is then
listed or admitted to trading, including but not limited to the
NASDAQ Stock Market or any other exchange, on such date, or if no
sale took place on such day, the last such date on which a sale
took place, or if the Common Stock is not then quoted on the NASDAQ
Stock Market, or listed or admitted to trading on any stock
exchange, the fair market value established by the Committee in a
manner consistent with Treasury Regulation § 1.422-2(e) (in
the case of Incentive Stock Options) or in a manner consistent with
Treasury Regulation § 1.409A-1(b)(5)(iv) (in the case of
Non-Qualified Stock Options), or any future corresponding
regulations.
(b) Subject
to the authority of the Committee set forth in Section 4(a) hereof,
Incentive Stock Options issued pursuant to this Plan shall be
issued substantially in the form set forth in Appendix I
hereof, which form is hereby incorporated by reference and made a
part hereof, and shall contain substantially the terms and
conditions set forth therein. Except as otherwise
provided by the Committee in the agreement evidencing the grant of
Incentive Stock Options, all Incentive Stock Options granted under
the Plan shall vest at a rate of one-fifth (1/5) of the initial
award on the first anniversary of the date of grant and, one-fifth
(1/5) of the initial award per year thereafter on each subsequent
anniversary of the grant date over a period of four (4)
years. Incentive Stock Options shall not be exercisable
after the expiration of ten years from the date such options are
granted, unless terminated earlier under the terms of the option,
except that options granted to individuals not described in Section
422(b)(6) of the Code shall conform to the provisions of Section
422(c)(5) of the Code. At the time of the grant of an
Incentive Stock Option hereunder, the Committee may, in its
discretion, amend or supplement any of the option terms contained
in Appendix I for any particular optionee, provided that the
option as amended or supplemented satisfies the requirements of
Section 422 of the Code and the regulations
thereunder. Subject to the restrictions set forth in
Section 2 hereof, each of the options granted pursuant to this
Section 5(b) is intended, if possible, to be an “Incentive
Stock Option” as that term is defined in Section 422 of the
Code and the regulations thereunder. In the event this
Plan or any option granted pursuant to this Section 5(b) is in any
way inconsistent with the applicable legal requirements of the Code
or the regulations thereunder for an Incentive Stock Option, this
Plan and such option shall be deemed automatically amended as of
the date hereof to conform to such legal requirements, if such
conformity may be achieved by amendment. If such
conformity may not be achieved by amendment, such option shall be
deemed to be a Non-Qualified Stock Option.
(c) Subject
to the authority of the Committee set forth in Section 4(a) hereof,
Non-Qualified Stock Options issued to officers and other key
employees pursuant to this Plan shall be issued substantially in
the form set forth in Appendix II hereof, which form is
hereby incorporated by reference and made a part hereof, and shall
contain substantially the terms and conditions set forth
therein. Except as otherwise provided by the Committee
in the agreement evidencing the grant of Non-Qualified Stock
Options, all Non-Qualified Stock Options granted under the Plan
shall vest at a rate of one-fifth (1/5) of the initial award on the
first anniversary of the date of grant and, one-fifth (1/5) of the
initial award per year thereafter on each subsequent anniversary of
the grant date over a period of four (4) years. Subject
to the authority of the Committee set forth in Section 4(a) hereof,
Non-Qualified Stock Options issued to non-employee directors and
important consultants and/or advisors pursuant to this Plan shall
be issued substantially in the form set forth in Appendix
III hereof, which form is hereby incorporated by reference and
made a part hereof, and shall contain substantially the terms and
conditions set forth therein. Non-Qualified Stock
Options shall expire ten years after the date they are granted,
unless terminated earlier under the option terms. At the
time of granting a Non-Qualified Stock Option hereunder, the
Committee may, in its discretion, amend or supplement any of the
option terms contained in Appendix II or Appendix III
for any particular optionee.
(d) Neither
the Company nor any of its current or future parent, subsidiaries
or affiliates, nor their officers, directors, shareholders, stock
option plan committees, employees or agents shall have any
liability to any optionee in the event (i) an option granted
pursuant to Section 5(b) hereof does not qualify as an
“Incentive Stock Option” as that term is used in
Section 422 of the Code and the regulations thereunder; (ii) any
optionee does not obtain the tax treatment pertaining to an
“Incentive Stock Option;” or (iii) any option granted
pursuant to Section 5(c) hereof is an “Incentive Stock
Option.”
(e) Except
as otherwise provided in Section 422 of the Code and regulations
thereunder or any successor provision, no Incentive Stock Option
granted pursuant to this Plan shall be transferable other than by
will or the laws of descent and distribution. Except as
otherwise provided by the Rules and Regulations of the Securities
and Exchange Commission, the Committee at the time of grant of a
Non-Qualified Stock Option may provide that such stock option is
transferable to any “family member” of the optionee by
gift or qualified domestic relations order. For purposes
of this section, a family member includes any child, stepchild,
grandchild, parent, step-parent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the
grantee’s household (other than a tenant or employee), a
trust in which these persons have more than 50% of the beneficial
interest, a foundation in which these persons (or the grantee)
controls the management of assets, and any other entity in which
these persons or the grantee own more than 50% of the voting
interests.
(a) At
the time of an award of restricted shares, in addition to any other
terms and conditions the Committee shall provide, the Committee
shall establish for each participant a period of time during which
restricted shares granted under the Plan are subject to forfeiture
by the participant if the conditions established by the Committee,
including the attainment of Performance Standards, if any, are not
met or upon the expiration of which the restricted shares shall
vest and no longer be subject to restriction (the “Restricted
Period”). The vesting of restricted shares granted
under the Plan will be subject to the maintenance of continuous
service to the Company for a period of time established by the
Committee or the attainment of Performance Standards as determined
by the Committee and set forth in the agreement evidencing the
Award. For purposes of this section, Performance
Standards means one or more of the following performance criteria,
either individually, alternatively or in any combination, applied
either to the Company as a whole or to a business segment or unit,
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
agreement evidencing the award of restricted shares: sales,
revenue, net income, net earnings, earnings per share, return on
the total capital, return on equity, cash flow, operating profit
and margin rate, subject to adjustment by the Committee to remove
the effect of changes for discontinued operations or
restructurings. Unless otherwise provided by the
Committee in the agreement evidencing the award of restricted
shares, all restricted shares shall have a Restricted Period of up
to five (5) years; provided that, such restrictions shall lapse
(i.e. such restricted shares shall vest) at a rate of twenty
percent (20%) of the initial award on the first anniversary of the
date of grant and twenty percent (20%) of the initial award per
year thereafter on each subsequent anniversary of the grant date
provided the participant maintains continuous service to the
Company since the grant date. Restricted shares may not
be sold, assigned, transferred, pledged or otherwise encumbered by
the participant, except as hereinafter provided, during the
Restricted Period. Except for such restrictions, and
subject to paragraphs (d) and (f) of this Section 6 and Section 9
hereof, the participant as owner of such restricted shares shall
have all the rights of a shareholder, including the right to vote
the shares.
(b) Except
as provided in paragraph (i) of this Section 6, if a participant
ceases to maintain Continuous Service for any reason (other than
death or disability), all restricted shares theretofore awarded to
such participant and which at the time of such termination of
Continuous Service are subject to the restrictions imposed by
paragraph (a) of this Section 6 shall upon such termination of
Continuous Service be forfeited and returned to the
Company. If a participant ceases to maintain Continuous
Service by reason of death or disability, restricted shares then
still subject to restrictions imposed by paragraph (a) of this
Section 6 will be free of those
restrictions. “Continuous Service,” as used
herein, means the absence of any interruption or termination of
service as an officer, director or employee of or consultant to the
Company or any Affiliate. Service shall not be
considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or any Affiliate
or in the case of transfers between payroll locations of the
Company, or between the Company and its subsidiaries.
(c) The
Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall
lapse with respect to restricted shares, or to remove any or all of
such restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of
such Restricted Period.
(d) Each
certificate in respect of restricted shares awarded under the Plan
shall be registered in the name of the participant and deposited by
the participant, together with a stock power endorsed in blank,
with the Company and shall bear the following (or a similar)
restricted legend (the “Restricted Legend”):
The
transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) contained in the 2008 Stock Option and Stock
Incentive Plan of Dorman Products, Inc. Copies of such
Plan are on file in the office of the Secretary of Dorman Products,
Inc., 3400 East Walnut Street, Colman, Pennsylvania
18915.
(e) At
the time of any award of restricted shares, the participant shall
enter into an agreement with the Company in a form attached hereto
as Appendix IV , as modified by the Committee, agreeing to
the terms and conditions of the restricted shares and such other
matters as the Committee, in its sole discretion, shall determine
(the “Restricted Stock Agreement”).
(f)
The payment to a participant of cash
dividends declared or paid on such restricted shares by the Company
shall be deferred until the lapsing of any restrictions imposed
under paragraph (a) of this Section 6. Such deferred
dividends shall be held by the Company for the account of the
participant. In such event, there shall be credited at
the end of each year (or portion thereof) interest on the amount of
the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of
deferred dividends, together with interest accrued thereon, shall
be made upon the earlier to occur of the lapsing of the
restrictions imposed under paragraph (a) of this Section 6 or upon
death or disability of the participant.
(g) At
the expiration of the Restricted Period, if any, imposed by
paragraph (a) of this Section 6, the Company shall redeliver to the
participant (or where the relevant provision of paragraph (b) of
this Section 6 applies in the case of a deceased participant, to
his legal representative, beneficiary or heir) the certificate(s)
and stock power deposited with it pursuant to paragraph (d) of this
Section 6 and the shares represented by such certificate(s) shall
be free of the Restricted Legend referred to in paragraph (d) of
this Section 6. Notwithstanding the foregoing, the
Securities Legend described in paragraph (g) of Section 9 shall
continue to be included on all certificates as long as registration
has not occurred.
(h) During
the Restricted Period, no Award nor any right of interest of a
participant in such Award set forth in any instrument evidencing
any Award under the Plan may be assigned, encumbered or transferred
except, in the event of the death of a participant, by will or the
laws of descent and distribution.
(i)
The Committee may provide in the Restricted Stock
Agreement if the Continuous Service of any participant (as defined
in Section 6) is involuntarily terminated for whatever reason,
except for cause, as defined by the Committee, at any time within a
specified period after a change in control, unless the Committee
shall otherwise provide, any Restricted Period with respect to
restricted shares shall lapse upon such termination and all
restricted shares shall become fully vested in the
participant.
(j)
Upon the termination of any Restricted Period with respect to
restricted shares (or at any such earlier time, if any, that an
election is made by the participant under Section 83(b) of the
Code, or any successor provision thereto, to include the value of
such shares in taxable income), the Company may withhold from any
payment or distribution made under this Plan sufficient shares or
may withhold from the participant’s compensation or require
to be paid by participant sufficient cash to cover any applicable
withholding and employment taxes. The Company shall have
the right to deduct from all dividends paid with respect to
restricted shares the amount of any taxes which the Company is
required to withhold with respect to such dividend
payments. No discretion or choice shall be conferred
upon any participant with respect to the form, timing or method of
any such tax withholding.
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Amendment,
Supplement, Suspension and Termination
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Awards shall
not be granted pursuant to this Plan after the expiration of ten
years from the date the Plan was originally adopted by the Board of
Directors of the Company. The Board of Directors
reserves the right at any time, and from time to time, to amend or
supplement this Plan, including the forms of option or restricted
stock agreement attached hereto, in any way, or to suspend or
terminate it, effective as of such date, which date may be either
before or after the taking of such action, as may be specified by
the Board of Directors; provided, however, that such action shall
not affect Awards granted under the Plan prior to the actual date
on which such action occurred. If an amendment or
supplement of this Plan is required by the Code or the regulations
thereunder to be approved by the shareholders of the Company in
order to permit the granting of “Incentive Stock
Options” (as that term is defined in Section 422 of the Code
and regulations thereunder) pursuant to the amended or supplemented
Plan, such amendment or supplement shall also be approved by the
shareholders of the Company in such manner as is prescribed by the
Code and the regulations thereunder. If the Board of
Directors voluntarily submits a proposed amendment, supplement,
suspension or termination for shareholder approval, such submission
shall not require any future amendments, supplements, suspensions
or terminations (whether or not relating to the same provision or
subject matter) to be similarly submitted for shareholder
approval.
This Plan shall
become effective on the date of its adoption by the Company’s
Board of Directors, subject however to approval by the holders of
the Common Stock in the manner as prescribed in the Code and the
regulations thereunder. Options may be granted under
this Plan prior to obtaining shareholder approval, provided such
options shall not be exercisable until shareholder approval is
obtained. No grants of restricted shares may be made
under the Plan prior to the receipt of shareholder
approval.
(a) Nothing
contained in this Plan or any Award granted pursuant to this Plan
shall confer upon any employee the right to continue in the employ
of the Company or any affiliated or subsidiary corporation or
interfere in any way with the rights of the Company or any
affiliated or subsidiary corporation to terminate his employment in
any way.
(b) Nothing
contained in this Plan or any Award granted pursuant to this Plan
shall confer upon any director or consultant the right to continue
as a director of, or consultant to, the Company or any affiliated
or subsidiary corporation or interfere in any way with the rights
of the Company or any affiliated or subsidiary corporation, or
their respective shareholders, to terminate the directorship of any
such director or the consultancy relationship of any such
consultant.
(c) Corporate
action constituting an offer of stock for sale to any person under
the terms of the options to be granted hereunder shall be deemed
complete as of the date when the Committee authorizes the grant of
the option to the such person, regardless of when the option is
actually delivered to such person or acknowledged or agreed to by
him.
(d) The
terms “parent corporation” and “subsidiary
corporation” as used throughout this Plan, and the options
granted pursuant to this Plan, shall (except as otherwise provided
in the option form) have the meaning that is ascribed to that term
when contained in Section 422(b) of the Code and the regulations
thereunder, and the Company shall be deemed to be the grantor
corporation for purposes of applying such meaning.
(e) References
in this Plan to the Code shall be deemed to also refer to the
corresponding provisions of any future United States revenue
law.
(f) The
use of the masculine pronoun shall include the feminine gender
whenever appropriate.
(g) To
the extent restricted shares or Common Stock issued upon the
exercise of options granted pursuant to the Plan have not been
registered under the federal and state securities laws or an
exemption is otherwise unavailable, the certificates for Common
Stock to be issued pursuant to the Plan shall bear the following
securities legend (the “Securities Legend”):
The shares
represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or under applicable state
securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement
under the Securities Act of 1933, as amended, and under any
applicable state securities laws or an opinion of counsel
acceptable to the Company that the proposed transaction will be
exempt from such registration.
The foregoing
legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any
applicable state laws or upon receipt of any opinion of counsel
acceptable to the Company that said registration is no longer
required.
(h) Each
of the events specified in the following clauses (i) and (ii) of
this subsection (h) shall be deemed a “change in
control”: (i) a change within a twelve-month
period in the holders of more than 50% of the outstanding voting
stock of the Company; or (ii) any other events deemed to constitute
a “change in control” by the Committee.
(i) In
the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation,
transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances,
the number and kind of shares subject to options and the option
price of such shares shall be appropriately adjusted and
outstanding Awards shall be treated like all other outstanding
shares of Common Stock. Any shares of stock or other
securities received, as a result of any of the foregoing adjustment
by the Committee or as part of an adjustment provided to
shareholders in general, by a participant with respect to
restricted shares shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such
shares or securities shall be legended and deposited with the
Company in the manner provided in Section 5 hereof.
Adopted by the Board of Directors this 12
th day of December, 2008.
APPENDIX I
INCENTIVE STOCK
OPTION
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To:
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Name
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Address:
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Date of
Grant:
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You are hereby granted an option, effective as
of the date hereof, to purchase __________ shares of common stock
(“Common Stock”) of Dorman Products, Inc. (the
“Company”) at a price of $____________ per
share pursuant to the Company’s 2008 Stock Option and Stock
Incentive Plan (the “Plan”).
Your Option may first be exercised at any time
on or after __________ for up to __% of the total number of shares
subject to the Option and thereafter pursuant to the following
schedule until the total number of shares subject to the Option are
fully exercisable:
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Vesting
Date
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Percent of Initial Award
Vested
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%
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Thus, this
Option is fully exercisable on or after __ years from the Date of
Grant. This Option shall terminate and is not
exercisable after 10 years from the Date of Grant (the
“Scheduled Termination Date”) This Option
shall be adjusted for any change in the outstanding shares of the
Common Stock of the Company by reason of a stock dividend or
distribution, supplemental offering of shares, stock split,
combination of shares, recapitalization, merger, consolidation,
exchange of shares, reorganization, conversion or what the
Committee deems in its sole discretion to be similar
circumstances. No fractional shares shall be issued or
delivered.
In the event of a “Change of
Control” (as defined below) of the Company, your option may,
from and after the date of the Change of Control, and
notwithstanding the immediately preceding paragraph, be exercised
for up to 100% of the total number of shares then subject to the
option minus the number of shares previously purchased upon
exercise of the option (as adjusted for stock dividends, stock
splits, combinations of shares and what the Committee deems in its
sole discretion to be similar circumstances) and your vesting date
may accelerate accordingly. A “Change of
Control” shall be deemed to have occurred upon the happening
of any of the following events:
1.
A change within a twelve-month period in the holders of more
than 50% of the outstanding voting stock of the Company;
or
2.
Any other event deemed to constitute a “Change of
Control” by the Committee.
You may exercise your option by giving written
notice to the Secretary of the Company on forms supplied by the
Company at its then principal executive office, accompanied by
payment of the option price for the total number of shares you
specify that you wish to purchase. The payment may be in
any of the following forms: (a) cash, which may be evidenced by a
check and includes cash received from a stock brokerage firm in a
so-called “cashless exercise”; (b) unless prohibited by
the Committee, certificates representing shares of Common Stock,
which will be valued by the Secretary of the Company at the fair
market value per share of Common Stock (as determined in accordance
with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company;
or (c) unless prohibited by the Committee, any combination of cash
and Common Stock valued as provided in clause (b). Any
assignment of stock shall be in a form and substance satisfactory
to the Secretary of the Company, including guarantees of
signature(s) and payment of all transfer taxes if the Secretary
deems such guarantees necessary or desirable.
Your option will, to the extent not previously
exercised by you, terminate 30 days after the date on which your
employment by the Company or a Company subsidiary corporation is
terminated (whether such termination be voluntary or involuntary)
other than by reason of disability as defined in Section 22(e)(3)
of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder, or death (but
in no event later than the Scheduled Termination
Date). After the date your employment is terminated, as
aforesaid, you may exercise this option only for the number of
shares which you had a right to purchase and did not purchase on
the date your employment terminated. If you are employed
by a Company subsidiary corporation, your employment shall be
deemed to have terminated on the date your employer ceases to be a
Company subsidiary corporation, unless you are on that date
transferred to the Company or another Company subsidiary
corporation. Your employment shall not be deemed to have
terminated if you are transferred from the Company to a Company
subsidiary corporation, or vice versa, or from one Company
subsidiary corporation to another Company subsidiary
corporation.
If you die while employed by the Company or a
Company subsidiary corporation, your executor or administrator, as
the case may be, may, at any time within one year after the date of
your death (but in no event later than the Scheduled Termination
Date), exercise
