Exhibit 4.3
SCOTT'S LIQUID GOLD-INC.
2005 STOCK INCENTIVE PLAN
Effective Date: March 31, 2005
Approved by Stockholders: May 4, 2005
Termination Date: March 31, 2015
As Amended On February 27, 2007
And May 6, 2008
SCOTT'S LIQUID GOLD-INC.
2005 STOCK INCENTIVE PLAN
INTRODUCTION
The purpose of the Scott's Liquid Gold-Inc. 2005 Stock Incentive
Plan (the "Plan") is to further the growth and development of Scott's
Liquid Gold-Inc., a Colorado corporation (the "Company"), by affording
an opportunity for stock ownership to selected Employees, Directors and
Consultants of the Company and its Subsidiaries who are responsible for
the conduct and management of its business or who are involved in
endeavors significant to its success. The Plan is also intended to
assist the Company in attracting new Employees and Consultants and
retaining existing Employees and Consultants; to encourage growth of
the Company through incentives that are consistent with the Company's
goals; to provide incentives for individual performance; and to promote
teamwork.
ARTICLE 1.
DEFINITIONS
When used in this Plan, the following capitalized terms shall
have the meanings set forth below unless a different meaning is plainly
required by the context:
1.1 Award. means the grant of Options, Restricted Stock or other
stock-based grant under the Plan.
1.2 Board of Directors. means the Board of Directors of the Company.
1.3 Cause. means "Cause," as defined in the Participant's employment
agreement, if applicable, or if the Participant has not entered into an
employment agreement with the Company, as determined in the sole and
absolute discretion of the Company, a termination on account of
dishonesty, fraud, misconduct, unauthorized use or disclosure of
confidential information or trade secrets or conviction or confession
of a crime punishable by law (except minor violations), in each such
case as determined by the Plan Administrator, and its determination
shall be conclusive and binding. Such actions constituting "Cause"
shall include, without limitation, a violation of the Company's Code
of Business Conduct and Ethics. A Participant who agrees to resign
from his or her affiliation with the Company in lieu of being
terminated for Cause shall be deemed to have been terminated for Cause
for purposes of the Plan.
1.4 Change in Control. means, as may be further limited by Code
Section 409A, the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following:
(a) Any third person, including a "group" as defined in
Section 13(d) or 14(d) of the Exchange Act, becomes the beneficial owner
of shares of the Company having 50% or more of the total number of votes
that may be cast for the election of Directors of the Company.
(b) The stockholder(s) of the Company approve: (i) any
agreement for a merger or consolidation of the Company with another
entity, provided that there shall be no change of control if the
persons and entities who were the stockholders of the Company
immediately before such merger or consolidation continue to own,
directly or indirectly, more than two-thirds of the outstanding voting
securities of the corporation resulting from such merger or consolidation
in substantially the same proportion as their ownership of the voting
securities of the Company outstanding immediately before such merger or
consolidation; (ii) any sale, exchange or other disposition of all or
substantially all of the Company's assets; or (iii) a plan of complete
dissolution or liquidation of the Company (or a complete dissolution or
liquidation of the Company shall otherwise occur).
(c) There is a consummated sale, exchange or other disposition of
greater than 50% in fair market value of the Company's assets, other
than in the ordinary course of business, whether in a single transaction
or a series of related transactions.
In determining whether subsection (a) has been satisfied, the third
person owning shares must be someone other than a person or an Affiliate
of a person that, as of the Effective Date, was the beneficial owner of
shares of the Company having 20% or more of the total number of votes
that may be cast for the election of Directors of the Company.
The Plan Administrator's reasonable determination as to whether such an
event has occurred shall be final and conclusive.
1.5 Code means the Internal Revenue Code of 1986, as amended from
time to time.
1.6 Common Stock or Stock means the Company's Common Stock and any
share or shares of the Company's capital stock hereafter issued or
issuable in substitution for such shares.
1.7 Consultant means a consultant, agent, advisor or independent
contractor who provides service to the Company and who does not receive
wages subject to income tax federal withholding under Code Section 3401;
provided, however, that such person is a natural person, renders bona
fide services that are not in connection with the offer and sale of the
Company's securities in a capital raising transaction and does not
directly or indirectly promote or maintain a market for the Company's
securities. Consultant does not include Directors who are not
compensated by the Company for services as Directors, and the payment
of a Director's fee by the Company for services as a Director shall not
cause a Director to be considered a Consultant for purposes of the Plan.
1.8 Continuous Service means that the Participant's service with the
Company, its Parent or Subsidiary, whether as an Employee, Consultant or
Director, is not interrupted or terminated. The Participant's Continuous
Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company,
its Parent or Subsidiary as an Employee, Consultant or Director or a
change in the entity for which the Participant renders such service,
provided that there is no interruption or termination of the
Participant's Continuous Service. For example, a change in status from
an Employee of the Company to a Consultant of a Subsidiary or a Director
will not constitute an interruption of Continuous Service. The Plan
Administrator, in its sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of
absence, including sick leave, military leave or any other personal
leave.
1.9 Director means a member of the board of directors of the
Company, its Parent or Subsidiary.
1.10 Disability means disability within the meaning of the long-term
disability policy maintained by the Company, or if none, within the
meaning of Code Section 22(e)(3).
1.11 Effective Date means the effective date of the Plan, as first
set forth above.
1.12 Employee means a common law employee of the Company or its
Subsidiary and any person who has accepted a binding offer of employment
from the Company or its Subsidiary, but excludes any individual
classified by the Company or its Subsidiary as an independent contractor
or leased employee.
1.13 Exchange Act means the Securities Exchange Act of 1934, as
amended from time to time.
1.14 Fair Market Value means the value of the Common Stock, determined
in accordance with the following: If the Common Stock is listed on any
established stock exchange or traded on the Nasdaq National Market, the
Nasdaq SmallCap Market, the OTC Bulletin Board or otherwise over the
counter, then the Fair Market Value per share shall be deemed to be
the average of the closing sales prices (or, if closing sales prices are
not available for the trading market, the average of closing bid and
asked prices) for the Common Stock or security for the five preceding
trading days as reported in the Wall Street Journal or another
publication or source for market prices selected by the Board of
Directors. If there has not been trading of the Common Stock on a
specific date, then a trading day is the next preceding day on which
there was such trading. If none of these conditions apply, the Fair
Market Value per share shall be deemed to be an amount as determined in
good faith by the Plan Administrator by applying any reasonable
valuation method.
1.15 Incentive Stock Option means any option granted to an eligible
Employee under the Plan, which the Company intends at the time the
option is granted to be an Incentive Stock Option within the meaning
of Code Section 422.
1.16 Nonqualified Stock Option means any option granted to an eligible
Employee, Director or Consultant under the Plan that is not an Incentive
Stock Option.
1.17 Option means and refers collectively to Incentive Stock Options
and Nonqualified Stock Options.
1.18 Option Agreement means the agreement specified in Section 6.2.
1.19 Parent means a parent corporation of the Company as defined in
Code Section 424(e).
1.20 Participant means any Employee, Director or Consultant who is
granted an Award under the Plan. Participant also means the personal
representative of a Participant and any other person who acquires the
right to exercise or receive payment pursuant to an Award by bequest or
inheritance.
1.21 Plan Administrator means the body that is responsible for the
administration of the Plan, as determined pursuant to Section 3.1.
1.22 Repriced means any amendment or adjustment of the exercise price
or the purchase price of an Award through amendment, cancellation,
replacement grants or any other means.
1.23 Restricted Stock means shares of Common Stock granted to a
Participant that are subject to the restrictions set forth in Article 8
of the Plan and the Restricted Stock Award Agreement. Restricted Stock
also means any shares of the Company's capital stock issued as the
result of a dividend on or split of Restricted Stock. Upon termination
of the restrictions, such Common Stock or other capital stock shall no
longer be Restricted Stock.
1.24 Restricted Stock Award Agreement means the agreement specified in
Section 8.2 between the Company and a Participant pursuant to which
Restricted Stock is granted to the Participant.
1.25 Restricted Stock Unit or RSU means a contingent obligation of
the Company to deliver shares of Common Stock to the Participant who
is a party to a Restricted Stock Unit Award Agreement pursuant to
Article 8 of the Plan. Each RSU represents the unfunded, unsecured
right of the Participant to receive a share of Common Stock on the
date(s) specified herein. RSUs do not constitute issued and outstanding
shares of Common Stock for any corporate purposes and do not confer on
the Participant any right to vote on matters that are submitted to a
vote of shareholders.
1.26 Restricted Stock Unit Award Agreement means the agreement
specified in Section 8.2 between the Company and a Participant pursuant
to which a contingent right to shares of Common Stock is granted to the
Participant.
1.27 Restriction Period means the period set forth in the Restricted
Stock Award Agreement that is the period beginning on the date of grant
of the Award and ending on the final vesting date of the Restricted Stock.
1.28 Rule 16b-3 means Rule 16b-3 promulgated by the Securities Exchange
Commission under the Exchange Act, together with any successor rule, as
in effect from time to time.
1.29 Stock Appreciation Right or SAR means a standalone stock
appreciation right that has been granted pursuant to Article 7 of the Plan.
1.30 Stock Appreciation Right Award Agreement means the agreement
specified in Section 7.2 between the Company and a Participant pursuant
to which a contingent right to shares of Common Stock is granted to the
Participant.
1.31 Subsidiary means a subsidiary corporation of the Company as
defined in Code Section 424(f).
1.32 Termination Date means the termination date of the Plan, as
first set forth above.
ARTICLE2.
EFFECTIVE DATE
The Effective Date of the Plan shall be the date on which the
Plan is approved by the stockholders of the Company.
ARTICLE3.
ADMINISTRATION
3.1 PLAN ADMINISTRATOR. The Plan shall be administered by the Board of
Directors, unless and until such time as the Board of Directors delegates
the administration of the Plan to a committee, which shall be appointed by
and shall serve at the pleasure of the Board of Directors. Any committee
member shall be deemed to have resigned automatically from the committee
upon his or her termination of service with the Company. To the extent
the Board considers it desirable for transactions relating to an Award to
be eligible to qualify for an exemption under Rule 16b-3, the Plan
Administrator shall consist of a committee of two or more Directors of
the Company, all of whom qualify as "non-employee directors" within the
meaning of Rule 16b-3. To the extent the Board considers it desirable
for compensation delivered pursuant to an Award to be eligible to
qualify for an exemption under Code Section 162(m), the Plan
Administrator shall consist of a committee of two or more Directors of
the Company, all of whom qualify as "outside directors" within the
meaning of Code Section 162(m). The Board may from time to time remove
members from or add members to any such committee; fill vacancies on the
committee, howsoever caused; and otherwise increase or decrease the
number of members of such committee, in each case as the Board deems
appropriate to permit transactions in Common Stock pursuant to the Plan
and to satisfy such conditions of Rule 16b-3 or Code Section 162(m) as
then in effect.
3.2 MEETINGS AND ACTIONS. The Plan Administrator shall hold meetings
at such times and places as it may determine. A majority of the members
of the Plan Administrator shall constitute a quorum, and the acts of the
majority of the members present at a meeting or a consent in writing
signed by all members of the Plan Administrator shall be the acts of
the Plan Administrator and shall be final, binding and conclusive upon
all persons, including the Company, its Subsidiaries, its stockholders,
and all persons having any interest in Awards that may be or have been
granted pursuant to the Plan.
3.3 POWERS OF PLAN ADMINISTRATOR. The Plan Administrator shall have
the full and exclusive right to grant and determine terms and conditions
of all Awards granted under the Plan and to prescribe, amend and rescind
rules and regulations for administration of the Plan. In selecting
Participants and granting Awards, the Plan Administrator shall take into
consideration the contribution the Participant has made or may make to
the success of the Company or its Subsidiaries and such other factors
as the Plan Administrator shall determine.
3.4 INTERPRETATION OF PLAN. The Plan Administrator may correct any
defect, supply any omission, or reconcile any inconsistency in the Plan
or in any agreement entered into hereunder. The determination of the
Plan Administrator as to any disputed question arising under the Plan,
including questions of construction and interpretation, shall be
final, binding and conclusive upon all persons, including the Company,
its Subsidiaries, its stockholders, and all persons having any interest
in Awards that may be or have been granted pursuant to the Plan.
ARTICLE4.
STOCK SUBJECT TO THE PLAN
4.1 PLAN LIMIT. Subject to the provisions of Section 4.4, the
aggregate number of shares of Common Stock that may be issued under
Awards granted pursuant to the Plan shall not exceed 1,500,000
shares, less the number of shares issued after May 6, 2008 (which is
the effective date of an amendment) as a result of the exercise of
stock options under the 1997 Stock Option Plan and the 1998 Stock
Option Plan of the Company. Shares that may be issued under Awards
may consist, in whole or in part, of authorized but unissued stock or
treasury stock of the Company not reserved for any other purpose.
4.2 INDIVIDUAL LIMIT. During any single calendar year, no Participant
shall be eligible to be granted Awards exceeding 10% of the limits set
forth in Section 4.1. From the Effective Date to the date on which the
Plan terminates, no Participant shall be eligible to be granted Awards
exceeding 20% of the limits set forth in Section 4.1.
4.3 UNUSED STOCK. If any outstanding Award under the Plan expires or
for any other reason ceases to be exercisable, is forfeited or
repurchased by the Company, in whole or in part (other than upon
exercise of an Award), the shares that were subject to such Award
(and as to which the Award had not been exercised) shall continue to be
available under the Plan or revert to the Plan to again be available for
issuance under the Plan; provided, however, that subject to the
provisions of Section 4.4 relating to adjustments, the aggregate
maximum number of shares of Common Stock that may be issued as Incentive
Stock Options shall be the number of shares of Common Stock as may be
approved by the stockholders of the Company from time to time for
issuance as Incentive Stock Options under Section 4.1.
4.4 ADJUSTMENT FOR CHANGE IN OUTSTANDING SHARES.
(a) In General. If there is any change, increase or decrease,
in the outstanding shares of Common Stock that is effected without
receipt of additional consideration by the Company, by reason of a stock
dividend, subdivision, reclassification, recapitalization, merger,
consolidation, stock split, combination or exchange of stock, or other
similar circumstances not involving the receipt of consideration by
the Company (each a Capitalization Event), then in each such event,
the Plan Administrator shall make an appropriate adjustment in the
aggregate number of shares of Common Stock available under the Plan,
the number of shares of Common Stock subject to each outstanding Award
and the exercise prices in order to prevent the dilution or
enlargement of any Participant's rights. In the event of any
adjustment in the number of shares of Common Stock covered by any
Award, including those provided in subsection (b) below, each such
Award shall cover only the number of full shares resulting from such
adjustment. The Plan Administrator's determinations in making any
adjustment shall be final and conclusive.
(b) Adjustments for Certain Distributions of Property. If the
Company at any time distributes with respect to its Common Stock
securities or other property (except cash or Common Stock), a
proportionate part of those securities or other property shall be set
aside and delivered to the Participant when he exercises an Option or
the restrictions on Restricted Stock lapse. The securities or other
property shall be in the same ratio to the total securities and
property set aside for the Participant as the number of shares of
Common Stock with respect to which the Option is then exercised or the
Restricted Stock then vests is to the total shares of Common Stock
subject to the Award.
(c) Exceptions to Adjustment. Except as expressly provided
herein, the issue by the Company of shares of Common Stock of any
class, or securities convertible into or exchangeable for shares of
Common Stock of any class, for cash or property or for labor or
services, or upon sale or upon exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into or exchangeable for shares of Common
Stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Common
Stock subject to any Award granted under the Plan.
4.5 RETENTION OF RIGHTS. The existence of this Plan and any Award
granted pursuant to the Plan shall not affect the right or power of
the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other change in
the Company's capital structure or its business, or a merger or
consolidation of the Company, or any issue of bonds, debentures, or
preferred or preference stock ranking before or affecting the Common
Stock, or the dissolution of the Company or any sale or transfer of
all or any part of the Company's assets or business, or any other
corporate act or proceeding, whether similar or not.
4.6 CANCELLATION OF AWARD. The Plan Administrator may at any time
cancel an Award, whether vested or unvested, if the Participant engages
in conduct that the Plan Administrator in its sole discretion
determines to be detrimental to the best interest of the Company.
Without limiting the foregoing, the Plan Administrator may cancel all
or any portion of an Award, whether vested or unvested, if the Plan
Administrator determines that the Participant has failed at any time
during the Participant's employment or other affiliation with the
Company to comply with any policies or procedures of the Company,
including the Company's Code of Business Conduct and Ethics.
ARTICLE5.
ELIGIBILITY
All full-time and part-time Employees shall be eligible to
receive any Award under the Plan. Directors and Consultants who are
not Employees shall be eligible to receive any Award, other than
Incentive Stock Options, under the Plan. Any Director who is
otherwise eligible to participate, who makes an election in writing
not to receive any grants under the Plan, shall not be eligible to
receive any such grants during the period set forth in such election.
ARTICLE6.
STOCK OPTIONS
6.1 GRANT OF OPTIONS. The Plan Administrator may from time to time
in its discretion determine which of the eligible Employees, Directors
and Consultants of the Company or its Subsidiaries should receive
Options, the type of Options to be granted (whether Incentive Stock
Options or Nonqualified Stock Options), the number of shares subject
to such Options, and the dates on which such Options are to be
granted. No Employee may be granted Incentive Stock Options to the
extent that the aggregate Fair Market Value (determined as of the
time each Option is granted) of the Common Stock with respect to which
any of the Employee's Options are exercisable for the first time
during a calendar year (under all incentive stock option plans of the
Company and its Parent and Subsidiaries) would exceed $100,000. To
the extent that the limitation set forth in the preceding sentence
has been exceeded, the Options that exceed the annual limitation shall
be deemed to be Nonqualified Stock Options rather than Incentive
Stock Options.
6.2 OPTION AGREEMENT. Each Option granted under the Plan shall be
evidenced by a written Option Agreement setting forth the terms upon
which the Option is granted. Each Option Agreement shall designate
the type of Options being granted (whether Incentive Stock Options or
Nonqualified Stock Options), and shall state the number of shares of
Common Stock, as designated by the Plan Administrator, to which that
Option pertains. More than one Option, and any combination of
Options, SARs and Restricted Stock Awards, may be granted to an
eligible person.
(a) Option Price. The Option price (i.e., exercise price) per
share of Common Stock under each Option shall be determined by the Plan
Administrator and stated in the Option Agreement. The Option price for
any Options granted under the Plan shall not be less than 100% of the
Fair Market Value (determined as of the day the Option is granted) of
the shares subject to the Option. The exercise price of the Common
Stock under each Option may not be Repriced.
(b) Duration of Options. Each Option shall be of a duration
as specified in the Option Agreement; provided, however, that the
term of any Option shall be no more than ten years from the date on
which the Option is granted and shall be subject to early termination
as provided herein.
(c) Vesting. Unless otherwise stated in the Option Agreement,
Options shall be fully vested. Any vesting schedule may be waived or
accelerated by the Plan Administrator at any time.
(d) Additional Limitations on Grant for 10% Stockholders. No
Incentive Stock Option shall be granted to an Employee who, at the
time the Incentive Stock Option is granted, owns stock (as determined
in accordance with Code Section 424(d)) representing more than 10% of
the total combined voting power of all classes of stock of the Company
or of any Parent or Subsidiary, unless the option price of such
Incentive Stock Option is at least 110% of the Fair Market Value
(determined as of the day the Incentive Stock Option is granted) of
the stock subject to the Incentive Stock Option and the Incentive
Stock Option by its terms is not exercisable more than five years
from the date it is granted.
(e) Rights as Stockholder. A Participant shall have no rights as
a stockholder of the Company with respect to any shares of Common Stock
covered by an Option until the date of the issuance of the stock
certificate for such shares.
(f) Other Terms and Conditions. The Option Agreement may
contain such other provisions, which shall not be inconsistent with
the Plan, as the Plan Administrator shall deem appropriate, including,
without limitation, provisions that relate to the Participant's
ability to exercise an Option in whole or in part to the passage
of time or the achievement of specific goals or the occurrence of
certain events, as specified by the Plan Administrator.
6.3 MANNER OF EXERCISE. Subject to the limitations and conditions
of the Plan or the Option Agreement, an Option shall be exercisable, in
whole or in part, from time to time, by giving written notice of
exercise to the Chief Financial Officer of the Company, which notice
shall specify the number of whole shares of Common Stock to be
purchased and shall be accompanied by (a) payment in full to the
Company of the exercise price of the whole number of shares to be
purchased; plus (b) payment in full of such amount as the Company shall
determine to be sufficient to satisfy any liability it may have for any
withholding of federal, state or local income or other taxes incurred
by reason of the exercise of the Option; and (c) representations
meeting the requirements of Section 11.4 if requested by the Company.
The conditions of this section shall be satisfied at the time that the
Option or any part thereof is exercised, and no shares of Common Stock
shall be issued or delivered until such conditions have been satisfied
by the Participant.
6.4 PAYMENT OF OPTION PRICE. Payment for shares and withholding taxes
shall be in the form of either (a) cash, (b) a certified or bank
cashier's check to the order of the Company, or (c) shares of the
Common Stock, properly endorsed to the Company, in an amount the Fair
Market Value of which on the date of receipt by the Company equals or
exceeds the aggregate option price of the shares with respect to
which the Option is being exercised, provided that such shares have
been held outright by the Participant for at least six months,
(d) any other form of legal consideration that may be acceptable to
the Plan Administrator, or (e) in any combination thereof; provided,
however, that no payment may be made in shares of Common Stock unless
the Plan Administrator has approved of payment in such form by such
Participant with respect to the Option exercise in question. If the
Common Stock is registered under Section 12 of the Exchange Act at the
time an Option is exercised and if the procedure stated in this sentence
is expressly permitted by the Plan Administrator, and to the extent the
option is exercised for vested shares, then payment may also be made
through a special sale and remittance procedure pursuant to which the
Participant shall concurrently provide irrevocable written instructions
(1) to a brokerage firm designated by the Company 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 aggregate exercise price payable for the purchased shares
plus all applicable withholding taxes, and (2) to the Company to
deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
ARTICLE7.
STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. The Plan Administrator may from time to time in
its discretion determine which of the eligible Employees, Directors and
Consultants should receive SARs, the number of shares subject to such
SARs, and the dates on which such SARs are to be granted. The grant of
the SAR shall be evidenced in a written Stock Appreciation Rights Award
Agreement. The Stock Appreciation Rights Award Agreement shall state
the number of shares of SARs being granted, as designated by the Plan
Administrator, the exercise price per share of each SAR, and the
duration of the SAR.
7.2 AWARD AGREEMENT. Each SAR granted under the Plan shall be evidenced
by a written Stock Appreciation Right Award Agreement setting forth the
terms upon which the SAR is granted. Each Stock Appreciation Right Award
Agreement shall state the number of shares of Common Stock, as designated
by the Plan Administrator, to which that SAR pertains. More than one
SAR, and any combination of Options, SARs and Restricted Stock Awards,
may be granted to an eligible person.
(a) SAR Exercise Price. The exercise price per share of Common
Stock under each SAR shall be determined by the Plan Administrator shall
not be less than 100% of the Fair Market Value (determined as the day
the SAR is granted ) of the Common Stock subject to the SAR, and shall
be stated in the Stock Appreciation Right Award Agreement. The exercise
price of the Common Stock under each SAR may not be Repriced.
(b) Duration of SARs. Each SAR shall be of a duration as
specified in the Stock Appreciation Right Award Agreement; provided,
however, that the term of any SAR shall be no more than ten years from
the date on which the SAR is granted and shall be subject to early
termination as provided herein.
(c) Vesting. Unless otherwise stated in the Stock Appreciation
Right Award Agreement, SARs shall be fully vested. Any vesting
schedule may be waived or accelerated by the Plan Administrator at any
time.
(d) Rights as Stockholder. A Participant shall have no rights
as a stockholder of the Company with respect to any shares of Common
Stock covered by a SAR until the date of the issuance of the stock
certificate for such shares.
(e) Other Terms and Conditions. The Stock Appreciation Right A
ward Agreement may contain such other provisions, which shall not be
inconsistent with the Plan, as the Plan Administrator shall deem
appropriate, including, without limitation, provisions that relate to
the Participant's ability to exercise an SAR in whole or in part to
the passage of time or the achievement of specific goals or the
occurrence of certain events, as specified by the Plan Administrator.
7.3 MANNER OF EXERCISE. Subject to the limitations and conditions of
the Plan or the Stock Appreciation Right Award Agreement, a SAR shall
be exercisable, in whole or in part, from time to time, by giving
written notice of exercise to the Chief Financial Officer of the
Company, which notice shall specify the number of whole shares of
Common Stock to be purchased and shall be accompanied by (a) payment
in full of such amount as the Company shall determine to be sufficient
to satisfy any liability it may have for any withholding of federal,
state or local income or other taxes incurred by reason of the exercise
of the SAR; and (b) representations meeting the requirements of
Section 11.4 if requested by the Company. The conditions of this
section shall be satisfied at the time that the SAR or any part thereof
is exercised, and no shares of Common Stock shall be issued or delivered
until such conditions have been satisfied by the Participant. The
effective date of exercise of a SAR shall be the date on which the
Company shall have received notice from the Participant of the
exercise thereof. Upon the exercise of SARs, the Participant shall
receive a number of shares of Common Stock having a Fair Market Value
equal to the Fair Market Value on the date of exercise of such SAR of
the number of shares of Common Stock with respect to which such SAR
shall have been exercised over the aggregate exercise price of the SAR
or portion thereof exercised.
ARTICLE8.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
8.1 GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Plan
Administrator may from time to time in its sole discretion determine
which of the eligible Employees, Directors, or Consultants should
receive grants of Restricted Stock and/or Restricted Stock Units, the
number of shares with respect to which Restricted Stock or RSUs are
to be granted to each such eligible Employee, Director, and
Consultant, the dates on which such Awards are to be granted, and the
restrictions applicable to each Award grant.
8.2 AWARD AGREEMENT. Each Restricted Stock Award or RSU granted under
the Plan shall be evidenced by a written Award Agreement setting forth
the terms upon which the Award is granted. Each Award Agreement shall
state the number of shares of Common Stock, as designated by the Plan
Administrator, to which that Award pertains; the price, if any, to be
paid by the Participant for the shares; and the restrictions applicable
to each grant. More than one Award may be granted to an eligible
person. The terms of any Award Agreement need not be identical to the
terms of any other Award Agreement applicable to other grants under the
Plan to the same or other Participants. No Restricted Stock or RSU
shall be issued under the Plan until the Participant provides the
Company with a signed Restricted Stock or RSU Award Agreement in the
form specified by the Plan Administrator with respect to the grant of
such Restricted Stock or RSU to that Participant. No shares of Common
Stock shall be issued under the Plan with respect to a Restricted
Stock Unit Award until the Participant provides the Company with a
signed Award Agreement and satisfies the conditions described in that
Award Agreement.
(a) Issuance of Restricted Stock. The right to receive
Restricted Stock shall be conditioned upon the delivery of the purchase
price, if any, by the Participant by (i) payment in full, in cash,
check, or by certified or bank cashier's check to the Company (or
payment by such other consideration as shall be permitted by the Plan
Administrator) or, upon approval of the Plan Administrator, shares of
the Common Stock, properly endorsed to the Company, in an amount the
Fair Market Value of which on the date of receipt by the Company
equals or exceeds the aggregate purchase price of the shares;
(ii) payment in similar form equal to such amount as the Company
shall determine to be sufficient to satisfy any liability it may
have for any withholding of federal, state or local income or other
taxes incurred by reason of the vesting of the Restricted Stock or
the Participant's election under Code Section 83(b);
(iii) a representation meeting the requirements of Section 11.4
if requested by the Plan Administrator; and (iv) a copy of the
executed Restricted Stock Award Agreement in the form specified by
the Plan Administrator with respect to the grant of Restricted
Stock to that Participant.
(b) Purchase Price. Restricted Stock may be granted under
the Plan without the payment of a purchase price. If a grant is
made with a purchase price, the purchase price of the Restricted
Stock may not be Repriced.
(c) Vesting. Unless otherwise stated in the Restricted Stock
Award Agreement or Restricted Stock Unit Award Agreement, as
applicable, the Award shall be fully vested. Any vesting schedule may
be waived or accelerated by the Plan Administrator at any time.
(d) Redemption of RSUs. Subject to the limitations and
conditions of the Plan or the Restricted Stock Unit Award Agreement,
RSUs shall be redeemed, in whole or in part, from time to time,
according to the terms of the applicable Restricted Stock Unit Award
Agreement, which notice shall specify the number of whole shares of
Common Stock to be issued; provided that the Participant provides the
Company (a) payment in full of such amount as the Company shall
determine to be sufficient to satisfy any liability it may have for any
withholding of federal, state or local income or other taxes incurred
by reason of the redemption of the RSU; and (b) representations
meeting the requirements of Section 11.4 if requested by the
Company. The conditions of this section shall be satisfied at the
time that the RSU or any part thereof is redeemed, and no shares of
Common Stock shall be issued or delivered until such conditions have
been satisfied by the Participant.
(e) Stock Certificates. The stock certificate or certificates
representing the Restricted Stock shall be registered in the name of
the Participant to whom such Restricted Stock shall have been granted.
Such certificates shall remain in the custody of the Company and the
Participant shall deposit with the Company stock powers or other
instruments of assignment, each endorsed in blank, so as to permit
retransfer to the Company of all or a portion of the Restricted Stock
that shall be forfeited or otherwise not become vested in accordance
with the Plan and the applicable Restricted Stock Award Agreement.
(f) Restrictions and Rights. Restricted Stock shall constitute
issued and outstanding shares of Common Stock for all corporate
purposes. The Participant shall have the right to vote such Restricted
Stock, to receive and retain all regular cash dividends and such other
distributions, as the Board of Directors may, in its discretion,
designate, pay or distribute on such Restricted Stock, and to exercise
all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, except as set forth in this
Article 8. The Restricted Stock Award Agreement or Restricted Stock
Unit Award Agreement, as applicable, may contain such other provisions,
which shall not be inconsistent with the Plan, as the Plan
Administrator shall deem appropriate.
(g) Forfeiture. If the Participant fails to satisfy any
applicable restrictions (including without limitation any vesting
requirements), terms and conditions set forth in this Plan or in the
Restricted Stock Award Agreement or Restricted Stock Unit Award
Agreement, as applicable, for any reason, any Restricted Stock or
RSUs held by such Participant and affected by such conditions shall
be forfeited to the Company in return for such consideration as shall
be specified in the applicable Award Agreement. The Company and its
officers are authorized to reflect such forfeiture of Restricted
Stock on the Company's stock ledger.
ARTICLE 9.
TERMINATION OF CONTINUOUS SERVICE
9.1 TERMINATION OF CONTINUOUS SERVICE FOR OPTIONS AND SARS. This
Section 9.1 applies only to Options and SARs. Any vesting of any
Award shall cease upon termination of the Participant's Continuous
Service, and any Award shall be exercisable only to the extent that
it was exercisable on the date of such termination of Continuous
Service. Any Award not exercisable as of the date of termination,
and any Award or portions thereof not exercised within the period
specified herein, shall terminate.
(a) Termination Other than for Cause. Subject to any
limitations set forth in the agreement for an Award, and provided
that the notice of exercise is provided as required by the Plan prior
to the expiration of the Award, the Participant shall be entitled to
exercise the Award (i) during the Participant's Continuous Service,
and (ii) for a period of three months after the date of termination
of the Participant's Continuous Service for reason other than Cause,
or such longer period as may be set forth in the Award Agreement.
(b) Termination by Death. Notwithstanding subsection (a), if a
Participant's Continuous Service should terminate as a result of the
Participant's death, or if a Participant should die within a period of
three months after termination of the Participant's Continuous Service
under circumstances in which subsection (a) would permit the exercise
of the Award following termination, the personal representatives of the
Participant's estate or the person or persons who shall have acquired
the Award from the Participant by bequest or inheritance may exercise
the Award at any time within one year after the date of death, but not
later than the expiration date of the Award.
(c) Termination by Disability. Notwithstanding subsection (a),
if a Participant's Continuous Service should terminate by reason
of the Participant's Disability, the Participant may exercise the
Award at any time within one year after the date of termination but
not later than the expiration date of the Award.
(d) Termination for Cause; Breach of Covenant Not to Compete
or Nondisclosure Agreement. Notwithstanding anything herein to the
contrary, and unless otherwise provided by the Award Agreement, all
unexercised Awards granted to the Participant shall terminate
immediately if the Participant is terminated for Cause, breaches any
obligation under a covenant not to compete with the Company or any of
its Subsidiaries, or breaches any obligation under an agreement not to
use or disclose proprietary information obtained from or through the
Company or any of its Subsidiaries, upon such occurrence.
(e) Extension of Option Termination Date. The Plan
Administrator, in its sole discretion, may extend the termination date
of an Award granted under the Plan without regard to the preceding
provisions of this section. Such extension may be made in the Award
Agreement as originally executed or by amendment to the Award
Agreement, either prior to or following termination of a Participant's
Continuous Service. The Plan Administrator shall have no power to
extend the termination date of an Incentive Stock Option beyond the
periods provided in subsections (a), (b) and (c) prior to the
termination of the Participant's Continuous Service or without the
approval of the Participant, which may be granted or withheld in the
Participant's sole discretion. Any extension of the termination date
of an Incentive Stock Option may be deemed to be the grant of a new
Option for purposes of the Code.
9.2 TERMINATION OF CONTINUOUS SERVICE FOR RESTRICTED STOCK AND RSUS.
In the event that a Participant terminates Continuous Service with the
Company for any reason, including Disability of the Participant, any
unvested Restricted Stock or RSUs held by such Participant as of the
date of such termination of Continuous Service shall be forfeited to
the Company as of the date of termination of Continuous Service unless
otherwise provided in the applicable Award Agreement.
ARTICLE 10.
CHANGE IN CONTROL
10.1 SUBSTITUTION OF AWARDS. In the event of a Change in Control
Event, any surviving corporation or acquiring corporation may assume
any outstanding Award under the Plan or may substitute similar stock
awards on an equitable basis of appropriate stock of the Company, or
of the surviving corporation or acquiring corporation, which will be
issuable in respect of the Common Stock (including an award to acquire
the same consideration paid to the stockholders in the Change in
Control Event ) for those outstanding under the Plan.
10.2 ACCELERATION OF VESTING. In the event of a Change in Control
Event, then the vesting of Awards held by Participants whose Continuous
Service has not terminated (and, if applicable, the time during which
such Awards may be exercised) shall be accelerated in full. In
anticipation of a Change in Control Event, the Plan Administrator may,
upon written notice to all Participants holding Awards, provide that
all unexercised Awards must be exercised upon the Change in Control
Event or within a specified number of days of the date of such change
in Control Event or such Awards will terminate. In response to such
notice, a Participant may make an irrevocable election to exercise the
Participant's Award contingent upon and effective as of the effective
date stated in such notice. Any Award shall terminate if not
exercised upon the time frame stated in the notice. The Plan
Administrator may, in its sole discretion, accelerate the vesting of
any outstanding Award in connection with any proposed or completed
Change in Control Event. Prior to such a Change in Control Event,
the Plan Administrator may, in its sole discretion, terminate any or
all unexercised Awards (after acceleration of vesting) in exchange for
consideration similar to that received by stockholders of Common Stock
of the Company in the Change in Control Event, less the exercise price
required under such Awards. Notwithstanding this Section 10.2 and
Section 1.4, there shall not be a Change of Control Event for purposes
of this Section 10.2 (including, without limitation, any accelerated
vesting) if (a) the transaction or transactions which would otherwise
result in a Change of Control Event are not a complete dissolution or
liquidation of the Company or stockholder approval of a complete
dissolution or liquidation, (b) the persons and entities who are
stockholders of the Company immediately before such transaction or
transactions continue to own, directly or indirectly, more than 2/3 of
the outstanding voting securities of the corporation resulting from
such transaction or transactions in substantially the same proportion
as their ownership of the voting securities of the Company outstanding
immediately before such transaction or transactions and (c) the Company
and its Subsidiaries continue operations of an active business
immediately after such transaction or transactions.
ARTICLE 11.
ISSUANCE OF SHARES
11.1 TRANSFER OF SHARES TO PARTICIPANT. As soon as practicable after
(a) a Participant has given the Company written notice of exercise of
an Option and has otherwise met the requirements of Section 6.3, with
respect to an Option, or (b) a Participant has satisfied any applicable
restrictions, terms and conditions set forth in this Plan or in the
Stock Appreciation Award Agreement with respect to a SAR, or (c) a
Participant has satisfied any applicable restrictions, terms and
conditions set forth in this Plan or in the Restricted Stock Award
Agreement with respect to a Restricted Stock Award, or (d) a
Participant has satisfied any applicable restrictions, terms and
conditions set forth in this Plan or in the Restricted Stock Unit
Award Agreement with respect to an RSU, the Company shall register a
certificate in such Participant's name for the number of shares of
Common Stock as to which the Award has been exercised or satisfied and
shall, upon the Participant's request, deliver such certificate to the
Participant. In no event shall the Company be required to transfer
fractional shares to the Participant, and in lieu thereof, the Company
may pay an amount in cash equal to the Fair Market Value of such
fractional shares on the date of exercise or vesting, as applicable.
11.2 LEGEND. All certificates evidencing shares of Common Stock
originally issued pursuant to this Plan or subsequently transferred
to any person or entity, and any shares of capital stock received in
respect thereof, may bear such legends and transfer restrictions as
the Company shall deem reasonably necessary or desirable, including,
without limitation, legends restricting transfer of the Common Stock
until there has been compliance with federal and state securities laws
and until the Participant or any other holder of the Common Stock has
paid the Company such amounts as may be necessary in order to satisfy
any withholding tax liability of the Company.
11.3 COMPLIANCE WITH LAWS. If the issuance or transfer of shares by the
Company would for any reason, in the opinion of counsel for the Company,
violate any applicable federal or state laws or regulations, the Company
may delay issuance or transfer of such shares to the Participant until
compliance with such laws can reasonably be obtained. In no event shall
the Company be obligated to effect or obtain any listing, registration,
qualification, consent or approval under any applicable federal or state
laws or regulations or any contract or agreement to which the Company is
a party with respect to the issuance of any such shares. If, after
reasonable efforts, the Company is unable to obtain the authority that
counsel for the Company deems necessary for the lawful issuance and
sale of shares upon exercise of Options or vesting of an Award under
the Plan, the Company shall be relieved from any liability for failure
to issue and sell shares upon exercise of such Options or vesting of
an Award unless and until such authority is obtained.
11.4 INVESTMENT REPRESENTATION. The Company may require any
Participant, as a condition precedent to exercising any Option or
acquiring or exercising any SAR, Restricted Stock, or RSU, to provide
a written representation providing assurances satisfactory to the
Company (a) as to the Participant's knowledge and experience in
financial and business matters and/or that the Participant has engaged
a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters,
(b) that the Participant is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of acquiring
the Common Stock or other security; and (c) that the Participant is
acquiring the stock subject to the Option, SAR, Restricted Stock or
RSU for such person's own account and not with any present intention
of selling or otherwise distributing the stock. Such a representation
shall not be required if (1) the issuance of the shares pursuant to
an Award has been registered under a then currently effective
registration statement under the Securities Act, or (2) as to any
particular requirement, a determination is made by counsel for the
Company that such representation is not required.
ARTICLE 12.
AMENDMENT AND TERMINATION
12.1 AMENDMENT OF THE PLAN. The Board of Directors may at any time and
from time to time alter, amend, suspend or terminate the Plan or any
part thereof as it may deem proper, except that no such action shall
diminish or impair the rights under an Award previously granted.
Unless the shareholders of the Company shall have given their approval,
the total number of shares which may be issued under the Plan shall not
be increased, except as provided in Section 4.4, and no amendment
shall be made which reduces exercise price for the grant of any Option,
SAR or RSU or purchase price for the grant of any Restricted Stock as
required by the Plan, except as provided in Section 4.4, or which
materially modifies the requirements as to eligibility under the Plan
to receive any Award. Subject to the terms and conditions of the Plan,
the Plan Administrator may modify, extend or renew outstanding Awards
granted under the Plan, except that no such action shall diminish or
impair the rights under an Award previously granted without the
consent of the Participant.
12.2 TERMINATION OF THE PLAN. This Plan shall not have any fixed
Termination Date. The Board of Directors may at any time suspend or
terminate the Plan. No such suspension or termination shall diminish
or impair the rights under an Award previously granted without the
consent of the Participant. Notwithstanding the foregoing, no Award
under the Plan may be granted any time after ten years after the
Effective Date of the Plan.
ARTICLE 13.
GENERAL PROVISIONS
13.1 TAX OBLIGATIONS.
(a) General. To the extent provided by the terms of an Award
Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of
Common Stock under an Award by any of the following means (in addition
to the right to withhold from any compensation paid to the Participant
by the Company, its Parent or Subsidiary) or by a combination of such
means: (i) tendering a cash payment; (ii) if and only if permitted
by the Plan Administrator, authorizing the Company to withhold shares
of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common
Stock under the Award; provided, however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax
required to be withheld by law (or such lower amount as may be
necessary to avoid variable award accounting); or (iii) if and only if
permitted by the Plan Administrator, delivering to the Company owned
and unencumbered shares of Common Stock.
(b) Code Section 409A. To the extent required to avoid
penalties under Code Section 409A, the Plan Administrator intends any
Award issued under the Plan to comply in all respects with Code
Section 409A and related regulations and intends to interpret and
administer any Award issued under the Plan in accordance with Code
Section 409A. Notwithstanding any provision to the contrary, all taxes
associated with participation in the Plan, including any liability
imposed under Code Section 409A, shall be borne by the Participant.
13.2 NO EMPLOYMENT RIGHTS. Nothing contained in this Plan or in any
Award granted under the Plan shall confer upon any Participant any
right with respect to the continuation of such Participant's Continuous
Service by the Company or any Subsidiary or interfere in any way with
the right of the Company or any Subsidiary, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate
such Continuous Service or to increase or decrease the compensation of
the Participant from the rate in existence at the time of the grant of
the Award.
13.3 NONTRANSFERABILITY OF AWARDS. Awards granted pursuant to the
Plan are not transferable by the Participant other than by will or the
laws of descent and distribution and shall be exercisable during the
Participant's lifetime only by the Participant. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of the Awards
contrary to the provisions hereof, or upon the levy of any attachment
or similar process upon the Award, the Award shall immediately become
null and void. Notwithstanding the foregoing, to the extent specified
in an Award Agreement, an Award may be transferred by a Participant
solely to (1) the Participant's immediate family (children,
grandchildren, or spouse) or trusts or other entities established for
the benefit of the Participant's immediate family; or (2) the trust
underlying a nonqualified deferred compensation plan established and
maintained by the Company, to the extent specifically permitted in the
trust agreement. Any such transfer of an Incentive Stock Option shall
result in the conversion of the Option to a Nonqualified Stock Option.
13.4 PARTICIPANTS IN FOREIGN COUNTRIES. The Plan Administrator shall
have the authority to adopt such modifications, procedures and subplans
as may be necessary or desirable to comply with provisions of the laws
of foreign countries in which the Company may operate to assure the
viability of the benefits from Awards granted to Participants employed
in such countries and to meet the objectives of the Plan.
13.5 OTHER EMPLOYEE BENEFITS. Unless so provided by the applicable
plan, the amount of compensation deemed to be received by a Participant
as a result of the exercise of an Award shall not constitute earnings
with respect to which any other employee benefits of the person are
determined, including without limitation benefits under any pension,
profit sharing, life insurance, or disability or other salary
continuation plan.
13.6 CONFIDENTIALITY OF INFORMATION. Information regarding the grant
of Awards under this Plan is confidential and may not be shared with
anyone other than the Participant's immediate family and personal
financial advisor and other person(s) designated by Participant by
power of attorney or assignment.
13.7 SEVERABILITY. If any provision of this Plan is held by any
court or governmental authority to be illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining
provisions. Instead, each provision held to be illegal or invalid
shall, if possible, be construed and enforced in a manner that will
give effect to the terms of such provision to the fullest extent
possible while remaining legal and valid.
13.8 GOVERNING LAW AND VENUE. This Plan, and all Awards granted
under this Plan, shall be construed and shall take effect in accordance
with the laws of the State of Colorado without regard to conflicts of
laws principles. Resolution of any disputes under the Plan or any
Award under the Plan shall only be held in courts in Denver County,
Colorado.
13.9 USE OF PROCEEDS. Any cash proceeds received by the Company from
the sale of shares of Common Stock under the Plan shall be used for
general corporate purposes.
Adopted as of the Effective Date as first set forth above.