Exhibit 10.2
CALAMP CORP.
2004 INCENTIVE STOCK PLAN
1. PURPOSE OF THE PLAN
The purpose of the CalAmp Corp. 2004 Stock Incentive Plan (the
"Plan") is to provide a flexible framework that will permit the Board of
Directors to develop and implement a variety of stock-based programs based on
changing needs of CalAmp Corp. (together with its subsidiaries, the
"Company"), its competitive market, and regulatory climate. The Board of
Directors and senior management of the Company believe it is in the best
interest of the Company's stockholders for officers, employees, and members
of the Board of Directors of the Company to own stock in the Company and that
such ownership will enhance the Company's ability to attract highly qualified
personnel, to strengthen its retention capabilities, to enhance the long-term
performance of the Company and its subsidiaries, to vest in Participants a
proprietary interest in the success of the Company and its subsidiaries, and
to provide certain "performance-based compensation" within the meaning of
Section 162(m)(4)(C) of the Code.
Upon its Effective Date, as defined herein, the Plan replaces the
Company's 1999 Stock Option Plan. Beginning on such date, the 1999 Stock
Option Plan becomes frozen and stock options can no longer be granted
thereunder.
2. DEFINITIONS
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "Award Agreement" shall mean the written agreement between the
Company and a Participant or other document approved by the Committee
evidencing an Incentive Award.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Cause" means the occurrence or existence of any of the
following with respect to a Participant, as determined by the Committee: (i)
unsatisfactory performance of duties or responsibilities, provided that the
Company has given the participant written notice specifying the
unsatisfactory performance of his or her duties and responsibilities and
afforded the participant reasonable opportunity for cure, all as determined
by the Committee; (ii) a material breach by the participant of any of his or
her material obligations under any employment agreement between the
participant and the Company of which the Company has given participant
written notice; (iii) willful failure to follow any lawful directive of the
Company consistent with the participant's position and duties, after written
notice and reasonable opportunity to cure, all as determined by the
Committee; (iv) a material breach by the participant of his or her duty not
to engage in any transaction that represents, directly or indirectly, self-
dealing with the Company (or any Subsidiary) that has not been approved by a
majority of the disinterested directors of the Board or of the terms of his
or her employment; (v) commission of any willful or intentional act by the
participant that reasonably could be expected to injure materially the
property, reputation, business or business relationships of the Company or
its customers; (vi) the conviction or the plea of nolo contendere or the
equivalent in respect of a felony involving moral turpitude; or (vii) the
abuse of any controlled substance or the abuse of alcohol or any other non-
controlled substance which the Committee reasonably determines renders the
participant unfit to serve in his or her capacity as an officer or employee
of the Company (or any Subsidiary).
(d) "Change of Control" shall mean the consummation of the first to
occur of (i) the sale, lease or other transfer of all or substantially all of
the assets of the Company to any person or group (as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended); (ii)
the adoption by the stockholders of the Company of a plan relating to the
liquidation or dissolution of the Company; (iii) the merger or consolidation
of the Company with or into another entity or the merger of another entity
into the Company or any Subsidiary thereof with the effect that immediately
after such transaction the stockholders of the Company immediately prior to
such transaction (or their Related parties) hold less than 50% of the total
voting power of all securities generally entitled to vote in the election of
directors, managers or trustees of the entity surviving such merger of
consolidation; or (iv) the acquisition by any person or group of more than
50% of the voting power of all securities of the Company generally entitled
to vote in the election of directors of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Compensation Committee of the Board
of Directors or such other committee as the Board of Directors shall appoint
from time to time to administer the Plan; provided, that the Committee shall
at all times consist of two or more persons, each of whom shall be a member
of the Board of Directors. To the extent required for transactions under the
Plan to qualify for the exemptions available under Rule 16b-3 (as defined
herein), members of the Committee (or any subcommittee thereof) shall be
"non-employee directors" within the meaning of Rule 16b-3. To the extent
required for compensation realized from Incentive Awards (as defined herein)
under the Plan to be deductible by the Company pursuant to Section 162(m) of
the Code, members of the Committee (or any subcommittee thereof) shall be
"outside directors" within the meaning of such section.
(g) "Company Stock" shall mean the common stock, par value $.01 per
share, of the Company.
(h) "Disability" shall mean: (1) any physical or mental condition
that would qualify a Participant for a disability benefit under the long-term
disability plan maintained by the Company and applicable to him or her or (2)
when used in connection with the exercise of an Incentive Stock Option (as
defined herein) following termination of employment, disability within the
meaning of Section 422(e)(3) of the Code.
(i) "Division" shall mean a portion of the Company's overall
business that is organized and managed as a separate operating unit or
business segment of the Company.
(j) "Effective Date" shall mean July 30, 2004.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(l) The "Fair Market Value" of a share of Company Stock with respect
to any day shall be the closing price of Company Stock on the immediately
preceding business day as reported on the Nasdaq National Market or on such
other securities exchange or reporting system as may be designated by the
Committee. In the event that the price of a share of Company Stock shall not
be so reported, the Fair Market Value of a share of Company Stock shall be
determined by the Committee in its absolute discretion.
(m) "Incentive Award" shall mean an Option, SAR, share of Restricted
Stock, share of Phantom Stock or Stock Bonus (each as defined herein) granted
pursuant to the terms of the Plan.
(n) "Incentive Stock Option" shall mean an Option that is an
"incentive stock option" within the meaning of Section 422 of the Code.
(o) "Issue Date" shall mean the date established by the Committee on
which Certificates representing shares of Restricted Stock shall be issued by
the Company pursuant to the terms of Section 9(e).
(p) "Non-Qualified Stock Option" shall mean an Option that is not an
Incentive Stock Option.
(q) "Option" shall mean an option to purchase shares of Company
Stock granted pursuant to Section 7.
(r) "Participant" shall mean an employee, member of the Board of
Directors, or consultant of the Company to whom an Incentive Award is granted
pursuant to the Plan and, upon his or her death, his or her successors,
heirs, executors and administrators, as the case may be.
(s) "Performance Goal" shall mean vesting targets which may be
established by the Committee from time to time and documented in writing in
connection with an Incentive Award. Such Performance Goals include targets
expressed in terms of: revenue; earnings before interest, taxes,
depreciation and amortization (EBITDA); operating income; pre-or after-tax
income; earnings per share, net cash flow; net cash flow per share; net
income; return on sales; return on equity; return on total capital; return on
assets; return on net assets employed; economic value added; share price
performance; total shareholder return; improvement in or attainment of
specified cost and expense levels; and improvement in or attainment of
specified working capital levels, applied to the Company (or any Subsidiary
or Division) as a whole, or any unit thereof, or as compared against a peer
group of companies as determined by the Committee.
(t) A share of "Phantom Stock" shall mean the right, granted
pursuant to Section 10, to receive in cash the Fair Market Value of a share
of Company Stock.
(u) A share of "Restricted Stock" shall mean a share of Company
Stock which is granted pursuant to the terms of Section 9 hereof and which is
subject to the restrictions set forth in Section 9(c).
(v) "Retirement" means termination of employment from the Company
or, in the case of a member of the Board of Directors, termination of service
to the Company, by a Participant whose: (i) age plus years of service with
the Company equal at least 65; and (ii) years of service with the Company
equal at least five (5).
(w) "Rule 16b-3" shall mean the rule thus designated as promulgated
under the Exchange Act.
(x) "SAR" shall mean a stock appreciation right granted pursuant to
Section 8.
(y) "Stock Bonus" shall mean a bonus payable in shares of Company
Stock granted pursuant to Section 11.
(z) "Subsidiary" shall mean any corporation or other entity in
which, at the time of reference, the Company owns, directly or indirectly,
stock or similar interests comprising more than 50 percent of the combined
voting power of all outstanding securities of such entity.
(aa) "Units" shall mean the aggregate number of Options, SARS,
shares of Restricted Stock, shares of Phantom Stock and Stock Bonuses awarded
to an individual Participant in an annual period, except that each share of
Restricted Stock, Phantom Stock or Bonus Stock awarded shall count as one and
two-tenths (1.2) Units.
(bb) "Vesting Date" shall mean the date established by the Committee
on which a share of Restricted Stock or Phantom Stock may vest.
3. STOCK SUBJECT TO THE PLAN
(a) Shares Available for Awards
Subject to adjustment as provided in Section 3(c), the total number
of shares of Company Stock with respect to which Incentive Awards may be
granted shall not exceed 3,000,000 shares. Such shares may be authorized but
unissued Company Stock or authorized and issued Company Stock held in the
Company's treasury or acquired by the Company for the purposes of the Plan.
The Committee may direct that any stock certificate evidencing shares issued
pursuant to the Plan shall bear a legend setting forth such restrictions on
transferability as may apply to such shares pursuant to the Plan.
The grant of an SAR that by its terms is to be settled in cash shall
not reduce the number of shares of Company Stock with respect to which
Incentive Awards may be granted pursuant to the Plan. Any Company Stock
issued in connection with an award of Restricted Stock, Phantom Stock, or
Bonus Stock shall be counted against the 3,000,000 share limit described in
the preceding paragraph as one and two-tenths (1.2) shares of Common Stock
for every one share of Common Stock issued in connection with such award.
(b) Individual Limitation
Subject to adjustment as provided in Section 3(c) hereof, the total
number of Incentive Awards awarded to any one employee during any fiscal year
of the Company, shall not exceed 300,000 Units. Determinations under the
preceding sentence shall be made in a manner that is consistent with
Section 162(m) of the Code and regulations promulgated thereunder. The
provisions of this Section 3(b) shall not apply in any circumstance with
respect to which the Committee determines that compliance with Section 162(m)
of the Code is not necessary.
(c) Adjustment for Change in Capitalization
If there is any change in the outstanding shares of Company Stock by
reason of a stock dividend or distribution, stock split-up, recapitalization,
combination or exchange of shares, or by reason of any merger, consolidation,
spinoff or other corporate reorganization in which the Company is the
surviving corporation, the number of shares available for issuance both in
the aggregate and with respect to each outstanding Incentive Award, the price
per share under each outstanding Incentive Award, and the limitation set
forth in Section 3(b), shall be proportionately adjusted by the Committee,
whose determination shall be final and binding. After any adjustment made
pursuant to this Section 3(c), the number of shares subject to each
outstanding Incentive Award shall be rounded to the nearest whole number.
(d) Re-use of Shares
The following shares of Company Stock shall again become available
for Incentive Awards: any shares subject to an Incentive Award that remain
unissued upon the cancellation or termination of such Award for any reason
whatsoever; any shares of Restricted Stock forfeited; and, if allowed by the
Committee as a form of payment of the Option exercise price or the required
tax withholding thereon, any shares delivered by a Participant to the Company
and any shares withheld and retained by the Company.
(e) No Repricing
Absent prior stockholder approval, neither the Committee nor the
Board of Directors shall have any authority, with or without the consent of
the affected holders of Incentive Awards, to "reprice" an Incentive Award
after the date of its initial grant with a lower exercise price in
substitution for the original exercise price. This paragraph may not be
amended, altered or repealed by the Board of Directors or the Committee
without approval of the stockholders of the Company.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall
from time to time designate the employees of the Company who shall be granted
Incentive Awards.
The Committee shall have full authority to administer the Plan,
including authority to interpret and construe any provision of the Plan and
the terms of any Incentive Award issued under it and to adopt such rules and
regulations for administering the Plan as it may deem necessary or
appropriate. The Committee shall determine whether an authorized leave of
absence shall constitute termination of employment. Decisions of the
Committee shall be final and binding on all parties. The Committee's
determinations under the Plan may, but need not, be uniform and may be made
on a Participant-by-Participant basis (whether or not two or more
Participants are similarly situated). Notwithstanding anything to the
contrary contained herein, the Board of Directors may, in its sole
discretion, at any time and from time to time, resolve to administer the
Plan, in which case the term "Committee" as used herein shall be deemed to
mean the Board of Directors.
The Committee may, in its absolute discretion, without amendment to
the Plan, (i) accelerate the date on which any Option or SAR granted under
the Plan becomes exercisable, (ii) waive or amend the operation of Plan
provisions respecting exercise after termination of employment or otherwise
adjust any of the terms of such Option or SAR and (iii) accelerate the
Vesting Date or Issue Date, or waive any condition imposed hereunder, with
respect to any share of Restricted Stock or Phantom Stock or otherwise adjust
any of the terms applicable to such share.
No member of the Committee shall be liable for any action, omission
or determination relating to the Plan, and the Company shall indemnify and
hold harmless each member of the Committee and each other director or
employee of the Company to whom any duty or power relating to the
administration or interpretation of the Plan has been delegated against any
cost or expense (including counsel fees) or liability (including any sum paid
in settlement of a claim with the approval of the Committee) arising out of
any action, omission or determination relating to the Plan, unless, in either
case, such action, omission or determination was taken or made by such
member, director or employee in bad faith and without reasonable belief that
it was in the best interests of the Company.
5. ELIGIBILITY
The persons who shall be eligible to receive Incentive Awards
pursuant to the Plan shall be such officers and salaried employees of the
Company and its Subsidiaries (including employees who are also directors and
prospective salaried employees conditioned on their becoming salaried
employees), non-employee members of the Board of Directors, and such
consultants to the Company and its Subsidiaries as the Committee shall select
in its discretion.
6. AWARDS UNDER THE PLAN; AWARD AGREEMENTS
The Committee may grant Options, SARS, shares of Restricted Stock,
shares of Phantom Stock and Stock Bonuses, in such amounts and with such
terms and conditions as the Committee shall determine, subject to the
provisions of the Plan.
Each Incentive Award granted under the Plan (except an unconditional
Stock Bonus) shall be evidenced by an Award Agreement which shall contain
such provisions as the Committee may in its sole discretion deem necessary or
desirable. By accepting an Incentive Award, a Participant thereby agrees that
the Incentive Award shall be subject to all of the terms and provisions of
the Plan and the applicable Award Agreement.
7. OPTIONS
(a) Identification of Options
Each Option shall be clearly identified in the applicable Award
Agreement as either a Non-Qualified Stock Option or an Incentive Stock
Option. In the absence of such identification, an Option shall be deemed to
be a Non-Qualified Stock Option.
(b) Exercise Price
Each Award Agreement with respect to an Option shall set forth the
amount (the "exercise price") payable by the holder to the Company upon
exercise of the Option. The exercise price per share shall be determined by
the Committee but shall in no event be less than the Fair Market Value of a
share of Company Stock on the date the Option is granted, except as permitted
in connection with the issuance of Options in a transaction to which Section
424(a) of the Code applies, or to the extent any compensation payable in
respect of an Option is intended to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code.
(c) Term and Exercise of Options
(1) Unless the applicable Award Agreement provides
otherwise, an Option shall become cumulatively exercisable as to 25% of the
shares covered thereby on each of the first, second, third and fourth
anniversaries of the date of grant. By way of example and not by way of
limitation, the Committee may require, as a condition to the vesting of any
Option, that the Participant or the Company achieves such Performance Goals
as the Committee may specify. The Committee shall determine the expiration
date of each Option; provided, however, that each Option shall be subject to
earlier termination, expiration or cancellation as provided in the Plan, and
further provided that no Option shall be exercisable more than ten (10) years
after the date of grant.
(2) An Option may be exercised for all or any portion of
the shares as to which it is exercisable; provided, that no partial exercise
of an Option shall be for an aggregate exercise price of less than $1,000
unless such partial exercise represents the entire unexercised portion of the
Option or the entire portion of the Option that is then exercisable. The
partial exercise of an Option shall not cause the expiration, termination or
cancellation of the remaining portion thereof.
(3) An Option shall be exercised by delivering notice to
the Company's principal office, to the attention of its Secretary (or the
Secretary's designee), no less than one business day in advance of the
effective date of the proposed exercise. Such notice shall be accompanied by
the applicable Award Agreement, shall specify the number of shares of Company
Stock with respect to which the Option is being exercised and the effective
date of the proposed exercise and shall be signed by the Participant or other
person then having the right to exercise the Option. Such notice may be
withdrawn at any time prior to the close of business on the business day
immediately preceding the effective date of the proposed exercise. Payment
for shares of Company Stock purchased upon the exercise of an Option shall be
made on the effective date of such exercise by one or a combination of the
following means:
(i) in cash, by certified check, bank cashier's check
or wire transfer;
(ii) through a broker-assisted transaction whereby a
broker selected and engaged by the Participant sells shares of Company Stock
in an open market transaction and remits to the Company from the sales
proceeds on behalf of the Participant the Option exercise price and the
required tax withholding amounts;
(iii) subject to the approval of the Committee, and at
the direction of the Participant, through shares retained by the Company in
an amount whose aggregate Fair Market Value is equal on the date of exercise
to the exercise price, thereby surrendering as payment the portion of the
Option that covers the retained shares;
(iv) subject to the approval of the Committee, in
shares of Company Stock owned by the Participant and valued at their Fair
Market Value on the effective date of such exercise; or
(v) subject to the approval of the Committee, by such
other provision as the Committee may from time to time authorize.
(4) Notwithstanding the foregoing, in the case of an
Incentive Stock Option exercised pursuant to (3)(iii) above, the number of
shares deemed to be used to satisfy the exercise price will not be treated as
having been purchased through the exercise of an Incentive Stock Option.
(5) No shares of Company Stock will be issued until full
payment has been made. Any payment in shares of Company Stock shall be
effected by the delivery of such shares to the Secretary (or the Secretary's
designee) of the Company, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other documents and
evidences as the Secretary (or the Secretary's designee) of the Company shall
require. Certificates for shares of Company Stock purchased upon the
exercise of an Option shall be issued in the name of the Participant or other
person entitled to receive such shares, and delivered to the Participant or
such other person as soon as practicable following the effective date on
which the Option is exercised.
(d) No Reload Rights
Options granted under this Plan shall not contain any provision
entitling the optionee to the automatic grant of additional options in
connection with any exercise of the original option.
(e) No Loans
The Company may not make loans to individual Participants for the
purpose of financing the exercise of an Option.
(f) Limitations on Incentive Stock Options
(1) To the extent that the aggregate Fair Market Value of
shares of Company Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year
under the Plan and any other stock option plan of the Company (or any
"subsidiary corporation" of the Company within the meaning of Section 424 of
the Code) shall exceed $100,000, or such higher value as may be permitted
under Section 422 of the Code, such Options shall be treated as Non-Qualified
Stock Options. Such Fair Market Value shall be determined as of the date on
which each such Incentive Stock Option is granted.
(2) No Incentive Stock Option may be granted to an
individual if, at the time of the proposed grant, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (or any "subsidiary corporation" of the Company within
the meaning of Section 424 of the Code), unless (i) the exercise price of
such Incentive Stock Option is at least 110% of the Fair Market Value of a
share of Company Stock at the time such Incentive Stock Option is granted and
(ii) such Incentive Stock Option is not exercisable after the expiration of
five years from the date such Incentive Stock Option is granted.
(g) Effect of Termination of Employment
(1) Unless the applicable Award Agreement provides or the
Committee shall determine otherwise, in the event that the employment or
service of a Participant with the Company shall terminate for any reason
other than Cause, Disability, Retirement or death: (i) Options granted to
such Participant, to the extent that they were exercisable at the time of
such termination, shall remain exercisable until the date that is 90 days
after such termination, on which date they shall expire; and (ii) Options
granted to such Participant, to the extent that they were not exercisable at
the time of such termination, shall expire at the close of business on the
date of such termination. The 90-day period described in this Section 7(g)(1)
shall be extended to one year in the event of the Participant's death during
such 90-day period. Notwithstanding the foregoing, no Option shall be
exercisable after the expiration of its term.
(2) Unless the applicable Award Agreement provides or the
Committee shall determine otherwise, in the event that the employment or
service of a Participant with the Company shall terminate on account of the
Disability or death of the Participant: (i) Options granted to such
Participant, to the extent that they were exercisable at the time of such
termination, shall remain exercisable until the date that is one year after
such termination, on which date they shall expire; and (ii) Options granted
to such Participant, to the extent that they were not exercisable at the time
of such termination, shall expire at the close of business on the date of
such termination. Notwithstanding the foregoing, no Option shall be
exercisable after the expiration of its term.
(3) Unless the applicable Award Agreement provides or the
Committee shall determine otherwise, in the event that the employment or
service of a Participant with the Company shall terminate on account of the
Retirement of the Participant: (i) Options granted to such Participant, to
the extent that they were exercisable at the time of such termination, shall
remain exercisable for a period of two years from the date of termination, on
which date they shall expire; and (ii) Options granted to such Participant,
to the extent that they were not exercisable at the time of such termination,
shall expire at the close of business on the date of such termination.
Notwithstanding the foregoing, no Option shall be exercisable after the
expiration of its term.
(4) Unless the applicable Award Agreement provides or the
Committee shall determine otherwise, if a Participant's employment by or
service with the Company (or any Subsidiary) is terminated for Cause, any
unexercised Stock Option granted to such participant shall be cancelled on
the date of such termination, whether or not exercisable on such date. See
also Section 19, Cancellation and Rescission of Incentive Awards.
(h) Acceleration of Exercise Date Upon Change in Control
In the event of a Change in Control, the Committee as constituted
immediately before such Change in Control may, in its sole discretion, take
action to make each Option granted under the Plan and outstanding at such
time fully and immediately exercisable upon such Change in Control, and if so
accelerated each Option shall remain exercisable until its expiration,
termination or cancellation pursuant to the terms of the Plan. In addition,
in the event of a potential Change in Control, the Committee may in its
discretion cancel any outstanding Options and pay to the holders thereof, in
cash or stock, or any combination thereof, the value of such Options based
upon the price per share of Common Stock to be received by other shareholders
of the Company in the Change in Control less the exercise price of each
Option.
8. SARS
(a) Exercise Price
The exercise price per share of an SAR shall be determined by the
Committee at the time of grant, but shall in no event be less than the Fair
Market Value of a share of Company Stock on the date of grant.
(b) Benefit Upon Exercise
At the time of granting an SAR, the Committee, in its sole and
absolute discretion, shall specify whether the benefit payable upon exercise
of the SAR will be paid in shares of Company Stock or in cash, and such form
of payment will be made a part of the applicable Award Agreement. The
exercise of an SAR with respect to any number of shares of Company Stock
shall entitle the Participant to a payment, for each such share, equal to the
excess of (i) the Fair Market Value of a share of Company Stock on the
exercise date over (ii) the exercise price of the SAR. Payment will be made
in shares of Company Stock, valued at their Fair Market Value on the date of
exercise, or in cash, as specified in the applicable Award Agreement.
Payments shall be made as soon as practicable following exercise of the SAR.
(c) Term and Exercise of SARS
(1) Unless the applicable Award Agreement provides
otherwise, an SAR shall become cumulatively exercisable as to 25 percent of
the shares covered thereby on each of the first, second, third and fourth
anniversaries of the date of grant. By way of example and not by way of
limitation, the Committee may require, as a condition to the vesting of any
SAR, that the Participant or the Company achieves such Performance Goals as
the Committee may specify. The Committee shall determine the expiration date
of each SAR. Unless the applicable Award Agreement provides otherwise, no SAR
shall be exercisable prior to the first anniversary of the date of grant.
(2) An SAR may be exercised for all or any portion of the
shares as to which it is exercisable; provided, that no partial exercise of
an SAR shall be for an aggregate exercise price of less than $1,000. The
partial exercise of an SAR shall not cause the expiration, termination or
cancellation of the remaining portion thereof.
(3) An SAR shall be exercised by delivering notice to the
Company's principal office, to the attention of its Secretary (or the
Secretary's designee), no less than one business day in advance of the
effective date of the proposed exercise. Such notice shall be accompanied by
the applicable Award Agreement, shall specify the number of shares of Company
Stock with respect to which the SAR is being exercised, and the effective
date of the proposed exercise, and shall be signed by the Participant. The
Participant may withdraw such notice at any time prior to the close of
business on the business day immediately preceding the effective date of the
proposed exercise.
(d) Effect of Termination of Employment
The provisions set forth in Section 7(g) with respect to the
exercise of Options following termination of employment shall apply as well
to such exercise of SARS.
(e) Acceleration of Exercise Date Upon Change in Control
In the event of a Change in Control, the Committee as constituted
immediately before such Change in Control may, in its sole discretion, take
action to make each SAR granted under the Plan and outstanding at such time
fully and immediately exercisable upon such Change in Control, and if so
accelerated each SAR shall remain exercisable until its expiration,
termination or cancellation pursuant to the terms of the Plan.
9. RESTRICTED STOCK
(a) Issue Date and Vesting Date
At the time of the grant of shares of Restricted Stock, the
Committee shall establish an Issue Date or Issue Dates and a Vesting Date or
Vesting Dates with respect to such shares. The Committee may divide such
shares into classes and assign a different Issue Date and/or Vesting Date for
each class. If the grantee is employed by the Company on an Issue Date (which
may be the date of grant), the specified number of shares of Restricted Stock
shall be issued in accordance with the provisions of Section 9(e). Provided
that all conditions to the vesting of a share of Restricted Stock imposed
pursuant to Section 9(b) are satisfied, and except as provided in
Section 9(g), upon the occurrence of the Vesting Date with respect to a share
of Restricted Stock, such share shall vest and the restrictions of
Section 9(c) shall cease to apply to such share.
(b) Conditions to Vesting
At the time of the grant of shares of Restricted Stock, the
Committee may impose such restrictions or conditions to the vesting of such
shares as it, in its absolute discretion, deems appropriate. By way of
example and not by way of limitation, the Committee may require, as a
condition to the vesting of any class or classes of shares of Restricted
Stock, that the Participant or the Company achieves such Performance Goals as
the Committee may specify. The Committee may, in its discretion, also make
grants of Restricted Stock which vest over a period of time of at least one
year.
(c) Restrictions on Transfer Prior to Vesting
Prior to the vesting of a share of Restricted Stock, no transfer of
a Participant's rights with respect to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall be permitted.
Immediately upon any attempt to transfer such rights, such share, and all of
the rights related thereto, shall be forfeited by the Participant.
(d) Dividends on Restricted Stock
The Committee in its discretion may require that any dividends paid
on shares of Restricted Stock shall be held in escrow until all restrictions
on such shares have lapsed.
(e) Issuance of Certificates
(1) Reasonably promptly after the Issue Date with respect
to shares of Restricted Stock, the Company shall cause to be issued a stock
certificate, registered in the name of the Participant to whom such shares
were granted, evidencing such shares; provided, that the Company shall not
cause such a stock certificate to be issued unless it has received a stock
power duly endorsed in blank with respect to such shares. Each such stock
certificate shall bear the following legend:
The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and conditions
(including forfeiture provisions and restrictions against transfer) contained
in the CalAmp Corp. 2004 Stock Incentive Plan and related Award Agreement,
and such rules, regulations and interpretations as the CalAmp Corp.
Compensation Committee may adopt. Copies of the Plan, Award Agreement and, if
any, rules, regulations and interpretations are on file in the office of the
Secretary of CalAmp Corp., 1401 North Rice Avenue, Oxnard, California 93030.
Such legend shall not be removed until such shares vest pursuant to the terms
hereof.
(2) Each certificate issued pursuant to this Section 9(e),
together with the stock powers relating to the shares of Restricted Stock
evidenced by such certificate, shall be held in escrow by the Company until
(i) the restrictions have lapsed and (ii) the income tax and employment tax
withholding amounts have been satisfied, as provided for in Section 16
hereof.
(f) Consequences of Vesting
Upon the vesting of a share of Restricted Stock pursuant to the
terms of the Plan and the applicable Award Agreement, the restrictions of
Section 9(c) shall cease to apply to such share. Reasonably promptly after a
share of Restricted Stock vests, the Company shall cause to be delivered to
the Participant to whom such shares were granted, a certificate evidencing
such share, free of the legend set forth in Section 9(e). Notwithstanding the
foregoing, such share still may be subject to restrictions on transfer as a
result of applicable securities laws.
(g) Effect of Termination of Employment
(1) Unless the applicable Award Agreement or the Committee
provides otherwise, during the 90 days following termination of a
Participant's employment for any reason other than Cause, the Company shall
have the right to require the return of any shares to which restrictions on
transferability apply, in exchange for which the Company shall repay to the
Participant (or the Participant's estate) any amount paid by the Participant
for such shares. In the event that the Company requires such a return of
shares, it also shall have the right to require the return of all dividends
paid on such shares, whether by termination of any escrow arrangement under
which such dividends are held or otherwise.
(2) In the event of the termination of a Participant's
employment for Cause, all shares of Restricted Stock granted to such
Participant which have not vested as of the date of such termination shall
immediately be returned to the Company, together with any dividends paid on
such shares, in return for which the Company shall repay to the Participant
any amount paid for such shares. See also Section 19, Cancellation and
Rescission of Incentive Awards.
(h) Effect of Change in Control
In the event of a Change in Control, the Committee as constituted
immediately before such Change in Control may, in its sole discretion, take
action to immediately vest upon such Change in Control all outstanding shares
of Restricted Stock which have not theretofore vested.
10. PHANTOM STOCK
(a) Vesting Date
At the time of the grant of shares of Phantom Stock, the Committee
shall establish a Vesting Date or Vesting Dates with respect to such shares.
The Committee may divide such shares into classes and assign a different
Vesting Date for each class. Provided that all conditions to the vesting of a
share of Phantom Stock imposed pursuant to Section 10(c) are satisfied, and
except as provided in Section 10(d), upon the occurrence of the Vesting Date
with respect to a share of Phantom Stock, such share shall vest.
(b) Benefit Upon Vesting
Upon the vesting of a share of Phantom Stock, the Participant shall
be entitled to receive in cash, within 30 days of the date on which such
share vests, an amount equal to the sum of (i) the Fair Market Value of a
share of Company Stock on the date on which such share of Phantom Stock vests
and (ii) the aggregate amount of cash dividends paid with respect to a share
of Company Stock during the period commencing on the date on which the share
of Phantom Stock was granted and terminating on the date on which such share
vests.
(c) Conditions to Vesting
At the time of the grant of shares of Phantom Stock, the Committee
may impose such restrictions or conditions to the vesting of such shares as
it, in its absolute discretion, deems appropriate. By way of example and not
by way of limitation, the Committee may require, as a condition to the
vesting of any class or classes of shares of Phantom Stock, that the
Participant or the Company achieves such Performance Goals as the Committee
may specify. The Committee may, in its discretion, also make grants of
Phantom Stock which vest over a period of time of at least one year.
(d) Effect of Termination of Employment
(1) Unless the applicable Award Agreement or the Committee
provides otherwise, shares of Phantom Stock that have not vested, together
with any dividends credited on such shares, shall be forfeited upon the
Participant's termination of employment for any reason other than Cause.
(2) In the event of the termination of a Participant's
employment for Cause, all shares of Phantom Stock granted to such Participant
which have not vested as of the date of such termination shall immediately be
forfeited, together with any dividends credited on such shares. See also
Section 19, Cancellation and Rescission of Incentive Awards.
(e) Effect of Change in Control
In the event of a Change in Control, the Committee as constituted
immediately before such Change in Control may, in its sole discretion, take
action to immediately vest upon such Change in Control all outstanding shares
of Phantom Stock which have not theretofore vested.
11. STOCK BONUSES
In the event that the Committee grants a Stock Bonus, a certificate
for the shares of Company Stock comprising such Stock Bonus shall be issued
in the name of the Participant to whom such grant was made and delivered to
such Participant as soon as practicable after the date on which such Stock
Bonus is payable.
12. NON-EMPLOYEE DIRECTOR AWARDS
Each year, on the first business day following the date of the
annual meeting of the stockholders of the Company at which directors of the
Company are elected (and, in the case that a person becomes a Non-Employee
Director other than at an annual meeting, on such date that the person first
becomes a Non-Employee Director), each Non-Employee Director shall receive
Incentive Awards in an amount not to exceed 10,000 Units. The specific
amount of Incentive Award Units to be granted to each Non-Employee Director
on such dates will be as determined by the Board of Directors from time to
time, subject to this limitation of 10,000 Units on each such date.
If, on any date upon which Incentive Awards are to be granted
pursuant to this Section 12, the number of shares of Company Stock remaining
available for issuance under the Plan is less than the total number of shares
of Company Stock that otherwise would be covered by such Incentive Awards, in
the aggregate, then Incentive Awards for a pro rata amount of the remaining
shares of Company Stock available for issuance (rounded to the nearest whole
share) shall be awarded to each Non-Employee Director on such date. Options
granted pursuant to this Section 12 shall become exercisable one (1) year
from the date of grant or over such longer period as the Board of Directors
may from time to time establish.
13. RIGHTS AS A STOCKHOLDER
No person shall have any rights as a stockholder with respect to any
shares of Company Stock covered by or relating to any Incentive Award until
the date of issuance of a stock certificate with respect to such shares.
Except as otherwise expressly provided in Section 3(c), no
adjustment to any Incentive Award shall be made for dividends or other rights
for which the record date occurs prior to the date such stock certificate is
issued.
14. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO INCENTIVE AWARD
Nothing contained in the Plan or any Award Agreement shall confer
upon any Participant any right with respect to the continuation of employment
by the Company or interfere in any way with the right of the Company, subject
to the terms of any separate employment agreement to the contrary, at any
time to terminate such employment or to increase or decrease the compensation
of the Participant.
No person shall have any claim or right to receive an Incentive
Award hereunder. The Committee's granting of an Incentive Award to a
Participant at any time shall neither require the Committee to grant any
other Incentive Award to such Participant or other person at any time nor
preclude the Committee from making subsequent grants to such Participant or
any other person.
15. SECURITIES MATTERS
(a) The Company shall be under no obligation to affect the
registration pursuant to the Securities Act of 1933 of any interests in the
Plan or any shares of Company Stock to be issued hereunder or to effect
similar compliance under any state laws. Notwithstanding anything herein to
the contrary, the Company shall not be obligated to cause to be issued or
delivered any certificates evidencing shares of Company Stock pursuant to the
Plan unless and until the Company is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of the Nasdaq
National Market and any other securities exchange on which shares of Company
Stock are traded. Certificates evidencing shares of Company Stock issued
pursuant to the terms hereof, may bear such legends, as the Committee or the
Company, in its sole discretion, deems necessary or desirable to insure
compliance with applicable securities laws.
(b) The transfer of any shares of Company Stock hereunder shall be
effective only at such time as counsel to the Company shall have determined
that the issuance and delivery of such shares is in compliance with all
applicable laws, regulations of governmental authority and the requirements
of the Nasdaq National Market and any other securities exchange on which
shares of Company Stock are traded. The Committee may, in its sole
discretion, defer the effectiveness of any transfer of shares of Company
stock hereunder in order to allow the issuance of such shares to be made
pursuant to registration or an exemption from registration or other methods
for compliance available under federal or state securities laws. The Company
shall inform the Participant in writing of the Committee's decision to defer
the effectiveness of a transfer. During the period of such a deferral in
connection with the exercise of an Option, the Participant may, by written
notice, withdraw such exercise and obtain the refund of any amount paid with
respect thereto.
16. WITHHOLDING TAXES
Whenever cash is to be paid pursuant to an Incentive Award, the
Company shall have the right to deduct therefrom an amount sufficient to
satisfy any federal, state and local withholding tax requirements related
thereto.
Whenever shares of Company Stock are to be delivered pursuant to an
Incentive Award, the amount of any federal, state and local tax withholding
requirements must be satisfied by the Participant prior to the issuance of
shares by the Company (or, in the case of Restricted Stock, before the
release of such shares from escrow). The Company shall have the right to
require the Participant to remit to the Company in cash an amount sufficient
to satisfy any federal, state and local withholding tax requirements related
thereto. With the approval of the Committee, which it shall have sole
discretion to grant, a Participant may satisfy the foregoing requirement by
(i) electing to have the Company withhold and retain from delivery shares of
Company Stock having a value equal to the amount of the tax withholding
requirement, or (ii) delivering to the Company already vested and owned
shares of Common Stock having a value equal to the amount of the tax
withholding requirement. Such shares shall be valued at their Fair Market
Value on the date as of which the amount of tax to be withheld is determined
(the "Tax Date"). Fractional share amounts shall be settled in cash. Such a
withholding election may be made with respect to all or any portion of the
shares to be delivered pursuant to an Incentive Award. To the extent required
for such a withholding of stock to qualify for the exemption available under
Rule 16b-3, such an election by a grantee whose transactions in Company Stock
are subject to Section 16(b) of the Exchange Act shall be: (i) subject to the
approval of the Committee in its sole discretion; (ii) irrevocable;
(iii) made no sooner than six months after the grant of the award with
respect to which the election is made; and (iv) made at least six months
prior to the Tax Date unless such withholding election is in connection with
exercise of an Option and both the election and the exercise occur prior to
the Tax Date in a "window period" of twenty business days beginning on the
third day following release of the Company's quarterly or annual summary
statement of sales and earnings.
17. NOTIFICATION OF ELECTION UNDER SECTION 83(b) OF THE CODE
If any Participant shall, in connection with the award of Restricted
Stock under the Plan, make the election permitted under Section 83(b) of the
Code (i.e., an election to include in gross income in the year of award the
amounts specified in Section 83(b)), such Participant shall notify the
Company of such election at the time of entering into the Award Agreement
pertaining to the Restricted Stock award, and shall concurrently make a
payment to the Company of the aggregate income tax and employment tax
withholding amount, such payment to be made in cash, by certified check, bank
cashier's check or wire transfer.
18. NOTIFICATION UPON DISQUALIFYING DISPOSITION
Each Award Agreement with respect to an Incentive Stock Option shall
require the Participant to notify the Company of any disposition of shares of
Company Stock issued pursuant to the exercise of such Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions) within ten days of such disposition.
19. CANCELLATION AND RESCISSION OF INCENTIVE AWARDS
Unless the Award Agreement specifies otherwise, the Committee may
cancel, rescind, suspend, withhold or otherwise limit or restrict any
unexpired, unpaid, or deferred Incentive Awards at any time if the
Participant is not in compliance with all applicable provisions of the Award
Agreement, or if the Participant engages in any "Detrimental Activity." For
purposes of this Section 19, "Detrimental Activity" shall include: (i) the
rendering of services for any organization or engaging directly or indirectly
in any business which is or becomes competitive with the Company, or which
organization or business, or the rendering of services to such organization
or business, is or becomes otherwise prejudicial to or in conflict with the
interests of the Company; (ii) the disclosure to anyone outside the Company,
or the use in other than the Company's business, without prior written
authorization from the Company, of any confidential information or material,
as defined in the Company's Agreement Regarding Confidential Information and
Intellectual Property, relating to the business of the Company, acquired by
the Participant either during or after employment with the Company; (iii) the
failure or refusal to disclose promptly and to assign to the Company,
pursuant to the Company's "Confidentiality, Company Property, and Non-
Solicitation Agreement" (formerly known as the Company's "Confidential
Invention Agreement"), all right, title and interest in any invention or
idea, patentable or not, made or conceived by the Participant during
employment by the Company, relating in any manner to the actual or
anticipated business, research or development work of the Company
or the failure or refusal to do anything reasonably necessary to enable the
Company to secure a patent where appropriate in the United States and in
other countries; (iv) activity that results in termination of the
Participant's employment for Cause; (v) a violation of any rules, policies,
procedures or guidelines of the Company, including but not limited to the
Company's Code of Business Conduct and Ethics policy; (vi) any attempt
directly or indirectly to induce any employee of the Company to be employed
or perform services elsewhere or any attempt directly or indirectly to
solicit the trade or business of any current or prospective customer,
supplier or partner of the Company; (vii) the Participant being convicted of,
or entering a guilty plea with respect to, a crime, whether or not connected
with the Company; or (viii) any other conduct or act determined to be
injurious, detrimental or prejudicial to any interest of the Company.
20. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors may, at any time, suspend or terminate the
Plan or revise or amend it in any respect whatsoever; provided, however, that
stockholder approval shall be required if and to the extent required by
Rule 16b-3 or by any comparable or successor exemption under which the Board
of Directors believes it is appropriate for the Plan to qualify, or if and to
the extent the Board of Directors determines that such approval is
appropriate for purposes of satisfying Section 162(m) or Section 422 of the
Code. Nothing herein shall restrict the Committee's ability to exercise its
discretionary authority pursuant to Section 4, which discretion may be
exercised without amendment to the Plan. No action hereunder may, without the
consent of a Participant, reduce the Participant's rights under any
outstanding Incentive Award.
21. NO OBLIGATION TO EXERCISE
The grant to a Participant of an Option or SAR shall impose no
obligation upon such Participant to exercise such Option or SAR.
22. TRANSFERS UPON DEATH; NONASSIGNABILITY
Upon the death of a Participant outstanding Incentive Awards granted
to such Participant may be exercised only by the executor or administrator of
the Participant's estate or by a person who shall have acquired the right to
such exercise by will or by the laws of descent and distribution. No transfer
of an Incentive Award by will or the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
with (a) written notice thereof and with a copy of the will and/or such
evidence as the Committee may deem necessary to establish the validity of the
transfer and (b) an agreement by the transferee to comply with all the terms
and conditions of the Incentive Award that are or would have been applicable
to the Participant and to be bound by the acknowledgments made by the
Participant in connection with the grant of the Incentive Award.
During a Participant's lifetime, the Committee may, in its
discretion, permit the transfer, assignment or other encumbrance of an
outstanding Option or outstanding shares of Restricted Stock; provided that,
in the case of an Incentive Stock Option, transferability may be permitted
during the Participant's lifetime only to the extent that the Incentive Stock
Option retains its qualified status, unless the Committee and the Participant
agree otherwise.
23. EXPENSES AND RECEIPTS
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used
for general corporate purposes.
24. FAILURE TO COMPLY
In addition to the remedies of the Company elsewhere provided for
herein, failure by a Participant (or beneficiary) to comply with any of the
terms and conditions of the Plan or the applicable Award Agreement, unless
such failure is remedied by such Participant (or beneficiary) within ten days
after notice of such failure by the Committee, shall be grounds for the
cancellation and forfeiture of such Incentive Award, in whole or in part, as
the Committee, in its sole discretion, may determine.
25. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall be effective as of the Effective Date. Unless earlier
terminated by the Board of Directors, the right to grant Incentive Awards
under the Plan will terminate on the tenth anniversary of the Effective Date.
Incentive Awards outstanding at Plan termination will remain in effect
according to their terms and the provisions of the Plan.
26. APPLICABLE LAW
Except to the extent preempted by any applicable federal law, the
Plan will be construed and administered in accordance with the laws of the
State of Delaware, without reference to the principles of conflicts of laws
thereunder.