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EXHIBIT 10.14
FIRST AVIATION SERVICES INC.
STOCK INCENTIVE PLAN
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TABLE OF CONTENTS
Page
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1. THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Shares Available for Awards; Share Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Grant of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Award Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8 No Transferability; Limited Exception to Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . 5
2. OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Limitations on Grant and Terms of Incentive Stock Options . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Limits on 10% Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Options and Rights in Substitution for Stock Options Granted by Other Corporations . . . . . . . . . . . . 7
3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK APPRECIATION RIGHTS) . . . . . . . . . . . . . . . . . 8
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Exercise of Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Limited Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. RESTRICTED STOCK AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Return to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Grants of Performance Share Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Special Performance-Based Share Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3 Grants of Stock Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4 Deferred Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Rights of Eligible Persons, Participants and
Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Adjustments; Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Effect of Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.5 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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6.6 Plan Amendment, Termination and Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.7 Privileges of Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.8 Effective Date of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.9 Term of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.10 Governing Law/Construction/Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.12 Effect of Change of Subsidiary Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.13 Non-Exclusivity of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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FIRST AVIATION SERVICES INC.
STOCK INCENTIVE PLAN
1. THE PLAN
1.1 Purpose
The purpose of this Plan is to promote the success of the
Company by providing an additional means through the grant of Awards to
attract, motivate, retain and reward key employees, including officers, whether
or not directors, of the Company with awards and incentives for high levels of
individual performance and improved financial performance of the Company and to
attract, motivate and retain experienced and knowledgeable independent
directors. "Corporation" means First Aviation Services Inc., a Delaware
corporation, and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article
7.
1.2 Administration and Authorization; Power and Procedure.
(a) Committee. This Plan shall be administered by and all
Awards to Eligible Persons shall be authorized by the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee.
Subject to the express provisions of this Plan, the Committee shall have the
authority:
(i) to determine from among those persons eligible the
particular Eligible Persons who will receive any Awards;
(ii) to grant Awards to Eligible Persons, determine the
price at which securities will be offered or awarded and the amount of
securities to be offered or awarded to any of such persons, and
determine the other specific terms and conditions of such Awards
consistent with the express limits of this Plan, and establish the
installments (if any) in which such Awards shall become exercisable or
shall vest, or determine that no delayed exercisability or vesting is
required, and establish the events of termination or reversion of such
Awards;
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(iii) to approve the forms of Award Agreements (which need
not be identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the Company and
Participants under this Plan, further define the terms used in this
Plan, and prescribe, amend and rescind rules and regulations relating
to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights
with respect to, or modify, discontinue, suspend, or terminate any or
all outstanding Awards held by Eligible Persons, subject to any
required consent under Section 6.6;
(vi) to accelerate or extend the exercisability or extend
the term of any or all such outstanding Awards within the maximum
ten-year term of Awards under Section 1.6; and
(vii) to make all other determinations and take such other
action as contemplated by this Plan or as may be necessary or
advisable for the administration of this Plan and the effectuation of
its purposes.
Notwithstanding the foregoing, the provisions of Article 8 relating to
Non-Employee Director Awards shall be automatic and, to the maximum extent
possible, self-effectuating.
(c) Binding Determinations. Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan shall be within the absolute discretion of
that entity or body and shall be conclusive and binding upon all persons. No
member of the Board or Committee, or officer of the Corporation or any
Subsidiary, shall be liable for any such action or inaction of the entity or
body, of another person or, except in circumstances involving bad faith, of
himself or herself. Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute discretion in matters
within their authority related to this Plan.
(d) Reliance on Experts. In making any determination or
in taking or not taking any action under this Plan, the Committee or the Board,
as the case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No director, officer or
agent of the Company shall be liable for any such action or determination taken
or made or omitted in good faith.
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(e) Delegation. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of the
Company.
1.3 Participation.
Awards may be granted by the Committee only to those persons
that the Committee determines to be Eligible Persons. An Eligible Person who
has been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine.
1.4 Shares Available for Awards; Share Limits.
(a) Shares Available. Subject to the provisions of
Section 6.2, the capital stock that may be delivered under this Plan shall be
shares of the Corporation's authorized but unissued Common Stock and any shares
of its Common Stock held as treasury shares. The shares may be delivered for
any lawful consideration.
(b) Share Limits. The maximum number of shares of Common
Stock that may be delivered pursuant to Awards (including Incentive Stock
Options) granted to Eligible Persons under this Plan shall not exceed 400,000
shares (the "Share Limit"). The maximum number of shares of Common Stock that
may be delivered pursuant to options qualified as Incentive Stock Options
granted under this Plan is 400,000 shares. The maximum number of shares
subject to those Options and Stock Appreciation Rights that are granted during
any calendar year to any individual shall be limited to 150,000 and the maximum
individual limit on the number of shares in the aggregate subject to all Awards
that during any calendar year are granted under this Plan shall be 150,000.
Each of the four foregoing numerical limits shall be subject to adjustment as
contemplated by this Section 1.4 and Section 6.2.
(c) Share Reservation; Replenishment and Reissue of
Unvested Awards. No Award may be granted under this Plan unless, on the date
of grant, the sum of (i) the maximum number of shares issuable at any time
pursuant to such Award, plus (ii) the number of shares that have previously
been issued pursuant to Awards granted under this Plan, other than reacquired
shares available for reissue consistent with any applicable legal limitations,
plus (iii) the maximum number of shares that may be issued at any time after
such date of grant pursuant to Awards that are outstanding on such date, does
not exceed the Share Limit. Shares that are subject to or underlie Awards
which expire or for any reason are cancelled or terminated, are forfeited, fail
to vest, or for any other reason are not paid or delivered under this Plan, as
well as reacquired shares, shall again, except to the extent prohibited by law,
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be available for subsequent Awards under the Plan. Except as limited by law,
if an Award is or may be settled only in cash, such Award need not be counted
against any of the limits under this Section 1.4.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the Committee
shall determine the number of shares of Common Stock subject to each Award, the
price (if any) to be paid for the shares or the Award and, in the case of
Performance Share Awards, in addition to matters addressed in Section 1.2(b),
the specific objectives, goals and performance criteria (such as an increase in
sales, market value, earnings or book value over a base period, the years of
service before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of the
Performance Share Award. Each Award shall be evidenced by an Award Agreement
signed by the Corporation and, if required by the Committee, by the
Participant.
1.6 Award Period.
Each Award and all executory rights or obligations under the
related Award Agreement shall expire on such date (if any) as shall be
determined by the Committee, but in the case of Options or other rights to
acquire Common Stock not later than ten (10) years after the Award Date.
1.7 Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Unless the Committee
otherwise expressly provides, no Award shall be exercisable or shall vest until
at least six months after the initial Award Date, and once exercisable an Award
shall remain exercisable until the expiration or earlier termination of the
Award.
(b) Procedure. Any exercisable Award shall be deemed to
be exercised when the Secretary of the Corporation receives written notice of
such exercise from the Participant, together with any required payment made in
accordance with Section 2.2(a).
(c) Fractional Shares/Minimum Issue. Fractional share
interests shall be disregarded, but may be accumulated. The Committee, however,
may determine in the case of Eligible Persons that cash, other securities, or
other property will be paid or transferred in lieu of any fractional share
interests. No fewer than [100] shares may be purchased on exercise of any
Award at one time unless the number purchased is the total number at the time
available for purchase under the Award.
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1.8 No Transferability; Limited Exception to Transfer
Restrictions.
(a) Limit On Exercise and Transfer. Unless
otherwise expressly provided in (or pursuant to) this Section 1.8, by
applicable law and by the Award Agreement, as the same may be amended, (i) all
Awards are non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;
Awards shall be exercised only by the Participant; and (ii) amounts payable or
shares issuable pursuant to an Award shall be delivered only to (or for the
account of) the Participant.
(b) Exceptions. The Committee may permit Awards
to be exercised by and paid only to certain persons or entities related to the
Participant, including but not limited to members of the Participant's
immediate family, charitable institutions, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Participant's immediate
family and/or charitable institutions, or to such other persons or entities as
may be approved by the Committee, pursuant to such conditions and procedures as
the Committee may establish. Any permitted transfer shall be subject to the
condition that the Committee receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes on a gratuitous
or donative basis and without consideration (other than nominal consideration).
Notwithstanding the foregoing, Incentive Stock Options and Restricted Stock
Awards shall be subject to any and all additional transfer restrictions under
the Code.
(c) Further Exceptions to Limits On Transfer.
The exercise and transfer restrictions in Section 1.8(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive benefits
in the event of the Participant's death or, if the
Participant has died, transfers to or exercise by the
Participant's beneficiary, or, in the absence of a
validly designated beneficiary, transfers by will or
the laws of descent and distribution,
(iii) transfers pursuant to a QDRO order if approved or
ratified by the Committee,
(iv) if the Participant has suffered a disability,
permitted transfers or exercises on behalf of the
Participant by his or her legal representative, or
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(v) the authorization by the Committee of "cashless
exercise" procedures with third parties who provide
financing for the purpose of (or who otherwise
facilitate) the exercise of Awards consistent with
applicable laws and the express authorization of the
Committee.
Notwithstanding the foregoing, Incentive Stock Options and Restricted Stock
Awards shall be subject to any and all additional transfer restrictions under
the Code.
2. OPTIONS.
2.1 Grants.
One or more Options may be granted under this Article to any
Eligible Person. Each Option granted shall be designated in the applicable
Award Agreement, by the Committee as either an Incentive Stock Option, subject
to Section 2.3, or a Non-Qualified Stock Option; provided, however, that
Incentive Stock Options may only be granted to Eligible Persons who are
employees of the Company.
2.2 Option Price.
(a) Pricing Limits. The purchase price per share of the
Common Stock covered by each Option shall be determined by the Committee at the
time of the Award, but in the case of Incentive Stock Options shall not be less
than 100% (110% in the case of a Participant described in Section 2.4) of the
Fair Market Value of the Common Stock on the date of grant.
(b) Payment Provisions. The purchase price of any shares
purchased on exercise of an Option granted under this Article shall be paid in
full at the time of each purchase in one or a combination of the following
methods: (i) in cash or by electronic funds transfer; (ii) by check payable to
the order of the Corporation; (iii) if authorized by the Committee or
specified in the applicable Award Agreement, by a promissory note of the
Participant consistent with the requirements of Section 1.8; (iv) by notice and
third party payment in such manner as may be authorized by the Committee; or
(v) by the delivery of shares of Common Stock of the Corporation already owned
by the Participant, provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Award by delivering
such shares, and provided further that any shares delivered which were
initially acquired upon exercise of a stock option must have been owned by the
Participant at least six months as of the date of delivery. Shares of Common
Stock used to satisfy the exercise price of
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an Option shall be valued at their Fair Market Value on the date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock Options.
(a) $100,000 Limit. To the extent that the aggregate
"Fair Market Value" of stock with respect to which incentive stock options
first become exercisable by a Participant in any calendar year exceeds
$100,000, taking into account both Common Stock subject to Incentive Stock
Options under this Plan and stock subject to incentive stock options under all
other plans of the Company [or any parent corporation], such options shall be
treated as Nonqualified Stock Options. For this purpose, the "Fair Market
Value" of the stock subject to options shall be determined as of the date the
options were awarded. In reducing the number of options treated as incentive
stock options to meet the $100,000 limit, the most recently granted options
shall be reduced first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares of Common
Stock are to be treated as shares acquired pursuant to the exercise of an
Incentive Stock Option.
(b) Option Period. Each Option and all rights thereunder
shall expire no later than 10 years after the Award Date.
(c) Other Code Limits. Incentive Stock Options may only
be granted to Eligible Employees of the Corporation or a Subsidiary that
satisfies the other eligibility requirements of the Code. There shall be
imposed in any Award Agreement relating to Incentive Stock Options such other
terms and conditions as from time to time are required in order that the Option
be an "incentive stock option" as that term is defined in Section 422 of the
Code.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any person who, at
the time the Option is granted, owns (or is deemed to own under Section 424(d)
of the Code) shares of outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation, unless
the exercise price of such Option is at least 110% of the Fair Market Value of
the stock subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
2.5 Options and Rights in Substitution for Stock Options Granted
by Other Corporations. Options and Stock
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Appreciation Rights may be granted to Eligible Persons under this Plan in
substitution for employee stock options granted by other entities to persons
who are or who will become Eligible Persons in respect of the Company, in
connection with a distribution, merger or reorganization by or with the
granting entity or an affiliated entity, or the acquisition by the Company,
directly or indirectly, of all or a substantial part of the stock or assets of
the other entity.
3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK
APPRECIATION RIGHTS).
3.1 Grants.
In its discretion, the Committee may grant Stock Appreciation
Rights to any Eligible Person either concurrently with the grant of another
Award or in respect of an outstanding Award, in whole or in part, or
independently of any other Award. Any Stock Appreciation Right granted in
connection with an Incentive Stock Option shall contain such terms as may be
required to comply with the provisions of Section 422 of the Code and the
regulations promulgated thereunder, unless the holder otherwise agrees.
3.2 Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement or the
Committee otherwise provides, a Stock Appreciation Right related to another
Award shall be exercisable at such time or times, and to the extent, that the
related Award shall be exercisable.
(b) Effect on Available Shares. To the extent that a
Stock Appreciation Right is exercised, the number of underlying shares of
Common Stock theretofore subject to a related Award shall be charged against
the maximum amount of Common Stock that may be delivered pursuant to Awards
under this Plan. The number of shares subject to the Stock Appreciation Right
and the related Option of the Participant shall, however, be reduced by the
number of underlying shares as to which the exercise related, unless the Award
Agreement otherwise provides.
(c) Stand-Alone SARs. A Stock Appreciation Right granted
independently of any other Award shall be exercisable pursuant to the terms of
the Award Agreement.
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3.3 Payment.
(a) Amount. Unless the Committee otherwise provides,
upon exercise of a Stock Appreciation Right and the attendant surrender of an
exercisable portion of any related Award, the Participant shall be entitled to
receive payment of an amount determined by multiplying
(i) the difference obtained by subtracting the
exercise price per share of Common Stock under the related Award (if
applicable) or the initial share value specified in the Award from the
Fair Market Value of a share of Common Stock on the date of exercise
of the Stock Appreciation Right, by
(ii) the number of shares with respect to which
the Stock Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole
discretion, shall determine the form in which payment shall be made of the
amount determined under paragraph (a) above, either solely in cash, solely in
shares of Common Stock (valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right), or partly in such shares and partly in cash,
provided that the Committee shall have determined that such exercise and
payment are consistent with applicable law. If the Committee permits the
Participant to elect to receive cash or shares (or a combination thereof) on
such exercise, any such election shall be subject to such conditions as the
Committee may impose.
3.4 Limited Stock Appreciation Rights.
The Committee may grant to any Eligible Person Stock
Appreciation Rights exercisable only upon or in respect of a change in control
or any other specified event ("Limited SARs") and such Limited SARs may relate
to or operate in tandem or combination with or substitution for Options, other
Stock Appreciation Rights or other Awards (or any combination thereof), and may
be payable in cash or shares based on the spread between the base price of the
Stock Appreciation Right and a price based upon the Fair Market Value of the
Shares during a specified period or at a specified time within a specified
period before, after or including the date of such event.
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4. RESTRICTED STOCK AWARDS.
4.1 Grants.
The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Person. Each Restricted Stock Award
Agreement shall specify the number of shares of Common Stock to be issued to
the Participant, the date of such issuance, the consideration for such shares
(but not less than the minimum lawful consideration under applicable state law)
by the Participant, the extent (if any) to which and the time (if ever) at
which the Participant shall be entitled to dividends, voting and other rights
in respect of the shares prior to vesting, and the restrictions (which may be
based on performance criteria, passage of time or other factors or any
combination thereof) imposed on such shares and the conditions of release or
lapse of such restrictions. Stock certificates evidencing shares of Restricted
Stock pending the lapse of the restrictions ("Restricted Shares") shall bear a
legend making appropriate reference to the restrictions imposed hereunder and
shall be held by the Corporation or by a third party designated by the
Committee until the restrictions on such shares shall have lapsed and the
shares shall have vested in accordance with the provisions of the Award and
Section 1.7. Upon issuance of the Restricted Stock Award, the Participant may
be required to provide such further assurance and documents as the Committee
may require to enforce the restrictions.
4.2 Restrictions.
(a) Pre-Vesting Restraints. Except as provided in
Section 4.1 and 1.8, restricted shares comprising any Restricted Stock Award
may not be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until the restrictions on such
shares have lapsed and the shares have become vested.
(b) Dividend and Voting Rights. Unless otherwise
provided in the applicable Award Agreement, a Participant receiving a
Restricted Stock Award shall be entitled to cash dividend and voting rights for
all shares issued even though they are not vested, provided that such rights
shall terminate immediately as to any Restricted Shares which cease to be
eligible for vesting.
(c) Cash Payments. If the Participant shall have paid or
received cash (including any dividends) in connection with the Restricted Stock
Award, the Award Agreement shall specify whether and to what extent such cash
shall be returned (with or without an earnings factor) as to
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any restricted shares which cease to be eligible for vesting.
4.3 Return to the Corporation.
Unless the Committee otherwise expressly provides, Restricted
Shares that remain subject to restrictions at the time of termination of
employment or are subject to other conditions to vesting that have not been
satisfied by the time specified in the applicable Award Agreement shall not
vest and shall be returned to the Corporation in such manner and on such terms
as the Committee shall therein provide.
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant Performance Share
Awards to Eligible Persons based upon such factors as the Committee shall deem
relevant in light of the specific type and terms of the award. An Award
Agreement shall specify the maximum number of shares of Common Stock (if any)
subject to the Performance Share Award, the consideration (but not less than
the minimum lawful consideration) to be paid for any such shares as may be
issuable to the Participant, the duration of the Award and the conditions upon
which delivery of any shares or cash to the Participant shall be based. The
amount of cash or shares or other property that may be deliverable pursuant to
such Award shall be based upon the degree of attainment over a specified period
of not more than 10 years (a "performance cycle") as may be established by the
Committee of such measure(s) of the performance of the Company (or any part
thereof) or the Participant as may be established by the Committee. The
Committee may provide for full or partial credit, prior to completion of such
performance cycle or the attainment of the performance achievement specified in
the Award, in the event of the Participant's death, Retirement, or Total
Disability, a Change in Control Event or in such other circumstances as the
Committee.
5.2 Special Performance-Based Share Awards.
Without limiting the generality of the foregoing, and in
addition to Options and Stock Appreciation Rights granted under other
provisions of this Plan which are intended to satisfy the exception for
"performance-based compensation" under Section 162(m) of the Code (with such
Awards hereinafter referred to as a "Qualifying Option" or a "Qualifying Stock
Appreciation Right," respectively), other performance-based awards within the
meaning of Section 162(m) of the Code ("Performance-Based Awards"), whether in
the form of restricted stock, performance stock,
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phantom stock or other rights, the grant, vesting, exercisability or payment of
which depends on the degree of achievement of the Performance Goals relative to
preestablished targeted levels for the Corporation or the Corporation and one
or more of its Subsidiaries, may be granted under this Plan. Any Qualifying
Option or Qualifying Stock Appreciation Right shall be subject only to the
requirements of subsections (a) and (c) below in order for such Awards to
satisfy the requirements for Performance-Based Awards under this Section 5.2.
With the exception of any Qualifying Option or Qualifying Stock Appreciation
Right, an Award that is intended to satisfy the requirements of this Section
5.2 shall be designated as a Performance-Based Award at the time of grant.
(a) Eligible Class. The eligible class of persons for
Performance-Based Awards under this Section shall be the executive officers of
the Corporation.
(b) Performance Goal Alternatives. The specific
performance goals for Performance-Based Awards granted under this Section
(other than Qualifying Options and Qualifying Stock Appreciation Rights) shall
be, on an absolute or relative basis, one or more of the Performance Goals, as
selected by the Committee in its sole discretion. The Committee shall
establish in the applicable Award Agreement the specific performance target(s)
relative to the Performance Goal(s) which must be attained before the
compensation under the Performance-Based Award becomes payable. The specific
targets shall be determined within the time period permitted under Section
162(m) of the Code (and any regulations issued thereunder) so that such targets
are considered to be preestablished and so that the attainment of such targets
is substantially uncertain at the time of their establishment. The applicable
performance measurement period may not be less than one nor more than 10 years.
(c) Maximum Performance-Based Award. Notwithstanding any
other provision of the Plan to the contrary, the maximum number of shares of
Common Stock which may be delivered pursuant to options, stock appreciation
rights, restricted stock or other share-based awards that are granted as
Performance-Based Awards to any Participant in any calendar year shall not
exceed 150,000 shares, either individually or in the aggregate, subject to
adjustment as provided in Section 6.2. Awards that are cancelled during the
year shall be counted against this limit to the extent required by Section
162(m) of the Code. In addition, the aggregate amount of compensation to be
paid to any Participant in respect of any Cash-Based Awards that are granted
during any calendar year as Performance-Based Awards shall not exceed $150,000.
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(d) Committee Certification. Before any
Performance-Based Award under this Section 5.2 (other than Qualifying Options
or Qualifying Stock Appreciation Rights) is paid, the Committee must certify in
writing that the Performance Goal(s) and any other material terms of the
Performance-Based Award were satisfied; provided, however, that a
Performance-Based Award may be paid without regard to the satisfaction of the
applicable Performance Goal in the event of a Change in Control Event in
accordance with Section 6.2(d).
(e) Terms and Conditions of Awards. The Committee will
have the discretion to determine the restrictions or other limitations of the
individual Awards granted under this Section 5.2 including the authority to
reduce Awards, payouts or vesting or to pay no Awards, in its sole discretion,
if the Committee preserves such authority at the time of grant by language to
this effect in its authorizing resolutions or otherwise.
(f) Adjustments for Changes in Capitalization and other
Material Changes. In the event of a change in corporate capitalization, such
as a stock split or stock dividend, or a corporate transaction, such as a
merger, consolidation, spinoff, reorganization or similar event, or any partial
or complete liquidation of the Corporation, or any similar event consistent
with regulations issued under Section 162(m) of the Code including, without
limitation, any material change in accounting policies or practices affecting
the Corporation and/or the Performance Goals or targets, then the Committee may
make adjustments to the Performance Goals and targets relating to outstanding
Performance-Based Awards to the extent such adjustments are made to reflect the
occurrence of such an event; provided, however, that adjustments described in
this subsection may be made only to the extent that the occurrence of an event
described herein was unforeseen at the time the targets for a Performance-Based
Award were established by the Committee.
5.3 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible Person
to reward exceptional or special services, contributions or achievements in the
manner and on such terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee. The number of shares
so awarded shall be determined by the Committee. The Award may be granted
independently or in lieu of a cash bonus.
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5.4 Deferred Payments.
The Committee may authorize for the benefit of any Eligible
Person the deferral of any payment of cash or shares that may become due or of
cash otherwise payable under this Plan, and provide for accredited benefits
thereon based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
6. OTHER PROVISIONS.
6.1 Rights of Eligible Persons, Participants and Beneficiaries.
(a) Employment Status. Status as an Eligible Person
shall not be construed as a commitment that any Award will be made under this
Plan to an Eligible Person or to Eligible Persons generally.
(b) No Employment Contract. Nothing contained in this
Plan (or in any other documents related to this Plan or to any Award) shall
confer upon any Eligible Person or other Participant any right to continue in
the employ or other service of the Company or constitute any contract or
agreement of employment or other service, nor shall interfere in any way with
the right of the Company to change such person's compensation or other benefits
or to terminate the employment of such person, with or without cause, but
nothing contained in this Plan or any document related hereto shall adversely
affect any independent contractual right of such person without his or her
consent thereto.
(c) Plan Not Funded. Awards payable under this Plan
shall be payable in shares or from the general assets of the Corporation, and
(except as provided in Section 1.4) no special or separate reserve, fund or
deposit shall be made to assure payment of such Awards. No Participant,
Beneficiary or other person shall have any right, title or interest in any fund
or in any specific asset (including shares of Common Stock, except as expressly
otherwise provided) of the Company by reason of any Award hereunder. Neither
the provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a
fiduciary relationship between the Company and any Participant, Beneficiary or
other person. To the extent that a Participant, Beneficiary or other person
acquires a right to receive payment pursuant to any Award hereunder,
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such right shall be no greater than the right of any unsecured general creditor
of the Company.
6.2 Adjustments; Acceleration.
(a) Adjustments. If there shall occur any extraordinary
dividend or other extraordinary distribution in respect of the Common Stock
(whether in the form of cash, Common Stock, other securities, or other
property), or any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), reverse stock split,
reorganization, merger, combination, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of the
Corporation, or there shall occur any similar, unusual or extraordinary
corporate transaction or event in respect of the Common Stock or a sale of
substantially all the assets of the Corporation as an entirety, then the
Committee shall, in such manner and to such extent (if any) as it deems
appropriate and equitable (1) proportionately adjust any or all of (a) the
number and type of shares of Common Stock (or other securities) which
thereafter may be made the subject of Awards (including the specific maxima and
numbers of shares set forth elsewhere in this Plan), (b) the number, amount and
type of shares of Common Stock (or other securities or property) subject to any
or all outstanding Awards, (c) the grant, purchase, or exercise price of any or
all outstanding Awards, (d) the securities, cash or other property deliverable
upon exercise of any outstanding Awards, or (e) the performance standards
appropriate to any outstanding Awards, or (2) in the case of an extraordinary
dividend or other distribution, recapitalization, reclassification, merger,
reorganization, consolidation, combination, sale of assets, split up, exchange,
or spin off, make provision for a cash payment or for the substitution or
exchange of any or all outstanding Awards or the cash, securities or property
deliverable to the holder of any or all outstanding Awards based upon the
distribution or consideration payable to holders of the Common Stock of the
Corporation upon or in respect of such event; provided, however, in each case,
that with respect to Awards of Incentive Stock Options, no such adjustment
shall be made which would cause the Plan to violate Section 424(a) of the Code
or any successor provisions thereto without the written consent of holders
materially adversely affected thereby. In any of such events, the Committee
may take such action sufficiently prior to such event if necessary to permit
the Participant to realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is available to shareholders
generally.
(b) Possible Early Termination of Awards. If any Award
or other right to acquire Common Stock has not been exercised or has not become
vested or exercisable prior to
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(i) a dissolution of the Corporation or (ii) a reorganization event described
in Section 6.2(a) that the Corporation does not survive, and no provision has
been made for the substitution, exchange or other settlement of such Award,
such Award shall thereupon terminate.
(c) Possible Early Termination of Accelerated Awards. If
any Option or other right to acquire Common Stock under this Plan (other than
under Article 8) has been fully accelerated as permitted by Section 6.2(b) but
is not exercised prior to (i) a dissolution of the Corporation, or (ii) an
event described in Section 6.2(a) that the Corporation does not survive, or
(iii) the consummation of an event described in Section 6.2(a) that results in
a Change of Control approved by the Board, such Option or right shall thereupon
terminate, subject to any provision that has been expressly made by the
Committee for the survival, substitution, exchange or other settlement of such
Option or right.
6.3 Effect of Termination of Employment.
(a) Options - Resignation or Dismissal. If the
Participant's employment by (or other service specified in the Award Agreement
to) the Company terminates for any reason (the date of such termination being
referred to as the "Severance Date") other than Retirement, Total Disability or
death, or "for cause" (as determined in the discretion of the Committee), the
Participant shall have, unless otherwise provided in the Award Agreement and
subject to earlier termination pursuant to or as contemplated by Section 1.6 or
6.2, three months after the Severance Date to exercise any Option to the extent
it shall have become exercisable on the Severance Date. In the case of a
termination "for cause", the Option shall terminate on the Severance Date. In
other cases, the Option, to the extent not exercisable on the Severance Date,
shall terminate.
(b) Options - Death or Disability. If the Participant's
employment by (or specified service to) the Company terminates as a result of
Total Disability or death, the Participant, Participant's Personal
Representative or his or her Beneficiary, as the case may be, shall have,
unless otherwise provided in the Award Agreement and subject to earlier
termination pursuant to or as contemplated by Section 1.6 or 6.2, until 3
months after the Severance Date to exercise any Option to the extent it shall
have become exercisable by the Severance Date. Any Option to the extent not
exercisable on the Severance Date shall terminate.
(c) Options - Retirement. If the Participant's
employment by (or specified service to) the Company terminates as a result of
Retirement, the Participant, Participant's Personal Representative or his or
her
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Beneficiary, as the case may be, shall have, unless otherwise provided in the
Award Agreement and subject to earlier termination pursuant to or as
contemplated by Section 1.6 or 6.2, until 3 months after the Severance Date to
exercise any Nonqualified Stock Option (three months after the Severance Date
in the case of an Incentive Stock Option) to the extent it shall have become
exercisable by the Severance Date. The Option, to the extent not exercisable
on the Severance Date, shall terminate.
(d) Certain SARs. Any SAR granted concurrently or in
tandem with an Option shall have the same post-termination provisions and
exercisability periods as the Option to which it relates, unless the Committee
otherwise provides.
(e) Other Awards. The Committee shall establish in
respect of each other Award granted hereunder the Participant's rights and
benefits (if any) in the event of a termination of employment and in so doing
may make distinctions based upon the cause of termination and the nature of the
Award.
(f) Committee Discretion. Notwithstanding the foregoing
provisions of this Section 2.6, in the event of, or in anticipation of, a
termination of employment with the Company for any reason, other than discharge
for cause, the Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or Participant's Beneficiary
or Personal Representative, as the case may be, or, subject to the provisions
of Section 1.6, extend the exercisability period upon such terms as the
Committee shall determine and expressly set forth in or by amendment to the
Award Agreement.
6.4 Compliance with Laws.
This Plan, the granting and vesting of Awards under this Plan
and the offer, issuance and delivery of shares of Common Stock and/or the
payment of money under this Plan or under Awards granted hereunder are subject
to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation,
be necessary or advisable in connection therewith. Any securities delivered
under this Plan shall be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Corporation, provide such assurances
and representations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements.
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6.5 Tax Withholding.
Upon any exercise, vesting, or payment of any Award or upon
the disposition of shares of Common Stock acquired pursuant to the exercise of
an Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the right at
its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount of
any taxes which the Company may be required to withhold with respect to such
Award event or payment or (ii) deduct from any amount payable in cash the
amount of any taxes which the Company may be required to withhold with respect
to such cash payment. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Plan, the
Committee may in its sole discretion grant (either at the time of the Award or
thereafter) to the Participant the right to elect, pursuant to such rules and
subject to such conditions as the Committee may establish, to have the
Corporation reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares valued at their then Fair Market
Value, to satisfy such withholding obligation.
6.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan, in whole
or in part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain jurisdiction as
to Awards then outstanding in accordance with the terms of this Plan.
(b) Shareholder Approval. Any amendment that would (i)
materially increase the benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate number of securities that may be issued under
this Plan, or (iii) materially modify the requirements as to eligibility for
participation in this Plan, shall be subject to shareholder approval only to
the extent then required by Section 422 of the Code or applicable law, or
deemed necessary or advisable by the Board.
(c) Amendments to Awards. Without limiting any other
express authority of the Committee under but subject to the express limits of
this Plan, the Committee by agreement or resolution may waive conditions of or
limitations on Awards to Eligible Persons that the Committee in the prior
exercise of its discretion has imposed, without the consent of a Participant,
and may make other changes to the terms and conditions of Awards that do not
affect in any
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manner materially adverse to the Participant, his or her rights and benefits
under an Award.
(d) Limitations on Amendments to Plan and Awards. No
amendment, suspension or termination of this Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant, affect in
any manner materially adverse to the Participant any rights or benefits of the
Participant or obligations of the Corporation under any Award granted under
this Plan prior to the effective date of such change. Changes contemplated by
Section 6.2 shall not be deemed to constitute changes or amendments for
purposes of this Section 6.6.
6.7 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the Committee or
this Plan, a Participant shall not be entitled to any privilege of stock
ownership as to any shares of Common Stock not actually delivered to and held
of record by him or her. No adjustment will be made for dividends or other
rights as a shareholders for which a record date is prior to such date of
delivery.
6.8 Effective Date of the Plan.
This Plan shall be effective as of January 24, 1997, the date
of Board approval, subject to shareholder approval within 12 months thereafter.
6.9 Term of the Plan.
No Award shall be granted under this Plan after more than ten
years after the effective date of this Plan (the "termination date"). Unless
otherwise expressly provided in this Plan or in an applicable Award Agreement,
any Award granted prior to the termination date may extend beyond such date,
and all authority of the Committee with respect to Awards hereunder, including
the authority to amend an Award, shall continue during any suspension of this
Plan and in respect of Awards outstanding on the termination date.
6.10 Governing Law/Construction/Severability.
(a) Choice of Law. This Plan, the Awards, all documents
evidencing Awards and all other related documents shall be governed by, and
construed in accordance with the laws of the state of incorporation of the
Corporation.
(b) Severability. If any provision shall be held by a
court of competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
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(c) Plan Construction.
(1) Rule 16b-3. It is the intent of the
Corporation that transactions in and affecting Awards in the case of
Participants who are or may be subject to Section 16 of the Exchange Act
satisfy any then applicable requirements of Rule 16b-3 so that such persons
(unless they otherwise agree) will be entitled to the benefits of Rule 16b-3 or
other exemptive rules under Section 16 of the Exchange Act in respect of those
transactions and will not be subjected to avoidable liability thereunder. If
any provision of this Plan or of any Award would otherwise frustrate or
conflict with the intent expressed above, that provision to the extent possible
shall be interpreted as to avoid such conflict. If the conflict remains
irreconcilable, the Committee may disregard the provision if it concludes that
to do so furthers the interest of the Corporation and is consistent with the
purposes of this Plan as to such persons in the circumstances.
(2) Section 162(m). It is the further intent of
the Company that Options or SARs with an exercise or base price not less than
Fair Market Value on the date of grant and performance awards under Section 5.2
of this Plan that are granted to or held by a Section 16 Person shall qualify
as performance-based compensation under Section 162(m) of the Code, and this
Plan shall be interpreted consistent with such intent.
6.11 Captions.
Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction or interpretation of this Plan or any provision thereof.
6.12 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder, if an
entity ceases to be a Subsidiary a termination of employment and service shall
be deemed to have occurred with respect to each Eligible Person in respect of
such Subsidiary who does not continue as an Eligible Person in respect of
another entity within the Company.
6.13 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit the
authority of the Board or the Committee to grant awards or authorize any other
compensation, with or without reference to the Common Stock, under any other
plan or authority.
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7. DEFINITIONS.
7.1 Definitions.
(a) "Award" shall mean an award of any Option, Stock
Appreciation Right, Restricted Stock, Stock Bonus, Performance Share Award,
dividend equivalent or deferred payment right or other right or security that
would constitute a "derivative security" under Rule 16a- 1(c) of the Exchange
Act, or any combination thereof, whether alternative or cumulative, authorized
by and granted under this Plan.
(b) "Award Agreement" shall mean any writing setting
forth the terms of an Award that has been authorized by the Committee.
(c) "Award Date" shall mean the date upon which the
Committee took the action granting an Award or such later date as the Committee
designates as the Award Date at the time of the Award or, in the case of Awards
under Article 8, the applicable dates set forth therein.
(d) "Award Period" shall mean the period beginning on an
Award Date and ending on the expiration date of such Award.
(e) "Beneficiary" shall mean the person, persons, trust
or trusts designated by a Participant or, in the absence of a designation,
entitled by will or the laws of descent and distribution, to receive the
benefits specified in the Award Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or administrator
if no other Beneficiary is designated and able to act under the circumstances.
(f) "Board" shall mean the Board of Directors of the
Corporation.
(g) "Cash Flow" shall mean cash and cash equivalents
derived from either (i) net cash flow from operations or (ii) net cash flow
from operations, financings and investing activities, as determined by the
Committee at the time an Award is granted.
(h) "Change in Control Event" shall mean any of the
following:
(1) Approval by the shareholders of the
Corporation of the dissolution or liquidation of the Corporation;
(2) Approval by the shareholders of the
Corporation of an agreement to merge or consolidate, or
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otherwise reorganize, with or into one or more entities that are not
Subsidiaries or other affiliates, as a result of which less than 50%
of the outstanding voting securities of the surviving or resulting
entity immediately after the reorganization are, or will be, owned,
directly or indirectly, by shareholders of the Corporation immediately
before such reorganization (assuming for purposes of such
determination that there is no change in the record ownership of the
Corporation's securities from the record date for such approval until
such reorganization and that such record owners hold no securities of
the other parties to such reorganization), but including in such
determination any securities of the other parties to such
reorganization held by affiliates of the Corporation);
(3) Approval by the shareholders of the
Corporation of the sale of substantially all of the Corporation's
business and/or assets to a person or entity which is not a Subsidiary
or other affiliate; or
(4) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act but excluding any person
described in and satisfying the conditions of Rule 13d-1(b)(1)
thereunder), other than a person who is the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of more than 25% of the
outstanding Shares of Common Stock at the time of adoption of this
Plan, (or an affiliate, successor, heir, descendant or related party
of or to any such person, becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing more than 50% of the
combined voting power of the Corporation's then outstanding securities
entitled to then vote generally in the election of directors of the
Corporation; or
(5) During any period not longer than two
consecutive years, individuals who at the beginning of such period
constituted the Board cease to constitute at least a majority thereof,
unless the election, or the nomination for election by the
Corporation's shareholders, of each new Board member was approved by a
vote of at least three-fourths of the Board members then still in
office who were Board members at the beginning of such period
(including for these purposes, new members whose election or
nomination was so approved).
(i) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
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(j) "Commission" shall mean the Securities and Exchange
Commission.
(k) "Committee" shall mean the Board or a committee
appointed by the Board to administer this Plan, which committee shall be
comprised only of two or more directors or such greater number of directors as
may be required under applicable law, each of whom, (i) in respect of any
decision at a time when the Participant affected by the decision may be subject
to Section 162(m) of the Code, shall be an "outside director" within the
meaning of Section 162(m) of the Code, and/or (ii) in respect of any decision
at a time when the Participant affected by the decision may be subject to
Section 16 of the Exchange Act, shall be a "Non-Employee Director" within the
meaning of Rule 16b- 3(b)(3).
(l) "Common Stock" shall mean the Common Stock of the
Corporation and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
(m) "Company" shall mean, collectively, the Corporation
and its Subsidiaries.
(n) "Corporation" shall mean First Aviation Services
Inc., a Delaware corporation, and its successors.
(o) "EBITDA" shall mean earnings before interest, taxes,
depreciation and amortization.
(p) "Eligible Employee" shall mean an officer (whether or
not a director) or other employee of the Company.
(q) "Eligible Person" means an Eligible Employee, or any
Other Eligible Person, as determined and selected by the Committee, in its
discretion, for participation in this Plan.
(r) "EPS" shall mean earnings per common share on a fully
diluted basis determined by dividing (i) net earnings, less dividends on
preferred stock of the Corporation by (ii) the weighted average number of
common shares and common shares equivalents outstanding.
(s) "EVA" shall mean net income of the business unit in
excess of the required rate of return on capital employed.
(t) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
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(u) "Fair Market Value" on any date shall mean (i) if the
stock is listed or admitted to trade on a national securities exchange, the
closing price of the stock on the Composite Tape, as published in the Western
Edition of The Wall Street Journal, of the principal national securities
exchange on which the stock is so listed or admitted to trade, on such date,
or, if there is no trading of the stock on such date, then the closing price of
the stock as quoted on such Composite Tape on the next preceding date on which
there was trading in such shares; (ii) if the stock is not listed or admitted
to trade on a national securities exchange, the last price for the stock on
such date, as furnished by the National Association of Securities Dealers, Inc.
("NASD") through the NASDAQ National Market Reporting System or a similar
organization if the NASD is no longer reporting such information; (iii) if the
stock is not listed or admitted to trade on a national securities exchange and
is not reported on the National Market Reporting System, the mean between the
bid and asked price for the stock on such date, as furnished by the NASD or a
similar organization; or (iv) if the stock is not listed or admitted to trade
on a national securities exchange, is not reported on the National Market
Reporting System and if bid and asked prices for the stock are not furnished by
the NASD or a similar organization, the value as established by the Committee
at such time for purposes of this Plan.
(v) "Incentive Stock Option" shall mean an Option which
is intended, as evidenced by its designation, as an incentive stock option
within the meaning of Section 422 of the Code, the award of which contains such
provisions (including but not limited to the receipt of shareholder approval of
this Plan, if the Award is made prior to such approval) and is made under such
circumstances and to such persons as may be necessary to comply with that
section.
(w) "Nonqualified Stock Option" shall mean an Option that
is designated as a Nonqualified Stock Option and shall include any Option
intended as an Incentive Stock Option that fails to meet the applicable legal
requirements thereof. Any Option granted hereunder that is not designated as
an incentive stock option shall be deemed to be designated a nonqualified stock
option under this Plan and not an incentive stock option under the Code.
(x) "Non-Employee Director" shall mean a member of the
Board of Directors of the Corporation who is not an officer or employee of the
Company.
(y) "Non-Employee Director Participant" shall mean a
Non-Employee Director who holds an outstanding Award under the provisions of
Article 8.
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(z) "Option" shall mean an option to purchase Common
Stock granted under this Plan. The Committee shall designate any Option
granted to an Eligible Person as a Nonqualified Stock Option or an Incentive
Stock Option.
(aa) "Other Eligible Person" shall mean any Non-Employee
Director or any individual consultant or advisor who renders or has rendered
bona fide services (other than services in connection with the offering or sale
of securities of the Company in a capital raising transaction) to the Company,
and who is selected to participate in this Plan by the Committee.
(ab) "Participant" shall mean an Eligible Person who has
been granted an Award under this Plan and a Non-Employee Director who has been
received an Award under this Plan.
(ac) "Performance Goal" shall mean EBITDA or EPS or EVA or
Return on Assets or ROE or Cash Flow or Total Stockholder Return, and
"Performance Goals" means any combination thereof.
(ad) "Performance Share Award" shall mean an Award of a
right to receive shares of Common Stock or other compensation (including cash)
under Section 5.2, the issuance or payment of which is contingent upon, among
other conditions, the attainment of performance objectives specified by the
Committee.
(ae) "Personal Representative" shall mean the person or
persons who, upon the disability or incompetence of a Participant, shall have
acquired on behalf of the Participant, by legal proceeding or otherwise, the
power to exercise the rights or receive benefits under this Plan and who shall
have become the legal representative of the Participant.
(af) "Plan" shall mean this Stock Incentive Plan.
(ag) "QDRO" shall mean a qualified domestic relations
order.
(ah) "Restricted Shares" or "Restricted Stock" shall mean
shares of Common Stock awarded to a Participant under this Plan, subject to
payment of such consideration, if any, and such conditions on vesting (which
may include, among others, the passage of time, specified performance
objectives or other factors) and such transfer and other restrictions as are
established in or pursuant to this Plan and the related Award Agreement, for so
long as such shares remain unvested under the terms of the applicable Award
Agreement.
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(ai) "Retirement" shall mean retirement with the consent
of the Company or, from active service as an employee or officer of the Company
on or after attaining age 55 with 10 or more years of service or after age 65
or, in the case of a Non-Employee Director, a retirement or resignation as a
director after at least five years service as a director.
(aj) "Return on Assets" shall mean consolidated net income
of the Corporation, divided by the average total assets for the period.
(ak) "ROE" shall mean consolidated net income of the
Corporation (less preferred dividends), divided by the average consolidated
common shareholders equity.
(al) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by
the Commission pursuant to the Exchange Act, as amended from time to time.
(am) "Section 16 Person" shall mean a person subject to
Section 16(a) of the Exchange Act.
(an) "Securities Act" shall mean the Securities Act of
1933, as amended from time to time.
(ao) "Stock Appreciation Right" shall mean a right authorized
under this Plan to receive a number of shares of Common Stock or an amount of
cash, or a combination of shares and cash, the aggregate amount or value of
which is determined by reference to a change in the Fair Market Value of the
Common Stock.
(ap) "Stock Bonus" shall mean an Award of shares of Common
Stock granted under this Plan for no consideration other than past services and
without restriction other than such transfer or other restrictions as the
Committee may deem advisable to assure compliance with law.
(aq) "Subsidiary" shall mean any corporation or other
entity a majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
(ar) "Total Disability" shall mean a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code and such other
disabilities, infirmities, afflictions or conditions as the Committee by rule
may include.
(as) "Total Stockholder Return" shall mean with respect to
the Corporation or other entities (if measures on a relative basis), the (i)
change in the market price of its common stock (as quoted in the principal
market on which it
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is traded as of the beginning and ending of the period) plus dividends and
other distributions paid, divided by (ii) the beginning quoted market price,
all of which is adjusted for any changes in equity structure, including but not
limited to stock splits and stock dividends.
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