EXHIBIT 10.1
ACORN HOLDING CORP.
2001 PERFORMANCE EQUITY PLAN
SECTION 1. PURPOSE; DEFINITIONS.
1.1. PURPOSE. The purpose of the Acorn Holding Corp. (the "Company") 2001
Performance Equity Plan (the "Plan"), adopted for the term set forth in Section
9 hereof, is to enable the Company to offer to its key employees and to key
employees of its subsidiaries, and independent agents and consultants of the
Company and its subsidiaries, Stock Options in the Company, thereby enhancing
its ability to attract, retain and reward such key employees and individuals,
and to increase the mutuality of interests between those employees and
individuals and the stockholders of the Company.
The Company previously adopted the 1991 Stock Option Plan (the "Prior Plan").
Awards granted under the Prior Plan prior to the effective date of this Plan
("Prior Awards") shall not be affected by the adoption of this Plan, and the
Prior Plan shall remain in effect following the effective date to the extent
necessary to administer the Prior Awards.
1.2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth herein:
(a) "Agents" means those persons who are not employees of the
Company or any subsidiary, including independent agents and consultants.
(b) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means a change of control of the
Company pursuant to Section 6 hereof.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute or statutes thereto.
(f) "Committee" means the Board of Directors of the
Corporation or by a committee which is appointed by the Board to perform such
functions.
(g) "Common Stock" means the Common Stock of the Company, par
value $.01 per share.
(h) "Company" means Acorn Holding Corp., a corporation
organized under the laws of the State of Delaware, and any successor thereto.
(i) "Disability" means disability as determined under
procedures established by the Committee for purposes of the Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor statute or statutes thereto.
(k) "Exchange Act Holder" means such officer or director or
10% beneficial owner of Common Stock subject to Section 16(b) of the Exchange
Act.
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(l) "Fair Market Value," unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock (as hereinafter defined) is listed on
a national securities exchange or quoted on the NASDAQ SmallCap Market System,
the closing price of the Common Stock on the last preceding day on which the
Common Stock was traded, as reported on the composite tape or by NASDAQ/SCM
System Statistics, as the case may be; (ii) if the Common Stock is not listed on
a national securities exchange or quoted on the NASDAQ SmallCap Market System,
but is traded in the over-the-counter market, the average of the bid and asked
prices for the Common Stock on the last preceding day for which such quotations
are reported by NASDAQ; and (iii) if the fair market value of the Common Stock
cannot be determined pursuant to clause (i) or (ii) hereof, such price as the
Committee shall determine.
(m) "Holder" means an eligible employee, prospective employee
or Agent of the Company or a Subsidiary who has received an award under the
Plan.
(n) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(o) "Non-Qualified Stock Option" means any Stock Option that
is not an Incentive Stock Option.
(p) "Plan" means this Acorn Holding Corp. 2001 Performance
Equity Plan, as hereinafter amended from time to time.
(q) "Prior Awards" and "Prior Plan" shall have the respective
meanings given to those terms in Section 1.1.
(r) "Stock Option" or "Option" means any Non-Qualified Stock
Option or Incentive Stock Option to purchase shares of Stock which is awarded
pursuant to the Plan.
(s) "Subsidiary" means any present or future subsidiary
corporation of the Company, as such term is defined in Section 424(f) of the
Code.
SECTION 2. ADMINISTRATION.
2.1. COMMITTEE MEMBERSHIP. The Plan shall be administered by the Committee, the
membership of which shall be at all times constituted so as to not adversely
affect the compliance of awards under the Plan with the requirements of Rule
16b-3 under the Exchange Act, Section 162(m) of the Code, or with the
requirements of any other applicable law, rule or regulation.
2.2. POWERS OF COMMITTEE. The Committee shall have full authority to award Stock
Options pursuant to the terms of the Plan, to eligible employees and prospective
employees described under Section 4 hereof. For purposes of illustration and not
of limitation, the Committee shall have the authority (subject to the express
provisions of this Plan):
(a) to select the eligible employees, prospective employees
and Agents to whom Stock Options may from time to time be awarded hereunder;
(b) to determine the Incentive Stock Options and Non-Qualified
Stock Options, if any, to be awarded hereunder to one or more eligible
employees, prospective employees and Agents;
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(c) to determine the number of shares to be covered by each
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award hereunder (including, but not limited
to, share price, any restrictions or limitations, and any vesting, settlement,
surrender, cancellation, acceleration, termination, exercise or forfeiture
provisions, as the Committee shall determine);
(e) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder; and
(f) to determine the terms and conditions under which awards
hereunder are to operate in conjunction with or apart from other equity awarded,
and cash awards made by the Company or any Subsidiary outside of this Plan.
2.3. INTERPRETATION OF PLAN. Subject to Section 7 hereof, the Committee shall
have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall, from time to time, deem
advisable, to interpret the terms and provisions of the Plan and any award
issued under the Plan (and to determine the form and substance of all Agreements
relating thereto), and to otherwise supervise the administration of the Plan.
Notwithstanding any provision in the Plan to the contrary, no term of the Plan
relating to Incentive Stock Options or any Agreement providing for Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of the Holder(s)
affected, to disqualify any Incentive Stock Option under such Section 422.
Subject to Section 7 hereof, all decisions made by the Committee pursuant to the
provisions of the Plan shall be made in the Committee's sole discretion and
shall be final and binding upon all persons, including the Company, its
Subsidiaries and the Holders.
SECTION 3. COMMON STOCK SUBJECT TO PLAN.
3.1. NUMBER OF SHARES. The total number of shares of Common Stock reserved and
available for distribution under the Plan shall be 450,000 shares. In addition,
Common Stock covered by any unexercised portions of terminated Options or Prior
Awards (including canceled Options or Prior Awards), or Prior Awards which are
otherwise surrendered by the Holder may again be subject to new awards under
this Plan. The number of shares of Common Stock deemed to be issued under the
Plan upon the exercise of an Option in the nature of a stock purchase right
shall be reduced by the number of shares of Common Stock surrendered by the
Holder in payment of the exercise or purchase price of the award and withholding
taxes thereon.
3.2. CHARACTER OF SHARES. Shares of Common Stock under the Plan may consist,
in whole or in part, of authorized and unissued shares or treasury shares.
3.3. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. In the event of any
acquisition, merger, reorganization, consolidation, recapitalization, dividend
(other than a dividend or its equivalent which is credited to a Holder or a
regular cash dividend), stock split, reverse stock split, or other change in
corporate structure affecting the Common Stock, such substitution or adjustment
shall be made in the aggregate number of shares reserved for issuance under the
Plan, in the maximum number of shares with respect to which awards may be
granted to any employee in any year, in the number and exercise price of shares
subject to outstanding Options, as may be determined to be appropriate by the
Committee in order to prevent the dilution or enlargement of each Holder's
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rights, provided that the number of shares subject to any award shall always be
a whole number.
SECTION 4. ELIGIBILITY.
4.1. GENERAL. Awards under the Plan may be made to (i) officers and other key
employees of the Company or any Subsidiary (including officers and key employees
serving as directors of the Company) who are at the time of the grant of an
award under this Plan regularly employed by the Company or any Subsidiary; (ii)
prospective employees of the Company or its Subsidiaries and (iii) Agents of the
Company. The exercise of any Stock Option and the vesting of any award hereunder
granted to a prospective employee shall be conditioned upon such person becoming
an employee of the Company or a Subsidiary. The term "prospective employee"
shall mean any person who holds an outstanding offer of regular employment on
specific terms from the Company or a Subsidiary.
SECTION 5. STOCK OPTIONS.
5.1. GRANT AND EXERCISE. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, as the Committee may from time to time approve. The Committee
shall have the authority to grant to any Holder hereof Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options. To the extent that
any Stock Option (or portion thereof) does not qualify as an Incentive Stock
Option, it shall constitute a separate Non-Qualified Stock Option.
5.2. TERMS AND CONDITIONS. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
(a) Exercise Price. The exercise price per share of Common
Stock purchasable under a Stock Option shall be determined by the Committee at
the time of grant but except as otherwise provided in Section 5.3 in the case of
Options granted to replace stock options issued by acquired companies, shall be
not less than 100% of the Fair Market Value of the Common Stock at the time of
grant (110%, in the case of an Incentive Stock Option granted to a Holder ("10%
Stockholder") who, at the time of grant, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or its
parent (if any) or subsidiary corporations, as those terms are defined in
Sections 424(e) and (f) of the Code).
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more than ten years
after the date on which the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee. If the Committee provides, in its discretion, that any Stock
Option is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after the time of grant in
whole or in part, based upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option, by giving written notice of exercise to the Company specifying
the number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, which shall be in cash or,
unless otherwise provided in the Agreement, in whole shares of Common Stock
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which are already owned by the Holder of the Stock Option or, unless otherwise
provided in the Stock Option Agreement, partly in cash and partly in such Common
Stock. Cash payments shall be made by wire transfer, certified or bank check or
personal check, in each case payable to the order of the Company; provided,
however, that the Company shall not be required to deliver certificates for
shares of Common Stock with respect to which a Stock Option is exercised until
the Company has confirmed the receipt of good and available funds in payment of
the purchase price thereof. Payments in the form of Common Stock (which shall be
valued at the Fair Market Value of a share of Common Stock on the date of
exercise) shall be made by delivery of stock certificates in negotiable form
which are effective to transfer good and valid title thereto to the Committee,
free of any liens or encumbrances. Payment may also be made, in the discretion
of the Company, by the delivery (including, without limitation, by fax) to the
Company or its designated agent of an executed irrevocable option exercise form
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares and deliver the sale or margin loan proceeds
directly to the Company to pay for the exercise price. Except as otherwise
expressly provided in this Plan or in the Agreement, no Stock Option granted to
an employee or prospective employee may be exercised at any time unless the
Holder thereof is then an employee of the Company or of a Subsidiary. The Holder
of a Stock Option shall have none of the rights of a stockholder with respect to
the shares subject to the Stock Option until such shares shall be transferred to
the Holder upon the exercise of the Stock Option.
(e) Buyout and Settlement Provisions. The Committee may at any
time offer to buy out for cash or otherwise settle a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
5.3. AWARDS FOR ACQUIRED COMPANIES. After any merger, consolidation,
reorganization, stock or asset purchase or similar transaction in which the
Company or a Subsidiary shall be a surviving corporation, the Committee may
grant Options under the provisions of the Plan, pursuant to Section 424 of the
Code or as is otherwise permitted under the Code, in full or partial replacement
of or substitution for stock options granted under a plan of another party to
the transaction whose shares of stock subject to the old options may no longer
be issued following the transaction. The manner of application of the foregoing
provisions to such options and any appropriate adjustments in the terms of such
awards shall be determined by the Company in its sole discretion. Any such
adjustments may provide for the elimination of any fractional shares which might
otherwise become subject to any awards. The foregoing shall not be deemed to
preclude the Company from assuming or substituting for stock options of acquired
companies other than pursuant to this Plan.
SECTION 6. ACCELERATION.
6.1. ACCELERATION UPON CHANGE OF CONTROL. Unless the award Agreement provides
otherwise or unless the Holder waives the application of this Section 6.1 prior
to a Change of Control (as hereinafter defined), in the event of a Change of
Control, each outstanding Stock Option granted under the Plan shall immediately
become exercisable in full notwithstanding the vesting or exercise provisions
contained in the Agreement.
6.2. CHANGE OF CONTROL DEFINED. A "Change of Control" shall be deemed to have
occurred upon any of the following events:
(a) any individual, firm, corporation or other entity, or any
group (as defined in Section 13(d)(3) of the Exchange Act becomes, directly or
indirectly, the beneficial owner (as defined in the General Rules and
Regulations of the Securities and Exchange Commission with respect to Sections
13(d) and 13(g) of the Exchange Act) of more than 20% of the then outstanding
shares of the Company's capital stock entitled to vote generally in the election
of directors of the Company; or
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(b) the commencement of, or the first public announcement of
the intention of any individual, firm, corporation or other entity or of any
group (as defined in Section 13(d)(3) of the Exchange Act) to commence, a tender
or exchange offer subject to Section 14(d)(1) of the Exchange Act for any class
of the Company's capital stock; or
(c) the stockholders of the Company approve (A) a definitive
agreement for the merger or other business combination of the Company with or
into another corporation pursuant to which the stockholders of the Company do
not own, immediately after the transaction, more than 50% of the voting power of
the corporation that survives and is a publicly owned corporation and not a
subsidiary of another corporation, or (B) a definitive agreement for the sale,
exchange or other disposition of all or substantially all of the assets of the
Company, or (C) any plan or proposal for the liquidation or dissolution of the
Company; or
(d) In the event of a "Change of Control" as defined in
Subsection (a) above, all outstanding Stock Options, shall become exercisable in
full, whether or not otherwise exercisable at such time, and any such Stock
Option shall remain exercisable in full thereafter until it expires pursuant to
its terms, unless the provisions of this Section 6 are suspended or terminated
by an affirmative vote of a majority of the Board.
6.3. GENERAL WAIVER BY COMMITTEE. The Committee may, after grant of an award,
accelerate the vesting of all or any part of any Stock Option and/or waive any
limitations or restrictions, if any, for all or any part of an award.
6.4. ACCELERATION UPON TERMINATION OF EMPLOYMENT. In the case of a Holder whose
employment with the Company or a Subsidiary is involuntarily terminated for any
reason (other than for cause), the Committee may accelerate the vesting of all
or any part of any award and/or waive in whole or in part any or all of the
remaining limitations or restrictions imposed hereunder or pursuant to the
Agreement.
SECTION 7. AMENDMENTS AND TERMINATION.
7.1. AMENDMENTS TO PLAN. The Board may at any time, and from time to time, amend
any of the provisions of the Plan, and may at any time suspend or terminate the
Plan; provided, however, that no such amendment shall be effective unless and
until it has been duly approved by the stockholders of the requisite number of
outstanding shares of Common Stock if (a) it increases the aggregate number of
shares of Common Stock which are available pursuant to the Plan, (except as
provided in Section 3 hereof) or (b) the failure to obtain such approval would
adversely affect the compliance of the Plan with the requirements of any
applicable law, rule or regulation.
7.2. AMENDMENTS TO INDIVIDUAL AWARDS. The Committee may amend the terms of any
award granted under the Plan; provided, however, that subject to Section 3
hereof, no such amendment may be made by the Committee which in any material
respect impairs the rights of the Holder without the Holder's consent.
SECTION 8. TERM OF PLAN.
8.1. EFFECTIVE DATE. The Plan shall be effective June 4, 2001, subject to
approval of the stockholders of the Company on or before June 3, 2002.
8.2. TERMINATION DATE. No award shall be granted pursuant to the Plan on or
after the tenth anniversary of its effective date, but awards granted prior to
or on such date may extend beyond that date. The Plan shall terminate at such
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time as no further awards may be granted and all awards granted under the Plan
are no longer outstanding.
SECTION 9. GENERAL PROVISIONS.
9.1. INVESTMENT REPRESENTATIONS. The Committee may require each person
acquiring shares of CommonStock pursuant to an award under the Plan to represent
to and agree with the Company in writing that the Holder is acquiring the shares
for investment without a view to distribution thereof.
9.2. ADDITIONAL INCENTIVE ARRANGEMENTS. Nothing contained in the Plan shall
prevent the Board from adopting such other or additional incentive arrangements
as it may deem desirable, including, but not limited to, the granting of stock
options and the awarding of stock and cash otherwise than under the Plan; and
such arrangements may be either generally applicable or applicable only in
specific cases.
9.3. NO RIGHT OF EMPLOYMENT. Nothing contained in the Plan or in any award
hereunder shall be deemed to confer upon any employee of the Company or any
Subsidiary any right to continued employment with the Company or any Subsidiary,
nor shall it interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of any of its employees at any time.
9.4. WITHHOLDING TAXES. Not later than the date as of which an amount first
becomes includible in the gross income of the Holder for federal income tax
purposes with respect to any award under the Plan, the Holder shall pay to the
Company, or make arrangements satisfactory to the Committee regarding the
payment of, any federal, state and local taxes of any kind required by law to be
withheld or paid with respect to such amount. If permitted by the Committee, tax
withholding or payment obligations may be settled with Common Stock, including
Common Stock that is part of the award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be conditional
upon such payment or arrangements and the Company or the Holder's employer (if
not the Company) shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the Holder from the
Company or any Subsidiary.
9.5. GOVERNING LAW. To the extent not preempted by the laws of the United
States, the laws of the State of Delaware, without reference to conflict of laws
provisions, shall be the controlling law in all matters relating to the Plan and
all awards made and actions taken thereunder.
9.6. OTHER BENEFIT PLANS. Any award granted under the Plan shall not be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or any Subsidiary and shall not affect any benefits under any other
benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
9.7. EMPLOYEE STATUS. A leave of absence, unless otherwise determined by the
Committee prior to the commencement thereof, shall not be considered a
termination of employment. Any awards granted under the Plan to an employee
shall not be affected by any change of employment, so long as the Holder
continues to be an employee of the Company or any Subsidiary.
9.8. NON-TRANSFERABILITY. Other than the transfer of a Stock Option by will, by
the laws of descent and distribution, or pursuant to the express provisions of
the applicable Agreement, no award under the Plan may be alienated, sold,
assigned, hypothecated, pledged, exchanged, transferred, encumbered or charged,
and any attempt to alienate, sell, assign, hypothecate, pledge, exchange,
transfer, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the person entitled to such benefit. Except as expressly
provided in any applicable Agreement, any Stock Option or other award granted
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under this Plan shall be only exercisable during the lifetime of the Holder by
the Holder or by his or her guardian or legal representative. Notwithstanding
the foregoing, the Company may grant Non-Qualified Stock Options that are
transferable, without payment of consideration, to immediate family members of
the Holder, to trusts or partnerships for such family members, or to such other
parties as the Committee may approve (as evidenced by the applicable award
agreement or an amendment thereto), and the Company may also amend outstanding
Non-Qualified Stock Options to provide for such transferability.
9.9. APPLICABLE LAWS. The obligations of the Company with respect to all awards
under the Plan shall be subject to (i) all applicable laws, rules and
regulations and such approvals by any governmental agencies as may be required,
including, without limitation, the effectiveness of a registration statement
under the Securities Act of 1933, as amended, and (ii) the rules and regulations
of any securities exchange on which the Common Stock may be listed or the NASDAQ
SmallCap Market System if the Common Stock is designated for quotation thereon.
9.10. CONFLICTS. If any of the terms or provisions of the Plan conflict with the
requirements of Rule 16b-3 under the Exchange Act, or with the requirements of
any other applicable law, rule or regulation, and/or with respect to Incentive
Stock Options, Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Rule 16b-3, and/or with respect to Incentive Stock Options, Section 422 of the
Code. With respect to Incentive Stock Options, if this Plan does not contain any
provision required to be included herein under Section 422 of the Code, such
provision shall be deemed to be incorporated herein with the same force and
effect as if such provision had been set out at length herein.
9.11. WRITTEN AGREEMENTS. Each award granted under the Plan shall be confirmed
by, and shall be subject to the terms of the Agreement executed by the Company
and the Holder. The Committee may terminate any award made under the Plan if the
Agreement relating thereto is not executed and returned to the Company within 60
days after the Agreement has been delivered to the Holder for his or her
execution.
9.12. COMMON STOCK CERTIFICATES. Notwithstanding anything to the contrary
contained herein, whenever certificates representing shares of Common Stock
subject to an award are required to be delivered pursuant to the terms of the
Plan, the Company may in lieu of such delivery requirement comply with the
provisions of Section 158 of the General Corporation Law of Delaware. All
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed, any applicable Federal or state securities law, and any
applicable corporate law, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.
9.13. UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an "unfunded"
plan for incentive compensation. With respect to any payments not yet made to a
Holder by the Company, nothing contained herein shall give any such Holder any
rights that are greater than those of a general creditor of the Company.
9.14. CERTAIN MERGERS. If in connection with a merger, reorganization,
consolidation, share exchange, transfer of assets or other transaction having
similar effect involving the Company ("Merger") in which the Company is not the
surviving corporation or pursuant to which a majority of the shares which are of
the same class as the shares that are subject to outstanding Options are
exchanged for, or converted into, or otherwise become shares of another
corporation, the surviving, continuing, successor or purchasing corporation, as
the case may be (the "Acquiring Corporation"), does not assume the Company's
rights and obligations under outstanding award agreements or substitute awards
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in respect of the Acquiring Corporation's stock for outstanding awards, the
Board shall provide prior to the Merger that any unexercisable and/or unvested
portion of the outstanding awards shall be immediately exercisable and vested as
of a date prior to such Merger, as the Board so determines. The exercise and/or
vesting of any award that was permissible solely by reason of this Section 9.14
shall be conditioned upon the consummation of the Merger. Any awards which are
neither assumed by the Acquiring Corporation nor exercised as of the date of the
Merger shall terminate effective as of the effective date of the Merger.
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