Exhibit 99.5
NEXTWAVE WIRELESS, INC.
2007 NEW EMPLOYEE STOCK INCENTIVE PLAN
SECTION 1. Purpose of the Plan.
The NextWave Wireless, Inc. 2007 New Employee Stock Incentive Plan (the
"Plan") is intended to promote the interests of NextWave Wireless Inc., a
Delaware corporation (the "Company"), and its stockholders by enabling the
Company and its subsidiaries and affiliates to foster and promote the interests
of the Company by attracting new employees, and non-employee directors to the
Company who will contribute to the Company's success by their ability, ingenuity
and industry, to enable such employees to acquire equity interests in the
Company and to provide a means whereby they may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to remain with and devote their best
efforts to the business of the Company thereby advancing the interests of the
Company and its stockholders. The Plan provides for payment of various forms of
incentive compensation and accordingly is not intended to be a plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, and
shall be administered accordingly.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Award" shall mean any Option, Restricted Share, Phantom Share, Bonus
Shares or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to Section
6(d) of the Plan.
"Change in Control" shall mean the occurrence of any one of the following
events:
(a) any "person" (as defined in Section 3(a)(9) of the Exchange Act, and
as modified in Section 13(d) and 14(d) of the Exchange Act) other
than (A) the Company or any of its subsidiaries, (B) any employee
benefit plan of the Company or any of its subsidiaries, (C) any
Affiliate, (D) a company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of the Company, or (E) an underwriter temporarily
holding securities pursuant to an offering of such securities (a
"Person"), becomes the "beneficial owner" (as defined in Rule 13d-3
of the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting securities
of the Company then outstanding;
(b) the consummation of any merger, organization, business combination
or consolidation of the Company or one of its subsidiaries with or
into any other entity or organization; provided, however, that a
merger, reorganization, business combination or consolidation which
would result in the holders of the voting securities of the Company
outstanding immediately prior thereto holding securities which
represent immediately after such merger, reorganization, business
combination or consolidation more than 50% of the combined voting
power of the voting securities of the Company or the surviving
company or the parent of such surviving company shall not be covered
by this subparagraph (b);
(c) the consummation of a sale, lease, transfer, conveyance or other
disposition (including by merger or consolidation) by the Company in
one or a series of related transactions, of all or substantially all
of the Company's assets, other than any such transaction if the
holders of the voting securities of the Company outstanding
immediately prior thereto hold securities immediately thereafter
which represent more than 50% of the combined voting power of the
voting securities of the acquiror, or parent of the acquiror, of
such assets;
(d) the Board of Directors of the Company approves a plan of complete
liquidation or dissolution of the Company, except in connection with
a transaction described in the proviso to subparagraph (b); or
(e) individuals who, as of the Effective Date, constitute the Board (the
"Incumbent Board") cease during a 12 month period for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a Director subsequent to the Effective Date
whose election by the Board, was approved by a vote of at least a
majority of the Directors then comprising the Incumbent Board shall
be considered as though such individual were a Director of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either (i) an actual or threatened election contest (as such terms
are used in Rule 14A-11 of Regulation 14A promulgated under the
Exchange Act) with respect to the election or removal of Directors
or an actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board or (ii) a plan or
agreement to replace a majority of the Directors of the Board then
comprising the Incumbent Board.
Solely with respect to any Award that is subject to Section 409A of the Code,
this definition is intended to comply with the definition of change in control
under Section 409A of the Code and, to the extent that the above definition does
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not so comply, such definition shall be void and of no effect and, to the extent
required to ensure that this definition complies with the requirements of
Section 409A of the Code, the definition of such term set forth in regulations
or other regulatory guidance issued under Section 409A of the Code by the
appropriate governmental authority is hereby incorporated by reference into and
shall form part of this Plan as fully as if set forth herein verbatim and the
Plan shall be operated in accordance with the above definition of Change in
Control as modified to the extent necessary to ensure that the above definition
complies with the definition prescribed in such regulations or other regulatory
guidance insofar as the definition relates to any Award that is subject to
Section 409A of the Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Committee" shall mean the compensation committee of the Board or a subset
thereof that is comprised solely of Independent Directors.
"Company" shall mean NextWave Wireless, Inc. or any successor thereto that
assumes and continues the Plan.
"Director" shall mean a member of the Board who is not an Employee.
"Effective Date" means the date that the Plan is adopted by the Board.
"Employee" shall mean any employee of the Company or an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, with respect to Shares, the closing sales
price on any national securities exchange of a Share as of the trading day
immediately prior to the date of determination, or if the Shares are not listed
on a national securities exchange, the average of the closing bid and closing
ask prices quoted in the Over-The-Counter Market Summary immediately prior to
the date of determination (or if there is no trading in the Shares on such date,
the next preceding date on which there was trading) as reported in The Wall
Street Journal (or other reporting service approved by the Committee), unless a
different measure of Fair Market Value is determined by the Committee. In the
event the Shares are not publicly traded at the time a determination of its fair
market value is required to be made hereunder, the determination of fair market
value shall be made in good faith by the Committee upon the reasonable
application of a reasonable valuation methodology.
"Independent Director" shall mean an Independent Director as defined by
NASDAQ Rule 4200(a)(15).
"Liquidity Event" shall mean a Change in Control.
"Option" shall mean an option granted under Section 6(a) of the Plan.
Options granted under the Plan may constitute nonqualified stock options, but
shall not constitute "incentive options" for purposes of Section 422 of the
Code.
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"Other Stock-Based Award" shall mean an award granted pursuant to Section
6(f) of the Plan that is not otherwise specifically provided for, the value of
which is based in whole or in part upon the value of a Share.
"Participant" shall mean any Employee or Director granted an Award under
the Plan.
"Performance Objectives" means the objectives, if any, established by the
Committee that are to be achieved with respect to an Award granted under this
Plan, which may be described in terms of Company-wide objectives, in terms of
objectives that are related to performance of a division, subsidiary, department
or function within the Company or an Affiliate in which the Participant
receiving the Award is employed or in individual or other terms, and which will
relate to the period of time determined by the Committee. Which objectives to
use with respect to an Award, the weighting of the objectives if more than one
is used, and whether the objective is to be measured against a
Company-established budget or target, an index or a peer group of companies,
shall be determined by the Committee in its discretion at the time of grant of
the Award. A Performance Objective need not be based on an increase or a
positive result and may include, for example, maintaining the status quo or
limiting economic losses.
"Person" shall mean an individual or a corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
"Phantom Share" shall mean an Award of the right to receive Shares issued
at the end of a Restricted Period which is granted pursuant to Section 6(e) of
the Plan.
"Plan" means the plan described in Section 1 of the Plan and set forth in
this document, as amended from time to time.
"Restricted Period" shall mean any period established by the Committee
with respect to an Award during which the Award remains subject to forfeiture,
is not exercisable by the Participant, and/or remains subject to the occurrence
of a Liquidity Event.
"Restricted Share" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Sections 6(b) of the Plan.
"SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.
"Shares" shall mean shares of common stock of the Company, and such other
securities or property as may become the subject of Awards under the Plan or
into which Shares may be converted.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
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be the acts of the Committee. No member of the Committee shall vote or act upon
any matter relating solely to himself. Grants of Awards to members of the
Committee must be ratified by the Board.
Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Committee by the Plan,
the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan
and any instrument or agreement relating to an Award made under the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any stockholder of the Company and any Employee or
Director. No Director or member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Award
granted hereunder and the Directors and the members of the Committee shall be
entitled to indemnification and reimbursement by the Company and its Affiliates
in respect of any claim, loss, damage or expense (including legal fees) arising
therefrom to the full extent permitted by law.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted
under the Plan shall be 2,500,000. In the event that any outstanding
Award expires, is cancelled or otherwise terminated, any rights to
acquire Shares allocable to the unexercised or unvested portion of
such Award shall again be available for the purposes of the Plan. In
the event that Shares issued under the Plan are reacquired by the
Company pursuant to any forfeiture provision, such Shares shall
again be available for the purposes of the Plan. In the event a
Participant pays for any Award through the delivery of previously
acquired Shares, the number of Shares available shall be increased
by the number of Shares delivered by the Participant.
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(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may only be authorized and unissued Shares and,
unless permitted under Delaware law, may not be treasury Shares. No
fractional Shares shall be issued under the Plan; payment for any
fractional Shares shall be made in cash.
(c) Adjustments. In the event that the Committee determines that any
distribution (whether in the form of cash, Shares, other securities,
or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities
of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company, or other similar
transaction or event affects the Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or property)
with respect to which Awards may be granted, (ii) the number and
type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision for a
cash payment to the holder of an outstanding Award; provided,
however, the Committee -------- ------- shall not take any action
otherwise authorized under this subparagraph (c) to the extent that
(i) such action would cause (A) the application of Section 409A of
the Code to the Award or (B) create adverse tax consequences under
Section 409A of the Code should either or both of those Code
sections apply to the Award or (ii) except as permitted in Section
7(c), materially reduce the benefit to the Participant without the
consent of the Participant.
SECTION 5. Eligibility.
Awards may be granted to any person who was not previously an employee or
director of the Company or an Affiliate, or following a bona fide period of
non-employment or non-service, as an inducement to the individual's entering
into employment with the Company or an Affiliate or as a non-employee director
of the Company or an Affiliate, including grants of Awards to new employees and
new directors in connection with a merger or acquisition.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Participants to whom Options
shall be granted, the number of Shares to be covered by each Option,
the purchase price therefor and the conditions and limitations
applicable to the exercise of the Option, including the following
terms and conditions and such additional terms and conditions
(including Performance Objectives), as the Committee shall
determine, that are not inconsistent with the provisions of the
Plan.
(i) Exercise Price. The purchase price per Share purchasable under
an Option shall be determined by the Committee at the time the
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Option is granted, but shall not be less than 100% of the Fair
Market Value per Share as of the date of determination.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or
in part (which may include the achievement of one or more
Performance Objectives), and the method or methods by which,
and the form or forms (which may include, without limitation,
cash, check acceptable to the Company, Shares already owned
for more than six months, outstanding Awards, other securities
or other property, or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant
exercise price) in which payment of the exercise price with
respect thereto may be made.
(iii) Option Repricing. Options under this Plan may not be repriced.
However, the Committee may, in its absolute discretion, grant
to holders of outstanding Options, in exchange for the
surrender and cancellation of such Options, options granted
under a shareholder approved plan of the Company in accordance
with the terms thereof, which have exercise prices lower (or
higher with any required consent) than the exercise price
provided in the Options so surrendered and canceled and
containing such other terms and conditions as the Committee
may deem appropriate.
(b) Restricted Shares. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Participants to
whom Restricted Shares shall be granted, the number of Restricted
Shares to be granted to each such Participant, the duration of the
Restricted Period during which, and the conditions, including
Performance Objectives, if any, under which if not achieved, the
Restricted Shares may be forfeited to the Company, and the other
terms and conditions of such Awards. Unless subject to the
achievement of Performance Objectives or a special determination is
made by the Committee as to a shorter Restricted Period, the
Restricted Period shall not be less than three years.
(i) Share Distribution Right ("SDR"). To the extent provided by
the Committee, in its discretion, a grant of Restricted Shares
may provide that distributions made by the Company with
respect to the Restricted Shares shall be subject to the same
forfeiture and other restrictions as the Restricted Share and,
if restricted, such distributions shall be held, without
interest, until the Restricted Share vests or is forfeited
with the SDR being paid or forfeited at the same time, as the
case may be. Absent such a restriction on the SDRs in the
Award Agreement, SDRs shall be paid to the holder of the
Restricted Share without restriction.
(ii) Registration. Any Restricted Share may be evidenced in such
manner as the Committee shall deem appropriate, including,
without limitation, book-entry registration or issuance of a
Share certificate or certificates. In the event any Share
certificate is issued in respect of Restricted Share granted
under the Plan, such certificate shall be registered in the
name of the Participant and shall bear an appropriate legend
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referring to the terms, conditions, and restrictions
applicable to such Restricted Share.
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that
granted the Restricted Share, upon termination of a
Participant's employment (as determined under criteria
established by the Committee) for any reason during the
applicable Restricted Period, all Restricted Shares shall be
forfeited by the Participant and reacquired by the Company.
Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be issued to the holder of
Restricted Shares promptly after the applicable restrictions
have lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period,
Restricted Shares will be subject to the limitations on
transfer as provided in Section 6(g)(iii).
(c) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Participants. Each Bonus Share
shall constitute a transfer of an unrestricted Share to the
Participant, without other payment therefor, as additional
compensation for the Participant's services to the Company. Bonus
Shares shall be in lieu of a cash bonus that otherwise would be
granted.
(d) Phantom Shares. The Committee shall have the authority to grant
Awards of Phantom Shares to Participants upon such terms and
conditions as the Committee may determine; provided, however, any
such Award shall contain terms that are designed to avoid
application of Section 409A of the Code to the Award or are designed
to avoid adverse tax consequences under Section 409A of the Code
should that Code section apply to the Award. Phantom Shares that are
vested on the date of grant shall be in lieu of a cash bonus that
otherwise would have been granted.
(i) Terms and Conditions. Each Phantom Share Award shall
constitute an agreement by the Company to issue or transfer a
specified number of Shares or pay an amount of cash equal to
the Fair Market Value of a specified number of Shares, or a
combination thereof to the Participant in the future, subject
to the fulfillment during the Restricted Period or other
period set by the Committee of such conditions, including
Performance Objectives, if any, as the Committee may specify
at the date of grant. During the Restricted Period, the
Participant shall not have any rights of ownership in the
Phantom Shares and shall not have any right to vote such
Shares.
(ii) Distributions. Any Phantom Shares Award may provide that an
amount equal to any distributions made by the Company with
respect to Shares during the Restricted Period be credited in
a cash bookkeeping account (without interest) or that
equivalent additional Phantom Shares be awarded, which account
or Shares may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee
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may determine. Notwithstanding any other provision of the Plan
to the contrary, any award of distributions on Shares
(described in the immediately preceding sentence) shall
contain terms that (i) are designed to avoid application of
Section 409A of the Code to the Award or (ii) are designed to
avoid adverse tax consequences under Section 409A should that
Code section apply.
(e) Other Stock-Based Awards. The Committee may also grant to
Participants an Other Stock-Based Award, which shall consist of a
right which is an Award denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to,
Shares as is deemed by the Committee to be consistent with the
purposes of the Plan. Subject to the terms of the Plan, including
the Performance Objectives, if any, applicable to such Award, the
Committee shall determine the terms and conditions of any such Other
Stock-Based Award. Notwithstanding any other provision of the Plan
to the contrary, any Other Stock-Based Award granted under the Plan
shall contain terms that (i) are designed to avoid application of
Section 409A of the Code or (ii) are designed to avoid adverse tax
consequences under Section 409A should that Code section apply to
such Award.
(f) General Provisions Applicable to all Awards.
(i) Awards May Be Granted Separately or Together. Awards may, in
the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for any other
Award granted under the Plan or any award granted under any
other plan of the Company or any Affiliate. No Award shall be
issued in tandem with another Award if the tandem awards would
result in adverse tax consequences under Section 409A of the
Code. Awards granted in addition to or in tandem with other
Awards or awards granted under any other plan of the Company
or any Affiliate may be granted either at the same time as or
at a different time from the grant of such other Awards or
awards.
(ii) Forms of Payment by Company Under Awards. Subject to the terms
of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the
grant, exercise or payment of an Award may be made in such
form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other
Awards or other property, or any combination thereof, and may
be made in a single payment or transfer, in installments, or
on a deferred basis, in each case in accordance with rules and
procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or
deferred payments.
(iii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award, and each
right under any Award, shall be exercisable only by the
Participant during the Participant's lifetime, or by the
person to whom the Participant's rights shall pass by
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will or the laws of descent and distribution.
Notwithstanding anything in the Plan to the contrary, an
Award of Options shall be transferable pursuant to a
domestic relations order.
(B) Except as provided in (C) below, no Award and no right
under any such Award may be assigned, alienated,
pledged, attached, sold or otherwise transferred or
encumbered by a Participant and any such purported
assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the contrary, to
the extent specifically provided by the Committee with
respect to a grant, an Award of Options may be
transferred to immediate family members or related
family trusts, or similar entities on such terms and
conditions as the Committee may establish.
(iv) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee; provided, that
in no event shall the term of any Award exceed a period of 10
years from the date of its grant.
(v) Stock Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the
Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock
exchange upon which such Shares or other securities are then
listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such
restrictions.
(vi) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities
shall be delivered pursuant to any Award until payment in full
of any amount required to be paid pursuant to the Plan or the
applicable Award Agreement (including, without limitation, any
exercise price, tax payment or tax withholding pursuant to
Section 9(b) of the Plan) is received by the Company. Such
payment may be made by such method or methods and in such form
or forms as the Committee shall determine, including, without
limitation, cash, reduction of a current payment of
compensation with the consent of the Participant, Shares,
other securities, other Awards or other property, withholding
of Shares, cashless exercise with simultaneous sale, or any
combination thereof; provided that the combined value, as
determined by the Committee, of all cash and cash equivalents
and the Fair Market Value of any such Shares or other property
so tendered to the Company, as of the date of such tender, is
at least equal to the full amount required to be paid pursuant
to the Plan or the applicable Award Agreement to the Company.
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(vii) Awards to Non-U.S. Employees. To comply with the laws in other
countries in which the Company or any of its Affiliates
operates or has Employees or Directors, the Committee, in its
sole discretion, shall have the power and authority to
(A) Determine which Affiliates shall be covered by the Plan;
(B) Determine which Employees and Directors outside the
United States are eligible to participate in the Plan;
(C) Modify the terms and conditions of any Award granted to
Employees and Directors outside the United States to
comply with applicable foreign laws;
(D) Establish sub-plans and modify exercise procedures and
other terms and procedures, to the extent such actions
may be necessary or advisable. Any sub-plans and
modifications to Plan terms and procedures established
under this Section 6(f)(vii) by the Committee shall be
attached to this Plan document as appendices; and
(E) Take any action, before or after an Award is made, that
it deems advisable to obtain approval or comply with any
necessary local government regulatory exemptions or
approvals.
(viii) Compliance with 409A. Notwithstanding any other provision of
the Plan to the contrary, any Award granted under the Plan
shall contain terms that (i) are designed to avoid application
of Section 409A of the Code to the Award or (ii) are designed
to avoid adverse tax consequences under Section 409A of the
Code should that Code Section apply to the Award.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Committee may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any
Shareholder, Participant, other holder or beneficiary of an Award,
or other Person; provided, however, no such amendment may be made
without Shareholder approval to the extent that such approval is
required by (i) applicable legal requirements or (ii) the
requirements of any securities exchange or market on which the
Shares are listed.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter any Award theretofore
granted, provided no change in any Award (i) shall (A) cause the
application of Section 409A of the Code to the Award or (B) create
adverse tax consequences under Section 409A of the Code should
either or both of those Code sections apply to the Award or (ii)
except as provided in Section 7(c), shall materially reduce the
benefit to Participant without the consent of such Participant.
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(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Except as provided in Section 7(b), the
Committee will authorize adjustments in the terms and conditions of,
and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events
described in Section 4(c) of the Plan) affecting the Company, any
Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan.
SECTION 8. Adjustments Upon Changes in Shares/Change in Control.
(a) If any change is made in the Shares subject to the Plan, or subject
to any Award, without the receipt of consideration by the Company
through merger, consolidation, reorganization, recapitalization,
reincorporation, Share distribution, stock split, liquidating
distribution, combination of Shares, exchange of Shares, change in
corporate structure or other transaction not involving the receipt
of consideration by the Company), the Plan shall be appropriately
adjusted in the class(es) and maximum number of Shares subject to
the Plan pursuant to, and subject to the limits of, Section 4(c) and
the outstanding Awards shall be appropriately adjusted in the
class(es) and number of Shares and exercise price per Share subject
to such outstanding Awards. Such adjustments shall be made by the
Committee, the determination of which shall be final, binding and
conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a "transaction not involving the
receipt of consideration by the Company".)
(b) In the event of a Change in Control, (1) if the Company does not
survive as an independent entity or organization (excluding as a
subsidiary), the surviving entity or organization or an affiliate of
such surviving entity or organization shall assume the Awards
outstanding under the Plan or substitute similar awards (including
an award to acquire the same consideration paid to the security
holders of the Company in the transaction effecting the Change in
Control) for those outstanding under the Plan, or (2) if the Company
continues as an independent entity or organization (excluding as a
subsidiary), such Awards shall continue in full force and effect. In
addition, upon a Change in Control, unless the Award Agreement
otherwise provides, all Awards shall become fully vested immediately
prior to the Change in Control. In the event of a Change in Control
in which the Company does not survive as an independent entity or
organization (excluding as a subsidiary), if any surviving entity or
organization and its affiliates refuse to assume or continue the
Awards, or to substitute similar awards for those outstanding under
the Plan, then the Awards not exercised or paid prior to such event
shall terminate on such event.
SECTION 9. General Provisions.
(a) No Rights to Awards. No Employee, Director or other Person shall
have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Employees, Directors, or holders or
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beneficiaries of Awards. The terms and conditions of Awards need not
be the same with respect to each recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold
at the minimum statutory rate from any Award, from any payment due
or transfer made under any Award or under the Plan or from any
compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, Shares that would otherwise be
issued pursuant to such Award, other Awards or other property) of
any applicable federal, state or local taxes payable in respect of
an Award, its exercise, the lapse of restrictions thereon, or any
payment or transfer under an Award or under the Plan and to take
such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. In
addition, unless the Award Agreement provides otherwise, the
Committee may provide that the Participant may direct the Company to
satisfy such Participant's tax obligation through the "constructive"
tender of already-owned Shares or the withholding of Shares
otherwise to be acquired upon the exercise or payment of such Award.
(c) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of
the Company or any Affiliate. Further, the Company or an Affiliate
may at any time dismiss a Participant from employment, free from any
liability or any claim under the Plan, unless otherwise expressly
provided in the Plan or in any Award Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and
applicable federal law.
(e) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the
Plan or any Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to
the applicable laws, or if it cannot be construed or deemed amended
without, in the determination of the Committee, materially altering
the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder
of the Plan and any such Award shall remain in full force and
effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance of transfer or such
Shares or such other consideration might violate any applicable law
or regulation or entitle the Company to recover the same under
Section 16(b) of the Exchange Act, and any payment tendered to the
Company by a Participant, other holder or beneficiary in connection
with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
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(g) No Trust or Fund Created. Neither the Plan nor the Award shall
create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that
any Person acquires a right to receive payments from the Company or
any Affiliate pursuant to an Award, such right shall be no greater
than the right of any general unsecured creditor of the Company or
any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be
paid or transferred in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled,
terminated, or otherwise eliminated.
(i) Securityholders' Agreement. The Committee may condition the grant,
payment and/or exercise of any Award upon the Participant's already
being, or becoming subject to, an agreement between and among
holders of securities in the Company covering, inter alia, the
transferability of the Shares, rights of the Company to repurchase
such Shares and such other matters as the Committee deems
appropriate; provided, however, any such restrictions shall
automatically lapse upon the Shares becoming readily tradeable on a
national securities market.
(j) Securities Laws Compliance. Unless the Shares have been registered
under the Securities Act of 1933 (and, in the case of any
Participant who may be deemed an affiliate of the Company for
securities law purposes, such Shares have been registered under such
Act for resale by such Participant), or the Company has determined
that an exemption from registration is available, the Company may
require prior to and as a condition of the exercise or payment of
any Award that (i)the Participant desiring to exercise or receive
payment such Award give the Company written notice thereof and that
such notice may not be given by the Participant until 45 days
thereafter (which time period may be waived by the Committee in its
sole discretion) in order to allow the Company the opportunity to
provide to such Participant any disclosure materials, or to make
such filings, as may be required under federal and state securities
laws and (ii) the Participant desiring to exercise or be paid such
Award famish the Company with a written representation in a form
prescribed by the Committee to the effect that such person is
acquiring said Shares solely with a view to investment for his or
her own account and not with a view to the resale or distribution of
all or any part thereof, and that such person will not dispose of
any of such Shares otherwise than in accordance with the provisions
of Rule 144 under the Act unless and until either the Shares are
registered under the Act or the Company is satisfied that an
exemption from such registration is available.
(k) Headings. Headings are given to the Sections and subsections of the
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 the Plan or any provision thereof.
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(l) Section 162(m) of the Code. Awards granted under this Plan shall not
be "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.
(m) No Guarantee of Tax Consequences. None of the Board, the Company nor
the Committee makes any commitment or guarantee that any federal,
state or local tax treatment will apply or be available to any
person participating or eligible to participate hereunder.
SECTION 10. Effective Date of the Plan.
This Plan shall be effective on the date it is adopted by the Board.
SECTION 11. Term of the Plan.
No Award shall be granted under the Plan after the 10th anniversary of the
effective date of the Plan and the Plan shall expire on that date unless earlier
terminated pursuant to Section 7. However, unless otherwise expressly provided
in the Plan or in an applicable Award Agreement, any Award granted prior to such
expiration or termination, and the authority of or the Committee to amend,
alter, adjust, suspend, discontinue, or terminate any such Award or to waive any
conditions or rights under such Award, shall extend beyond such expiration or
termination date.
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