EXHIBIT 10.18
MARTEN TRANSPORT, LTD.
1995 STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN.
The purpose of the Marten Transport, Ltd. 1995 Stock Incentive Plan (the
"Plan") is to advance the interests of Marten Transport, Ltd. (the "Company")
and its stockholders by enabling the Company to attract and retain persons of
ability to perform services for the Company by providing an incentive to such
individuals through equity participation in the Company and by rewarding such
individuals who contribute to the achievement by the Company of its economic
objectives.
2. DEFINITIONS.
The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:
2.1 "BOARD" means the Board of Directors of the Company.
2.2 "BROKER EXERCISE NOTICE" means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.
2.3 "CHANGE IN CONTROL" means an event described in Section 13.1 of the
Plan.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended.
2.5 "COMMITTEE" means the Compensation Committee of the Board, which is
charged with administering the Plan, as provided in Section 3 of the Plan.
2.6 "COMMON STOCK" means the common stock of the Company, par value
$.Ol per share, or the number and kind of shares of stock or other securities
into which such Common Stock may be changed in accordance with Section 4.3 of
the Plan.
2.7 "DISABILITY" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or any Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code.
2.8 "ELIGIBLE RECIPIENTS" means all employees (including, without
limitation, officers and directors who are also employees) of the Company or any
Subsidiary and any non-employee consultants and independent contractors of the
Company or any Subsidiary.
2.9 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
2.10 "FAIR MARKET VALUE" means, with respect to the Common Stock, as of
any date (or, if no shares were traded or quoted on such date, as of the next
preceding date on which there was such a trade or quote), the closing sale price
per share of the Common Stock as reported on the NASDAQ National Market System.
2.11 "INCENTIVE AWARD" means an Option, Stock Appreciation Right,
Restricted Stock Award, Performance Unit or Stock Bonus granted to an Eligible
Recipient pursuant to the Plan.
2.12 "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.13 "NON-EMPLOYEE DIRECTOR" means any member of the Board of Directors
of the Company who is not an employee of the Company or any Subsidiary.
2.14 "NON-STATUTORY STOCK 0PTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not
qualify as an Incentive Stock Option.
2.15 "0PTION" means an Incentive Stock Option or a Non-Statutory Stock
Option.
2.16 "PARTICIPANT" means an Eligible Recipient who receives one or more
Incentive Awards under the Plan.
2.17 "PERFORMANCE UNIT" means a right granted to an Eligible Recipient
pursuant to Section 9 of the Plan to receive a payment from the Company, in the
form of stock, cash or a combination of both, upon the achievement of
established performance goals.
2.18 "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that are
already owned by the Participant or, with respect to any Incentive Award, that
are to be issued upon the grant, exercise or vesting of such Incentive Award.
2.19 "RESTRICTED STOCK AWARD" means an award of Common Stock granted to
an Eligible Recipient pursuant to Section 8 of the Plan that is subject to the
restrictions on transferability and the risk of forfeiture imposed by the
provisions of such Section 8.
2.20 "RETIREMENT" means normal or approved early termination of
employment or service pursuant to and in accordance with the regular
retirement/pension plan or practice of the Company or Subsidiary then covering
the Participant, provided that if the Participant is not covered by any such
plan or practice, the Participant will be deemed to be covered by the Company's
plan or practice for purposes of this determination.
2.21 "SECURITIES ACT" means the Securities Act of 1933, as amended.
2.22 "STOCK APPRECIATION RIGHT" means a right granted to an Eligible
Recipient pursuant to Section 7 of the Plan to receive a payment from the
Company, in the form of stock, cash or a combination of both, equal to the
difference between the Fair Market Value of one or more shares of Common Stock
and the exercise price of any such share under the terms of such Stock
Appreciation Right.
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2.23 "STOCK BONUS" means an award of Common Stock granted to an Eligible
Recipient pursuant to Section 10 of the Plan.
2.24 "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
2.25 "TAX DATE" means the date any withholding tax obligation arises
under the Code for a Participant with respect to an Incentive Award.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE. The Plan will be administered by the Compensation
Committee of the Board, all of whom will be "disinterested persons" within the
meaning of Rule 16b-3 under the Exchange Act. As used in this Plan, the term
"Committee" will refer to the Compensation Committee of the Board. To the
extent consistent with corporate law, the Committee may delegate to any officers
of the Company the duties, power and authority of the Committee under the Plan
pursuant to such conditions or limitations as the Committee may establish;
provided, however, that only the Committee may exercise such duties, power and
authority with respect to Eligible Recipients who are subject to Section 16 of
the Exchange Act. The Committee may exercise its duties, power and authority
under the Plan in its sole and absolute discretion without the consent of any
Participant or other party, unless the Plan specifically provides otherwise.
Each determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will be conclusive and binding
for all purposes and on all persons, and no member of the Committee will be
liable for any action or determination made in good faith with respect to the
Plan or any Incentive Award granted under the Plan.
3.2 AUTHORITY OF THE COMMITTEE.
(a) In accordance with and subject to the provisions of the
Plan, the Committee will have the authority to determine all provisions of
Incentive Awards as the Committee may deem necessary or desirable and as
consistent with the terms of the Plan, including, without Limitation, the
following: (i) the Eligible Recipients to be selected as Participants; (ii)
the nature and extent of the Incentive Awards to be made to each
Participant (including the number of shares of Common Stock to be subject
to each Incentive Award, any exercise price, the manner in which Incentive
Awards will vest or become exercisable and whether Incentive Awards will be
granted in tandem with other Incentive Awards) and the form of written
agreement, if any, evidencing such Incentive Award; (iii) the time or times
when Incentive Awards will be granted; (iv) the duration of each Incentive
Award; and (v) the restrictions and other conditions to which the payment
or vesting of Incentive Awards may be subject. In addition, the Committee
will have the authority under the Plan to pay the economic value of any
Incentive Award in the form of cash, Common Stock or any combination of
both.
(b) The Committee will have the authority under the Plan to
amend or modify the terms of any outstanding Incentive Award in any manner,
including, without limitation, the authority to modify the number of shares
or other terms and conditions of an Incentive Award, extend the term of an
Incentive Award, accelerate the exercisability or vesting or otherwise
terminate any restrictions relating to an Incentive Award, accept the
surrender
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of any outstanding Incentive Award or, to the extent not previously
exercised or vested, authorize the grant of new Incentive Awards in
substitution for surrendered Incentive Awards; provided, however that the
amended or modified terms are permitted by the Plan as then in effect and
that any Participant adversely affected by such amended or modified terms
has consented to such amendment or modification. No amendment or
modification to an Incentive Award, however, whether pursuant to this
Section 3.2 or any other provisions of the Plan, will be deemed to be a
regrant of such Incentive Award for purposes of this Plan.
(c) In the event of (i) any reorganization, merger,
consolidation, recapitalization, Liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering,
extraordinary dividend or divestiture (including a spin-off) or any other
change in corporate structure or shares, (H) any purchase, acquisition,
sale or disposition of a significant amount of assets or a significant
business, (iii) any change in accounting principles or practices, or (iv)
any other similar change, in each case with respect to the Company or any
other entity whose performance is relevant to the grant or vesting of an
Incentive Award, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the
surviving corporation) may, without the consent of any affected
Participant, amend or modify the vesting criteria of any outstanding
Incentive Award that is based in whole or in part on the financial
performance of the Company (or any Subsidiary or division thereof) or such
other entity so as equitably to reflect such event, with the desired result
that the criteria for evaluating such financial performance of the Company
or such other entity will be substantially the same (in the discretion of
the Committee or the board of directors of the surviving corporation)
following such event as prior to such event; provided, however, that the
amended or modified terms are permitted by the Plan as then in effect.
4. SHARES AVAILABLE FOR ISSUANCE.
4.1 MAXIMUM NUMBER OF SHARES. Subject to adjustment as provided in
Section 4.3 of the Plan, the maximum number of shares of Common Stock that will
be available for issuance under the Plan will be 500,000 shares. The shares
available for issuance under the Plan may, at the election of the Committee, be
either treasury shares or shares authorized but unissued, and, if treasury
shares are used, all references in the Plan to the issuance of shares will, for
corporate law purposes, be deemed to mean the transfer of shares from treasury.
4.2 ACCOUNTING FOR INCENTIVE AWARDS. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. Any shares of Common Stock that are
subject to an Incentive Award that lapses, expires, is forfeited or for any
reason is terminated unexercised or unvested and any shares of Common Stock that
are subject to an Incentive Award that is settled or paid in cash or any form
other than shares of Common Stock will automatically again become available for
issuance under the Plan. Any shares of Common Stock that constitute the
forfeited portion of a Restricted Stock Award, however, will not become
available for further issuance under the Plan.
4.3 ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the Committee
(or, if the
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Company is not the surviving corporation in any such transaction, the board of
directors of the surviving corporation) will make appropriate adjustment (which
determination will be conclusive) as to the number and kind of securities
available for issuance under the Plan and, in order to prevent dilution or
enlargement of the rights of Participants, the number, kind and, where
applicable, exercise price of securities subject to outstanding Incentive
Awards.
5. PARTICIPATION.
Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of the economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee. Incentive Awards will be deemed
to be granted as of the date specified in the grant resolution of the Committee,
which date will be the date of any related agreement with the Participant.
6. OPTIONS.
6.1 GRANT. An Eligible Recipient may be granted one or more Options under
the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee. The Committee may designate whether an Option is to be considered an
Incentive Stock Option or a Non-Statutory Stock Option.
6.2 EXERCISE PRICE. The per share price to be paid by a Participant upon
exercise of an Option will be determined by the Committee in its discretion at
the time of the Option grant, provided that (a) such price will not be less than
100% of the Fair Market Value of one share of Common Stock on the date of grant
with respect to an Incentive Stock Option (110% of the Fair Market Value if, at
the time the Incentive Stock Option is granted, the Participant owns, directly
or indirectly, more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the Company),
and (b) such price win not be less than 85% of the Fair Market Value of one
share of Common Stock on the date of grant with respect to a Non-Statutory Stock
Option.
6.3 EXERCISABILITY AND DURATION. An Option will become exercisable at
such times and in such installments as may be determined by the Committee at the
time of grant; provided, however, that no Option may be exercisable prior to six
months from its date of grant and no Incentive Stock Option may be exercisable
after 10 years from its date of grant (five years from its date of grant if, at
the time the Incentive Stock Option is granted, the Participant owns, directly
or indirectly, more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the Company).
6.4 PAYMENT OF EXERCISE PRICE. The total purchase price of the shares to
be purchased upon exercise of an Option will be paid entirely in cash (including
check, bank draft or money order); provided, however, that the Committee may
allow such payments to be made, in whole or in part and upon such terms and
conditions as may be established by the Committee, by tender of a Broker
Exercise Notice, Previously Acquired Shares, a promissory note or by a
combination of such methods.
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6.5 MANNER OF EXERCISE. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained in the
Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company (Attention: Chief Financial Officer) at its principal
executive office in Mondovi, Wisconsin and by paying in full the total exercise
price for the shares of Common Stock to be purchased in accordance with Section
6.4 of the Plan.
6.6 AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK OPTIONS. To
the extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which incentive stock options (within the meaning of Section 422 of the Code)
are exercisable for the first time by a Participant during any calendar year
(under the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company (within the meaning of the
Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code
from time to time), such excess Options win be treated as Non-Statutory Stock
Options. The determination will be made by taking incentive stock options into
account in the order in which they were granted. If such excess only applies to
a portion of an incentive stock option, the Committee will designate which
shares will be treated as shares to be acquired upon exercise of an incentive
stock option.
6.7 AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.
(a) GRANT OF OPTIONS. Following the effective date of the Plan,
each Non-Employee Director who is subsequently appointed or elected for the
first time to serve on the Board will be granted automatically, as of the
effective date of such appointment or election, a Non-Statutory Stock
Option to purchase 10,000 shares of Common Stock (subject to adjustment as
provided in Section 4.3 of the Plan).
(b) OPTION EXERCISE PRICE. The per share price to be paid by
the Non-Employee Director at the time such an Option is exercised will be
100% of the Fair Market Value of one share of Common Stock on the date the
Option is granted. The total purchase price of the shares to be purchased
upon exercise will be paid entirely in cash (including check, bank draft or
money order).
(c) VESTING AND DURATION OF OPTIONS. Each such Option will
become exercisable, on a cumulative basis, with respect to the number of
whole shares of Common Stock representing one-third of the shares covered
by such Option on each of the first two anniversaries of its date of grant
and as to the remaining shares on the third anniversary of the date of
grant; provided that no such Option shall become exercisable as to any
further shares from and after the date on which the holder thereof ceases
to be a member of the Board. The term of each such Option shall be 10
years from the date of grant. Each such Option shall remain exercisable
for the full term thereof irrespective of whether the holder remains a
member of the Board, except that in the event of the death of the holder,
such Option may be exercised by the Holder's heirs or personal
representatives at any time before the earlier of the expiration of the
term of the Option or one year following the date of death. Such Options
will not be subject to the termination provisions of Section 11 of the
Plan.
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(d) MANNER OF 0PTION EXERCISE. An Option may be exercised by a Non-
Employee Director in whole or in part from time to time, subject to the
conditions contained in the Plan and in the agreement evidencing such
Option, by giving written notice of exercise to the Company at its
principal executive office (such notice to specify the particular Option
that is being exercised and the number of shares with respect to which the
Option is being exercised) accompanied by payment, in cash or check payable
to the Company, of the total purchase price of the shares to be purchased
under the Option.
(e) NON-DISCRETIONARY GRANTS. Options granted to Non-Employee
Directors pursuant to this Section 6.7 are intended to qualify as "formula
awards" within the meaning of Rule 16b-3 under the Exchange Act. As a
result, other than as provided in Section 16 of the Plan, the Committee
will not have the authority to amend the eligibility requirements for, or
modify the terms or accelerate the vesting of, such Options (including,
without limitation, the authority to modify the rights of Non-Employee
Directors in connection with termination of service as a director or a
change in control of the Company) if such amendments, modifications or
acceleration of vesting would disqualify such Options from treatment as
"formula awards."
(f) RESCISSION OF PRIOR AUTOMATIC GRANT PROVISION. Following the
effective date of the Plan, the provisions of this Section 6.7 supercede
and replace the provisions of Section 19 of the Marten Transport, Ltd. 1986
Non-Statutory Stock Option Plan, as amended, with respect to all future
grants of Options to each Non-Employee Director who has been subsequently
appointed or elected for the first time to serve on the Board. The
provisions of Section 19 of the Marten Transport, Ltd. 1986 Non-Statutory
Stock Option Plan, as amended, shall remain in effect only with respect to
options that have previously been granted pursuant to such provisions and
for so long as such options remain outstanding.
7. STOCK APPRECIATION RIGHTS.
7.1 GRANT. An Eligible Recipient may be granted one or more Stock
Appreciation Rights under the Plan, and such Stock Appreciation Rights shall be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as will be determined by the Committee.
7.2 EXERCISE PRICE. The exercise price of a Stock Appreciation Right will
be determined by the Committee at the date of grant but will not be less than
85% of the Fair Market Value of one share of Common Stock on the date of grant.
7.3 EXERCISABILITY AND DURATION. A Stock Appreciation Right will become
exercisable at such time and in such installments as may be determined by the
Committee at the time of grant; provided, however, that no Stock Appreciation
Right may be exercisable prior to six months or after 10 years from its date of
grant. A Stock Appreciation Right will be exercised by giving notice in the
same manner as for Options, as set forth in Section 6.5 of the Plan.
8. RESTRICTED STOCK AWARDS.
8.1 GRANT. An Eligible Recipient may be granted one or more
Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as may be determined by the Committee. The
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Committee may impose such restrictions or conditions, not inconsistent with the
provisions of the Plan, to the vesting of such Restricted Stock Awards as it
deems appropriate, including, without limitation, that the Participant remain in
the continuous employ or service of the Company or a Subsidiary for a certain
period or that the Participant or the Company (or any Subsidiary or division
thereof) satisfy certain performance goals or criteria; provided, however, that
no Restricted Stock Award may vest prior to six months from its date of grant.
8.2 RIGHTS AS A SHAREHOLDER; TRANSFERABILITY. Except as provided in
Sections 8.1, 8.3 and 14.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this Section 8 upon
the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.
8.3 DIVIDENDS AND DISTRIBUTIONS. Unless the Committee determines
otherwise (either in the agreement evidencing the Restricted Stock Award at the
time of grant or at any time after the grant of the Restricted Stock Award), any
dividends or distributions (including regular quarterly cash dividends) paid
with respect to shares of Common Stock subject to the unvested portion of a
Restricted Stock Award will be subject to the same restrictions as the shares to
which such dividends or distributions relate. In the event the Committee
determines not to pay such dividends or distributions currently, the Committee
will determine whether any interest will be paid on such dividends or
distributions. In addition, the Committee may require such dividends and
distributions to be reinvested (and in such case the Participants consent to
such reinvestment) in shares of Common Stock that will be subject to the same
restrictions as the shares to which such dividends or distributions relate.
8.4 ENFORCEMENT OF RESTRICTIONS. To enforce the restrictions referred to
in this Section 8, the Committee may place a legend on the stock certificates
referring to such restrictions and may require the Participant, until the
restrictions have lapsed, to keep the stock certificates, together with duly
endorsed stock powers, in the custody of the Company or its transfer agent or to
maintain evidence of stock ownership, together with duly endorsed stock powers,
in a certificateless book-entry stock account with the Company's transfer agent.
9. PERFORMANCE UNITS.
An Eligible Recipient may be granted one or more Performance Units under
the Plan, and such Performance Units will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee. The Committee may impose such restrictions or
conditions, not inconsistent with the provisions of the Plan, to the vesting of
such Performance Units as it deems appropriate, including, without limitation,
that the Participant remain in the continuous employ or service of the Company
or any Subsidiary for a certain period or that the Participant or the Company
(or any Subsidiary or division thereof) satisfy certain performance goals or
criteria. The Committee will have the discretion either to determine the form
in which payment of the economic value of vested Performance Units will be made
to the Participant (i.e., cash, Common Stock or any combination thereof) or to
consent to or disapprove the election by the Participant of the form of such
payment.
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10. STOCK BONUSES.
An Eligible Recipient may be granted one or more Stock Bonuses under the
Plan, and such Stock Bonuses will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee. The Participant will have all voting, dividend, liquidation and
other rights with respect to the shares of Common Stock issued to a Participant
as a Stock Bonus under this Section 10 upon the Participant becoming the holder
of record of such shares; provided, however, that the Committee may impose such
restrictions on the assignment or transfer of a Stock Bonus as it deems
appropriate.
11. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.
11.1 TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. In the event a
Participant's employment or other service with the Company and all Subsidiaries
is terminated by reason of death, Disability or Retirement:
(a) All outstanding Options and Stock Appreciation Rights then
held by the Participant will remain exercisable to the extent exercisable
as of such termination for a period of one year after such termination (but
in no event after the expiration date of any such Option or Stock
Appreciation Right);
(b) All outstanding Restricted Stock Awards then held by the
Participant that have not vested will be terminated and forfeited; and
(c) All outstanding Performance Units and Stock Bonuses then
held by the Participant will vest and/or continue to vest in the manner
determined by the Committee and set forth in the agreement evidencing such
Performance Units or Stock Bonuses.
11.2 TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR RETIREMENT.
(a) In the event a Participant's employment or other service is
terminated with the Company and all Subsidiaries for any reason other than
death, Disability or Retirement, or a Participant is in the employ or
service of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the
Company (unless the Participant continues in the employ or service of the
Company or another Subsidiary), all rights of the Participant under the
Plan and any agreements evidencing an Incentive Award will immediately
terminate without notice of any kind, and no Options or Stock Appreciation
Rights then held by the Participant will thereafter be exercisable, all
Restricted Stock Awards then held by the Participant that have not vested
will be terminated and forfeited, and all Performance Units and Stock
Bonuses then held by the Participant will vest and/or continue to vest in
the manner determined by the Committee and set forth in the agreement
evidencing such Performance Units or Stock Bonuses; provided, however, that
if such termination is due to any reason other than termination by the
Company or any Subsidiary for "cause," all outstanding Options and Stock
Appreciation Rights then held by such Participant will remain exercisable
to the extent exercisable as of such termination for a period of three
months after such termination (but in no event after the expiration date of
any such Option or Stock Appreciation Right).
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(b) For purposes of this Section 11.2, "cause" (as determined by
the Committee) will be as defined in any employment or other agreement or
policy applicable to the Participant or, if no such agreement or policy
exists, will mean (i) dishonesty, fraud, misrepresentation, embezzlement or
deliberate injury or attempted injury, in each case related to the Company
or any Subsidiary, (ii) any unlawful or criminal activity of a serious
nature, (iii) any intentional and deliberate breach of a duty or duties
that, individually or in the aggregate, are material in relation to the
Participant's overall duties, or (iv) any material breach of any
employment, service, confidentiality or non-compete agreement entered into
with the Company or any Subsidiary.
11.3 MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the other
provisions of this Section 11, upon a Participant's termination of employment or
other service with the Company and all Subsidiaries, the Committee may in its
discretion (which may be exercised at any time on or after the date of grant,
including following such termination) cause Options and Stock Appreciation
Rights (or any part thereof) then held by such Participant to become or continue
to become exercisable and/or remain exercisable following such termination of
employment or service and Restricted Stock Awards, Performance Units and Stock
Bonuses then held by such Participant to vest and/or continue to vest or become
free of transfer restrictions, as the case may be, following such termination of
employment or service, in each case in the manner determined by the Committee;
provided, however, that (a) no Option or Stock Appreciation may become
exercisable, and no Restricted Stock Award may vest and become non-forfeitable,
prior to six months from its date of grant, and (b) no Option or Stock
Appreciation Right may remain exercisable beyond its expiration date.
11.4 BREACH OF CONFIDENTIALITY OR NON-COMPETE AGREEMENTS.
Notwithstanding anything in this Plan to the contrary, in the event that a
Participant materially breaches the terms of any confidentiality or non-compete
agreement entered into with the Company or any Subsidiary, whether such breach
occurs before or after termination of such Participant's employment or other
service with the Company or any Subsidiary, the Committee may immediately
terminate all rights of the Participant under the Plan and any agreements
evidencing an Incentive Award then held by the Participant without notice of any
kind.
11.5 DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE. Unless the
Committee otherwise determines, a Participant's employment or other service
will, for purposes of the Plan, be deemed to have terminated on the date
recorded on the personnel or other records of the Company or the Subsidiary for
which the Participant provides employment or other service, as determined by the
Committee based upon such records.
12. PAYMENT OF WITHHOLDING TAXES.
12.1 GENERAL RULES. The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts that may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all federal, state and local withholding and employment-related
tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with
respect to, an Incentive Award or a disqualifying disposition of stock received
upon exercise of an Incentive Stock Option, or (b) require the Participant
promptly to remit the amount of such withholding to the Company before taking
any action, including issuing any shares of Common Stock, with respect to an
Incentive Award.
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12.2 SPECIAL RULES. The Committee may, upon terms and conditions
established by the Committee, permit or require a Participant to satisfy, in
whole or in part, any withholding or employment-related tax obligation described
in Section 12.1 of the Plan by electing to tender Previously Acquired Shares, a
Broker Exercise Notice or a promissory note (on terms acceptable to the
Committee in its sole discretion), or by a combination of such methods.
13. CHANGE IN CONTROL.
13.1 CHANGE IN CONTROL. For purposes of this Section 13.1, a "Change in
Control' of the Company will mean the following:
(a) the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a person or entity
that is not controlled by the Company;
(b) the approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company;
(c) a merger or consolidation to which the Company is a party if
the stockholders of the Company immediately prior to the effective date of
such merger or consolidation have "beneficial ownership" (as defined in
Rule 13d-3 under the Exchange Act), immediately following the effective
date of such merger or consolidation, of securities of the surviving
corporation representing less than 50% of the combined voting power of the
surviving corporation's then outstanding securities ordinarily having the
right to vote at elections of directors;
(d) any person (other than any person that is presently the
beneficial owner of 20% or more of the outstanding Common Stock) becomes
after the effective date of the Plan the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more
of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of directors; or
(e) a change in control of the Company of a nature that would be
required to be reported pursuant to Section 13 or 15(d) of the Exchange
Act, whether or not the Company is then subject to such reporting
requirements.
13.2 ACCELERATION OF VESTING. Without limiting the authority of the
Committee under Section 3.2 of the Plan, if a Change in Control of the Company
occurs, then, (a) all outstanding Options and Stock Appreciation Rights that
have been held by a Participant for at least six months will become immediately
exercisable in full and will remain exercisable for the remainder of their
terms, regardless of whether the Participant to whom such Options or Stock
Appreciation Rights have been granted remains in the employ or service of the
Company or any Subsidiary; (b) all outstanding Restricted Stock Awards that have
been held by the Participant for at least six months will become immediately
fully vested and non-forfeitable; and (c) all outstanding Performance Units and
Stock Bonuses then held by the Participant will vest and/or continue to vest in
the manner determined by the Committee and set forth in the agreement evidencing
such Performance Units or Stock Bonuses.
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13.3 CASH PAYMENT FOR 0PTIONS. If a Change in Control of the Company
occurs, then the Committee, if approved by the Committee either in an agreement
evidencing an Incentive Award at the time of grant or at any time after the
grant of an Incentive Award, may determine that some or all Participants holding
outstanding Options will receive, with respect to some or all of the shares of
Common Stock subject to such Options, as of the effective date of any such
Change in Control of the Company, cash in an amount equal to the excess of the
Fair Market Value of such shares immediately prior to the effective date of such
Change in Control of the Company over the exercise price per share of such
Options.
13.4 LIMITATION ON CHANGE IN CONTROL PAYMENTS. Notwithstanding anything
in Section 13.2 or 13.3 of the Plan to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as provided
in Section 13.2 or the payment of cash in exchange for all or part of an
Incentive Award as provided in Section 13.3 (which acceleration or payment could
be deemed a "payment" within the meaning of Section 28OG(b)(2) of the Code),
together with any other payments which such Participant has the right to receive
from the Company or any corporation that is a member of an "affiliated group"
(as defined in Section 1504(a) of the Code without regard to Section 1504(b) of
the Code) of which the Company is a member, would constitute a "parachute
payment" (as defined in Section 28OG(b)(2) of the Code), then the payments to
such Participant pursuant to Section 13.2 or 13.3 will be reduced to the largest
amount as will result in no portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code; provided, however, that if such
Participant is subject to a separate agreement with the Company or a Subsidiary
that specifically provides that payments attributable to one or more forms of
employee stock incentives or to payments made in lieu of employee stock
incentives will not reduce any other payments under such agreement, even if it
would constitute an excess parachute payment, or provides that the Participant
will have the discretion to determine which payments will be reduced in order to
avoid an excess parachute payment, then the limitations of this Section 13.4
will, to that extent, not apply.
14. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS, TRANSFERABILITY.
14.1 EMPLOYMENT OR SERVICE. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary
14.2 RIGHTS AS A STOCKHOLDER. As a holder of Incentive Awards (other
than Restricted Stock Awards and Stock Bonuses), a Participant will have no
rights as a stockholder unless and until such Incentive Awards are exercised
for, or paid in the form of, shares of Common Stock and the Participant becomes
the holder of record of such shares. Except as otherwise provided in the Plan,
no adjustment will be made for dividends or distributions with respect to such
Incentive Awards as to which there is a record date preceding the date the
Participant becomes the holder of record of such shares, except as the Committee
may determine.
14.3 RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will or
the laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of any Participant in an Incentive Award prior to the
exercise or vesting of such Incentive Award will be assignable or transferable,
or subjected to any lien, during the lifetime of the Participant, either
voluntarily or involuntarily, directly or indirectly, by operation of law or
otherwise. A Participant will, however, be entitled to designate a beneficiary
to receive an Incentive Award upon such
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Participant's death, and in the event of a Participant's death, payment of any
amounts due under the Plan will be made to, and exercise of any Options (to the
extent permitted pursuant to Section 11 of the Plan) may be made by, the
Participant's legal representatives, heirs and legatees.
14.4 NON-EXCLUSIVITY OF THE PLAN. Except as expressly set forth herein,
nothing contained in the Plan is intended to modify or rescind any previously
approved compensation plans or programs of the Company or create any limitations
on the power or authority of the Board to adopt such additional or other
compensation arrangements as the Board may deem necessary or desirable.
15. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Plan or any agreements entered
into pursuant to the Plan, the Company will not be required to issue any shares
of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee deems necessary or advisable. The Company may condition
such issuance, sale or transfer upon the receipt of any representations or
agreements from the parties involved, and the placement of any legends on
certificates representing shares of Common Stock, as may be deemed necessary or
advisable by the Company in order to comply with such securities law or other
restrictions.
16. PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Incentive Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided, however, that (a) the
Board will not have the authority to amend the eligibility requirements for
Options granted pursuant to Section 6.7 of the Plan, or to modify the number of
shares, exercise price, exercisability, duration, manner of payment or other
terms with respect to such Options, more than once every six months, other than
to comply with changes in the Code, the Employee Retirement Income Security Act
or the rules promulgated thereunder; and (b) no amendments to the Plan will be
effective without approval of the stockholders of the Company if stockholder
approval of the amendment is then required pursuant to Rule 16b-3 under the
Exchange Act, Section 422 of the Code or the rules of the NASD or any stock
exchange. No termination, suspension or amendment of the Plan may adversely
affect any outstanding Incentive Award without the consent of the affected
Participant; provided, however, that this sentence win not impair the right of
the Committee to take whatever action it deems appropriate under Sections
3.2(c), 4.3 and 13 of the Plan.
17. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan is effective as of March 9, 1995, the date it was adopted by the
Board. The Plan will terminate at midnight on March 8, 2005, and may be
terminated prior to such time by Board action, and no Incentive Award will be
granted after such termination. Incentive Awards
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outstanding upon termination of the Plan may continue to be exercised, or become
free of restrictions, in accordance with their terms.
18. MISCELLANEOUS
18.1 GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Wisconsin.
18.2 SUCCESSORS AND ASSIGNS. The Plan will be binding upon and inure to
the benefit of the successors and permitted assigns of the Company and the
Participants.
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