Exhibit 10.5
MAINCONTROL, INC. 2000 EXECUTIVE INCENTIVE PLAN
(Effective as of , 2000)
1. Purposes
The purposes of the MainControl, Inc. 2000 Executive Incentive Plan (the
"Plan") are to enable MainControl, Inc. (the "Company") to attract, retain,
motivate and reward executives and key employees of the highest caliber and
quality by providing them with the opportunity to earn incentive compensation
directly linked to the Company's performance.
2. Definitions
For purposes of the Plan, the following terms shall be defined as
follows:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and the
applicable rulings and regulations (including any proposed regulations)
thereunder.
"Committee" means the Compensation Committee of the Board, any successor
committee thereto or any other committee appointed by the Board to administer
the Plan. The Committee shall consist of at least two individuals, each of whom
shall be qualified as an "outside director" (or shall satisfy any successor
standard thereto) for purposes of Section 162(m), and shall serve at the
pleasure of the Board.
"Common Stock" means the Common Stock, par value $0.001 per share, of the
Company.
"Covered Employee" means a Participant who has been designated by the
Committee as a Participant whose compensation for the relevant fiscal year may
be subject to the limit on deductible compensation imposed by Section 162(m).
"Disability" means eligibility for disability benefits under the terms of
the Company's long-term disability plan in effect at the time the Participant
becomes disabled.
"Equity Plan" means the MainControl, Inc. 2000 Equity Plan and any
successor or similar plan of the Company.
"Fair Market Value" means, with respect to a share of Common Stock on any
given date shall be determined in accordance with the following provisions: (i)
if the Common Stock is at the time neither listed on any Stock Exchange nor
traded on the Nasdaq National Market, then the fair market value thereof as of
the relevant date of determination, shall be determined in accordance with a
valuation methodology approved by the Committee; or (ii) if the Common Stock is
at the time listed on the Nasdaq National Market, the fair market value of a
share of Common Stock shall equal the average of the highest and the lowest
quoted selling price of a share of Common Stock on the Nasdaq National Market,
or such other domestic securities exchange as may be designated by the
Committee, or in the event that the Common Stock is not listed for trading on a
domestic securities exchange but is quoted on an automated system, on such
automated system, in any such case on the valuation date (or, if there were no
sales on the valuation date, the average of the highest and the lowest quoted
selling prices as reported on said composite tape or automated system for the
most recent day during which a sale occurred).
"Participant" means each executive officer, senior officer or key
employee of the Company or a Subsidiary whom the Committee designates as a
participant under the Plan.
"Performance Targets" means the targets related to the performance goals
designated in Section 4(d), which Performance Targets will be established by
the Committee for a Performance Period.
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"Performance Period" means each fiscal year of the Company or such other
period as may be designated by the Committee.
"Section 162(m)" means Section 162(m) of the Code.
"Subsidiary" means (i) a corporation or other entity with respect to
which the Company, directly or indirectly, has the power, whether through the
ownership of voting securities, by contract or otherwise, to elect at least a
majority of the members of such corporation's board of directors or analogous
governing body, or (ii) any other corporation or other entity in which the
Company, directly or indirectly, has an equity or similar interest and which
the Committee designates as a Subsidiary for purposes of the Plan.
3. Administration
(a) Power and Authority of the Committee. The Plan shall be administered
by the Committee which shall have full power and authority, subject to the
express provisions hereof:
(i) to select Participants from executive officers, senior
officers and key employees of the Company;
(ii) to establish the Performance Targets for achievement during a
Performance Period and to determine whether such Performance Targets
have been achieved;
(iii) to determine the cash amount and/or number of shares of
Common Stock payable in connection with an award;
(iv) to prescribe, amend and rescind rules and procedures relating
to the Plan;
(v) to vary the terms of awards to take account of tax, securities
law and other regulatory requirements of foreign jurisdictions;
(vi) subject to the provisions of the Plan and subject to such
additional limitations and restrictions as the Committee may impose, to
delegate to one or more officers of the Company some or all of its
authority under the Plan;
(vii) to employ such legal counsel, independent auditors and
consultants as it deems desirable for the administration of the Plan and
to rely upon any opinion or computation received therefrom; and
(viii) to make all other determinations and to formulate such
procedures as may be necessary or advisable for the administration of
the Plan.
(b) Plan Construction and Interpretation. The Committee shall have full
power and authority, subject to the express provisions hereof, to construe and
interpret the Plan.
(c) Determinations of Committee Final and Binding. All determinations by
the Committee in carrying out and administering the Plan and in construing and
interpreting the Plan shall be final, binding and conclusive for all purposes
and upon all persons interested herein.
(d) Liability of Committee. No member of the Committee shall be liable
for any action nor determination made in good faith, and the members of the
Committee shall be entitled to indemnification and reimbursement in the manner
provided in the Company's Restated Certificate of Incorporation as it may be
amended from time to time. In the performance of its responsibilities with
respect to the Plan, the Committee shall be entitled to rely upon information
and advice furnished by the Company's officers, the Company's accountants, the
Company's counsel and any other party the Committee deems necessary, and no
member of the Committee shall be liable for any action taken or not taken in
reliance upon any such advice.
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4. Awards
(a) Performance Targets. The Committee shall determine in its sole
discretion whether any executive officer, senior officer or other employee of
the Company shall have the opportunity to earn incentive compensation under
this Plan during any Performance Period. If the Committee decides to offer such
opportunity to one or more executive officers, senior officers or other
employees of the Company, then no later than 90 days after the beginning of a
Performance Period (or such other time as may be required or permitted by
Section 162(m)), the Committee shall (i) designate each Participant for the
Performance Period, (ii) select from the performance goals set forth in Section
4(d) below the performance goal or goals to be applicable to the Performance
Period, (iii) establish specific Performance Targets related to such
performance goals and the incentive amounts which may be earned for the
Performance Period by each Participant and (iv) specify the relationship
between Performance Targets and the incentive amount to be earned by each
Participant for the Performance Period. The Committee may specify that the
incentive amount for a Performance Period will be earned if the applicable
Performance Target is achieved for one performance goal or for any one of a
number of performance goals. The Committee may also provide that the incentive
amount for a Performance Period will be earned only if a Performance Target is
achieved for more than one performance goal, or that the incentive amount to be
earned for a given Performance Period will vary based upon different levels of
achievement of the applicable Performance Targets.
(b) Following the completion of each Performance Period, the Committee
shall certify in writing whether the applicable Performance Targets have been
achieved for such Performance Period and the incentive amounts, if any, payable
to Participants for such Performance Period. In determining the incentive
amount earned by a Participant for a given Performance Period, the Committee
shall have the right to reduce (but not to increase) the incentive amount
payable at a given level of performance to take into account additional factors
that the Committee may deem relevant to the assessment of individual or
corporate performance for the Performance Period.
(c) Payment of Awards; Maximum Limitation. Anything in this Plan to the
contrary notwithstanding, (i) the maximum aggregate incentive amount that may
be earned under the Plan by a Participant for all Performance Periods of one
year or less beginning in any given fiscal year of the Company shall be
$1,000,000, and (ii) the maximum aggregate incentive amount that may be earned
under the Plan by a Participant for all Performance Periods of more than one
year beginning in any given fiscal year of the Company shall be $5,000,000.
(d) Performance Goals. For purposes of this Plan, the performance goals
from which the Committee shall establish Performance Targets applicable to
specific Performance Periods shall be limited to the following:
(i) return on equity;
(ii) net income growth;
(iii) total return to stockholders;
(iv) expense management;
(v) risk management of the business portfolio;
(vi) market share;
(vii) industry leadership;
(viii) new products; and
(ix) organizational development;
each of which may be established (x) on a corporate-wide basis or with respect
to one or more operating units, divisions, acquired businesses, minority
investments, partnerships or joint ventures, or, where applicable, (y) on a
relative or an absolute basis or (z) on a per share or an aggregate basis.
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5. Termination of Employment
If a Participant's employment with the Company or a Subsidiary terminates
during a Performance Period by reason of death, Disability or retirement or
with the approval of the Committee, the Participant shall receive a pro rata
payment based upon the number of full months during which the Participant was
employed during the Performance Period and the degree to which the Performance
Targets are determined by the Committee to have been achieved prior to the
Participant's termination. If a Participant's employment with the Company or a
Subsidiary terminates during a Performance Period for any reason other than
death, Disability or retirement or other than with the approval of the
Committee, the Participant's participation in the Plan shall terminate
forthwith and he or she shall not be entitled to an award for such Performance
Period.
6. Payment of Awards
Payment of awards determined under Section 4 shall be made to each
Participant as soon as practicable after the Committee determines that the
applicable Performance Targets have been achieved. The Committee in its sole
discretion shall determine whether awards shall be payable in cash, in the form
of stock awards or restricted stock units issued pursuant to an Equity Plan or
from treasury, or in any combination thereof. If the Committee determines that
an award shall be paid in the form of stock awards or restricted stock units
issued under an Equity Plan or from treasury, then for purposes of determining
the number of shares of Common Stock subject to an award the Committee may
value such shares at a discount to Fair Market Value to reflect any
restrictions, conditions and limitations set forth in the relevant Equity Plan
or the applicable award agreement or certificate or otherwise applicable to the
shares, provided, that such discount shall not exceed 50% of the Fair Market
Value as of the relevant date of determination.
7. Effective Date; Term
The Plan shall become effective upon its adoption by the Board, subject
to its approval by the stockholders of the Company. Prior to such stockholder
approval, the Committee may grant awards conditioned on stockholder approval.
If such stockholder approval is not obtained at or before the first annual
meeting of stockholders to occur after the adoption of the Plan by the Board
(including any adjournment or adjournments thereof), the Plan and any awards
made hereunder shall terminate ab initio and be of no further force and effect.
Unless the Company determines to submit Section 4 of the Plan to the Company's
stockholders at the first stockholder meeting that occurs in the fifth year
following the year in which the Plan was last approved by stockholders (or any
earlier meeting designated by the Board), in accordance with the requirements
of Section 162(m) of the Code, and such stockholder approval is obtained, then
no further awards shall be made under the Plan after the date of such annual
meeting.
8. Amendment and Termination
Notwithstanding Section 7, the Board or the Committee may at any time
amend, suspend, discontinue or terminate the Plan; provided, however, that no
such action shall be effective without approval by the stockholders of the
Company to the extent necessary to continue to qualify the amounts payable
hereunder to Covered Employees as performance-based compensation under Section
162(m).
9. Miscellaneous
(a) Tax Withholding. No later than the date as of which an amount first
becomes includable in the gross income of the Participant for applicable income
tax purposes with respect to any award under the Plan, the Participant shall
pay to the Company or make arrangements satisfactory to the Committee regarding
the payment of any federal, state or local taxes of any kind required by law to
be withheld with respect to such amount. In the case of an award that is
payable in shares of Common Stock, the Company may permit the Participant to
satisfy, in whole or in part, such obligation to remit the minimum required
withholding taxes by
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directing the Company to withhold shares of Common Stock that would otherwise
be received by such individual, pursuant to such rules as the Committee may
establish from time to time.
(b) No Rights to Awards or Employment. No Participant shall have any
claim or right to receive awards under the Plan. Nothing in the Plan shall
confer upon any employee of the Company any right to continued employment with
the Company or interfere in any way with the right of the Company to terminate
the employment of any of its employees at any time, with or without cause.
(c) Other Compensation. Nothing in this Plan shall preclude or limit the
ability of the Company to pay any compensation to a Participant under the
Company's other compensation and benefit plans and programs, including without
limitation any Equity Plan.
(d) No Limitation on Corporate Actions. Nothing contained in the Plan
shall be construed to prevent the Company or any Subsidiary from taking any
corporate action which is deemed by it to be appropriate or in its best
interest, whether or not such action would have an adverse effect on any
awards made under the Plan. No Participant, beneficiary or other person shall
have any claim against the Company or any Subsidiary as a result of any such
action.
(e) Unfunded Plan. The Plan is intended to constitute an unfunded plan
for incentive compensation. Prior to the payment of any award, nothing
contained herein shall give any Participant any rights that are greater than
those of a general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver payment in cash or Common
Stock with respect to awards hereunder.
(f) Non-Transferability. Except as expressly provided herein, no
Participant or beneficiary shall have the power or right to sell, transfer,
assign, pledge or otherwise encumber or dispose of the Participant's interest
under the Plan.
(g) Designation of Beneficiary. A Participant may designate a
beneficiary or beneficiaries to receive any payments which may be made
following the Participant's death. Such designation may be changed or canceled
at any time without the consent of such beneficiary. Any such designation,
change or cancellation must be made in a form approved by the Committee and
shall not be effective until received by the Committee. If a Participant does
not designate a beneficiary, or the designated beneficiary or beneficiaries
predeceases the Participant, any payments which may be made following the
Participant's death shall be made to the Participant's estate.
(h) Severability. If any provision of this Plan is held unenforceable,
the remainder of the Plan shall continue in full force and effect without
regard to such unenforceable provision and shall be applied as though the
unenforceable provision were not contained in the Plan.
(i) Expenses. The costs and expenses of administering the Plan shall be
borne by the Company.
(j) Governing Law. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with and governed by the laws of the
State of Delaware, without reference to the principles of conflict of laws.
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