Exhibit 10.1
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1ST INDEPENDENCE RESTRICTED STOCK PLAN
Effective January 1, 2006
ADOPTION OF
1st INDEPENDENCE RESTRICTED STOCK PLAN
Pursuant to resolutions adopted by the Board of Directors of 1ST
Independence Financial Group, Inc. ("Company") on December 15, 2005, the
undersigned officers of the Company hereby adopt the 1st Independence Restricted
Stock Plan on behalf of the Company, in the form attached hereto.
Dated this 15th day of December , 2005.
1st INDEPENDENCE FINANCIAL GROUP, INC.
By: /s/ N. William White
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N. William White, President & CEO
ATTEST:
By: /s/ R. Michael Wilbourn
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R. Michael Wilbourn, Executive
Vice President and Chief Financial Officer
TABLE OF CONTENTS
Page
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ARTICLE I.............................................................24
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Establishment and Purpose..........................................24
Section 1.1. Establishment of the Plan.....................24
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Section 1.2. Purposes of the Plan..........................24
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ARTICLE II............................................................25
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Definitions........................................................25
Section 2.1. "Award".......................................25
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Section 2.2. "Board".......................................25
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Section 2.3. "Cause".......................................25
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Section 2.4. "Change in Control"...........................25
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Section 2.5. "Code"........................................26
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Section 2.6. "Committee"...................................26
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Section 2.7. "Company".....................................26
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Section 2.8. "Company Stock"...............................26
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Section 2.9. "Director"....................................27
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Section 2.10. "Effective Date".............................27
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Section 2.11. "Fair Market Value"..........................27
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Section 2.12. "Grant Date".................................27
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Section 2.13. "Non-employee Director"......................27
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Section 2.14. "Participant"................................27
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Section 2.15. "Period of Restriction"......................27
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Section 2.16. "Plan".......................................27
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Section 2.17. "Purchase Price".............................27
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Section 2.18. "Restricted Stock"...........................27
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Section 2.19. "Restricted Stock Agreement".................27
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Section 2.20. "Rule 16b-3".................................27
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Section 2.21. "Subsidiary".................................27
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Section 2.22. "Total and Permanent Disability".............27
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ARTICLE III...........................................................29
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Administration.....................................................29
Section 3.1. The Committee.................................29
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Section 3.2. Authority of the Committee....................29
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ARTICLE IV............................................................30
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Eligibility........................................................30
Section 4.1. Eligibility...................................30
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Section 4.2. Participation.................................30
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ARTICLE V.............................................................31
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Restricted Stock...................................................31
Section 5.1. Number of Shares..............................31
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Section 5.2. Grant of Restricted Stock.....................31
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Section 5.3. Restricted Stock Agreement....................31
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Section 5.4. Vesting and Transfer of Restricted Stock......31
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Section 5.5. Return of Restricted Stock to Company.........33
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Section 5.6. Shareholder Rights............................33
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Section 5.7. Dividends and Voting Rights...................33
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Section 5.8. Changes in Stock..............................33
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ARTICLE VI............................................................35
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Amendment, Termination and Duration................................35
Section 6.1. Amendment, Suspension or Termination..........35
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Section 6.2. Duration of the Plan and Shareholder Approval.35
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ARTICLE VII...........................................................36
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Tax Withholding....................................................36
Section 7.1. Withholding Requirements......................36
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Section 7.2. Withholding Arrangements......................36
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ARTICLE VIII..........................................................37
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Legal Construction.................................................37
Section 8.1. Gender and Number.............................37
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Section 8.2. Severability..................................37
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Section 8.3. Requirements of Law...........................37
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Section 8.4. Governing Law.................................37
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Section 8.5. Headings......................................37
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Section 8.6. Mistake of Fact...............................37
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Section 8.7. Evidence......................................37
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ARTICLE IX............................................................38
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Miscellaneous......................................................38
Section 9.1. No Effect on Employment or Service............38
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Section 9.2. Liability and Indemnification.................38
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Section 9.3. Successors....................................38
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Section 9.4. Use of Proceeds...............................38
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Section 9.5. Investment Representations....................38
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Section 9.6. Funding.......................................39
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1st INDEPENDENCE RESTRICTED STOCK PLAN
1
Establishment and Purpose
..1 Establishment of the Plan. 1st Independence Financial Group, Inc., a Delaware
corporation (the "Company"), hereby establishes an equity-based incentive
compensation plan to be known as the 1st Independence Restricted Stock Plan (the
"Plan"), set forth in this document. The Plan provides for the award of
Restricted Stock. The Plan and the grant of Awards hereunder are conditioned on
the Plan's approval by the shareholders of the Company. The Plan is adopted
effective as of January 1, 2006; no Restricted Stock may be awarded until the
Plan has been approved by a majority of the shares of common stock of the
Company represented at the shareholder's meeting at which approval of the Plan
is considered.
..2 Purposes of the Plan. The Plan is designed to promote the interests of the
Company and its Subsidiaries by encouraging their officers, key employees and
Non-employee Directors, upon whose judgment, initiative and industry the Company
and its Subsidiaries are largely dependent for the successful conduct and growth
of their business, to continue their association with the Company and its
Subsidiaries by providing additional incentive and opportunity for unusual
industry and efficiency through stock ownership, and by increasing their
proprietary interest in the Company and their personal interest in its continued
success and progress.
2
Definitions
For purposes of the Plan, the following words and phrases have the
following meanings unless a different meaning is plainly required by the
context:
..1 "Award" means an award of Restricted Stock.
..2 "Board" means the Board of Directors of the Company, unless the context
clearly requires otherwise, and to the extent that any powers and discretion
vested in the Board of Directors are delegated to any committee of the Board,
the term "Board" shall also mean such committee.
..3 "Cause" means: (i) the willful and continued failure of a Participant to
perform his required duties as an officer or key employee of the Company or any
Subsidiary, (ii) action by a Participant involving willful misfeasance or gross
negligence, (iii) the requirement or direction of a federal or state regulatory
agency having jurisdiction over the Company or any Subsidiary to terminate the
employment of a Participant, (iv) conviction of a Participant of the commission
of any criminal offense involving dishonesty or breach of trust, or (v) any
intentional breach by a Participant of a material term, condition or covenant of
any agreement of employment, termination or severance or any other agreement
between the Participant and the Company or any Subsidiary.
..4 "Change in Control" of the Company will be deemed to have occurred if
one of the following events takes place:
..A Change in Ownership. A change in the ownership of the Company
occurs on the date that any person, or group of persons, as
defined in subparagraph (b), acquires ownership of stock of
the Company that, together with stock held by the person or
group, constitutes more than 50 percent of the total fair
market value or total voting power of the stock. However, if
any person or group is considered to own more than 50 percent
of the total fair market value or total voting power of the
stock, the acquisition of additional stock by the same person
or group is not considered to cause a change in the ownership
of the Company. An increase in the percentage of stock owned
by any person or group, as a result of a transaction in which
the Company acquires its stock in exchange for property will
be treated as an acquisition of stock.
..B Change in the Effective Control. A change in the effective
control of the Company will occur when: (i) any person or
group acquires, or has acquired during the twelve-month period
ending on the date of the most recent acquisition by such
person(s), ownership of stock of the Company possessing 35
percent or more of the total voting power; or (ii) a majority
of members of the Board is replaced during any twelve-month
period by Directors whose appointment or election is not
endorsed by a majority of the members of the Company's Board
prior to the date of the appointment or election. However, if
any person or group is considered to effectively control the
Company, the acquisition of additional control of the Company
by the same person(s) is not considered to cause a change in
the effective control.
..C Change in the Ownership of a Substantial Portion of the
Company's Assets. A change in the ownership of a substantial
portion of the Company's assets occurs on the date that any
person or group acquires, or has acquired during the 12-month
period ending on the date of the most recent acquisition by
such person(s), assets from the Company that have a total
gross fair market value equal to or more than 40 percent of
the total gross fair market value of all of the assets
immediately prior to such acquisition(s). Gross fair market
value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.
However, there is no Change in Control under this subparagraph
when there is a transfer to an entity that is controlled by
the shareholders of the transferring Company immediately after
the transfer. A transfer of assets by the Company is not
treated as a change in the ownership of such assets if the
assets are transferred to: (i) a shareholder of the Company
(immediately before the asset transfer) in exchange for or
with respect to its stock; (ii) an entity, 50 percent or more
of the total value or voting power of which is owned, directly
or indirectly, by the Company; (iii) a person, or group of
persons, that owns, directly or indirectly, 50 percent or more
of the total value or voting power of all the outstanding
stock of the Company or (iv) an entity, at least 50 percent of
the total value or voting power of which is owned, directly or
indirectly, by a person described in (iii). For purposes of
this subparagraph, except as otherwise provided, a person's
status is determined immediately after the transfer of the
assets. For example, a transfer to a Company in which the
transferor Company has no ownership interest before the
transaction, but which is a majority-owned subsidiary of the
transferor Company after the transaction is not treated as a
change in the ownership of the assets of the transferor
Company.
..D Acting as a Group. For purposes of this Section, persons will not be
considered to be acting as a group solely because they
purchase or own stock of the Company at the same time, or as a
result of the same public offering. However, persons will be
considered to be acting as a group if they are owners of a
Company that enters into a merger, consolidation, purchase or
acquisition of stock or similar business transaction with the
Company. If a person, including an entity, owns stock in both
Companies that enter into a merger, consolidation, purchase or
acquisition of stock or similar transaction, such shareholder
is considered to be acting as a group with other shareholders
in a Company prior to the transaction giving rise to the
change and not with respect to the ownership interest in the
other Company.
..5 "Code" means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or to a regulation adopted thereunder will include
such section, guidance issued by the Internal Revenue Service or the Treasury
Department with respect to such section, any valid regulation promulgated under
such section, and any comparable provision of any future law, legislation or
regulation amending, supplementing or superseding such section or regulation.
..6 "Committee" means the Compensation Committee of the Board who has been
designated from time to time by the Board pursuant to Section 3.1 to administer
the Plan; and who is serving on the date that the Plan is approved by the
shareholders of the Company or thereafter.
..7 "Company" means 1st Independence Financial Group, Inc., an Indiana
corporation, and any successor thereto.
..8 "Company Stock" means the common voting stock of the Company.
..9 "Director" means any individual who is a member of the Board.
..10 "Effective Date" means January 1, 2006.
..11 "Fair Market Value" means the mean between the reported closing bid and
asked prices for the shares of Company Stock, as quoted by the North American
Securities Dealers Automated Quotation System ("NASDAQ"). If the common stock of
the Company is not quoted by NASDAQ, Fair Market Value shall be determined by
the Committee based upon quotations of the entities which make a market in
Company stock and such other factors as the Committee shall deem appropriate. If
the common stock of the Company is not quoted by entities which make a market in
the Company's stock, the Fair Market Value shall be determined by the Committee
in good faith based upon a valuation of the Company Stock conducted by a
qualified appraiser and such other factors as the Committee deems appropriate.
..12 "Grant Date" means, with respect to any Award granted under the Plan, the
date as of which the Award was granted by the Committee, regardless if the
Restricted Stock Agreement to which the Award relates is executed subsequent to
such date.
..13 "Non-employee Director" means any individual who is a member of the
Board and who is not an employee of the Company.
..14 "Participant" means an officer, key employee or Non-employee Director
to whom an Award has been granted.
..15 "Period of Restriction" means the period during which the transfer of shares
of Restricted Stock is subject to restrictions and, therefore, are subject to a
substantial risk of forfeiture. As provided in Article V, such restrictions may
be based on the passage of time or the occurrence of such other events as may be
determined by the Committee in its sole discretion.
..16 "Plan" means the 1st Independence Financial Group Restricted Stock Plan, as
set forth in this instrument and as hereafter amended from time to time.
..17 "Purchase Price" means the price at which a share of Restricted Stock
of the Company may be purchased by a Participant.
..18 "Restricted Stock" means an Award granted to a Participant pursuant
to Article V.
..19 "Restricted Stock Agreement" means the written agreement which sets
forth the terms and provisions applicable to each Award.
..20 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, and any future
rule or regulation amending, supplementing or superseding such rule.
..21 "Subsidiary" means any banking institution or other corporation more than 50
percent of whose total combined voting stock of all classes is held by the
Company or by another corporation qualifying as a Subsidiary within this
definition.
..22 "Total and Permanent Disability" means a Participant who:
is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment which can be expected to result in
death or can be expected to last for a continuous
period of not less than 12 months; or
is, by reason of any medically determinable physical
or mental impairment which can be expected to result
in death or can be expected to last for a continuous
period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3
months under an accident and health plan covering
employees of the Participant's employer.
3
Administration
..1 The Committee. The Plan will be administered by a Committee of not less than
three Directors of the Company who will be designated from time to time by the
Board. No Director who is also an officer or key employee of the Company or any
of its Subsidiaries will be eligible to serve as a member of the Committee. The
decision of a majority of the members of the Committee will constitute a
decision of the Committee. It is intended that the Committee be comprised solely
of Directors who both are (a) "Non-employee Directors" under Rule 16b-3, and (b)
"outside Directors" as described in Treasury Regulation Section 1.162-27(e)(3).
Failure of the Committee to be so comprised will not result in the cancellation,
termination, expiration or lapse of any Award. Until and unless this Article is
amended to provide otherwise, all references in the Plan to the Committee are to
the Compensation Committee of the Board.
..2 Authority of the Committee.
..1 Except as limited by law or by the Articles of Incorporation or
By-Laws of the Company, and subject to the provisions of the
Plan, the Committee will have full power and discretion to:
(i) select officers, key employees and Non-employee Directors
to receive Awards; (ii) determine the sizes of Awards; (iii)
determine the terms and conditions of Awards in a manner
consistent with the Plan; (iv) construe and interpret the
Plan, all Restricted Stock Agreements and any other agreements
or instruments entered into under the Plan; (v) establish,
amend or waive rules and regulations for the Plan's
administration; and (vi) amend the terms and conditions of any
outstanding Restricted Stock Agreement to the extent such
terms and conditions are within the discretion of the
Committee as provided in the Plan. Further, the Committee will
make all other determinations which may be necessary or
advisable for the administration of the Plan. Each Award will
be evidenced by a written Restricted Stock Agreement between
the Company and the Participant and will contain terms and
conditions established by the Committee consistent with the
provisions of the Plan. Any notice or document required to be
given to or filed with the Committee will be properly given or
filed if hand delivered (and a delivery receipt is received)
or mailed by certified mail, return receipt requested, postage
paid, to the Committee at 1st Independence Bank, P.O. Box
1433, 3801 Charlestown Road, New Albany, Indiana 47151-1433.
..2 The Committee is authorized, subject to the provisions of the
Plan, to adopt, amend and rescind such rules and regulations
as it may deem appropriate for the administration of the Plan
and to make determinations and interpretations which it deems
consistent with the Plan's provisions. The Committee's
determinations and interpretations in this regard will be
final and conclusive.
4
Eligibility
..1 Eligibility. Officers, key employees and Non-employee Directors of the
Company or of any of its Subsidiaries, as selected by the Committee, are
eligible to receive Awards. An officer, key employee or Non-employee Director
will become a Participant as of the date specified by the Committee. A
Participant can be removed as an active Participant by the Committee effective
as of any date; provided, however, that no such removal will adversely affect
any Award previously granted to the Participant.
..2 Participation. No officer, key employee or Non-employee Director will have
the right to be selected to receive an Award under the Plan or, having been
selected, to be selected to receive a future Award. Participation in the Plan
will not give any Participant any right or claim to any benefit under the Plan,
unless such right or claim has specifically accrued under the terms of the Plan.
5
Restricted Stock
..1 Number of Shares. Awards of Restricted Stock will be made in shares of
Company Stock which can be unissued shares or reacquired shares (including
shares purchased in the open market), or a combination thereof, as the Committee
may from time to time determine in its sole discretion. Subject to the
provisions of Section 5.8, the maximum number of shares to be delivered upon the
grant of all Restricted Stock awarded under the Plan will not exceed 80,500
shares. Shares of Restricted Stock which are forfeited can be made the subject
of further Awards.
..2 Grant of Restricted Stock. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant shares of Restricted
Stock to any officer, key employee or Non-employee Director in such amounts as
the Committee determines in its sole discretion. Subject to the limitations of
Section 5.1, the Committee will determine the number of shares of Restricted
Stock to be granted to each Participant in its sole discretion.
..3 Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced
by a Restricted Stock Agreement that specifies the Period of Restriction, the
number of shares granted, the Grant Date, the Purchase Price (if any) and such
other terms and conditions as the Committee determines in its sole discretion.
..4 Vesting and Transfer of Restricted Stock. Shares issued due to grant of an
Award will be subject to the terms and conditions specified herein and to such
other terms, conditions and restrictions as the Committee in its sole discretion
may determine and provide in the Restricted Stock Agreement. The Company may
cause any certificate for shares to be delivered hereunder to be properly marked
with a legend or other notation which reflects the limitations on transfer of
such shares as provided in the Plan, the applicable Restricted Stock Agreement
or as the Committee may otherwise require in its sole discretion.
..1 Restrictions on Transferability. Except as provided in this
subsection, no shares of Restricted Stock awarded under the
Plan may be sold, assigned, transferred, pledged or
hypothecated by the Participant in any way, whether by
operation of law or otherwise and shall not be subject to
execution, attachment or similar process. Each certificate
evidencing shares of Restricted Stock awarded under the Plan
will bear a legend which sets forth such restrictions; and,
any attempted sale, assignment, transfer, pledge,
hypothecation, execution, attachment or similar disposition
will be null and void and of no effect.
..2 Vesting. Unless otherwise provided in the applicable
Restricted Stock Agreement or determined by the Committee in
its sole discretion, Restricted Stock awarded under the Plan
will become vested upon completion of years of service for the
Company in accordance with the following schedule:
Years of Service Vested Percentage Forfeited Percentage
From Grant Date
1 20% 80%
2 40% 60%
3 60% 40%
4 80% 20%
5 100% 0%
Notwithstanding the vesting schedule specified above, the
Committee may, in its sole discretion, amend the vesting
schedule for a particular Restricted Stock Award in a manner
which causes the Restricted Stock to which the Award relates
to vest under a more rapid schedule. The Committee shall not
amend such schedule to (i) require a Participant to complete
more years of service than specified in the schedule, or (ii)
reduce the percentage rates specified in the schedule, to
slow the rate at which the Restricted Stock vests.
For purposes of this Section 5.4, a "year of service" means a
period of 12 consecutive months of continuous, active
employment of the Participant with the Company commencing as
of the applicable Grant Date.
..3 Lapse of Restrictions and Vesting. The restrictions on shares of
Restricted Stock contained in subsections 5.4(a) and (b) will
lapse and such shares will become fully vested, nonforfeitable
and transferable upon the earliest to occur of: (i) the
date(s) prescribed by the Committee in the Restricted Stock
Agreement; (ii) the Participant's death; or (iii) the
Participant's Total and Permanent Disability. The specific
terms and conditions regarding the lapse of restrictions and
the vesting of shares of Restricted Stock will be contained in
the Restricted Stock Agreement. In no event will a Participant
have any right under the Plan or in a Restricted Stock
Agreement to affect the time at which the Restricted Stock
awarded to him becomes vested.
..4 Forfeiture of Shares on Termination of Employment. If a
Participant's employment with the Company or any Subsidiary is
terminated for any reason other than for Cause or on account
of the Total and Permanent Disability or death, prior to the
time the shares of Restricted Stock become vested, as provided
in subsections 5.4(b) or (c), all of the unvested shares of
Restricted Stock will be forfeited and will thereupon revert
to the Company. Such forfeiture will be effective on the date
of the Participant's termination of employment. Transfer of
employment from the Company to a Subsidiary, or vice versa, or
from one Subsidiary to another, will not be deemed termination
of employment. The Committee has the authority to determine in
each case whether a leave of absence on military or government
service is deemed a termination of employment.
Notwithstanding the foregoing provisions of this
Section, if a Participant's employment terminates for any
reason other than Cause, the Committee may, in its sole
discretion, by means of a written amendment to the Restricted
Stock Agreement, provide that (i) the unvested shares of
Restricted Stock will not be forfeited upon termination of
employment, and (ii) the restrictions on shares of Restricted
Stock contained in subsections 5.4(a) and (b) will lapse and
such shares will become fully vested, nonforfeitable and
transferable upon the earliest to occur of: (x) the date(s)
prescribed by the Committee in the amendment to the Restricted
Stock Agreement, (y) the Participant's death, or (z) the
Participant's Total and Permanent Disability; provided,
however, that the Committee will provide in any such amendment
that (A) shares of Restricted Stock that were not vested on
the date the Participant terminated employment will be
immediately forfeited; and (B) shares of Restricted Stock
which became vested after the Participant terminated
employment must be returned to the Company, upon a finding by
the Committee, as determined in its sole discretion, that the
Participant has violated any provision of the amended
Restricted Stock Agreement, including without limitation any
non-competition, non-solicitation or non-disclosure provision
thereof.
..5 Forfeiture on Termination For Cause. If a Participant's
employment is terminated for Cause prior to the time the
shares of Restricted Stock become vested, as provided in
subsections 5.4(b) or (c), all of the unvested shares will be
forfeited and thereupon revert to the Company. Such forfeiture
will be effective on the date the Participant receives notice
of his termination for Cause.
..6 Change in Control of Company. In the event of a Change in
Control of the Company (i) the restrictions on the transfer of
all shares of Restricted Stock provided in subsection 5.4(a),
will immediately lapse, and (ii) all of the shares of
Restricted Stock subject to forfeiture under subsections
5.4(b), (d) and (e) will immediately become fully vested and
nonforfeitable.
..5 Return of Restricted Stock to Company. On the date set forth in the
applicable Restricted Stock Agreement, the Restricted Stock for which
restrictions have not lapsed by the last day of the Period of Restriction will
revert to the Company and thereafter will be available for the grant of new
Awards.
..6 Shareholder Rights. No person will have any rights of a shareholder
(including, but not limited to, voting rights) with respect to shares subject to
an Award until such shares have been recorded on the Company's official
shareholder records (or the records of its transfer agents or registrars) as
having been issued and transferred to the Participant. Upon grant of the Award
or any portion thereof, the Company will have a reasonable period in which to
issue and transfer the shares to the Participant, and the Participant will not
be treated as a shareholder for any purpose whatsoever prior to such issuance
and transfer. No payment or adjustment will be made for rights for which the
record date is prior to the date such shares are recorded as issued and
transferred in the Company's official shareholder records (or the records of its
transfer agents or registrars), except as otherwise provided herein or in a
Restricted Stock Agreement.
..7 Dividends and Voting Rights. Upon the Award of shares of Restricted Stock
under the Plan, subject to the requirements of Section 5.4 concerning
restrictions on the transferability of Restricted Stock and the requirement that
a Participant remain an employee or Non-employee Director of the Company or its
Subsidiaries, the Participant will be entitled to: (i) receive all dividends
payable and paid with respect to Restricted Stock awarded and issued to the
Participant; and (ii) exercise all voting rights associated with such Restricted
Stock. Provided, however, upon the transfer or other disposition of any shares
of Restricted Stock in violation of subsection 5.4(a) or upon the forfeiture of
any shares of Restricted Stock in accordance with subsection 5.4(b), (d) or (e),
the Participant will not be entitled to receive any dividends declared or
exercise any voting rights on or after the date such shares of Restricted Stock
were transferred or forfeited.
..8 Changes in Stock.
..1 Subject to the provisions of subsection 5.8(b), in the event of any
change in the Company's shares through stock dividends,
split-ups, recapitalizations, reclassifications, conversions
or otherwise, or in the event that other stock is converted
into or substituted for Company shares as the result of any
merger, consolidation, reorganization or similar transaction
which results in a Change in Control of the Company, then the
Committee may make appropriate adjustment or substitution in
the aggregate number, price and kind of shares available under
the Plan and in the number, price and kind of shares covered
under any Restricted Stock awarded or to be awarded under the
Plan. The Committee's determination in this respect will be
final and conclusive. Provided, however, that the Company will
not, and will not permit its Subsidiaries to, recommend,
facilitate or agree or consent to a transaction or series of
transactions which would result in a Change in Control of the
Company unless and until the person or persons or entity or
entities acquiring or succeeding to the assets or capital
stock of the Company or any of its Subsidiaries as a result of
such transaction or transactions agrees to be bound by the
terms of the Plan insofar as it pertains to Restricted Stock
theretofore awarded but which are unvested and agrees to
assume and perform the obligations of the Company hereunder.
..2 In the event of a Change in Control of the Company pursuant to
which another person or entity acquires control of the Company
(such other person or entity being the "Successor"), shares
subject to the Plan and each Award of Restricted Stock, will,
automatically by virtue of such Change in Control of the
Company, be converted into and replaced by shares of common
stock, or such other class of securities having rights and
preferences no less favorable than common voting stock of the
Successor, and the number of shares of Restricted Stock, and
the Purchase Price per share upon exercise of the Restricted
Stock, if any, will be correspondingly adjusted, so that, by
virtue of such Change in Control of the Company, each
Participant will have that number of shares of Restricted
Stock of the Successor which have a Fair Market Value equal,
as of the date of such Change in Control of the Company, to
the Fair Market Value, as of the date of such Change in
Control of the Company, of the shares of Restricted Stock of
the Company theretofore awarded to him.
Section 5.9. Information to be Furnished. Participants, or any other
persons entitled to benefits under the Plan, must furnish to the Committee such
documents, evidence, data or other information as the Committee considers
necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each Participant and for each other person who is entitled to
benefits hereunder, are to be provided on the condition that the Participant of
the person who is entitled to benefits hereunder furnish full, true and complete
data, evidence or other information, and that he promptly signs any document
reasonably related to the administration of the Plan requested by the Committee.
No fractional shares will be issued under the Plan.
6
Amendment, Termination and Duration
..1 Amendment, Suspension or Termination. The Board may, at any time, without the
approval of the shareholders of the Company (except as otherwise required by
applicable law, rule or regulations, including without limitation any
shareholder approval of the safe harbor rule promulgated under the Securities
Exchange Act of 1934) alter, amend, modify, suspend or discontinue the Plan, but
may not, without the consent of the affected Participant or without the approval
of the shareholders of the Company, make any alteration which would: (i)
increase the aggregate number of shares subject to an Award, except as provided
in Section 5.8; (ii) decrease the Purchase Price, except as provided in Section
5.8; (iii) permit any member of the Committee to be eligible for an Award; (iv)
withdraw administration of the Plan from the Committee or Board; (v) extend the
term of the Plan, (vi) change the manner of determining the Purchase Price;
(vii) change the class of individuals eligible for Awards; or (viii) without the
consent of the affected Participant, alter or impair any Award.
..2 Duration of the Plan and Shareholder Approval. The Plan will be effective on
the Effective Date and, subject to Section 6.1 (regarding the Board's right to
supplement, amend, alter or discontinue the Plan), will remain in effect
thereafter until terminated by the Board; provided, however, that no Award can
be granted until the Plan has been approved by the holders of at least a
majority of the outstanding shares at a meeting at which approval of the Plan is
considered.
7
Tax Withholding
..1 Withholding Requirements. The Company has the power and the right, prior to
the delivery of any Company Stock on the vesting of Restricted Stock, to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy all federal, state and local income and employment taxes
required by applicable law to be withheld with respect to exercise or vesting of
such Award. In no event will any amount withheld be in an amount that would
require the Company to incur accounting charges.
..2 Withholding Arrangements. The Committee, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant
to satisfy a tax withholding obligation, in whole or in part, by electing to
have the Company withhold otherwise deliverable shares. The amount of the
withholding requirement will be deemed to include any amount that the Committee
agrees may be withheld at the time any such election is made, not to exceed, in
the case of income tax withholding, the amount determined, based upon minimum
statutory requirements, by using the maximum federal, state or local marginal
income tax rates applicable to the Participant with respect to the Award on the
date the amount of income tax to be withheld is determined.
8
Legal Construction
..1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also includes the feminine, the plural includes the
singular, and the singular includes the plural.
..2 Severability. In the event any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as if
the illegal or invalid provision had never been included herein.
..3 Requirements of Law. The grant of Awards and the issuance of shares under the
Plan will be subject to all applicable statutes, laws, rules and regulations and
to such approvals and requirements as may be required from time to time by any
governmental authorities or any securities exchange or market on which the
shares are then listed or traded.
..4 Governing Law. The Plan and all Restricted Stock Agreements will be construed
in accordance with and governed by the laws of the State of Indiana without
giving effect to any choice or conflict of law provisions, principles or rules
(whether of the State of Indiana or any other jurisdiction) that would cause the
application of any laws of any jurisdiction other than the State of Indiana. The
Plan and all Restricted Stock Agreements are intended to comply, and will be
construed by the Board and Committee in a manner which complies, with the
applicable provisions of Code Section 409A. To the extent there is any conflict
between a provision of the Plan or a Restricted Stock Agreement and a provision
of Code Section 409A, the applicable provision of Code Section 409A will
control.
..5 Headings. The descriptive headings and sections of the Plan are provided
herein for convenience of reference only and will not serve as a basis for
interpretation or construction of the Plan.
..6 Mistake of Fact. Any mistake of fact or misstatement of facts will be
corrected when it becomes known by a proper adjustment to an Award or Restricted
Stock Agreement.
..7 Evidence. Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person relying thereon
considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
9
Miscellaneous
..1 No Effect on Employment or Service. Neither the Plan nor the grant of any
Award or the execution of any Restricted Stock Agreement will confer upon any
Participant any right to continued employment by the Company, or will interfere
with or limit in any way the right of the Company to terminate any employee's
employment or service at any time, with or without Cause. Employment with the
Company and its Subsidiaries is on an at-will basis only, unless otherwise
provided by a written employment or severance agreement, if any, between the
employee and the Company or a Subsidiary, as the case may be. If there is any
conflict between the provisions of the Plan or any Restricted Stock Agreement
executed and delivered hereunder and an employment or severance agreement
between an employee and the Company, the provisions of such employment or
severance agreement will control, including, but not limited to, the vesting and
forfeiture of any Awards.
..2 Liability and Indemnification. No member of the Board, the Committee or any
officer or employee of the Company or any Subsidiary will be personally liable
for any action, failure to act, decision or determination made in good faith in
connection with the Plan. By participating in the Plan, each Participant agrees
to release and hold harmless the Company and its Subsidiaries (and their
respective directors, officers and employees) and the Committee from and against
any tax liability, including, but not limited to, interest and penalties,
incurred by the Participant in connection with his receipt of Awards under the
Plan and the deferral, payment and exercise thereof. Each person who is or was a
member of the Committee, or of the Board, will be indemnified and held harmless
by the Company against and from (a) any loss, cost, liability or expense
(including, but not limited to, attorneys' fees) that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan or any
Restricted Stock Agreement; and (b) any and all amounts paid by him in
settlement thereof, with the Company's prior written approval, or paid by him in
satisfaction of any judgment in any such claim, action, suit or proceeding
against him; provided, however, that he will give the Company an opportunity, at
the Company's expense, to handle and defend such claim, action, suit or
proceeding before he undertakes to handle and defend the same on his own behalf.
The foregoing right of indemnification is exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or By-Laws, by contract, as a matter of law or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.
..3 Successors. All obligations of the Company under the Plan, with respect to
Awards granted hereunder, are binding on any successor to the Company, whether
or not the existence of such successor is the result of a Change in Control of
the Company. The Company will not, and will not permit its Subsidiaries to,
recommend, facilitate or agree or consent to a transaction or series of
transactions which would result in a Change in Control of the Company unless and
until the person or persons or entity or entities acquiring control of the
Company as a result of such Change in Control agree(s) to be bound by the terms
of the Plan insofar as it pertains to Awards theretofore granted and agrees to
assume and perform the obligations of the Company and its Successor (as defined
in Section 5.8) hereunder.
..4 Use of Proceeds. The proceeds, if any, received by the Company from the sale
of stock pursuant to the Plan will be used for general corporate purposes.
..5 Investment Representations. Unless the shares subject to an Award are
registered under the Securities Act of 1933, each Participant in the Restricted
Stock Agreement between the Company and the Participant shall agree for himself
and his legal representatives that any and all shares acquired upon the award of
Restricted Stock shall be acquired for investment and not with a view to, or for
sale in connection with, any distribution thereof.
..6 Funding. Benefits payable under the Plan to any person will be paid by the
Company from its general assets. Shares to be issued hereunder will be issued
directly by the Company from its authorized but unissued shares or acquired by
the Company on the open market, or a combination thereof. Neither the Company
nor any of its Subsidiaries will be required to segregate on its books or
otherwise establish any funding procedure for any amount to be used for the
payment of benefits under the Plan. The Company (or any of its Subsidiaries)
may, however, in its sole discretion, set funds aside in investments to meet any
anticipated obligations under the Plan. Any such action or set-aside will not be
deemed to create a trust of any kind between the Company and any of its
Subsidiaries and any Participant or other person entitled to benefits under the
Plan or to constitute the funding of any Plan benefits. Consequently, any person
entitled to a payment under the Plan will have no rights greater than the rights
of any other unsecured general creditor of the Company or its Subsidiaries.