EXHIBIT 10d
CLEAN DIESEL TECHNOLOGIES, INC.
1994 INCENTIVE PLAN
As amended through August 8, 1996
1. Purpose and Effective Date
The purpose of this 1994 Incentive Plan of Clean Diesel Technologies,
Inc., a Delaware corporation ("the Corporation") is to further the interests of
the Corporation and its shareholders by providing incentives in the form of
awards to such directors, officers, employees, consultants or advisors to the
Corporation as the directors shall determine are key to the continued success
and profitability of the Corporation. The Plan is intended to retain
Participants with significant training, experience and ability; to attract new
Participants whose services are considered valuable; and to encourage such
Participants to acquire a proprietary interest in the Corporation. So that the
maximum incentive can be provided each Participant in the Plan by granting to
such participant an Award best suited to the circumstances, the Plan provides
for granting, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
Shares, Performance Awards, Bonuses, Other Awards, or any combination of the
foregoing.
This Plan shall become effective upon its adoption by the Board,
subject to approval within one (1) year of such adoption by the Corporation's
shareholders, and shall remain effective until terminated by resolution of the
Board.
2. Definitions
As used in this Plan:
(1) "Award" means the grant hereunder, and by consent of the
Participant, awards or options granted previously by the Corporation of any form
of Option, Stock Appreciation Right, Restricted Share, Performance Award, Other
Award, Bonus, or any other form of Share based or non-Share based Award.
(2) "Award Agreement" means a written agreement between the Corporation
and a Participant that sets forth the terms, conditions and limitations
applicable to an Award.
(3) "Beneficiary" means, where a Participant is with respect to any
Award not forfeitable by its terms on the death of the Participant entitled to
any unpaid portion thereof, such person or persons entitled thereto under the
Participant's will or under the laws of descent and distribution.
(4) "Board" means the Board of Directors of the Corporation.
(5) "Bonus" means any payment under ss. 6.5.
(6) "Change in Control" has the meaning set forth in ss. 8.
(7) "Code" means the United States Internal Revenue Code of 1986, as
amended and in effect from time to time, or any successor statute.
(8) "Committee" means the Committee of the Board or any successor
committee as described in Section 3.1, or, if there shall be no such Committee,
the Board.
(9) "Corporation" means Clean Diesel Technologies, Inc., a Delaware
corporation, or any successor corporation, and its subsidiaries and affiliates,
incorporated or otherwise, in which the Corporation shall own directly or
indirectly at least fifty percent (50%) of the interests.
(10) "Employee" means any individual who is a salaried employee on the
payroll of the Corporation.
(11) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.
(12) "Fair Market Value Per Share" in reference to the common stock of
the Corporation means such value as shall be determined by the Board or a
Committee thereof, as the case may be, responsible from time to time for the
administration of the Plan.
(13) "Non-Qualified Stock Option" shall mean a stock option which is
not an Incentive Stock Option within the meaning of S. 422 of the Code.
(14) "Option" means an Award to purchase Shares granted pursuant to ss.
6.1.
(15) "Participant" means any director, officer, employee, consultant or
advisor who is granted an Award under this Plan. Except that consultants and
advisors shall not include those rendering services in connection with the offer
or sale of the Corporation's securities in a capital raising transaction.
(16) "Performance Award" has the meaning described in ss. 6.4.
(17) "Plan" means this 1994 Incentive Plan of Clean Diesel
technologies, Inc., as amended from time to time.
(18) "Restricted Shares" means Shares which have certain restrictions
attached to the ownership thereof, which may be issued under ss. 6.3.
(19) "Retirement" means termination of a Participant's
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employment with the Corporation by retirement under the normal, mandatory, early
and applicable age plus service or other provision of the applicable retirement
plan of the Corporation or a subsidiary or affiliate of the Corporation, or, if
there shall be no such plan or plans, then under such procedures as the Company
or its subsidiaries and affiliates may from time to time establish.
(20) "Rule 16b-3" means such rule as promulgated by the Securities and
Exchange Commission under the Exchange Act as now in force or as such regulation
or successor regulation shall be hereafter amended.
(21) "Shares" mean shares of common stock of the Corporation.
(22) "Share Unit" means the right to receive a payment equivalent in
value to one Share on the date of payment.
(23) "Stock Appreciation Right" means a right which may be issued under
ss. 6.2, the value of which is determined relative to the appreciation in value
of Shares.
(24) "Totally Disabled" means a condition of a Participant found by a
qualified physician selected by the Corporation to be that as described in ss.
22(e)(3) of the Code or as such Section or successor section shall be hereafter
amended.
(25) "Non-Employee Director" means a director as defined in
Rule 16b-3.
3. Administration
3.1 Committee
(a) This Plan shall be administered by the Board. The Board
may, however, appoint a Committee to administer the Plan which shall
consist of not less than a sufficient number of Non-Employee Directors
so as to qualify the Committee to administer this Plan as contemplated
by Rule 16b-3 and to that end the Board may limit the participation of
Committee members in the Plan to formula based or other awards. The
Board may remove members from or add members to the Committee.
Vacancies on the Committee shall be filled by the Board.
(b) To the extent permitted by ss. 13.3, the Board or
Committee is authorized to (i) determine the persons who shall be
Participants in the Plan and which Awards shall be granted to
Participants, (ii) establish, amend and rescind rules, regulations and
guidelines relating to the Plan as it deems appropriate, (iii)
interpret and administer the Plan, Awards and Award Agreements, (iv)
establish, modify and terminate terms and conditions of Award
Agreements, (v) grant waivers and accelerations of Plan, Award and
Award Agreement restrictions and (vi) take any other action necessary
for the
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proper administration and operation of the Plan.
(c) The Board or Committee may designate persons and
entities other than its members, including but not limited to, any
successor committee, the Chief Executive officer, and the Corporate
Secretary, to carry out any of its responsibilities under and described
in this Plan, under such conditions or limitations as the Board or
Committee may establish, other than its authority with regard to
participants, if any, who are subject to ss. 16 of the Exchange Act.
3.2 Effect of Determinations
Determinations of the Board or Committee and its designees shall be
final, binding and conclusive on the Corporation, its stockholders, Employees
and Participants. No member of the Board or Committee or any of its designees
shall be personally liable for any action or determination made in good faith
with respect to this Plan, any award, or any Award Agreement.
4. Eligibility
Persons eligible for Awards under this Plan shall consist of key
managerial and other directors, officers, employees, consultants or agents who
possess valuable experience and skills and have contributed, or can be expected
to contribute, materially to the success and profitability of the Corporation.
The Board or Committee shall determine which persons shall be Participants, the
types of Awards to be made to Participants and the terms, conditions and
limitations applicable to the Awards.
5. Shares Subject to This Plan
5.1 Maximum Number of Shares
The maximum number of Shares available for Awards under this Plan in
each calendar year during any part of which this Plan shall be in effect shall
be such fixed amount of shares as the Board shall from time to time determine
but not more than twelve and one half percent (12.5%) of the issued and
outstanding shares of the Corporation. Treasury stock shall not be deemed to be
issued and outstanding. Any and all such Shares may be issued in respect of any
of the types of Awards.
5.2 Share Accounting
Shares related to Awards that are forfeited, terminate, expire
unexercised, exchanged, settled in cash in lieu of Shares or settled in such
other manner so that a portion or all of the Shares included in an Award are not
issued to a Participant shall be available for other Awards. Any Shares not so
used shall be available for further Awards; provided, however, that in any
calendar year no more than the amount determined under ss. 5.1 above,
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shall be available for Awards. Shares issued under this Plan shall be authorized
and unissued Shares or Shares reacquired by the Corporation, as determined by
the Committee. No fractional Shares shall be issued under this Plan.
6. Awards
(a) Awards may include, but are not limited to, those described in this
ss. 6. Awards may be granted singly, in combination, or in tandem with other
Awards. Subject to the other provisions of this Plan, Awards may also be made in
combination or in tandem with, in replacement of, or as alternatives to, grants
or rights under this Plan and any other plan of the Corporation, including any
plan of any acquired entity and for the benefit of any present or former
director, officer, consultant or agent of such acquired entity. Subject to the
terms of the Awards described in this ss. 6 and the related Award Agreement, the
form of payment for Awards may be in cash, in Shares, in Share Units, or such
other form as determined by the Board or the Committee, and may be made partly
in one form and partly in one or more other forms, all as determined by the
Committee. Except as otherwise provided in this Plan, Awards shall be evidenced
by Award Agreements, the terms of which may be amended or accelerated by the
Board or Committee following the grant of any Award and need not be uniform
among Participants. Except as otherwise provided in this Plan, Awards shall be
granted for such minimum consideration as is required by applicable law, rules
and regulations, including without limitation, the then applicable Rule 16b-3,
and such additional consideration, if any, as may be determined by the
Committee.
(b) Notwithstanding anything contained in this Plan, if required by the
then applicable Rule 16b-3 or any successor provision, any "equity security"
awarded pursuant to this Plan to any participant who is subject to Section 16 of
the Exchange Act must be held by the Participant for at least six (6) months
after the award thereof. In addition, if required by the then applicable Rule
16b-3 or any successor provision, with respect to any Participant who is subject
to Section 16 of the Exchange Act, at least six (6) months must elapse from the
date of acquisition of a "derivative security" hereunder to the date of
disposition of such security. The terms "equity security" and "derivative
security" shall have the meanings described in the then applicable Rule 16b-3.
6.1 Options
Options may be granted under this Plan from time to time. If Options
are granted they shall be upon the following terms and conditions with such
additional terms and conditions, not inconsistent with the provisions of this
Plan, as the Board or Committee in its discretion shall deem desirable:
(a) Options shall be Non-Qualified Stock Options.
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(b) The option price per Share for all Options shall be not
less than one hundred per cent (100%) of the Fair Market Value Per
Share on the date the Option is granted.
(c) Award Agreements for Options shall conform to the
requirements of this Plan, and may contain such other provisions as the
Committee shall deem advisable.
(d) Award Agreements for Options shall specify when an Option
may be exercisable. An option may be exercised, in whole or in part, by
giving written notice of exercise to the Corporation specifying the
number of Shares to be purchased. Shares purchased upon exercise of an
Option shall be paid for in full at the time the Option is exercised in
cash or, with the consent of the Board or Committee, in Shares. Payment
may also be made in any other manner or form approved by the Board or
Committee, consistent with applicable law, regulations and rules.
(e) A holder of an Option shall have no rights as a
stockholder with respect to any Shares covered by such Option unless
and until the date of the issuance of the stock certificate for such
Shares.
(f) (i) If, after completion of any required period of
continuous employment or affiliation in order to exercise an Option as
provided in an Award Agreement, a Participant dies while employed by
the Corporation, such Option shall be exercisable by the Beneficiary
thereof, but after the date of death of the Participant only within the
period specified in the Award Agreement which shall not be later than
the expiration date of the Option.
(ii) Following the death of a Participant, the Board
or Committee may at its discretion, upon the request of such
Participant's Beneficiary who holds an exercisable Option and in
consideration of the surrender of such Option, pay the amount by which
the Fair Market Value per Share on the date of such request shall
exceed the Option price per Share multiplied by the number of Shares as
to which the request was made.
(g) If, after completion of any required period of continuous
employment in order to exercise an Option as provided in an Award
Agreement, a Participant is Totally Disabled or retires, such Option
shall be exercisable by the Participant, but only within the period
specified in the Award Agreement.
6.2 Stock Appreciation Rights
Stock Appreciation Rights may be granted under this Plan from
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time to time. If Stock Appreciation Rights are granted they shall be upon the
following terms and conditions, and such additional terms and conditions, not
inconsistent with the provisions of this Plan, as the Board or Committee in its
discretion shall deem desirable:
(a) A Stock Appreciation Right may be granted in tandem with
part or all of, in addition to, or completely independent of, an Option
or any other Award under this Plan. A Stock Appreciation Right issued
in tandem with an Option may be granted at the time of grant of the
related Option or at any time thereafter during the term of the Option.
(b) Award Agreements for Stock Appreciation Rights shall
conform to the requirements of this Plan and may contain such other
provisions (including but not limited to, the permitted form of payment
for the exercise of the Stock Appreciation Right, the requirement of
employment for designated periods of time prior to exercise and the
ability of the Board or Committee to revoke Stock Appreciation Rights
which are issued in tandem with options without compensation to the
Participant) as the Board or Committee shall deem advisable.
(c) Stock Appreciation Rights issued in tandem with Options
shall be subject to the following:
(i) Stock Appreciation Rights shall be exercisable at
such time or times and to the extent, but only to the extent, that the
Option to which they relate shall be exercisable.
(ii) Upon exercise of Stock Appreciation Rights the
holder thereof shall be entitled to receive a number of Shares equal in
aggregate value to the amount by which the Fair Market Value Per Share
on the date of such exercise shall exceed the option price per Share of
the related Option, multiplied by the number of Shares in respect of
which the Stock Appreciation Rights shall have been exercised.
(iii) All or any part of the obligation arising out
of an exercise of Stock Appreciation Rights may, at the discretion of
the Board or Committee, be settled by the payment of cash equal to the
aggregate value of the Shares (or a fraction of a Share) that would
otherwise be delivered under ss. 6.2(c)(ii).
(iv) Upon exercise of Stock Appreciation Rights the
unexercised tandem options of the Participant shall automatically
terminate upon the exercise of such Stock Appreciation Rights.
(v) Stock Appreciation Rights issued in tandem with
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Options shall automatically terminate upon the exercise of such
Options.
6.3 Restricted Shares
Awards of Restricted Shares may be granted under this Plan from time to
time. If Awards of Restricted Shares are granted they shall be upon the
following terms and conditions and such additional terms and conditions, not
inconsistent with the express provisions of this Plan, as the Committee in its
discretion shall deem desirable:
(a) Restricted Shares are Shares which are subject to such
terms, conditions and restrictions as the Board or Committee deems
appropriate, which may include restrictions upon the sale, assignment,
transfer or other disposition of the Restricted Shares and the
requirement of forfeiture of the Restricted Shares upon termination of
employment under certain specified conditions. The Board or Committee
may condition the lapsing of restrictions on part or all of an Award of
Restricted Shares upon the attainment of specific performance goals or
such other factors as the Board or Committee may determine. Awards of
Restricted Shares may be granted for no cash consideration or for such
minimum consideration as may be required by applicable law.
(b) Award Agreements for Restricted Shares shall conform to
the requirements of this Plan, and may contain such other terms and
conditions (including but not limited to, a description of a period
during which the Participant may not transfer the Restricted Shares and
limits on encumbering the Restricted Shares during such period) as the
Board or Committee shall deem desirable. To the extent permitted by ss.
13.3 hereof, the Board or Committee may provide for the lapse of any
such term or condition in installments and may accelerate or waive any
such term or condition in whole or in part, based on service,
performance and/or such other factors or criteria as the Board or
Committee may determine.
(c) Award Agreements for Restricted Shares shall provide that
the stock certificates representing Restricted Shares shall be
legended, that such certificates be held by a custodian or the
Corporation, or that there be other mechanisms for maintaining control
by the Corporation of the Restricted Shares until the restrictions
thereon are no longer in effect. After the lapse, waiver or release of
the restrictions imposed pursuant to the Award Agreement on any
Restricted Shares, the Corporation shall cause to be issued in the
Participant's name a stock certificate evidencing the Restricted Shares
with respect to which the restrictions have lapsed or been waived or
released, free of any legend, and
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shall cause such stock certificate to be delivered to the
Participant.
(d) Except as otherwise provided in this Plan or in the Award
Agreement, the participant shall have, with respect to Awards of
Restricted Shares, all of the rights of a shareholder of the
Corporation, including the right to vote the Restricted Shares and the
right to receive any cash or stock dividends on such Restricted Shares.
The Board or Committee may provide that the payment of cash dividends
shall or may be deferred. Any reinvestment of deferred cash dividends
shall be as determined by the Board or Committee. Stock dividends
issued with respect to restricted Shares shall be Restricted Shares and
shall be subject to the same terms, conditions and restrictions that
apply to the Restricted Shares with respect to which such dividends are
issued. Any additional Shares issued with respect to cash or stock
dividends shall not be counted against the maximum number of Shares for
which Awards may be granted under this Plan as set forth in Section 5.
(e) If the employment of a Participant is terminated prior to
the lapse of restrictions on Restricted Shares because the Participant
dies, becomes Totally Disabled or retires involuntarily the
restrictions on all Restricted Shares awarded to a participant shall
lapse on the date of such termination.
6.4 Performance Awards
Performance Awards may be granted under this Plan from time to time. If
Performance Awards are granted they shall be upon the following terms and
conditions and such additional terms and conditions, not inconsistent with the
express provisions of this Plan, as the Board or Committee in its discretion
shall deem advisable:
(a) Performance Awards are Awards which are based upon the
long-term performance of all or a portion of the Corporation or which
are based upon the long-term individual performance of a Participant.
Performance Awards may be in the form of performance units, performance
shares and such other forms of Performance Awards which the Board or
Committee shall determine to be desirable. Performance Awards are
Awards which are granted to participants contingent upon (i) the future
performance of all or a portion of the Corporation which may include,
without limitation, performance relative to a group of companies in the
same or related industries, achievement of specific business
objectives, attainment of certain growth rates, profitability goals and
such other measurements as the Board or Committee determines to be
appropriate, (ii) the future performance of a Participant,
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which may include, without limitation, attainment of specified goals
and objectives and such other measurements as the Board or Committee
determines to be appropriate, (iii) the future performance of a
combination of all or a portion of the Corporation and a participant,
or (iv) such other measurements and criteria as may be considered
appropriate by the Board or Committee. Performance Awards may contain
multiple performance measurements.
(b) Award Agreements for Performance Awards shall conform to
the requirements of this Plan and may contain such other terms and
conditions as the Board or Committee shall deem desirable, including
but not limited to, applicable performance measurements, a description
of whether performance measurements are to be used singly or in
combination, a description of whether different performance
measurements may be used for different performance periods, the length
of performance periods, the ability of the Board or Committee to amend
and adjust measurements, payouts and performance periods of performance
Awards and any requirements of employment during performance periods.
(c) Award Agreements for Performance Awards shall provide for
a required minimum period of continuous employment during a performance
period of a Performance Award. If such minimum period of continuous
employment shall have elapsed, the Award Agreement may provide, or the
Board or Committee may determine, the portion of the payment of the
Performance Award which participant or the Participant's beneficiary,
as applicable, is to receive at the end of the performance period.
6.5 Bonuses
Bonuses may be granted under this Plan from time to time on an annual
or one-time basis. The amount of Bonuses which may be awarded shall be as
determined by the Board or Committee. The Board or Committee may establish a
basis upon which aggregate Bonus expenditures for any year shall be determined,
which may include measurements of financial performance of the Corporation or of
a unit or department thereof, relative performance of the Corporation or of a
department thereof within the same or related industries, competitive
compensation considerations and other measurements and criteria.
(a) Each Bonus may be made at the discretion of the Board or
Committee either in cash, in Shares, in Share Units, or in another form
as determined by the Board or Committee and may be made partly in one
form and partly in one or more other forms. In the case of an Award of
a Bonus in Shares or Share Units, the number shall be determined by
using the Fair Market Value Per Share on the date of the Award of the
Bonus.
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(b) The payment of any Bonus shall be subject to such
obligations or conditions as the Board or Committee may specify in making or
recommending the Award of the Bonus, but Bonuses need not be evidenced by Award
Agreements.
(c) When payment of all or part of a Bonus is deferred in the
form of Shares or Share Units, the account of the Participant to whom
the Bonus was made will be credited with an amount per Share equal to
the dividends payable on each issued and outstanding Share ("dividend
equivalents"). Amounts thus credited shall, in the discretion of the
Board or Committee, either:
(i) be paid in cash as and when each such credit
shall be made, or
(ii) be credited in Shares or Share Units, with the
number determined by using the Fair Market Value Per Share on the date
of the dividend payment and delivered in such form and at such time or
times as may be determined by the Committee.
(d) When payment of all or part of a bonus is deferred in
cash, the Committee may provide that the account of the Participant to
whom the Bonus was made shall be credited with amounts equivalent to
interest ("interest equivalents"). Amounts thus credited shall be at
the rate determined by the Committee.
(e) Any Bonus payable in Shares may, in the discretion of the
Board or Committee, be paid in cash, on each date on which payment in
Shares would otherwise have been made, in an amount equal to the Fair
Market Value Per Share on each such date, multiplied by the number of
Shares which would otherwise have been paid on such date.
(f) Bonuses may be awarded in Share Units in accordance with
the following terms and conditions and such other terms and conditions
as the Board or Committee may impose:
(i) The number of Share Units awarded with respect to
any Bonus shall be the number determined by using the Fair Market Value
Per Share on the date of the Award of the Bonus.
(ii) Any Bonus made in Share Units may, in the
discretion or on the recommendation of the Board or Committee, be paid
in Shares on each date on which payment in cash would otherwise be
made.
(g) In lieu of the foregoing forms of payment of Bonuses, the
Board or Committee may specify or recommend any other form of payment
which it determines to be of
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substantially equivalent economic value to the cash value of the Bonus
including, without limitation, forms involving payments to a trust or
trusts for the benefit of one or more Participants.
(h) Each payment of a Bonus that is to be made in cash shall
be from the general funds of the Corporation or its respective
subsidiary or affiliate, as the case may be.
(i) In the event of the death of a Participant to whom a Bonus
is to be or shall have been made, the Bonus or any portion thereof
remaining unpaid shall be paid to such Participant's Beneficiary under
the Participant's will or pursuant to the relevant laws of descent and
distribution.
6.6 Other Awards
(a) The Board or Committee may grant other Share based Awards under
this Plan, including without limitation, those Awards pursuant to which Shares
are or may in the future be acquired, Awards denominated in Share Units,
securities convertible into Shares and dividend equivalents. The Board or
Committee shall determine the terms and conditions of such other Share based
Awards. Shares issued in connection with such other Share based Awards shall be
issued for such minimum consideration as shall be required by applicable law,
rules and regulations, including the then applicable Rule 16b-3, and such
additional consideration, if any, as may be determined by the Board or
Committee.
(b) The Board or Committee may also grant other non-Share based Awards
under this Plan and shall determine the terms and conditions of such other
non-Share based Awards in tandem or combination with other Awards or each other,
in exchange of other Awards, or in tandem or combination with, or as
alternatives to grants or rights under any other employee plan of the
Corporation, including any plan of any acquired entity. The Board or Committee
shall have the authority to determine the Participants for such Awards and all
other terms and conditions of such other Awards. No amendment of this Plan is
required for the creation of another type of Award.
7. Adjustments Upon Changes in Capitalization
(a) Subject to any required action by the Corporation's stockholders,
in the event of a reorganization, recapitalization, stock split, stock dividend,
exchange of Shares, combination of Shares, merger, consolidation or any other
change in corporate structure of the Corporation affecting the Shares, or in the
event of a sale by the Corporation of all or a significant part of its assets,
or any distribution to its shareholders other than a normal cash dividend, the
Board or Committee may make appropriate adjustment in the number, kind, price
and value of Shares
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authorized by this Plan and any adjustments to outstanding Awards as it
determines appropriate so as to prevent dilution or enlargement of rights.
(b) The existence of an Award under this Plan shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference
stocks, ahead of or affecting the Stock or rights thereunder or convertible
thereto, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business or any other corporate act
or proceeding, whether of a similar character or otherwise.
(c) Awards granted hereunder prior to June 30, 1995 with respect to
Shares shall be adjusted as to the number thereof, in the event of the issuance
or reacquisition of Shares for any reason by the Corporation, so as to maintain
the ratio of the number of Shares with respect to such Awards outstanding on
June 30, 1995 to the number of the Corporations's issued and outstanding Shares
on such date; provided, however, that (i) where the Corporation shall issue
securities convertible into Shares or options or warrants for purchase of
Shares, no such adjustment shall be required until the conversion of securities
into or the purchase of Shares and (ii) upon any such adjustment the exercise
price of additional Shares upon a Participant's Award shall be the purchase
price (or fair market value of consideration therefor) of Shares issued which
initiated the adjustment and the Shares originally granted by the Award shall
carry the original exercise price therof. This Section 7 (c) shall expire and be
of no further force and effect after the first public offering of common stock
of the Corporation. The adjustments contemplated by this Section, however, shall
be effected with respect to shares issued in such public offering. A "Public
Offering" shall mean shares issued only pursuant to an effective registration
statement filed with the Securities and Exchange Commission.
8. Change in Control
8.1 Definition of Change in Control
A "Change in Control" shall be deemed to have occurred if any one or
more of the events described in paragraphs (a), (b) or (c) below occurs.
(a) Any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (including any group of persons with which
any person or its affiliates or associates, as such terms are defined
in Rule 12b-2 under the Exchange Act has any agreement, arrangement or
understanding, oral or written,
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regarding the acquiring, holding, voting or disposing of any of the
Corporation's securities, but excluding a trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation)
(i) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing fifty one percent (51%) or more of the combined voting
power of the Corporation's then outstanding securities (hereinafter
referred to as an "Acquiring Person"); or
(b) In any two year period persons being a majority of the
Board shall cease to be so unless the nomination of the new directors
during such period was approved by at least a majority of the directors
then still in office who were directors at the beginning of the period;
or
(c) A consolidation or merger or "Business Combination," as
that term is defined as of the effective date of this Plan in Section
203(c)(3) of The General Corporation Law of Delaware, of the
Corporation shall occur (with the term "interested shareholder" as used
in that Section being deemed to refer to an Acquiring Person) in which
the Corporation is not the surviving Corporation and pursuant to which
the Corporation's shares are converted to cash, securities or other
property, but not a business combination where shareholders of the
Corporation prior to the business combination have substantially the
same proportionate ownership in a business entity after the merger; or
(d) The Shareholders of the Corporation shall approve any plan for
liquidation or dissolution of the Corporation not otherwise involving a
transaction where shareholders of the Corporation prior to the
transaction have substantially the same proportionate ownership of a
business entity after the transaction.
(e) In no event, however, shall a Change in Control be deemed to
have occurred with respect to a Participant, if that Participant is
part of an Acquiring Person which consummates the Change in Control
transaction. A Participant shall be deemed "part of an Acquiring
Person" for purposes of the preceding sentence if the Participant is an
equity participant or has agreed to become an equity participant in the
Acquiring Person (except for (i) passive ownership of less than three
percent of the securities of the Acquiring Person; or (ii) ownership of
equity participation in the Acquiring Person which is otherwise not
deemed to be significant, as determined prior to the Change in Control
by a majority of the disinterested Continuing Directors).
8.2 Effect of Change in Control
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Upon the occurrence of an event of Change in Control, unless otherwise
with respect to any Award specifically prohibited by the terms of the second
paragraph of Section 6:
(a) Any and all Options and Stock Appreciation Rights
shall become immediately exercisable.
(b) Any restriction periods and restrictions imposed on
Restricted Shares (except such as may be required by relevant
securities laws) shall lapse, and within ten (10) business days after
the occurrence of a Change in Control, the stock certificates
representing Restricted Shares, without any restrictions or legend
thereon (except a legend as may be required by relevant securities
laws), shall be delivered to the applicable Participants;
(c) The goal, objective, target value or the like, attainable
under all performance Awards shall be deemed to have been fully earned
for the entire performance period as of the effective date of the
Change in Control, except that all performance Awards which shall have
been outstanding less than six (6) months on the effective date of the
Change in Control shall not be deemed to have earned the goal,
objective, target value, or the like; and
(d) Subject to ss. 14.3 hereof, all such other actions and
modifications to the Awards as determined by the Board or Committee to
be appropriate before the Change in Control of the Corporation shall
become effective.
9. Relationship of the Plan to Benefit Plans
The amount of Bonuses to any Participant under this Plan shall be
eligible for inclusion in the Participant's earnings base for the purpose of
determining the benefits to which the Participant is entitled under retirement,
pension, excess benefit, thrift, savings, profit-sharing, insurance, long-term
disability and other benefit plans, if any, of the Corporation as determined by
the Board or Committee. No other income of a Participant attributable to this
Plan shall be included in the Participant's earnings for purposes of any benefit
plan in which the Participant may be eligible to participate.
10. Effect of the Plan On Right to Continued Employment and
Interest in Particular Property
(a) None of the existence of this Plan, any Awards granted pursuant
hereto or any Award Agreement shall create any right to continued employment of
any Participant by the Corporation. No Participant shall have, under any
circumstances, any interest whatsoever, vested or contingent, in any particular
property or asset of the Corporation or in any particular Share or Shares of
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the Corporation that may be held by the Corporation (other than Restricted
Shares held by a custodian) by virtue of any Award. A Participant may be granted
additional Awards under this Plan under such circumstances and at such times as
the Board or Committee may determine; provided, however, that no Participant
shall be entitled to any Award in the absence of a specific grant by the Board
or Committee of an Award, notwithstanding the prior grant of an Award to such
Participant.
(b) This Plan shall not be deemed a substitute for, and shall not
preclude the establishment or continuation of any other plan, practice or
arrangement that may now or hereafter be provided for the payment of
compensation, special awards or benefits to directors, officer, employees,
consultants and agents of the Corporation and its subsidiaries generally, or to
any class or group of employees, including without limitation, any retirement,
pension, excess benefit, thrift, savings, profit-sharing, insurance, long-term
disability, health care plans or other employee benefit plans. Any such
arrangements may be authorized by the Corporation and payment thereunder made
independently of this Plan.
11. Withholding Taxes and Deferrals
11.1 Cash Withholding
The Corporation and its participating subsidiaries shall have the right
to deduct from any cash payment made under Awards under this Plan any federal,
state, provincial or local income, or other taxes required by law to be withheld
with respect to such payment or to take such other action as may be necessary in
the opinion of the Corporation to satisfy all obligations for the payment of
such taxes.
11.2 Share Withholding
Any Share based Award may provide by the grant thereof that the
recipient of such Award may elect, in accordance with any applicable laws, rules
and regulations, to pay a portion or all of the amount of such minimum required
withholding taxes in Shares. In such event, the Participant shall authorize the
Corporation to withhold, or shall agree to deliver to the Corporation, Shares
owned by such Participant or a portion of the Shares that otherwise would be
distributed to such Participant, having a Fair Market Value equal to the amount
of withholding tax liability.
11.3 Deferrals
The Board or Committee may require or permit a Participant to defer
such Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise, the
satisfaction of any requirements or
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goals or lapse or waiver of restrictions of an Award made under this Plan. If
any such deferment election is required or permitted, the Board or Committee
shall establish rules and procedures for such payment deferrals.
12. Compliance With Applicable Legal Requirements
No certificate for Shares distributable pursuant to this Plan shall be
issued and delivered unless the issuance of such certificate complies with all
applicable legal requirements including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act of 1933, as
amended from time to time or any successor statute, the Exchange Act and the
requirements of the exchanges on which Shares may, at the time, be listed, and
the provisions of any foreign securities laws or the rules of foreign securities
exchanges, where applicable.
13. Amendments
13.1 Plan Amendments
The Board may, insofar as permitted by law, from time to time, with
respect to any Shares at the time not subject to Awards, suspend or discontinue
this Plan or revise or amend it in any respect whatsoever, provided, however,
unless the Committee or the Board, as appropriate, specifically otherwise
provides, any revision or amendment that would cause this Plan to fail to comply
with any requirement of applicable law, regulation or rule if such amendment
were not approved by the stockholders of the Corporation shall not be effective
unless and until the approval of the stockholders of the Corporation is
obtained.
13.2 Award Amendments
Subject to the terms and conditions and within the limitations of this
Plan, the Board or Committee may amend, cancel, modify, or extend outstanding
Awards granted under this Plan.
13.3 Rights of Participants
No amendment, suspension or termination of this Plan nor any amendment,
cancellation or modification of any outstanding Award or Award Agreement that
would adversely affect the right of any Participant with respect to an Award
previously granted under this Plan will be effective without the written consent
of the affected participant. Such written consent may be obtained simultaneously
with the grant of any Award.
13.4 Rule 16b-3
This Plan is intended to comply with Rule 16b-3 with respect to
Participants, if any, who are subject to ss. 16 of the Exchange
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Act and in the event that the Corporation shall become subject to said ss. 16.
Should the requirements of Rule 16b-3 change, the Board or the Committee, as
appropriate, may amend the Plan to comply with the requirements of the amended
Rule 16b-3 or its successor provision or provisions.
14. Miscellaneous Provisions
14.1 Awards in Various Countries
The Board or Committee shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of various countries in which the Corporation
or its subsidiaries may operate to assure the viability of the benefits of
Awards made to participants employed in such countries and to meet the
objectives of this Plan.
14.2 Transferability
(a) Awards may not be pledged or assigned and may otherwise be
transferred only to the extent provided herein or in an Award Agreement not
inconsistent herewith, provided, however, that an Option or Stock Appreciation
Right or any other benefit or Award hereunder deemed to be a derivative security
shall not be transferable other than by will or the laws of descent and
distribution and shall be exercisable during a Participant's lifetime only by
him or by his guardian or legal representative or pursuant to a "qualified
domestic relations order" as defined by the Code, or such order under the laws
of other jurisdictions as shall be similar in effect to a qualified domestic
relations order.
(b) Notwithstanding the foregoing, however, a Participant may, with the
consent of the Board or Committee and subject to such terms and conditions as
they may impose, assign or transfer an Award to or among immediate family
members, their issue or spouses or to a trust or family partnership of which
such immediate family members, their issue or spouses, are beneficiaries or
partners, as the case may be.
14.3 Cancellation of Awards
Except as otherwise provided in this Plan or in applicable Award
Agreements, the terms of which need not be uniform among Participants, if a
participant to whom an Award is granted ceases to be employed by the Corporation
all of such Participant's unexercised Awards and Awards on which there are
restrictions shall be immediately canceled.
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14.4 Arbitration; Governing Law
(a) The Shares are registered in the United States under the Exchange Act
and are listed for trading on the United States stock exchange known as The
NASDAQ Stock Market, Inc. Any and all disputes whatsoever between a Participant
and the Corporation concerning the administration of this Plan, the
interpretation and effect of an Award Agreement or of this Plan or the rights of
a Participant under an Award Agreement shall be finally determined before one
neutral arbitrator in the City of Stamford, Connecticut, U.S.A. under the rules
of commercial arbitration of the American Arbitration Association then in effect
and judgment upon any award by such arbitrator may be entered in any Court
having jurisdiction or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may be. The
arbitrator hereunder shall have no power or authority to award consequential,
punitive or statutory damages.
(b) This Plan, its administration and all Awards granted hereunder, the
terms and provisions of any related Award Agreements and the rights of all
Participants shall be governed and interpreted in accordance with the laws of
Connecticut U.S.A.
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