Exhibit 99.1
TRANSACT TECHNOLOGIES INCORPORATED
2005 EQUITY INCENTIVE PLAN
1. DEFINED TERMS
Exhibit A, which is incorporated by reference, defines the terms used in
the Plan and sets forth certain operational rules related to those terms.
2. PURPOSE
The Plan has been established to advance the interests of the Company by
providing for the grant to Participants of Stock-based and other incentive
Awards.
3. ADMINISTRATION
The Administrator has discretionary authority, subject only to the express
provisions of the Plan, to interpret the Plan; determine eligibility for and
grant Awards; determine, modify or waive the terms and conditions of any Award;
prescribe forms, rules and procedures; and otherwise do all things necessary to
carry out the purposes of the Plan. In the case of any Award intended to be
eligible for the performance-based compensation exception under Section 162(m),
the Administrator will exercise its discretion consistent with qualifying the
Award for that exception. Determinations of the Administrator made under the
Plan will be conclusive and will bind all parties.
4. LIMITS ON AWARDS UNDER THE PLAN
(A) NUMBER OF SHARES. A maximum of 600,000 shares of Stock may be
delivered in satisfaction of Awards under the Plan, including without limitation
upon the exercise of ISOs. The number of shares of Stock delivered in
satisfaction of Awards shall, for purposes of the preceding sentence, be
determined net of shares of Stock withheld by the Company in payment of the
exercise price of the Award or in satisfaction of tax withholding requirements
with respect to the Award. The limit set forth in this Section 4(a) shall be
construed to comply with Section 422 of the Code and regulations thereunder. To
the extent consistent with the requirements of Section 422 of the Code and
regulations thereunder, and with other applicable legal requirements (including
applicable stock exchange requirements), Stock issued under awards of an
acquired company that are converted, replaced, or adjusted in connection with
the acquisition shall not reduce the number of shares available for Awards under
the Plan.
(B) TYPE OF SHARES. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the
Company. No fractional shares of Stock will be delivered under the Plan.
(C) SECTION 162(M) LIMITS. The maximum number of shares of Stock for which
Stock Options may be granted to any person in any calendar year and the maximum
number of shares of Stock subject to SARs granted to any person in any calendar
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year will each be 500,000. The maximum number of shares subject to other Awards
granted to any person in any calendar year will be 500,000 shares. The maximum
amount payable to any person in any year under Cash Awards will be $750,000. The
foregoing provisions will be construed in a manner consistent with Section
162(m).
5. ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among those key Employees
and directors of, and consultants and advisors to, the Company or its Affiliates
who, in the opinion of the Administrator, are in a position to make a
significant contribution to the success of the Company and its Affiliates.
Eligibility for ISOs is limited to employees of the Company or of a "parent
corporation" or "subsidiary corporation" of the Company as those terms are
defined in Section 424 of the Code.
6. RULES APPLICABLE TO AWARDS
(A) ALL AWARDS
(1) AWARD PROVISIONS. The Administrator will determine the terms of
all Awards, subject to the limitations provided herein. By accepting any Award
granted hereunder, the Participant agrees to the terms of the Award and the
Plan. Notwithstanding any provision of this Plan to the contrary, awards of an
acquired company that are converted, replaced or adjusted in connection with the
acquisition may contain terms and conditions that are inconsistent with the
terms and conditions specified herein as determined by the Administrator.
(2) TERM OF PLAN. No Awards may be made after March 24, 2015, but
previously granted Awards may continue beyond that date in accordance with their
terms.
(3) TRANSFERABILITY. Neither ISOs nor, except as the Administrator
otherwise expressly provides, other Awards may be transferred other than by will
or by the laws of descent and distribution, and during a Participant's lifetime
ISOs and, except as the Administrator otherwise expressly provides with respect
to other non-transferable Awards requiring exercise may be exercised only by the
Participant.
(4) VESTING, ETC. The Administrator may determine the time or times
at which an Award will vest or become exercisable and the terms on which an
Award requiring exercise will remain exercisable. Without limiting the
foregoing, the Administrator may at any time accelerate the vesting or
exercisability of an Award, regardless of any adverse or potentially adverse tax
consequences resulting from such acceleration. Unless the Administrator
expressly provides otherwise, however, the following rules will apply:
immediately upon the cessation of the Participant's Employment, each Award
requiring exercise that is then held by the Participant or by the Participant's
permitted transferees, if any, will cease to be exercisable and will terminate,
and all other Awards that are then held by the Participant or by the
Participant's permitted transferees, if any, to the extent not already vested
will be forfeited, except that:
(A) subject to (B) and (C) below, all Stock Options and SARs held by
the Participant or the Participant's permitted transferees, if any,
immediately prior to the cessation of the Participant's Employment, to the
extent then exercisable, will remain exercisable for the lesser of (i) a
period of three months or (ii) the period ending on the
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latest date on which such Stock Option or SAR could have been exercised
without regard to this Section 6(a)(4), and will thereupon terminate;
(B) all Stock Options and SARs held by a Participant or the
Participant's permitted transferees, if any, immediately prior to the
Participant's death or voluntary resignation from active employment at or
after age 55, to the extent then exercisable, will remain exercisable for
the lesser of (i) the one year period ending with the first anniversary of
the Participant's death or voluntary resignation from active employment at
or after age 55 or (ii) the period ending on the latest date on which such
Stock Option or SAR could have been exercised without regard to this
Section 6(a)(4), and will thereupon terminate; and
(C) all Stock Options and SARs held by a Participant or the
Participant's permitted transferees, if any, immediately prior to the
cessation of the Participant's Employment will immediately terminate upon
such cessation if the Administrator in its sole discretion determines that
such cessation of Employment has resulted for reasons which cast such
discredit on the Participant as to justify immediate termination of the
Award.
(5) TAXES. The Administrator will make such provision for the
withholding of taxes as it deems necessary. The Administrator may, but need not,
hold back shares of Stock from an Award or permit a Participant to tender
previously owned shares of Stock in satisfaction of tax withholding requirements
(but not in excess of the minimum withholding required by law).
(6) DIVIDEND EQUIVALENTS, ETC. The Administrator may provide for the
payment of amounts in lieu of cash dividends or other cash distributions with
respect to Stock subject to an Award.
(7) RIGHTS LIMITED. Nothing in the Plan will be construed as giving
any person the right to continued employment or service with the Company or its
Affiliates, or any rights as a stockholder except as to shares of Stock actually
issued under the Plan. The loss of existing or potential profit in Awards will
not constitute an element of damages in the event of termination of Employment
for any reason, even if the termination is in violation of an obligation of the
Company or Affiliate to the Participant.
(8) SECTION 162(M). This Section 6(a)(8) applies to any Performance
Award intended to qualify as performance-based for the purposes of Section
162(m) other than a Stock Option or SAR. In the case of any Performance Award to
which this Section 6(a)(8) applies, the Plan and such Award will be construed to
the maximum extent permitted by law in a manner consistent with qualifying the
Award for such exception. With respect to such Performance Awards, the
Administrator will preestablish, in writing, one or more specific Performance
Criteria no later than 90 days after the commencement of the period of service
to which the performance relates (or at such earlier time as is required to
qualify the Award as performance-based under Section 162(m)). Prior to grant,
vesting or payment of the Performance Award, as the case may be, the
Administrator will certify whether the applicable Performance Criteria have been
attained and such determination will be final and conclusive. No Performance
Award to
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which this Section 6(a)(8) applies may be granted after the first meeting of the
stockholders of the Company held in 2010 until the listed performance measures
set forth in the definition of "Performance Criteria" (as originally approved or
as subsequently amended) have been resubmitted to and reapproved by the
stockholders of the Company in accordance with the requirements of Section
162(m) of the Code, unless such grant is made contingent upon such approval.
(B) AWARDS REQUIRING EXERCISE
(1) TIME AND MANNER OF EXERCISE. Unless the Administrator expressly
provides otherwise, an Award requiring exercise by the holder will not be deemed
to have been exercised until the Administrator receives a notice of exercise (in
form acceptable to the Administrator) signed by the appropriate person and
accompanied by any payment required under the Award. If the Award is exercised
by any person other than the Participant, the Administrator may require
satisfactory evidence that the person exercising the Award has the right to do
so.
(2) EXERCISE PRICE. The exercise price (or the base value from which
appreciation is to be measured) of each Award requiring exercise shall be 100%
(in the case of an ISO granted to a ten-percent shareholder within the meaning
of Section 422(b)(6) of the Code, 110%) of the fair market value of the Stock
subject to the Award, determined as of the date of grant, or such higher amount
as the Administrator may determine in connection with the grant. No such Award,
once granted, may be repriced other than in accordance with the applicable
stockholder approval requirements of Nasdaq.
(3) PAYMENT OF EXERCISE PRICE. Where the exercise of an Award is to
be accompanied by payment, the Administrator may determine the required or
permitted forms of payment, subject to the following: all payments will be by
cash or check acceptable to the Administrator, or, if so permitted by the
Administrator and if legally permissible, (i) through the delivery of shares of
Stock that have been outstanding for at least six months (unless the
Administrator approves a shorter period) and that have a fair market value equal
to the exercise price, (ii) by delivery to the Company of a promissory note of
the person exercising the Award, payable on such terms as are specified by the
Administrator, (iii) through a broker-assisted exercise program acceptable to
the Administrator, (iv) by other means acceptable to the Administrator, or (v)
by any combination of the foregoing permissible forms of payment. The delivery
of shares in payment of the exercise price under clause (a)(i) above may be
accomplished either by actual delivery or by constructive delivery through
attestation of ownership, subject to such rules as the Administrator may
prescribe.
(C) AWARDS NOT REQUIRING EXERCISE
Restricted Stock and Unrestricted Stock, whether delivered outright or
under Awards of Stock Units or other Awards that do not require exercise, may be
made in exchange for such lawful consideration, including services, as the
Administrator determines.
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7. EFFECT OF CERTAIN TRANSACTIONS
(A) MERGERS, ETC.
(1) CHANGE IN CONTROL. In the event of a Change in Control,
(A) each Award requiring exercise shall become fully exercisable,
the restrictions on each outstanding share of Stock shall lapse, and the
delivery of shares of Stock deliverable under each outstanding Stock Unit
(including Restricted Stock Units and Performance Awards consisting of
Stock Units) shall be accelerated and such shares shall be delivered, in
each case prior to the Change in Control on a basis that gives the holder
of the Award a reasonable opportunity, as determined by the Administrator,
following exercise of the Award or the vesting or delivery of the shares,
as the case may be, to participate as a stockholder in the Change in
Control; and
(B) if the Change in Control is also a Covered Transaction, each
Award requiring exercise or providing for the future delivery of Stock, to
the extent not previously exercised, surrendered, paid or otherwise
terminated, shall terminate upon consummation of the Covered Transaction
unless the acquiring entity or an affiliate thereof assumes the Award or
provides a new award in substitution therefor.
(2) COVERED TRANSACTION NOT CONSTITUTING A CHANGE IN CONTROL. In the
event of a Covered Transaction that does not constitute a Change in Control,
(A) unless assumed (or unless another award is substituted) in the
Covered Transaction, each Award requiring exercise shall become fully
exercisable, and the delivery of shares of Stock deliverable under each
outstanding Stock Unit (including Restricted Stock Units and Performance
Awards consisting of Stock Units) shall be accelerated and such shares
shall be delivered, in each case prior to the Covered Transaction on a
basis that gives the holder of the Award a reasonable opportunity, as
determined by the Administrator, following exercise of the Award, to
participate as a stockholder in the Covered Transaction; provided, that
the Administrator may require that any stock or other property delivered
upon the exercise, surrender or satisfaction of an Award accelerated under
this Section 7(2)(B) be placed in escrow or otherwise made subject to such
restrictions as the Administrator deems appropriate to reflect any
performance or other vesting provisions to which the Award was subject or
otherwise to carry out the intent of the Plan;
(B) each Award (other than outstanding shares of Restricted Stock,
which shall be treated in the same manner as other shares of Stock,
subject to Section 7(2)(C) below), to the extent not previously exercised,
surrendered, paid or otherwise terminated, shall terminate immediately
upon consummation of the Covered Transaction; and
(C) in the case of Restricted Stock, the Administrator may require
that any amounts delivered, exchanged or otherwise paid in respect of such
Stock in connection with the Covered Transaction be placed in escrow or
otherwise made subject to such restrictions as the Administrator deems
appropriate to reflect any performance or other
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vesting provisions to which the Award was subject or otherwise to carry
out the intent of the Plan.
(B) CHANGE IN AND DISTRIBUTIONS WITH RESPECT TO STOCK
(1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock dividend,
stock split or combination of shares (including a reverse stock split),
recapitalization or other change in the Company's capital structure, the
Administrator will make appropriate adjustments to the maximum number of shares
specified in Section 4(a) that may be delivered under the Plan and to the
maximum share limits described in Section 4(c), and will also make appropriate
adjustments to the number and kind of shares of stock or securities subject to
Awards then outstanding or subsequently granted, any exercise prices relating to
Awards and any other provision of Awards affected by such change.
(2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also make
adjustments of the type described in Section 7(b)(1) above to take into account
distributions to stockholders other than those provided for in Section 7(a) and
7(b)(1), or any other event, if the Administrator determines that adjustments
are appropriate to avoid distortion in the operation of the Plan and to preserve
the value of Awards made hereunder, having due regard for the qualification of
ISOs under Section 422 of the Code and with the performance-based compensation
rules of Section 162(m), where applicable.
(3) CONTINUING APPLICATION OF PLAN TERMS. References in the Plan to
shares of Stock will be construed to include any stock or securities resulting
from an adjustment pursuant to this Section 7.
8. LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove any restriction from shares of Stock previously
delivered under the Plan until: (i) the Company is satisfied that all legal
matters in connection with the issuance and delivery of such shares have been
addressed and resolved; (ii) if the outstanding Stock is at the time of delivery
listed on any stock exchange or national market system, the shares to be
delivered have been listed or authorized to be listed on such exchange or system
upon official notice of issuance; and (iii) all conditions of the Award have
been satisfied or waived. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act. The Company may
require that certificates evidencing Stock issued under the Plan bear an
appropriate legend reflecting any restriction on transfer applicable to such
Stock, and the Company may hold the certificates pending lapse of the applicable
restrictions.
9. AMENDMENT AND TERMINATION
The Administrator may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law, and
may at any time terminate the Plan as to any future grants of Awards; provided,
that except as otherwise expressly provided in
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the Plan the Administrator may not, without the Participant's consent, alter the
terms of an Award so as to affect adversely the Participant's rights under the
Award, unless the Administrator expressly reserved the right to do so at the
time of the Award. Any amendments to the Plan shall be conditioned upon
stockholder approval only to the extent, if any, such approval is required by
law (including the Code and applicable stock exchange requirements), as
determined by the Administrator.
10. OTHER COMPENSATION ARRANGEMENTS
The existence of the Plan or the grant of any Award will not in any way
affect the Company's right to Award a person bonuses or other compensation in
addition to Awards under the Plan.
11. WAIVER OF JURY TRIAL
By accepting an Award under the Plan, each Participant waives any right to
a trial by jury in any action, proceeding or counterclaim concerning any rights
under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be
delivered in connection therewith, and agrees that any such action, proceedings
or counterclaim shall be tried before a court and not before a jury. By
accepting an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or
otherwise, that the Company would not, in the event of any action, proceeding or
counterclaim, seek to enforce the foregoing waivers.
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EXHIBIT A
DEFINITION OF TERMS
The following terms, when used in the Plan, will have the meanings and be
subject to the provisions set forth below:
"ADMINISTRATOR": The Compensation Committee, except that the Compensation
Committee may delegate (i) to one or more of its members such of its duties,
powers and responsibilities as it may determine; (ii) to one or more officers of
the Company the power to grant rights or options to the extent permitted by
Section 157(c) of the Delaware General Corporation Law; (iii) to one or more
officers of the Company the authority to allocate other Awards among such
persons (other than officers of the Company) eligible to receive Awards under
the Plan as such delegated officer or officers determine consistent with such
delegation; provided, that with respect to any delegation described in this
clause (iii) the Compensation Committee (or a properly delegated member or
members of such Committee) shall have authorized the issuance of a specified
number of shares of Stock under such Awards and shall have specified the
consideration, if any, to be paid therefor; and (iv) to such Employees or other
persons as it determines such ministerial tasks as it deems appropriate. In the
event of any delegation described in the preceding sentence, the term
"Administrator" shall include the person or persons so delegated to the extent
of such delegation.
"AFFILIATE": Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock of the Company, or in which the
Company or any such corporation or other entity owns, directly or indirectly,
50% of the outstanding capital stock (determined by aggregate voting rights) or
other voting interests.
"AWARD": Any or a combination of the following:
(i) Stock Options.
(ii) SARs.
(iii) Restricted Stock.
(iv) Unrestricted Stock.
(v) Stock Units, including Restricted Stock Units.
(vi) Performance Awards.
(vii) Cash Awards.
(viii) Awards (other than Awards described in (i) through (vii)
above) that are convertible into or otherwise based on Stock.
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"BOARD": The Board of Directors of the Company.
"CASH AWARD": An Award denominated in cash.
"CHANGE IN CONTROL": Any of (i) a reorganization, merger, consolidation or
similar transaction in which the surviving corporation is not, and is not a
subsidiary of, a publicly owned corporation in which the stockholders of the
Company immediately prior to the transaction continue to own beneficially
securities representing more than 50% of the voting power of all outstanding
voting securities of the Company, (ii) a sale, exchange or other disposition of
all or substantially all the Company's assets, or (iii) any acquisition of
voting securities of the Company by any person or group (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), but excluding (a) the Company or
any of its subsidiaries, (b) any person who was an officer or director of the
Company on the day prior to the Effective Date, or (c) any savings, pension or
other benefits plan for the benefit of employees of the Company or any of its
subsidiaries, which theretofore did not beneficially own voting securities
representing more than 50% of the voting power of all outstanding voting
securities of the Company, if such acquisition results in such entity, person or
group owning beneficially securities representing more than 50% of the voting
power of all outstanding voting securities of the Company. As used herein,
"voting power" means ordinary voting power for the election of directors of the
Company.
"CODE": The U.S. Internal Revenue Code of 1986 as from time to time
amended and in effect, or any successor statute as from time to time in effect.
"COMPENSATION COMMITTEE": The Compensation and Corporate Governance
Committee of the Board.
"COMPANY": TransAct Technologies Incorporated.
"COVERED TRANSACTION": Any of (i) a reorganization, merger, consolidation
or similar transaction or series of related transactions, including a sale or
other disposition of stock, in which the Company is not the surviving
corporation or which results in the acquisition of all or substantially all of
the Company's then outstanding common stock by a single person or entity or by a
group of persons and/or entities acting in concert, (ii) a sale or transfer of
all or substantially all the Company's assets, or (iii) a dissolution or
liquidation of the Company. Where a Covered Transaction involves a tender offer
that is reasonably expected to be followed by a merger described in clause (i)
(as determined by the Administrator), the Covered Transaction shall be deemed to
have occurred upon consummation of the tender offer.
"EMPLOYEE": Any person who is employed by the Company or an Affiliate.
"EMPLOYMENT": A Participant's employment or other service relationship
with the Company and its Affiliates. Employment will be deemed to continue,
unless the Administrator expressly provides otherwise, so long as the
Participant is employed by, or otherwise is providing services in a capacity
described in Section 5 to the Company or its Affiliates. If a Participant's
employment or other service relationship is with an Affiliate and that entity
ceases
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to be an Affiliate, the Participant's Employment will be deemed to have
terminated when the entity ceases to be an Affiliate unless the Participant
transfers Employment to the Company or its remaining Affiliates.
"ISO": A Stock Option intended to be an "incentive stock option" within
the meaning of Section 422 of the Code. Each option granted pursuant to the Plan
will be treated as providing by its terms that it is to be a non-incentive
option unless, as of the date of grant, it is expressly designated as an ISO.
"PARTICIPANT": A person who is granted an Award under the Plan.
"PERFORMANCE AWARD": An Award subject to Performance Criteria. The
Committee in its discretion may grant Performance Awards that are intended to
qualify for the performance-based compensation exception under Section 162(m)
and Performance Awards that are not intended so to qualify.
"PERFORMANCE CRITERIA": Specified criteria, other than the mere
continuation of Employment or the mere passage of time, the satisfaction of
which is a condition for the grant, exercisability, vesting or full enjoyment of
an Award. For purposes of Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion will mean an objectively determinable measure of performance relating
to any or any combination of the following (measured either absolutely or by
reference to an index or indices and determined either on a consolidated basis
or, as the context permits, on a divisional, subsidiary, line of business,
project or geographical basis or in combinations thereof): sales; revenues;
assets; expenses; earnings before or after deduction for all or any portion of
interest, taxes, depreciation, or amortization, whether or not on a continuing
operations or an aggregate or per share basis; return on equity, investment,
capital or assets; one or more operating ratios; borrowing levels, leverage
ratios or credit rating; market share; capital expenditures; cash flow; stock
price; stockholder return; sales of particular products or services; customer
acquisition or retention; acquisitions and divestitures (in whole or in part);
joint ventures and strategic alliances; spin-offs, split-ups and the like;
reorganizations; or recapitalizations, restructurings, financings (issuance of
debt or equity) or refinancings. A Performance Criterion and any targets with
respect thereto determined by the Administrator need not be based upon an
increase, a positive or improved result or avoidance of loss. To the extent
consistent with the requirements for satisfying the performance-based
compensation exception under Section 162(m), the Administrator may provide in
the case of any Award intended to qualify for such exception that one or more of
the Performance Criteria applicable to such Award will be adjusted in an
objectively determinable manner to reflect events (for example, but without
limitation, acquisitions or dispositions) occurring during the performance
period that affect the applicable Performance Criterion or Criteria.
"PLAN": The TransAct Technologies Incorporated 2005 Equity Incentive Plan
as from time to time amended and in effect.
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"RESTRICTED STOCK": An Award of Stock for so long as the Stock remains
subject to restrictions requiring that it be redelivered or offered for sale to
the Company if specified conditions are not satisfied.
"RESTRICTED STOCK UNIT": A Stock Unit that is, or as to which the delivery
of Stock or cash in lieu of Stock is, subject to the satisfaction of specified
performance or other vesting conditions.
"SECTION 162(M)": Section 162(m) of the Code.
"SAR": A right entitling the holder upon exercise to receive an amount
(payable in shares of Stock of equivalent value) equal to the excess of the fair
market value of the shares of Stock subject to the right over the fair market
value of such shares at the date of grant.
"STOCK": Common Stock of the Company, par value $0.01 per share.
"STOCK UNIT": An unfunded and unsecured promise, denominated in shares of
Stock, to deliver Stock or cash measured by the value of Stock in the future.
"STOCK OPTIONS": Options entitling the recipient to acquire shares of
Stock upon payment of the exercise price.
"UNRESTRICTED STOCK": An Award of Stock not subject to any restrictions
under the terms of the Award.
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