EXHIBIT 10.1
VALEANT PHARMACEUTICALS INTERNATIONAL
2006 EQUITY INCENTIVE PLAN
APPROVED BY BOARD ON: APRIL 14, 2006
APPROVED BY STOCKHOLDERS: MAY 23, 2006
TERMINATION DATE: APRIL 13, 2016
1. GENERAL.
(a) SUCCESSOR TO AND CONTINUATION OF PRIOR PLAN. This Plan was adopted by
the Board on the Adoption Date to be effective as provided in Section 11 on the
Effective Date. The Plan is intended as the successor to and continuation of the
ICN Pharmaceuticals, Inc. 2003 Equity Incentive Plan (the "PRIOR PLAN").
Following the Effective Date of this Plan, no additional stock awards shall be
granted under the Prior Plan. Any shares remaining available for issuance
pursuant to the exercise of options or settlement of stock awards under the
Prior Plan shall be added to the share reserve of this Plan and available for
issuance pursuant to Stock Awards granted hereunder. All outstanding stock
awards granted under the Prior Plan shall remain subject to the terms of the
Prior Plan, except that the Board may elect to extend one or more of the
features of the Plan to stock awards granted under the Prior Plan. Any shares
subject to outstanding stock awards granted under the Prior Plan that expire or
terminate for any reason prior to exercise or settlement shall be added to the
share reserve of this Plan and become available for issuance pursuant to Stock
Awards granted hereunder. All Stock Awards granted subsequent to the Effective
Date of this Plan shall be subject to the terms of this Plan.
(b) ELIGIBLE AWARD RECIPIENTS. The persons eligible to receive Awards are
Employees, Directors and Consultants.
(c) AVAILABLE AWARDS. The Plan provides for the grant of the following
Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii)
Restricted Stock Awards, (iv) Restricted Stock Unit Awards, (v) Stock
Appreciation Rights, (vi) Performance Stock Awards, (vii) Performance Cash
Awards, and (viii) Other Stock Awards.
(d) GENERAL PURPOSE. The Company, by means of the Plan, seeks to secure
and retain the services of the group of persons eligible to receive Awards as
set forth in Section 1(a), to provide incentives for such persons to exert
maximum efforts for the success of the Company and any Affiliate and to provide
a means by which such eligible recipients may be given an opportunity to benefit
from increases in value of the Common Stock through the granting of Stock
Awards.
2. ADMINISTRATION.
(a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless
and until the Board delegates administration of the Plan to a Committee or
Committees, as provided in Section 2(c).
(b) POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:
(i) To determine from time to time (A) which of the persons eligible
under the Plan shall be granted Awards; (B) when and how each Award shall be
granted; (C) what type or combination of types of Award shall be granted; (D)
the provisions of each Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive cash or Common
Stock pursuant to a Stock Award; and (E) the number of shares of Common Stock
with respect to which a Stock Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Awards granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement or in the written
terms of a Performance Cash Award, in a manner and to the extent it shall deem
necessary or expedient to make the Plan or Award fully effective.
(iii) To settle all controversies regarding the Plan and Awards
granted under it.
(iv) To accelerate the time at which a Stock Award may first be
exercised or the time during which an Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the Award stating
the time at which it may first be exercised or the time during which it will
vest.
(v) To suspend or terminate the Plan at any time. Suspension or
termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the written consent of the
affected Participant.
(vi) To amend the Plan in any respect the Board deems necessary or
advisable, including, without limitation, relating to Incentive Stock Options
and certain nonqualified deferred compensation under 409A of the Code and/or to
bring the Plan or Stock Awards granted under the Plan into compliance therewith,
subject to the limitations, if any, of applicable law. However, except as
provided in Section 9(a) relating to Capitalization Adjustments, stockholder
approval shall be required for any amendment of the Plan that either (i)
materially increases the number of shares of Common Stock available for issuance
under the Plan, (ii) materially expands the class of individuals eligible to
receive Awards under the Plan, (iii) materially increases the benefits accruing
to Participants under the Plan or materially reduces the price at which shares
of Common Stock may be issued or purchased under the Plan, (iv) materially
extends the term of the Plan, or (v) expands the types of Awards available for
issuance under the Plan, but only to the extent required by applicable law or
listing requirements. Except as provided herein, rights under any Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the affected Participant, and
(ii) such Participant consents in writing.
(vii) To submit any amendment to the Plan for stockholder approval,
including, but not limited to, amendments to the Plan intended to satisfy the
requirements of (i) Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on
corporate deductibility of compensation paid to Covered Employees, (ii) Section
422 of the Code regarding Incentive Stock Options or (iii) Rule 16b-3.
(viii) To approve forms of Award Agreements for use under the Plan
and to amend the terms of any one or more Awards or stock awards granted under
the Prior Plan, including, but not limited to, amendments to provide terms more
favorable than previously provided in the Award Agreement, subject to any
specified limits in the Plan that are not subject to Board discretion; PROVIDED
HOWEVER, that, the rights under any Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the affected
Participant, and (ii) such Participant consents in writing. Notwithstanding the
foregoing, subject to the limitations of applicable law, if any, and without the
affected Participant's consent, the Board may amend the terms of any one or more
Awards if necessary to maintain the qualified status of the Award as an
Incentive Stock Option or to bring the Award into compliance with Code Section
409A and the related guidance thereunder.
(ix) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan or Awards.
(x) To adopt such procedures and sub-plans as are necessary or
appropriate to permit participation in the Plan by Employees, Directors or
Consultants who are foreign nationals or employed outside the United States.
(C) DELEGATION TO COMMITTEE.
(i) GENERAL. The Board may delegate some or all of the
administration of the Plan to a Committee or Committees. If administration of
the Plan is delegated to a Committee, the Committee shall have, in connection
with the administration of the Plan, the powers theretofore possessed by the
Board that have been delegated to the Committee, including the power to delegate
to a subcommittee of the Committee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to the Board
shall thereafter be to the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest
in the Board some or all of the powers previously delegated.
(ii) SECTION 162(M) AND RULE 16B-3 COMPLIANCE. In the sole
discretion of the Board, the Committee may consist solely of two or more Outside
Directors, in accordance with Section 162(m) of the Code, or solely of two or
more Non-Employee Directors, in accordance with Rule 16b-3. In addition, the
Board or the Committee, in its sole discretion, may (A) delegate to a Committee
of Directors who need not be Outside Directors the authority to grant Awards to
eligible persons who are either (I) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting
from such Stock Award, or (II) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code, or (B) delegate to a Committee
of Directors who need not be Non-Employee Directors the authority to grant Stock
Awards to eligible persons who are not then subject to Section 16 of the
Exchange Act.
(d) DELEGATION TO AN OFFICER. The Board may delegate to one or more
Officers the authority to do one or both of the following (i) designate
Employees who are not Officers to be recipients of Options (and, to the extent
permitted by applicable law, other Stock Awards) and the terms thereof, and (ii)
determine the number of shares of Common Stock to be subject to such Stock
Awards granted to such Employees; PROVIDED, HOWEVER, that the Board resolutions
regarding such delegation shall specify the total number of shares of Common
Stock that may be subject to the Stock Awards granted by such Officer and that
such Officer may not grant a Stock Award to himself or herself. Notwithstanding
anything to the contrary in this Section 2(d), the Board may not delegate to an
Officer authority to determine the Fair Market Value of the Common Stock
pursuant to Section 13(v)(ii) below.
(e) EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.
(f) CANCELLATION AND RE-GRANT OF STOCK AWARDS. Neither the Board nor any
Committee shall have the authority to: (i) reprice any outstanding Stock Awards
under the Plan, or (ii) cancel and re-grant any outstanding Stock Awards under
the Plan, unless the stockholders of the Company have approved such an action
within twelve (12) months prior to such an event.
(g) ARBITRATION. Any dispute or claim concerning any Stock Awards granted
(or not granted) pursuant to the Plan or any disputes or claims relating to or
arising out of the Plan shall be fully, finally and exclusively resolved by
binding and confidential arbitration conducted pursuant to the Commercial
Arbitration Rules of the American Arbitration Association in Orange County,
California. The Company and the Participant shall each pay 50% of the
arbitration fees. In addition to any other relief, the arbitrator may award to
the prevailing party recovery of its attorneys' fees and costs. By accepting a
Stock Award, Participants and the Company waive their respective rights to have
any such disputes or claims tried by a judge or jury.
3. SHARES SUBJECT TO THE PLAN.
(a) SHARE RESERVE. Subject to the provisions of Section 9(a) relating to
Capitalization Adjustments, the aggregate number of shares of Common Stock that
may be issued pursuant to Stock Awards after the Effective Date shall consist of
the sum of (i) the number of unallocated shares remaining
available for issuance under the Prior Plan as of the Effective Date, (ii) an
additional four million two hundred thousand (4,200,000) shares to be approved
by the stockholders at the 2006 Annual Meeting as part of the approval of this
Plan and (iii) the number of shares added to the reserve pursuant to Section
3(b) (the "Share Reserve"). For clarity, the limitation in this subsection 3(a)
is a limitation in the number of shares of the Company's common stock that may
be issued pursuant to the Plan. Accordingly, this subsection 3(a) does not limit
the granting of Stock Awards except as provided in subsection 7(a). Shares may
be issued in connection with a merger or acquisition as permitted by NASD Rule
4350(i)(1)(A)(iii) or, if applicable, NYSE Listed Company Manual Section
303A.08, or AMEX Company Guide Section 711 and such issuance shall not reduce
the number of shares available for issuance under the Plan. Furthermore, if a
Stock Award (i) expires or otherwise terminates without having been exercised in
full or (ii) is settled in cash (I.E., the holder of the Stock Award receives
cash rather than stock), such expiration, termination or settlement shall not
reduce (or otherwise offset) the number of shares of the Company's common stock
that may be issued pursuant to the Plan.
(b) ADDITIONS TO THE SHARE RESERVE. The share reserve under the Plan also
shall be increased from time to time by a number of shares equal to the number
of shares of Common Stock that (i) are issuable pursuant to options or stock
awards outstanding under the Prior Plan as of the Effective Date of the Plan and
(ii) but for the termination of the Prior Plan as of the Effective Date, would
otherwise have reverted to the share reserve of the Prior Plan pursuant to the
provisions thereof.
(c) REVERSION OF SHARES TO THE SHARE RESERVE. If any shares of common
stock issued pursuant to a Stock Award are forfeited back to the Company because
of the failure to meet a contingency or condition required to vest such shares
in the Participant, then the shares which are forfeited shall revert to and
again become available for issuance under the Plan. Also, any shares reacquired
by the Company pursuant to subsection 8(g) or as consideration for the exercise
of an Option shall again become available for issuance under the Plan.
Notwithstanding the provisions of this subsection 3(c), any such shares shall
not be subsequently issued pursuant to the exercise of Incentive Stock Options.
(d) INCENTIVE STOCK OPTION LIMIT. Notwithstanding anything to the contrary
in this Section 3(d), subject to the provisions of Section 9(a) relating to
Capitalization Adjustments the aggregate maximum number of shares of Common
Stock that may be issued pursuant to the exercise of Incentive Stock Options
shall be the number of shares of Common Stock in the Share Reserve.
(e) SECTION 162(M) LIMITATION ON ANNUAL GRANTS. Subject to the provisions
of Section 9(a) relating to Capitalization Adjustments, at such time as the
Company may be subject to the applicable provisions of Section 162(m) of the
Code, no Employee shall be eligible to be granted during any calendar year Stock
Awards whose value is determined by reference to an increase over an exercise or
strike price of at least one hundred percent (100%) of the Fair Market Value of
the Common Stock on the date the Stock Award is granted covering more than One
Million (1,000,000) shares of Common Stock.
(f) SOURCE OF SHARES. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the market or otherwise.
4. ELIGIBILITY.
(a) ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options may be
granted only to employees of the Company or a parent corporation or subsidiary
corporation (as such terms are defined in Code Sections 424(e) and (f)). Stock
Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.
(b) TEN PERCENT STOCKHOLDERS. A Ten Percent Stockholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock on the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.
(c) CONSULTANTS. A Consultant shall not be eligible for the grant of a
Stock Award only if, at the time of grant, a Form S-8 Registration Statement
under the Securities Act ("FORM S-8") is not available to register either the
offer or the sale of the Company's securities to such Consultant because of the
nature of the services that the Consultant is providing to the Company, because
the Consultant is not a natural person, or because of any other rule governing
the use of Form S-8.
5. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise of each type of
Option. If an Option is not specifically designated as an Incentive Stock
Option, then the Option shall be a Nonstatutory Stock Option. The provisions of
separate Options need not be identical; PROVIDED, HOWEVER, that each Option
Agreement shall include (through incorporation of provisions hereof by reference
in the Option Agreement or otherwise) the substance of each of the following
provisions:
(a) TERM. Subject to the provisions of Section 4(b) regarding Ten Percent
Stockholders, no Option shall be exercisable after the expiration of ten (10)
years from the date of its grant or such shorter period specified in the Option
Agreement.
(b) EXERCISE PRICE. Subject to the provisions of Section 4(b) regarding
Ten Percent Stockholders, the exercise price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Option if such Option is granted pursuant to an assumption or substitution
for another option in a manner consistent with the provisions of Section 424(a)
of the Code (whether or not such options are Incentive Stock Options).
(c) CONSIDERATION. The purchase price of Common Stock acquired pursuant to
the exercise of an Option shall be paid, to the extent permitted by applicable
law and as determined by the Board in its sole discretion, by any combination of
the methods of payment set forth below. The Board shall have the authority to
grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment.
The methods of payment permitted by this Section 5(c) are:
(i) by cash, check, bank draft or money order payable to the
Company;
(ii) pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of the
stock subject to the Option, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
(iii) by delivery to the Company (either by actual delivery or
attestation) of shares of Common Stock;
(iv) by a "net exercise" arrangement pursuant to which the Company
will reduce the number of shares of Common Stock issued upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price; PROVIDED, HOWEVER, that the Company shall accept a
cash or other payment from the Participant to the extent of any remaining
balance of the aggregate exercise price not satisfied by such reduction in the
number of whole shares to be issued; PROVIDED, FURTHER, that shares of Common
Stock will no longer be outstanding under an Option and will not be exercisable
thereafter to the extent that (A) shares are used to pay the exercise price
pursuant to the "net exercise," (B) shares are delivered to the Participant as a
result of such exercise, and (C) shares are withheld to satisfy tax withholding
obligations; or
(v) in any other form of legal consideration that may be acceptable
to the Board.
(d) TRANSFERABILITY OF OPTIONS. The Board may, in its sole discretion,
impose such limitations on the transferability of Options as the Board shall
determine. In the absence of such a determination by the Board to the contrary,
the following restrictions on the transferability of Options shall apply:
(i) RESTRICTIONS ON TRANSFER. An Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder;
provided, however, that the Board may, in its sole discretion, permit transfer
of the Option in a manner consistent with applicable tax and securities laws
upon the Optionholder's request.
(ii) DOMESTIC RELATIONS ORDERS. Notwithstanding the foregoing, an
Option may be transferred pursuant to a domestic relations order, PROVIDED,
HOWEVER, that an Incentive Stock Option may be deemed to be a Nonqualified Stock
Option as a result of such transfer.
(iii) BENEFICIARY DESIGNATION. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
provided by or otherwise satisfactory to the Company, designate a third party
who, in the event of the death of the Optionholder, shall thereafter be entitled
to exercise the Option.
(e) VESTING GENERALLY. The total number of shares of Common Stock subject
to an Option may vest and therefore become exercisable in periodic installments
that may or may not be equal. The Option may be subject to such other terms and
conditions on the time or times when it may or may not be exercised (which may
be based on the satisfaction of Performance Goals or other criteria) as the
Board may deem appropriate. The vesting provisions of individual Options may
vary. The provisions of this Section 5(e) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.
(f) TERMINATION OF CONTINUOUS SERVICE. Except as otherwise provided in the
applicable Option Agreement or other agreement between the Optionholder and the
Company, in the event that an Optionholder's Continuous Service terminates
(other than for Cause or upon the Optionholder's death or Disability), the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of Continuous
Service) but only within such period of time ending on the earlier of (i) the
date three (3) months following the termination of the Optionholder's Continuous
Service (or such longer or shorter period specified in the Option Agreement), or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination of Continuous Service, the Optionholder does
not exercise his or her Option within the time specified herein or in the Option
Agreement (as applicable), the Option shall terminate.
(g) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of Continuous
Service), but only within such period of time ending on the earlier of (i) the
date twelve (12) months following such termination of Continuous Service (or
such longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination of Continuous Service, the Optionholder does not exercise his
or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
(h) DEATH OF OPTIONHOLDER. In the event that (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death, or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death, but only within the period ending on the
earlier of (i) the date twelve (12) months
following the date of death (or such longer or shorter period specified in the
Option Agreement), or (ii) the expiration of the term of such Option as set
forth in the Option Agreement. If, after the Optionholder's death, the Option is
not exercised within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
(i) EXTENSION OF TERMINATION DATE. Unless otherwise provided in an
Optionholder's Option Agreement, if the exercise of the Option following the
termination of the Optionholder's Continuous Service (other than for Cause)
would be prohibited at any time solely because the issuance of shares of Common
Stock would violate the registration requirements under the Securities Act, then
the Option shall terminate on the earlier of (i) the expiration of a period
equal to the post-termination exercise period described in Section 5(f), 5(g) or
5(h) above after the termination of the Optionholder's Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option as set forth in
the Option Agreement. In addition, unless otherwise provided in an
Optionholder's Option Agreement, if the sale of the Common Stock received upon
exercise of an Option following the termination of the Optionholder's Continuous
Service (other than for Cause) would violate the Company's insider trading
policy, then the Option shall terminate on the earlier of (i) the expiration of
a period equal to the post-termination exercise period described in Section
5(f), 5(g) or 5(h) above after the termination of the Optionholder's Continuous
Service during which the exercise of the Option would not be in violation of the
Company's insider trading policy, (ii) the 15th day of the third month after the
date on which the Option would cease to be exercisable but for this Section
5(i), or such longer period as would not cause the Option to become subject to
Section 409A(a)(1) of the Code; or (iii) the expiration of the term of the
Option as set forth in the Option Agreement.
(j) TERMINATION FOR CAUSE. Except as explicitly provided otherwise in an
Optionholder's Option Agreement, in the event that an Optionholder's Continuous
Service is terminated for Cause, the Option shall terminate upon the termination
date of such Optionholder's Continuous Service, and the Optionholder shall be
prohibited from exercising his or her Option from and after the time of such
termination of Continuous Service.
(k) NON-EXEMPT EMPLOYEES. No Option granted to an Employee that is a
non-exempt employee for purposes of the Fair Labor Standards Act shall be first
exercisable for any shares of Common Stock until at least six months following
the date of grant of the Option. The foregoing provision is intended to operate
so that any income derived by a non-exempt employee in connection with the
exercise or vesting of an Option will be exempt from his or her regular rate of
pay.
6. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
(a) RESTRICTED STOCK AWARDS. Each Restricted Stock Award Agreement shall
be in such form and shall contain such terms and conditions as the Board shall
deem appropriate. To the extent consistent with the Company's Bylaws, at the
Board's election, shares of Common Stock may be (x) held in book entry form
subject to the Company's instructions until any restrictions relating to the
Restricted Stock Award lapse; or (y) evidenced by a certificate, which
certificate shall be held in such form and manner as determined by the Board.
The terms and conditions of Restricted Stock Award Agreements may change from
time to time, and the terms and conditions of separate Restricted Stock Award
Agreements need not be identical, PROVIDED, HOWEVER, that each Restricted Stock
Award Agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:
(i) CONSIDERATION. A Restricted Stock Award may be awarded in
consideration for (A) past or future services actually rendered to the Company
or an Affiliate, or (B) any other form of legal consideration that may be
acceptable to the Board in its sole discretion and permissible under applicable
law.
(ii) VESTING. Shares of Common Stock awarded under the Restricted
Stock Award Agreement may be subject to forfeiture to the Company in accordance
with a vesting schedule to be determined by the Board.
(iii) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event
a Participant's Continuous Service terminates, the Company may receive via a
forfeiture condition, any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination of Continuous
Service under the terms of the Restricted Stock Award Agreement.
(iv) TRANSFERABILITY. Rights to acquire shares of Common Stock under
the Restricted Stock Award Agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the Restricted Stock
Award Agreement, as the Board shall determine in its sole discretion, so long as
Common Stock awarded under the Restricted Stock Award Agreement remains subject
to the terms of the Restricted Stock Award Agreement.
(b) RESTRICTED STOCK UNIT AWARDS. Each Restricted Stock Unit Award
Agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of Restricted Stock
Unit Award Agreements may change from time to time, and the terms and conditions
of separate Restricted Stock Unit Award Agreements need not be identical,
PROVIDED, HOWEVER, that each Restricted Stock Unit Award Agreement shall include
(through incorporation of the provisions hereof by reference in the Agreement or
otherwise) the substance of each of the following provisions:
(i) CONSIDERATION. At the time of grant of a Restricted Stock Unit
Award, the Board will determine the consideration, if any, to be paid by the
Participant upon delivery of each share of Common Stock subject to the
Restricted Stock Unit Award. The consideration to be paid (if any) by the
Participant for each share of Common Stock subject to a Restricted Stock Unit
Award may be paid in any form of legal consideration that may be acceptable to
the Board in its sole discretion and permissible under applicable law.
(ii) VESTING. At the time of the grant of a Restricted Stock Unit
Award, the Board may impose such restrictions or conditions to the vesting of
the Restricted Stock Unit Award as it, in its sole discretion, deems
appropriate.
(iii) PAYMENT. A Restricted Stock Unit Award may be settled by the
delivery of shares of Common Stock, their cash equivalent, any combination
thereof or in any other form of consideration, as determined by the Board and
contained in the Restricted Stock Unit Award Agreement.
(iv) ADDITIONAL RESTRICTIONS. At the time of the grant of a
Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such
restrictions or conditions that delay the delivery of the shares of Common Stock
(or their cash equivalent) subject to a Restricted Stock Unit Award to a time
after the vesting of such Restricted Stock Unit Award.
(v) DIVIDEND EQUIVALENTS. Dividend equivalents may be credited in
respect of shares of Common Stock covered by a Restricted Stock Unit Award, as
determined by the Board and contained in the Restricted Stock Unit Award
Agreement. At the sole discretion of the Board, such dividend equivalents may be
converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares
covered by the Restricted Stock Unit Award credited by reason of such dividend
equivalents will be subject to all the terms and conditions of the underlying
Restricted Stock Unit Award Agreement to which they relate.
(vi) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. Except as
otherwise provided in the applicable Restricted Stock Unit Award Agreement, such
portion of the Restricted Stock Unit Award that has not vested will be forfeited
upon the Participant's termination of Continuous Service.
(vii) COMPLIANCE WITH SECTION 409A OF THE CODE. Notwithstanding
anything to the contrary set forth herein, any Restricted Stock Unit Award
granted under the Plan that is not exempt from the requirements of Section 409A
of the Code shall contain such provisions so that such Restricted Stock Unit
Award will comply with the requirements of Section 409A of the Code. Such
restrictions, if any, shall
be determined by the Board and contained in the Restricted Stock Unit Award
Agreement evidencing such Restricted Stock Unit Award. For example, such
restrictions may include, without limitation, a requirement that any Common
Stock that is to be issued in a year following the year in which the Restricted
Stock Unit Award vests must be issued in accordance with a fixed pre-determined
schedule.
(c) STOCK APPRECIATION RIGHTS. Each Stock Appreciation Right Agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. Stock Appreciation Rights may be granted as stand-alone
Stock Awards or in tandem with other Stock Awards. The terms and conditions of
Stock Appreciation Right Agreements may change from time to time, and the terms
and conditions of separate Stock Appreciation Right Agreements need not be
identical; PROVIDED, HOWEVER, that each Stock Appreciation Right Agreement shall
include (through incorporation of the provisions hereof by reference in the
Agreement or otherwise) the substance of each of the following provisions:
(i) TERM. No Stock Appreciation Right shall be exercisable after the
expiration of ten (10) years from the date of its grant or such shorter period
specified in the Stock Appreciation Right Agreement.
(ii) STRIKE PRICE. Each Stock Appreciation Right will be denominated
in shares of Common Stock equivalents. The strike price of each Stock
Appreciation Right shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock equivalents subject to the Stock Appreciation
Right on the date of grant.
(iii) CALCULATION OF APPRECIATION. The appreciation distribution
payable on the exercise of a Stock Appreciation Right will be not greater than
an amount equal to the excess of (A) the aggregate Fair Market Value (on the
date of the exercise of the Stock Appreciation Right) of a number of shares of
Common Stock equal to the number of share of Common Stock equivalents in which
the Participant is vested under such Stock Appreciation Right, and with respect
to which the Participant is exercising the Stock Appreciation Right on such
date, over (B) the strike price that will be determined by the Board at the time
of grant of the Stock Appreciation Right.
(iv) VESTING. At the time of the grant of a Stock Appreciation
Right, the Board may impose such restrictions or conditions to the vesting of
such Stock Appreciation Right as it, in its sole discretion, deems appropriate.
(v) EXERCISE. To exercise any outstanding Stock Appreciation Right,
the Participant must provide written notice of exercise to the Company in
compliance with the provisions of the Stock Appreciation Right Agreement
evidencing such Stock Appreciation Right.
(vi) PAYMENT. The appreciation distribution in respect to a Stock
Appreciation Right may be paid in Common Stock, in cash, in any combination of
the two or in any other form of consideration, as determined by the Board and
contained in the Stock Appreciation Right Agreement evidencing such Stock
Appreciation Right.
(vii) TERMINATION OF CONTINUOUS SERVICE. In the event that a
Participant's Continuous Service terminates (other than for Cause), the
Participant may exercise his or her Stock Appreciation Right (to the extent that
the Participant was entitled to exercise such Stock Appreciation Right as of the
date of termination) but only within such period of time ending on the earlier
of (A) the date three (3) months following the termination of the Participant's
Continuous Service (or such longer or shorter period specified in the Stock
Appreciation Right Agreement), or (B) the expiration of the term of the Stock
Appreciation Right as set forth in the Stock Appreciation Right Agreement. If,
after termination, the Participant does not exercise his or her Stock
Appreciation Right within the time specified herein or in the Stock Appreciation
Right Agreement (as applicable), the Stock Appreciation Right shall terminate.
(viii) EXTENSION OF TERMINATION DATE. Unless otherwise provided in a
Participant's Stock Appreciation Right Agreement, if the exercise of the Stock
Appreciation Right following the
termination of the Participant's Continuous Service (other than for Cause) would
be prohibited at any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities Act, then the
Stock Appreciation Right shall terminate on the earlier of (i) the expiration of
a period equal to the post-termination exercise period described in Section
6(c)(vii) above after the termination of the Participant's Continuous Service
during which the exercise of the Stock Appreciation Right would not be in
violation of such registration requirements, or (ii) the expiration of the term
of the Stock Appreciation Right as set forth in the Stock Appreciation Right
Agreement. In addition, unless otherwise provided in a Participant's Stock
Appreciation Right Agreement, if the sale of the Common Stock received upon
exercise of a Stock Appreciation Right following the termination of the
Participant's Continuous Service (other than for Cause) would violate the
Company's insider trading policy, then the Stock Appreciation Right shall
terminate on the earlier of (i) the expiration of a period equal to the
post-termination exercise period described in Section 6(c)(vii) above after the
termination of the Participant's Continuous Service during which the exercise of
the Stock Appreciation Right would not be in violation of the Company's insider
trading policy, (ii) the 15th day of the third month after the date on which the
Stock Appreciation Right would cease to be exercisable but for this Section
6(c)(viii), or such longer period as would not cause the Stock Appreciation
Right to become subject to Section 409A(a)(1) of the Code; or (iii) the
expiration of the term of the Stock Appreciation Right as set forth in the Stock
Appreciation Right Agreement.
(ix) TERMINATION FOR CAUSE. Except as explicitly provided otherwise
in an Participant's Stock Appreciation Right Agreement, in the event that a
Participant's Continuous Service is terminated for Cause, the Stock Appreciation
Right shall terminate upon the termination date of such Participant's Continuous
Service, and the Participant shall be prohibited from exercising his or her
Stock Appreciation Right from and after the time of such termination of
Continuous Service.
(x) COMPLIANCE WITH SECTION 409A OF THE CODE. Notwithstanding
anything to the contrary set forth herein, any Stock Appreciation Rights granted
under the Plan that are not exempt from the requirements of Section 409A of the
Code shall contain such provisions so that such Stock Appreciation Rights will
comply with the requirements of Section 409A of the Code. Such restrictions, if
any, shall be determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right. For example, such
restrictions may include, without limitation, a requirement that a Stock
Appreciation Right that is to be paid wholly or partly in cash must be exercised
and paid in accordance with a fixed pre-determined schedule.
(d) PERFORMANCE AWARDS.
(i) PERFORMANCE STOCK AWARDS. A Performance Stock Award is a Stock
Award that may be granted, may vest, or may be exercised based upon the
attainment during a Performance Period of certain Performance Goals. A
Performance Stock Award may, but need not, require the completion of a specified
period of Continuous Service. The length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure
of whether and to what degree such Performance Goals have been attained shall be
conclusively determined by the Committee in its sole discretion. The maximum
number of shares that may be granted to any Participant in a calendar year
attributable to Stock Awards described in this Section 6(d)(i) shall not exceed
One Million (1,000,000) shares of Common Stock. In addition, to the extent
permitted by applicable law and the applicable Award Agreement, the Board may
determine that cash may be used in payment of Performance Stock Awards.
(ii) PERFORMANCE CASH AWARDS. A Performance Cash Award is a cash
award that may be granted upon the attainment during a Performance Period of
certain Performance Goals. A Performance Cash Award may also require the
completion of a specified period of Continuous Service. The length of any
Performance Period, the Performance Goals to be achieved during the Performance
Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee in its sole
discretion. The maximum value that may be granted to any Participant in a
calendar year attributable to cash awards described in this Section 6(d)(i)
shall not exceed Three Million dollars ($3,000,000). The Board may provide for
or, subject to such terms and conditions as the Board may specify, may permit a
Participant to elect for, the payment of any Performance
Cash Award to be deferred to a specified date or event. The Committee may
specify the form of payment of Performance Cash Awards, which may be cash or
other property, or may provide for a Participant to have the option for his or
her Performance Cash Award, or such portion thereof as the Board may specify, to
be paid in whole or in part in cash or other property. In addition, to the
extent permitted by applicable law and the applicable Award Agreement, the Board
may determine that Common Stock authorized under this Plan may be used in
payment of Performance Cash Awards, including additional shares in excess of the
Performance Cash Award as an inducement to hold shares of Common Stock.
(e) OTHER STOCK AWARDS. Other forms of Stock Awards valued in whole or in
part by reference to, or otherwise based on, Common Stock may be granted either
alone or in addition to Stock Awards provided for under Section 5 and the
preceding provisions of this Section 6. Subject to the provisions of the Plan,
the Board shall have sole and complete authority to determine the persons to
whom and the time or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Other Stock Awards and all other terms and conditions of such
Other Stock Awards.
7. COVENANTS OF THE COMPANY.
(a) AVAILABILITY OF SHARES. During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.
(b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; PROVIDED, HOWEVER, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority that counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under
the Plan, the Company shall be relieved from any liability for failure to issue
and sell Common Stock upon exercise of such Stock Awards unless and until such
authority is obtained.
(c) NO OBLIGATION TO NOTIFY. The Company shall have no duty or obligation
to any holder of a Stock Award to advise such holder as to the time or manner of
exercising such Stock Award. Furthermore, the Company shall have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may
not be exercised. The Company has no duty or obligation to minimize the tax
consequences of a Stock Award to the holder of such Stock Award.
8. MISCELLANEOUS.
(a) USE OF PROCEEDS FROM SALES OF COMMON STOCK. Proceeds from the sale of
shares of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.
(b) CORPORATE ACTION CONSTITUTING GRANT OF STOCK AWARDS. Corporate action
constituting a grant by the Company of a Stock Award to any Participant shall be
deemed completed as of the date of such corporate action, unless otherwise
determined by the Board, regardless of when the instrument, certificate, or
letter evidencing the Stock Award is communicated to, or actually received or
accepted by, the Participant.
(c) STOCKHOLDER RIGHTS. No Participant shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares of
Common Stock subject to such Stock Award unless and until such Participant has
exercised the Stock Award pursuant to its terms and the Participant shall not be
deemed to be a stockholder of record until the issuance of the Common Stock
pursuant to such exercise has been entered into the books and records of the
Company.
(d) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan, any Stock
Award Agreement or other instrument executed thereunder or in connection with
any Award granted pursuant to the Plan shall confer upon any Participant any
right to continue to serve the Company or an Affiliate in the capacity in effect
at the time the Stock Award was granted or shall affect the right of the Company
or an Affiliate to terminate (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a Consultant pursuant to
the terms of such Consultant's agreement with the Company or an Affiliate, or
(iii) the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.
(e) INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
any Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).
(f) INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (x) the issuance of the shares
upon the exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act, or (y) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.
(g) WITHHOLDING OBLIGATIONS. Unless prohibited by the terms of a Stock
Award Agreement, the Company may, in its sole discretion, satisfy any federal,
state or local tax withholding obligation relating to an Award by any of the
following means (in addition to the Company's right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such
means: (i) causing the Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or otherwise
issuable to the Participant in connection with the Award; (iii) withholding cash
from an Award settled in cash; or (iv) by such other method as may be set forth
in the Award Agreement.
(h) ELECTRONIC DELIVERY. Any reference herein to a "written" agreement or
document shall include any agreement or document delivered electronically or
posted on the Company's intranet.
(i) DEFERRALS. To the extent permitted by applicable law, the Board, in
its sole discretion, may determine that the delivery of Common Stock or the
payment of cash, upon the exercise, vesting or settlement of all or a portion of
any Award may be deferred and may establish programs and procedures for deferral
elections to be made by Participants. Deferrals by Participants will be made in
accordance with Section 409A of the Code. Consistent with Section 409A of the
Code, the Board may provide for distributions while a Participant is still an
employee. The Board is authorized to make deferrals of Stock Awards and
determine when, and in what annual percentages, Participants may receive
payments, including lump sum payments, following the Participant's termination
of employment or retirement, and
implement such other terms and conditions consistent with the provisions of the
Plan and in accordance with applicable law.
(j) COMPLIANCE WITH 409A. To the extent that the Board determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Award
Agreement evidencing such Award shall incorporate the terms and conditions
necessary to avoid the consequences specified in Section 409A(a)(1) of the Code.
To the extent applicable, the Plan and Award Agreements shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations
and other interpretive guidance issued thereunder, including without limitation
any such regulations or other guidance that may be issued or amended after the
Effective Date. Notwithstanding any provision of the Plan to the contrary, in
the event that following the Effective Date the Board determines that any Award
may be subject to Section 409A of the Code and related Department of Treasury
guidance (including such Department of Treasury guidance as may be issued after
the Effective Date), the Board may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Board determines are necessary or appropriate to (1) exempt
the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (2) comply with
the requirements of Section 409A of the Code and related Department of Treasury
guidance.
9. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.
(a) CAPITALIZATION ADJUSTMENTS. In the event of a Capitalization
Adjustment, the Board shall appropriately adjust: (i) the class(es) and maximum
number of securities subject to the Plan pursuant to Section 3(a), (ii) the
class(es) and maximum number of securities that may be issued pursuant to the
exercise of Incentive Stock Options pursuant to Section 3(d), (iii) the
class(es) and maximum number of securities that may be awarded to any person
pursuant to Section 3(e) and 6(d)(i), and (iv) the class(es) and number of
securities and price per share of stock subject to outstanding Stock Awards. The
Board shall make such adjustments, and its determination shall be final, binding
and conclusive.
(b) CORPORATE TRANSACTION. The following provisions shall apply to Stock
Awards in the event of a Corporate Transaction unless otherwise provided in the
instrument evidencing the Stock Award or any other written agreement between the
Company or any Affiliate and the holder of the Stock Award or unless otherwise
expressly provided by the Board at the time of grant of a Stock Award.
(i) STOCK AWARDS MAY BE ASSUMED. Except as otherwise stated in the
Stock Award Agreement, in the event of a Corporate Transaction, any surviving
corporation or acquiring corporation (or the surviving or acquiring
corporation's parent company) may assume or continue any or all Stock Awards
outstanding under the Plan or may substitute similar stock awards for Stock
Awards outstanding under the Plan (including but not limited to, awards to
acquire the same consideration paid to the stockholders of the Company pursuant
to the Corporate Transaction), and any reacquisition or repurchase rights held
by the Company in respect of Common Stock issued pursuant to Stock Awards may be
assigned by the Company to the successor of the Company (or the successor's
parent company, if any), in connection with such Corporate Transaction. A
surviving corporation or acquiring corporation (or its parent) may choose to
assume or continue only a portion of a Stock Award or substitute a similar stock
award for only a portion of a Stock Award. The terms of any assumption,
continuation or substitution shall be set by the Board in accordance with the
provisions of Section 2.
(ii) STOCK AWARDS HELD BY CURRENT PARTICIPANTS. Except as otherwise
stated in the Stock Award Agreement, in the event of a Corporate Transaction in
which the surviving corporation or acquiring corporation (or its parent company)
does not assume or continue such outstanding Stock Awards or substitute similar
stock awards for such outstanding Stock Awards, then with respect to Stock
Awards that have not been assumed, continued or substituted and that are held by
Participants whose Continuous Service has not terminated prior to the effective
time of the Corporate Transaction (referred to as the "CURRENT PARTICIPANTS"),
the vesting of such Stock Awards (and, if applicable, the time at which such
Stock Awards may be exercised) shall (contingent upon the effectiveness of the
Corporate Transaction) be accelerated in full to a date prior to the effective
time of such Corporate Transaction as the Board shall
determine (or, if the Board shall not determine such a date, to the date that is
five (5) days prior to the effective time of the Corporate Transaction), and
such Stock Awards shall terminate if not exercised (if applicable) at or prior
to the effective time of the Corporate Transaction, and any reacquisition or
repurchase rights held by the Company with respect to such Stock Awards shall
lapse (contingent upon the effectiveness of the Corporate Transaction).
(iii) STOCK AWARDS HELD BY PERSONS OTHER THAN CURRENT PARTICIPANTS.
Except as otherwise stated in the Stock Award Agreement, in the event of a
Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding
Stock Awards or substitute similar stock awards for such outstanding Stock
Awards, then with respect to Stock Awards that have not been assumed, continued
or substituted and that are held by persons other than Current Participants, the
vesting of such Stock Awards (and, if applicable, the time at which such Stock
Award may be exercised) shall not be accelerated and such Stock Awards (other
than a Stock Award consisting of vested and outstanding shares of Common Stock
not subject to the Company's right of repurchase) shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate
Transaction; PROVIDED, HOWEVER, that any reacquisition or repurchase rights held
by the Company with respect to such Stock Awards shall not terminate and may
continue to be exercised notwithstanding the Corporate Transaction.
(iv) PAYMENT FOR STOCK AWARDS IN LIEU OF EXERCISE. Notwithstanding
the foregoing, in the event a Stock Award will terminate if not exercised prior
to the effective time of a Corporate Transaction, the Board may provide, in its
sole discretion, that the holder of such Stock Award may not exercise such Stock
Award but will receive a payment, in such form as may be determined by the
Board, equal in value to the excess, if any, of (A) the value of the property
the holder of the Stock Award would have received upon the exercise of the Stock
Award, over (B) any exercise price payable by such holder in connection with
such exercise.
(c) CHANGE IN CONTROL. Except as specifically provided otherwise in the
Stock Award Agreement covering a Stock Award or other written agreement between
the Company or any Affiliate and the Participant and notwithstanding any other
provisions of the Plan to the contrary, if (i) a Change in Control occurs and
(ii) within the period beginning six (6) months before such Change in Control
and ending twelve (12) months after the effective date of such Change in Control
a Participant's Continuous Service (including service with a successor to the
Company or an Affiliate) terminates due to an involuntary termination (not
including death or Disability) without Cause or due to a voluntary termination
for Good Reason, then, as of the date of such termination, (x) each Stock Award
held by such Participant shall automatically become fully vested (and any
reacquisition or repurchase rights held by the Company with respect to the
shares of Common Stock subject to such acceleration shall lapse in full, as
appropriate) and, if applicable, each such Stock Award shall become immediately
exercisable in full, and (y) the Participant may exercise his or her Option or
Stock Appreciation Right until the earlier of (i) the date one (1) year
following such termination, or (ii) the expiration of the term of the Option or
Stock Appreciation Right as set forth in the applicable Award Agreement. In
addition, a Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock
Award Agreement for such Stock Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant.
(d) POTENTIAL REDUCTION OF PARACHUTE PAYMENTS.
(i) If the acceleration of the vesting and exercisability of Stock
Awards provided for in Sections 9(b) and 9(c), together with payments and other
benefits of a Participant (collectively, the "PAYMENT") (i) constitute a
"parachute payment" within the meaning of Section 280G of the Code, or any
comparable successor provisions, and (ii) but for this Section 9(d) would be
subject to the excise tax imposed by Section 4999 of the Code, or any comparable
successor provisions (the "EXCISE TAX"), then such Payment shall be either (1)
provided to such Participant in full, or (2) provided to such Participant as to
such lesser extent that would result in no portion of such Payment being subject
to the Excise Tax, whichever of the foregoing amounts, when taking into account
applicable federal, state, local and foreign income and employment taxes, the
Excise Tax, and any other applicable taxes, results in the receipt by such
Participant, on an after-tax basis, of the greatest amount of the Payment,
notwithstanding that all or some portion of the Payment may be subject to the
Excise Tax.
(ii) The Company shall appoint a nationally recognized independent
accounting firm or consulting firm (the "ACCOUNTANT") to make the determinations
required hereunder, which accounting firm shall not then be serving as
accountant or auditor for the individual, entity or group that effected the
Change in Control. The Company shall bear all costs and expenses with respect to
the determinations the Accountant may reasonably incur in connection with any
calculations contemplated by this Section 9(d).
(iii) Unless the Company and such Participant otherwise agree in
writing, any determination required under this Section 9(d) shall be made in
writing in good faith by the Accountant. If a reduction in the Payment is to be
made as provided above, reductions shall occur in the following order unless the
Participant elects in writing a different order (PROVIDED, HOWEVER, that such
election shall be subject to Company approval if made on or after the date that
triggers the Payment or a portion thereof):(A) reduction of cash payments; (B)
cancellation of accelerated vesting of Options and other Stock Awards; and (C)
reduction of other benefits paid to the Participant. If acceleration of vesting
of Stock Awards is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of date of grant of the Stock Awards (I.E., the
earliest granted Stock Award cancelled last) unless the Participant elects in
writing a different order for cancellation.
(iv) For purposes of making the calculations required by this
Section 9(d), the Accountant may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of the Code and other applicable
legal authority. The Company and the Participant shall furnish to the Accountant
such information and documents as the Accountant may reasonably request in order
to make such a determination.
(v) If, notwithstanding any reduction described above, the Internal
Revenue Service (the "IRS") determines that the Participant is liable for the
Excise Tax as a result of the Payment, then the Participant shall be obligated
to pay back to the Company, within thirty (30) days after a final IRS
determination or, in the event that the Participant challenges the final IRS
determination, a final judicial determination, a portion of the Payment (the
"REPAYMENT AMOUNT"). The Repayment Amount with respect to the Payment shall be
the smallest such amount, if any, as shall be required to be paid to the Company
so that the Participant's net after-tax proceeds with respect to the Payment
(after taking into account the payment of the Excise Tax and all other
applicable taxes imposed on the Payment) shall be maximized. The Repayment
Amount with respect to the Payment shall be zero if a Repayment Amount of more
than zero would not result in the Participant's net after-tax proceeds with
respect to the Payment being maximized. If the Excise Tax is not eliminated
pursuant to this paragraph, the Participant shall pay the Excise Tax.
(vi) Notwithstanding any other provision of this Section 9(d), if
(A) there is a reduction in the Payment as described above, (B) the IRS later
determines that the Participant is liable for the Excise Tax, the payment of
which would result in the maximization of the Participant's net after-tax
proceeds of the Payment (calculated as if the Payment had not previously been
reduced), and (C) the Participant pays the Excise Tax, then the Company shall
pay or otherwise provide to the Participant that portion of the Payment that was
reduced pursuant to this Section 9(d) contemporaneously or as soon as
administratively possible after the Participant pays the Excise Tax so that the
Participant's net after-tax proceeds with respect to the Payment are maximized.
If the Participant either (A) brings any action to enforce rights pursuant
to this Section 9(d), or (B) defends any legal challenge to his or her rights
under this Section 9(d), the Participant shall be entitled to recover attorneys'
fees and costs incurred in connection with such action, regardless of the
outcome of such action; PROVIDED, HOWEVER, that if such action is commenced by
the Participant, the court finds that the action was brought in good faith.
10. TERMINATION OR SUSPENSION OF THE PLAN.
(a) PLAN TERM. Unless sooner terminated by the Board pursuant to Section
3, the Plan shall automatically terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No Awards may be granted
under the Plan while the Plan is suspended or after it is terminated.
(b) NO IMPAIRMENT OF RIGHTS. Termination of the Plan shall not impair
rights and obligations under any Award granted while the Plan is in effect
except with the written consent of the affected Participant.
11. EFFECTIVE DATE OF PLAN.
This Plan shall become effective on the Effective Date. Prior to the
Effective Date, the Prior Plan is unaffected by the Plan, and Stock Awards shall
continue to be granted from the Prior Plan. If the Plan has not been approved by
the stockholders of the Company by the first anniversary of the Adoption Date,
the adoption of the Plan shall be null and void and the Prior Plan shall
continue unaffected by the adoption of the Plan. If the Plan is so approved, (i)
the Prior Plan shall be deemed merged into the Plan and to cease their separate
existence and (ii) outstanding options and other awards granted pursuant to the
Prior Plan shall automatically become Stock Awards. Notwithstanding that the
Prior Plan is merged into the Plan, the terms of the Prior Plan shall continue
to govern any Stock Awards granted prior to the Effective Date.
12. CHOICE OF LAW.
The law of the State of California shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.
13. DEFINITIONS. As used in the Plan, the definitions contained in this Section
13 shall apply to the capitalized terms indicated below:
(a) "ADOPTION DATE" means April 14, 2006, the date the Plan was adopted by
the Board.
(b) "AFFILIATE" means, at the time of determination, any "parent" or
"subsidiary" as such terms are defined in Rule 405 of the Securities Act. The
Board shall have the authority to determine the time or times at which "parent"
or "subsidiary" status is determined within the foregoing definition.
(c) "AWARD" means a Stock Award or a Performance Cash Award.
(d) "BOARD" means the Board of Directors of the Company.
(e) "CAPITALIZATION ADJUSTMENT" means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or
subject to any Stock Award after the Effective Date without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company. Notwithstanding the foregoing, the
conversion of any convertible securities of the Company shall not be treated as
a transaction "without receipt of consideration" by the Company.
(f) "CAUSE" means with respect to a Participant, the occurrence of any of
the following events: (i) such Participant's commission of any felony or any
crime involving fraud or moral turpitude under the laws of the United States or
any state thereof; (ii) such Participant's attempted commission of, or
participation in, a fraud or act of dishonesty against the Company; (iii) such
Participant's intentional, material violation of any contract or agreement
between the Participant and the Company or of any statutory duty owed to the
Company; (iv) such Participant's intentional unauthorized use or intentional
disclosure of the Company's confidential information or trade secrets; or (v)
such Participant's gross misconduct. The determination that a termination of the
Participant's Continuous Service is either for Cause or without Cause shall be
made by the Company in good faith in its sole discretion. Any determination by
the Company that the Continuous Service of a Participant was terminated by
reason of dismissal without Cause for the purposes of outstanding Awards held by
such Participant shall have no effect upon any determination of the rights or
obligations of the Company or such Participant for any other purpose.
(g) A "CHANGE IN CONTROL," with respect to Awards granted on or after the
Effective Date, will be deemed to have occurred upon the first to occur of an
event set forth in any one of the following paragraphs:
(i) the acquisition (other than from the Company, by any person (as
such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) of beneficial Ownership (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of thirty percent (30%) or more of
the combined voting power of the Company's then outstanding voting securities;
(ii) the individuals who, as of the Effective Date, are members of
the Board (the "INCUMBENT BOARD"), cease for any reason to constitute at least a
majority of the Board, unless the election, or nomination for election by the
Company's stockholders, of any new director was approved by a vote of at least a
majority of the Incumbent Board, and such new director shall, for purposes of
this Plan, be considered as a member of the Incumbent Board; or
(iii) the closing of:
(1) a merger or consolidation involving the Company if the
stockholders of the Company, immediately before such merger or consolidation, do
not, as a result of such merger or consolidation, Own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the then
outstanding voting securities of the corporation resulting from such merger or
consolidation in substantially the same proportion as their Ownership of the
combined voting power of the voting securities of the Company outstanding
immediately before such merger or consolidation; or
(2) a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because thirty percent (30%) or more of the combined voting power
of the Company's then outstanding securities is acquired by (i) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained by the Company or any of its subsidiaries or (ii) any corporation
which, immediately prior to such acquisition, is Owned directly or indirectly by
the stockholders of the Company in the same proportion as their Ownership of
stock in the Company immediately prior to such acquisition.
For the avoidance of doubt, the term Change in Control shall not include a
sale of assets, merger or other transaction effected exclusively for the purpose
of changing the domicile of the Company.
Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Awards subject to such
agreement; PROVIDED, HOWEVER, that if no definition of Change in Control or any
analogous term is set forth in such an individual written agreement, the
foregoing definition shall apply.
In the event that a Change in Control affects any Award that is deferred on or
after January 1, 2005, then to the extent necessary to avoid the adverse tax
treatment contained in Code Section 409A(a)(1), the term "CHANGE IN CONTROL"
shall conform to the definition of Change of Control under Section 409A of the
Code, as amended, and the Treasury Department or Internal Revenue Service
Regulations or Guidance issued thereunder.
(h) "CODE" means the Internal Revenue Code of 1986, as amended.
(i) "COMMITTEE" means a committee of one (1) or more Directors to whom
authority has been delegated by the Board in accordance with Section 2(c).
(j) "COMMON STOCK" means the common stock of the Company.
(k) "COMPANY" means Valeant Pharmaceuticals International., a Delaware
corporation.
(l) "CONSULTANT" means any person, including an advisor, who is (i)
engaged by the Company or an Affiliate to render consulting or advisory services
and is compensated for such services, or (ii) serving as a member of the board
of directors of an Affiliate and is compensated for such services. However,
service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a "Consultant" for purposes of the Plan.
(m) "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant's service with the Company or an Affiliate, shall not terminate a
Participant's Continuous Service. For example, a change in status from an
employee of the Company to a consultant to an Affiliate or to a Director shall
not constitute an interruption of Continuous Service. To the extent permitted by
law, the Board or the chief executive officer of the Company, in that party's
sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal leave.
Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
Service for purposes of vesting in a Stock Award only to such extent as may be
provided in the Company's leave of absence policy, in the written terms of any
leave of absence agreement or policy applicable to the Participant, or as
otherwise required by law.
(n) "CORPORATE TRANSACTION" means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:
(i) a sale or other disposition of all or substantially all, as
determined by the Board in its sole discretion, of the consolidated assets of
the Company and its Subsidiaries;
(ii) a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;
(iii) the consummation of a merger, consolidation or similar
transaction following which the Company is not the surviving corporation; or
(iv) the consummation of a merger, consolidation or similar
transaction following which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the
merger, consolidation or similar transaction into other property, whether in the
form of securities, cash or otherwise.
(o) "COVERED EMPLOYEE" shall have the meaning provided in Section
162(m)(3) of the Code and the regulations promulgated thereunder.
(p) "DIRECTOR" means a member of the Board.
(q) "DISABILITY" means, with respect to a Participant, the inability of
such Participant 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, as provided in Section 22(e)(3) and 409A(a)(2)(c)(i) of the
Code.
(r) "EFFECTIVE DATE" means the effective date of this Plan document, which
is the date of the annual meeting of stockholders of the Company held in 2006
provided this Plan is approved by the Company's stockholders at such meeting.
(s) "EMPLOYEE" means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services,
shall not cause a Director to be considered an "Employee" for purposes of the
Plan.
(t) "ENTITY" means a corporation, partnership, limited liability company
or other entity.
(u) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(v) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the date of determination, as reported in THE
WALL STREET JOURNAL or such other source as the Board deems reliable. Unless
otherwise provided by the Board, if there is no closing sales price (or closing
bid if no sales were reported) for the Common Stock on the date of
determination, then the Fair Market Value shall be the closing selling price (or
closing bid if no sales were reported) on the last preceding date for which such
quotation exists.
(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined by the Board in good faith.
(w) "GOOD REASON" means, with respect to a particular Participant, the
occurrence of any of the following events, conditions or actions taken by the
Company without Cause and without such Participant's consent: (i) Participant's
duties or responsibilities are materially diminished (and not simply a change in
title or reporting relationships); PROVIDED, HOWEVER, that the Participant shall
not have "Good Reason" to terminate if the Company is retained as a separate
legal entity or business unit following the effective date of a Change of
Control and the Participant holds the same position in such legal entity or
business unit as the eligible employee held before the effective date of such
Change of Control, (ii) any reduction in such Participant's level of base salary
(except for salary decreases generally applicable to the Company's other
similarly-situated employees), (iii) any significant reduction, in the
aggregate, in the employee benefit programs made available to the Participant
other than a reduction in such employee benefit programs affecting all employees
of the Company substantially equally, or (iv) an increase in the Participant's
one-way driving distance from the Participant's principal personal residence to
the principal office or business location at which the Participant is required
to perform services of more than 20 miles, except for required travel for the
Company's business to an extent substantially consistent with the Participant's
prior business travel obligations.
(x) "INCENTIVE STOCK OPTION" means an Option that is intended to be, and
qualifies as, an "incentive stock option" within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.
(y) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current employee or officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from
the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure
would not be required under Item 404(a) of Regulation S-K promulgated pursuant
to the Securities Act ("REGULATION S-K")), does not possess an interest in any
other transaction for which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(z) "NONSTATUTORY STOCK OPTION" means any Option that does not qualify as
an Incentive Stock Option.
(aa) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(bb) "OPTION" means an Incentive Stock Option or a Nonstatutory Stock
Option to purchase shares of Common Stock granted pursuant to the Plan.
(cc) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan.
(dd) "OPTIONHOLDER" means a person to whom an Option is granted pursuant
to the Plan or, if permitted under the terms of this Plan, such other person who
holds an outstanding Option.
(ee) "OTHER STOCK AWARD" means an award based in whole or in part by
reference to the Common Stock which is granted pursuant to the terms and
conditions of Section 6(d).
(ff) "OTHER STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions
of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject
to the terms and conditions of the Plan.
(gg) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" who receives
compensation for prior services (other than benefits under a tax-qualified
retirement plan) during the taxable year, has not been an officer of the Company
or an "affiliated corporation," and does not receive remuneration from the
Company or an "affiliated corporation," either directly or indirectly, in any
capacity other than as a Director, or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.
(hh) "OWN," "OWNED," "OWNER," "OWNERSHIP" A person or Entity shall be
deemed to "Own," to have "Owned," to be the "Owner" of, or to have acquired
"Ownership" of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.
(ii) "PARTICIPANT" means a person to whom an Award is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Stock
Award.
(jj) "PERFORMANCE CASH AWARD" means an award of cash granted pursuant to
the terms and conditions of Section 6(d)(ii).
(kk) "PERFORMANCE CRITERIA" means the one or more criteria that the Board
shall select for purposes of establishing the Performance Goals for a
Performance Period. The Performance Criteria that shall be used to establish
such Performance Goals may be based on any one of, or combination of, the
following: (i) earnings per share; (ii) earnings before interest, taxes and
depreciation; (iii) earnings before
interest, taxes, depreciation and amortization; (iv) total stockholder return;
(v) return on equity; (vi) return on assets, investment, or capital employed;
(vii) operating margin; (viii) gross margin; (ix) operating income; (x) net
income (before or after taxes); (xi) net operating income; (xii) net operating
income after tax; (xiii) pre-tax profit; (xiv) operating cash flow; (xv) sales
or revenue targets; (xvi) increases in revenue or product revenue; (xvii)
expenses and cost reduction goals; (xviii) improvement in or attainment of
working capital levels; (xix) economic value added (or an equivalent metric);
(xx) market share; (xxi) cash flow; (xxii) cash flow per share; (xxiii) share
price performance; (xxiv) debt reduction; (xxv) implementation or completion of
projects or processes; (xxvi) customer satisfaction; (xxvii) stockholders'
equity; and (xxviii) to the extent that an Award is not intended to comply with
Section 162(m) of the Code, other measures of performance selected by the Board.
Partial achievement of the specified criteria may result in the payment or
vesting corresponding to the degree of achievement as specified in the Stock
Award Agreement or the written terms of a Performance Cash Award. The Board
shall, in its sole discretion, define the manner of calculating the Performance
Criteria it selects to use for such Performance Period.
(ll) "PERFORMANCE GOALS" means, for a Performance Period, the one or more
goals established by the Board for the Performance Period based upon the
Performance Criteria. Performance Goals may be based on a Company-wide basis,
with respect to one or more business units, divisions, Affiliates, or business
segments, and in either absolute terms or relative to the performance of one or
more comparable companies or the performance of one or more relevant indices. At
the time of the grant of any Award, the Board is authorized to determine
whether, when calculating the attainment of Performance Goals for a Performance
Period: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to
exclude exchange rate effects, as applicable, for non-U.S. dollar denominated
net sales and operating earnings; (iii) to exclude the effects of changes to
generally accepted accounting standards required by the Financial Accounting
Standards Board; (iv) to exclude the effects of any statutory adjustments to
corporate tax rates; and (v) to exclude the effects of any "extraordinary items"
as determined under generally accepted accounting principles. In addition, the
Board retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals.
(mm) "PERFORMANCE PERIOD" means the period of time selected by the Board
over which the attainment of one or more Performance Goals will be measured for
the purpose of determining a Participant's right to and the payment of a Stock
Award or a Performance Cash Award. Performance Periods may be of varying and
overlapping duration, at the sole discretion of the Board.
(nn) "PERFORMANCE STOCK AWARD" means a Stock Award granted under the terms
and conditions of Section 6(d)(i).
(oo) "PLAN" means this Valeant Pharmaceuticals International 2006 Equity
Incentive Plan.
(pp) "RESTRICTED STOCK AWARD" means an award of shares of Common Stock
which is granted pursuant to the terms and conditions of Section 6(a).
(qq) "RESTRICTED STOCK AWARD AGREEMENT" means a written agreement between
the Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of a Restricted Stock Award grant. Each Restricted Stock Award
Agreement shall be subject to the terms and conditions of the Plan.
(rr) "RESTRICTED STOCK UNIT AWARD" means a right to receive shares of
Common Stock which is granted pursuant to the terms and conditions of Section
6(b).
(ss) "RESTRICTED STOCK UNIT AWARD AGREEMENT" means a written agreement
between the Company and a holder of a Restricted Stock Unit Award evidencing the
terms and conditions of a Restricted Stock Unit Award grant. Each Restricted
Stock Unit Award Agreement shall be subject to the terms and conditions of the
Plan.
(tt) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.
(uu) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(vv) "STOCK APPRECIATION RIGHT" means a right to receive the appreciation
on Common Stock that is granted pursuant to the terms and conditions of Section
6(c).
(ww) "STOCK APPRECIATION RIGHT AGREEMENT" means a written agreement
between the Company and a holder of a Stock Appreciation Right evidencing the
terms and conditions of a Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.
(xx) "STOCK AWARD" means any right to receive Common Stock granted under
the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a
Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation
Right, a Performance Stock Award or any Other Stock Award.
(yy) "STOCK AWARD AGREEMENT" means a written agreement between the Company
and a Participant evidencing the terms and conditions of a Stock Award grant.
Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.
(zz) "SUBSIDIARY" means, with respect to the Company, (i) any corporation
of which more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, Owned
by the Company, and (ii) any partnership in which the Company has a direct or
indirect interest (whether in the form of voting or participation in profits or
capital contribution) of more than fifty percent (50%).
(aaa) "TEN PERCENT STOCKHOLDER" means a person who Owns (or is deemed to
Own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Affiliate.