Exhibit 10.7
PICOR CORPORATION
2001 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN: DEFINITIONS
The name of the plan is the Picor Corporation 2001 Stock Option and
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers and directors of Picor Corporation (the "Company") and its
Subsidiaries upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company's welfare will assure a closer identification of
their interests with those of the Company, thereby stimulating their efforts on
the Company's behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Administrator" is defined in Section 2(a).
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards and Unrestricted Stock Awards.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Committee of the Board referred to in Section 2.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 13.
"Fair Market Value" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Administrator; provided,
however, that if the Stock is admitted to quotation on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ National
System or a national securities exchange, the determination shall be made by
reference to market quotations. If there are no market quotations for such date,
the determination shall be made by reference to the last date preceding such
date for which there are market quotations; provided further, however, that if
the date for which Fair Market Value is determined is the first day when trading
prices for the Stock are reported on NASDAQ or on a national securities
exchange, the Fair Market Value shall be the "Price to the
Public" (or equivalent) set forth on the cover page for the final prospectus
relating to the Company's Initial Public Offering.
"Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"Initial Public Offering" means the consummation of the first fully
underwritten, firm commitment public offering pursuant to an effective
registration statement under the Act covering the offer and sale by the Company
of its equity securities, or such other event as a result of or following which
the Stock shall be publicly held.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Restricted Stock Award" means Awards granted pursuant to Section 6.
"Retirement" means the employee's termination of employment with the
Company and its Subsidiaries after attainment of the age of 62.5 years.
"Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50
percent or more of the economic interest or the total combined voting power of
all classes of stock or other interests in one of the other corporations or
entities in the chain.
"Transaction" is defined in Section 3(c).
"Unrestricted Stock Award" means any Award granted pursuant to Section 7.
SECTION 2. ADMINISTRATION OF THE PLAN: ADMINISTRATOR AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS
(a) Committee. The Plan shall be administered by either the Board or, at
the discretion of the Board, a committee of the Board comprised, except as
contemplated by Section 2(c), of not less than two directors (in either case,
the "Administrator").
(b) Powers of Administrator. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
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(i) to select the individuals to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, Unrestricted Stock Awards or any combination of the foregoing, granted
to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by any
Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;
(v) to accelerate at any time the exercisability or vesting of all or
any portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend at any
time the period in which Stock Options may be exercised; and
(vii) at any time to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
Notwithstanding the foregoing, no Award shall be granted under the Plan
unless the recipient of such Award has executed and delivered a Stock
Restriction Agreement in substantially the form attached hereto as Exhibit A or
such other form as the Administrator may determine from time to time. All
decisions and interpretations of the Administrator shall be binding on all
persons, including the Company and Plan participants.
(c) Delegation of Authority to Grant Awards. The Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Administrator's authority and duties with respect to the granting of
Awards at Fair Market Value to individuals who are not subject to the reporting
and other provisions of Section 16 of the Exchange Act or "covered employees"
within the meaning of Section 162(m) of the Code, and in the event of such
delegation, such Chief Executive Officer shall be deemed a one-person Committee
of the Board. Any such delegation by the Administrator shall include a
limitation as to the amount of Awards that may be granted during the period of
the delegation and shall contain guidelines as to the determination of the
exercise price of any Option, the conversion ratio or price of other Awards and
the vesting criteria. The Administrator may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any prior actions of
the Administrator's delegate or delegates that were consistent with the terms of
the Plan.
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(d) Indemnification. Neither the Board nor the Administrator, nor any
member of either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and Committee (and any delegate
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage, judgment, settlement or
expense (including, without limitation, reasonable attorneys' fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors' and officers' liability insurance coverage which may be in effect
from time to time.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 10,000,000 shares, subject to
adjustment as provided in Section 3(b). For purposes of this limitation, the
shares of Stock underlying any Awards which are forfeited, canceled, reacquired
by the Company, satisfied without the issuance of Stock or otherwise terminated
(other than by exercise) shall be added back to the shares of Stock available
for issuance under the Plan. Subject to such overall limitation, shares of Stock
may be issued up to such maximum number pursuant to any type or types of Award;
provided, however, that from and after the date on which the Company becomes
subject to the deduction limit imposed by Section 162(m) of the Code, Stock
Options with respect to no more than 1,600,000 shares of Stock may be granted to
any one individual participant during any one calendar year period. The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company and held in its treasury.
(b) Changes in Stock. If, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company's capital stock, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Stock or other
securities, the Administrator shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, (ii) the number of Stock Options that can be granted to any one individual
participant, (iii) the number and kind of shares or other securities subject to
any then outstanding Awards under the Plan, and (iv) the price for each share
subject to any then outstanding Stock Options under the Plan, without changing
the aggregate exercise price (i.e., the exercise price multiplied by the number
of Stock Options) as to which such Stock Options remain exercisable. The
adjustment by the Administrator shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Administrator in its discretion may make a cash payment
in lieu of fractional shares.
The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of
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the participant, if it would constitute a modification, extension or renewal of
the Option within the meaning of Section 424(h) of the Code.
(c) Mergers and Other Transactions. In the case of and subject to the
consummation of (i) the dissolution or liquidation of the Company, (ii) the sale
of all or substantially all of the assets of the Company on a consolidated basis
to an unrelated person or entity, (iii) a merger, reorganization or
consolidation in which the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the surviving or resulting entity immediately upon completion of
such transaction, (iv) the sale of all of the Stock of the Company to an
unrelated person or entity or (v) any other transaction in which the owners of
the Company's outstanding voting power prior to such transaction do not own at
least a majority of the outstanding voting power of the relevant entity after
the transaction (in each case, a "Transaction"), as of the effective date of
such Transaction, all Options that are not exercisable shall become fully
exercisable and all other Awards which are not vested shall become fully vested,
except as the Administrator may otherwise specify with respect to particular
Awards. Upon the effectiveness of the Transaction, the Plan and all outstanding
Options and other Awards granted hereunder shall terminate, unless provision is
made in connection with the Transaction for the assumption of Awards heretofore
granted, or the substitution of such Awards of new Awards of the successor
entity or parent thereof, with appropriate adjustment as to the number and kind
of shares and, if appropriate, the per share exercise prices, as provided in
Section 3(b) above. In the event of such termination, each optionee shall be
permitted to exercise for a period of at least 15 days prior to the date of such
termination all outstanding Options held by such optionee which are then
exercisable or become exercisable upon the effectiveness of the Transaction.
(d) Substitute Awards. The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances. Any substitute Awards granted under
the Plan shall not count against the share limitations set forth in Section
3(a).
SECTION 4. ELIGIBILITY
Participants in the Plan will be such full or part-time officers and other
employees and directors of the Company and its Subsidiaries who are responsible
for or contribute to the management, growth or profitability of the Company and
its Subsidiaries as are selected from time to time by the Administrator in its
sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
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Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after November
21, 2011.
(a) Stock Options Granted to Employees and Key Persons. The Administrator
in its discretion may grant Stock Options to eligible employees and key persons
of the Company or any Subsidiary. Stock Options granted pursuant to this Section
5(a) shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Administrator shall deem desirable. If the Administrator so
determines, Stock Options may be granted in lieu of cash compensation at the
participant's election, subject to such terms and conditions as the
Administrator may establish, as well as in addition to other compensation.
(i) Exercise Price. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined by
the Administrator at the time of grant but shall not be less than 100 percent of
the Fair Market Value on the date of grant in the case of Incentive Stock
Options. If an employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10 percent of the combined voting
power of all classes of stock of the Company or any parent or subsidiary
corporation and an Incentive Stock Option is granted to such employee, the
option price of such Incentive Stock Option shall be not less than 110 percent
of the Fair Market Value on the grant date.
(ii) Option Term. The term of each Stock Option shall be fixed by the
Administrator, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10 percent of the combined voting power of all classes of stock of the Company
or any parent or subsidiary corporation and an Incentive Stock Option is granted
to such employee, the term of such option shall be no more than five years from
the date of grant.
(iii) Exercisability; Rights of a Stockholder. Stock Options shall
become exercisable at such time or times, whether or not in installments, as
shall be determined by the Administrator at or after the grant date; provided,
however, that Stock Options granted in lieu of compensation shall be exercisable
in full as of the grant date. The Administrator may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee shall have
the rights of a stockholder only as to shares acquired upon the exercise of a
Stock Option and not as to unexercised Stock Options.
(iv) Method of Exercise. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the number
of shares to be purchased. Payment of the purchase price may be made by one or
more of the following methods to the extent provided in the Option Award
agreement:
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(A) In cash, by certified or bank check or other instrument
acceptable to the Administrator;
(B) If approved by the Administrator, through the delivery (or
attestation to the ownership) of shares of Stock that are not then subject
to restrictions under any Company plan and that have been beneficially
owned by the optionee for at least six months or have been purchased by the
participant on the open market. Such surrendered shares shall be valued at
Fair Market Value on the exercise date;
(C) If approved by the Administrator, by the optionee delivering
to the Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company for the purchase
price; provided that in the event the optionee chooses to pay the purchase
price as so provided, the optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements
as the Administrator shall prescribe as a condition of such payment
procedure; or
(D) By the optionee delivering to the Company a promissory note
if the Board has unanimously authorized the loan of funds to the optionee
for the purpose of enabling or assisting the optionee to effect the
exercise of his Stock Option; provided that at least so much of the
exercise price as represents the par value of the Stock shall be paid other
than with a promissory note.
Payment instruments will be received subject to collection. No certificates
for shares of Stock so purchased will be issued to optionee until the Company
has completed all steps required by law to be taken in connection with the
issuance and sale of the shares, including without limitation (i) receipt of a
representation from the optionee at the time of exercise of the Option that the
optionee is purchasing the shares for the optionee's own account and not with a
view to any sale or distribution thereof, (ii) the legending of any certificate
representing the shares to evidence the foregoing representations and
restrictions, and (iii) obtaining from optionee payment or provision for all
withholding taxes due as a result of the exercise of the Option. The delivery of
certificates representing the shares of Stock to be purchased pursuant to the
exercise of a Stock Option will be contingent upon receipt from the optionee (or
a purchaser acting in his or her stead in accordance with the provisions of the
Stock Option) by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Option Award agreement or
applicable provisions of laws. In the event an optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation
method, the shares of Stock transferred to the optionee upon the exercise of the
Stock Option shall be net of the number of shares attested to.
(v) Annual Limit on Incentive Stock Options. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the shares
of Stock with respect to which Incentive Stock Options granted under this Plan
and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar year
shall not exceed $100,000. To the extent that any Stock Option exceeds this
limit, it shall constitute a Non-Qualified Stock Option.
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(b) Non-transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or by the optionee's legal representative or
guardian in the event of the optionee's incapacity. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Award
agreement regarding a given Option that the optionee may transfer, without
consideration for the transfer, his Non-Qualified Stock Options to members of
his immediate family, to trusts for the benefit of such family members, or to
partnerships in which such family members are the only partners, provided that
the transferee agrees in writing with the Company to be bound by all of the
terms and conditions of this Plan and the applicable Option.
(c) Termination. Except as may otherwise be provided in this Section 5(c)
or by the Administrator either in the Award agreement, or subject to Section 10
below, in writing after the Award agreement is issued, a participant's rights in
all Stock Options shall automatically terminate upon the participant's
termination of employment with the Company and its Subsidiaries for any reason.
Notwithstanding the foregoing, the period within which to exercise the Option
shall be modified as set forth below:
(i) Termination Due to Death. If the participant's employment
terminates by reason of death, (1) any Option held by the participant, which,
but for such participant's death, would have vested and become exercisable on or
prior to the first anniversary of such termination, shall become fully
exercisable and (2) any Option exercisable at the time of such termination may
thereafter be exercised by the participant's legal representative or legatee for
a period of 12 months from the date of death or until the Expiration Date, if
earlier.
(ii) Termination Due to Disability. If the participant's employment
terminates by reason of Disability (as defined in Section 22(c)(3) of the Code),
(1) any Option held by the participant, which, but for such participant's
Disability, would have vested and become exercisable on or prior to the first
anniversary of such termination, shall become fully exercisable and (2) any
Option exercisbale at the time of such termination may thereafter be exercised
by the participant for a period of 12 months from the date of termination or
until the Expiration Date, if earlier. The death of the participant during the
12-month period provided in this Section 5(c)(ii) shall extend such period for
another 12 months from the date of death or until the Expiration Date, if
earlier.
(iii) Termination Due to Retirement. Any Stock Option held by an
optionee whose employment by the Company and its Subsidiaries is terminated by
reason of Retirement shall remain outstanding and subject to all of the terms
and conditions of the Award agreement as though such optionee's employment had
not ceased by reason of such Retirement.
(iv) Determination of Reason. The Administrator's determination of the
reason for termination of the participant's employment shall be conclusive and
binding on the participant and his or her representatives or legatees.
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SECTION 6. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is an Award
entitling the recipient to acquire, at par value or such other higher purchase
price determined by the Administrator, shares of Stock subject to such
restrictions and conditions as the Administrator may determine at the time of
grant ("Restricted Stock"). Conditions may be based on continuing employment (or
other business relationship) and/or achievement of pre-established performance
goals and objectives. The grant of a Restricted Stock Award is contingent on the
participant executing the Restricted Stock Award agreement. The terms and
conditions of each such agreement shall be determined by the Administrator, and
such terms and conditions may differ among individual Awards and participants.
(b) Rights as a Stockholder. Upon execution of a written instrument setting
forth the Restricted Stock Award and payment of any applicable purchase price, a
participant shall have the rights of a stockholder with respect to the voting of
the Restricted Stock, subject to such conditions contained in the written
instrument evidencing the Restricted Stock Award. Unless the Administrator shall
otherwise determine, certificates evidencing the Restricted Stock shall remain
in the possession of the Company until such Restricted Stock is vested as
provided in Section 6(d) below, and the participant shall be required, as a
condition of the grant, to deliver to the Company a stock power endorsed in
blank.
(c) Restrictions. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award agreement. If a participant's employment
(or other business relationship) with the Company and its Subsidiaries
terminates for any reason, the Company shall have the right to repurchase
Restricted Stock that has not vested at the time of termination at its original
purchase price, from the participant or the participant's legal representative.
(d) Vesting of Restricted Stock. The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Administrator either in the Award agreement or, subject to
Section 10 below, in writing after the Award agreement is issued, a
participant's rights in any shares of Restricted Stock that have not vested
shall automatically terminate upon the participant's termination of employment
(or other business relationship) with the Company and its Subsidiaries and such
shares shall be subject to the Company's right of repurchase as provided in
Section 6(c) above.
(e) Waiver, Deferral and Reinvestment of Dividends. The Restricted Stock
Award agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends paid on the Restricted Stock.
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SECTION 7. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Administrator) an Unrestricted Stock Award to any participant pursuant to
which such participant may receive shares of Stock free of any restrictions
("Unrestricted Stock") under the Plan. Unrestricted Stock Awards may be granted
or sold as described in the preceding sentence in respect of past services or
other valid consideration, or in lieu of cash compensation due to such
participant.
SECTION 8. TAX WITHHOLDING
(a) Payment by Participant. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant. The Company's obligation to deliver stock certificates
to any participant is subject to and conditioned on tax obligations being
satisfied by the participant.
(b) Payment in Stock. Subject to approval by the Administrator, a
participant may elect to have the minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the participant with a minimum aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due.
SECTION 9. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
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SECTION 10. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent. The Administrator may provide substitute Awards at the
same or reduced exercise or purchase price or with no exercise or purchase price
in a manner not inconsistent with the terms of the Plan, but such price, if any,
must satisfy the requirements which would apply to the substitute or amended
Award if it were then initially granted under this Plan, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. If and to the extent determined by the Administrator to be required by
the Code to ensure that Incentive Stock Options granted under the Plan are
qualified under Section 422 of the Code or to ensure that compensation earned
under Stock Options qualifies as performance-based compensation under Section
162(m) of the Code, if and to the extent intended to so qualify, Plan amendments
shall be subject to approval by the Company stockholders entitled to vote at a
meeting of stockholders. Nothing in this Section 10 shall limit the Board's
authority to take any action permitted pursuant to Section 3(c).
SECTION 11. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.
SECTION 12. GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The Administrator
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.
(b) Delivery of Stock Certificates. Stock certificates to participants
under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the Company shall have mailed such certificates in the
United States mail, addressed to the participant, at the participant's last
known address on file with the Company.
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(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(d) Trading Restrictions. Option exercises and other Awards under the Plan
shall be subject to such Company's trading restrictions, terms and conditions,
including, without limitation, the restrictions, terms and conditions set forth
in a Stock Restriction Agreement executed and delivered pursuant to Section 2
hereof, as may be established or required by the Administrator, or in accordance
with policies set by the Administrator, from time to time.
(e) Loans to Participants. The Company shall have the authority to make
loans to participants hereunder (including to facilitate the purchase of shares)
and shall further have the authority to issue shares for promissory notes
hereunder.
(f) Designation of Beneficiary. Each participant to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the
participant's death. Any such designation shall be on a form provided for that
purpose by the Administrator and shall not be effective until received by the
Administrator. If no beneficiary has been designated by a deceased participant,
or if the designated beneficiaries have predeceased the participant, the
beneficiary shall be the participant's estate.
SECTION 13. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the stockholders in
accordance with applicable law. Subject to such approval by the stockholders and
to the requirement that no Stock may be issued hereunder prior to such approval,
Stock Options and other Awards may be granted hereunder on and after adoption of
this Plan by the Board.
SECTION 14. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: November 21, 2001
DATE APPROVED BY STOCKHOLDERS: November 21, 2001
As adjusted for a 3 for 1 stock dividend issued on March 8, 2006
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EXHIBIT A
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EXHIBIT A
STOCK RESTRICTION AGREEMENT
PICOR CORPORATION
Agreement made as of ______ by and between PICOR CORPORATION, a Delaware
corporation with an address of P.O. Box 859, Slatersville, Rhode Island 02876
(the "Company"), and ________ (the "Stockholder"), which is the holder of
options to purchase shares of common stock, par value $.01 per share, of the
Company (the "Common Stock") (collectively the shares of Common Stock issuable
upon the exercise of such options, and all other shares of Common Stock acquired
by the Stockholder subsequent to the date hereof are herein referred to as the
"Stock").
WHEREAS, the Stockholder has been granted, as of the date first set forth
above, options to purchase __________ shares of Common Stock of the Company
pursuant to the Company's 2001 Stock Option and Incentive Plan (the "Equity
Incentive Plan");
NOW, THEREFORE, in consideration of the mutual promises of the parties and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows.
SECTION 1. Voluntary Transfers. Neither the Stockholder nor any permitted
transferee of his shares under Section 5 may sell, assign, transfer, exchange,
pledge or otherwise dispose of any shares of Stock or any interest therein now
held or hereafter acquired by such shareholder (collectively referred to as a
"transfer") without first giving written notice thereof to the Company,
identifying the proposed transferee, the purchase price, if any, and terms of
the proposed transaction, and offering said shares to the Company for purchase
by it as hereinafter provided. Within 30 days after receipt of the notice, the
Company may elect to purchase all of the shares so offered and if it does not do
so, said shares may be transferred within 60 days after the expiration of said
30-day period to the proposed transferee upon the price and terms specified in
the notice, provided that said transferee shall thereupon become a party to this
Agreement as a Stockholder in the manner provided hereinafter.
SECTION 2. Termination of Employment. Within 30 days after the voluntary or
involuntary termination of all employment of a Stockholder with the Company as
an employee, officer and Director thereof, except a termination by reason of
death, said Stockholder and each transferee of his or her shares under Section 5
shall give written notice to the Company offering to the Company for purchase as
hereinafter provided all of the shares of Stock owned on the date of termination
by said Stockholder and each such transferee. Within 30 days after receipt of
the notice, the Company may elect to purchase all or any part of the shares so
offered and if it does not elect to do so, said shares may be retained by said
Stockholder or transferee subject to all other provisions of this Agreement.
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SECTION 3. Death of a Stockholder. In the event of the death of the
Stockholder, his executors or administrators and each transferee of his shares
under Section 5 shall, within 90 days after the date of death, give written
notice thereof to the Company offering to it for purchase as hereinafter
provided all of the shares of Stock owned on said date by the Stockholder and
each such transferee. Within 30 days after receipt of the notice, the Company
may elect to purchase all or any part of the shares so offered; and if the
Company does not do so, said shares may be retained by the estate of said
Stockholder or by such transferee subject to all other provisions of this
Agreement.
SECTION 4. Transfers by Operation of Law. In the event that a Stockholder
(i) files a voluntary petition under any bankruptcy or insolvency law, or a
petition for the appointment of a receiver or makes an assignment for the
benefit of creditors, or (ii) is subjected involuntarily to such a petition or
assignment or to an attachment or other legal or equitable interest with respect
to his shares of Stock, and such involuntary petition or assignment or
attachment is not discharged within 60 days after its date, or (iii) is
subjected to a transfer of shares of his Stock by operation of law, the Company
shall have the right to elect to purchase all or any part of the shares of Stock
which are owned by the Stockholder. Failure of the Company to elect to purchase
said shares under this Section shall not affect its right to purchase the same
shares under Section 1 in the event of a proposed sale, assignment, transfer,
pledge or other disposition thereof by or to any receiver, petitioner, assignee,
transferee or other person obtaining an interest in said shares.
SECTION 5. Exceptions to Restrictions. Except as provided above, these
restrictions shall be inapplicable to:
(a) Transfers of Stock between the Stockholder and the trustees of a trust
revocable by the Stockholder alone,
(b) Transfers of Stock between the Stockholder and his guardian or
conservator, and
(c) Transfers of Stock upon the death of the Stockholder to his executors
or administrators or to trustees under his will;
provided, that such Stock in the hands of each such transferee shall remain
subject to this Agreement.
SECTION 6. Transfers in Violation of Agreement. If any transfer of shares
of Stock is made or attempted contrary to the provisions of this Agreement, or
if shares of Stock are not offered to the Company as required by this Agreement,
the Company shall have the right to purchase said shares from the owner thereof
or his or her transferee at any time before or after the transfer, as
hereinafter provided. In addition to any other legal or equitable remedies which
it may have, the Company may enforce its rights by actions for specific
performance (to the extent permitted by law) and may refuse to recognize any
such transferee as one of its stockholders for
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any purpose, including without limitation for purposes of dividend and voting
rights, until all applicable provisions of this Agreement have been complied
with.
SECTION 7. Purchase Price.
(a) Except as provided in Section 7(b) of this Agreement, unless
otherwise determined by the unanimous consent of the members of the Board of
Directors the purchase price per share of Stock which the Company elects to
purchase pursuant to this Agreement shall be equal to the exercise price of the
most recent award of an option under the Company's Equity Incentive Plan,
provided that the exercise price of such option was not less than the fair
market value of the Stock at the time of grant and was granted not more than
three months prior to the event giving rise to the Stockholder's right to
purchase such Stock. In the event no such option was awarded within such three
month period, then the purchase price per share of Stock shall be the fair
market value of such Stock as determined by unanimous consent of the Board of
Directors.
(b) Notwithstanding any contrary provisions hereof, in the event of a
proposed sale of Stock of the Stockholder under Section 1, or of the
Stockholder's transferee under Section 5, to a third party in a bona fide
transaction for fair value payable in cash or the equivalent currently or in
future installments, the purchase price of said Stock shall be the value offered
by such third party and the Company shall have the right of first refusal,
exercisable within the period specified in Section 1, to purchase said Stock at
such price upon terms equivalent to those offered by such third party. Such
right of first refusal shall not apply to a proposed assignment, transfer,
exchange, pledge or any other sale or disposition of Stock under Section 1 which
does not constitute a sale as described above, and the provisions of
subparagraphs (a) and (b) of this Section 7 shall apply to such other
transactions.
SECTION 8. Tenders. All shares of Stock which the Company has elected to
purchase hereunder shall be tendered to the Company, or to one or more
substitute purchasers designated by it, at the principal office of the Company
at a reasonable date and time specified by it (in any event within 30 days after
the Company's election), by delivery of certificates representing such shares,
endorsed in blank and in proper form for transfer against payment of the
purchase price in cash or by certified or bank checks, except as provided in
Section 9.
SECTION 9. Payment by Installments. If no person has been designated as a
substitute purchaser by the Company pursuant to Section 8 and if the total
purchase price of a single purchase of Stock by the Company exceeds 10% of its
working capital as of any date within 60 days prior to the date of tender of
said Stock, the Company may elect to make payment in such installments as it
deems appropriate over a period not exceeding 36 months from the date of tender.
Unpaid installments shall bear interest at the lowest "applicable Federal rate"
established under Section 1274(d)(2) (or its successor provision) of the
Internal Revenue Code which is in effect during the three month period ending
with the month in which the Company elects to purchase, and shall be evidenced
by a promissory note of the Company. If the Company elects to make installment
payments, the seller of the purchased Stock shall be entitled to receive and
hold an endorsed certificate for an equivalent number of treasury shares as
collateral security for
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payment of the balance of the purchase price and shall promptly re-deliver said
certificate to the Company when full payment of the purchase price has been
made. Unless and until the Company defaults in payment or performance of any of
its obligations under this Section 9 or said promissory note, the seller shall
have none of the rights of a stockholder of the Company, but after such default
he shall have all voting, dividend and other rights of a record holder of the
purchased Stock and of a defaulted secured creditor under the Uniform Commercial
Code or other applicable law. Notwithstanding the foregoing, the net proceeds of
any insurance policy on the life of a deceased Stockholder payable to and
collected by the Company shall forthwith be applied to payment of the Company's
obligations hereunder to the representatives of the deceased Stockholder.
SECTION 10. No Transfer of Unvested Shares. The Stockholder acknowledges
and agrees that his interests in any shares of Restricted Stock awarded under
the Equity Incentive Plan are subject to forfeiture and repurchase unless and
until all conditions to the vesting of such shares have been satisfied under the
Equity Incentive Plan and the related Restricted Stock Award, and that such
shares may not be transferred in any manner unless and until all conditions to
such vesting have been fulfilled and the restrictions shall have lapsed.
Notwithstanding any provision hereof to the contrary, in the event the
Stockholder's interests in such shares of Restricted Stock are subject to
forfeiture due to the termination of the Stockholder's employment with the
Company, the Company will nonetheless repurchase such shares at the purchase
price set forth in Section 7, against delivery of all certificates representing
such shares, duly endorsed for transfer in accordance with this Agreement. The
provisions of this Section 10 shall govern in the event of any inconsistency
with any other provision of this Agreement, the Equity Incentive Plan or the
related Restricted Stock Award, as applicable.
SECTION 11. Waiver and Amendment. From time to time the Company may waive
its rights hereunder either generally or with respect to one or more specific
transfers which have been proposed, attempted or made. All action to be taken by
the Company hereunder (including any amendment of this Agreement) shall be taken
only with the consent of the holders of a majority of the issued and outstanding
shares of Common Stock. Any Stock which the Company has elected to purchase
hereunder may be disposed of by the Company (acting through its Board of
Directors) in such manner as it deems appropriate, with or without further
restrictions on the transfer thereof, subject to any applicable legal
requirements or contractual agreements.
SECTION 12. Action by Stockholders. Unless otherwise expressly provided to
the contrary herein, in any case where the holders of issued and outstanding
shares of Common Stock are to consent or otherwise act under this Agreement,
such action may be taken by written consent of such Stockholders or by a meeting
of the Stockholders called in the manner provided for a meeting of stockholders
in the by-laws of the Company.
SECTION 13. Termination. This Agreement shall terminate upon the first to
occur of the following events:
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(a) The consummation of a Transaction (as such term is defined in the
Equity Incentive Plan);
(b) The closing of a registered underwritten public offering of the
Company's equity securities; or
(c) The unanimous consent of the Board of Directors and the holders of
a majority of the issued and outstanding shares of Common Stock.
SECTION 14. Legend on Certificates. Each certificate of Stock subject to
this Agreement shall bear on its face the following legend:
"The shares represented by this certificate are subject to
restrictions on transfer, a copy of which will be furnished by the
Company to the holder of this certificate upon written request and
without charge."
SECTION 15. Parties. This Agreement shall be binding upon the parties
hereto and their heirs, representatives, successors and assigns. The Company may
assign its rights hereunder either generally or from time to time to one or more
substitute purchasers of Stock which it has the right to purchase, except as
provided in Section 9. Transferees, successors or additional holders of Stock
may become parties to this Agreement by endorsing a schedule attached hereto or
by executing a counterpart of this Agreement. An original copy of this Agreement
and of any counterpart subsequently executed shall be kept by the Secretary of
the Company.
SECTION 16. Notices. All notices and elections hereunder shall be in
writing and shall be delivered, transmitted by facsimile or sent by certified or
registered mail, postage prepaid, to the parties at their addresses set forth
above or to any subsequent address of which the Company has notified the
Stockholders or any Stockholder has notified the Company. Such notices or
elections shall be effective upon receipt or three days after the date mailed,
whichever is sooner.
SECTION 17. Governing Law. This Agreement shall be construed under and
governed by the laws of the State of Delaware, applied without regard to its
conflicts of laws principles.
[Remainder of page left blank intentionally]
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EXECUTED as an instrument under seal as of the date first set forth above.
PICOR CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER:
Name
-----------------------------------
The undersigned holder of shares of Common Stock of the Company hereby
consents to the execution and delivery of this Agreement by the Company.
VICOR CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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