EXHIBIT 10.4
IPG PHOTONICS CORPORATION
NON-EMPLOYEE DIRECTORS STOCK PLAN
(Effective June 21, 2006)
IPG Photonics Corporation has established this IPG Photonics Corporation
Non-Employee Directors Stock Plan to attract and retain Non-Employee Directors
of IPG Photonics Corporation.
1. DEFINITIONS
The following terms shall have the following meanings unless the context
indicates otherwise:
1.1. "Award" shall mean a Stock Option, a SAR, a Stock Award, a Stock Unit, or a
Cash Award.
1.2. "Award Agreement" shall mean a written agreement between the Company and a
Participant that establishes the terms, conditions, restrictions and/or
limitations applicable to an Award, in addition to those established by the
Plan and by the Board.
1.3. "Board" shall mean the Board of Directors of the Company.
1.4. "Cause" shall have the meaning set forth in any written agreement between
the Participant and the Company. If there is no written agreement between
the Participant and the Company, or if such agreement does not define
"Cause," then "Cause" shall have the meaning specified in the Award
Agreement; provided, that if the Award Agreement does not so specify,
"Cause" shall mean, as determined by the Board in its sole discretion, the
Participant: (i) engages in conduct that cause financial or reputational
injury to the Company; (ii) engages in any act of dishonesty or misconduct
that results in damage to the Company, or its business or reputation or
that the Board determines to adversely affect the value, reliability or
performance of the Participant to the Company; (iii) refuses or fails to
substantially comply with the human resources rules, policies, directions
and/or restrictions relating to harassment and/or discrimination, or with
compliance or risk management rules, policies, directions and/or
restrictions of the Company; or (iv) fails to cooperate with the Company in
any internal investigation or administrative, regulatory or judicial
proceeding. If any part of the definition of Cause set forth in clauses (i)
through (iv) above is deemed applicable to a Participant, this shall not
preclude or prevent the reliance by the Company or the Board on any other
part of the preceding sentence that also may be applicable. An act or
omission is "willful" for this purpose if it was knowingly done, or
knowingly omitted to be done, by the Participant not in good faith and
without reasonable belief that the act or omission was in the best interest
of the Company.
1.5. "Change in Control of the Company" shall mean the occurrence of any one or
more of the following:
(a) Any "person" (as such term is defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act), including a
"group" (as defined in Section 13(d)(3) of the Exchange Act), other
than (i) the Company, (ii) any wholly-owned subsidiary of the Company,
or (iii) any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliate, becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company having fifty percent (50%) or
more of the combined voting power of the then-outstanding securities
of the Company that may be cast for the election of directors of the
Company (other than as a result of an issuance of securities initiated
by the Company in the ordinary course of business) (the "Company
Voting Securities"); provided, however, that the event described in
this paragraph (a) shall not be deemed to be a Change in Control by
virtue of any underwriter temporarily holding securities pursuant to
an offering of such securities;
(b) During any period of two consecutive years, individuals who at the
beginning of any such period constitute the Board (the "Incumbent
Directors") cease for any reason to constitute at least a majority of
the Board, unless the election, or the nomination for election by the
stockholders of the Company, of each new director of the Company
during such period was approved by a vote of at least two-thirds of
the Incumbent Directors then still in office;
(c) As the result of, or in connection with, any cash tender or exchange
offer, merger or other business combination, sale of all or
substantially all of the assets or contested election, or any
combination of the foregoing transactions, less than a majority of the
combined voting power of the then-outstanding securities of the
Company or any successor corporation or entity entitled to vote
generally in the election of the directors of the Company or such
other corporation or entity after such transaction is held in the
aggregate by the holders of the securities of the Company entitled to
vote generally in the election of directors of the Company immediately
prior to such transaction; or
(d) The shareholders of the Company approve a plan of complete liquidation
of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any person acquires beneficial ownership of more than
fifty percent (50%) of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided, however, that if
after such acquisition by the Company such person becomes the beneficial
owner of additional Company Voting Securities that increases the percentage
of outstanding Company Voting Securities beneficially owned by such person,
a Change in Control transaction shall then occur.
Notwithstanding the foregoing, to the extent necessary to avoid subjecting
Participants to interest and additional tax under Section 409A of the Code,
no "Change in Control" will be deemed to occur unless and until paragraph
(a), (b), (c) or (d), above, and the preceding paragraph are satisfied and
Section 409A(a)(2)(A)(v) of the Code is satisfied.
1.6. "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
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1.7. "Committee" shall mean (i) the Board or (ii) a committee or subcommittee of
the Board appointed by the Board from among its members. The Committee may
be the Board's Compensation Committee. Unless the Board determines
otherwise, the Committee shall be comprised solely of not less than two
members who each shall qualify as a "Non-Employee Director" within the
meaning of Rule 16b-3(b)(3) (or any successor rule) under the Exchange Act.
1.8. "Common Stock" shall mean the voting, common stock, $0.0001 par value per
share, of the Company.
1.9. "Company" shall mean IPG Photonics Corporation, a Delaware corporation.
1.10. "Disability" means the total and permanent disability of a Participant
(incurred while in the active service of the Company) based on proof
satisfactory to the Board. Total and permanent disability shall be as
defined in the Company's long-term disability plan, if any, or as otherwise
provided by the Company.
Notwithstanding the foregoing, to the extent necessary to avoid subjecting
an individual to interest and additional tax under Section 409A of the
Code, such individual shall not be deemed to have a Disability unless and
until Section 409A(a)(2)(C) is satisfied.
1.11. "Dividend Equivalent Right" shall mean the right to receive an amount
equal to the amount of any dividend paid with respect to a share of Common
Stock multiplied by the number of shares of Common Stock underlying or with
respect to a Stock Option, a SAR, or a Stock Unit, and which shall be
payable in cash, in Common Stock, or in the form of Stock Units, or a
combination of any or all of the foregoing.
1.12. "Effective Date" shall mean the date on which the Plan is adopted by the
Board.
1.13. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, including applicable regulations thereunder.
1.14. "Fair Market Value of the Common Stock" shall mean:
(a) if the Common Stock is readily tradeable on a national securities
exchange or other market system, the closing price of the Common Stock
on the date of calculation (or on the last preceding trading date if
Common Stock was not traded on such date), or
(b) if the Common Stock is not readily tradeable on a national securities
exchange or other market system, the value as determined in good faith
by the Board.
1.15. "Non-Employee Director" shall mean a member of the Board who is not an
employee of the Company or any of its affiliates.
1.16. "Nonqualified Stock Option" shall mean a Stock Option that does not
qualify as an "incentive stock option" as such term is used in Code Section
422.
1.17. "Nonvoting Stock" shall mean the capital stock of any class or classes
having no voting power to elect the directors of a corporation.
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1.18. "Participant" shall mean any Non-Employee Director to whom an Award has
been granted by the Board under the Plan.
1.19. "Plan" shall mean the IPG Photonics Corporation Non-Employee Directors
Stock Plan, as amended.
1.20. "Recapitalization" shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Company's outstanding shares of capital stock as a class
without the Company's receipt of consideration.
1.21. "Reorganization" shall mean any of the following: (a) a merger or
consolidation in which the Company is not the surviving entity; (b) a sale,
transfer or other disposition of all or substantially all of the Company's
assets; (c) a reverse merger in which the Company is the surviving entity
but in which the Company's outstanding voting securities are transferred in
whole or in part to a person or persons different from the persons holding
those securities immediately prior to the merger; or (d) any transaction
effected primarily to change the state in which the Company is incorporated
or to create a holding company structure.
1.22. "Retirement" means termination of Service (other than removal for Cause,
death or Disability) after completion of eight or more years of Service as
a director, only if the Non-Employee Director shall provide Services until
the end of a full one-year term (which for this purpose is until the next
annual meeting of shareholders) or, in the event of a classified board of
directors in which a class of directors is elected by shareholders and
where a retiring director may be serving a multi-year term, until the end
of a full year of such term (which for this purpose is until the next
annual meeting of shareholders).
1.23. "SAR" shall mean a grant by the Board to a Participant of a stock
appreciation right as described in Section 7 below.
1.24. "Service" shall mean the provision of services to the Company as a member
of the Board of Directors of the Company.
1.25. "Stock" shall mean the shares of capital stock of the Company.
1.26. "Stock Award" shall mean a grant by the Board to a Participant of an Award
of Common Stock as described in Section 8.1 below.
1.27. "Stock Option" shall mean a grant by the Board to a Participant of an
option to purchase Common Stock as described in Section 6 below.
1.28. "Stock Unit" shall mean a grant by the Board to a Participant of an Award
as described in Section 8.2 below.
1.29. "Treasury Regulations" shall mean the regulations promulgated under the
Code by the United States Department of the Treasury, as amended from time
to time.
1.30. "Vest" shall mean:
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(a) with respect to Stock Options and SARs, when the Stock Option or SAR
(or a portion of such Stock Option or SAR) first becomes exercisable
and remains exercisable subject to the terms and conditions of such
Stock Option or SAR; or
(b) with respect to Awards other than Stock Options and SARs, when the
Participant has:
(i) an unrestricted right, title and interest to receive the
compensation (whether payable in Common Stock, cash or a
combination of both) attributable to an Award (or a portion of
such Award) or to otherwise enjoy the benefits underlying such
Award; and
(ii) a right to transfer an Award subject to no Company-imposed
restrictions or limitations other than restrictions and/or
limitations imposed by Section 10 below.
1.31. "Vesting Date" shall mean the date or dates on which an Award Vests.
1.32. "Voting Stock" shall mean the capital stock of any class or classes having
general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
2. TERM OF PLAN. The Plan shall be effective as of the Effective Date. The
Plan shall terminate on the 10th anniversary of the Effective Date, unless
sooner terminated by the Board under Section 13.1 below.
3. ELIGIBILITY AND PARTICIPATION
3.1. ELIGIBILITY. All Non-Employee Directors shall be eligible to participate in
the Plan and to receive Awards.
3.2. PARTICIPATION. Participants shall consist of such Non-Employee Directors as
the Board in its sole discretion designates to receive Awards under the
Plan.
4. ADMINISTRATION
4.1. RESPONSIBILITY. The Board shall have the responsibility, in its sole
discretion, to control, operate, manage and administer the Plan in
accordance with its terms.
4.2. AWARD AGREEMENT. Each Award granted under the Plan shall be evidenced by an
Award Agreement which shall be signed by the Company and the Participant;
provided, however, that in the event of any conflict between a provision of
the Plan and any provision of an Award Agreement, the provision of the Plan
shall prevail.
4.3. AUTHORITY OF THE BOARD. The Board shall have all the discretionary
authority that may be necessary or desirable to enable it to discharge its
responsibilities with respect to the Plan.
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4.4. DELEGATION OF AUTHORITY. The Board may delegate to the Committee all or any
part of its authority under the Plan. To the extent of any such delegation,
references in the Plan to the Board will be deemed to be references to the
Committee.
4.5. DETERMINATIONS AND INTERPRETATIONS BY THE BOARD. All determinations and
interpretations made by the Board shall be binding and conclusive on all
Participants and their heirs, successors, and legal representatives.
4.6. LIABILITY. No member of the Board, no member of the Committee and no
employee of the Company shall be liable for (a) any act or failure to act
hereunder, except in circumstances involving his or her gross negligence or
willful misconduct, or (b) any act or failure to act hereunder by any other
member or employee or by any agent to whom duties in connection with the
administration of the Plan have been delegated.
4.7. INDEMNIFICATION. Each person who is or has been a member of the Committee
or the Board, and any individual or individuals to whom the Board has
delegated authority under this Section 4, will be indemnified and held
harmless by the Company from and against any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or as a result of any claim, action, suit or proceeding to
which he or she may be a party or in which he or she may be involved by
reason of any action taken, or failure to act with respect to their duties
on behalf of, under the Plan, except in circumstances involving such
person's gross negligence or willful misconduct. Each such person will also
be indemnified and held harmless by the Company from and against any and
all amounts paid by him or her in a settlement approved by the Company, or
paid by him or her in satisfaction of any judgment, of or in a claim,
action, suit or proceeding against him or her and described in the previous
sentence, so long as he or she gives the Company an opportunity, at its own
expense, to handle and defend the claim, action, suit or proceeding before
he or she undertakes to handle and defend it. The foregoing right of
indemnification will not be exclusive of or limit any other rights of
indemnification to which a person who is or has been a member of the
Committee or the Board may be entitled under the Articles of Incorporation
or By-Laws of the Company, as a matter of law, agreement or otherwise,
including but not limited to any indemnification agreement between an
indemnified person hereunder and the Company as it may be amended from time
to time, or any power that the Company may have to indemnify him or her or
hold him or her harmless. Any person entitled to indemnification under this
Section shall have the right to elect to be indemnified under this Section
or any other arrangement or agreement pursuant to which such person is
entitled to indemnification from the Company, or any combination thereof.
5. SHARES SUBJECT TO PLAN
5.1. AVAILABLE SHARES. At any given time, the maximum number of shares of Common
Stock that may be issued or transferred to Participants under the Plan will
be 0.75% of the number of Company shares outstanding (on a fully-diluted
basis) at the end of the plan year preceding the then-current plan year, or
on January 1, 2006, whichever is greater, subject to adjustments made in
accordance with Section 5.2 below. Notwithstanding the foregoing, the
maximum number of shares of Common Stock that may be issued or transferred
to Participants under the Plan shall be 166,666 shares. Shares of Common
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Stock issued or transferred under the Plan may be either authorized or
unissued shares, shares of issued stock held in the Company's treasury, or
a combination of both, at the discretion of the Company. Any shares of
Common Stock underlying an Award which terminate by reason of expiration,
forfeiture, cancellation or otherwise without the issuance of such shares
shall again be available under the Plan. Awards that are payable only in
cash are not subject to this Section 5.1.
5.2. ADJUSTMENT TO SHARES. If there is any change in the Common Stock of the
Company, through merger, consolidation, Reorganization, Recapitalization,
stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, dividend in kind or
other like change in capital structure or distribution (other than normal
cash dividends) to stockholders of the Company, an adjustment shall be made
to each outstanding Award so that each such Award shall thereafter be with
respect to or exercisable for such securities, cash and/or other property
as would have been received in respect of the Common Stock subject to such
Award had such Award been paid, distributed or exercised in full
immediately prior to such change or distribution. Such adjustment shall be
made successively each time any such change or distribution shall occur. In
addition, in the event of any such change or distribution, in order to
prevent dilution or enlargement of Participants' rights under the Plan, the
Board shall have the authority to adjust, in an equitable manner, the
number and kind of shares that may be issued under the Plan, the number and
kind of shares subject to outstanding Awards, the exercise price applicable
to outstanding Stock Options, and the Fair Market Value of the Common Stock
and other value determinations applicable to outstanding Awards.
Appropriate adjustments may also be made by the Board in the terms of any
Awards granted under the Plan to reflect such changes or distributions and
to modify any other terms of outstanding Awards on an equitable basis,
including modifications of performance goals and changes in the length of
performance periods. In addition, the Board is authorized to make
adjustments to the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events affecting the
Company or the financial statements of the Company, or in response to
changes in applicable laws, regulations, or accounting principles.
6. STOCK OPTIONS
6.1. IN GENERAL. The Board may, in its sole discretion, grant Stock Options to
Non-Employee Directors on or after the Effective Date. The Stock Options so
granted shall be Nonqualified Stock Options. The Board shall, in its sole
discretion, determine the Non-Employee Directors who will receive Stock
Options and the number of shares of Common Stock underlying each Stock
Option. Each Stock Option shall be subject to such terms and conditions
consistent with the Plan as the Board may impose from time to time. In
addition, each Stock Option shall be subject to the terms and conditions
set forth in Sections 6.2 through 6.6 below.
6.2. EXERCISE PRICE. The Board shall specify the exercise price of each Stock
Option in the Award Agreement which exercise price shall not be less than
100 percent of the Fair Market Value of the Common Stock on the date of
grant.
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6.3. TERM OF STOCK OPTION. The Board shall specify the term of each Stock Option
in the Award Agreement; provided, however, that no Stock Option shall be
exercisable after the 10th anniversary of the date of grant of such Stock
Option. Each Stock Option shall terminate at such earlier times and upon
such conditions or circumstances as the Board shall, in its sole
discretion, set forth in the Award Agreement on the date of grant.
6.4. VESTING DATE. The Board shall specify in the Award Agreement the Vesting
Date for each Stock Option. The Board may grant Stock Options that are
Vested, either in whole or in part, on the date of grant. If the Board
fails to specify a Vesting Date in the Award Agreement, 25 percent of such
Stock Option shall become exercisable on each of the first four one-year
anniversaries of the date of grant and shall remain exercisable following
such anniversary date until the Stock Option expires in accordance with its
terms under the Award Agreement or under the terms of the Plan. The Vesting
of a Stock Option may be subject to such other terms and conditions as
shall be determined by the Board.
6.5. EXERCISE OF STOCK OPTIONS. The Stock Option exercise price may be paid in
cash or, in the sole discretion of the Board, by delivery to the Company of
shares of Common Stock then owned by the Participant, or by the Company's
withholding a portion of the shares of Common Stock for which the Stock
Option is exercisable, or by a combination of these methods. If the Common
Stock is readily tradeable on a national securities exchange or other
market system, payment may also be made by delivering a properly executed
exercise notice to the Company and delivering a copy of irrevocable
instructions to a broker directing the broker to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price. To
facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms. The Board may
prescribe any other method of paying the exercise price that it determines
to be consistent with applicable law and the purpose of the Plan,
including, without limitation, in lieu of the delivery to the Company of
shares of Common Stock then owned by the Participant, providing the Company
with a notarized statement attesting to the number of shares owned by the
Participant, where, upon verification by the Company, the Company would
issue to the Participant only the number of incremental shares to which the
Participant is entitled upon exercise of the Stock Option. In determining
which methods a Participant may utilize to pay the exercise price, the
Board may consider such factors as it determines are appropriate.
6.6. ADDITIONAL TERMS AND CONDITIONS. The Board may, by way of the Award
Agreements or otherwise, establish such other terms, conditions,
restrictions and/or limitations, if any, of any Stock Option, provided they
are not inconsistent with the Plan.
7. SARS
7.1. IN GENERAL. The Board may, in its sole discretion, grant SARs to
Non-Employee Directors. A SAR is a right to receive a payment in cash,
Common Stock or a combination of both, in an amount equal to the excess of
(x) the Fair Market Value of the Common Stock, or other specified
valuation, of a specified number of shares of Common Stock on the date the
SAR is exercised over (y) the Fair Market Value of the Common Stock, or
other specified valuation (which shall be no less than the Fair Market
Value of the Common Stock), of such shares of Common Stock on the date the
SAR is granted, all
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as determined by the Board; provided, however, that if a SAR is granted
retroactively in tandem with or in substitution for a Stock Option, the
designated Fair Market Value of the Common Stock in the Award Agreement may
be the Fair Market Value of the Common Stock on the date such Stock Option
was granted. Each SAR shall be subject to such terms and conditions,
including, but not limited to, a provision that automatically converts a
SAR into a Stock Option on a conversion date specified at the time of
grant, as the Board shall impose from time to time in its sole discretion
and subject to the terms of the Plan.
8. STOCK AWARDS AND STOCK UNITS
8.1. STOCK AWARDS. The Board may, in its sole discretion, grant Stock Awards to
Non-Employee Directors as additional compensation or in lieu of other
compensation for services to the Company. A Stock Award shall consist of
shares of Common Stock which shall be subject to such terms and conditions
as the Board in its sole discretion determines appropriate including,
without limitation, restrictions on the sale or other disposition of such
shares and the Vesting Date with respect to such shares. The Board may
require the Participant to deliver a duly signed stock power, endorsed in
blank, relating to the Common Stock covered by such Stock Award and/or that
the stock certificates evidencing such shares be held in custody or bear
restrictive legends until the restrictions thereon shall have lapsed. With
respect to shares of Common Stock subject to a Stock Award, the Participant
shall have all of the rights of a holder of shares of Common Stock,
including the right to receive dividends and to vote the shares, unless the
Board determines otherwise on the date of grant.
8.2. STOCK UNITS. The Board may, in its sole discretion, grant Stock Units to
Non-Employee Directors as additional compensation or in lieu of other
compensation for services to the Company. A Stock Unit is a hypothetical
share of Common Stock represented by a notional account established and
maintained (or caused to be established or maintained) by the Company for
such Participant who receives a grant of Stock Units. Stock Units shall be
subject to such terms and conditions as the Board, in its sole discretion,
determines appropriate including, without limitation, determinations of the
Vesting Date with respect to such Stock Units and the criteria for the
Vesting of such Stock Units. Subject to Section 8.3, a Stock Unit granted
by the Board shall provide for payment in cash or shares of Common Stock at
such time or times as the Award Agreement shall specify. The Board shall
determine whether a Participant who has been granted a Stock Unit shall
also be entitled to a Dividend Equivalent Right.
8.3. PAYOUT OF STOCK UNITS. Subject to a Participant's election to defer in
accordance with Section 13.3 below, upon the Vesting of a Stock Unit, the
shares of Common Stock representing the Stock Unit shall be distributed to
the Participant, unless the Board, in its sole discretion, provides for the
payment of the Stock Unit in cash (or partly in cash and partly in shares
of Common Stock) equal to the value of the shares of Common Stock which
would otherwise be distributed to the Participant.
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9. CHANGE IN CONTROL
9.1. ACCELERATED VESTING. Notwithstanding any other provision of this Plan to
the contrary, if there is a Change in Control of the Company, all
outstanding Awards shall accelerate, including, without limitation,
acceleration of the Vesting Date and/or payout of such Awards.
9.2. CASHOUT. The Board, in its sole discretion, may determine that, upon the
occurrence of a Change in Control of the Company, all or a portion of
certain outstanding Awards shall terminate within a specified number of
days after notice to the holders, and each such holder shall receive an
amount equal to the value of such Award on the date of the Change in
Control, and with respect to each share of Common Stock subject to a Stock
Option or SAR, an amount equal to the excess of the Fair Market Value of
such shares of Common Stock immediately prior to the occurrence of such
Change in Control of the Company over the exercise price per share of such
Stock Option or SAR. Such amount shall be payable in cash, in one or more
kinds of property (including the property, if any, payable in the
transaction) or in a combination thereof, as the Board, in its sole
discretion, shall determine.
9.3. ASSUMPTION OR SUBSTITUTION OF AWARDS. Notwithstanding anything contained in
the Plan to the contrary, the Board may, in its sole discretion, provide
that an Award may be assumed by any entity which acquires control of the
Company or may be substituted by a similar award under such entity's
compensation plans.
10. TERMINATION OF SERVICE
10.1. TERMINATION OF SERVICE DUE TO DEATH, DISABILITY OR RETIREMENT. Subject to
any written agreement between the Company and a Participant, if a
Participant's Service is terminated due to death, disability or Retirement:
(a) all non-Vested portions of Awards held by the Participant on the date
of the Participant's death or the date of the termination of his or
her Service for disability or Retirement, as the case may be, shall
immediately become vested; and
(b) all Vested portions of Awards held by the Participant on the date of
the Participant's death or the date of the termination of his or her
Service for disability or Retirement, as the case may be, shall remain
exercisable until the earlier of:
(i) the end of the 12-month period following the date of the
Participant's death or the date of the termination of his or her
Service for disability or Retirement, as the case may be, or
(ii) the date the Award would otherwise expire.
10.2. TERMINATION OF SERVICE FOR CAUSE. Subject to any written agreement between
the Company and a Participant, if a Participant's Service is terminated by
the Company because of a removal for Cause, all Awards held by the
Participant on the date of the termination of Service, whether Vested or
non-Vested, shall immediately be forfeited by the Participant as of such
date. A Participant's Service shall be deemed to have removed
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for Cause if, after the Participant's Service has terminated, facts and
circumstances are discovered that would have justified a removal for Cause.
10.3. OTHER TERMINATIONS OF SERVICE. Subject to any written agreement between
the Company and a Participant, if a Participant's Service is terminated for
any reason other than for Cause, death, disability or Retirement:
(a) all non-Vested portions of Awards held by the Participant on the date
of the termination of his or her Service shall immediately be
forfeited by such Participant as of such date; and
(b) all Vested portions of Awards held by the Participant on the date of
the termination of his or her Service shall remain exercisable until
the earlier of (i) the end of the 90-day period following the date of
the termination of the Participant's Service or (ii) the date the
Award would otherwise expire.
11. TAXES
11.1. WITHHOLDING TAXES. The Company will have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable
event arising under the Plan.
11.2. USE OF COMMON STOCK TO SATISFY WITHHOLDING OBLIGATION. With respect to
withholding required upon the exercise of Stock Options or SARs, upon the
lapse of restrictions on a Stock Award, or upon any other taxable event
arising as a result of Awards granted hereunder, the Company may satisfy
the minimum withholding requirement for supplemental wages, in whole or in
part, by withholding shares of Stock having a Fair Market Value (determined
on the date the Participant recognizes taxable income on the Award) equal
to the minimum withholding tax required to be collected on the transaction.
The Participant may elect, subject to the approval of the Board, to deliver
the necessary funds to satisfy the withholding obligation to the Company,
in which case there will be no reduction in the shares of Common Stock
otherwise distributable to the Participant.
12. AMENDMENT AND TERMINATION
12.1. TERMINATION OF PLAN. The Board may suspend or terminate the Plan at any
time with or without prior notice; provided, however, that no action
authorized by this Section 12.1 shall reduce the amount of any outstanding
Award or change the terms and conditions thereof without the Participants'
consent.
12.2. AMENDMENT OF PLAN. The Board may amend the Plan at any time with or
without prior notice; provided, however, that no action authorized by this
Section 12.2 shall reduce the amount of any outstanding Award or change the
terms and conditions thereof without the Participants' consent. No
amendment of the Plan shall, without the approval of the stockholders of
the Company:
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(a) increase the total number of shares which may be issued under the Plan
by amending the formula and/or limit contained in Section 5.1 hereof;
or
(b) modify the requirements as to eligibility for Awards under the Plan.
In addition, the Plan shall not be amended without the approval of such
amendment by the Company's stockholders if such amendment is required under
the rules and regulations of the stock exchange or national market system
on which the Common Stock is listed.
12.3. AMENDMENT OR CANCELLATION OF AWARD AGREEMENTS. The Board may amend or
modify any Award Agreement at any time by mutual agreement between the
Company and the Participant or such other persons as may then have an
interest therein. In addition, by mutual agreement between the Company and
a Participant or such other persons as may then have an interest therein,
Awards may be granted to a Non-Employee Director in substitution and
exchange for, and in cancellation of, any Awards previously granted to such
Non-Employee Director under the Plan, or any award previously granted to
such Non-Employee Director under any other present or future plan of the
Company or any present or future plan of an entity which (i) is purchased
by the Company, (ii) purchases the Company, or (iii) merges into or with
the Company.
13. MISCELLANEOUS
13.1. OTHER PROVISIONS. Awards granted under the Plan may also be subject to
such other provisions (whether or not applicable to an Award granted to any
other Participant) as the Company determines on the date of grant to be
appropriate, including, without limitation, for the forfeiture of, or
restrictions on resale or other disposition of, Common Stock acquired under
any Stock Option, for the acceleration of Vesting of Awards in the event of
a Change in Control of the Company, for the payment of the value of Awards
to Participants in the event of a Change in Control of the Company, or to
comply with federal and state securities laws.
13.2. TRANSFERABILITY. Each Award granted under the Plan to a Participant shall
not be transferable otherwise than by will or the laws of descent and
distribution, and Stock Options and SARs shall be exercisable, during the
Participant's lifetime, only by the Participant. In the event of the death
of a Participant, each Stock Option or SAR theretofore granted to him or
her shall be exercisable during such period after his or her death as the
Board shall, in its sole discretion, set forth in the Award Agreement on
the date of grant and then only by the executor or administrator of the
estate of the deceased Participant or the person or persons to whom the
deceased Participant's rights under the Stock Option or SAR shall pass by
will or the laws of descent and distribution. Notwithstanding the
foregoing, the Board, in its sole discretion, may permit the
transferability of a Stock Option by a Participant solely to members of the
Participant's immediate family or trusts or family partnerships or other
similar entities for the benefit of such persons, and subject to such
terms, conditions, restrictions and/or limitations, if any, as the Board
may establish and include in the Award Agreement.
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13.3. ELECTION TO DEFER COMPENSATION ATTRIBUTABLE TO AWARD. The Board may, in
its sole discretion and subject to Code Section 409A, allow a Participant
to elect to defer the receipt of any compensation attributable to an Award
under guidelines and procedures to be established by the Board after taking
into account the advice of the Company's tax counsel.
13.4. LISTING OF SHARES AND RELATED MATTERS. If at any time the Board shall
determine that the listing, registration or qualification of the shares of
Common Stock subject to an Award on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of, or in connection
with, the granting of an Award or the issuance of shares of Common Stock
thereunder, such Award may not be exercised, distributed or paid out, as
the case may be, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Board.
13.5. NO RIGHT TO CONTINUED SERVICE OR TO GRANTS. A Participant's rights, if
any, to continue to serve the Company as a director shall not be enlarged
or otherwise affected by his or her designation as a Participant under the
Plan. The adoption of the Plan shall not be deemed to give any Non-Employee
Director or any other individual any right to be selected as a Participant
or to be granted an Award.
13.6. GOVERNING LAW. The Plan, all Awards granted hereunder, and all actions
taken in connection herewith shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws, except as superseded by applicable federal
law. Participants and the Company each submit and consent to the
jurisdiction of the courts in the Commonwealth of Massachusetts, County of
Worcester, including the Federal Courts located therein, should Federal
jurisdiction requirements exist in any action brought to enforce (or
otherwise relating to) this Plan or an Award Agreement.
13.7. OTHER BENEFITS. No Award granted under the Plan shall be considered
compensation for purposes of computing benefits under any retirement plan
of the Company nor affect any benefits or compensation under any other
benefit or compensation plan of the Company, now or subsequently in effect.
13.8. NO FRACTIONAL SHARES. No fractional shares of Common Stock shall be issued
or delivered pursuant to the Plan or any Award. The Board shall determine
whether cash, Common Stock, Stock Options, or other property shall be
issued or paid in lieu of fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.
13.9. COMPLIANCE WITH CODE SECTION 409A. Any provision of the Plan that becomes
subject to Code Section 409A, will be interpreted and applied consistent
with that Section and the applicable Treasury Regulations.
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