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Exhibit 10.6
FERROFLUIDICS CORPORATION
AMENDED AND RESTATED 1994 RESTRICTED STOCK PLAN
SECTION 1. General Purpose of the Plan; Definitions.
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The name of the plan is the Ferrofluidics Corporation Amended and Restated
1994 Restricted Stock Plan (the "Plan"). The purpose of the Plan is to encourage
and enable the officers and employees of Ferrofluidics 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" means the Board or the Committee.
"Award" means an award granted pursuant to Section 5.
"Board" means the Board of Directors of the Company.
"Cause" means and shall be limited to a vote of the Board resolving
that the participant should be dismissed as a result of (i) any material
breach by the participant of any agreement to which the participant and the
Company are parties, (ii) any act (other than retirement) or omission to
act by the participant which may have a material and adverse effect on the
business of the Company or any Subsidiary or on the participant's ability
to perform services for the Company or any Subsidiary, including, without
limitation, the commission of any crime (other than ordinary traffic
violations), or (iii) any material misconduct or neglect of duties by the
participant in connection with the business or affairs of the Company or
any Subsidiary.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means a committee of two or more Non-Employee Directors
appointed by the Board to administer the Plan.
"Disability" means disability as set forth in Section 22(e)(3) of the
Code.
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"Effective Date" means the date on which the Plan is approved by the
Board or, if approved by the shareholders, the date of such shareholder
approval, as set forth in Section 12.
"Fair Market Value" on any given date means the last reported sale
price at which Stock is traded on such date or, if no Stock is traded on
such date, the most recent date on which Stock was traded, as reflected on
the principal stock exchange or, if applicable, any other national stock
exchange on which the Stock is traded or admitted to trading.
"Non-Employee Director" means a member of the Board who is a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3)(i)
promulgated under the Act, or any successor definition under said rule.
"Stock" means the Common Stock, $.004 par value 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% or more of the total combined voting power of all
classes of stock or other interests in one of the other corporations or
entities in the chain.
SECTION 2. Administration of Plan; Authority to Select Participants and
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Determine Awards.
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(a) 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:
(i) to select the officers and other employees of the Company and
its Subsidiaries 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 Awards granted to any one or more participants;
(iii) to determine the number of shares to be covered by any Award;
(iv) to determine and modify 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;
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(v) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to
an Award shall be deferred either automatically or at the
election of the participant and whether and to what extent the
Company shall pay or credit amounts equal to interest (at rates
determined by the Administrator) or dividends or deemed
dividends on such deferrals; and
(vi) 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.
All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan participants.
(b) 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 Awards,
including the granting thereof, to individuals who are not subject to the
reporting and other provisions of Section 16 of the Act. 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.
SECTION 3. Shares Issuable under the Plan; Mergers; Substitution.
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(a) SHARES ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be such aggregate number of shares
of Common Stock as does not exceed five percent (5%) of the total number of
outstanding shares of Common Stock (which limit shall be applied in the case of
each Award on the basis of the total number of outstanding shares of Common
Stock at the time of such Award), subject to adjustment as provided for in
Section 3(b) hereof. 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 so long as the participants to whom such Awards had been
previously granted received no benefits of ownership of the underlying shares of
Stock to which the Award related. Subject to such overall limitation, shares may
be issued up to such maximum number pursuant to any Award. Shares issued under
the Plan may be authorized but unissued shares or shares reacquired by the
Company.
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(b) STOCK DIVIDENDS, MERGERS, ETC. In the event of a stock dividend, stock
split or similar change in capitalization affecting the Stock, the Administrator
shall make appropriate adjustments in (i) the number and kind of shares of stock
or securities on which Awards may thereafter be granted, (ii) the number and
kind of shares remaining subject to outstanding Awards, and (iii) the purchase
price, if any, in respect of such shares. In the event of any merger,
consolidation, dissolution or liquidation of the Company, the Administrator in
its sole discretion may, as to any outstanding Awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under the
Plan and in the number and purchase price (if any) of shares subject to such
Awards as it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate such Awards upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of any Award, shall require payment or other consideration which
the Administrator deems equitable in the circumstances).
(c) 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 concurrently 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.
SECTION 4. Eligibility.
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Participants in the Plan will be such full or part-time officers and other
employees of the Company and its Subsidiaries who are responsible for or
contribute to the management, growth or profitability of the Company and its
Subsidiaries and who are selected from time to time by the Administrator, in its
sole discretion.
SECTION 5. Restricted Stock Awards.
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(a) NATURE OF STOCK AWARD. The Administrator may grant Awards to any
employees of the Company or any Subsidiary. An Award entitles the recipient to
acquire, at no cost or for a purchase price determined by the Administrator,
shares of Stock subject to such restrictions and conditions, if any, as the
Administrator may determine at the time of grant. Conditions may be based on
continuing employment and/or achievement of pre-established performance goals
and objectives. In addition, an Award may be granted to an employee by the
Administrator in lieu of a cash bonus due to such employee pursuant to any other
plan of the Company. The Administrator may at any time waive such conditions or
restrictions or accelerate the date or dates on which such conditions or
restrictions will lapse.
(b) ACCEPTANCE OF AWARD. A participant who is granted an Award shall have
no rights with respect to such Award unless the participant shall have accepted
the Award within
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60 days (or such shorter date as the Administrator may specify) following the
award date by making payment to the Company, if required, by certified or bank
check or other instrument or form of payment acceptable to the Administrator in
an amount equal to the specified purchase price, if any, of the shares covered
by the Award and by executing and delivering to the Company a written instrument
that sets forth the terms and conditions of the Award in such form as the
Administrator shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with Section 5(b) above, a
participant shall have all the rights of a shareholder with respect to the Stock
including voting and dividend rights, subject to any non-transferability
restrictions and Company repurchase or forfeiture rights described in this
Section 5 and subject to such other conditions contained in the written
instrument evidencing the Award. Unless the Administrator shall otherwise
determine, certificates evidencing shares of Stock subject to restrictions shall
remain in the possession of the Company until such shares are vested as provided
in Section 5(e) below.
(d) RESTRICTIONS. Shares of Stock which are issued under restrictions
established by the Administrator may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of except as specifically provided herein or
in the written instrument evidencing the Award. In the event of termination of
employment by the Company and its Subsidiaries for any reason (including death,
Disability, and for Cause), the Company shall have the right, at the discretion
of the Administrator, to repurchase shares of the Stock with respect to which
conditions have not lapsed at their purchase price, or to require forfeiture of
such shares to the Company if acquired at no cost, from the participant or the
participant's legal representative. The Company must exercise such right of
repurchase or forfeiture not later than the 90th day following such termination
of employment (unless otherwise specified in the written instrument evidencing
the Award).
(e) VESTING OF STOCK. The Administrator at the time of grant may 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 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 and shall be deemed "vested."
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written instrument
evidencing the Award may require or permit the immediate payment, waiver,
deferral or investment of dividends paid on the Stock.
SECTION 6. Tax Withholding.
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(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,
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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.
(b) PAYMENT IN SHARES. Subject to approval by the Administrator, a
participant may elect to have such 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 an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
SECTION 7. Transfer, Leave of Absence, Etc.
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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.
SECTION 8. Amendments and Termination.
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The Board may at any time amend or discontinue the Plan and the
Administrator may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same purchase price or with no purchase price, 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) 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.
SECTION 9. Status of Plan.
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With respect to any payments in 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
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trusts or other arrangements to meet the Company's obligations to deliver Stock
or make payments hereunder, provided that the existence of such trusts or other
arrangements is consistent with the provision of the foregoing sentence.
SECTION 10. Change of Control Provisions.
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Upon the occurrence of a Change of Control as defined in this Section 10:
(a) Restrictions and conditions on all Awards shall automatically be deemed
waived, and the recipients of such Awards shall become entitled to receipt of
the Stock subject to such Awards.
(b) The Administrator may at any time prior to a Change of Control waive
any restrictions or conditions of any Award to the extent it shall in its sole
discretion determine.
(c) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Act) becomes a "beneficial owner" (as such term is defined in Rule
13d-3 promulgated under the Act) (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities; or
(ii) persons who, as of the Effective Date, constituted the Board (the
"Incumbent Board") cease for any reason, including without limitation as a
result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any person
becoming a director of the Company subsequent to the Effective Date whose
election was approved by at least a majority of the directors then
comprising the Incumbent Board shall, for purposes of this Plan, be
considered a member of the Incumbent Board; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or other entity,
other than (a) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (b) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar
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transaction) in which no "person" (as hereinabove defined) acquires more
than 50% of the combined voting power of the Company's then outstanding
securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
SECTION 11. General Provisions.
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(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Administrator
may require each person acquiring shares 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 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. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(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, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.
SECTION 12. Effective Date of Plan.
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The Plan shall become effective upon approval by the Board and may be
subject to the approval by the holders of a majority of the shares of capital
stock of the Company present or represented and entitled to vote at a meeting of
stockholders; provided, however, that such stockholder approval shall not affect
the validity or effectiveness of the Plan.
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SECTION 13. Governing Law.
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This Plan shall be governed by Massachusetts law except to the extent such
law is preempted by federal law.
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