EXHIBIT 10.9
AMENDED AND RESTATED
PENSKE AUTOMOTIVE GROUP, INC.
2002 EQUITY COMPENSATION PLAN
1. DEFINITIONS: As used herein, the following definitions shall apply:
(a) "Award" shall mean any stock option, stock appreciation right,
restricted stock, restricted stock unit, performance share award or
other stock-based award granted under the Plan.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean a committee consisting of two or more members
of the Board of Directors of the Corporation, each of whom shall be an
"outside director" as defined under Section 162(m) of the Code, and
the Treasury Regulations thereunder, as appointed by the Board of
Directors of the Corporation to administer the Plan. The Committee
shall initially consist of the Corporation's Compensation and
Management Development Committee.
(d) "Corporation" shall mean Penske Automotive Group, Inc., a Delaware
corporation, or any successor thereof.
(e) "Discretion" shall mean in the sole discretion of the Committee, with
no requirement whatsoever that the Committee follow past practices,
act in a manner consistent with past practices, or treat a Participant
(as hereinafter defined) in a manner consistent with the treatment
afforded other Participants with respect to the Plan.
(f) "Incentive Option" shall mean an option to purchase Common Stock of
the Corporation which meets the requirements set forth in the Plan and
also meets the definition of an incentive stock option set forth in
Section 422 of the Code.
(g) "Nonqualified Option" shall mean an option to purchase Common Stock of
the Corporation which meets the requirements set forth in the Plan but
does not meet the definition of an incentive stock option set forth in
Section 422 of the Code.
(h) "Other stock-based award" shall mean any right granted under Paragraph
20 of the Plan.
(i) "Participant" shall mean any individual designated by the Committee
under Paragraph 6 for participation in the Plan who is (i) a key
employee (including an officer or director who is also a key employee)
of the Corporation or any Subsidiary, (ii) a director who is not an
employee of the Corporation or any Subsidiary (hereinafter sometimes
referred to as an "outside director"), and (iii) a consultant or
advisor of the Corporation or any Subsidiary.
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(j) "Performance share" shall mean a grant of Common Stock of the
Corporation upon the attainment of one or more performance goals
during a performance period established by the Committee, as provided
in Paragraph 19.
(k) "Plan" shall mean this Amended and Restated Penske Automotive Group,
Inc. 2002 Equity Compensation Plan which is a continuation of, but
which amends and restates, the Penske Automotive Group, Inc. 2002
Equity Compensation Plan (the "Predecessor Plan").
(l) "Restricted stock" shall mean a grant of Common Stock of the
Corporation which is subject to restrictions against transfer,
forfeiture and such other terms and conditions determined by the
Committee, as provided in Paragraph 18.
(m) "Restricted stock unit" shall mean a grant of a right to obtain the
value of a share of Common Stock of the Corporation which is subject
to restrictions against transfer, forfeiture and such other terms and
conditions determined by the Committee, as provided in Paragraph 18.
(n) "Stock appreciation right" shall mean a right to receive the
appreciation in value, or a portion of the appreciation in value, of a
specified number of shares of the Common Stock of the Corporation, as
provided in Paragraph 12.
(o) "Subsidiary" shall mean any corporation, limited liability company,
partnership or any other entity in which the Corporation owns,
directly or indirectly, stock or other ownership interest therein,
possessing more than twenty-five percent (25%) of the combined voting
power of all classes of stock or other ownership interest.
2. PURPOSE OF PLAN: The purpose of the Plan is to provide key employees
(including officers and directors who are also key employees), outside
directors, consultants and advisors of the Corporation and its Subsidiaries
with incentives to make significant and extraordinary contributions to the
long-term performance and growth of the Corporation and its Subsidiaries,
to join the interests of key employees, outside directors, consultants and
advisors with the interests of the shareholders of the Corporation, and to
facilitate attracting and retaining key employees, outside directors,
consultants and advisors with exceptional abilities.
3. ADMINISTRATION: The Plan shall be administered by the Committee. Subject to
the provisions of the Plan, the Committee shall determine, from those
eligible to be Participants under the Plan, the persons to be granted
Awards, the type of Awards and the amount of stock or rights covered by
Awards to be granted to each such person, and the terms and conditions of
any Awards. Subject to the provisions of the Plan, the Committee is
authorized to interpret the Plan, to promulgate, amend and rescind rules
and regulations relating to the Plan and to make all other determinations
necessary or advisable for its administration. Interpretation and
construction of any provision of the Plan by the Committee shall, unless
otherwise determined by the Board of Directors of the Corporation, be final
and conclusive. A majority of the Committee shall constitute a quorum, and
the acts approved by a majority of the members present at any meeting at
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which a quorum is present, or acts approved in writing by a majority of the
Committee, shall be the acts of the Committee.
4. INDEMNIFICATION OF COMMITTEE MEMBERS: In addition to such other rights of
indemnification as they may have, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
Award granted hereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by the Board of Directors of
the Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it
shall be determined in such action, suit or proceeding that such Committee
member has acted in bad faith; provided, however, that within sixty (60)
days after receipt of notice of institution of any such action, suit or
proceeding, a Committee member shall offer the Corporation in writing the
opportunity, at its own cost, to handle and defend the same.
5. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN: The maximum number of shares of
stock which may be issued pursuant to Awards granted under the Plan or with
respect to which Awards may be granted under the Plan shall not exceed in
the aggregate 4,200,000 shares of Common Stock of the Corporation, which
amount gives effect to the Company's June 1, 2006 two-for-one stock split
(subject to further adjustments as provided in this Paragraph 5). Any
shares that are delivered by the Corporation, and any awards or grants that
are made by, or become obligations of, the Corporation through the
assumption by the Corporation or a Subsidiary of, or in substitution for,
outstanding awards or grants previously made by an acquired company, shall
not be counted against the number of shares available under the Plan.
Consistent with the purpose of the Plan and with a view to avoiding over or
under counting, the Committee shall, in its Discretion, determine the
number of shares to charge against the shares remaining available under the
Plan as a result of the grant or settlement of Awards made under the Plan.
If any shares covered by an Award or to which an Award relates are
forfeited, or if an Award otherwise terminates without the delivery of
shares or of other consideration, then the shares covered by such Award, or
to which such Award relates, or the number of shares otherwise counted
against the aggregate number of shares available under the Plan with
respect to such Award, to the extent of any such forfeiture or termination,
shall again be, or shall become, available for granting Awards under the
Plan.
The maximum number of shares with respect to which Awards may be granted to
any Participant during the term of the Plan shall not exceed 1,000,000
shares of Common Stock of the Corporation, which amount gives effect to the
Company's June 1, 2006 two-for-one stock split (subject to further
adjustments as provided in this Paragraph 5). All shares with respect to
which an Award is granted shall be counted for purposes of this per-person
share limitation, regardless of whether the Participant did not realize the
benefit of the Award as a result of forfeiture, cancellation, expiration,
termination or other event.
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The number of shares with respect to each outstanding Award, the option
price with respect to outstanding stock options, the grant value with
respect to outstanding stock appreciation rights, the aggregate number of
shares available at any time under the Plan, and the maximum number of
shares with respect to which Awards may be made to an individual
Participant during the term of the Plan shall be subject to such adjustment
as the Committee, in its Discretion, deems appropriate to reflect such
events as stock dividends, stock splits, recapitalizations, mergers,
consolidations or reorganizations of or by the Corporation; provided,
however, that no fractional shares shall be issued pursuant to the Plan, no
Awards may be granted under the Plan with respect to fractional shares, and
any fractional shares resulting from such adjustments shall be eliminated
from any outstanding Award.
6. PARTICIPANTS: The Committee shall determine and designate from time to
time, in its Discretion, those key employees (including officers and
directors who are also key employees), outside directors, consultants or
advisors of the Corporation or any Subsidiary to receive Awards who, in the
judgment of the Committee, are or will become responsible for the direction
and financial success of the Corporation or any Subsidiary.
7. WRITTEN AGREEMENT: Each Award granted under the Plan may be evidenced by a
written agreement between the Corporation and the Participant which shall
contain such provisions as may be approved by the Committee. Such
agreements shall constitute binding contracts between the Corporation and
the Participant, and every Participant, upon acceptance of such agreement,
shall be bound by the terms and restrictions of the Plan and of such
agreement. The terms of each such agreement shall be in accordance with the
Plan, but the agreements may include such additional provisions and
restrictions determined by the Committee, provided that such additional
provisions and restrictions do not violate the terms of the Plan.
8. ALLOTMENT OF SHARES: The Committee shall determine and fix, in its
Discretion, the number of shares with respect to which each Participant may
be granted Awards; provided, however, that no Incentive Option may be
granted under the Plan to any one Participant which would result in the
aggregate fair market value, determined as of the date the option is
granted, of underlying stock with respect to which Incentive Options are
exercisable for the first time by such Participant during any calendar year
under any plan maintained by the Corporation (or any parent or Subsidiary
of the Corporation) exceeding $100,000.
9. STOCK OPTIONS: Subject to the terms of the Plan, the Committee, in its
Discretion, may grant to Participants either Incentive Options,
Nonqualified Options or any combination thereof; provided, however, that an
Incentive Option may only be granted to an employee of the Corporation or a
Subsidiary, and in the case of a Subsidiary only if (i) the Subsidiary is
treated as a disregarded entity owned by the Corporation, or (ii) the
Subsidiary is a corporation (or is treated as a disregarded entity owned by
a corporation) fifty percent or more of the combined voting power of all
classes of stock of which is owned, directly or indirectly, by the
Corporation. Each option granted under the Plan shall designate the number
of shares covered thereby, if any, with respect to which the
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option is an Incentive Option, and the number of shares covered thereby, if
any, with respect to which the option is a Nonqualified Option.
10. STOCK OPTION PRICE: Subject to the rules set forth in this Paragraph 10, at
the time any stock option is granted, the Committee, in its Discretion,
shall establish the price per share for which the shares covered by the
option may be purchased. With respect to an Incentive Option, such option
price shall not be less than 100% of the fair market value of the stock on
the date on which such option is granted; provided, however, that with
respect to an Incentive Option granted to a Participant who at the time of
the grant owns (after applying the attribution rules of Section 424(d) of
the Code) more than 10% of the total combined voting stock of the
Corporation or of any parent or Subsidiary, the option price shall not be
less than 110% of the fair market value of the stock on the date such
option is granted. With respect to a Nonqualified Option, the option price
shall not be less than 100% of the fair market value of the stock on the
date such option is granted. Fair market value of a share shall be
determined by the Committee. The option price shall be subject to
adjustment in accordance with the provisions of Paragraph 5 of the Plan.
11. PAYMENT OF STOCK OPTION PRICE: At the time of the exercise in whole or in
part of any stock option granted hereunder, payment of the option price in
full in cash or, with the consent of the Committee, in Common Stock of the
Corporation shall be made by the Participant for all shares so purchased.
In the Discretion of, and subject to such conditions as may be established
by, the Committee, payment of the option price may also be made by the
Corporation retaining from the shares to be delivered upon exercise of the
stock option that number of shares having a fair market value on the date
of exercise equal to the option price of the number of shares with respect
to which the Participant exercises the option. In the Discretion of the
Committee, a Participant may exercise an option, if then exercisable, in
whole or in part, by delivery to the Corporation of written notice of the
exercise in such form as the Committee may prescribe, accompanied by
irrevocable instructions to a stock broker to promptly deliver to the
Corporation full payment for the shares with respect to which the option is
exercised from the proceeds of the stock broker's sale of or loan against
some or all of the shares (a "Regulation T Stock Option Exercise"). In the
event the Corporation then has in effect a stock repurchase program, in its
Discretion and subject to such terms and conditions as it may impose, the
Committee may permit a Participant to exercise an option and pay the option
price by delivering to the Corporation a written notice of exercise which
includes a request that the Corporation repurchase (and retain the
repurchase price of) that number of the option shares having a fair market
value on the date of exercise equal to the option price of the number of
shares with respect to which the Participant exercises the option. Such
payment may also be made in such other manner as the Committee determines
is appropriate, in its Discretion. No Participant shall have any of the
rights of a shareholder of the Corporation under any stock option until the
actual issuance of shares to said Participant, and prior to such issuance
no adjustment shall be made for dividends, distributions or other rights in
respect of such shares, except as provided in Paragraph 5.
12. STOCK APPRECIATION RIGHTS: Subject to the terms of the Plan, the Committee
may grant stock appreciation rights to Participants either in conjunction
with, or
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independently of, any stock options granted under the Plan. A stock
appreciation right granted in conjunction with a stock option may be an
alternative right wherein the exercise of the stock option terminates the
stock appreciation right to the extent of the number of shares purchased
upon exercise of the stock option and, correspondingly, the exercise of the
stock appreciation right terminates the stock option to the extent of the
number of shares with respect to which the stock appreciation right is
exercised. Alternatively, a stock appreciation right granted in conjunction
with a stock option may be an additional right wherein both the stock
appreciation right and the stock option may be exercised. A stock
appreciation right may not be granted in conjunction with an Incentive
Option under circumstances in which the exercise of the stock appreciation
right affects the right to exercise the Incentive Option or vice versa,
unless the stock appreciation right, by its terms, meets all of the
following requirements:
(a) the stock appreciation right will expire no later than the Incentive
Option;
(b) the stock appreciation right may be for no more than the difference
between the option price of the Incentive Option and the fair market
value of the shares subject to the Incentive Option at the time the
stock appreciation right is exercised;
(c) the stock appreciation right is transferable only when the Incentive
Option is transferable, and under the same conditions;
(d) the stock appreciation right may be exercised only when the Incentive
Option is eligible to be exercised; and
(e) the stock appreciation right may be exercised only when the fair
market value of the shares subject to the Incentive Option exceeds the
option price of the Incentive Option.
Upon exercise of a stock appreciation right, a Participant shall be
entitled to receive, without payment to the Corporation (except for
applicable withholding taxes), an amount equal to the excess of or, in the
Discretion of the Committee, a portion of the excess of (i) the then
aggregate fair market value of the number of shares with respect to which
the Participant exercises the stock appreciation right, over (ii) the
aggregate fair market value of such number of shares at the time the stock
appreciation right was granted. This amount shall be payable by the
Corporation, in the Discretion of the Committee, in cash, in shares of
Common Stock of the Corporation, in other property or any combination
thereof.
13. GRANTING AND EXERCISE OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS:
Subject to the provisions of this Paragraph 13, each stock option and stock
appreciation right granted hereunder shall be exercisable at any such time
or times or in any such installments as may be determined by the Committee
at the time of the grant; provided, however, that the aggregate fair market
value (determined at the time the option is granted) of the stock with
respect to which Incentive Options are exercisable for the first time by a
Participant during any calendar year shall not exceed $100,000. A
Participant may exercise a stock option or stock appreciation right, if
then
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exercisable, in whole or in part, by delivery to the Corporation of written
notice of the exercise, in such form as the Committee may prescribe,
accompanied, in the case of a stock option, by payment for the shares with
respect to which the stock option is exercised as provided in Paragraph 11
(unless the Committee, in its Discretion, permits a cashless form of option
exercise permitted by Paragraph 11). Except as provided in Paragraph 17,
stock options and stock appreciation rights may be exercised only while the
Participant is an employee, outside director, consultant or advisor, as the
case may be, of the Corporation or a Subsidiary. Successive stock options
and stock appreciation rights may be granted to the same Participant,
whether or not the stock option(s) and stock appreciation right(s)
previously granted to such Participant remain unexercised. A Participant
may exercise a stock option or stock appreciation right, if then
exercisable, notwithstanding that stock options and stock appreciation
rights previously granted to such Participant remain unexercised.
14. NON-TRANSFERABILITY OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS: No
stock option or stock appreciation right granted under the Plan to a
Participant shall be transferable by such Participant otherwise than by
will, or by the laws of descent and distribution, and stock options and
stock appreciation rights shall be exercisable, during the lifetime of the
Participant, only by the Participant. Notwithstanding the foregoing, in its
Discretion and subject to such terms and conditions as it may prescribe,
the Committee may permit a Participant to transfer a Nonqualified Option or
a related or independently granted stock appreciation right.
15. TERM OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS: If not sooner
terminated, each stock option and stock appreciation right granted
hereunder shall expire not more than ten (10) years from the date of the
granting thereof; provided, however, that with respect to an Incentive
Option granted to a Participant who, at the time of the grant, owns (after
applying the attribution rules of Section 424(d) of the Code) more than 10%
of the total combined voting stock of all classes of stock of the
Corporation or any parent or Subsidiary, such option shall expire not more
than five (5) years after the date of granting thereof.
16. CONTINUATION OF EMPLOYMENT: The Committee may require, in its Discretion,
that any Participant under the Plan to whom a stock option or a stock
appreciation right shall be granted shall agree in writing as a condition
of the granting of such stock option or stock appreciation right to remain
an employee, consultant, advisor or outside director of the Corporation or
a Subsidiary, as the case may be, for a designated minimum period from the
date of the granting of such stock option or stock appreciation right as
shall be fixed by the Committee, and the Committee may further require, in
its Discretion, that any Participant agree in writing to comply with any
confidentiality, non-solicitation, non-competition and non-disparagement
provisions and covenants that the Committee may require as a condition
precedent to the exercise of a stock option or a stock appreciation right.
17. TERMINATION OF EMPLOYMENT: If the employment of an employee Participant
terminates, if the consultancy or advisorship of a consultant or advisor
Participant terminates, or if an outside director Participant ceases to be
a director (hereinafter
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collectively referred to as a "termination of employment"), the Committee
may, in its Discretion, permit the exercise of stock options and stock
appreciation rights granted to such Participant (a) for a period not to
exceed three months following such termination of employment (or one year
following termination of employment on account of the Participant's death
or permanent disability) with respect to Incentive Options or related stock
appreciation rights, and (b) for a period not to extend beyond the
expiration date with respect to Nonqualified Options or related or
independently granted stock appreciation rights. In no event, however,
shall a stock option or a stock appreciation right be exercisable
subsequent to its expiration date. A stock option or stock appreciation
right may only be exercised after a Participant's termination of employment
to the extent exercisable on the date of termination of employment;
provided, however, that if the termination of employment is due to the
Participant's death, permanent disability or retirement at a retirement age
permitted under the Corporation's or Subsidiary's retirement plan or
policies, or if the termination of employment results from action by the
Corporation or a Subsidiary without cause or from an agreement between the
Corporation or a Subsidiary and the Participant (hereinafter collectively
referred to as a "qualifying termination of employment"), the Committee, in
its Discretion, may permit all or part of the stock options and stock
appreciation rights granted to such Participant to thereupon become
exercisable in full or in part. For purposes of this Paragraph 17 and any
other provision of the Plan where the term is used, the Committee's
definition of "cause" shall be final and conclusive.
18. RESTRICTED STOCK OR RESTRICTED STOCK UNITS: Subject to the terms of the
Plan, the Committee may award Participants shares of restricted stock
and/or the Committee may grant Participants restricted units with respect
to a specified number of shares of stock. All shares of restricted stock
and all restricted stock units granted to Participants under the Plan shall
be subject to the following terms and conditions (and to such other terms
and conditions prescribed by the Committee):
(a) At the time of each award of restricted shares or restricted stock
units, there shall be established for the shares or units a restricted
period, which period may differ among Participants and may have
different expiration dates with respect to portions of shares or units
covered by the same award.
(b) Shares of restricted stock or restricted stock units awarded to
Participants may not be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered during the restricted period
applicable to such shares or units. Except for such restrictions on
transfer, a Participant may be provided all of the rights of a
shareholder in respect of restricted shares including, but not limited
to, the right to receive dividends on, and the right to vote, the
shares. A Participant shall have no ownership interest in shares of
stock with respect to which restricted stock units are granted;
provided, however, that the Committee may, in its Discretion, permit
payment to such Participant of dividend equivalents on such units
equal to the amount of dividends, if any, which are paid on that
number of shares with respect to which the restricted stock units are
granted.
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(c) If there is a termination of employment of a Participant, all shares
or units theretofore awarded to the Participant which are still
subject to the restrictions imposed by Paragraph 18(b) shall upon such
termination of employment be forfeited and transferred back to the
Corporation, without payment of any consideration by the Corporation;
provided, however, that in the event of a qualifying termination of
employment, the Committee may, in its Discretion, release some or all
of the shares or units from the restrictions.
(d) Shares of restricted stock granted under the Plan may be evidenced in
such manner as the Committee may deem appropriate, including, without
limitation, book-entry registration or issuance of stock certificates.
If stock certificates are issued in respect of shares of restricted
stock, such certificates shall be registered in the name of the
Participant, deposited with the Corporation or its designee, together
with a stock power endorsed in blank, and, in the Discretion of the
Committee, a legend shall be placed upon such certificates reflecting
that the shares represented thereby are subject to restrictions
against transfer and forfeiture.
(e) At the expiration of the restricted period applicable to restricted
shares, the Corporation shall deliver to the Participant or the legal
representative of the Participant's estate stock certificates for such
shares. If stock certificates were previously issued for the shares
and a legend has been placed on such certificates, the Corporation
shall cause such certificates to be reissued without the legend.
(f) At the expiration of the restricted period applicable to restricted
stock units, the Corporation shall pay to the Participant an amount
equal to the then fair market value of that number of shares to which
such restricted stock units relate. In the Discretion of the
Committee, such amount may be paid in cash, stock, other property or
any combination thereof.
In the case of events such as stock dividends, stock splits,
recapitalizations, mergers, consolidations or reorganizations of or by the
Corporation, any stock, securities or other property which a Participant
receives or is entitled to receive by reason of his ownership of restricted
shares shall, unless otherwise determined by the Committee, be subject to
the same restrictions applicable to the restricted shares.
19. PERFORMANCE SHARES: The Committee may grant to a Participant the right to
obtain performance shares subject to the following terms and conditions:
(a) The Participant's right to obtain performance shares shall be subject
to attainment of one or more performance goals over a performance
period prescribed by the Committee.
(b) The performance goal applicable to an award to a Participant of the
right to obtain performance shares shall be based upon free cash flow,
cash flow return on investment, stock price, market share, sales,
revenues, earnings per share, return on equity, total stockholder
return, costs, net income, working capital turnover,
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inventory or receivable turnover and/or margins of the Corporation, a
Subsidiary, or a division or unit thereof. The specific targets and
other details of the performance goal shall be established by the
Committee in its Discretion. A performance goal must, however, be
objective so that a third party with knowledge of the relevant facts
could determine whether the goal has been attained.
(c) The performance goal applicable to an award to a Participant of the
right to obtain performance shares shall be established by the
Committee in writing at any time during the period beginning on the
date of the award and ending on the earlier of (i) ninety (90) days
after commencement of the performance period applicable to the award,
or (ii) expiration of the first 25% of the performance period;
provided, however, that there must be substantial uncertainty whether
a performance goal will be attained at the time it is established by
the Committee.
(d) The performance goal established by the Committee must prescribe an
objective formula or standard, that could be applied by a third party
having knowledge of the relevant performance results, to compute the
number of performance shares issuable to the Participant if the goal
is attained.
(e) Unless otherwise determined by the Committee in the case of a
Participant who dies or becomes permanently disabled, performance
shares shall be issued to a Participant only after (i) expiration of
the performance period and attainment of the performance goal
applicable to the award, and (ii) issuance of a written certification
by the Committee (including approved minutes of the meeting of the
Committee at which the certification is made) that the performance
goal and any other material terms of the award have been attained or
satisfied.
(f) No Participant shall have any of the rights of a shareholder of the
Corporation in respect of the shares covered by a performance share
award until the actual issuance of the shares to said Participant and,
prior to such issuance, no adjustments shall be made for dividends,
distributions or other rights in respect of such shares, except as
provided in Paragraph 5.
(g) In its Discretion and subject to such terms and conditions as it may
impose, including terms and conditions intended to comply with Section
409A of the Code, the Committee may permit a Participant to elect to
defer receipt of performance shares to a time later than the time the
shares otherwise would be issued to the Participant. In such event,
the Committee may, in its Discretion, provide for the payment by the
Corporation of a dividend equivalent or interest at a rate determined
by the Committee.
(h) In the Discretion of the Committee, in lieu of settling a performance
share award by issuance of shares of Common Stock of the Corporation
to a Participant, all or a portion of the award may be settled by
payment of cash or other property to the Participant in an amount or
having a value equal to the then value of the otherwise issuable
shares; provided, however, that the amount of cash and the value of
any
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other property paid to any Participant during any calendar year in
settlement of a performance share award shall not exceed $5.0 Million.
(i) Unless otherwise determined by the Committee, performance shares or
rights therein awarded to a Participant may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered by the
Participant at any time before actual issuance of the shares to the
Participant.
(j) In its Discretion, the Committee may subject a performance share award
to a Participant to any other terms or conditions not inconsistent
with the foregoing, including, without limitation, a requirement that
the Participant remain an employee of the Corporation or a Subsidiary
(including at or above a specified salary grade), or that the
Participant remain a consultant, advisor or outside director of the
Corporation or a Subsidiary, for the entire performance period
applicable to the award.
Performance share awards under the Plan are intended to constitute
qualified performance-based compensation for purposes of Section
162(m)(4)(C) of the Code and the Treasury Regulations thereunder, and the
provisions of this Paragraph 19 (and the other provisions of the Plan
relating to performance share awards) shall be interpreted and administered
to effectuate that intent. Moreover, the Committee may revise or modify the
terms of an outstanding performance share award to the extent the Committee
determines, in its Discretion, that such revision or modification is
necessary for such award to constitute qualified performance-based
compensation.
20. OTHER STOCK-BASED AWARDS: The Committee may grant to Participants such
other awards that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on or related to, shares of Common
Stock of the Corporation as are deemed by the Committee, in its Discretion,
to be consistent with the purposes of the Plan; provided, however, that
such grants must comply with applicable law.
21. INVESTMENT PURPOSE: If the Committee, in its Discretion, determines that as
a matter of law such procedure is or may be desirable, it may require a
Participant, upon any acquisition of stock hereunder and as a condition to
the Corporation's obligation to deliver certificates representing such
shares, to execute and deliver to the Corporation a written statement in
form satisfactory to the Committee, representing and warranting that the
Participant's acquisition of shares of stock shall be for such person's own
account, for investment and not with a view to the resale or distribution
thereof and that any subsequent offer for sale or sale of any such shares
shall be made either pursuant to (a) a Registration Statement on an
appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with respect to the shares being offered and sold, or (b) a
specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption the Participant shall, prior to any
offer for sale or sale of such shares, obtain a favorable written opinion
from counsel for or approved by the Corporation as to the availability of
such exemption. The Corporation may endorse an appropriate legend referring
to the
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foregoing restriction upon the certificate or certificates representing any
shares issued or transferred to the Participant under the Plan.
22. RIGHTS TO CONTINUED EMPLOYMENT: Nothing contained in the Plan or in any
Award granted pursuant to the Plan, nor any action taken by the Committee
hereunder, shall confer upon any Participant any right with respect to
continuation of employment or service as an employee, consultant, advisor
or outside director of the Corporation or a Subsidiary nor interfere in any
way with the right of the Corporation or a Subsidiary to terminate such
person's employment or service at any time with or without cause.
23. WITHHOLDING PAYMENTS: If, upon the grant, exercise, release of restrictions
or settlement of or in respect of an Award, or upon any other event or
transaction under or relating to the Plan, there shall be payable by the
Corporation or a Subsidiary any amount for income or employment tax
withholding, in the Committee's Discretion, either the Corporation shall
appropriately reduce the amount of stock, cash or other property to be paid
to the Participant or the Participant shall pay such amount to the
Corporation or Subsidiary to enable it to pay or to reimburse it for paying
such income or employment tax withholding. The Committee may, in its
Discretion, permit Participants to satisfy such withholding obligations, in
whole or in part, by electing to have the amount of Common Stock delivered
or deliverable by the Corporation in respect of an Award appropriately
reduced, or by electing to tender Common Stock back to the Corporation
subsequent to receipt of such stock in respect of an Award. The Corporation
or any of its Subsidiaries shall also have the right to withhold the amount
of such taxes from any other sums or property due or to become due from the
Corporation or any of its Subsidiaries to the Participant upon such terms
and conditions as the Committee shall prescribe. The Corporation may also
defer issuance of stock under the Plan until payment by the Participant to
the Corporation or any of its Subsidiaries of the amount of any such tax.
In the case of a Regulation T Stock Option Exercise, the Committee may in
its Discretion permit the Participant to irrevocably instruct a stock
broker to promptly deliver to the Corporation an amount (in addition to the
option exercise price) equal to any withholding tax owing in respect of
such option exercise from the proceeds of the stock broker's sale of or
loan against some or all of the shares. In the event the Corporation then
has in effect a stock repurchase program, in its Discretion and subject to
such terms and conditions as it may impose, the Committee may permit
Participants to satisfy their withholding tax obligations by requesting
that the Corporation repurchase (and retain the repurchase price of) that
number of shares issuable or issued under the Plan having a then fair
market value equal to the amount of withholding tax due. The Committee may
make such other arrangements with respect to income or employment tax
withholding as it shall determine.
24. CHANGE IN CONTROL: Notwithstanding any other provision of the Plan or any
provision of a grant or award agreement, in the event the Committee
determines that there has been or will be a change in control of the
Corporation or of any Subsidiary, the Committee may, without the consent of
the holder, provide for any treatment of outstanding Awards which it
determines, in its Discretion, to be appropriate. Such treatment may
include, without limitation, acceleration of vesting of stock options and
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stock appreciation rights, release of restrictions applicable to restricted
stock or restricted stock units, or deeming performance share awards to
have been earned. In determining whether there has been or will be a change
in control of the Corporation or of any Subsidiary, the Committee may
utilize a definition it deems appropriate of a change in control contained
in any existing agreement between the Corporation or a Subsidiary and one
of its senior executives.
25. SECTION 409A: To the extent applicable, this Plan is intended to comply
with the provisions of Section 409A of the Code. This Plan shall be
administered in a manner consistent with the intent.
26. EFFECTIVENESS OF PLAN: The Plan shall be effective on the date the Board of
Directors of the Corporation adopts the Plan and shall apply with respect
to Awards granted on or after such date; provided, however, that the terms
of the Predecessor Plan shall continue to apply to Awards granted prior to
the date the Board of Directors of the Corporation adopts the Plan.
27. TERMINATION, DURATION AND AMENDMENTS OF PLAN: The Plan may be abandoned or
terminated at any time by the Board of Directors of the Corporation. Unless
sooner terminated by the Board of Directors, the Plan shall terminate on
the date ten (10) years after the adoption by the Board of Directors of the
Predecessor Plan, and no Awards may be granted thereafter. The termination
of the Plan shall not affect the validity of any Award outstanding on the
date of termination.
For the purpose of conforming to any changes in applicable law or
governmental regulations, or for any other lawful purpose, the Board of
Directors of the Corporation or the Committee shall have the right, without
approval of the shareholders of the Corporation, to amend or revise the
terms of the Plan at any time; provided, however, that no such amendment or
revision shall (i) with respect to the Plan, increase the maximum number of
shares in the aggregate which are subject to the Plan or with respect to
which Awards may be made to individual Participants (subject, however, to
the provisions of Paragraph 5), materially change the class of persons
eligible to be Participants under the Plan or establish additional and
different business criteria on which performance share goals are based
without approval or ratification of the shareholders of the Corporation; or
(ii) with respect to an Award previously granted under the Plan, except as
otherwise specifically provided in the Plan, alter or impair any such Award
without the consent of the holder thereof.
As adopted by the Board of Directors on October 25, 2007.
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