1
EXHIBIT 10.13
HAMILTON BANCORP INC.
2000 EXECUTIVE INCENTIVE COMPENSATION PLAN
--------------------------------------
1. PURPOSE. The purpose of this Plan is to advance the interests of
HAMILTON BANCORP INC., a Florida corporation (the "Company"), and its
Subsidiaries and Affiliates by providing an additional incentive to attract and
retain qualified and competent persons who are key employees or directors of the
Company and its Subsidiaries and Affiliates, and upon whose efforts and judgment
the success of the Company and its Subsidiaries and Affiliates are largely
dependent.
2. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:
(a) "Affiliate" shall mean any corporation other than the
Company that is a member of an affiliated group of corporations, as
defined in Section 1504 (determined without regard to Section 1504(b))
of the Internal Revenue Code, of which the Company is a member.
(b) "Annual Incentive Award" shall mean a conditional right
granted to a Participant under Section 11(c) hereof to receive a cash
payment, Shares or other Award, unless otherwise determined by the
Committee, after the end of a specified fiscal year.
(c) "Award" shall mean any cash award, Option, Restricted
Stock, Performance Award or Annual Incentive Award, together with any
other right or interest granted to a Participant under the Plan.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Committee" shall mean the compensation committee
appointed by the Board pursuant to Section 16(a) hereof.
(f) "Common Stock" shall mean the Company's Common Stock, par
value $.01 per share.
(g) "Covered Employee" shall mean any individual who, on the
last day of the taxable year of the Company, is (i) the Chief Executive
Officer of the Company or is acting in such capacity (the "CEO"), (ii)
among the four highest compensated officers of the Company and its
Subsidiaries and Affiliates (other than the CEO), or (iii) otherwise
considered to be a "Covered Employee" within the meaning of Section
162(m) of the Internal Revenue Code and the regulations promulgated
thereunder.
(h) "Director" shall mean a member of the Board.
(i) "Eligible Person" means each Officer of the Company (as
defined under the Exchange Act) and other officers, directors and
employees of the Company and its Subsidiaries and Affiliates.
2
An employee on leave of absence may be considered as still in the
employ of the Company or its Subsidiary or Affiliate for purposes of
eligibility for participation in the Plan.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(k) "Fair Market Value" of a Share on any date of reference
shall mean the "Closing Price" (as defined below) of the Common Stock
on the business day immediately preceding such date, unless the
Committee or the Board in its sole discretion shall determine otherwise
in a fair and uniform manner. For the purpose of determining Fair
Market Value, the "Closing Price" of the Common Stock on any business
day shall be (i) if the Common Stock is listed or admitted for trading
on any United States national securities exchange, or if actual
transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such
exchange or reporting system, as reported in any newspaper of general
circulation, (ii) if the Common Stock is quoted on the National
Association of Securities Dealers Automated Quotations System
("NASDAQ"), or any similar system of automated dissemination of
quotations of securities prices in common use, the last reported sale
price of Common Stock on such system or, if sales prices are not
reported, the mean between the closing high bid and low asked
quotations for such day of Common Stock on such system, as reported in
any newspaper of general circulation or (iii) if neither clause (i) or
(ii) is applicable, the mean between the high bid and low asked
quotations for the Common Stock as reported by the National Quotation
Bureau, Incorporated if at least two securities dealers have inserted
both bid and asked quotations for Common Stock on at least five of the
ten preceding days. If neither (i), (ii), or (iii) above is applicable,
then Fair Market Value shall be determined in good faith by the
Committee or the Board in a fair and uniform manner.
(l) "Incentive Stock Option" shall mean an incentive stock
option as defined in Section 422 of the Internal Revenue Code.
(m) "Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(n) "Non-Employee Director" shall mean a Director who is not
an employee of the Company or any Subsidiary or Affiliate.
(o) "Non-Qualified Stock Option" shall mean an Option which is
not an Incentive Stock Option.
(p) "Officer" shall mean the Company's Chairman of the Board,
President, Chief Executive Officer, principal financial officer,
principal accounting officer, any vice-president of the Company in
charge of a principal business unit, division or function (such as
sales, administration or finance), any other officer who performs a
policy-making function, or any other person who performs similar
policy-making functions for the Company. Officers of Subsidiaries shall
be deemed Officers of the Company if they perform such policy-making
functions for the Company. As used in this paragraph, the phrase
"policy-making function" does not include policy-making functions that
are not significant. If pursuant to Item 401(b) of Regulation S-K (17
C.F.R.ss.229.401(b)) the Company identifies a person as an "executive
2
3
officer," the person so identified shall be deemed an "Officer" even
though such person may not otherwise be an "Officer" pursuant to the
foregoing provisions of this paragraph.
(q) "Option" (when capitalized) shall mean any option granted
under this Plan.
(r) "Outside Director" shall mean a member of the Board who
qualifies as an "outside director" under Section 162(m) of the Internal
Revenue Code and the regulations thereunder and as a "Non-Employee
Director" under Rule 16b-3 promulgated under the Securities Exchange
Act.
(s) "Participant" shall mean a person to whom an Award is
granted under this Plan or any person who succeeds to the rights of
such person under this Plan by reason of the death of such person.
(t) "Performance Award" shall mean a right, granted to an
Eligible Person under Section 11 hereof, to receive Awards based upon
performance criteria specified by the Committee or the Board.
(u) "Plan" shall mean this 2000 Executive Incentive
Compensation Plan for the Company.
(v) "Restricted Stock" means Shares granted to a Participant
under Section 10 hereof, that are subject to certain restrictions
and/or risks of forfeiture.
(w) "Share" shall mean a share of Common Stock.
(x) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the
Company if, at the time of the granting of the Option, each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing 50 percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
3. SHARES SUBJECT TO AWARDS.
(a) LIMITATION ON OVERALL NUMBER OF SHARES SUBJECT TO AWARDS.
Subject to adjustment as provided in Section 12(a) hereof, the total
number of Shares reserved and available for delivery in connection with
Awards under the Plan shall be the sum of (i) 300,000, plus (ii) the
number of Shares with respect to Awards previously granted under the
Plan that terminate without being exercised, expire, are forfeited or
canceled, and the number of Shares that are surrendered in payment of
any Awards or any tax withholding with regard thereto. Any Shares
delivered under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. Subject to
adjustment as provided in Section 12(a) hereof, in no event shall the
aggregate number of Shares which may be issued pursuant to ISOs exceed
300,000 Shares.
(b) PER PERSON AWARD LIMITATION. In each fiscal year during
any part of which the Plan is in effect, an Eligible Person may not be
granted Awards relating to more than 150,000 Shares, subject to
adjustment as provided in Section 12(a), under each of Sections 5(a)
and 10(a). In addition, the
3
4
maximum amount that may be earned as an Annual Incentive Award or other
cash Award in any fiscal year by any one Participant shall be
$5,000,000, and the maximum amount that may be earned as a Performance
Award or other cash Award in respect of a performance period by any one
Participant shall be $5,000,000.
4. INCENTIVE AND NON-QUALIFIED OPTIONS.
(a) An Option granted hereunder shall be either an Incentive
Stock Option or a Non-Qualified Stock Option as determined by the
Committee at the time of grant of such Option and shall clearly state
whether it is an Incentive Stock Option or a Non-Qualified Stock
Option. All Incentive Stock Options shall be granted within 10 years
from the effective date of this Plan. Incentive Stock Options may not
be granted to any person who is not an employee of the Company or any
Subsidiary or Affiliate.
(b) Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate fair market value (determined at the time the Option
is granted) of the Shares, with respect to which Options meeting the
requirements of Section 422(b) of the Internal Revenue Code are
exercisable for the first time by any individual during any calendar
year (under all plans of the Company and its parent and subsidiary
corporations as defined in Section 424 of the Internal Revenue Code),
exceeds $100,000.
5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that
may contain any term deemed necessary or desirable by the Committee,
provided such terms are not inconsistent with this Plan or any
applicable law. Participants shall be those persons selected by the
Committee in its sole discretion. Any person who files with the
Committee, in a form satisfactory to the Committee, a written waiver of
eligibility to receive any Option under this Plan shall not be eligible
to receive any Option under this Plan for the duration of such waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution the person has made to the success of
the Company or its Subsidiaries or Affiliates and such other factors as
the Committee shall determine. The Committee shall also have the
authority to consult with and receive recommendations from officers and
other personnel of the Company and its Subsidiaries and Affiliates with
regard to these matters. The Committee may from time to time in
granting Options under the Plan prescribe such other terms and
conditions concerning such Options as it deems appropriate, including,
without limitation, (i) prescribing the date or dates on which the
Option becomes exercisable, (ii) providing that the Option rights
accrue or become exercisable in installments over a period of years, or
upon the attainment of stated goals or both, or (iii) relating an
Option to the continued employment of the Participant for a specified
period of time, provided that such terms and conditions are not more
favorable to a Participant than those expressly permitted herein.
(c) If applicable, the Options granted to employees under
this Plan shall be in addition to regular salaries, pension, life
insurance or other benefits related to their employment with the
Company or its
4
5
Subsidiaries or Affiliates. Neither the Plan nor any Option granted
under the Plan shall confer upon any person any right to employment or
continuance of employment by the Company or its Subsidiaries or
Affiliates.
(d) Notwithstanding any other provision of this Plan, an
Incentive Stock Option shall not be granted to any person owning
directly or indirectly (through attribution under Section 424(d) of the
Internal Revenue Code) at the date of grant, stock possessing more than
10% of the total combined voting power of all classes of stock of the
Company (or of its parent or subsidiary corporation (as defined in
Section 424 of the Internal Revenue Code) at the date of grant) unless
the option price of such Option is at least 110% of the Fair Market
Value of the Shares subject to such Option on the date the Option is
granted, and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.
(e) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, Options may not be
granted to a Covered Employee unless the grant of such Option is
authorized by, and all of the terms of such Options are determined by,
a Committee that is appointed in accordance with Section 16 of this
Plan and all whose members are Outside Directors.
(f) Incentive Stock Options may not be granted to any Outside
Directors.
6. EXERCISE PRICE. The exercise price per Share of any Option shall be
any price determined by the Committee but shall not be less than the par value
per Share; provided, however, that in no event shall the exercise price per
Share of any Incentive Stock Option be less than the Fair Market Value of the
Shares underlying such Option on the date such Option is granted.
7. EXERCISE OF OPTIONS.
(a) An Option shall be deemed exercised when (i) the Company
has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of
the Shares as to which the Option is exercised has been made, and (iii)
arrangements that are satisfactory to the Committee in its sole
discretion have been made for the Participant's payment to the Company
of the amount that is necessary for the Company or Subsidiary or
Affiliate employing the Participant to withhold in accordance with
applicable Federal or state tax withholding requirements.
(b) Unless further limited by the Committee in any Option, the
consideration to be paid for the Shares to be issued upon exercise of
an Option as well as the method of payment of the exercise price and of
any withholding and employment taxes applicable thereto, shall consist
of: (1) cash, (2) certified or official bank check, (3) money order,
(4) Shares that have been held by the Participant for at least six (6)
months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), (5) the withholding of Shares issuable upon
exercise of the Option, (6) pursuant to a "cashless exercise"
procedure, by delivery of a properly executed exercise notice together
with such other documentation, and subject to such guidelines, as the
Committee shall require to effect an exercise of the Option and
delivery to the Company by a licensed broker acceptable to the Company
of proceeds from the sale of Shares or a
5
6
margin loan sufficient to pay the exercise price and any applicable
income or employment taxes, or (7) in such other consideration as the
Committee deems appropriate, or by a combination of the above. In the
case of an Incentive Stock Option, the permissible methods of payment
shall be specified at the time the Option is granted. The Committee in
its sole discretion may accept a personal check in full or partial
payment of any Shares. If the exercise price is paid in whole or in
part with Shares, or through the withholding of Shares issuable upon
exercise of the Option, the value of the Shares surrendered or withheld
shall be their Fair Market Value on the date the Option is exercised.
The Company in its sole discretion may, on an individual basis or
pursuant to a general program established in connection with this Plan,
lend money to a Participant, guarantee a loan to a Participant, or
otherwise assist a Participant to obtain the cash necessary to exercise
all or a portion of an Option granted hereunder or to pay any tax
liability of the Participant attributable to such exercise. If the
exercise price is paid in whole or part with Participant's promissory
note, such note shall (i) provide for full recourse to the maker, (ii)
be collateralized by the pledge of the Shares that the Participant
purchases upon exercise of such Option, (iii) bear interest at the
prime rate of the Company's principal lender, and (iv) contain such
other terms as the Committee in its sole discretion shall reasonably
require.
(c) No Participant shall be deemed to be a holder of any
Shares subject to an Option unless and until a stock certificate or
certificates for such Shares are issued to such person(s) under the
terms of this Plan. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the
date such stock certificate is issued, except as expressly provided in
Section 12 hereof.
8. EXERCISABILITY OF OPTIONS. Any Option shall become exercisable in
such amounts, at such intervals and upon such terms as the Committee shall
provide in such Option, except as otherwise provided in this Section 8 and in
Section 13 hereof.
(a) The expiration date of an Option shall be determined by
the Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date on which the
Option is granted.
(b) The Committee may in its sole discretion, accelerate the
date on which any Option may be exercised and may accelerate the
vesting of any Shares subject to any Option or previously acquired by
the exercise of any Option.
9. TERMINATION OF OPTION PERIOD.
(a) Unless otherwise provided in any Option agreement, the
unexercised portion of any Option shall automatically and without
notice terminate and become null and void at the time of the earliest
to occur of the following:
(i) three months after the date on which the
Participant's employment with the Company or any Subsidiary or
Affiliate is terminated other than by reason of (A) Cause,
which, solely for purposes of this Plan, shall mean the
termination of the Participant's employment by reason of
6
7
the Optionee's willful misconduct or gross negligence, (B) a
mental or physical disability (within the meaning of Internal
Revenue Code Section 22(e)) of the Participant as determined
by a medical doctor satisfactory to the Committee, or ( C)
death of the Participant;
(ii) immediately upon the termination of the
Participant's employment with the Company or any Subsidiary or
Affiliate for Cause;
(iii)twelve months after the date on which the
Participant's employment is terminated with the Company or any
Subsidiary or Affiliate by reason of a mental or physical
disability (within the meaning of Internal Revenue Code
Section 22(e)) as determined by a medical doctor satisfactory
to the Committee;
(iv) (A) twelve months after the date of termination
of the Participant's employment with the Company or any
Subsidiary or Affiliate by reason of death of the Participant,
or, if later, (B) three months after the date on which the
Participant shall die if such death shall occur during the one
year period specified in Subsection 9(a)(iii) hereof. All
references herein to the termination of the Participants
employment shall, in the case of a Participant who is not an
employee of the Company or a Subsidiary or Affiliate, refer to
the termination of the Participants service with the Company
or a Subsidiary or Affiliate.
(b) The Committee in its sole discretion may by written notice
(A cancellation notice) cancel, effective upon the consummation of any
corporate transaction described in Subsection 13(b)(ii) or (iii)
hereof, any Option that remains unexercised on such date. Such
cancellation notice shall be given a reasonable period of time prior to
the proposed date of such cancellation and may be given either before
or after approval of such corporate transaction.
10. RESTRICTED STOCK. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(a) GRANT AND RESTRICTIONS. Restricted Stock shall be subject
to such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose, which restrictions
may lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance goals
and/or future service requirements), in such installments or otherwise,
as the Committee may determine at the date of grant or thereafter.
Except to the extent restricted under the terms of the Plan and any
Award agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder,
including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee or the Board). During the
restricted period applicable to the Restricted Stock, subject to
Section 14 below, the Restricted Stock may not be sold, transferred,
pledged, hypothecated, margined or otherwise encumbered by the
Participant.
(b) FORFEITURE. Except as otherwise determined by the
Committee at the time of the Award, upon termination of a Participant's
employment or service with the Company or any Subsidiary or Affiliate
7
8
during the applicable restriction period, the Participant's Restricted
Stock that is at that time subject to restrictions shall be forfeited
and reacquired by the Company; provided that the Committee may provide,
by rule or regulation or in any Award agreement, or may determine in
any individual case, that restrictions or forfeiture conditions
relating to Restricted Stock shall be waived in whole or in part in the
event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture
of Restricted Stock.
(c) CERTIFICATES FOR STOCK. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the
name of the Participant, the Committee may require that such
certificates bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock, that
the Company retain physical possession of the certificates, and that
the Participant deliver a stock power to the Company, endorsed in
blank, relating to the Restricted Stock.
(d) DIVIDENDS AND SPLITS. As a condition to the grant of an
Award of Restricted Stock, the Committee may require that any cash
dividends paid on a share of Restricted Stock be automatically
reinvested in additional shares of Restricted Stock or applied to the
purchase of additional Awards under the Plan. Unless otherwise
determined by the Committee, Shares distributed in connection with a
stock split or stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of forfeiture to
the same extent as the Restricted Stock with respect to which such
Shares or other property has been distributed.
11. PERFORMANCE AND ANNUAL INCENTIVE AWARDS.
(a) PERFORMANCE CONDITIONS. The right of a Participant to
exercise or receive a grant or settlement of any Award, and the timing
thereof, may be subject to such performance conditions as may be
specified by the Committee or the Board. The Committee or the Board may
use such business criteria and other measures of performance as it may
deem appropriate in establishing any performance conditions, and may
exercise its discretion to reduce the amounts payable under any Award
subject to performance conditions, except as limited under Sections
11(b) and 11(c) hereof in the case of a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m). If and
to the extent required under Code Section 162(m), any power or
authority relating to a Performance Award or Annual Incentive Award
intended to qualify under Code Section 162(m), shall be exercised by
the Committee and not the Board.
(b) PERFORMANCE AWARDS GRANTED TO DESIGNATED COVERED
EMPLOYEES. If and to the extent that the Committee determines that a
Performance Award to be granted to an Eligible Person who is designated
by the Committee as likely to be a Covered Employee should qualify as
"performance-based compensation" for purposes of Code Section 162(m),
the grant, exercise and/or settlement of such Performance Award shall
be contingent upon achievement of preestablished performance goals and
other terms set forth in this Section 11(b).
8
9
(i) PERFORMANCE GOALS GENERALLY. The performance
goals for such Performance Awards shall consist of one or more
business criteria and a targeted level or levels of
performance with respect to each of such criteria, as
specified by the Committee consistent with this Section 11(b).
Performance goals shall be objective and shall otherwise meet
the requirements of Code Section 162(m) and regulations
thereunder including the requirement that the level or levels
of performance targeted by the Committee result in the
achievement of performance goals being "substantially
uncertain." The Committee may determine that such Performance
Awards shall be granted, exercised and/or settled upon
achievement of any one performance goal or that two or more of
the performance goals must be achieved as a condition to
grant, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to
any one Participant or to different Participants.
(ii) BUSINESS CRITERIA. One or more of the following
business criteria for the Company, on a consolidated basis,
and/or specified subsidiaries or business units of the Company
(except with respect to the total stockholder return and
earnings per share criteria), shall be used exclusively by the
Committee in establishing performance goals for such
Performance Awards: (1) total stockholder return; (2) such
total stockholder return as compared to total return (on a
comparable basis) of a publicly available index such as, but
not limited to, the Standard & Poor's 500 Stock Index or the
S&P Specialty Retailer Index; (3) net income; (4) pretax
earnings; (5) earnings before interest expense, taxes,
depreciation and amortization; (6) pretax operating earnings
after interest expense and before bonuses, service fees, and
extraordinary or special items; (7) operating margin; (8)
earnings per share; (9) return on equity; (10) return on
capital; (11) return on investment; (12) operating earnings;
(13) working capital or inventory; and (14) ratio of debt to
stockholders' equity. One or more of the foregoing business
criteria shall also be exclusively used in establishing
performance goals for Annual Incentive Awards granted to a
Covered Employee under Section 11 hereof that are intended to
qualify as "performanced-based compensation under Code Section
162(m).
(iii)PERFORMANCE PERIOD; TIMING FOR ESTABLISHING
PERFORMANCE GOALS. Achievement of performance goals in respect
of such Performance Awards shall be measured over a
performance period of up to ten years, as specified by the
Committee. Performance goals shall be established not later
than 90 days after the beginning of any performance period
applicable to such Performance Awards, or at such other date
as may be required or permitted for "performance-based
compensation" under Code Section 162(m).
(iv) PERFORMANCE AWARD POOL. The Committee may
establish a Performance Award pool, which shall be an unfunded
pool, for purposes of measuring Company performance in
connection with Performance Awards. The amount of such
Performance Award pool shall be based upon the achievement of
a performance goal or goals based on one or more of the
business criteria set forth in Section 11(b)(ii) hereof during
the given performance period, as specified by the Committee in
accordance with Section 11(b)(iii) hereof. The Committee may
specify the amount of the Performance Award pool as a
percentage of any of such business
9
10
criteria, a percentage thereof in excess of a threshold
amount, or as another amount which need not bear a strictly
mathematical relationship to such business criteria.
(v) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS.
Settlement of such Performance Awards shall be in cash, Stock,
other Awards or other property, in the discretion of the
Committee. The Committee may, in its discretion, reduce the
amount of a settlement otherwise to be made in connection with
such Performance Awards. The Committee shall specify the
circumstances in which such Performance Awards shall be paid
or forfeited in the event of termination of employment by the
Participant prior to the end of a performance period or
settlement of Performance Awards.
(c) ANNUAL INCENTIVE AWARDS GRANTED TO DESIGNATED COVERED
EMPLOYEES. If and to the extent that the Committee determines that an
Annual Incentive Award to be granted to an Eligible Person who is
designated by the Committee as likely to be a Covered Employee should
qualify as "performance-based compensation" for purposes of Code
Section 162(m), the grant, exercise and/or settlement of such Annual
Incentive Award shall be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 11(c).
(i) ANNUAL INCENTIVE AWARD POOL. The Committee may
establish an Annual Incentive Award pool, which shall be an
unfunded pool, for purposes of measuring Company performance
in connection with Annual Incentive Awards. The amount of such
Annual Incentive Award pool shall be based upon the
achievement of a performance goal or goals based on one or
more of the business criteria set forth in Section 11(b)(ii)
hereof during the given performance period, as specified by
the Committee in accordance with Section 11(b)(iii) hereof.
The Committee may specify the amount of the Annual Incentive
Award pool as a percentage of any such business criteria, a
percentage thereof in excess of a threshold amount, or as
another amount which need not bear a strictly mathematical
relationship to such business criteria.
(ii) POTENTIAL ANNUAL INCENTIVE AWARDS. Not later
than the end of the 90th day of each fiscal year, or at such
other date as may be required or permitted in the case of
Awards intended to be "performance-based compensation" under
Code Section 162(m), the Committee shall determine the
Eligible Persons who will potentially receive Annual Incentive
Awards, and the amounts potentially payable thereunder, for
that fiscal year, either out of an Annual Incentive Award pool
established by such date under Section 11(c)(i) hereof or as
individual Annual Incentive Awards. In the case of individual
Annual Incentive Awards intended to qualify under Code Section
162(m), the amount potentially payable shall be based upon the
achievement of a performance goal or goals based on one or
more of the business criteria set forth in Section 11(b)(ii)
hereof in the given performance year, as specified by the
Committee; in other cases, such amount shall be based on such
criteria as shall be established by the Committee.
(iii) PAYOUT OF ANNUAL INCENTIVE AWARDS. After the
end of each fiscal year, the Committee shall determine the
amount, if any, of (A) the Annual Incentive Award pool, and
the maximum amount of potential Annual Incentive Award payable
to each Participant in the Annual Incentive
10
11
Award pool, or (B) the amount of potential Annual Incentive
Award otherwise payable to each Participant. The Committee
may, in its discretion, determine that the amount payable to
any Participant as an Annual Incentive Award shall be reduced
from the amount of his or her potential Annual Incentive
Award, including a determination to make no Award whatsoever.
The Committee shall specify the circumstances in which an
Annual Incentive Award shall be paid or forfeited in the event
of termination of employment by the Participant prior to the
end of a fiscal year or settlement of such Annual Incentive
Award.
(d) WRITTEN DETERMINATIONS. All determinations by the
Committee as to the establishment of performance goals, the amount of
any Performance Award pool or potential individual Performance Awards
and as to the achievement of performance goals relating to Performance
Awards under Section 11(b), and the amount of any Annual Incentive
Award pool or potential individual Annual Incentive Awards and the
amount of final Annual Incentive Awards under Section 11(c), shall be
made in writing in the case of any Award intended to qualify under Code
Section 162(m). The Committee may not delegate any responsibility
relating to such Performance Awards or Annual Incentive Awards if and
to the extent required to comply with Code Section 162(m).
(e) STATUS OF SECTION 11(b) AND SECTION 11(c) AWARDS UNDER
CODE SECTION 162(m). It is the intent of the Company that Performance
Awards and Annual Incentive Awards under Section 11(b) and 11(c) hereof
granted to persons who are designated by the Committee as likely to be
Covered Employees within the meaning of Code Section 162(m) and
regulations thereunder shall, if so designated by the Committee,
constitute "qualified performance-based compensation" within the
meaning of Code Section 162(m) and regulations thereunder. Accordingly,
the terms of Sections 11(b), (c) and (d) and Section 3(b) hereof,
including the definitions of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with Code Section
162(m) and regulations thereunder. The foregoing notwithstanding,
because the Committee cannot determine with certainty whether a given
Participant will be a Covered Employee with respect to a fiscal year
that has not yet been completed, the term Covered Employee as used
herein shall mean only a person designated by the Committee, at the
time of grant of Performance Awards or an Annual Incentive Award, as
likely to be a Covered Employee with respect to that fiscal year. If
any provision of the Plan or any agreement relating to such Performance
Awards or Annual Incentive Awards does not comply or is inconsistent
with the requirements of Code Section 162(m) or regulations thereunder,
such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements.
12. ADJUSTMENTS.
(a) In the event that any dividend or other distribution
(whether in the form of cash, Shares, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or
event affects the Shares such that a substitution or adjustment is
determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan,
or because the Company shall cease to exist as a result of such
transaction, then the Committee shall, in such manner as it may deem
equitable, substitute or adjust any or all of (i) the number and kind
of
11
12
Shares which may be delivered in connection with Awards granted
thereafter, (ii) the number and kind of Shares by which annual
per-person Award limitations are measured under Section 3 hereof, (iii)
the number and kind of Shares subject to or deliverable in respect of
outstanding Awards and (iv) the exercise price, grant price or purchase
price relating to any Award and/or make provision for payment of cash
or other property in respect of any outstanding Award. In addition, the
Committee (and the Board if and only to the extent such authority is
not required to be exercised by the Committee to comply with Code
Section 162(m)) is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including
Performance Awards and performance goals, and Annual Incentive Awards
and any Annual Incentive Award pool or performance goals relating
thereto) in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence, as well
as acquisitions and dispositions of businesses and assets) affecting
the Company, any Subsidiary, Affiliate or any business unit, or the
financial statements of the Company or any Subsidiary or Affiliate, or
in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view
of the Committee's assessment of the business strategy of the Company,
any Subsidiary, Affiliate or business unit thereof, performance of
comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made
if and to the extent that such authority or the making of such
adjustment would cause Options, Performance Awards or Annual Incentive
Awards granted hereunder to Participants designated by the Committee as
Covered Employees and intended to qualify as "performance-based
compensation" under Code Section 162(m) and the regulations thereunder
to otherwise fail to qualify as "performance-based compensation" under
Code Section 162(m) and regulations thereunder.
(b) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class,
either in connection with a direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall
be made to, the number of (or, in the case of Options, the exercise
price) for Shares then subject to outstanding Awards granted under the
Plan.
(c) Without limiting the generality of the foregoing, the
existence of outstanding Awards granted under the Plan shall not affect
in any manner the right or power of the Company to make, authorize or
consummate (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or
its business; (ii) any merger or consolidation of the Company; (iii)
any issue by the Company of debt securities, or preferred or preference
stock that would rank above the Shares subject to outstanding Options;
(iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of
the Company; or (vi) any other corporate act or proceeding, whether of
a similar character or otherwise.
13. CHANGE IN CONTROL.
(a) EFFECT OF CHANGE IN CONTROL. If and to the extent provided
in the Award, in the event of a "Change in Control," as defined in
Section 13(b), the following provisions shall apply:
12
13
(i) Any Award carrying a right to exercise that was
not previously exercisable and vested shall become fully
exercisable and vested as of the time of the Change in
Control;
(ii) The restrictions, deferral of settlement, and
forfeiture conditions applicable to any other Award granted
under the Plan shall lapse and such Awards shall be deemed
fully vested as of the time of the Change in Control; and
(iii) With respect to any such outstanding Award
subject to achievement of performance goals and conditions
under the Plan, such performance goals and other conditions
will be deemed to be met if and to the extent so provided by
the Committee in the Award agreement relating to such Award.
(b) DEFINITION OF CHANGE IN CONTROL. A "Change in Control"
shall be deemed to occur:
(i) if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or
occurring pursuant to a plan) that has the result that
stockholders of the Company immediately before such
transaction cease to own at least fifty percent (50%) of the
voting stock of the Company or of any entity that results from
the participation of the Company in a reorganization,
consolidation, merger, liquidation or any other form of
corporate transaction; or
(ii) if the stockholders of the Company shall approve
a plan of merger, consolidation, reorganization, liquidation
or dissolution in which the Company does not survive (unless
the approved merger, consolidation, reorganization,
liquidation or dissolution is subsequently abandoned);
(iii) if the stockholders of the Company shall
approve a plan for the sale, lease, exchange or other
disposition of all or substantially all the property and
assets of the Company (unless such plan is subsequently
abandoned); or
(iv) the acquisition (other than from the Company) by
any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more
than 20% of either the then outstanding shares of the
Company's Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote
generally in the election of directors (hereinafter referred
to as the ownership of a "Controlling Interest") excluding,
for this purpose, any acquisitions by (1) the Company or its
Subsidiaries, (2) any person, entity or "group" that as of the
date on which the Award is granted owns beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act) of a Controlling Interest or (3) any
employee benefit plan of the Company or its Subsidiaries.
14. TRANSFERABILITY OF AWARDS. No Award or other right or interest of a
Participant under the Plan, including any Award or right which constitutes a
derivative security as generally defined in Rule 16a-1(c) under the Exchange
Act, shall be pledged, hypothecated or otherwise encumbered or subject to any
lien, obligation or
13
14
liability of such Participant to any party (other than the Company or a
Subsidiary or Affiliate), or assigned or transferred by such Participant
otherwise than by will or the laws of descent and distribution or to a
beneficiary upon the death of a Participant, and such Awards or rights that may
be exercisable shall be exercised during the lifetime of the Participant only by
the Participant or his or her guardian or legal representative, except that
Awards and other rights (other than ISOs) may be transferred to one or more
beneficiaries or other transferees during the lifetime of the Participant, and
may be exercised by such transferees in accordance with the terms of such Award,
but only if and to the extent such transfers and exercises are permitted by the
Committee or the Board pursuant to the express terms of an Award agreement
(subject to any terms and conditions which the Committee or the Board may impose
thereon, and further subject to any prohibitions or restrictions on such
transfers pursuant to Rule 16b-3). A beneficiary, transferee, or other person
claiming any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award agreement
applicable to such Participant, except as otherwise determined by the Committee
or the Board, and to any additional terms and conditions deemed necessary or
appropriate by the Committee or the Board.
15. ISSUANCE OF SHARES.
(a) Notwithstanding any other provision of this Plan, the
Company shall not be obligated to issue any Shares unless it is advised
by counsel of its selection that it may do so without violation of the
applicable Federal and State laws pertaining to the issuance of
securities, and may require any stock so issued to bear a legend, may
give its transfer agent instructions, and may take such other steps, as
in its judgment are reasonably required to prevent any such violation.
(b) As a condition to any sale or issuance of Shares pursuant
to this Plan, the Committee may require such agreements or undertakings
as the Committee may deem necessary or advisable to facilitate
compliance with any applicable law or regulation including, but not
limited to, the following:
(i) a representation and warranty by the Participant
to the Company, that he is acquiring the Shares to be issued
to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to
be bound by any legends endorsed upon the certificate(s) for
such Shares that are, in the opinion of the Committee,
necessary or appropriate to facilitate compliance with the
provisions of any securities laws deemed by the Committee to
be applicable to the issuance and transfer of such Shares.
16. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a committee appointed by
the Board (the "Committee") which shall consist of not less than two
Directors, each of whom shall be Outside Directors. The membership of
the Committee shall be constituted so as to comply at all times with
the applicable requirements of Rule 16b-3 promulgated under the
Securities Exchange Act and Section 162(m) of the Internal Revenue
Code. The Committee shall have all of the powers of the Board with
respect to the Plan. Any member of the Committee may be removed at any
time, with or without cause, by resolution
14
15
of the Board and any vacancy occurring in the membership of the
Committee may be filled by appointment of the Board.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The
determinations by the Committee, and the interpretation and
construction of any provision of the Plan or any Award by the
Committee, shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the
Committee at a meeting or (ii) without a meeting by the unanimous
written approval of the members of the Committee.
(d) The Board may reserve to itself the power to grant Awards
to employees or Directors of the Company or any Subsidiary or Affiliate
who are not Covered Employees. If and to the extent that the Board
reserves such powers, then all references herein to the Committee shall
refer to the Board with respect to Awards granted by the Board.
17. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS.
Awards granted under the Plan may, in the discretion of the Committee,
be granted either alone or in addition to, in tandem with, or in
substitution or exchange for, any other Award or any award granted
under another plan of the Company, any Subsidiary, Affiliate or any
business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of a Participant to receive payment from
the Company or any Subsidiary or Affiliate. Such additional, tandem,
and substitute or exchange Awards may be granted at any time. If an
Award is granted in substitution or exchange for another Award or
award, the Committee shall require the surrender of such other Award or
award in consideration for the grant of the new Award. In addition,
Awards may be granted in lieu of cash compensation, including in lieu
of cash amounts payable under other plans of the Company or any
Subsidiary or Affiliate, in which the value of the Shares subject to
the Award is equivalent in value to the cash compensation (for example,
Restricted Stock), or in which the exercise price, grant price or
purchase price of the Award in the nature of a right that may be
exercised is equal to the Fair Market Value of the underlying Shares
minus the value of the cash compensation surrendered (for example,
Options granted with an exercise price "discounted" by the amount of
the cash compensation surrendered).
(b) TERM OF AWARDS. The term of each Award shall be for such
period as may be determined by the Committee; provided that in no event
shall the term of any Option exceed a period of ten years (or such
shorter term as may be required in respect of an ISO under Section 422
of the Code).
(c) FORM AND TIMING OF PAYMENT UNDER AWARDS; DEFERRALS.
Subject to the terms of the Plan and any applicable Award agreement,
payments to be made by the Company or a Subsidiary or Affiliate upon
the exercise of an Option or other Award or settlement of an Award may
be made in such forms as the Committee shall determine, including,
without limitation, cash, Shares, other Awards or other property, and
may be made in a single payment or transfer, in installments, or on a
deferred basis. The
15
16
settlement of any Award may be accelerated, and cash paid in lieu of
Shares in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events.
Installment or deferred payments may be required by the Committee
(subject to Section 20 of the Plan) or permitted at the election of the
Participant on terms and conditions established by the Committee.
Payments may include, without limitation, provisions for the payment or
crediting of a reasonable interest rate on installment or deferred
payments or the grant or crediting of dividend equivalents or other
amounts in respect of installment or deferred payments denominated in
Shares.
18. WITHHOLDING OR DEDUCTION FOR TAXES. If at any time specified herein
for the making of any issuance or delivery of any Award or Shares to any
Participant or beneficiary, any law or regulation of any governmental authority
having jurisdiction in the premises shall require the Company, any Subsidiary or
Affiliate, as appropriate, to withhold, or to make any deduction for, any taxes
or take any other action in connection with the issuance or delivery then to be
made, such issuance or delivery shall be deferred until such withholding or
deduction shall have been provided for by the Participant or beneficiary, or
other appropriate action shall have been taken.
19. INTERPRETATION.
(a) As it is the intent of the Company that the Plan comply in
all respects with Rule 16b-3 promulgated under the Securities Exchange
Act ("Rule 16b-3"), any ambiguities or inconsistencies in construction
of the Plan shall be interpreted to give effect to such intention, and
if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent
required to permit the Plan to comply with Rule 16b-3. The Committee or
the Board may from time to time adopt rules and regulations under, and
amend, the Plan in furtherance of the intent of the foregoing.
(b) The Plan and any Option agreements entered into pursuant
to the Plan shall be administered and interpreted so that all Incentive
Stock Options granted under the Plan will qualify as Incentive Stock
Options under section 422 of the Internal Revenue Code. If any
provision of the Plan or any such Option agreement should be held
invalid for the granting of Incentive Stock Options or illegal for any
reason, such determination shall not affect the remaining provisions
hereof, but instead the Plan and the Option agreement shall be
construed and enforced as if such provision had never been included in
the Plan or the Option agreement.
(c) This Plan shall be governed by the laws of the State of
Florida.
(d) Headings contained in this Plan are for convenience only
and shall in no manner be construed as part of this Plan.
(e) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
16
17
20. AMENDMENT AND DISCONTINUATION OF THE PLAN. The Committee or the
Board may from time to time amend, suspend or terminate the Plan or any Award;
provided, however, that, any amendment to the Plan shall be subject to the
approval of the Company's shareholders if such shareholder approval is required
by any federal or state law or regulation (including, without limitation, Rule
16b-3 or to comply with Section 162(m) of the Internal Revenue Code) or the
rules of any Stock exchange or automated quotation system on which the Common
Stock may then be listed or granted. Except to the extent provided in this Plan,
no amendment, suspension or termination of the Plan or any Award issued
hereunder shall substantially impair the rights or benefits of any Participant
pursuant to any Award previously granted without the consent of the Participant.
21. UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is intended
to constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligation to deliver
Shares pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the creation
of trusts and deposit therein cash, Shares, other Awards or other property, or
make other arrangements to meet the Company's obligations under the Plan. Such
trusts or other arrangements shall be consistent with the "unfunded" status of
the Plan unless the Committee otherwise determines with the consent of each
affected Participant. The trustee of such trusts may be authorized to dispose of
trust assets and reinvest the proceeds in alternative investments, subject to
such terms and conditions as the Committee may specify and in accordance with
applicable law
22. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan
is September 1, 2000 provided that the shareholders shall approved the Plan by
November 1, 2000, and the Plan shall terminate on the 10th anniversary of the
effective date.
17