Exhibit 10.9
KEY EMPLOYEE LONG-TERM
INCENTIVE STOCK PLAN
THE WACKENHUT CORPORATION
As amended July 23, 2001
THE WACKENHUT CORPORATION
KEY EMPLOYEE LONG-TERM INCENTIVE STOCK PLAN
TABLE OF CONTENTS
ARTICLE SECTION PAGE
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1. ESTABLISHMENT, PURPOSE AND DURATION
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1.1 Establishment of the Plan 1
1.2 Purpose of the Plan 1
1.3 Duration of the Plan 1
2. DEFINITIONS AND CONSTRUCTION
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2.1 Definitions 1
2.2 Gender and Number 5
2.3 Severability 5
3. ADMINISTRATION
3.1 The Committee 5
3.2 Authority of the Committee 5
3.3 Decisions Binding 6
3.4 Procedures of the Committee 6
3.5 Award Agreements 6
4. SHARES SUBJECT TO THE PLAN
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4.1 Number of Shares 6
4.2 Lapsed Awards 7
4.3 Adjustments in Authorized Shares 7
5. ELIGIBILITY AND PARTICIPATION
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5.1 Eligibility 7
5.2 Actual Participation 7
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ARTICLE SECTION PAGE
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6. STOCK OPTIONS
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6.1 Grant of Options 7
6.2 Option Agreement 7
6.3 Option Price 8
6.4 Duration of Options 8
6.5 Exercise of Options 8
6.6 Payment 8
6.7 Restrictions on Share Transferability 8
6.8 Termination of Employment Due to Death,
Disability or Retirement 8
6.9 Termination of Employment for Other Reasons 9
6.10 Nontransferability of Options 9
7. RESTRICTED STOCK UNITS
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7.1 Grant of Restricted Stock Units 9
7.2 Restricted Stock Unit Agreement 9
7.3 Vesting 10
7.4 Other Restrictions 10
7.5 Payment 10
7.6 Dividend Equivalents 10
7.7 Termination of Employment Due to Death,
Disability or Retirement 10
7.8 Termination of Employment for Other Reasons 10
8. PERFORMANCE UNITS AND PERFORMANCE SHARES
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8.1 Grant of Performance Units and Performance Shares 11
8.2 Value of Performance Units and Performance Shares 11
8.3 Payment of Performance Units and Performance Shares 11
8.4 Form and Timing of Payment 11
8.5 Termination of Employment Due to Death,
Disability or Retirement 11
8.6 Termination of Employment for Other Reasons 11
8.7 Nontransferability 12
8.8 Performance Measures 12
9. RIGHTS OF EMPLOYEES
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9.1 Employment 12
9.2 Participation 13
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ARTICLE SECTION PAGE
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10. CHANGE IN CONTROL
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10.1 Stock Based Awards 13
10.2 Performance Based Awards 13
10.3 Pooling of Interests Accounting 13
11. AMENDMENT, MODIFICATION AND TERMINATION
11.1 Amendment, Modification and Termination 13
11.2 Awards Previously Granted 14
11.3 Compliance with Code Section 162(m) 14
12. WITHHOLDING
12.1 Tax Withholding 14
12.2 Share Withholding 14
13. REDEMPTION OF COMMON STOCK ON 14
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OF EMPLOYMENT
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14. INDEMNIFICATION 15
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15. SUCCESSORS 15
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16. REQUIREMENTS OF LAW
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16.1 Requirements of Law 15
16.2 Governing Law 15
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THE WACKENHUT CORPORATION
KEY EXECUTIVE LONG-TERM INCENTIVE STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. The Wackenhut Corporation (hereinafter
referred to as the "Company"), a Florida corporation, hereby establishes an
incentive compensation plan to be known as the "Key Executive Long-Term
Incentive Stock Plan" (hereinafter referred to as the "Plan"), as set forth in
this document. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Restricted Stock Units, Performance Units, and
Performance Shares.
Upon approval by the Board of Directors of the Company, subject to
ratification within twelve (12) months by an affirmative vote of a majority of
Shares of the Common Stock present and entitled to vote at the Annual Meeting at
which a quorum is present, the Plan shall become effective as of August 1, 1991
(the "Effective Date"), and shall remain in effect as provided in Section 1.3
herein.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
success, and enhance the value of the Company by providing incentives to Key
Employees that will link their personal interests to those of Company
shareholders, and provide an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Key Employees upon
whose judgement, interest and special effort the successful conduct of its
operations largely is dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective
Date, as described in Section 1.1 herein, and shall remain in effect, subject to
the right of the Board of Directors to terminate the Plan at any time pursuant
to Article 12 herein, until all Shares subject to it shall have been purchased
or acquired according to the Plan's provisions. However, in no event may an
Award be granted under the Plan on or after the tenth (10th) anniversary of the
Plan's Effective Date.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Award" means, individually or collectively, a grant
under this Plan of Nonqualified Stock Options,
Incentive Stock Options, Restricted Stock Units,
Performance Units or Performance Shares.
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(b) "Beneficial Owner" shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
(c) "Board or "Board of Directors" means the Board of
Directors of The Wackenhut Corporation.
(d) "Cause" means (i) willful and gross misconduct on the
part of a Participant that is materially and
demonstrably detrimental to the Company; or (ii) the
commission by a Participant of one or more acts which
constitute an indictable crime under United States
Federal, state or local law. "Cause" under either (i)
or (ii) shall be determined in good faith by a
written resolution duly adopted by the affirmative
vote of not less than two-thirds (2/3) of all the
Directors at a meeting duly called and held for that
purpose after reasonable notice to the Participant
and opportunity for the Participant and his or her
legal counsel to be heard.
(e) "Change in Control" of the Company shall be deemed to
have occurred if the conditions set forth in any one
or more of the following paragraphs shall have been
satisfied:
(i) Any person (other than a trustee or other
fiduciary holding securities under an
employee benefit plan of the Company, or a
corporation owned directly or indirectly by
the stockholders of the Company in
substantially the same proportions as their
ownership of Shares of the Company), is or
becomes the Beneficial Owner, directly or
indirectly, of securities of the Company
representing 20% or more of the combined
voting power of the Company's then
outstanding securities; or
(ii) During any period of two (2) consecutive
years (not including any period prior to the
execution of this Plan), individuals who at
the beginning of such period constitute the
Board (and any new Director, whose election
by the Board or nomination for election by
the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the
Directors then still in office who either
were Directors at the beginning of the
period or whose election or nomination for
election was previously so approved), cease
for any reason to constitute a majority
thereof; or
(iii) The stockholders of the Company approve (a)
a plan of complete liquidation of the
Company; or (b) an agreement for the sale or
disposition of all or substantially all the
Company's assets; or (c) a merger or
consolidation of the Company with any other
corporation, other than a merger or
consolidation which would result in the
voting securities of the Company outstanding
immediately prior thereto continuing to
represent (either by
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remaining outstanding or by being converted
into voting securities of the surviving
entity), at least 50% of the combined voting
securities of the Company (or such surviving
entity) outstanding immediately after such
merger or consolidation.
However, in no event shall a Change in Control be
deemed to have occurred, with respect to the
Participant, if the Participant is part of a
purchasing group which consummates the
Change-in-Control transaction. A Participant shall be
deemed "part of a purchasing group..." for purposes
of the preceding sentence if the Participant is an
equity participant or has agreed to become an equity
participant in the purchasing company or group
(except for (i) passive ownership of less than 5% of
the Shares of the purchasing company; or (ii)
ownership of equity participation in the purchasing
company or group which is otherwise not deemed to be
significant, as determined prior to the Change in
Control by a majority of the disinterested
Directors).
(f) "Code means the Internal Revenue Code of 1986, as
amended from time to time.
(g) "Committee" means the Nominating and Compensation
Committee of the Board, or any other committee
appointed by the Board to administer the Plan
pursuant to Article 3 herein.
(h) "Company" means The Wackenhut Corporation, a Florida
corporation (including any and all subsidiaries), or
any successor thereto as provided in Article 15
herein.
(i) "Director" means any individual who is a member of
the Board of Directors of the Company.
(j) "Disability" means a permanent and total disability,
within the meaning of the Code Section 22 (e) (3), as
determined by the Committee in good faith, upon
receipt of sufficient competent medical advice from
one or more individuals, selected by the Committee,
who are qualified to give professional medical
advice.
(k) "Employee" means any full-time, nonunion employee of
the Company. Directors who are not otherwise employed
by the Company shall not be considered employees
under this Plan.
(l) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor
Act thereto.
(m) "Fair Market Value" means the average of the highest
and lowest price at which the Stock was traded on the
five business days preceding the date of an awarded,
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as reported on the consolidated tape of the New York
Stock Exchange.
(n) "Incentive Stock Option" or "ISO" means an option to
purchase Shares, granted under Article 6 herein,
which is designated as an Incentive Stock Option and
is intended to meet the requirements of Section 422A
of the code.
(o) "Key Employee" means an employee of the Company,
including an employee who is an officer of the
Company, who, in the opinion of members of the
Committee, can contribute significantly to the growth
and profitability of the Company. "Key Employee" also
may include those employees, identified by the
Committee, in situations concerning extraordinary
performance, promotion, retention, or recruitment.
The granting of an Award under this Plan shall be
deemed a determination by the Committee that such
employee is a Key Employee.
(p) "Nonqualified Stock Option" or "NQSO" means an option
to purchase shares, granted under Article 6 herein,
which is not intended to be an Incentive Stock
Option.
(q) "Option" means an Incentive Stock Option or a
Nonqualified Stock Option.
(r) "Option Price" means the price at which a share may
be purchased by a Participant pursuant to an Option,
as determined by the Committee.
(s) "Participant" means a Key Employee of the Company who
has an outstanding Award granted under the Plan.
(t) "Performance Share" means an Award, designated as a
performance share, granted to a Participant pursuant
to Article 8 herein.
(u) "Performance Unit" means an Award, designated as a
performance unit, granted to a Participant pursuant
to Article 8 herein.
(v) "Period of Restriction" means the period during which
the transfer of Shares covered by each grant of
Restricted Stock Units is restricted in some way
(based on the passage of time, the achievement of
performance goals, or upon the occurrence of other
events as determined by the Committee, at its
discretion), and is subject to a substantial risk of
forfeiture, as provided in Article 7 herein.
(w) "Person" shall have the meaning ascribed to such term
in Section 3 (a) (9) of the Exchange Act and used in
Sections 13 (d) and 14 (d) thereof, including a
"group" as defined in Section 13 (d).
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(x) "Restricted Stock Unit" means an Award granted to a
Participant pursuant to Article 7 herein.
(y) "Stock" or "Shares" means the $.10 par value Series
B common stock of The Wackenhut Corporation.
(z) "Covered Employee" means a Participant who, as of the
date of vesting and/or payout of an Award, as
applicable, is one of the group of "covered
employees", as defined in the regulations promulgated
under Code Section 162(m), or any successor thereto.
(aa) "Performance-Base Exception" means the
performance-based exception from the tax
deductibility limitations of Code Section 162(m).
2.2 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
2.3 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Nominating and
Compensation Committee of the Board, or by any other Committee appointed by the
Board consisting of not less than two (2) Directors who are not Employees. The
members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors. No member of the Committee
shall be eligible to participate in the Plan or any similar Plan of the Company
or any of its Subsidiaries while serving on the Committee or shall have been so
eligible at any time within one (1) year prior to his or her service on the
Committee.
3.2 AUTHORITY OF THE COMMITTEE. Subject to the provisions herein and
subject to ratification by the Board, the Committee shall have full power to
select Key Employees to whom Awards are granted; to determine the size and types
of Awards; to determine the terms and conditions of such Awards in a manner
consistent with the Plan; to construe and interpret the Plan and any agreement
or instrument entered into under the Plan; to establish, amend, or waive rules
and regulations for the Plan's administration; and (subject to the provisions of
Article 11 herein) to amend the terms and conditions of any outstanding Award to
the extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Further, the Committee shall have the full power to
make all other determinations which may be necessary or advisable for the
administration of the Plan.
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3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive and binding on
all Persons, including the Company, its stockholders, employees, Participants,
and their estates and beneficiaries.
3.4 PROCEDURES OF THE COMMITTEE. All determinations of the Committee
shall be made by not less than a majority of its members present at the meeting
(in person or otherwise) at which a quorum is present. A majority of the entire
Committee shall constitute a quorum for the transaction of business. Any action
required or permitted to be taken at a meeting of the Committee may be taken
without a meeting if a unanimous written consent, which sets forth the action,
is signed by each member of the Committee and filed with the minutes for
proceedings of the Committee. No member of the Committee shall be liable, in the
absence of bad faith, for any act or omission with respect to his or her
services on the Committee. Service on the Committee shall constitute service as
a Director of the Company so that members of the Committee shall be entitled to
indemnification (as provided in Article 14 herein), and limitation of liability
and reimbursement with respect to their services as members of the Committee to
the same extent as for services as Directors of the Company.
3.5 AWARD AGREEMENTS. Each Award under the Plan shall be evidenced by
an award agreement which shall be signed by an officer of the Company and by the
Participant, and shall contain such terms and conditions as may be approved by
the Committee, which need not be the same in all cases. Any award agreement may
be supplemented or amended in writing from time to time as approved by the
Committee, provided that the terms of such agreements as amended or
supplemented, as well as the terms of the original award agreement, are not
inconsistent with the provisions of the Plan.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANT. Subject to adjustment as
provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be three million one hundred and
thirty five thousand eight hundred and forty four (3,135,844). The Board shall
determine the appropriate methodology for calculating the number of Shares
issued pursuant to the Plan. Unless and until the Board determines that an Award
to a Covered Employee shall not be designed to comply with the Performance-Based
Exception, the following rules shall apply to grants of such Awards under the
Plan:
(a) Stock Options. The maximum aggregate number of Shares that may
be granted in the form of Stock Options, pursuant to any Award
granted in any one fiscal year to any one single Participant,
shall be one hundred thousand (100,000).
(b) Performance Shares/Performance Units. The maximum aggregate
payout (determined as of the end of the applicable performance
period) with respect to Awards of Performance Shares or
Performance Units granted in any one fiscal year to any one
Participant shall be equal to the value of fifty thousand
(50,000) Shares.
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4.2 LAPSED AWARDS. If any Award granted under this Plan terminates,
expires, or lapses for any reason, any Shares subject to such Award again shall
be available for the grant of an Award under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, Stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under Section 4.1
(including such single Participant limits), and in the number and class of
and/or price of Shares subject to outstanding Options, Restricted Stock Units,
Performance Units, and Performance Shares granted under the Plan, as may be
determined to be appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargements of rights; and provided that the
number of Shares subject to any Award shall always be a whole number. Any
adjustment of an ISO under this paragraph shall be made in such a manner so as
not to constitute a "modification" within the meaning of Section 425(h)(3) of
the Code.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include
all Employees of the Company, who, in the opinion of members of the Committee,
are Key Employees. "Key Employees" may include Employees who are members of the
Board, but may not include Directors who are not Employees.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from Key Employees those to whom Awards
shall be granted and shall determine the nature and amount of each Award. No
Employee shall have any right to be granted an Award under this Plan.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Key Employees at any time and from time to time, as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number o Shares subject to Options granted to each
Participant. The Committee may grant ISOs, NQSOs, or a combination thereof.
However, no Employee may receive an Award of ISOs that are first exercisable
during any calendar year to the extent that the aggregate Fair Market Value of
the shares (determined at the time the options are granted) exceeds $100,000.
Nothing in this Article 6 shall be deemed to prevent the grant of NQSOs in
excess of the maximum established by Section 422A of the Code.
6.2 OPTION AGREEMENT. Each Option grant shall be evidenced by an Option
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Option Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Section 422A of the Code,
or a NQSO whose grant is intended not to fall under the Code provisions of
Section 422A.
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6.3 OPTION PRICE. The purchase price per Share covered by an Option
shall be determined BY THE COMMITTEE, but, in the case of an ISO, shall not be
less than 100% of the Fair Market Value of such Share on the date the Option is
granted.
An ISO granted to an employee who, at the time of grant, owns (Within
the meaning of Section 425 (d) of the Code) Shares possessing more than 10% of
the total combined voting power of all classes of stock of the Company, shall
have an exercise price which is at least 110% of the Fair Market Value of the
Shares subject to the Option.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant provided, however, that no ISO
shall be exercisable later than the tenth (10th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 PAYMENT. Options shall be exercised by the delivery of a written
notice of exercise to the Secretary of the Company, setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full
payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having a Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares which are tendered
must have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price), or (c) by a combination of (a) or
(b).
The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law. The proceeds from such a
payment shall be added to the general funds of the Company and shall be used for
general corporate purposes.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Options exercised.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee shall impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan, as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements of
any Stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
6.8 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.
In the event the employment of a Participant is terminated by reason of death or
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disability, any outstanding Options shall become immediately exercisable at any
time prior to the expiration date of the Options or within one year after such
date of termination of employment, whichever period is shorter, by such person
or persons as shall have acquired the Participant's rights under the Option by
will or by the laws of descent and distribution.
In the event the employment of a Participant is terminated by reason of
retirement (as defined under the then established rules of the Company's
nonqualified retirement plan), any outstanding Options shall become immediately
exercisable at any time prior to the expiration date of the options.
In its sole discretion, and prior to the termination of the employment
due to death, disability or retirement, the Committee may extend the period
during which outstanding Options may be exercised.
In the case of ISOs, the tax treatment prescribed under Section 422A of
the Internal Revenue Code of 1986, as amended, may not be available if the
Options are not exercised within the Section 422A prescribed time period after
termination of employment.
6.9 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of
the Participant shall terminate for any reason other than for death, disability,
retirement or for Cause, the Participant shall have the right to exercise
Options that were vested in the Participant at the date of termination within
the 90 days after the date of termination but in no event beyond the expiration
of the term of the Option and only to the extent that the Participant was
entitled to exercise the Option at the date of termination of employment. The
Committee, in its sole discretion, shall have the right to extend the 90 days up
to the expiration date of the Options.
If the employment of the participant shall terminate for Cause, all
outstanding Options immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the vested status of
the Options.
6.10 NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, all Options granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant.
ARTICLE 7. RESTRICTED STOCK UNITS
7.1 GRANT OF RESTRICTED STOCK UNITS. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Restricted Stock Units to Key Employees in such amounts as the Committee
shall determine.
7.2 RESTRICTED STOCK UNIT AGREEMENT. Each Restricted Stock Unit grant
shall be evidenced by a Restricted Stock Unit Agreement that shall specify the
Period of Restriction, or Periods, the number of Restricted Stock Units covered
by the grant, and such other provisions as the Committee shall determine. Each
Restricted Stock Unit shall be equivalent in value to a Share of Common Stock.
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7.3 VESTING. Each grant of Restricted Stock Units shall require the
Participant to remain in the employment of the Corporation or a Subsidiary for a
prescribed period ("Restriction Period"). The Committee shall determine the
Restriction Period or Periods which shall apply to the share of Common Stock
covered by each grant of Restricted Stock Units.
7.4 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any Restricted Stock Units granted pursuant to the Plan as it
may deem advisable including, without limitation, restrictions based upon the
achievement of specific (Company-wide, divisional, and/or individual)
performance goals, and/or restrictions under applicable Federal or state
securities laws.
7.5 PAYMENT. Upon expiration of the Restriction Period or Periods
applicable to each grant of Restricted Stock Units, the Participant shall,
without payment on his part, be entitled to receive payment in an amount equal
to the aggregate fair market value of the shares of Common Stock covered by such
grant on the date of expiration. Such payment may be made only in shares of
Common Stock equal to the number of Restricted Stock Units with respect to which
such payment is made.
7.6 DIVIDEND EQUIVALENTS. A Participant whose Restricted Stock Units
have not previously terminated shall be entitled to receive payment in an amount
equal to each cash dividend the Company would have paid to such Participant
during the term of those Restricted Stock Units as if the Participant has been
the owner of record of the shares of Common Stock covered by such Restricted
Stock Units on the record date for the payment of such dividend. Payment of each
such dividend equivalent shall be made on payment date of the cash dividend with
respect to which it is made, or as soon as practicable thereafter.
7.7 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.
In the event that a Participant's employment is terminated with the Company
because of death, disability or normal retirement (as defined under the then
established rules of the Company), any remaining Period of Restriction
applicable to the Restricted Stock Units pursuant to Section 7.3 hereof shall
automatically terminate and, except as otherwise provided in Section 7.4, the
Shares issued in payment of the Restricted Stock Units shall be free of
restrictions and freely transferable. In the event that a Participant terminates
his employment with the Company because of early retirement (as defined under
the then established rules of the Company), the Committee, in its sole
discretion, may waive the restrictions remaining on any or all grants of
Restricted Stock Units pursuant to Section 7.3 herein and add such new
restrictions to Shares issued in payment of Restricted Stock Units as it deems
appropriate.
7.8 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant terminates his employment with the Company for any reason other than
for death, disability or retirement, as set forth in Section 7.7 herein, during
the Period of Restriction, then any Restricted Stock Units granted still subject
to restrictions as of the date of such termination shall automatically be
forfeited. In such event, the Participant shall not be entitled to receive any
payment with respect to those Restricted Stock Units, except as provided in
Section 7.6 herein, provided, however, that, in the event of any involuntary
termination of the employment of a
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participant by the Company other than for Cause, the Committee, in its sole
discretion, may waive the automatic forfeiture of any or all such Restricted
Stock Unit grants.
ARTICLE 8. PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1 GRANT OF PERFORMANCE UNITS AND PERFORMANCE SHARES. Subject to the
terms and provisions of the Plan, Performance Units or Performance Shares may be
granted to Participants at any time and from time to time as shall be determined
by the Committee. The Committee shall have complete discretion in determining
the number of Performance Units or Performance Shares granted to each
Participant.
8.2 VALUE OF PERFORMANCE UNITS AND PERFORMANCE SHARES. Each Performance
Unit shall have an initial value of one dollar ($1.00) and each Performance
Share initially shall represent one share of Stock. The Committee shall set
performance goals in its discretion which, depending on the extent to which they
are met, will determine the ultimate value of the Performance Unit or
Performance Share to the Participant. The time period during which the
performance goals must be met shall be called a "Performance Period".
8.3 PAYMENT OF PERFORMANCE UNITS AND PERFORMANCE SHARES. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Share shall be entitled to receive the value thereof as determined by the extent
to which performance goals discussed in Section 8.2 have been met.
8.4 FORM AND TIMING OF PAYMENT. Payment in Section 8.3 above shall be
made in cash, stock or a combination thereof as determined by the Committee.
Payment may be made in a lump sum or installments as prescribed by the
Committee. If any payment is to be made on a deferred basis, the Committee may
provide for the payment of dividend equivalents or interest during the deferral
period.
8.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.
In the case of death, disability, or retirement, the holder of a Performance
Unit or Performance Share shall receive pro rata payment based on the number of
months service during the Performance Period but based on the achievement of
performance goals during the entire Performance Period. Payment shall be made at
the time payments are made to Participants who did not temrinate service during
the Performance Period.
8.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant terminates employment with the Company for any reason other than
death, disability or retirement, all Performance Units or Performance Shares
shall be forfeited; provided, however, that in the event of an involuntary
termination of the employment of the Participant by the Company other than for
Cause, the Committee in its sole discretion may waive the automatic forfeiture
provisions and pay out on a pro rata basis based on the achievement of
performance goals during the entire Performance Period; in the event the
Committee chooses to make a pro rata payment, such a payment shall be made at
the time payments are made to Participants who did not terminate service during
the Performance Period.
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8.7 NONTRANSFERABILITY. No Performance Units or Performance Shares
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution until the termination of the applicable Performance Period. All
rights with respect to Performance Units or Performance Shares granted to a
Participant under the Plan shall be exercisable during his lifetime only by the
Participant or the Participant's legal representative.
8.8 PERFORMANCE MEASURES. Unless and until the Committee proposes for
shareholder vote and shareholders approve a change in the general performance
measures set forth in this Section 8.8, the attainment of which may determine
the degree of payout and / or vesting with respect to Awards to Covered
Employees which are designed to qualify for the Performance-Based Exception, the
performance measure(s) to be used for purposes of such grants shall be chosen
from among:
(a) Return on Equity;
(b) Earnings Per Share;
(c) Operating Cash Flow;
(d) Gross Revenue;
(e) Income Before Taxes;
(f) Net Income;
(g) Return on Revenue; and
(h) Stock Price Appreciation.
The Board shall have the discretion to adjust the determinations of the
degree of attainment of the pre-established performance goals; provided,
however, that Awards which are designed to qualify for the Performance-Based
Exception, and which are held by Covered Employees, may not be adjusted upward
(the Board shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and / or securities laws change to
permit Board discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Board shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Board determines that it is advisable to grant
Awards which shall not qualify for the Performance-Based Exception, the Board
may make such grants without satisfying the requirements of Code Section 162(m).
ARTICLE 9. RIGHTS OF EMPLOYEES
9.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company.
9.2 PARTICIPATION. No employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
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ARTICLE 10. CHANGE IN CONTROL
10.1 STOCK BASED AWARDS. Notwithstanding the remaining provisions of
the Plan, in the event of a Change in Control of the Company, all Stock based
awards granted under this Plan, including NQSOs, ISOs, and Restricted Stock
Units, that are still outstanding and not yet vested, shall become immediately
100% vested in each Participant, as of the first date that the definition of
Change in Control has been fulfilled, and shall remain as such for the remaining
life of the Award, as such life is provided herein and within the provisions of
the related individual Award Agreements. Within ten (10) business days after the
occurrence of a Change in Control, the stock certificates representing payment
of Restricted Stock Unit grants, without any restrictions or legend thereon,
shall be delivered to the applicable Participants.
10.2 PERFORMANCE BASED AWARDS. Notwithstanding the remaining provisions
of the Plan, in the event of a Change in Control of the Company, all performance
based awards granted under this Plan shall be immediately paid out in cash,
including Performance Units or Performance shares. The amount of the payout
shall be based on the extent to which performance goals, established for the
Performance Period then in progress, have been met up to the date of the Change
in Control, or at target, whichever is higher.
10.3 POOLING OF INTERESTS ACCOUNTING. Notwithstanding any other
provision of the Plan to the contrary, in the event that the consummation of a
Change in Control is contingent on using the pooling of interests accounting
methodology, the Board may take any action necessary to preserve the use of
pooling of interests accounting.
ARTICLE 11. AMENDMENT, MODIFICATION AND TERMINATION
11.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend, or
modify the Plan. However, without the approval of the stockholders of the
company (as may be required by the Code, by the insider trading rules of Section
16 of the Exchange Act, by any national securities exchange or system on which
the Shares are then listed or reported, or by a regulatory body having
jurisdiction with respect hereto), no such termination, amendment, or
modification may:
(a) Increase the total amount of Shares which may be
issued under this Plan, except as provided in Section
4.3 herein; or
(b) Change the class of employees eligible to participate
in the Plan; or
(c) Materially increase the cost of the Plan or
materially increase the benefits to Participants; or
(d) Extend the maximum period after the date of grant
during which Options may be exercised; or
(e) Change the provisions of the Plan regarding Option
Price.
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11.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment or
modification of the Plan shall in any manner adversely affect any Award
previously granted under the Plan, without the written consent of the
Participant.
11.3 COMPLIANCE WITH CODE SECTION 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall comply
with the requirements of Code Section 162(m); provided, however, that in the
event the Board determines that such compliance is not desired with respect to
any Award or Awards available for grant under the Plan, then compliance with
Code Section 162(m) will not be required. In addition, in the event that changes
are made to Code Section 162(m) to permit greater flexibility with respect to
any Award or Awards available under the Plan, the Board may, subject to this
Article 11, make any adjustments it deems appropriate.
ARTICLE 12. WITHHOLDING
12.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise or payment made under or as a result of this Plan.
12.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of NQSOs, or upon the payment of Restricted Stock Units, or upon the
payment of Performance Units or Performance shares (if paid in full or part in
Shares), participants may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair market Value, on the date the tax is to be
determined, equal to the amount required to be withheld. All elections shall be
irrevocable, and be made in writing, signed by the Participant in advance of the
day that the transaction becomes taxable.
Share withholding elections made by Participants who are subject to the
short-swing profit restrictions of Section 16 of the Exchange Act must comply
with such additional restrictions in making their election.
ARTICLE 13. REDEMPTION OF COMMON STOCK
ON TERMINATION OF EMPLOYMENT
As of the time of voluntary or involuntary termination of employment of
a Participant and at the discretion of the Committee, Participant shall sell to
the Corporation, and the Corporation shall redeem from the Participant, all of
Participant's Shares, that are owned or have vested due to Participant's
participation in the Plan. The redemption price for each Share redeemed shall be
the average of the highest and lowest price at which the Stock was traded during
the five business days preceding the date of the Committee's decision to redeem
the Shares of a participant. The redeemed shares shall be transferred to the
Corporation properly endorsed by the Participant free and clear of all claims,
liens and encumbrances whatsoever. As used herein, the term "termination of
employment" means the complete termination of employment.
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ARTICLE 14. INDEMNIFICATION
Each Person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of any judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at
its own expense, to handle and defend the same before he undertakes to handle
and defend it on his own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such Persons
may be entitled under the Company's Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
ARTICLE 15. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all substantially all of the business
and/or assets of the Company.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
16.2 GOVERNING LAW. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Florida.
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