EXHIBIT 10.49
UNIVERSAL ELECTRONICS INC.
2002 STOCK INCENTIVE PLAN
EFFECTIVE FEBRUARY 5, 2002
TABLE OF CONTENTS
SECTION 1.GENERAL PURPOSE OF PLAN; DEFINITIONS.............................................A-3
SECTION 2.ADMINISTRATION...................................................................A-4
SECTION 3.NUMBER OF SHARES OF STOCK SUBJECT TO PLAN........................................A-5
SECTION 4.ELIGIBILITY......................................................................A-5
SECTION 5.STOCK OPTIONS....................................................................A-6
SECTION 6.STOCK APPRECIATION RIGHTS........................................................A-8
SECTION 7.RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS...............................A-9
SECTION 8.AMENDMENT AND TERMINATION...................................................... A-10
SECTION 9.UNFUNDED STATUS OF PLAN.........................................................A-11
SECTION 10.GENERAL PROVISIONS.............................................................A-11
SECTION 11.EFFECTIVE DATE OF PLAN.........................................................A-12
SECTION 12.TERM OF PLAN...................................................................A-12
UNIVERSAL ELECTRONICS INC.
2002 STOCK INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this Plan is the Universal Electronics Inc. 2002 Stock Incentive
Plan (the "Plan"). The purpose of this Plan is to enable the Corporation (as
hereinafter defined) and its Subsidiaries (as hereinafter defined) to obtain and
retain competent personnel who will contribute to the Corporation's success by
their ability, ingenuity and industry and to provide incentives to the
participating directors, officers and other employees which are related to
increases in stockholder value and will therefore inure to the benefit of all
stockholders of the Corporation.
For purposes of this Plan, the following terms shall be defined as set forth
below:
(a) "Award" means any grant under this Plan in the form of Stock Options, Stock
Appreciation Rights, Performance Stock Units, Restricted Stock Units or any
combination of the foregoing.
(b) "Board" means the Board of Directors of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.
(d) "Committee" means the Compensation Committee or any other committee the
Board may subsequently appoint to administer this Plan. The Committee shall
be composed entirely of directors who meet the qualifications referred to
in Section 2 of this Plan.
(e) "Corporation" means Universal Electronics Inc., a corporation incorporated
under the laws of the State of Delaware (or any successor corporation),
including, where applicable, any and all of its subsidiaries or related
entities.
(f) "Disability" means an event of illness or other incapacity of Optionee
resulting in Optionee's failure or inability to discharge Optionee's duties
as an employee of the Corporation, any Subsidiary or any Related Entity for
ninety (90) or more days during any period of 120 consecutive days.
(g) "Eligible Employee" means an employee of the Corporation, any Subsidiary or
any Related Entity as described in Section 4 of this Plan.
(h) "Fair Market Value" means, as of any given date, with respect to any Awards
granted hereunder, the mean of the high and low trading price of the Stock
on such date as reported on The Nasdaq Stock Market or if the Stock is not
then traded on The Nasdaq Stock Market, on such other national securities
exchange on which the Stock is admitted to trade or, if none, on the
National Association of Securities Dealers Automated Quotation System if
the Stock is admitted for quotation thereon; provided, however, that if any
such system, exchange or quotation system is closed on any day on which
Fair Market Value is to be determined, Fair Market Value shall be
determined as of the first day immediately proceeding such day on which
such system, exchange or quotation system was open for trading; provided,
further, that in all other circumstances, "Fair Market Value" means the
value determined by the Committee after obtaining an appraisal by one or
more independent appraisers meeting the requirements of regulations issued
under Section 170(a)(1) of the Code.
(i) "Incentive Stock Option" means any Stock Option intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Code.
(j) "Non-Employee Director" shall have the meaning set forth in Rule 16b-3
("Rule 16b-3"), as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended from time to time
(the "Exchange Act"), or any successor definition adopted by the Securities
and Exchange Commission.
(k) "Nonqualified Stock Option" means any Stock Option that is not an Incentive
Stock Option.
(l) "Optionee" means a Participant granted a Stock Option pursuant to Section 5
of this Plan which remains outstanding.
(m) "Participant" means any Eligible Employee selected by the Committee,
pursuant to the Committee's authority in Section 2 of this Plan, to receive
Awards.
(n) "Performance Stock Unit" means the right to receive one share of Stock as
set forth in an Award granted pursuant to Section 7 of this Plan.
(o) "Related Entity" means any corporation, joint venture or other entity,
domestic or foreign, other than a Subsidiary, in which the Corporation
owns, directly or indirectly, a substantial equity interest.
(p) "Restricted Stock Unit" means the right to receive one share of Stock as
set forth in an Award granted pursuant to Section 7 of this Plan.
(q) "Retirement" means (i) retirement from active employment under a retirement
plan of the Corporation, any Subsidiary or Related Entity or under an
employment contract with any of them or (ii) termination of employment at
or after age 55 under circumstances which the Committee, in its sole
discretion, deems equivalent to retirement.
(r) "Stock" means the common stock, par value $0.01 per share, of the
Corporation.
(s) "Stock Appreciation Right" means the right pursuant to an Award granted
under Section 6 of this Plan, (i) in the case of a Related Stock
Appreciation Right (as defined in Section 6 of this Plan), to surrender to
the Corporation all or a portion of the related Stock Option and receive an
amount equal to the excess of the Fair Market Value of one share of Stock
as of the date such Stock Option or portion thereof is surrendered over the
option price per share specified in such Stock Option, multiplied by the
number of shares of Stock in respect of which such Stock Option is being
surrendered and (ii) in the case of a Freestanding Stock Appreciation Right
(as defined in Section 6 of this Plan), receive an amount equal to the
excess of the Fair Market Value of one share of Stock as of the date of
exercise over the price per share specified in such Freestanding Stock
Appreciation Right, multiplied by the number of shares of Stock in respect
of which such Freestanding Stock Appreciation Right is being exercised.
(t) "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5 of this Plan.
(u) "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation, if each of the corporations (other than the
last corporation in the unbroken chain) owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the
other corporations in the chain.
SECTION 2. ADMINISTRATION.
This Plan shall be administered by the Committee, composed solely of two or more
directors who are Non-Employee Directors, who shall be appointed by the Board
and who shall serve at the pleasure of the Board. In the event that a Committee
has not been appointed or in the Board's sole discretion, this Plan shall be
administered by the Board which shall have all of the power and authority of the
Committee set forth below. The Committee shall have the power and authority in
its sole discretion to grant Awards pursuant to the terms and provisions of this
Plan.
In particular, the Committee shall have the full authority, not inconsistent
with this Plan:
(a) to select Participants;
(b) to determine whether and to what extent Awards are to be granted to
Participants hereunder;
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(c) to determine the number of shares of Stock to be covered by each such Award
granted hereunder, but in no case shall such number be in the aggregate
greater than that allowed under this Plan;
(d) to approve or ratify transactions by Participants involving acquisitions
from the Corporation or dispositions to the Corporation of equity
securities of the Corporation made pursuant to the terms of this Plan;
(e) to determine the terms and conditions of any Award granted hereunder
(including, without limitation, (i) the restrictive periods applicable to
Restricted Stock Unit Awards and (ii) the performance objectives and
periods applicable to Performance Stock Unit Awards);
(f) to waive compliance by a Participant with any obligation to be performed by
such Participant under any Award and to waive any term or condition of any
such Award (provided, however, that no such waiver shall detrimentally
affect the rights of the Participant without such Participant's consent);
and
(g) to determine the terms and conditions which shall govern all written
agreements evidencing the Awards.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan as it shall,
from time to time deem advisable; to interpret the provisions of this Plan and
the terms and conditions of any Award issued, expired, terminated, canceled or
surrendered under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan.
All decisions made by the Committee pursuant to the provisions of this Plan and
as to the terms and conditions of any Award (and any agreements relating
thereto) shall be final and binding on all persons, including the Corporation
and any Optionee.
SECTION 3. NUMBER OF SHARES OF STOCK SUBJECT TO PLAN.
One million (1,000,000) shares of Stock are reserved and available for issuance
under this Plan. Such shares may consist, in whole or in part, of authorized and
unissued shares or issued shares reacquired by the Corporation from time to
time, as the Board may determine.
To the extent that (a) a Stock Option expires or is otherwise terminated,
canceled or surrendered without being exercised (including, without limitation,
in connection with the grant of a replacement option) or (b) any Restricted
Stock Unit Award or Performance Stock Unit Award granted hereunder expires or is
otherwise terminated or is canceled, the shares of Stock underlying such Stock
Option or subject to such Restricted Stock Unit Award or Performance Stock Unit
Award shall again be available for issuance in connection with future Awards
under this Plan. Upon the exercise of a Related Stock Appreciation Right, the
Stock Option, or the part thereof to which such Related Stock Appreciation Right
is related, shall be deemed to have been exercised for the purpose of the
limitation on the number of shares of Stock in respect of which the Related
Stock Appreciation Right was exercised.
In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, spin-off, or other change in corporate structure or
capitalization affecting the Stock, the Committee shall make an equitable
adjustment or substitution in the number and class of shares reserved for
issuance under this Plan, the number and class of shares covered by outstanding
Awards and the option price per share of Stock Options or the applicable price
per share specified in Stock Appreciation Rights to reflect the effect of such
change in corporate structure or capitalization on the Stock; provided, however,
that any fractional shares resulting from such adjustment shall be eliminated;
provided further, however, that if by reason of any such change in corporate
structure or capitalization a Participant holding a Restricted Stock Unit Award
or Performance Stock Unit Award shall be entitled, subject to the terms and
conditions of such Award, to additional or different shares of any security, the
issuance of such additional or different shares shall thereupon be subject to
all of the terms and conditions (including restrictions and performance
criteria) which were applicable to such Award prior to such change in corporate
structure or capitalization; and, provided, further, however, that unless the
Committee in its sole discretion determines otherwise, any issuance by the
Corporation of shares of stock of any class or securities convertible into
shares of stock of any class shall not affect, and no such adjustment or
substitution by reason thereof
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shall be made with respect to, the number or class of shares reserved for
issuance under this Plan, the number or class of shares covered by outstanding
Awards or any option price or applicable price.
SECTION 4. ELIGIBILITY.
Directors, officers and other employees of the Corporation, its Subsidiaries and
its Related Entities who are responsible for or contribute to the management,
growth or profitability of the business of the Corporation, its Subsidiaries or
its Related Entities, as determined by the Committee, shall be eligible to be
granted Awards; provided however, with respect to an employee of a Related
Entity, that such person was an employee of the Corporation, a Subsidiary or, if
originally an employee of the Corporation or a Subsidiary, of another Related
Entity immediately prior to becoming employed by such Related Entity and
accepted employment with such Related Entity at the request of the Corporation
or a Subsidiary. The Participants under this Plan shall be selected, from time
to time, by the Committee, in its sole discretion, from among those Eligible
Employees.
SECTION 5. STOCK OPTIONS.
(a) GRANT AND EXERCISE. Stock Options may be granted either alone or in
addition to other Awards granted under this Plan. Any Stock Option granted
under this Plan shall be in such form as the Committee may, from time to
time, approve, and the terms and conditions of Stock Option Awards need not
be the same with respect to each Optionee. Each Optionee shall enter into a
Stock Option agreement ("Stock Option Agreement") with the Corporation, in
such form as the Committee shall determine, which agreement shall set
forth, among other things, the exercise price of the Stock Option, the term
of the Stock Option and conditions regarding exercisability of the Stock
Option granted thereunder.
(i) NATURE OF OPTIONS. The Committee shall have the authority to grant any
Participant either Incentive Stock Options, Nonqualified Stock Options
or both types of Stock Options (in each case with or without Stock
Appreciation Rights), except that the Committee shall not grant any
Incentive Stock Options to an employee of a Related Entity. Any Stock
Option which does not qualify as an Incentive Stock Option, or the
terms of which at the time of its grant provide that it shall not be
treated as an Incentive Stock Option, shall constitute a Nonqualified
Stock Option.
(ii) EXERCISABILITY. Subject to such terms and conditions as shall be
determined by the Committee in its sole discretion at or after the
time of grant, Stock Options shall be exercisable from time to time
(a) to the extent of twenty-five percent (25%) of the number of shares
of Stock covered by the Stock Option, on and after the first
anniversary and before the second anniversary of the date of grant of
the Stock Option, (b) to the extent of fifty percent (50%) of the
number of shares of Stock covered by the Stock Option, on and after
the second anniversary and before the third anniversary of the date of
grant of the Stock Option, (c) to the extent of seventy-five percent
(75%) of the number of shares of Stock covered by the Stock Option, on
and after the third anniversary and before the fourth anniversary of
the date of grant of the Stock Option and (d) to the extent of one
hundred percent (100%) of the number of shares of Stock covered by the
Stock Option, on and after the fourth anniversary of the date of grant
of the Stock Option and before the expiration of the stated term of
the Stock Option (or to such lesser extent as the Committee in its
sole discretion shall determine at the time of grant or to such
greater extent as the Committee in its sole discretion shall determine
at or after the time of grant).
(iii) METHOD OF EXERCISE. Stock Options may be exercised by giving written
notice of exercise delivered in person or by mail as required by the
terms of any Stock Option Agreement at the Corporation's principal
executive office, specifying the number of shares of Stock with
respect to which the Stock Option is being exercised, accompanied by
payment in full of the option price in cash or its equivalent as
determined by the Committee in its sole discretion. If requested by
the Committee, the Optionee shall deliver to the Corporation the Stock
Option Agreement evidencing the Stock Option being exercised for
notation thereon of such exercise and return thereafter of such
agreement to the Optionee. As determined by the Committee in its sole
discretion at or after the time of grant, payment of the option price
in full or in part may also be made in the form of shares of
unrestricted Stock
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already owned by the Optionee (based on the Fair Market Value of the
Stock on the date the Stock Option is exercised); provided, however,
that in the case of an Incentive Stock Option, the right to make
payment of the option price in the form of already owned shares of
Stock may be authorized only at the time of grant. 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
this Plan's purpose and applicable law. An Optionee shall generally
have the rights to dividends or other rights of a stockholder with
respect to shares of Stock subject to the Stock Option when the
Optionee has given written notice of exercise, has paid in full for
such shares of Stock, and, if requested, has made representations
described in Section 10(a) of this Plan.
(b) TERMS AND CONDITIONS. Stock Options granted under this Plan shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem desirable.
(i) OPTION PRICE. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of
grant, but shall be not less than 100% of the Fair Market Value of the
Stock on the date of the grant; provided, however, that if any
Participant owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Corporation or any
Subsidiary when an Incentive Stock Option is granted to such
Participant, the option price of such Incentive Stock Option (to the
extent required by the Code at the time of grant) shall be not less
than 110% of the Fair Market Value of the Stock on the date such
Incentive Stock Option is granted.
(ii) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee at the time of grant, but no Stock Option shall be
exercisable more than ten years after the date such Stock Option is
granted; provided, however, that if any Participant owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of
stock of the Corporation or any Subsidiary when an Incentive Stock
Option is granted to such Participant, such Stock Option (to the
extent required by the Code at time of grant) shall not be exercisable
more than five years from the date such Incentive Stock Option is
granted.
(iii) TRANSFERABILITY OF OPTIONS. Except as otherwise determined by the
Committee, no Stock Option shall be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution and,
during the Optionee's lifetime, all Stock Options shall be exercisable
only by the Optionee, or in the case of Optionee's legal incompetency,
only by Optionee's guardian or legal representative.
(iv) OPTION EXERCISE AFTER TERMINATION BY REASON OF DEATH OR DISABILITY. If
an Optionee's employment with the Corporation, any Subsidiary or any
Related Entity terminates by reason of death or Disability, and Stock
Option held by such Optionee may thereafter be exercised for a period
of one year (or such shorter or longer period as the Committee in its
sole discretion shall specify at or after the time of grant) from the
date of such termination or until the expiration of the stated term of
such Stock Option, whichever period is shorter, to the extent to which
the Optionee would on the date of termination have been entitled to
exercise the Stock Option (or to such greater or lesser extent as the
Committee in its sole discretion shall determine at or after the time
of grant). In the event of a termination of employment by reason of
death or Disability, if an Incentive Stock Option is exercised after
the expiration of the exercise period that applies for purposes of
Section 422 of the Code, such Stock Option will thereafter be treated
as a Nonqualified Stock Option.
(v) OPTION EXERCISE AFTER TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE
TERMINATION. If an Optionee's employment with the Corporation, any
Subsidiary, or any Related Entity is terminated, by the Corporation or
such Subsidiary or such Related Entity, without "Cause" (as such term
is defined in the Stock Option Agreement) or in the event of
"Constructive Termination" (as such term is defined in the Stock
Option Agreement), the Committee, in its sole discretion, may permit
the Optionee to
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exercise any Stock Option held by such Optionee, to the extent not
theretofore exercised, in whole or in part with respect to all
remaining shares covered by the Stock Option at any time prior to the
expiration of the Stock Option (or such shorter period as the
Committee in its sole discretion shall specify at or after the time of
grant), or to such greater or lesser extent as the Committee in it
sole discretion shall determine at or after the time of grant. An
Optionee's acceptance of employment, at the request of the Corporation
or a Subsidiary, with a Related Entity (or acceptance of employment,
at the request of the Corporation or a Subsidiary, with any other
Related Entity), shall not be deemed a termination of employment
hereunder and any Stock Option held by Optionee may be exercised
thereafter to the extent that the Optionee would on the date of
exercise have been entitled to exercise such Stock Option if such
Optionee had continued to be employed by the Corporation or such
Subsidiary (or such initial Related Entity), provided that the
Optionee has been in continuous employ with the Related Entity to
which such Optionee has moved from the date of acceptance of
employment therewith until the date of exercise. In the event of
termination of employment by the Corporation, any Subsidiary or any
Related Entity without Cause or in the event of Constructive
Termination of the Optionee's employment or the acceptance of
employment with a Related Entity, if an Incentive Stock Option is
exercised after the expiration of the exercise period that applies for
purposes of Section 422 of the Code, such Stock Option will thereafter
be treated as a Nonqualified Stock Option.
(vi) OPTION EXERCISE AFTER TERMINATION TO RESIGNATION. If an Optionee's
employment with the Corporation, any Subsidiary, or any Related Entity
terminates as a result of Optionee's voluntary resignation , other
than a voluntary resignation due to a Constructive Termination (as
defined in the Stock Option Agreement), the Committee, in its sole
discretion, may permit the Optionee to exercise any Stock Option held
by such Optionee to the extent such Option was exercisable on the date
of such termination (or to such greater or lesser extent as the
Committee in its sole discretion shall determine at or after the time
of grant) for a period of time equal to the shorter of (i) ninety (90)
days from the date of such termination (or such shorter period as the
Committee in its sole discretion shall specify at or after the time of
grant) or (ii) the expiration of the stated term of such Stock Option.
(vii) OTHER TERMINATION. Except as otherwise provided in this Section 5 of
this Plan, or as determined by the Committee in its sole discretion,
if an Optionee's employment with the Corporation, any Subsidiary or
any Related Entity terminates, all Stock Options held by the Optionee
will terminate immediately without the necessity of any further action
by the Corporation, the Committee or the Optionee.
(viii) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required for
incentive stock option treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the date of Incentive
Stock Option is granted) of the shares of Stock with respect to which
Incentive Stock Options granted under this Plan and all other option
plans of the Corporation or any Subsidiary become exercisable for the
first time by an Optionee during any calendar year shall not exceed
$100,000; provided, however, that if the aggregate Fair Market Value
(so determined) of the shares of Stock covered by such options exceeds
$100,000 during any year in which they become exercisable, such
options with a Fair Market Value in excess of $100,000 will be
Nonqualified Stock Options.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted either in
conjunction with all or part of any Stock Option granted under this Plan
("Related Stock Appreciation Rights") or alone ("Freestanding Stock
Appreciation Rights") and, in either case, in addition to other Awards
granted under this Plan. Participants shall enter into a Stock Appreciation
Rights Agreement with the Corporation if requested by the Committee, in
such form as the Committee shall determine.
(i) TIME OF GRANT. Related Stock Appreciation Rights related to a
Nonqualified Stock Option may be granted either at or after the time
of the grant of such Nonqualified Stock Option. Related Stock
Appreciation Rights related to such an Incentive Stock Option may be
granted only at the time of the
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grant of such Incentive Stock Option. Freestanding Stock Appreciation
Rights may be granted at any time.
(ii) EXERCISABILITY. Related Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Stock Options to
which they relate shall be exercisable in accordance with the
provisions of Section 5(a)(ii) of this Plan and Freestanding Stock
Appreciation Rights shall be exercisable, subject to such terms and
conditions as shall be determined by the Committee in its sole
discretion at or after the time of grant, from time to time, to the
extent that Stock Options are exercisable in accordance with the
provisions of Section 5(a)(ii) of this Plan. A Related Stock
Appreciation Right granted in connection with an Incentive Stock
Option may be exercised only if and when the Fair Market Value of the
Stock subject to the Incentive Stock Option exceeds the option price
of such Stock Option.
(iii) METHOD OF EXERCISE. Stock Appreciation Rights shall be exercised by a
Participant by giving written notice of exercise delivered in person
or by mail as required by the terms of any agreement evidencing the
Stock Appreciation Right at the Corporation's principal executive
office, specifying the number of shares of Stock in respect of which
the Stock Appreciation Right is being exercised. If requested by the
Committee, the Participant shall deliver to the Corporation the
agreement evidencing the Stock Appreciation Right being exercised and,
in the case of a Related Stock Appreciation Right, the Stock Option
Agreement evidencing any related Stock Option, for notation thereon of
such exercise and return thereafter of such agreements to the
Participant.
(iv) AMOUNT PAYABLE. Upon the exercise of a Related Stock Appreciation
Right, an Optionee shall be entitled to receive an amount in cash or
shares of Stock equal in value to the excess of the Fair Market Value
of one share of Stock on the date of exercise over the option price
per share specified in the related Stock Option, multiplied by the
number of shares of Stock in respect of which the Related Stock
Appreciation Rights shall have been exercised, with the Committee
having in its sole discretion the right to determine the form of
payment. Upon the exercise of a Freestanding Stock Appreciation Right,
a Participant shall be entitled to receive an amount in cash or shares
of Stock equal in value to the excess of the Fair Market Value of one
share of Stock on the date of exercise over the price per share
specified in the Freestanding Stock Appreciation Right, which shall be
not less than 100% of the Fair Market Value of the Stock on the date
of Grant, multiplied by the number of shares of Stock in respect of
which the Freestanding Stock Appreciation Rights shall have been
exercised, with the Committee having in its sole discretion the right
to determine the form of payment.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights under this Plan shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions not inconsistent with the terms of this
Plan, as the Committee shall deem desirable.
(i) TERMS OF STOCK APPRECIATION RIGHTS. The term of a Related Stock
Appreciation Right shall be the same as the term of the related Stock
Option. A Related Stock Appreciation Right or applicable portion
thereof shall terminate and no longer be exercisable upon the
exercise, termination, cancellation or surrender of the related Stock
Option, except that, unless otherwise provided by the Committee in its
sole discretion at or after the time of grant, a Related Stock
Appreciation Right granted with respect to less than the full number
of shares of Stock covered by a related Stock Option shall terminate
and no longer be exercisable if and to the extent that the number of
shares of Stock covered by the exercise, termination, cancellation or
surrender of the related Stock Option exceeds the number of shares of
Stock not covered by the Related Stock Appreciation Right.
The term of each Freestanding Stock Appreciation Right shall be fixed by
the Committee, but no Freestanding Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.
(ii) TRANSFERABILITY OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall be transferable only when and to the extent that a Stock
Option would be transferable under Section 5(b)(iii) of this Plan.
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(iii) TERMINATION OF EMPLOYMENT. In the event of the termination of
employment of an Optionee holding a Related Stock Appreciation Right,
such right shall be exercisable to the same extent that the related
Stock Option is exercisable after such termination. In the event of
the termination of employment of the holder of a Freestanding Stock
Appreciation Right, such right shall be exercisable to the same extent
that a Stock Option with the same terms and conditions as such
Freestanding Stock Appreciation Right would have been exercisable in
the event of the termination of employment of the holder of such Stock
Option.
SECTION 7. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) GRANT. Awards of Restricted Stock Units or Performance Stock Units may be
granted either alone or in addition to other Awards granted under this
Plan. Each Restricted Stock Unit or Performance Stock Unit represents the
right to receive, subject to the terms and provisions of this Plan and any
agreements evidencing such Awards, one share of Stock. If the Committee in
its sole discretion so determines at the time of grant, a Participant to
whom a Restricted Stock Unit Award or Performance Stock Unit Award has been
granted may be credited with an amount equivalent to all cash dividends
("Dividend Equivalents") that would have been paid to the holder of such
Restricted Stock Unit Award or Performance Stock Unit Award if one share of
Stock for every Restricted Stock Unit or Performance Stock Unit awarded had
been issued to the holder on the date of grant of such Restricted Stock
Unit Award or Performance Stock Unit Award. The Committee shall determine
the terms and conditions of each Restricted Stock Unit Award and
Performance Stock Unit, including without limitation, the number of
Restricted Stock Units or Performance Stock Units to be covered by such
Awards, the restricted period applicable to Restricted Stock Unit Awards
and the performance objectives applicable to Performance Stock Unit Awards.
The Committee in its sole discretion may prescribe terms and conditions
applicable to the vesting of such Restricted Stock Unit Awards or
Performance Stock Unit Awards in addition to those provided in this Plan.
The Committee shall establish such rules and guidelines governing the
crediting of Dividend Equivalents, including the timing, form of payment
and payment contingencies of Dividend Equivalents, as it may deem
desirable. The Committee in its sole discretion may at any time accelerate
the time at which the restrictions on all or any part of a Restricted Stock
Unit Award lapse or deem the performance objectives with respect to all or
any part of a Performance Stock Unit Award to have been attained.
Restricted Stock Units Awards and Performance Stock Unit Awards shall not
be transferable otherwise than by will or by the laws of descent and
distribution. Shares of Stock shall be deliverable upon the vesting of
Restricted Stock Unit Awards and Performance Stock Unit Awards for no
consideration other than services rendered or, in the Committee's sole
discretion, the minimum amount of consideration other than services (such
as the par value of Stock) required to be received by the Corporation in
order to assure compliance with applicable state law, which amount shall
not exceed 10% of the Fair Market Value of such shares of Stock on the date
of issuance. Each such Award shall be evidenced by a Restricted Stock Unit
Award agreement ("Restricted Stock Unit Award Agreement") or Performance
Stock Unit Award agreement ("Performance Stock Unit Award Agreement").
(b) TERMS AND CONDITIONS. Unless otherwise determined by the Committee in its
sole discretion:
(i) a breach of any term or condition provided in this Plan, the
Restricted Stock Unit Award Agreement or the Performance Stock Unit
Award Agreement or established by the Committee with respect to such
Restricted Stock Unit Award or Performance Stock Unit Award will cause
a cancellation of the unvested portion of such Restricted Stock Unit
Award or Performance Stock Unit Award (including any Dividend
Equivalents credited in respect thereof) and the Participant shall not
be entitled to receive any consideration in respect of such
cancellation; and
(ii) termination of such holder's employment with the Corporation, any
Subsidiary or any Related Entity prior to the lapsing of the
applicable restriction period or attainment of applicable performance
objectives will cause a cancellation of the unvested portion of such
Restricted Stock Unit Award or Performance Stock Unit Award (including
any Dividend Equivalents credited in respect thereof) and the
Participant shall not be entitled to receive any consideration in
respect of such cancellation.
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(c) COMPLETION OF RESTRICTION PERIOD AND ATTAINMENT OF PERFORMANCE OBJECTIVES.
To the extent that restrictions with respect to any Restricted Stock Unit
Award lapse or performance objectives with respect to any Performance Stock
Unit Award are attained and provided that other applicable terms and
conditions have been satisfied:
(i) such of the Restricted Stock Units or Performance Stock Units as to
which restrictions have lapsed or performance objectives have been
attained shall become vested and the Committee shall cause to be
issued and delivered to the Participant a stock certificate
representing a number of shares of Stock equal to such number of
Restricted Stock Units or Performance Stock Units, and, subject to
Section 10(a) hereof, free of all restrictions; and
(ii) any Dividend Equivalents credited in respect of such Restricted Stock
Units or Performance Stock Units shall become vested to the extent
that such Restricted Stock Units or Performance Stock Units shall have
become vested and the Committee shall cause such Dividend Equivalents
to be delivered to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit Award (including
any Dividend Equivalents credited in respect thereof) that shall not have become
vested at the end of the applicable restricted period or the period given for
the attainment of performance objectives shall expire, terminate and be canceled
and the Participant shall not thereafter have any rights with respect to the
Restricted Stock Units or Performance Stock Units (or any Dividend Equivalents
credited in respect thereto) covered thereby.
SECTION 8. AMENDMENT AND TERMINATION.
The Board may amend, alter, or discontinue this Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of a
Participant under any Award theretofore granted without such Participant's
consent, or which, without the approval of the stockholders of the Corporation
(where such approval is necessary to satisfy then applicable requirements of
Rule 16b-3 under the Exchange Act, The Nasdaq Stock Market, Inc., any Federal
tax law relating to Incentive Stock Options or any applicable state law), would:
(a) except as provided in Section 3 of this Plan, increase the total number of
shares of Stock which may be issued under this Plan;
(b) except as provided in Section 3 of this Plan, decrease the option price of
any Stock Option to less than 100% of the Fair Market Value on the date of
the grant of the Option;
(c) change the class of employees eligible to participate in this Plan; or
(d) extend (i) the period during which Stock Options may be granted or (ii) the
maximum period of any Award under Sections 5(b)(ii) or 6(b)(i) of this
Plan.
Except as restricted herein with respect to Incentive Stock Options, the
Committee may amend or alter the terms and conditions of any Award theretofore
granted, and of any agreement evidencing such Award, prospectively or
retroactively, but no such amendment or alteration shall impair the rights of
any Optionee under such Award or agreement without such Optionee's consent.
SECTION 9. UNFUNDED STATUS OF PLAN.
This Plan is intended to constitute an "unfunded" plan. With respect to any
payments not yet made and due to a Participant by the Corporation, nothing
contained herein shall give any such Participant any rights that are greater
than those of a general unsecured creditor of the Corporation.
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SECTION 10. GENERAL PROVISIONS.
(a) The Committee may require each Optionee purchasing shares of Stock pursuant
to a Stock Option to represent to and agree with the Corporation in writing
that such Optionee is acquiring the shares of Stock without a view to
distribution thereof. All certificates for shares of Stock delivered under
this Plan and, to the extent applicable, all evidences of ownership with
respect to Dividend Equivalents delivered under this Plan, shall be subject
to such stock-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock
is then listed or quotation system on which the Stock is admitted for
trading and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from adopting other
or additional compensation arrangements, subject to stockholder approval if
such approval is required, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of this Plan
shall not confer upon any employee of the Corporation, any Subsidiary or
any Related Entity any right to continued employment with the Corporation,
any Subsidiary or any Related Entity as the case may be, nor shall it
interfere in any way with the right of the Corporation, any Subsidiary or
any Related Entity to terminate the employment of any of its employees at
any time.
(c) Each Participant shall be deemed to have been granted an Award on the date
the Committee took action to grant such Award under this Plan or such later
date as the Committee in its sole discretion shall determine at the time
such grant is authorized.
(d) Unless the Committee otherwise determines, each Participant shall, no later
than the date as of which the value of an Award first becomes includable in
the gross income of the Participant for federal income tax purposes, pay to
the Corporation, or make arrangements satisfactory to the Committee
regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Award. The obligations
of the Corporation under this Plan shall be conditional on such payment or
arrangements and the Corporation (and, where applicable, its Subsidiaries
and its Related Entities) shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due
to the Participant. A Participant may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the
Corporation to withhold from shares of Stock to be issued upon the exercise
of a Stock Option or upon the vesting of any Restricted Stock Unit Award or
the Performance Stock Unit Award a number of shares of Stock with an
aggregate Fair Market Value that would satisfy the withholding amount due,
or (ii) transferring to the Corporation shares of Stock owned by the
Participant with an aggregate Fair Market Value that would satisfy the
withholding amount due. With respect to any Participant who is a director
or an executive officer, the election to satisfy the tax withholding
obligations relating to the exercise of a Stock Option or to the vesting of
a Restricted Stock Unit Award or Performance Stock Unit Award in the manner
permitted by this subsection (d) shall be made during the "window period"
as described within the Corporation Insider Trading Policy unless otherwise
determined in the sole discretion of the Committee of the Board.
(e) No member of the Board or the Committee, nor any officer or employee of the
Corporation acting on behalf of the Board or the Committee, shall be
personally liable for any action, failure to act, determination or
interpretation taken or made in good faith with respect to this Plan, and
all members of the Board or the Committee and each and any officer or
employee of the Corporation acting on their behalf shall, to the extent
permitted by law and by the Corporation's Amended and Restated Certificate
of Incorporation, as amended, and its Amended and Restated By-Laws, as
amended, be fully indemnified and protected by the Corporation in respect
of any such action, failure to act, determination or interpretation.
(f) This Plan is intended to satisfy the conditions of Rule 16b-3 under the
Exchange Act, and all interpretations of this Plan shall, to the extent
permitted by law, regulations and rulings, be made in a manner consistent
with and so as to satisfy the conditions of Rule 16b-3 under the Exchange
Act. The term "executive officer" as used in
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this Plan means any officer who is subject to the provisions of Section
16(b) of the Exchange Act. Any provisions of this Plan or the application
of any provision of this Plan inconsistent with Rule 16b-3 under the
Exchange Act shall be inoperative and shall not affect the validity of this
Plan.
(g) In interpreting and applying the provisions of this Plan, any Stock Option
granted as an Incentive Stock Option pursuant to this Plan shall, to the
extent permitted by law, regulations and rulings be construed as, and any
ambiguity shall be resolved in favor of preserving its status as, an
"incentive stock option" within the meaning of Section 422 of the Code.
Once an Incentive Stock Option has been granted, no action by the Committee
that would cause such Stock Option to lose its status under the Code as an
"incentive stock option" shall be effective as to such Incentive Stock
Option unless taken at the request of or with the consent of the
Participant. Notwithstanding any provision to the contrary in this Plan or
in any Incentive Stock Option granted pursuant to this Plan, if any change
in law or any regulation or ruling of the Internal Revenue Service shall
have the effect of disqualifying any Stock Option granted under this Plan
which is intended to be an "incentive stock option" within the meaning of
Section 422 of the Code, the Stock Option granted shall nevertheless
continue to be outstanding as and shall be deemed to be a Nonqualified
Stock Option under this Plan.
(h) Notwithstanding any other provision herein to the contrary, the maximum
number of shares with respect to which Awards may be granted to the same
Participant under this Plan may not exceed, in the aggregate, 266,666
shares of Stock, except to the extent of adjustments authorized by Section
3 of this Plan.
SECTION 11. EFFECTIVE DATE OF PLAN.
This Plan shall be effective February 5, 2002.
SECTION 12. TERM OF PLAN.
No Award shall be granted under this Plan on or after the tenth anniversary of
the effective date of this Plan; provided, however, that the exercisability of
Awards granted prior to such tenth anniversary may extend beyond that date.
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