EXHIBIT 10.1
PHAZAR CORP
2009 EQUITY INCENTIVE PLAN
As Adopted by the Board of Directors on April 8, 2009
1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company and its Subsidiaries by offering them an
opportunity to participate in the Company's future performance through awards of
Options, the right to purchase Common Stock and Stock Bonuses. Capitalized terms
not defined in the text are defined in Section 2.
2. DEFINITIONS.
As used in this Plan, the following terms will have the following meanings:
"AWARD" means any award under this Plan, including any Option, Stock Award or
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Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award, the signed written
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agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"BOARD" means the Board of Directors of the Company.
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"CAUSE" means any cause, as defined by applicable law, for the termination of a
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Participant's employment with the Company or a Parent or Subsidiary of the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMPANY" means PHAZAR CORP, a Delaware corporation, or any successor
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corporation.
"DISABILITY" means a disability, whether temporary or permanent, partial or
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total, as determined by the Board.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
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"EXERCISE PRICE" means the price at which a holder of an Option may purchase the
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Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's
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Common Stock determined as follows:
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(a) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination if
at least one hundred shares were traded on such date, otherwise the closing
price on the last preceding date on which at least one hundred shares were
traded, on the principal national securities exchange on which the Common Stock
is listed or admitted to trading;
(b) if such Common Stock is quoted on the NASDAQ National Market or the
NASDAQ Capital Market, its closing price on the NASDAQ National Market or the
NASDAQ Capital Market, respectively, on the date of determination;
(c) if neither of the foregoing is applicable, by the Board in good faith.
"INSIDER" means an officer or director of the Company or any other person whose
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transactions in the Company's Common Stock are subject to Section 16 of the
Exchange Act.
"OPTION" means an award of an option to purchase Shares pursuant to Section 6.
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"PARENT" means any corporation (other than the Company) in an unbroken chain of
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corporations ending with the Company if each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Award under this Plan.
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"PERFORMANCE FACTORS" means the factors selected by the Board, in its sole and
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absolute discretion, to determine whether the performance goals applicable to
Awards have been satisfied, including, without limitation, the following
factors:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added; and
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(k) Individual business objectives.
"PERFORMANCE PERIOD" means the period of service determined by the Board, not to
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exceed five years, during which years of service or performance is to be
measured for Stock Awards or Stock Bonuses, if such Awards are restricted.
"PLAN" means this PHAZAR CORP 2009 Equity Incentive Plan, as amended from time
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to time.
"PURCHASE PRICE" means the price at which the Participant of a Stock Award may
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purchase the Shares.
"SEC" means the Securities and Exchange Commission.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"SHARES" means shares of the Company's Common Stock reserved for issuance under
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this Plan, as adjusted pursuant to Sections 3 and 18, and any successor
security.
"STOCK AWARD" means an award of Shares pursuant to Section 7.
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"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant to
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Section 8.
"SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain
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of corporations beginning with the Company 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 such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect to a
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Participant, that the Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent contractor or advisor
to the Company or a Parent or Subsidiary of the Company. An employee will not be
deemed to have ceased to provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved by the Company,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute or unless provided otherwise pursuant to a formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Board may make
such provisions respecting suspension of vesting of the Award while on leave
from the employ of the Company or a Subsidiary as it may deem appropriate,
except that in no event may an Option be exercised after the expiration of the
term set forth in the Option agreement. The Board will have sole discretion to
determine whether a Participant has ceased to provide services and the effective
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date on which the Participant ceased to provide services (the "Termination
Date").
3. SHARES SUBJECT TO THE PLAN.
3.1 Number of Shares Available. Subject to Sections 3.2 and 18, the total
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aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan shall be 273,600 Shares and will include Shares that are
subject to: (a) issuance upon exercise of an Option but cease to be subject to
such Option for any reason other than exercise of such Option; (b) an Award
granted hereunder but forfeited or repurchased by the Company at the original
issue price; and (c) an Award that otherwise terminates without Shares being
issued. At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under this Plan and all other outstanding but
unvested Awards granted under this Plan.
3.2 Adjustment of Shares. In the event that the number of outstanding
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shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Board.
4. ELIGIBILITY.
ISOs (as defined in Section 6 below) may be granted only to employees
(including officers and directors who are deemed to be employees) of the Company
or of a Parent or Subsidiary of the Company. All other Awards may be granted to
officers, directors, employees, agents and consultants of the Company or any
Parent or Subsidiary of the Company, provided such consultants, independent
contractors and advisors render bona-fide services not in connection with the
offer and sale of securities in a capital-raising transaction or promotion of
the Company's securities. A person may be granted more than one Award under this
Plan.
5. ADMINISTRATION.
5.1 Board. The Plan shall be administered and interpreted by the Board.
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5.2 Board Authority. The Board will have the authority to:
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(a)construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
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(b)prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form, terms and conditions of Awards;
(e)determine the number of Shares or other consideration subject to
Awards;
(f)determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or any other incentive or compensation
plan of the Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i)correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned;
(k)amend or terminate the Plan, provided, however, the Board will not
amend the Plan in any manner that requires shareholder approval
without such approval; and
(l)make all other determinations necessary or advisable for the
administration of this Plan.
5.3 Board Discretion. Any determination made by the Board with respect to
any Award will be made at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. No member of the Board shall be
personally liable for any action taken or decision made in good faith relating
to this Plan, and all members of the Board shall be fully protected and
indemnified to the fullest extent permitted under applicable law by the Company
in respect to any such action, determination, or interpretation.
6. OPTIONS.
The Board may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code
("ISO") or Nonqualified Stock Options ("NQSOs"), the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
6.1 Form of Option Grant. Each Option granted under this Plan will be
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evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO (hereinafter referred to as the "Stock Option Agreement"), and
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will be in such form and contain such provisions (which need not be the same for
each Participant) as the Board may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
6.2 Date of Grant. The date of grant of an Option will be the date on which
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the Board makes the determination to grant such Option, unless otherwise
specified by the Board. The Stock Option Agreement and a copy of this Plan will
be delivered to the Participant within a reasonable time after the granting of
the Option.
6.3 Exercise Period. Options may be exercisable within the times or upon
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the events determined by the Board as set forth in the Stock Option Agreement
governing such Option; provided, however, that no Option will be exercisable
after the expiration of ten (10) years from the date the Option is granted; and
provided further that no ISO granted to a person who directly or by attribution
owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company
("Ten Percent Stockholder") will be exercisable after the expiration of five (5)
years from the date the ISO is granted. The Board also may provide for Options
to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Board
determines, provided, however, that in all events a Participant will be entitled
to exercise an Option at the rate of at least 20% per year over five years from
the date of grant, subject to reasonable conditions such as continued
employment; and further provided that an Option granted to a Participant who is
an officer or director may become fully exercisable at any time or during any
period established by the Company.
6.4 Exercise Price. The Exercise Price of an Option will be determined by
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the Board when the Option is granted and may not be less than 85% of the Fair
Market Value of the Shares on the date of grant; provided that: (a) the Exercise
Price of an ISO will be not less than 100% of the Fair Market Value of the
Shares on the date of grant; and (b) the Exercise Price of any Option granted to
a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased must be made
in accordance with Section 9 of this Plan.
6.5 Method of Exercise. Options may be exercised only by delivery to the
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Company of a written stock option exercise agreement (the "Exercise Agreement")
in a form approved by the Board, (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant's investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being purchased.
6.6 Termination. Notwithstanding the exercise periods set forth in the
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Stock Option Agreement, exercise of an Option will always be subject to the
following:
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(a) If the Participant's service is Terminated for any reason except
death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable upon
the Termination Date, but must be exercised no later than three (3) months after
the Termination Date (or such longer time period not exceeding five (5) years as
may be approved by the Board, with any exercise beyond three (3) months after
the Termination Date deemed to be an NQSO).
(b) If the Participant's service is Terminated because of the
Participant's death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant's
Disability), then the Participant's Options may be exercised only to the extent
that such Options would have been exercisable by the Participant on the
Termination Date and must be exercised by the Participant (or the Participant's
legal representative) no later than twelve (12) months after the Termination
Date (or such longer time period not exceeding five (5) years as may be approved
by the Board, with any such exercise beyond (i) three (3) months after the
Termination Date when the Termination is for any reason other than the
Participant's death or Disability, or (ii) twelve (12) months after the
Termination Date when the Termination is for Participant's death or Disability,
deemed to be an NQSO).
(c) Notwithstanding the provisions in paragraph 6.6(a) above, if the
Participant's service is Terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any Shares whatsoever, after
Termination, whether or not after Termination the Participant may receive
payment from the Company or a Subsidiary for vacation pay, for services rendered
prior to Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits. For the purpose
of this paragraph, Termination shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that his or her service
is terminated.
6.7 Limitations on Exercise. The Board may specify a reasonable minimum
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number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent the Participant from exercising an
Option for the full number of Shares for which it is then exercisable.
6.8 Limitations on ISO. The aggregate Fair Market Value (determined as of
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the date of grant) of Shares with respect to which ISO are exercisable for the
first time by a Participant during any calendar year (under this Plan or under
any other incentive stock option plan of the Company, Parent or Subsidiary of
the Company) will not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
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incorporated herein and will apply to any Options granted after the effective
date of such amendment.
6.9 Modification, Extension or Renewal. The Board may modify, extend or
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renew outstanding Options and authorize the grant of new Options in substitution
therefore, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Board may reduce the Exercise Price of outstanding Options without the
consent of Participants affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 6.4 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.
6.10 No Disqualification. Notwithstanding any other provision in this Plan,
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no term of this Plan relating to ISO will be interpreted, amended or altered,
nor will any discretion or authority granted under this Plan be exercised, so as
to disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code.
7. STOCK AWARD.
A Stock Award is an offer by the Company to sell to an eligible person
Shares that may or may not be subject to restrictions. The Board will determine
to whom an offer will be made, the number of Shares the person may purchase, the
price to be paid (the "Purchase Price"), the restrictions to which the Shares
will be subject, if any, and all other terms and conditions of the Stock Award,
subject to the following:
7.1 Form of Stock Award. All purchases under a Stock Award made pursuant to
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this Plan will be evidenced by an Award Agreement (the "Stock Purchase
Agreement") that will be in such form (which need not be the same for each
Participant) as the Board will from time to time approve, and will comply with
and be subject to the terms and conditions of this Plan. The offer of a Stock
Award will be accepted by the Participant's execution and delivery of the Stock
Purchase Agreement and payment for the Shares to the Company in accordance with
the Stock Purchase Agreement.
7.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Stock
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Award will be determined by the Board on the date the Stock Award is granted and
may not be less than 85% of the Fair Market Value of the Shares on the grant
date, except in the case of a sale to a Ten Percent Stockholder, in which case
the Purchase Price will be 100% of the Fair Market Value. Payment of the
Purchase Price must be made in accordance with Section 9 of this Plan.
7.3 Terms of Stock Awards. Stock Awards may be subject to such restrictions
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as the Board may impose. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon completion of the
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performance goals as set out in advance in the Participant's individual Stock
Purchase Agreement. Stock Awards may vary from Participant to Participant and
between groups of Participants. Prior to the grant of a Stock Award subject to
restrictions, the Board shall: (a) determine the nature, length and starting
date of any Performance Period for the Stock Award; (b) select from among the
Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the transfer of any Stock Award, the Board shall determine the extent to which
such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and have different performance
goals and other criteria.
7.4 Termination During Performance Period. If a Participant is Terminated
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during a Performance Period for any reason, then such Participant will be
entitled to payment (whether in Shares, cash or otherwise) with respect to the
Stock Award only to the extent earned as of the date of Termination in
accordance with the Stock Purchase Agreement, unless the Board determines
otherwise.
8. STOCK BONUSES.
8.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares for
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extraordinary services rendered to the Company or any Parent or Subsidiary of
the Company. A Stock Bonus will be awarded pursuant to an Award Agreement (the
"Stock Bonus Agreement") that will be in such form (which need not be the same
for each Participant) as the Board will from time to time approve, and will
comply with and be subject to the terms and conditions of this Plan. A Stock
Bonus may be awarded upon satisfaction of such performance goals as are set out
in advance in the Participant's individual Award Agreement (the "Performance
Stock Bonus Agreement"). Stock Bonuses may vary from Participant to Participant
and between groups of Participants, and may be based upon the achievement of the
Company, Parent or Subsidiary and/or individual performance factors or upon such
other criteria as the Board may determine.
8.2 Terms of Stock Bonuses. The Board will determine the number of Shares
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to be awarded to the Participant. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Board will: (a) determine the nature, length and starting
date of any Performance Period for each Stock Bonus; (b) select from among the
Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Stock Bonus, the Board shall determine the extent to which
such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Board. The Board
may adjust the performance goals applicable to the Stock Bonuses to take into
account changes in law and accounting or tax rules and to make such adjustments
as the Board deems necessary or appropriate to reflect the impact of
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extraordinary or unusual items, events or circumstances to avoid windfalls or
hardships.
8.3 Form of Payment. The earned portion of a Stock Bonus may be paid to the
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Participant by the Company either currently or on a deferred basis, as agreed by
the Participant and the Company, with such interest or dividend equivalent, if
any, as the Board may determine. Payment of an interest or dividend equivalent
(if any) may be made in the form of cash or whole Shares or a combination
thereof, either in a lump sum payment or in installments, as the Board will
determine.
9. PAYMENT FOR SHARE PURCHASES.
Payment for Shares purchased pursuant to this Plan must be made in cash (by
check) or, where expressly approved for the Participant by the Board and where
permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by the
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144; or (2) were obtained by the Participant in the public
market;
(c) by waiver of compensation due or accrued to the Participant for
services rendered;
(d) with respect only to purchases upon exercise of an Option, and provided
that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the Financial Industry Regulatory Authority (a
"FINRA Dealer") whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay for the Exercise
Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company; or
(2) through a "margin" commitment from the Participant and a FINRA Dealer
whereby the Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the FINRA Dealer in a margin account as security for
a loan from the FINRA Dealer in the amount of the Exercise Price, and whereby
the FINRA Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(e) by any combination of the foregoing.
10. WITHHOLDING TAXES.
10.1 Withholding Generally. Whenever Shares are to be issued in
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satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
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certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.
10.2 Stock Withholding. When, under applicable tax laws, a participant
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incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Board may allow the Participant
to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a
Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Board and will be in writing in a form acceptable to the Board.
11. PRIVILEGES OF STOCK OWNERSHIP.
11.1 Voting and Dividends. No Participant will have any of the rights of a
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stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are issued pursuant to a Stock Award with restrictions, then any new,
additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Stock Award.
11.2 Financial Statements. The Company will provide publicly available
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financial information,, including financial statements to each Participant prior
to such Participant's purchase of Shares under this Plan, and to each
Participant annually during the period such Participant has Awards outstanding;
provided, however, the Company will not be required to provide such financial
statements to Participants whose services in connection with the Company assure
them access to equivalent information.
12. NON-TRANSFERABILITY.
Awards of Shares granted under this Plan, and any interest therein, will
not be transferable or assignable by the Participant, and may not be made
subject to execution, attachment or similar process, other than by will or by
the laws of descent and distribution. Awards of Options granted under this Plan,
and any interest therein, will not be transferable or assignable by the
Participant, and may not be made subject to execution, attachment or similar
process, other than by will or by the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust in which the options are to
be passed to beneficiaries upon the death of the trustor, or by gift to
"immediate family" as that term is defined in 17 C.F.R. 240.16a-1(e). During the
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lifetime of the Participant an Award will be exercisable only by the
Participant. During the lifetime of the Participant, any elections with respect
to an Award may be made only by the Participant unless otherwise determined by
the Board and set forth in the Award Agreement with respect to Awards that are
not ISOs.
13. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan
will be subject to such stop transfer orders, legends and other restrictions as
the Board may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
14. ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant's Shares, the Board may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Board appropriately endorsed in blank, with the Company or an agent designated
by the Company to hold in escrow until such restrictions have lapsed or
terminated, and the Board may cause a legend or legends referencing such
restrictions to be placed on the certificates.
15. EXCHANGE AND BUYOUT OF AWARDS.
The Board may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The Board
may at any time buy from a Participant an Award previously granted with payment
in cash, Shares or other consideration, based on such terms and conditions as
the Board and the Participant may agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
PHAZAR CORP
2009 Annual Shareholder Meeting Proxy Notice Page 29 of 34
17. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or any Parent or Subsidiary
of the Company or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor. In the event of
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(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 18.1, (i)
the vesting of any or all Awards granted pursuant to this Plan will accelerate
upon a transaction described in this Section 18 and (ii) any or all Options
granted pursuant to this Plan will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Board
determines. If such Options are not exercised prior to the consummation of the
corporate transaction, they shall terminate at such time as determined by the
Board.
18.2 Other Treatment of Awards. Subject to any greater rights granted to
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Participants under the foregoing provisions of this Section 18, in the event of
the occurrence of any transaction described in Section 18.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.
PHAZAR CORP
2009 Annual Shareholder Meeting Proxy Notice Page 30 of 34
18.3 Assumption of Awards by the Company. The Company, from time to time,
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also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either; (a) granting an Award under this Plan in substitution of such other
company's award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
19. ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which it is adopted by the
Board (the "Effective Date"). Upon the Effective Date, the Board may grant
Awards pursuant to this Plan. The Company intends to seek stockholder approval
of the Plan within twelve (12) months after the date this Plan is adopted by the
Board; provided, however, if the Company fails to obtain stockholder approval of
the Plan during such 12-month period, pursuant to Section 422 of the Code, any
Option granted as an ISO at any time under the Plan will not qualify as an ISO
within the meaning of the Code and will be deemed to be an NQSO. Further, said
Awards made before obtaining stockholder approval shall be conditional upon
stockholder approval and consistent with NASDAQ Rule 4350(i), the Company may
not issue securities pursuant to Awards before obtaining stockholder approval
for this plan.
20. TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate ten
(10) years from the date this Plan is adopted by the Board or, if earlier, the
date of stockholder approval. This Plan and all agreements thereunder shall be
governed by and construed in accordance with the laws of the State of Texas.
21. AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect,
including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the
Board will not, without the approval of the stockholders of the Company, amend
this Plan in any manner that requires such stockholder approval.
PHAZAR CORP
2009 Annual Shareholder Meeting Proxy Notice Page 31 of 34
22. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan
to the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to adopt
such additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
23. ACTION BY BOARD.
Any action permitted or required to be taken by the Board or any decision
or determination permitted or required to be made by the Board pursuant to this
Plan shall be taken or made in the Board's sole and absolute discretion.
PHAZAR CORP
2009 Annual Shareholder Meeting Proxy Notice Page 32 of 34