Exhibit 4.8
SF HOLDINGS GROUP, INC.
SHARE INCENTIVE PLAN
1. Purpose.
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The SF Holdings Group, Inc. Share Incentive Plan (the "Plan")
is intended to provide incentives which will attract, retain and motivate highly
competent persons as full-time, salaried employees, directors and consultants of
SF Holdings Group, Inc. (the "Company") and of any Subsidiary (as defined in
Section 6(d) below) or affiliate, direct or indirect, now existing or hereafter
formed or acquired, by providing them opportunities to acquire shares of
non-voting Class D common stock, par value $.001 per share, of the Company
("Common Stock") or to receive monetary payments based on the value of such
shares pursuant to the Benefits (as defined below) described herein.
Furthermore, the Plan is intended to assist in aligning the interests of the
Company's full-time, salaried employees, directors and consultants with those of
its stockholders.
2. Administration.
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(a) The Plan will be administered by a committee (the
"Committee") appointed by the Board of Directors of the Company from among its
members (which may be the Company's Compensation Committee) and shall be
comprised, unless otherwise determined by the Board of Directors, solely of not
less than two members who shall be (i) "Non-Employee Directors" within the
meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and (ii)
"outside directors" within the meaning of Treasury Regulation Section
1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). The Committee shall be authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with
the Plan and any Benefits granted hereunder as it deems necessary or advisable.
All determinations and interpretations made by the Committee shall be binding
and conclusive on all participants and their legal representatives. No member of
the Committee shall be liable for any act or failure to act hereunder, except in
circumstances involving his or her willful misconduct, or for any act or failure
to act hereunder by any other member or by any agent to whom duties in
connection with the administration of the Plan have been delegated. The Company
shall indemnify members of the Committee and any agent of the Committee who is
an employee of the Company, a Subsidiary or an affiliate, direct or indirect,
against any and all liabilities or expenses to which they may be subjected by
reason of any act or failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person's willful misconduct.
(b) The Committee may delegate to one or more of its members,
or to one or more agents, such administrative duties as it may deem advisable,
and the Committee, or any person to whom it has delegated duties as aforesaid,
may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such counsel, consultant
or agent shall be paid by the Company, or the Subsidiary or affiliate whose
employees have benefited from the Plan, as determined by the Committee.
3. Participants.
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Participants will consist of such full-time, salaried
employees, directors and consultants of the Company or any Subsidiary or
affiliate, direct or indirect, as the Committee in its sole discretion
determines to be in a position to have an impact upon the success and future
growth and profitability of the Company and whom the Committee may designate
from time to time to receive Benefits under the Plan. Designation of a
participant in any year shall not require the Committee to designate such person
to receive a Benefit in any other year or, once designated, to receive the same
type or amount of Benefits as granted to the participant in any other year. The
Committee shall consider such factors as it
deems pertinent in selecting participants and in determining the type and amount
of their respective Benefits.
4. Type of Benefits.
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Benefits under the Plan may be granted in any one or a
combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Stock
Awards, (d) Performance Awards and (e) Stock Units (each as described below and,
collectively, the "Benefits"). Stock Awards, Performance Awards, and Stock Units
may, as determined by the Committee in its discretion, constitute
Performance-Based Awards, as described in Section 11 hereof. Benefits shall be
evidenced by agreements (which need not be identical) in such forms as the
Committee may from time to time approve; provided, however, that in the event of
any conflict between the provisions of the Plan and any such agreements, the
provisions of the Plan shall prevail.
5. Common Stock Available Under the Plan.
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(a) The aggregate number of shares of Common Stock that may
be subject to Benefits, including Stock Options, granted under the Plan shall be
95,995 shares of Common Stock, which may be authorized and unissued or treasury
shares, subject to any adjustments made in accordance with Section 13 hereof.
The maximum number of shares of Common Stock with respect to which Benefits may
be granted or measured to any individual participant under the Plan during the
term of the Plan shall not exceed 9,600; provided, however, that the maximum
number of shares of Common Stock with respect to which Stock Options and Stock
Appreciation Rights may be granted to an individual participant under the Plan
during the term of the Plan shall not exceed 9,600 (in each case, subject to
adjustments made in accordance with Section 13 hereof). Any shares of Common
Stock subject to a Stock Option or Stock Appreciation Right which for any reason
is cancelled or terminated without having been exercised, any shares of Common
Stock subject to Stock Awards, Performance Awards or Stock Units which are
forfeited, any shares of Common Stock subject to Performance Awards settled in
cash or any shares of Common Stock delivered to the Company as part or full
payment for the exercise of a Stock Option or Stock Appreciation Right shall
again be available for Benefits under the Plan.
(b) Pursuant to the terms of the Company's Amended and
Restated Certificate of Incorporation, as amended, immediately following
consummation of an underwritten initial public offering of shares of common
stock of the Company, the Common Stock may be converted into shares of voting
stock of the Company.
6. Stock Options.
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The Committee may, in its discretion, grant Stock Options
to participants at any time and from time to time. Stock Options shall consist
of awards that will enable the holder to purchase a number of shares of Common
Stock at set terms and conditions. Stock Options may be "incentive stock
options" ("Incentive Stock Options"), within the meaning of Section 422 of the
Code, or Stock Options which do not constitute Incentive Stock Options
("Nonqualified Stock Options"). The Committee will have the authority to grant
to any participant one or more Incentive Stock Options, Nonqualified Stock
Options, or both types of Stock Options (in each case with or without Stock
Appreciation Rights). Each Stock Option shall be subject to such terms and
conditions consistent with the Plan as the Committee may impose from time to
time, subject to the following limitations:
(a) Exercise Price. Each Stock Option granted hereunder shall
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have such per-share exercise price as the Committee may determine at the date of
grant; subject to subsection (d) below.
(b) Payment of Exercise Price. The Stock Option exercise
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price may be paid in cash or, in the discretion of the Committee, by the
delivery of shares of Common Stock of the Company then owned by the participant,
by the withholding of shares of Common Stock for which a Stock Option is
exercisable, by delivering to the Secretary of the Company an executed
promissory note (or such other form of indebtedness) on such terms and
conditions as the Committee shall determine in its sole discretion, or by a
combination of these methods. In the discretion of the Committee, payment may
also be made by delivering a properly executed exercise notice to the Secretary
of the Company together with a copy of
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irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the exercise price. To facilitate the
foregoing, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms. The Committee may prescribe any other method of
paying the exercise price that it determines to be consistent with applicable
law and the purpose of the Plan, including, without limitation, in lieu of the
exercise of a Stock Option by delivery of shares of Common Stock then owned by a
participant, providing the Company with a notarized statement attesting to the
number of shares owned, where, upon verification by the Company, the Company
would issue to the participant only the number of incremental shares to which
the participant is entitled upon exercise of the Stock Option. In determining
which methods a participant may utilize to pay the exercise price, the Committee
may consider such factors as it determines are appropriate.
(c) Exercise Period. Stock Options granted under the Plan
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shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee; provided, however, subject
to subsection (d) below, that no Stock Option shall be exercisable later than
ten years after the date it is granted except in the event of a participant's
death, in which case, the exercise period of such participant's Stock Options
may be extended beyond such period but no later than one year after the
participant's death. All Stock Options shall terminate at such earlier times and
upon such conditions or circumstances as the Committee shall in its discretion
set forth in such option agreement at the date of grant.
(d) Limitations on Incentive Stock Options. Incentive Stock
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Options may be granted only to participants who are employees of the Company or
a Subsidiary (as defined in Section 424(f) of the Code) or Parent (as defined in
Section 424(e) of the Code) of the Company at the date of grant. The aggregate
Fair Market Value (determined as of the date the Incentive Stock Option is
granted) of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by a participant during any calendar year (under
all option plans of the Company) shall not exceed $100,000. For purposes of the
preceding sentence, Incentive Stock Options will be taken into account in the
order in which they are granted. The per share exercise price of an Incentive
Stock Option shall not be less than 100% of the Fair Market Value of the Common
Stock on the date of grant, and no Incentive Stock Option may be exercised later
than ten years after the date on which it is granted; provided, however, that
Incentive Stock Options may not be granted to any participant who, at the time
of grant, owns stock possessing (after the application of the attribution rules
of Section 424(d) of the Code) more than 10% of the total combined voting power
of all classes of stock of the Company or any Subsidiary or Parent of the
Company, unless the exercise price is fixed at not less than 110% of the Fair
Market Value of the Common Stock as of the date of grant and the exercise of
such option is prohibited by its terms after the expiration of five years from
the date of grant of such Stock Option. The method of payment of the exercise
price of an Incentive Stock Option shall be determined at the date of grant and
specified in the award agreement.
7. Stock Appreciation Rights.
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The Committee may, in its discretion, grant
Stock Appreciation Rights to the holders of any Stock Options granted hereunder.
In addition, Stock Appreciation Rights may be granted independently of, and
without relation to, Stock Options. A Stock Appreciation Right means a right to
receive a payment, in cash, Common Stock or a combination thereof, in an amount
equal to the excess of (x) the Fair Market Value, or other specified valuation,
of a specified number of shares of Common Stock on the date the right is
exercised over (y) the Fair Market Value, or other specified valuation (which
may be less than the Fair Market Value), of such shares of Common Stock as of
the date the right is granted, all as determined by the Committee.
8. Stock Awards.
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The Committee may, in its discretion, grant Stock Awards
(which may include mandatory payment of bonus incentive compensation in stock)
consisting of Common Stock issued or transferred to participants with or without
other payments therefor. Stock Awards may be subject to such terms and
conditions as the Committee determines appropriate, including, without
limitation, restrictions on the sale or other disposition of such shares of
Common Stock, the right of the Company to reacquire such shares of Common Stock
for no consideration upon termination of the participant's employment within
specified periods, and may constitute Performance-Based Awards, as described in
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Section 11 hereof. The Committee may require the participant to deliver a duly
signed stock power, endorsed in blank, relating to the Common Stock covered by
such an Award. The Committee may also require that the stock certificates
evidencing such shares of Common Stock be held in custody or bear restrictive
legends until the restrictions thereon shall have lapsed. The Stock Award shall
specify whether the participant shall have, with respect to the shares of Common
Stock subject to a Stock Award, all of the rights of a holder of shares of
Common Stock of the Company, including the right to receive dividends.
9. Performance Awards.
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(a) The Committee may, in its discretion, grant Performance
Awards to participants at any time and from time to time. Performance Awards may
constitute Performance-Based Awards, as described in Section 11 hereof. The
Committee shall have complete discretion in determining the number, amount and
timing of awards granted to each participant. Such Performance Awards may be in
the form of shares of Common Stock or Stock Units. Performance Awards may be
awarded as short-term or long-term incentives. Performance targets may be based
upon, without limitation, Company-wide, divisional and/or individual
performance.
(b) With respect to those Performance Awards that are not
intended to constitute Performance-Based Awards, the Committee shall have the
authority at any time to make adjustments to performance targets for any
outstanding Performance Awards which the Committee deems necessary or desirable
unless at the time of establishment of such targets the Committee shall have
precluded its authority to make such adjustments.
(c) Payment of earned Performance Awards shall be made in
accordance with terms and conditions prescribed or authorized by the Committee.
The participant may elect to defer, or the Committee may require or permit the
deferral of, the receipt of Performance Awards upon such terms as the Committee
deems appropriate.
10.Stock Units.
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(a) The Committee may, in its discretion, grant Stock
Units to participants at any time and from time to time. The Committee shall
determine the criteria for the vesting of Stock Units. Stock Units may
constitute Performance-Based Awards as described in Section 11 hereof. A Stock
Unit granted by the Committee shall provide payment in shares of Common Stock at
such time as the award agreement shall specify. Shares of Common Stock issued
pursuant to this Section 10 may be issued with or without other payments
therefor as may be required by applicable law or such other consideration as may
be determined by the Committee. The Committee shall determine whether a
participant granted a Stock Unit shall be entitled to a Dividend Equivalent
Right (as defined below).
(b) Upon vesting of a Stock Unit, unless the Committee has
determined to defer payment with respect to such Stock Unit or a participant has
elected to defer payment under subsection (c) below, shares of Common Stock
representing the Stock Units shall be distributed to the participant unless the
Committee provides for the payment of the Stock Units in cash or partly in cash
and partly in shares of Common Stock equal to the value of the shares of Common
Stock which would otherwise be distributed to the participant.
(c) Prior to the date on which a Stock Unit may vest, the
Committee may permit a participant to elect not to receive a distribution upon
the vesting of such Stock Unit and for the Company to continue to maintain the
Stock Unit on its books of account. In such event, the value of a Stock Unit
shall be payable in cash or shares of Common Stock pursuant to the agreement of
deferral.
(d) A "Stock Unit" means a notional account representing one
share of Common Stock. A "Dividend Equivalent Right" means the right to receive
the amount of any dividend paid on the
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share of Common Stock underlying a Stock Unit, which shall be payable in cash or
in the form of additional Stock Units.
11.Performance-Based Awards.
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Certain Benefits granted under the Plan may
be granted in a manner such that the Benefits qualify for the performance-based
compensation exemption of Section 162(m) of the Code ("Performance-Based
Awards"). As determined by the Committee in its sole discretion, either the
granting or vesting of such Performance-Based Awards is to be based upon one or
more of the following factors: net sales, pretax income before allocation of
corporate overhead and bonus, budget, earnings per share, net income, division,
group or corporate financial goals, return on stockholders'
equity, return on assets, attainment of strategic and operational initiatives,
appreciation in and/or maintenance of the price of the Common Stock or any other
publicly-traded securities of the Company, market share, gross profits, earnings
before interest and taxes, earnings before interest, taxes, depreciation and
amortization, economic value-added models and comparisons with various stock
market indices, reductions in costs or any combination of the foregoing. With
respect to Performance-Based Awards, (i) the Committee shall establish in
writing (x) the performance goals applicable to a given period, and such
performance goals shall state, in terms of an objective formula or standard, the
method for computing the amount of compensation payable to the participant if
such performance goals are obtained and (y) the individual employees or class of
employees to which such performance-based goals apply no later than 90 days
after the commencement of such period (but in no event after 25% of such period
has elapsed) and (ii) no Performance-Based Awards shall be payable to or vest
with respect to, as the case may be, any participant for a given period until
the Committee certifies in writing that the objective performance goals (and any
other material terms) applicable to such period have been satisfied. With
respect to any Benefits intended to qualify as Performance-Based Awards, after
establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as
determined in accordance with Section 162(m) of the Code) upon the attainment of
such performance goal. Notwithstanding the preceding sentence, the Committee may
reduce or eliminate the number of shares of Common Stock or cash granted or the
number of shares of Common Stock vested upon the attainment of such performance
goal.
12.Foreign Laws.
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The Committee may grant Benefits to individual
participants who are subject to the tax laws of nations other than the United
States, which Benefits may have terms and conditions as determined by the
Committee as necessary to comply with applicable foreign laws. The Committee may
take any action which it deems advisable to obtain approval of such Benefits by
the appropriate foreign governmental entity; provided, however, that no such
Benefits may be granted pursuant to this Section 12 and no action may be taken
which would result in a violation of the Exchange Act, the Code or any other
applicable law.
13.Adjustment Provisions; Change in Control.
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(a) If there shall be any change in the Common Stock of the
Company, through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, split up, spinoff, combination of
shares, exchange of shares, dividend in kind or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company (each, a "Change Event"), an adjustment shall be made to each
outstanding Stock Option and Stock Appreciation Right such that each such Stock
Option and Stock Appreciation Right shall thereafter be exercisable for such
securities, cash and/or other property as would have been received in respect of
the Common Stock subject to such Stock Option or Stock Appreciation Right had
such Stock Option or Stock Appreciation Right been exercised in full immediately
prior to such change or distribution, and such an adjustment shall be made
successively each time any such change shall occur. In addition, in the event of
any such change or distribution, in order to prevent dilution or enlargement of
participants' rights under the Plan, the Committee will have authority to
adjust, in an equitable manner, the number and kind of shares of Common Stock
that may be issued under the Plan, the number and kind of shares of Common Stock
subject to outstanding Benefits, the exercise price applicable to outstanding
Benefits, and the Fair Market Value of the Common Stock and other value
determinations applicable to outstanding Benefits; provided,
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however, that any such arithmetic adjustment to a Performance-Based Award shall
not cause the amount of compensation payable thereunder to be increased from
what otherwise would have been due upon attainment of the unadjusted award.
Appropriate adjustments may also be made by the Committee in the terms of any
Benefits under the Plan to reflect such changes or distributions and to modify
any other terms of outstanding Benefits on an equitable basis, including
modifications of performance targets and changes in the length of performance
periods; provided, however, that any such arithmetic adjustment to a
Performance-Based Award shall not cause the amount of compensation payable
thereunder to be increased from what otherwise would have been due upon
attainment of the unadjusted award. In addition, other than with respect to
Stock Options, Stock Appreciation Rights and other awards intended to constitute
Performance-Based Awards, the Committee is authorized to make adjustments to the
terms and conditions of, and the criteria included in, Benefits in recognition
of unusual or nonrecurring events affecting the Company or the financial
statements of the Company, or in response to changes in applicable laws,
regulations, or accounting principles. Notwithstanding the foregoing, except
with the consent of the affected participant, (i) each such adjustment with
respect to an Incentive Stock Option shall comply with the rules of Section
424(a) of the Code and (ii) no such adjustment shall be made which would render
such Incentive Stock Option granted hereunder other than an incentive stock
option for purposes of Section 422 of the Code.
(b) Notwithstanding any other provision of the Plan, in the
event of a Change in Control (as defined below) of the Company, the Committee,
in its discretion, may take such actions as it deems appropriate with respect to
outstanding Benefits without the consent of any participant, including, without
limitation, accelerating the exercisability or vesting of such Benefits or
providing for the assumption or replacement of Benefits by a successor
corporation.
The Committee, in its discretion, may determine that, upon the
occurrence of a Change in Control of the Company, each Stock Option and Stock
Appreciation Right outstanding hereunder shall terminate within a specified
number of days after notice to the holder, and such holder shall receive, with
respect to each share of Common Stock subject to such Stock Option or Stock
Appreciation Right to the extent vested, an amount equal to the excess of the
Fair Market Value of such shares of Common Stock immediately prior to the
occurrence of such Change in Control over the exercise price per share of such
Stock Option or Stock Appreciation Right; such amount to be payable in cash, in
one or more kinds of property (including the property, if any, payable in the
transaction) or in a combination thereof, as the Committee, in its discretion,
shall determine.
For purposes of this Section 13(b), a "Change in Control" of
the Company shall be deemed to have occurred only upon any of the following
events: (i) a person or entity or group of persons or entities, acting in
concert, shall become the direct or indirect beneficial owner (within the
meaning of Rule 13d-3 of the Exchange Act) of securities of the Company
representing fifty-one percent (51%) or more of the combined voting power of the
issued and outstanding common stock of the Company (a "Significant Owner"),
unless such shares are originally issued to such Significant Owner by the
Company, (ii) a sale of all or substantially all of the assets of the Company or
(iii) any other event which the Committee determines to constitute a change of
control of the Company.
14. Re-Purchase Option.
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A participant who holds a vested Stock Option or
shares of Common Stock issued pursuant to a Stock Option may, by notice to the
Secretary of the Company, request that the Company repurchase such vested Stock
Option or shares of Common Stock. The Committee, in its sole discretion, may
(but shall not be obligated to) authorize such repurchase on such terms and
conditions as the Committee deems appropriate, including without limitation, the
price and the form of consideration.
15.Nontransferability of Benefits and Common Stock.
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(a) Each Benefit granted under the Plan to a participant
shall not be transferable otherwise than by will or the laws of descent and
distribution, and shall be exercisable, during the participant's lifetime, only
by the participant. In the event of the death of a participant, each Stock
Option or Stock Appreciation Right theretofore granted to him or her shall be
exercisable during such period after his or her death as the Committee shall in
its discretion set forth in such option or right at the date of grant and then
only by the executor or administrator of the estate of the deceased participant
or the person or persons to whom the deceased participant's rights under the
Stock Option
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or Stock Appreciation Right shall pass by will or the laws of descent and
distribution. Notwithstanding the foregoing, at the discretion of the Committee,
an award of a Benefit other than an Incentive Stock Option may permit the
transferability of a Benefit by a participant solely to the participant's
spouse, siblings, parents, children and grandchildren or trusts for the benefit
of such persons or partnerships, corporations, limited liability companies or
other entities owned solely by such persons, including trusts for such persons,
subject to any restriction included in the award of the Benefit; provided,
however, that any such transferee shall agree in writing on a form prescribed by
the Committee to be bound by all provisions of the Benefit and the Plan.
(b) Except as otherwise expressly provided in the award
agreement or authorized in writing by the Committee, no participant shall effect
or facilitate any transfer, sale, assignment, pledge, hypothecation, gift,
placement in trust (voting or otherwise) or transfer by operation of law (other
than by way of a merger or consolidation of the Company) of, creation of a
security interest in or lien on, or any other encumbering or disposition
(directly or indirectly and whether or not voluntary) of, any shares of Common
Stock issued to a participant pursuant to the Plan or pursuant to any Benefit
granted under the Plan (including shares of Common Stock acquired upon the
occurrence of a Change Event and shares of Common Stock issued upon the
conversion, exchange or exercise of securities received in connection with such
Change Event). No transfer in violation of the Plan shall be made or recorded on
the books of the Company and any such transfer shall be void and of no force or
effect. All shares of Common Stock issued to a participant pursuant to the Plan
or pursuant to any Benefit granted under the Plan (including shares of Common
Stock acquired upon the occurrence of a Change Event and shares of Common Stock
issued upon the conversion, exchange or exercise of securities received in
connection with such Change Event) may be transferable to the executor or
administrator of the estate of the deceased participant or by will or the laws
of descent and distribution, or to the Company and/or its designee(s) (each such
transferee, together with any transferee listed in the following sentence, being
a "Permitted Transferee"). At the discretion of the Committee, a participant may
transfer shares of Common Stock issued pursuant to the Plan or pursuant to any
Benefit granted under the Plan (including shares of Common Stock acquired upon
the occurrence of a Change Event and shares of Common Stock issued upon the
conversion, exchange or exercise of securities received in connection with such
Change Event) to the participant's spouse, siblings, parents, children or
grandchildren or trusts for the benefit of such persons or partnerships,
corporations, limited liability companies or other entities owned solely by such
persons, including trusts for such persons; provided, however, that any
Permitted Transferee shall agree in writing on a form prescribed by the
Committee to be bound by all provisions of the Plan. The provisions of this
Section 15(b) shall terminate upon the registration by the Company of a class of
equity securities pursuant to Section 12 of the Exchange Act.
16.Compliance with Securities Laws.
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The Company shall not in any event be obligated to file any
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or any applicable state or foreign securities laws, to permit
the issuance of any Common Stock pursuant to the Plan or pursuant to any Benefit
granted under the Plan in violation of the Securities Act or any applicable
securities laws. Each participant (or such participant's Permitted Transferee or
legal representative in the event of the participant's Disability) shall, as a
condition to his or her right to receive such shares of Common Stock, deliver to
the Company an agreement or certificate containing such representations,
warranties and covenants as the Company may deem necessary or appropriate to
ensure that the issuance of shares of Common Stock is not required to be
registered under the Securities Act or any applicable securities laws.
"Disability" shall mean (i) permanent disability as defined under the
appropriate provisions of the applicable long-term disability plan maintained
for the benefit of employees of the Company or any Subsidiary of the Company who
are regularly employed on a salaried basis, (ii) if no such long-term disability
plan exists, an inability to perform a participant's employment duties and
responsibilities by reason of any physical or mental condition for a period of
26 weeks during any 12-month period in connection with the same physical or
mental condition or (iii) another meaning agreed to in writing by the
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Committee and the participant; provided, however, that in the case of a
participant holding an Incentive Stock Option, "disability" shall have the
meaning specified in Section 22(e)(3) of the Code.
Certificates for shares of Common Stock, when issued, shall
have substantially the following legends, or statements of other applicable
restrictions, endorsed thereon:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
TERMS OF THE COMPANY'S SHARE INCENTIVE PLAN AND AN AWARD AGREEMENT
ENTERED INTO PURSUANT THERETO.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND ACCORDINGLY NEITHER SUCH SHARES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
ACT AND ANY SUCH LAWS APPLICABLE THERETO AND THE RULES AND REGULATIONS
THEREUNDER."
No legend relating to registration under the Securities Act
shall be required for shares of Common Stock issued pursuant to an effective
registration statement under the Securities Act and in accordance with
applicable state or foreign securities laws.
17.Other Provisions.
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The award of any Benefit under the Plan may also
be subject to such other provisions (whether or not applicable to the Benefit
awarded to any other participant) as the Committee determines appropriate, at
the date of grant, including, without limitation, for the installment purchase
of Common Stock under Stock Options, for the installment exercise of Stock
Appreciation Rights, to assist the participant in financing the acquisition of
Common Stock, for the forfeiture of, or restrictions on resale or other
disposition of, Common Stock acquired under any form of Benefit, for the
acceleration of exercisability or vesting of Benefits in the event of a change
of control of the Company (whether or not a Change in Control), for the payment
of the value of Benefits to participants in the event of a change of control of
the Company (whether or not a Change in Control), or to comply with federal and
state securities laws, or understandings or conditions as to the participant's
employment in addition to those specifically provided for under the Plan.
18.Fair Market Value.
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For purposes of the Plan and any Benefits awarded
hereunder, Fair Market Value of a share of Common Stock shall be the closing
price of a share of Common Stock on the date of calculation (or on the last
preceding trading date if Common Stock was not traded on such date, so long as
such date is not more than 30 days prior to such date of calculation) if the
Common Stock is readily tradable on a national securities exchange or other
market system. If the Common Stock is not readily tradable or if the Common
Stock was last traded on a national securities exchange or other market system
on a date more than 30 days prior to such date of calculation, Fair Market Value
of a share of Common Stock shall be an amount as reasonably determined by the
Committee either (i) considering the enterprise value of the Company to be equal
to seven (7) times EBITDA less the aggregate of long-term debt and accreted
book-value of preferred stock outstanding or (ii) in good faith as the fair
market value of a share of Common Stock. For purposes of section, "EBITDA" shall
mean, the consolidated net income of the Company for the twelve-month period
ending the last day of the calendar month prior to such date of calculation,
calculated in accordance with generally accepted accounting principles
consistently applied before deducting interest expense, income tax expense,
depreciation and amortization but in any event excluding all extraordinary items
and all gains or losses realized on sales of assets sold outside the ordinary
course of business.
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19.Withholding.
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All payments or distributions of Benefits made pursuant to
the Plan shall be net of any amounts required to be withheld pursuant to
applicable federal, state and local tax withholding requirements. If the Company
proposes or is required to distribute Common Stock pursuant to the Plan, it may
require the recipient to remit to it or to the Subsidiary or affiliate of the
Company that employs such recipient an amount sufficient to satisfy such tax
withholding requirements prior to the delivery of any certificates for such
Common Stock. In lieu thereof, the Company or the employing Subsidiary or
affiliate of the Company shall have the right to withhold the amount of such
taxes from any other sums due or to become due from such corporation to the
recipient as the Committee shall prescribe. The Committee may, in its discretion
and subject to such rules as it may adopt (including any as may be required to
satisfy applicable tax and/or non-tax regulatory requirements), permit a
participant to pay all or a portion of the federal, state and local withholding
taxes arising in connection with any Benefit consisting of shares of Common
Stock by electing to have the Company withhold shares of Common Stock having a
Fair Market Value equal to the amount of tax to be withheld, such tax calculated
at rates required by statute or regulation.
20.Tenure.
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A participant's right,if any, to continue to serve the Company
or any of its subsidiaries or affiliates as a director, officer, employee,
consultant or otherwise, shall not be enlarged or otherwise affected by his or
her designation as a participant under the Plan.
21.Unfunded Plan.
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Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company and such right shall be expressly subordinate to
all indebtedness of the Company and its Subsidiaries for borrowed money. All
payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts except as expressly
set forth in the Plan. The Plan is not intended to be subject to the Employee
Retirement Income Security Act of 1974, as amended.
22.No Fractional Shares.
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No fractional shares of Common Stock shall be issued or
delivered pursuant to the Plan or any Benefit. The Committee shall determine
whether cash, or Benefits, or other property shall be issued or paid in lieu of
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
23.Duration, Amendment and Termination.
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No Benefit shall be granted more than ten (10) years after
the Effective Date. The Committee may amend the Plan from time to time or
suspend or terminate the Plan at any time. However, no action authorized by this
Section 23 shall reduce the amount of any existing Benefit or change the terms
and conditions thereof without the participant's consent. No amendment of the
Plan may be made without approval of the stockholders of the Company if the
amendment will (i) increase the total number of shares of Common Stock which may
be issued under the Plan; (ii) change the types of factors on which
Performance-Based Awards are to be based under the Plan; or (iii) modify the
requirements as to eligibility for participation in the Plan.
24.Governing Law.
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The Plan, Benefits granted hereunder and actions taken in
connection herewith shall be governed and construed in accordance with the laws
of the State of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
25.Effective Date.
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(a) The Plan shall be effective as of the date of its
adoption by the Board (the "Effective Date"); provided, however, that the Plan
is approved by the stockholders of the Company
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within 12 months of the Effective Date, and such approval of stockholders shall
be a condition to the right of each participant to receive any Benefits
hereunder. Any Benefits granted under the Plan prior to such approval of
stockholders shall be effective as of the date of grant (unless, with respect to
any Benefit, the Committee specifies otherwise at the time of grant), but no
such Benefit may be exercised or settled and no restrictions relating to any
Benefit may lapse prior to such stockholder approval, and if stockholders fail
to approve the Plan as specified hereunder, any such Benefit shall be cancelled.
(b) The Plan shall terminate on January 29, 2010 (unless
sooner terminated by the Committee).
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