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Exhibit 10.8.1
NUMATICS, INCORPORATED
INCENTIVE PLAN
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Section 1 -- Purposes
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This Numatics, Incorporated Stock Incentive Plan (the "Plan") is intended
to provide for incentive compensation to certain directors, key executives and
employees of Numatics, Incorporated (the "Company") or any Affiliated Entity,
based upon the contributions of such executives and employees to the long-term
growth and profitability of the Company. Incentive compensation encourages
identification with shareholder concerns, as well as current and continuing
interest in the development and financial success of the Company. The Plan also
is intended to assist the Company and Affiliated Entities to attract and retain
executives and employees of superior ability and promise.
Section 2 -- Certain Additional Definitions
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The terms set forth in quotation marks below have the following respective
meanings under the Plan:
"Affiliated Entity" means a corporation, partnership or other business
enterprise in which the Company directly or indirectly has a significant
equity interest under United States generally accepted accounting
principles.
"Award" means an Option granted under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board (or, if no
Board committee so named is in existence at a relevant time, such other
Board committee as the Board shall have specified).
"Company Stock" means the common stock of the Company.
"Disabled" means the total and permanent inability of an Employee by
reason of sickness or injury to perform the material duties of such
Employee's regular occupation with his or her Employer, where such
inability has existed for at least six continuous months.
"Disability" means the condition of being Disabled.
"Employee" means an employee of the Company or an Affiliated Entity.
"Employer" means the Company or the Affiliated Entity which employs an
Employee at any given time.
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"Fair Market Value" of a share of Common Stock means an amount
determined by dividing (b) by (a):
(a) the total number of shares of Common Stock outstanding on a fully
diluted basis;
(b) the amount that is equal to:
(i) the product of (A) 7.61, and (B) the company's Net
Operating Income for the most recently completed quarterly period,
plus
(ii) cash and cash equivalents at the end of the most recently
completed quarterly period, plus
(iii) the aggregate consideration that would be received by the
Company upon the assumed exercise or conversion of all outstanding
options, warrants and convertible securities, minus
(iv) the sum of Long-Term Debt (including the current portion
thereof) and short-term debt for borrowed money at the end of the most
recently completed quarterly period.
For these purposes, the terms "Net Operating Income" and "Long-Term Debt"
have the same meaning as in the Securities Purchase Agreement between the
Company and Harvard Private Capital Holdings, Inc., dated January 3, 1996,
as amended from time to time.
"Option" means an Option to purchase Company Stock granted pursuant to
Section 6 of the Plan.
"Outside Director" means a person who is a member of the Board and is
not also an Employee.
Section 3 -- Administration
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The Plan shall be administered by the Committee, which, subject only to
such limitations as are expressly set forth in the Plan, shall have authority to
grant Awards to such Employees as it may select from time to time, to determine
the type, amount and other terms and conditions of each Award granted, to
prescribe the forms of written agreements to evidence Awards, to interpret the
Plan and the provisions of such agreements, to adopt administrative rules and
procedures concerning operation of the Plan, and to take such other actions as
it determines to be necessary, advisable, appropriate or convenient for the
administration of the Plan in accordance with its purposes. The Committee may
delegate performance of record-keeping and other ministerial functions
concerning the Plan and its day-to-day operation to such persons as it may
specify from time to time.
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Section 4 -- Eligibility for Awards; No Requirement of Uniformity
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An Option may be granted by the Committee at any time to any Employee or
any Outside Director. The type, amount and other terms and conditions of an
Award made to a grantee at any given time need not be the same as for any other
Award granted then or at any other time to the same or any other grantee.
Section 5 -- Maximum Number of Shares
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Subject to adjustment as provided in Section 8, the aggregate number of
shares of Company Stock available for issuance pursuant to the exercise of
Options shall not exceed 200,000 shares. If any Option (or portion thereof)
shall expire, terminate, or be cancelled or forfeited while unexercised, for any
reason, the shares subject to such unexercised Option (or Option portion) shall
again become available for Awards.
Section 6 -- Options
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(a) Type. All Options granted under this Plan shall be nonqualified stock
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options, that is, Options that are not intended to meet the requirements of
Section 422 of the Code (or any successor provision in effect at a relevant
time). In connection with the grant of any Option, the Committee may prescribe
such terms and conditions, not inconsistent with the Plan, as it deems
desirable.
(b) Number of Shares and Exercisability. The number of shares subject to
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an Option granted by the Committee, the time at which the Option or any portion
thereof first becomes exercisable (which time may but need not be coincident
with the date of grant) and the latest date on which the Option may be exercised
(the "expiration date") shall be as specified by the Committee at the time of
grant. The Committee may, in its discretion, accelerate the exercisability of
any Option (or Option portion) at any time or provide for automatic acceleration
of exercisability of any Option (or portion) upon the occurrence of such events
as it may specify. During the lifetime of the grantee of an Option, the Option
may be exercised only by the grantee or the grantee's legal representative.
(c) Exercise Price. Unless the Committee specifies a higher price at the
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time of grant, the per share exercise price of each Option shall be the Fair
Market Value of a share of Company Stock on such date as determined by the
Committee.
(d) Exercise Procedures and Payment. The holder of an exercisable Option
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(or Option portion) may exercise it in whole or in part by complying with such
procedures for exercise prescribed by the Committee as are then in effect and
tendering payment in full of the aggregate exercise price for the number of
shares in respect of which the Option is then being exercised. Except to the
extent that the Committee at the time of grant of the Option specifies one or
more other acceptable forms of payment of the exercise price, payment shall be
made entirely in cash.
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(e) Effect Upon Outstanding Options of Termination of Employment or Service
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as an Outside Director.
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(1) General. For purposes of the Plan, (i) a transfer of an Employee
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from the Company to an Affiliated Entity, from an Affiliated Entity to the
Company or between Affiliated Entities or (ii) a leave of absence, duly
authorized in writing by the Company and approved by the Committee shall
not be deemed a termination of employment. For purposes of the Plan,
termination of employment as an Employee shall be considered to occur on
the date on which an Employee is no longer obligated to perform services
for the Company or any of its Affiliated Entities and the Employee's right
to reemployment is not guaranteed either by statute or contract, regardless
of whether the Employee continues to receive compensation from the Company
or any of its Affiliated Entities after such date. For purposes of the
Plan, an Outside Director shall be deemed to have terminated service as an
Outside Director on the earliest of (A) his/her resignation from the Board,
(B) his/her removal from the Board by the shareholders of the Company, and
(C) the date on which his/her term of office as a Board member expires
without reelection to the Board by the Company's shareholders. Except as
otherwise hereinafter provided, if an Employee holding an Option terminates
employment or if the service of an Outside Director holding an Option
terminates, such termination of employment or service, as applicable,
automatically shall operate to cancel and terminate all Options in their
entirety, whether or not exercisable at the time of such termination of
employment or service.
(2) Retirement of an Employee. If an Employee terminates employment
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due to his/her retirement from the Company or an Affiliated Entity on or
after age 65 (or prior to age 65 with the consent of the Committee) but the
Employee then is (or at that time becomes) a director of the Company, the
Option shall continue in effect in accordance with its terms as if it had
been granted to an Outside Director. If any other Employee ceases to be
employed by the Company or an Affiliated Entity due to his/her retirement
on or after age 65 (or prior to age 65 with the consent of the Committee),
the Option shall continue to be exercisable in accordance with its terms
for a period of three months after such termination of employment or, if
less, until its expiration date, but only to the extent that the Option was
exercisable on the date of termination.
(3) Disability of an Employee. If an Employee ceases to be employed
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by the Company or an Affiliated Entity due to his/her Disability, the
Option shall continue to be exercisable in accordance with its terms for a
period of three months after such termination of employment or, if less,
until the its expiration date, but only to the extent that the Option was
exercisable on the date of Disability.
(4) Death. If an Employee or an Outside Director dies either while
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still an Employee (or an Outside Director, if applicable) or otherwise
during a time when he/she could have exercised an Option, the Option shall
continue to be exercisable in accordance with its terms by the beneficiary
or personal representative of the decedent for a period of six months
following the date of his/her death, or, if less, until its expiration
date, but only to the extent that the Option was exercisable on the date of
death.
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(5) Extensions of Exercisability. Anything in this Section 6(e)
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notwithstanding, the Committee may in its discretion allow a longer post-
termination exercise period for any then outstanding Option, as long the
exercise period allowed does not extend beyond the Option's expiration
date.
Section 7 -- Certain Provisions Generally Applicable to Awards
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(a) Award Agreements. Each Award granted under the Plan shall be evidenced
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by a written agreement setting forth (including, to the extent appropriate, by
incorporating applicable provisions of the Plan) the type, amount and other
terms and conditions of such Award, including, in addition to such terms and
conditions as are expressly required to be determined by the Committee, all such
other terms and conditions not inconsistent with the Plan as the Committee, in
its discretion, shall have specified with respect to such Award.
(b) Transfer Restrictions; Potential Forfeiture. No Option and none of the
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rights or privileges conferred by any such Award may be sold, assigned, pledged,
hypothecated or otherwise transferred in any manner whatsoever, whether
voluntarily, by operation of law or otherwise, except pursuant to the laws of
descent and distribution or by the predecessor holder's last will and testament.
Upon any attempt to sell, assign, pledge, hypothecate or otherwise transfer any
such Award or any of the rights and privileges conferred thereby contrary to the
provisions of the Plan, or upon the sale under levy of attachment or similar
process upon the rights and privileges conferred by any such Award, the Award
and all such rights and privileges shall immediately terminate.
(c) Overriding Precondition; Potential Forfeiture. It shall be an
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overriding precondition to the exercisability of each Option: (1) that the
grantee of such Award not engage in any activity that, in the opinion of the
Committee, is in competition with any activity of the Company or any Affiliated
Entity or otherwise inimical to the best interests of the Company (except that
employment with any entity at the request of the Company and employment that has
been specifically approved by the Committee shall not be considered an activity
in competition with or, in itself, otherwise inimical to the Company or any
Affiliated Entity) and (2) that the grantee furnish the Committee with all such
information concerning satisfaction of the foregoing condition as the Committee
shall reasonably request. If the Committee makes a determination that a
grantee, whether while still an Employee or afterward, has engaged in any such
competitive or otherwise inimical activity, such determination shall operate to
immediately cancel all then outstanding Options theretofore granted to the
grantee.
(d) Specific Precondition. It shall be a precondition to the grant of any
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Option to an Employee that such Employee first execute and deliver to the
Company a Stock Transfer Agreement by and between the Employee and the Company,
a copy of which is attached hereto as Exhibit A.
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(e) Tax Withholding. The Company shall have the right to withhold or
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require the grantee or other holder of any Award to pay to the Company the full
extent of any amounts required to be withheld by the Company in connection with
the exercise or settlement of such Award, and any such required payment relating
to the exercise of an Option shall be a condition precedent to settlement of
such Award.
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(f) Shareholder Status. Neither the grantee of an Award, nor any other
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person to whom the Award or the grantee's rights thereunder may pass, shall be
deemed for any purposes to be a holder of shares of Company Stock with respect
to shares issuable pursuant to such an Award until certificates representing
such shares have been issued in the name of such grantee or other person.
(g) No Change in Employment Status. Neither the establishment of the Plan,
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the eligibility of any Employee to be granted Awards, the grant of any Award to
an Employee, nor any provision of the Plan or such Award is intended or shall be
construed as conferring upon any Employee the right to continue in the
employment of the Company or any Affiliated Entity or affect any right of the
Company or an Affiliated Entity to terminate such Employee's employment.
Section 8 -- Adjustments upon Changes in Capitalization
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In the event of a reorganization or recapitalization, merger, consolidation
or similar transaction involving the Company, a stock-on-stock dividend or
split, a reverse split or a combination of Company Stock, a rights offering, or
any other change in the corporate or capital structure of the Company, the Board
shall make such adjustments as it may deem appropriate in the number and kind of
shares available for issuance under and pursuant to the Plan, the number and
kind of shares covered by outstanding Options and the per share exercise price
of such Options.
Section 9 -- Change in Control.
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A "Change in Control" shall occur if at any time during which Options
remain outstanding (a) title or voting rights with respect to more than 50
percent of the Company Stock becomes owned by any parties or entities other than
the existing shareholders of record of the Company's Stock as of the effective
date of the plan (provided that transfer of shares to one or more members of a
shareholder's immediate family, to a trust of which the shareholder is the
grantor during his lifetime or at death or to the grantor of a trust that is a
shareholder or to the grantor's immediate family shall not be deemed a Change in
Control), (b) the Company is either acquired by and/or merged with another
organization or corporate entity owned or controlled by parties or entities
other than the existing principal shareholders of record of the Company's Stock
as of the effective date of the Plan, resulting in the Company's Stock not being
the surviving common stock subsequent to the establishment of the merged
organization, or (c) the Company conveys all or substantially all of its assets
to another corporation, entity, or person, the ownership of which is not the
existing shareholders of record of the Company's Stock as of the effective date
of the plan. If a Change in Control occurs, all Options granted hereunder shall
become immediately exercisable.
Section 10 -- Effectiveness, Duration, Amendment, Suspension and Termination
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The Plan shall become effective immediately upon Board approval, and shall
continue thereafter until terminated by the Board. The Board may amend, suspend
or terminate the Plan or any portion thereof at any time, but no such Board
action shall adversely affect the rights of
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any grantee or other holder of any Award then outstanding without the consent of
such grantee or holder.
Adopted by the Board of Directors of the Company: June 29, 2000
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