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EXHIBIT 10.17
2000 OMNIBUS STOCK AND INCENTIVE PLAN
OF
AROC INC.
ARTICLE I. GENERAL
SECTION 1.1. Purpose of the Plan. The 2000 Omnibus Stock and Incentive Plan of
AROC Inc. is intended to advance the best interests of the Company, its
Subsidiaries and its stockholders in order to attract, retain and motivate
directors, officers, key employees and consultants by providing them with
additional incentives through the award of (i) Options (including Reload
Options) to purchase shares of Common Stock (which Options may be Incentive
Stock Options or Non-Qualified Stock Options); (ii) Stock Appreciation Rights;
(iii) shares of Restricted Stock; and (iv) Performance Awards.
SECTION 1.2. Definitions. For purposes of this Plan, the following definitions
shall apply:
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Award" means a grant under this Plan in the form of Options, Performance
Awards, Restricted Stock or Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Cause" with respect to any Participant has the meaning given that term or
any substantially comparable term or usage in any employment or severance
arrangement applicable to the Participant and approved by the Board or the
Committee, or in the absence of any such arrangement or term, means:
(a) the willful and continued failure by the Participant to
substantially perform his duties with the Company or a Subsidiary
(other than any such failure resulting from the Participant's
Disability), within a reasonable period of time after a written
demand for substantial performance is delivered to the
Participant by the board of directors of the Participant's
employer, which demand specifically identifies the manner in
which the board of directors of the Participant's employer
believes that the Participant has not substantially performed his
duties;
(b) the failure by the Participant to materially conform to the
Company's policies and procedures, within a reasonable period of
time after a written demand for substantial performance is
delivered to the Participant by the board of directors of the
Participant's employer, which demand specifically identifies the
manner in which the board of directors of the Participant's
employer believes that the Participant has failed to materially
conform to the Company's policies and procedures;
(c) the willful engaging by the Participant in conduct that is
demonstrably and materially injurious to the Company or a
Subsidiary, monetarily or otherwise; or
(d) the engaging by the Participant in egregious misconduct involving
serious moral turpitude to the extent that, in the reasonable
judgment of the board of directors of the Participant's employer,
the Participant's credibility
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and reputation no longer conform to the standard of the
employer's employees. For purposes of the Plan, no act, or
failure to act, on the Participant's part shall be deemed
"willful" unless done, or omitted to be done, by the Participant
not in good faith and without reasonable belief that the
Participant's action or omission was in the best interest of the
Company.
"Change in Control" with respect to any Participant has the meaning given
that term or any substantially comparable term or usage in any employment or
severance arrangement applicable to the Participant and approved by the Board or
the Committee, or in the absence of any such arrangement or term, means the
occurrence of any of the following events:
(a) Any "person" (as such term is used in Section 13(d) and 14(d)(2)
of the 1934 Act), becomes the beneficial owner, directly or
indirectly, of Voting Securities representing thirty percent
(30%) or more of the combined voting power of the Company's then
outstanding Voting Securities or, if a person is the beneficial
owner, directly or indirectly, of Voting Securities representing
thirty percent (30%) or more of the combined voting power of the
Company's outstanding Voting Securities as of the date the
particular Award is granted, such person becomes the beneficial
owner, directly or indirectly, of additional Voting Securities
representing ten percent (10%) or more of the combined voting
power of the Company's then outstanding Voting Securities,
(b) During any period of twelve (12) months, individuals who at the
beginning of such period constitute the Board cease for any
reason to constitute a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of
each new director was approved by a vote of at least a majority
of the directors then still in office who were directors at the
beginning of the period,
(c) The stockholders of the Company approve (x) any consolidation or
merger of the Company or any of its subsidiaries that results in
the holders of the Company's Voting Securities immediately prior
to the consolidation or merger having (directly or indirectly)
less than a majority ownership interest in the outstanding Voting
Securities of the surviving corporation immediately after the
consolidation or merger, (y) any sale, lease, exchange or other
transfer (in one transaction or a series of related transaction)
of all, or substantially all, of the assets of the Company, or
(z) any plan or proposal for the liquidation of dissolution of
the Company;
(d) The stockholders of the Company accept a share exchange, with the
result that stockholders of the Company immediately before such
share exchange do not own, immediately following such share
exchange, at least a majority of the Voting Securities of the
entity resulting from such share exchange in substantially the
same proportion as their ownership of the Voting Securities
outstanding immediately before such share exchange; or
(e) Any tender or exchange offer is made to acquire thirty percent
(30%) or more of the Voting Securities of the Company, other than
an offer made by the Company, and shares are acquired pursuant to
that offer.
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For purposes of this definition, the term "Voting Securities" means equity
securities, or securities that are convertible or exchangeable into the equity
securities, that have the right to vote generally in the election of at least a
majority of the Board that have,
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means a committee of at least two members of the Board. If it
is intended that the Committee satisfy the requirements of Rule 16b-3 under the
1934 Act and Section 162(m) of the Code, then all of the members of the
Committee, at the time of service on the Committee hereunder, should be "Non-
Employee Directors," as defined in Rule 16b-3(b)(3) under the 1934 Act and
"Outside Directors," as defined in Treasury Regulation Section 162-27(e)(3),
under the Code. If no Committee has been designated to administer the Plan,
references to the Committee shall be deemed to be references to the Board, whose
members shall not be required to meet the qualifications of this definition.
"Common Stock" means the common stock, par value $0.001 per share, of the
Company.
"Company" means AROC Inc. and its successors and assigns.
"Date of Termination" of a Participant means the first day occurring on or
after the date on which a Participant is granted an Award on which the
Participant is not employed by the Company or any Subsidiary, regardless of the
reason for the termination of employment; provided that a termination of
employment shall not be deemed to occur by reason of a transfer of the
Participant between the Company and a Subsidiary or between two Subsidiaries;
and further provided that the Participant's employment shall not be considered
terminated while the Participant is on a leave of absence from the Company or a
Subsidiary approved by the Participant's employer. If, as a result of a sale or
other transaction, the Participant's employer ceases to be a Subsidiary (and the
Participant's employer is or becomes an entity that is separate from the
Company), the occurrence of such transaction shall be treated as the
Participant's Date of Termination caused by the Participant being discharged by
the employer.
"Disability" with respect to any Participant has the meaning given that
term or any substantially comparable term or usage in any employment or
severance arrangement applicable to the Participant and approved by the Board or
the Committee, or in the absence of any such arrangement or term, means, except
as otherwise determined by the Committee, a condition that renders the
Participant unable, by reason of a medically determinable physical or mental
impairment, to engage in any substantial gainful activity, which condition, in
the opinion of a physician selected by the Committee, is expected to have a
duration of not less than 120 days.
"Eligible Participant" has the meaning given in Section 1.4.
"Expiration Date" with respect to an Award means the date established as
the Expiration Date by the Committee at the time of the grant; provided,
however, that the Expiration Date with respect to any Incentive Stock Option
shall not be later than the earliest to occur of: (i) the ten-year anniversary
of the date on which the Award is granted; provided, however, that the
expiration date of an Incentive Stock Option granted to any person who owns
(within the meaning of Section 422(b)(6) of the Code), directly or indirectly,
stock possessing more than 10% of the total combined voting power of all classes
of the Company's stock shall not be later than the fifth anniversary of the date
on which the Award is granted; or (ii) if the Participant's Date of Termination
occurs by reason of Disability, the one-year anniversary of such Date of
Termination or if the Participant's Date of Termination occurs for a reason
other than Disability, 90 days after such Date of Termination.
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"Fair Market Value" of a share of Common Stock on any date of reference
means the closing price on the business day immediately preceding such date,
unless the Committee in its sole discretion shall determine otherwise in a fair
and uniform manner. For purposes of this Plan, the "Closing Price" of the
Common Stock on any business day shall be: (i) if the Common Stock is listed or
admitted for trading on any United States national securities exchange or
included in the National Market System of the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), the last reported sale price of
Common Stock on such exchange or system, as reported in any newspaper of general
circulation; (ii) if the Common Stock is quoted on NASDAQ, or any similar system
of automated dissemination of quotations of securities prices in common use, the
mean between the closing high bid and low asked quotations for such day of the
Common Stock on such system; (iii) if neither clause (i) nor (ii) is applicable,
the mean between the high bid and low asked quotations for Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and asked quotations for Common Stock
on at least five of the ten preceding days; or, (iv) in lieu of the above, if
actual transactions in the Common Stock are reported on a consolidated
transaction reporting system, the last sale price of the Common Stock for such
day and on such system.
"Incentive Stock Option" means any Option designated as such and granted in
accordance with the requirements of Section 422 of the Code.
"Non-Qualified Stock Option" means an Option granted under the Plan other
than an Incentive Stock Option.
"Original Option" means an Option with respect to which a Reload Option is
granted pursuant to Section 2.1(g).
"Participant" means any Eligible Participant that is granted an Award under
the Plan.
"Performance Award" means an Award granted pursuant to Article IV.
"Performance Measures" means the objectives established by the Committee
pursuant to Section 4.1(b).
"Performance Period" means the period over which the performance of a
holder of a Performance Award is measured.
"Plan" means the 2000 Omnibus Stock and Incentive Plan of AROC Inc.
"Reload Option" means a Reload Option granted pursuant to Section 2.1(g).
"Restricted Stock Award" means an Award of stock of the Company that is
granted pursuant to Article III that is subject to the restrictions imposed by
Article III.
"Retirement" with respect to any Participant has the meaning given that
term or any substantially comparable term or usage in any employment or
severance arrangement applicable to the Participant and approved by the Board or
the Committee, or in the absence of any such arrangement or term, means the
termination of the Participant's employment by the Company or a Subsidiary other
than discharge for cause, after age 65, or on or before age 65 if pursuant to
the terms of any retirement plan maintained by the Company or any of its
Subsidiaries in which such person participates.
"Stock Appreciation Right" means a Stock Appreciation Right granted
pursuant to Section 2.2 of this Plan.
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"Subsidiary" of the Company means any corporation, partnership or other
entity that is designated by the Board as a participating employer under the
Plan, provided that the Company directly or indirectly owns at least 20% of the
combined voting power of all classes of stock of such entity or at least 20% of
the ownership interests in such entity.
"Withholding Tax" means any Federal, state or local withholding tax
liability.
SECTION 1.3. Administration of the Plan.
(a) The Plan shall be administered by the Committee. The Committee shall
have authority to interpret conclusively the provisions of the Plan, to adopt
such rules and regulations for carrying out the Plan as it may deem advisable,
to decide conclusively all questions of fact arising in the application of the
Plan, to establish performance criteria in respect of Awards under the Plan, to
certify that Plan requirements have been met for any Participant in the Plan, to
submit such matters as it may deem advisable to the Company's stockholders for
their approval, and to make all other determinations and take all other actions
necessary or desirable for the administration of the Plan. The Committee is
expressly authorized to adopt rules and regulations limiting or eliminating its
discretion in respect of certain matters as it may deem advisable to comply with
or obtain preferential treatment under any applicable tax or other law rule, or
regulation. All decisions and acts of the Committee shall be final and binding
upon all affected Plan Participants.
(b) The Committee shall designate the Eligible Participants, if any, to be
granted Awards and the type and amount of such Awards and the time when Awards
will be granted. All Awards granted under the Plan shall be on the terms and
subject to the conditions determined by the Committee consistent with the Plan.
SECTION 1.4. Eligible Participants. Directors of the Company, key employees,
including officers, and consultants to the Company and its Subsidiaries shall be
eligible for Awards under the Plan; provided, however, that only employees of
the Company and its corporate Subsidiaries shall be eligible for Awards of
Options granted in accordance with Section 2.3(i).
SECTION 1.5. Awards Under the Plan. Awards to Eligible Participants may be in
the form of (i) Options (including Reload Options); (ii) Stock Appreciation
Rights; (iii) shares of Restricted Stock; (iv) Performance Awards; or (v) any
combination of the foregoing.
SECTION 1.6. Shares Subject to the Plan.
(a) General limitation. The aggregate number of shares of Common Stock
that may be issued under the Plan shall be 7,000,000. Shares distributed
pursuant to the Plan shall consist of authorized but unissued shares of the
Company, unless the Board determines in its sole discretion that any shares to
be distributed shall consist of treasury stock of the Company. If any Award
under the Plan shall expire, terminate or be canceled (including cancellation
upon the Participant's exercise of a related Award) for any reason without
having been exercised in full, or if any Award shall be forfeited to the
Company, the unexercised or forfeited Award shall not count against the above
limits and shall again become available for grants under the Plan (unless the
holder of such Award received dividends or other economic benefits with respect
to such Award, which dividends or other economic benefits are not forfeited, in
which case the Award shall count against the above limits). Shares of Common
Stock equal in number to the shares surrendered in payment of the option price,
and shares of Common Stock that are withheld in order to satisfy Federal, state
or local tax liability, shall not count against the above limits. Only the
number of shares of Common Stock actually issued upon exercise of a Stock
Appreciation Right shall count against the above limits, and any shares that
were estimated to be used for such purposes and were not in fact so
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used shall again become available for grants under the Plan. Cash exercises of
Stock Appreciation Rights and cash settlement of other Awards will not count
against the above limits.
(b) Additional Limitations.
(i) The aggregate number of shares of Common Stock that may be granted
pursuant to an Award of Options or Stock Appreciation Rights that may be awarded
to any Eligible Participant shall not exceed 3,000,000 during any calendar year.
(ii) No more than 3,000,000 shares of Common Stock may be subject to
Restricted Stock Awards or Performance Awards that are intended to be
"performance based compensation" (as that term is used in Section 162(m) of the
Code) may be granted.
(iii) The aggregate amount of cash that may be credited to any one
Eligible Participant pursuant to any Performance Award during any one year may
not exceed $1,000,000.
(iv) The number of shares of Common Stock that will be available under
the Plan for Options granted in accordance with Section 2.3(i) is 3,000,000.
SECTION 1.7. Other Compensation Programs. Nothing contained in the Plan shall
be construed to preempt or limit the authority of the Board to exercise its
corporate rights and powers, including, but not by way of limitation, the right
of the Board (i) to grant incentive awards for proper corporate purposes
otherwise than under the Plan to any employee, officer, director or other person
or entity or (ii) to grant incentive awards to, or assume incentive awards of,
any person or entity in connection a Change of Control.
SECTION 1.8. Award Agreements. Each Award shall be evidenced by an agreement
that may contain any term deemed necessary or desirable by the Committee,
provided such terms are not inconsistent with this Plan or applicable law.
ARTICLE II. STOCK OPTIONS AND SARS
SECTION 2.1. Terms and Conditions of Options. Subject to the following
provisions, all Options granted under the Plan to an Eligible Participant shall
be in such form and shall have such terms and conditions as the Committee, in
its discretion, may from time to time determine consistent with the Plan.
(a) Exercise Price. The exercise price per share shall be determined by
the Committee, except that in the case of an Option granted in accordance with
Section 2.3(i) the exercise price per share shall not be less than 100 percent
of the Fair Market Value, as determined by the Committee, of a share of Common
Stock on the date the Option is granted (110 percent in the case of an Incentive
Stock Option granted to a person who owns (within the meaning of Section
422(b)(6) of the Code) directly or indirectly, stock possessing more than 10% of
the total combined voting power of all classes of the Company's stock).
(b) Term of Option. The term of an Option shall be determined by the
Committee, except that, in the case of an Incentive Stock Option, the term of
the Option shall not exceed ten years from the date of grant unless the grant is
to a person who owns (within the meaning of Section 422(b)(6) of the Code),
directly or indirectly, stock possessing more that 10% of the total combined
voting power of all classes of the Company's stock, in which case the term of
the Option shall not exceed five years from the date of grant, and,
notwithstanding any other provision of this Plan, no Option shall be exercised
after the expiration of its term.
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(c) Exercise of Options. Options shall be exercisable at such time or
times and subject to such terms and conditions as the Committee shall specify in
the Option Agreement. Unless the Option Agreement specifies otherwise, the
Committee shall have discretion at any time to accelerate such time or times and
otherwise waive or amend any conditions in respect of all or any portion of the
Options held by any Participant. An Option may be exercised in accordance with
its terms as to any or all shares purchasable thereunder.
(d) Payment for Shares. The Committee may authorize payment for shares as
to which an Option is exercised to be made in cash, shares of Common Stock owned
by the Participant for at least six months, or a combination thereof, by
"cashless exercise" or in such other manner as the Committee in its discretion
may provide. The Committee, in its sole discretion and on such terms as it may
determine, may loan money to the Participant, guarantee a loan to the
Participant, or otherwise assist the Participant to obtain the necessary cash to
exercise all, or a portion of, an Award granted hereunder, or to pay any tax
liability of the Participant attributable to such exercise.
(e) Stockholder Rights. The holder of an Option shall, as such, have none
of the rights of a stockholder.
(f) Termination of Employment. The Committee shall have discretion to
specify in the Option Agreement, or, with the consent of the Participant, an
amendment thereof, provisions with respect to the period, not extending beyond
the term of the Option, during which the Option may be exercised following the
optionee's termination of employment, provided, however, that Incentive Stock
Options that have not been previously exercised, must be exercised within three
months following the Participant's termination of employment unless employment
is terminated because of Disability, in which event the exercise period is
extended to one year following termination.
(g) Reload Options. The Committee shall have the authority to specify, at
the time of grant or, with respect to Non-Qualified Stock Options, at or after
the time of grant, that the Participant to whom an Option is or was granted
under this Plan (which, except in the case of an Incentive Stock Option, may
include a former salaried officer or key employee of the Company or any
Subsidiary) shall be granted a Reload Option in the event such person exercises
all or a part of an Original Option by surrendering in accordance with Section
2.1(d) of this Plan already owned shares of unrestricted Common Stock in full or
partial payment of the exercise price under such Original Option, subject to the
availability of shares of stock under this Plan at the time of such exercise.
Each Reload Option shall cover a number of shares of stock equal to the number
of shares of stock surrendered in payment of the exercise price under such
Original Option, shall have an exercise price per share of stock equal to the
Fair Market Value of the stock on the date of grant of such Reload Option and
shall expire on the stated expiration date of the Original Option. A Reload
Option shall be exercisable at any time and from time to time from and after the
date of grant of such Reload Option (or, as the Committee in its sole discretion
shall determine at or after the time of grant, at such time or times as shall be
specified in the Reload Option). Any Reload Option may provide for the grant,
when exercised, of subsequent Reload Options to the extent and upon such terms
and conditions, consistent with this Section 2.1(g), as the Committee in its
sole discretion shall specify at or after the time of grant of such Reload
Option. A Reload Option shall contain such other terms and conditions, which
may include a restriction on the transferability of the shares of stock received
upon exercise of the Original Option representing at least the after-tax profit
received upon exercise of the Original Option, as the Committee in its sole
discretion shall deem desirable and which may be set forth in rules or
guidelines adopted by the Committee or in the Option Agreement evidencing the
Reload Option.
SECTION 2.2. Stock Appreciation Rights. An Award of a Stock Appreciation Right
shall entitle the Participant, subject to terms and conditions determined by the
Committee, to receive upon exercise of the
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right, all or a portion of the excess of (i) the Fair Market Value of a
specified number of shares of Common Stock at the time of exercise over (ii) a
specified price that shall not be less than 100% of the Fair Market Value of the
shares of Common Stock at the time of grant. Stock Appreciation Rights may be
granted in connection with a previously or contemporaneously granted Option, or
independent of any Option. If issued in connection with an Option, the Committee
may impose a condition that exercise of a Stock Appreciation Right cancels the
Option with which it is connected. A Stock Appreciation Right may not be
exercised at any time when the Fair Market Value of the shares of Common Stock
to which it relates does not exceed the exercise price of the Option associated
with those shares of Common Stock. A Stock Appreciation Right issued in
connection with an Option may be exercised at any time the Option to which it
relates is exercisable, but only to the extent the Option to which it relates is
then exercisable, and shall be subject to the conditions applicable to such
Option.
SECTION 2.3. Statutory Options. Subject to the limitations on Option terms set
forth in Section 2.1(b), and subject to obtaining stockholder approval of the
Plan within 12 months after the Plan is adopted, the Committee shall have the
authority to grant (i) Incentive Stock Options within the meaning of Section 422
of the Code and (ii) Options containing such terms and conditions as shall be
required to qualify such Options for preferential tax treatment under the Code
as in effect at the time of such grant. Options granted pursuant to this
Section 2.3 may contain such other terms and conditions permitted by Article II
of this Plan as the Committee, in its discretion, may from time to time
determine (including, without limitation, provision for Stock Appreciation
Rights and Reload Options), to the extent that such terms and conditions do not
cause the Options to lose their preferential tax treatment; provided, however,
that the aggregate Fair Market Value (as determined on the date of the grant) of
the stock with respect to which Incentive Stock Options are exercisable for the
first time by any Participant during any calendar year shall not exceed
$100,000.
SECTION 2.4. Change of Control. Notwithstanding the exercisability schedule
governing any Option or Stock Appreciation Right, unless otherwise provided in
the grant relating to a specific Award of an Option or Stock Appreciation Right
or other agreement with the Participant, upon the occurrence of a Change of
Control, all Options and Stock Appreciation Rights outstanding at the time of
such Change of Control and held by participants at the time of such Change of
Control shall become immediately exercisable and, unless the Participant agrees
otherwise in writing, remain exercisable for three years (but not beyond the
term of the Option or Stock Appreciation Right) after the Participant's
termination of employment for any reason other than termination by the Company
or a Subsidiary for Cause.
ARTICLE III. RESTRICTED STOCK
SECTION 3.1. Terms and Conditions of Restricted Stock Awards. Subject to the
following provisions, all Awards of Restricted Stock under the Plan to an
Eligible Participant shall be in such form and shall have such terms and
conditions as the Committee, in its discretion, may from time to time determine
consistent with the Plan.
(a) Restricted Stock Award. The Restricted Stock Award shall specify the
number of shares of Restricted Stock to be awarded, the price, if any, to be
paid by the Participant receiving the Restricted Stock Award, and the date or
dates on which the Restricted Stock will vest. The vesting and number of shares
of Restricted Stock may be conditioned upon the completion of a specified period
of service with the Company or its Subsidiaries or upon the attainment of any of
the following specified performance goals as fixed by the Committee: (i) net
income before or after extraordinary items, operating income, income before
taxes, earnings before depreciation, interest and taxes, cash flow or revenues
of (x) the Company on a consolidated basis, (y) one or more Subsidiaries or (z)
one or more operating divisions, departments, units or segments of the Company
or one or more of its Subsidiaries; (ii) return on equity; (iii) return on
capital employed; (iv) return on net assets; (v) increases in the market price
of the
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Common Stock or other securities of the Company before or after dividends; (vi)
the performance of the Company's Common Stock or other securities in comparison
to other stocks, stock indexes or groups of stocks or other investments; (vii)
increases in sales, margins or profit on a Company, Subsidiary, division,
department unit, segment, product or product line basis; or (viii) any
combination of the above.
(b) Restrictions on Transfer. Unless otherwise provided in the grant
relating to the Restricted Stock Award, stock certificates representing the
Restricted Stock granted to a Participant shall be registered in the
Participant's name or at the option of the Committee not issued until such time
as the Restricted Stock shall become vested or otherwise determined by the
Committee. If certificates are issued prior to the shares of Restricted Stock
becoming vested, such certificates shall either be held by the Company on behalf
of the Participant, or delivered to the Participant bearing a legend to restrict
transfer of the certificate until the Restricted Stock has vested, as determined
by the Committee. The Committee shall determine whether the Participant shall
have the right to vote and/or receive dividends on the Restricted Stock before
it has vested. Except as may otherwise be expressly permitted by the Committee,
no share of Restricted Stock may be sold, transferred, assigned, or pledged by
the Participant until such share has vested in accordance with the terms of the
Restricted Stock Award. Unless the grant of a Restricted Stock Award specifies
otherwise, in the event of a Participant's termination of employment before all
the Participant's Restricted Stock has vested, or in the event other conditions
to the vesting of Restricted Stock have not been satisfied prior to any deadline
for the satisfaction of such conditions set forth in the Award, the shares of
Restricted Stock that have not vested shall be forfeited and any purchase price
paid by the employee shall be returned to the Participant. At the time
Restricted Stock vests (and, if the Participant has been issued legend
certificates of Restricted Stock, upon the return of such certificates to the
Company), a certificate for such vested shares shall be delivered to the
Participant (or the beneficiary designated by the Participant in the event of
death), free of all restrictions.
(c) Accelerated Vesting. Notwithstanding the vesting conditions set forth
in the Restricted Stock Award, unless the Restricted Stock Award grant or other
agreement with the Participant thereof specifies otherwise:
(i) the Committee may in its discretion at any time accelerate the
vesting of Restricted Stock or otherwise waive or amend any conditions of a
grant of a Restricted Stock Award, and
(ii) all shares of Restricted Stock shall vest upon a Change of
Control of the Company.
ARTICLE IV. PERFORMANCE AWARDS
SECTION 4.1. Terms and Conditions of Performance Awards. The Committee shall
be authorized to grant Awards that are intended to be "performance-based
compensation" ("Performance Awards"), which are payable in stock, cash or a
combination thereof, at the discretion of the Committee.
(a) Performance Period. The Committee shall establish with respect to each
Performance Award a Performance Period over which the performance of the holder
of such Performance Award shall be measured. The Performance Period for a
Performance Award shall be established at the time such Performance Award is
granted and may overlap with performance periods relating to other Performance
Awards granted hereunder to the same Participant.
(b) Performance Objectives. The Committee shall establish a minimum level
of acceptable achievement for the Participant at the time of the grant of each
Performance Award. Each Performance Award shall be contingent upon future
performance and achievement of the Performance Measures fixed by the Committee.
Such Performance Measures shall be based on (i) net income before or after
extraordinary items, operating income, income before taxes, earnings before
depreciation, interest and
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taxes, cash flow or revenues of (x) the Company on a consolidated basis, (y) one
or more Subsidiaries or (z) one or more operating divisions, departments, units
or segments of the Company or one or more of its Subsidiaries; (ii) return on
equity; (iii) return on capital employed; (iv) return on net assets; (v)
increases in the market price of the Common Stock or other securities of the
Company before or after dividends; (vi) the performance of the Company's Common
Stock or other securities in comparison to other stocks, stock indexes or groups
of stocks or other investments; (vii) increases in sales, margins or profit on a
Company, Subsidiary, division, department, unit, segment, product or product
line basis; or (viii) any combination of the above.
(c) Amount, Frequency of Vesting. The Committee shall have the authority
to determine at the time of grant of the Performance Award the maximum value of
a Performance Award, the frequency of Performance Awards and the date or dates
when Performance Awards vest.
(d) Payment. Following the end of each Performance Period, the holder of
each Performance Award will be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the Performance Measures for such Performance Period, as determined by the
Committee. If at the end of the Performance Period the specified Performance
Measures have been attained, the Participant shall be deemed to have fully
earned the Performance Award. Unless otherwise provided in the Performance
Award, if the Participant exceeds the specified minimum level of acceptable
achievement but does not attain such objectives, the Participant shall be deemed
to have partly earned the Performance Award, and shall become entitled to
receive a portion of the total award, as determined by the Committee. Unless
otherwise provided in the Performance Award, if a Performance Award is granted
after the start of a Performance Period, the Performance Award shall be reduced
to reflect the portion of the Performance Period during which the Performance
Award was in effect. Unless the Performance Award specifies otherwise, the
Committee may adjust the payment of Performance Awards or the performance
objectives if events occur or circumstances arise which would cause a particular
payment or set of performance objectives to be inappropriate, as determined by
the Committee.
(e) Termination of Employment. Unless otherwise provided in the agreement
relating to the Performance Award or other agreement with the Participant, a
Participant that receives a Performance Award who, by reason of death,
Disability or Retirement, terminates employment before the end of the applicable
Performance Period shall be entitled to receive, to the extent earned, a portion
of the Performance Award that is proportional to the portion of the Performance
Period during which the Participant was employed. Unless otherwise provided in
the grant relating to the Performance Award or other agreement with the
Participant, a Participant who receives a Performance Award who terminates
employment for any other reason shall not be entitled to any part of the
Performance Award unless the Committee determines otherwise.
(f) Accelerated Vesting. Notwithstanding the vesting conditions set forth
in a Performance Award, unless the Performance Award specifies otherwise (i) the
Committee may in its discretion at any time accelerate vesting of the
Performance Award or otherwise waive or amend any conditions (including but not
limited to performance objectives) in respect of a Performance Award, and (ii)
all Performance Awards shall vest upon a Change of Control of the Company. In
addition, unless a Performance Award specifies otherwise, each Participant shall
receive the maximum Performance Award such Participant could have earned for the
proportionate part of the Performance Period prior to the Change of Control, and
shall retain the right to earn any additional portion of his or her Performance
Award if such Participant remains in the Company's employ.
(g) Stockholder Rights. The holder of a Performance Award shall, as such,
have none of the rights of a stockholder.
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ARTICLE V. ADDITIONAL PROVISIONS
SECTION 5.1. General Restrictions. Each Award under the Plan shall be subject
to the requirement that, if at any time the Committee shall determine that (i)
the listing, registration or qualification of the shares of Common Stock subject
or related thereto upon any securities exchange or under any state or Federal
law; (ii) the consent or approval of any government regulatory body; or (iii) an
agreement by the recipient of an Award with respect to the disposition of shares
of Common Stock, is necessary or desirable (in connection with any requirement
or interpretation of any Federal or state securities law, rule or regulation) as
a condition of, or in connection with, the granting of such Award or the
issuance, purchase or delivery of shares of Common Stock thereunder, such Award
may not be consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
SECTION 5.2. Adjustments for Changes in Capitalization. In the event of any
stock dividends, stock splits, recapitalizations, combinations, exchanges of
shares, mergers, consolidations, liquidations, split-ups, split-offs, spin-offs
or other similar changes in capitalization, or any distributions to
stockholders, including a rights offering, other than regular cash dividends,
changes in the outstanding stock of the Company by reason of any increase or
decrease in the number of issued shares of Common Stock resulting from a split-
up or consolidation of shares or any similar capital adjustment or the payment
of any stock dividend, any share repurchase at a price in excess of the market
price of the Common Stock at the time such repurchase is announced or other
increase or decrease in the number of such shares, the Committee shall make
appropriate adjustment in the number and kind of shares authorized by the Plan
(including shares available for Incentive Stock Options), in the number, price
or kind of shares covered by the Awards and in any outstanding Awards under the
Plan. In the event of any adjustment in the number of shares covered by any
Award, any fractional shares resulting from such adjustment shall be disregarded
and each such Award shall cover only the number of full shares resulting from
such adjustment.
SECTION 5.3. Amendments.
(a) The Board may at any time and from time to time and in any respect
amend or modify the Plan.
(b) The Committee shall have the authority to amend any Award to include
any provision which, at the time of such amendment, is authorized under the
terms of the Plan; however, no outstanding Award may be revoked or altered in a
manner unfavorable to the holder without the written consent of the holder.
SECTION 5.4. Cancellation of Awards. Any Award granted under the Plan may be
canceled at any time with the consent of the holder and a new Award may be
granted to such holder in lieu thereof, which award may, in the discretion of
the Committee, be on more favorable terms and conditions than the canceled
Award.
SECTION 5.5. Beneficiary. A Participant may file with the Company a written
designation of beneficiary, on such form as may be prescribed by the Committee,
to receive any Options, Stock Appreciation Rights, shares of Restricted Stock,
Common Stock, and Performance Awards that become deliverable to the Participant
pursuant to the Plan after the Participant's death. A Participant may, from
time to time, amend or revoke a designation of beneficiary. If no designated
beneficiary survives the Participant, the executor or administrator of the
Participant's estate shall be deemed to be the Participant's beneficiary.
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SECTION 5.6. Withholding. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock under the Plan, the Company shall have
the right to require the holder to pay an amount in cash or to retain or sell
without notice, or demand surrender of, shares of Common Stock in value
sufficient to satisfy any Withholding Tax prior to the delivery of any
certificate for such shares (or remainder of shares if Common Stock is retained
to satisfy such Withholding Tax). Whenever payments under the Plan are to be
made in cash, such payments shall be net of an amount sufficient to satisfy any
Withholding Tax liability. Whenever Common Stock is so retained, sold or
surrendered to satisfy Withholding Tax, the value of shares of Common Stock so
retained, sold or surrendered shall be determined by the Committee, and the
value of shares of Common Stock so sold shall be the net proceeds (after
deduction of commissions) received by the Company from such sale, as determined
by the Committee.
SECTION 5.7. Transferability. Except as expressly provided in the Plan or as
may be permitted by the Committee, no Award under the Plan shall be assignable
or transferable by the holder thereof except by will or by the laws of descent
and distribution. Except as expressly provided in the Plan or as may be
permitted by the Committee, during the life of the holder, Awards under the Plan
shall be exercisable only by such holder or by the guardian or legal
representative of such holder.
SECTION 5.8. Non-uniform Determinations. Determinations by the Committee under
the Plan (including, without limitation, determinations of the persons to
receive Awards; the form, amount and timing of such Awards; the terms and
provisions of such Awards and the agreements evidencing same; and provisions
with respect to termination of employment) need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated.
SECTION 5.9. No Guarantee of Employment. The grant of an Award under the Plan
shall not constitute an assurance of continued employment for any period or any
obligation of the Board to nominate any director for reelection by the Company's
stockholders.
SECTION 5.10. Deferred Compensation and Trust Agreements. The Committee may
authorize and establish deferred compensation agreements and arrangements in
connection with Awards under the Plan and may establish trusts and other
arrangements, including "rabbi trusts", with respect to such agreements and
appoint one or more trustees for such trusts. Shares of Common Stock under the
Plan may also be acquired by one or more trustees from the Company, in the open
market or otherwise.
SECTION 5.11. Duration and Termination.
(a) The Plan shall be of unlimited duration. Notwithstanding the
foregoing, no incentive stock option (within the meaning of Section 422 of the
Code) shall be granted under the Plan ten (10) years after the approval of the
Company's stockholders, but Awards granted prior to such date may extend beyond
such date, and the terms of this Plan shall continue to apply to all Awards
granted hereunder.
(b) The Board may suspend, discontinue or terminate the Plan at any time.
Such action shall not impair any of the rights of any holder of any Award
outstanding on the date of the Plan's suspension, discontinuance or termination
without the holder's written consent.
SECTION 5.12. Effective Date. The Plan shall be effective as of April 12,
2000, provided, however, that no incentive stock option (within the meaning of
Section 422 of the Code) may be granted under the Plan unless the Plan is
approved by the Company's stockholders within 12 months after April 12, 2000.
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