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Exhibit 4.4
APPLIED EXTRUSION TECHNOLOGIES, INC.
AET 2001 SHARE INCENTIVE PLAN
1. PURPOSE
The purpose of this AET 2001 Share Incentive Plan (the "Plan") is to
advance the interests of Applied Extrusion Technologies, Inc. ("AET") by
enhancing the ability of AET and its subsidiaries (the "Company") to attract and
retain employees who are in a position to make significant contributions to the
success of the Company, to reward them for their contributions and to encourage
them to take into account the long-term interests of the Company.
The Plan provides for the award of shares (the "Shares") of the Company's
authorized common stock (the "Common Stock"), subject to certain terms and
conditions as specified in a share incentive agreement ("Incentive Agreement")
to be entered into by the Company and each employee receiving a grant hereunder
and which shall be in substantially the form of Exhibit A hereto, with such
modifications thereto as the Company's Board of Directors (the "Board") may
approve.
2. ELIGIBILITY FOR AWARDS
Persons eligible to receive awards under the Plan shall be those
employees of the Company, excluding the directors and the executive officers,
and those consultants of the Company (the "Employee" or "Employees") who, in
the opinion of the Board are in a position to make a significant contribution
to the success of the Company and its subsidiaries. A subsidiary for purposes
of the Plan shall be a corporation that would be treated as a "subsidiary" of
AET for purposes of Section 424(f) of the Internal Revenue Code (the "Code").
3. ADMINISTRATION
The Plan shall be administered by the Board, which shall have authority,
not inconsistent with the express provisions of the Plan, to grant awards to
such Employees as the Board may select; to determine the time or times when
awards shall be granted and the number of shares of Common Stock subject to each
award; to determine the terms and conditions of each award; to prescribe the
form or forms of any instruments evidencing awards and any other instruments
required under the Plan and to change such forms from time to time; to adopt,
amend and rescind rules and regulations for the administration of the Plan; and
to interpret the Plan and to decide any questions and settle all controversies
and disputes that may arise in connection with the Plan. Such determinations of
the Board shall be conclusive and shall bind all parties. Subject to Section 8
the Board shall also have the authority, both generally and in particular
instances, to waive compliance by an Employee with any obligation to be
performed by the Employee under an award, to waive any condition or provision of
an award, and to amend or cancel any award (and if an award is canceled, to
grant a new award on such terms as the Board shall specify) except that the
Board may not take any action with respect to an outstanding award that would
adversely affect the rights of the holder of such award without such holder's
consent. Nothing in
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the preceding sentence shall be construed as limiting the power of the Board to
make adjustments contemplated by Section 5(c).
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee") consisting of one or
more members of the Board, in which event, except as the context otherwise
clearly requires, all references in this Plan to the Board shall be deemed to
refer to the Committee. If the Committee consists of two more members, (i) a
majority of its members shall constitute a quorum, (ii) all determinations of
the Committee shall be made by a majority of its members, and (iii) any
determination of the Committee under the Plan may be made without notice or
meeting of the Committee by a writing signed by a majority of the Committee
members. References to the Board (including, for the avoidance of doubt, the
Committee, if one is appointed) shall also include such other delegates as the
Board may determine, but only to the extent of any delegation by the Board to
such other delegates of its administrative responsibilities hereunder.
4. EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall become effective on the date on which it is approved by the
Board.
No awards shall be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board, but restrictions and
conditions with respect to previously granted awards may extend beyond that
date.
5. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. Subject to adjustment as provided in Section 5(c),
the aggregate number of shares of Common Stock that may be delivered under the
Plan shall be 1,000,000. If any award of Shares is forfeited, the number of
shares of Common Stock as to which such award was forfeited shall be available
for future grants within the limits set forth in this Section 5(a).
(b) SHARES TO BE DELIVERED. Shares delivered under the Plan shall be
authorized but unissued Common Stock or, if the Board so decides in its sole
discretion, previously issued Common Stock acquired by the Company and held in
its treasury. No fractional shares of Common Stock shall be delivered under the
Plan.
(c) CHANGES IN STOCK. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in AET's capital stock,
the number and kind of Shares subject to awards then outstanding or subsequently
granted under the Plan, the maximum number of shares of Common Stock that may be
delivered under the Plan, and other relevant provisions shall be appropriately
adjusted by the Board, whose determination shall be binding on all persons.
The Board may also adjust the number of Shares subject to outstanding
awards and the terms of outstanding awards to take into consideration material
changes in accounting practices or principles, extraordinary dividends,
consolidations or mergers, acquisitions or dispositions of stock or property or
any other event if it is determined by the Board that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
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6. RESTRICTED STOCK
The Board may grant or sell Common Stock to any Employee on such conditions
and with such restrictions as the Board determines. Subject to the provisions of
this Plan and the restrictions contained in the Incentive Agreement, an Employee
shall have all the rights of a shareholder with respect to the Shares granted or
sold to the Employee hereunder. Except as the Board may otherwise determine, any
certificates representing such Shares shall remain in the possession of the
Company until such Shares are free of restrictions under the Plan and the
Incentive Agreement. The Shares may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of except as specifically provided in the
Incentive Agreement. In connection with the grant or sale of the Shares, the
Employee shall pay to the Company in cash or make arrangements satisfactory to
the Company to pay, including, if the Board so permits, by the use of Shares
involved in the grant or sale or other shares of Common Stock owned by the
Employee, any withholding taxes arising by reason of such grant or sale,
including arrangements for the payment of any such taxes arising by reason of
the lapse of restrictions with respect to such Common Stock.
7. NO RIGHT TO CONTINUED SERVICE WITH THE COMPANY
Neither the adoption of the Plan nor the grant of awards shall confer upon
any Employee any right to continue as an employee of the Company or affect in
any way the right of the Company to terminate the Employee at any time. Except
as specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the relationship
of an Employee even if the termination is in violation of an obligation of the
Company to the Employee by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of awards to an Employee shall
affect the right of the Company to make awards to such Employee that are not
subject to the Plan, to issue to such Employee Common Stock as a bonus or
otherwise, or to adopt other plans or arrangements under which Common Stock may
be issued.
The Board may at any time discontinue granting awards under the Plan. With
the consent of the Employee, the Board may at any time cancel an existing award
in whole or in part and grant another award for such number of shares as the
Board specifies. The Board may at any time or times amend the Plan or any
outstanding award for the purpose of satisfying applicable laws or regulations
or for any other purpose that may at the time be permitted by law, or may at any
time terminate the Plan as to further grants of awards, but no such amendment
shall adversely affect the rights of any award holder (without such award
holder's consent) under any award previously granted.
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EXHIBIT A
SHARE INCENTIVE AGREEMENT
This SHARE INCENTIVE AGREEMENT is dated as of ________, 2001 between
Applied Extrusion Technologies, Inc. of 3 Centennial Drive, Peabody,
Massachusetts 01960 (the "Company"), and [____________] (the "Employee"). In
connection with the Employee's past service to the Company, the parties wish to
provide for the issuance to the Employee of restricted shares of the Company's
Common Stock, $0.01 par value (the "Common Stock").
SECTION 1. Grant of Restricted Stock.
(a) The Company hereby agrees to issue to the Employee a total of
[_____] shares (the "Shares") of the Company's authorized Common
Stock in consideration for the Employee's past services to the
Company, which have a value in excess of the par value of such
shares. The issuance of the Shares hereunder is being made
pursuant to and subject to the terms of the Company's AET 2001
Share Incentive Plan (the "Plan").
(b) The Shares granted under this Agreement are subject to certain
restrictions and conditions as set forth in this Agreement.
SECTION 2. Vesting.
(a) The Shares shall vest in accordance with the following schedule,
if and only if the Employee is employed by the Company or any of
its subsidiaries (as defined in the Plan) from the date hereof
through such dates: (1) fifty percent (50%) of the Shares shall
vest on the first (1st) annual anniversary of the date hereof,
and (2) the remaining fifty percent (50%) of the Shares shall
vest on the second (2nd) annual anniversary of the date hereof.
(b) Notwithstanding the foregoing, if a Change of Control of the
Company occurs, then one hundred percent (100%) of the Shares
shall become vested immediately upon such Change of Control, as
defined in Exhibit A hereto.
SECTION 3. Transfer Restrictions/Repurchase Rights/Restrictive
Legends.
(a) Subject to subsection (b) below and any other restrictions on
transfer of the Shares, including, but not limited to, those
restrictions set forth in the Plan, a Share covered by this grant
shall become freely transferable by the Employee upon completion
of the vesting period applicable to such share set forth in
Section 2(a) hereof.
(b) Upon the termination of Employee's employment for any reason
(including without limitation by reason of disability, death,
retirement, voluntary resignation or termination by the Company
with or without cause) prior to the completion of the vesting
period for all or a portion of the Shares, such unvested Shares
shall be automatically forfeited to the Company.
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(c) For so long as this Agreement remains in effect, all certificates
representing Shares will bear appropriate restrictive legends
referring to the restrictions set forth in this Section 3 and
shall be held by the Company.
SECTION 4. Voting Rights, Dividend and Other Distributions. During the
period in which the Shares remain unvested, the Employee may exercise full
voting rights and shall receive all regular cash dividends paid with respect to
such Shares. Except as the Board shall otherwise determine, any other dividends
and other distributions paid to participants with respect to the Shares in the
Company's capital stock, shall be subject to the same restrictions and
conditions as the Shares with respect to which they were paid.
SECTION 5. Tax Issues. The issuance of the shares to the Employee
pursuant to this agreement involves complex and substantial tax considerations,
including, without limitation, consideration of the advisability of the Employee
making an election under Section 83(b) of the Internal Revenue Code within 30
days of the purchase. The Employee is urged to consult his tax advisor with
respect to the transactions described in this agreement. The Company makes no
warranties or representations whatsoever to the Employee regarding the tax
consequences of the Employee's receipt of the Shares or this Agreement.
SECTION 6. Employment Relationship. Nothing in this Agreement shall
interfere with or limit in any way the right of the Company to terminate the
Employee at any time (with or without cause), or confer upon the Employee any
right to continue in the employ of the Company for any period of time or to
continue to receive the Employee's current (or other) rate of compensation.
SECTION 7. Withholding of Taxes. The Company may, if necessary or
desirable, withhold from any amounts due and payable by the Company to the
Employee (or secure payment from you in lieu of withholding) the amount of any
withholding or other tax due from the Company with respect to the issuance of
the Shares, and the Company may defer such issuance unless indemnified by the
Employee to its satisfaction against the payment of any such amount. To the
extent permitted by law, such withholding may be effected through the delivery
by the Employee of shares of Common Stock held by the employee for at least six
months and valued at fair market value.
SECTION 8. Adjustments. In the event of a reorganization,
recapitalization, stock dividend, stock split or combination or other change in
the Company's capital stock, appropriate adjustments shall be made to the
repurchase price and number of the Shares issued hereunder.
SECTION 9. Terms and Conditions.
(a) The award of Shares evidenced by this Agreement is subject to the
terms, conditions and definitions of the Plan, a copy of which is
attached to this Agreement. To the extent that the terms,
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conditions and definitions of this Agreement are inconsistent
with those of the Plan, those of the Plan shall govern. All
decisions under, and interpretations of, such provisions of the
Plan by the Board or the Committee, as defined in the Plan,
shall be final, binding and conclusive upon the Employee and his
or her heirs. On and after the commencement of the Committee's
duties under the Plan, all references to the Board in Sections 2
and 3 of this Agreement shall mean and relate to such Committee.
(b) The Company is not obligated to deliver any Shares or to remove
any restrictions from shares previously delivered under the Plan
(1) until all conditions hereunder have been satisfied or
removed, (2) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been
complied with, (3) until the shares to be delivered have been
listed or authorized to be listed on The Nasdaq National Market
upon official notice of the notice of issuance, and (4) until all
other legal matters in connection with the issuance and delivery
of such shares have been approved by the Company's counsel. If
the sale of Common Stock has not been registered under the
Securities Act of 1933, as amended, as a condition to the
purchase of the Shares, the Employee shall make such
representations and agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and shall
require that the certificates evidencing the Common Stock bear an
appropriate legend restricting transfer.
SECTION 10. Waivers and Amendments. The Company, in its sole
discretion, shall have the right at any time immediately to waive or amend all
or any of the terms of the Agreement, provided, however, that no such waiver or
amendment shall adversely affect the rights of any award holder (without such
award holder's consent) under any award previously granted.
SECTION 11. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware (without giving effect to any
conflicts or choice of law provisions thereof that would cause the application
of the domestic substantive laws of any other jurisdiction).
SECTION 12. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
SECTION 13. Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and supersedes all prior agreements and understandings, whether
oral or written, with respect thereto. Without limiting the foregoing, the
Employee agrees that the provisions of this Agreement fulfill all obligations
that the Company may have to issue to the Employee stock, options or equity
interests in the Company or any of its subsidiaries.
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SECTION 14. Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby, and each provision of this Agreement shall
be enforced to the fullest extent permitted by law.
SECTION 15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
constitute one agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
APPLIED EXTRUSION
TECHNOLOGIES, INC.
By:
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Name:
Title:
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[Employee]
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EXHIBIT A
A Change of Control will occur for the purposes of this
Agreement if (1) any individual, corporation, partnership, company or
other entity, or group of any such entities, (a "Person") becomes the
owner of securities of the Company representing more than 50% of the
combined voting power of the Company's then-outstanding securities, (2)
the Company is a party to, or the stockholders of the Company approve,
a merger, consolidation, or other reorganization (other than (a) a
merger, consolidation or other reorganization which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent, either by remaining outstanding or by being
converted into voting securities of the surviving entity, more than 50%
of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger,
consolidation, or other reorganization, or (b) a merger, consolidation,
or other reorganization effected to implement a recapitalization of the
Company, or similar transaction, in which no Person acquires more than
20% of the combined voting power of the Company's then outstanding
securities), a sale of all or substantially all assets, or a plan of
liquidation, or (3) individuals who, at the date hereof, constitute the
Board cease for any reason to constitute a majority thereof; provided,
however, that any director who is not in office at the date hereof but
whose election by the Board or whose nomination for election by the
Company's shareholders was approved by a vote of at least a majority of
the directors then still in office who either were directors at the
date hereof or whose election or nomination for election was previously
so approved shall be deemed to have been in office at the date hereof
for purposes of this definition.
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