exv99w1
Exhibit 99.1
POLYPORE INTERNATIONAL, INC.
2007 STOCK INCENTIVE PLAN
(Amended and Restated Effective as of May 12, 2011)
1. Purpose and Effective Date.
(a) Purpose of the Plan. The purpose of the Plan is to assist the Company in
attracting, retaining, motivating and rewarding certain key employees, officers, directors and
consultants of the Company and its Affiliates, and promoting the creation of long-term value for
stockholders of the Company by closely aligning the interests of such individuals with those of
such stockholders. The Plan authorizes the award of Stock-based incentives to Eligible Persons to
encourage such persons to expend their maximum efforts in the creation of stockholder value.
(b) Original Effective Date. The Plan was initially adopted by the Board on June 22,
2007 and effective as of the date upon which the Company commenced its initial public offering
pursuant to an effective registration statement, which was June 28, 2007.
(c) Restatement Effective Date. This amendment and restatement is a continuation of
the Plan and shall be effective as of May 12, 2011, provided that this amendment and restatement of
the Plan shall be subject to the requisite approval of the Companys stockholders at the 2011
Annual Meeting of Stockholders.
2. Definitions.
For purposes of the Plan, the following terms shall be defined as set forth below:
(a) Affiliate means, with respect to any entity, any other entity that,
directly or indirectly through one or more intermediaries, controls, is controlled by or is under
common control with, such entity.
(b) Award means any Option, Restricted Stock or other Stock-based award granted
under the Plan.
(c) Award Agreement means an agreement between the Company and a Participant,
including an Option Agreement or Restricted Stock Agreement, setting forth the terms and conditions
applicable to an Award granted to the Participant under this Plan. The Award Agreement may be in
such form as the Committee shall determine, including a master agreement with respect to all or any
types of Awards supplemented by an Award notice issued by the Company.
(d) Board means the Board of Directors of the Company.
(e) Cause means, in the absence of any employment agreement between a Participant
and the Employer otherwise defining Cause, (i) fraud or embezzlement on the part of Participant in
the course of his or her employment or services, (ii) personal dishonesty or acts of gross
negligence or gross misconduct, which, in each case, is demonstrably and materially
injurious to
the Company or any of its Affiliates (iii) a Participants intentional engagement in conduct that
is materially injurious to the Company or any of its Affiliates, (iv) a Participants conviction by
a court of competent jurisdiction of, or pleading guilty or no contest to, (x) a felony or (y)
any other criminal charge (other
than minor traffic violations) which could reasonably be expected to have a material adverse
impact on the reputation or business of the Company or any of its Affiliates; (v) public or
consistent drunkenness by a Participant or his or her illegal use of narcotics which is, or could
reasonably be expected to become, materially injurious to the reputation or business of the Company
or any of its Affiliates or which impairs, or could reasonably be expected to impair, the
performance of a Participants duties to the Company or any of its Affiliates; or (vi) willful
failure by a Participant to follow the lawful directions of a superior officer or the Board, unless
such failure did not occur in bad faith and is cured promptly after written notice of such failure
is given to the Participant by such superior officer or the Board, or such direction otherwise
constitutes Good Reason. In the event there is an employment agreement between a Participant and
the Employer defining Cause, Cause shall have the meaning provided in such agreement.
(f) Change in Control means:
(i) a change in ownership or control of the Company effected through a transaction or series
of transactions (other than an offering of Stock to the general public through a registration
statement filed with the Securities and Exchange Commission) whereby any person or related
group of persons (as such terms are used in Sections 13(d) and l4(d)(2) of the Exchange Act),
other than the Company or any of its Affiliates, or an employee benefit plan maintained by the
Company or any of its Affiliates, directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than
fifty percent (50%) of the total combined voting power of the Companys securities outstanding
immediately after such acquisition;
(ii) the date upon which individuals who, as of the Effective Date, constitute the Board (the
Incumbent Board), cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Companys stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the Board; or
(iii) the sale or disposition, in one or a series of related transactions, of all or
substantially all of the assets of the Company to any person or group (as such terms are
defined in Sections l3(d)(3) and 14(d)(2) of the Exchange Act) other than the Companys Affiliates.
(g) Code means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and regulations thereto.
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(h) Committee means the Board or such other committee appointed by the Board
consisting of two or more individuals.
(i) Company means Polypore International, Inc., a Delaware corporation.
(j) Covered Employee means an individual who is considered a covered employee
within the meaning of Section 162(m) of the Code.
(k) Disability means, in the absence of any employment agreement between a
Participant and the Employer otherwise defining Disability, the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code. In the event there is an employment
agreement between a Participant and the Employer defining Disability, Disability shall have the
meaning provided in such agreement.
(l) Effective Date means the date upon which the Company commenced an initial public
offering pursuant to an effective registration statement.
(m) Eligible Person means (i) each employee of the Company or of any of its
Affiliates, including each such person who may also be a director of the Company and/or its
Affiliates; (ii) each non-employee director of the Company and/or its Affiliates; (iii) each other
person who provides substantial services to the Company and/or its Affiliates and who is designated
as eligible by the Committee; and (iv) any person who has been offered employment by the Company or
its Affiliates; provided, that such prospective employee may not receive any payment or exercise
any right relating to an Award until such person has commenced employment with the Company or its
Affiliates. An employee on an approved leave of absence may be considered as still in the employ
of the Company or its Affiliates for purposes of eligibility for participation in the Plan.
(n) Employer means either the Company or an Affiliate of the Company that the
Participant (determined without regard to any transfer of an Award) is principally employed by or
provides services to, as applicable.
(o) Exchange Act means the Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules thereto.
(p) Expiration Date means the date upon which the term of an Option expires, as
determined under Section 6(b) hereof.
(q) Fair Market Value means, as of any date when the Stock is listed on one or more
national securities exchanges, the closing price reported on the principal national securities
exchange on which such Stock is listed and traded on the date of determination. If the Stock is
not listed on an exchange, or representative quotes are not otherwise available, the Fair Market
Value shall mean the amount determined by the Board in good faith to be the fair market value per
share of Stock.
(r) Option means a conditional right, granted to a Participant under Section 6
hereof, to purchase Stock at a specified price during specified time periods. Options under the
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Plan are not intended to qualify as incentive stock options meeting the requirements of Section
422 of the Code.
(s) Option Agreement means a written agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option grant.
(t) Participant means an Eligible Person who has been granted an Award under the
Plan, or if applicable, such other person or entity who holds an Award.
(u) Performance Award means an Award granted under Section 9, which is subject to
the attainment of one or more Performance Goals during a Performance Period, as established by the
Committee in its discretion.
(v) Performance Goals means the criteria and objectives designated by the Committee
that must be met during the Performance Period as a condition of the Participants receipt of a
Performance Award, as described in Section 9(c) hereof.
(w) Performance Period means the period designated by the Committee during which the
Performance Goals with respect to a Performance Award shall be measured.
(x) Plan means this Polypore International, Inc. 2007 Stock Incentive Plan, as
amended from time to time.
(y) Qualified Member means a member of the Committee who is a Non-Employee
Director within the meaning of Rule 16b-3 under the Exchange Act and an outside director within
the meaning of Regulation 1.162-27(e) under Section 162(m) of the Code.
(z) Restricted Stock means Stock granted to a Participant under Section 7 hereof
that is subject to certain restrictions and to a risk of forfeiture.
(aa) Restricted Stock Agreement means a written agreement between the Company and a
Participant evidencing the terms and conditions of an individual Restricted Stock grant.
(bb) Securities Act means the Securities Act of 1933, as amended from time to time,
including rules thereunder and successor provisions and rules thereto.
(cc) Stock means the Companys Common Stock, par value $0.01 per share, and such
other securities as may be substituted for such stock pursuant to Section 10 hereof.
3. Administration.
(a) Authority of the Committee. Except as otherwise provided below, the Plan shall be
administered by the Committee. The Committee shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to (i) select Eligible Persons to become
Participants; (ii) grant Awards; (iii) determine the type, number of shares of Stock subject to,
and other terms and conditions of, and all other matters relating to, Awards; (iv) prescribe Award
Agreements (which need not be identical for each Participant) and rules and
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regulations for the
administration of the Plan; (v) construe and interpret the Plan and Award Agreements and correct
defects, supply omissions, or reconcile inconsistencies therein; (vi) suspend the right to exercise
Awards during any period that the Committee deems appropriate to comply with applicable securities
laws, and thereafter extend the exercise period of an Award by an equivalent period of time; and
(vii) make all other decisions and determinations as the Committee may deem necessary or advisable
for the administration of the Plan. The foregoing notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting Awards under the Plan to non-employee
directors. In any case in which the Board is performing a function of the Committee under the
Plan, each reference to the Committee herein shall be deemed to refer to the Board, except where
the context otherwise requires. Any action of the Committee shall be final, conclusive and binding
on all persons, including, without limitation, the Company, its Affiliates, Eligible Persons,
Participants and beneficiaries of Participants.
(b) Manner of Exercise of Committee Authority. At any time that a member of the
Committee is not a Qualified Member, (i) any action of the Committee relating to an Award intended
by the Committee to qualify as performance-based compensation within the meaning of Section
162(m) of the Code may be taken by a subcommittee, designated by the Committee or the Board,
composed solely of two or more Qualified Members (a Qualifying Committee) and (ii) any action
relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of
the Exchange Act in respect of the Company may be taken either by such a Qualifying Committee, or
by the Committee but with each such member who is not a Qualified Member abstaining or recusing
himself or herself from such action; provided, that upon such abstention or recusal, the Committee
remains composed of two or more Qualified Members. Any action authorized by such a Qualifying
Committee or by the Committee upon the abstention or recusal of such non-Qualified Member(s) shall
be deemed to be the action of the Committee for purposes of the Plan. The express grant of any
specific power to the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee.
(c) Delegation. To the extent permitted by applicable law, the Committee may delegate
to officers or employees of the Company or any of its Affiliates, or committees thereof, the
authority, subject to such terms as the Committee shall determine, to perform such functions,
including but
not limited to administrative functions, as the Committee may determine appropriate. The
Committee may appoint agents to assist it in administering the Plan. Notwithstanding the foregoing
or any other provision of the Plan to the contrary, any Award granted under the Plan to any person
or entity who is not an employee of the Company or any of its Affiliates shall be expressly
approved by the Committee.
(d) Section 409A. The Committee shall take into account compliance with Section 409A
of the Code in connection with any grant of an Award under the Plan, to the extent applicable.
4. Shares Available Under the Plan.
(a) Number of Shares Available for Delivery. Subject to adjustment as provided in
Section 10 hereof, the total number of shares of Stock reserved and available for
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delivery in
connection with Awards under the Plan shall be 4,751,963. Shares of Stock delivered under the Plan
shall consist of authorized and unissued shares or previously issued shares of Stock reacquired by
the Company on the open market or by private purchase.
(b) Share Counting Rules. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments if the number of shares of Stock actually delivered differs
from the number of shares previously counted in connection with an Award. To the extent that an
Award expires or is canceled, forfeited, settled in cash or otherwise terminated without a delivery
to the Participant of the full number of shares to which the Award related, the undelivered shares
will again be available for grant. Shares withheld in payment of the exercise price or taxes
relating to an Award and shares equal to the number surrendered in payment of any exercise price or
taxes relating to an Award shall not be again available for Awards under the Plan.
(c) Individual Limitations. Notwithstanding anything to the contrary herein, during
any time that the Company is subject to Section 162(m) of the Code: (i) the maximum number of
shares of Stock with respect to which Options and stock appreciation rights (to the extent granted
as an Award under the Plan) may be granted to any individual in any one calendar year shall not
exceed 1,000,000, (ii) the maximum number of shares of Stock with respect to which Awards (other
than Options or stock appreciation rights) consisting of or covering shares of Stock (whether such
Awards may be settled in shares of Stock and/or cash) may be granted to any individual in any one
calendar year shall not exceed 1,000,000, and (iii) the maximum cash payment that may be made to
any individual in any one calendar year pursuant to any cash-based Performance Award shall not
exceed $3,000,000. The share limitations in this Section 4(c) shall be subject to adjustment
pursuant to Section 10 to the extent such adjustment will not affect the status of any Award
intended to qualify as performance-based compensation under Section 162(m) of the Code.
5. Vesting.
The Committee shall determine the time or times at which an Award will vest, become
exercisable or the restrictions thereon shall lapse and the terms on which an Award requiring
exercise will become and remain exercisable, provided, however, that except as otherwise provided
herein, (a) for Awards to employees of the Employer that vest (or for which the restrictions lapse,
as applicable) based on the lapse of time or otherwise without being subject to attainment of one
or more performance goals, the period over which the Award shall vest (or the restrictions shall
lapse, as applicable) shall not be less than three (3) years from the date of grant; and (b) for
Awards to employees of the Employer that are contingent on the achievement of one or more
performance goals (including Performance Awards), the Award shall not vest (or the restrictions
shall not lapse) in less than one (1) year. Notwithstanding the foregoing, the Committee may
provide at the time of grant of an Award or thereafter for accelerated vesting (or lapse of
restrictions) in connection with the Participants death, Disability, a Change in Control, changes
in applicable laws, or, subject to
the minimum vesting periods above, at any other time. Notwithstanding anything herein to the
contrary, up to a maximum of ten percent (10%) of the aggregate shares of Stock authorized for
issuance under Section 4(a) of the Plan (as subject to adjustment in accordance with Section 10 of
the Plan) may be subject to Awards that do not
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satisfy the minimum vesting periods and/or that
provide for acceleration upon other circumstances.
6. Options.
(a) General. Options may be granted to Eligible Persons in such form and having such
terms and conditions as the Committee shall deem appropriate. The provisions of separate Options
shall be set forth in an Option Agreement, which agreements need not be identical.
(b) Term. The term of each Option shall be set by the Committee at the time of
grant; provided, however, that no Option granted hereunder shall be exercisable after the
expiration of ten (10) years from the date it was granted.
(c) Exercise Price. The exercise price per share of Stock covered by an Option shall
be set by the Committee at the time of grant, provided that the exercise price may not be less than
the Fair Market Value per share of Stock on the date of grant, except in the case of substitute
awards granted upon assumption of, or in substitution for, outstanding awards previously granted by
another entity in connection with a corporation transaction such as a merger, consolidation or
acquisition of stock or property to the extent permitted by applicable law.
(d) Payment for Stock. Payment for shares of Stock acquired pursuant to Options
granted hereunder shall be made in full, upon exercise of the Options: (i) in immediately available
funds in United States dollars, or by certified or bank cashiers check; (ii) by delivery of a
notice of net exercise to the Company, pursuant to which the Participant shall receive the number
of shares of Stock underlying the Options so exercised reduced by the number of shares of Stock
equal to the aggregate exercise price of the Options divided by the Fair Market Value on the date
of exercise; (iii) by delivery of shares of Stock having a value equal to the exercise price; or
(iv) by any other means approved by the Committee. Anything herein to the contrary
notwithstanding, if the Committee determines that any form of payment available hereunder would be
in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of payment shall not be
available.
(e) Vesting. Subject to Section 5, Options shall vest and become exercisable in such
manner, on such date or dates, or upon the achievement of performance or other conditions, in each
case, as may be determined by the Committee and set forth in the Option Agreement. Unless
otherwise specifically determined by the Committee, the vesting of an Option shall occur only while
the Participant is employed or rendering services to the Employer, and all vesting shall cease upon
a Participants termination of employment or services with the Employer for any reason. If an
Option is exercisable in installments, such installments or portions thereof which become
exercisable shall remain exercisable until the Option expires.
(f) Transferability of Options. An Option shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant. Notwithstanding the foregoing, Options shall be transferable
to the extent provided in the Option Agreement or otherwise determined by the Committee.
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(g) Termination of Employment or Service. Except as may otherwise be provided by the
Committee in the Option Agreement or as otherwise determined by the Committee:
(i) If prior to the Expiration Date, a Participants employment or service, as applicable,
with the Employer terminates for any reason other than (A) by the Employer for Cause, or (B)
by reason of the Participants death or Disability, (1) all vesting with respect to the
Options shall cease, (2) any unvested Options shall expire as of the date of such termination, and
(3) any vested Options shall remain exercisable until the earlier of the Expiration Date or the
date that is ninety (90) days after the date of such termination.
(ii) If prior to the Expiration Date, a Participants employment or service, as applicable,
with the Employer terminates by reason of such Participants death or Disability, (A) all vesting
with respect to the Options shall cease, (B) any unvested Options shall expire as of the date of
such termination, and (C) any vested Options shall expire on the earlier of the Expiration Date or
the date that is twelve (12) months after the date of such termination due to death or Disability
of the Participant. In the event of a Participants death, the Options shall remain exercisable by
the person or persons to whom a Participants rights under the Options pass by will or the
applicable laws of descent and distribution until its expiration, but only to the extent the
Options were vested by such Participant at the time of such termination due to death.
(iii) If prior to the Expiration Date, a Participants employment or service, as applicable,
with the Employer is terminated by the Employer for Cause, all Options (whether or not vested)
shall immediately expire as of the date of such termination.
Notwithstanding the foregoing, any outstanding Options held by a Participant whose employment
or service, as applicable, with the Employer terminates by reason of such Participants termination
by the Employer without Cause or retirement may become or remain exercisable on such terms and
conditions provided by the Committee.
7. Restricted Stock.
(a) General. Restricted Stock granted hereunder shall be in such form and shall
contain such terms and conditions as the Committee shall deem appropriate. The terms and
conditions of each Restricted Stock grant shall be evidenced by a Restricted Stock Agreement, which
agreements need not be identical. Subject to the restrictions set forth in Section 7(b), except as
otherwise set forth in the applicable Restricted Stock Agreement, the Participant shall generally
have the rights and privileges of a stockholder as to such Restricted Stock, including the right to
vote such Restricted Stock. Unless otherwise set forth in a Participants Restricted Stock
Agreement, cash dividends and stock dividends, if any, with respect to the Restricted Stock shall
be withheld by the Company for the Participants account, and shall be subject to forfeiture to the
same degree as the shares of Restricted Stock to which such dividends relate. Except as otherwise
determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends
withheld.
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(b) Restrictions on Transfer. In addition to any other restrictions set forth in a
Participants Restricted Stock Agreement, until such time that the Restricted Stock has vested
pursuant to the terms of the Restricted Stock Agreement, the Participant shall not be permitted to
sell, transfer, pledge, or otherwise encumber the Restricted Stock. Notwithstanding anything
contained herein to the contrary, the Committee shall have the authority to remove any or all of
the restrictions on the Restricted Stock subject to Section 5.
(c) Certificates. Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee shall determine. If certificates representing Restricted Stock are
registered in the name of the Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession of the certificates, and that the
Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted
Stock. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, that
the Restricted Stock shall be held in book entry form rather than delivered to the Participant
pending the release of the applicable restrictions.
(d) Termination of Employment or Service. Except as may otherwise be provided by the
Committee in the Restricted Stock Agreement or as otherwise determined by the Committee, if, prior
to the time that the Restricted Stock has vested, a Participants employment or service, as
applicable, terminates for any reason, (i) all vesting with respect to the Restricted Stock shall
cease, and (ii) as soon as practicable following such termination, the Company shall repurchase
from the Participant, and the Participant shall sell, any unvested shares of Restricted Stock at a
purchase price equal to the original purchase price paid for the Restricted Stock, or if the
original purchase price is equal to $0, such unvested shares of Restricted Stock shall be forfeited
by the Participant to the Company for no consideration as of the date of such termination.
8. Other Stock-Based Awards.
The Committee is authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be
consistent with the purposes of the Plan. Subject to Section 5, such Awards may be granted to
Eligible Persons in such form and having such terms and conditions as the Committee shall deem
appropriate. The provisions of each other Stock-based Award shall be evidenced by an Award
Agreement, which agreements need not be identical. To the extent that such an Award is intended to
be a stock appreciation right that qualifies as performance-based compensation within the meaning
of Section 162(m) of the Code, the applicable exercise price or grant value with respect to the
stock appreciation right shall not be less than the Fair Market Value on the date of grant of the
shares of Stock to which the stock appreciation right pertains.
9. Performance Awards.
(a) Performance Awards. Subject to the terms of the Plan (including the limits in
Section 4(c)), the Committee may designate an Award of Restricted Stock or other Stock-based award
as a Performance Award based upon a determination that the Participant is or
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may become a Covered
Employee and the Committee wishes such Awards to qualify for the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code. Performance Awards shall be contingent upon
the attainment of one or more Performance Goals. The provisions of this Section 9 shall control to
the extent inconsistent with Sections 7 and 8 and such Performance Awards shall be subject to the
terms and conditions set forth below.
(b) Award Agreement. Each grant of a Performance Award shall be evidenced by an Award
Agreement in such form as the Committee shall determine. The Award Agreement shall specify the
number of shares of Stock to which the Performance Award pertains (if applicable), the Performance
Goals applicable to such Performance Award, the length of the Performance Period, and such
additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine.
(c) Performance Goals. The Committee shall establish one or more Performance Goals
for the Participant that are objectively determinable (i.e., such that a third party with knowledge
of the relevant facts could determine whether the goals have been met). Such Performance Goals
must be established in writing by the Committee within ninety (90) days after the beginning of the
Performance Period (or, if earlier, by the date on which twenty-five percent (25%) of the
Performance Period has elapsed) or within such other time period prescribed by Section 162(m) of
the Code, provided, that achievement of the Performance Goals must be substantially uncertain at
the time they are established. Such Performance Goals shall be based on one or more of the
following, as determined in the sole discretion of the Committee: stock price; market share;
earnings per share (basic or diluted); net income; pre-tax operating income; earnings (including
after-tax earnings or earnings before or after any one or more of interest, taxes, depreciation,
and amortization); profits (including gross or net profits, after-tax
profits or pre-tax profits); revenues; financial return ratios; total stockholder return;
enterprise value; cash flow measures (including operating cash flow, free cash flow, and cash flow
return on investment); cash position; return on equity; return on investment; return on assets
(gross or net); return on capital; sales; expense measures (including levels of operating expense
and expense reduction levels); debt levels (including borrowing capacity); debt to equity ratio;
debt to capitalization ratio; consummation of debt offerings; reduction of debt; debt rating;
consummation of equity offerings; contractual compliance (including obtaining waivers of
non-compliance or amendments of contractual covenants); measures of customer satisfaction; growth
in assets, sales, or market share; gross or operating margins; or strategic business objectives
based on meeting specified revenue goals, market penetration goals, geographical business expansion
goals, cost targets or goals relating to acquisitions or divestitures. Performance Goals may be
based on the performance of the Company and/or its Affiliates, based on one or more Affiliates,
divisions, business units or subsidiaries, or based on any combination of the foregoing.
Performance Goals also may be expressed by reference to the Participants individual performance
with respect to any of the foregoing criteria. The Committee may adjust or modify Performance
Goals for a Performance Period if the Company is involved in a merger, acquisition or divestiture
transaction that has any material effect on the Performance Goals established at the time of grant
only to the extent that such adjustment or modification would not affect the status of any
Performance Award intended to qualify as performance-based compensation under Section 162(m) of the
Code.
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Performance Goals may be expressed in such form as the Committee shall determine, including
either in absolute or relative terms (including, but not by way of limitation, by comparison to a
pre-established target, to previous years or to other companies or other external measures,
including peer companies or an index), in percentages, in terms of growth over time or otherwise,
provided that the Performance Goals meet the requirements hereunder. Performance Goals need not be
based upon an increase or positive result under one of the above criteria and could include, for
example, maintaining the status quo or the limitation of economic losses (measured in such case by
reference to the specific criteria). When establishing the Performance Goals, the Committee may
specify that the Performance Goals shall be determined either before or after taxes and shall be
adjusted to exclude items such as (i) asset write-downs or impairment charges; (ii) the effect of
unusual or extraordinary charges or income items or other events, including acquisitions or
dispositions of businesses or assets, restructurings, discontinued operations, reductions in force,
refinancing/restructuring of short term and/or long term debt, or other extraordinary non-recurring
items as described in managements discussion and analysis of financial condition and results of
operations appearing in the Companys annual report to stockholders for the applicable year or
quarterly report for the applicable quarter; (iii) the effect of currency fluctuations or foreign
exchange rates; (iv) litigation or claim expenses, judgments or settlements; or (v) changes in
accounting principles or tax laws or other laws or provisions affecting reported results. The
Performance Goals established by the Committee may be (but need not be) particular to a Participant
and/or different each Performance Period.
The Committee also may establish subjective Performance Goals for Participants, but the
subjective Performance Goals may be used only to reduce, and not increase, the Performance Award
otherwise payable under the Plan. The Committee can establish other performance measures for
Awards granted to Participants that are not intended to qualify under the performance-based
compensation provisions of Section 162(m) of the Code.
(d) Payment. Prior to the vesting, settlement, payment or delivery, as the case may
be, of a Performance Award, the Committee shall certify in writing the extent to which the
applicable Performance Goals and any other material terms of the Performance Award have been
achieved or exceeded for the applicable Performance Period. Notwithstanding the satisfaction of
any Performance Goals, the Committee may, in its discretion, reduce the number of shares or amount
paid under a Performance Award based on such criteria as it determines (including, but not limited
to, individual merit). In no event may the Committee waive achievement of the Performance Goal
requirements for a Covered Employee except to the extent any such waiver would comply with the
rules for performance-based compensation under Section 162(m) of the Code.
(e) Code Section 162(m). The Committee shall have the power to impose such other
restrictions on Performance Awards as it may deem necessary or appropriate to ensure that such
Performance Awards satisfy all requirements for performance-based compensation within the meaning
of Section 162(m) of the Code. Nothing contained in the Plan shall be construed to limit the
authority of the Company or the Committee to adopt other compensation arrangements, including an
arrangement not intended to be performance-based compensation under Section 162(m) of the Code.
10. Adjustment for Recapitalization, Merger, etc.
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(a) Capitalization Adjustments. The aggregate number of shares of Stock that may be
granted or purchased pursuant to Awards (as set forth in Section 4 hereof), the number of shares of
Stock covered by each outstanding Award, and the price per share thereof in each such Award shall
be equitably and proportionally adjusted or substituted, as determined by the Committee, as to the
number, price or kind of a share of Stock or other consideration subject to such Awards (i) in the
event of changes in the outstanding Stock or in the capital structure of the Company by reason of
stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring after the date of
grant of any such Award (including any Corporate Event (as defined below)); (ii) in connection with
any extraordinary dividend declared and paid in respect of shares of Stock, whether payable in the
form of cash, stock or any other form of consideration; or (iii) in the event of any change in
applicable laws or any change in circumstances which results in or would result in any substantial
dilution or enlargement of the rights granted to, or available for, Participants in the Plan.
(b) Corporate Events. Notwithstanding the foregoing, except as may otherwise be
provided in an Award Agreement, in the event of (i) a merger or consolidation involving the Company
in which the Company is not the surviving corporation; (ii) a merger or consolidation involving the
Company in which the Company is the surviving corporation but the holders of shares of Stock
receive securities of another corporation and/or other property, including cash; (iii) a Change in
Control; or (iv) the reorganization or liquidation of the Company (each of (i), (ii), (iii) or
(iv), a Corporate Event), in lieu of providing the adjustment set forth in subsection (a) above,
the Committee may, in its discretion, cancel any or all vested and/or unvested Awards as of the
consummation of such Corporate Event, and provide that holders of Awards so cancelled will receive
a payment in respect of cancellation of their Awards based on the amount of the per share
consideration being paid for the Stock in connection with such Corporate Event, less, in the case
of Options and other Awards subject to exercise, the applicable exercise price; provided, however,
that holders of (A) Options shall only be entitled to consideration in respect of cancellation of
such Awards if the per share consideration less the applicable exercise price is greater than zero,
and (B) performance vested Awards shall only be entitled to consideration in respect of
cancellation of such Awards to the extent that applicable performance criteria are achieved prior
to or as a result of such Corporate Event, and shall not otherwise be entitled to payment in
consideration of cancelled unvested Awards. Payments to holders pursuant to the preceding sentence
shall be made in cash, or, in the sole discretion of the Committee, in the form of such other
consideration necessary for a holder of an Award to receive property, cash or securities (or a
combination thereof) as such holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the holder of the number
of shares of Stock covered by the Award at such time (less any applicable exercise price).
(c) Fractional Shares. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an Award.
11. Forfeiture and Clawback Events.
(a) An Award Agreement may provide that, notwithstanding any other provision of this Plan to
the contrary, upon the occurrence of certain events (including, but not
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limited to, termination of
employment or service for Cause, breach of confidentiality or other restrictive covenants that
apply to
the Participant, engaging in competition against the Company, or other conduct or activity by
the Participant that is detrimental to the business or reputation of the Company), whether during
or after termination, in addition to any forfeitures due to a vesting schedule or termination of
employment or service and any other penalties or restrictions that may apply under any employment
agreement, state law, or otherwise, the Participants rights and benefits with respect to an Award
will be subject to reduction, forfeiture or recoupment, including without limitation, that the
Participant will forfeit and/or the Company will reduce or recoup:
(i) any and all Awards granted to the Participant under the Plan, including Awards that have
become vested and exercisable; and/or
(ii) the profit the Participant has realized on the exercise of any Options, as specified in
an Award Agreement.
(b) All Awards granted under the Plan are also subject to the terms and conditions of any
policy regarding clawbacks, forfeitures, or recoupments adopted by the Company.
12. Use of Proceeds.
The proceeds received from the sale of Stock pursuant to the Plan shall be used for
general corporate purposes.
13. Rights and Privileges as a Stockholder.
Except as otherwise specifically provided in the Plan, no person shall be entitled to the
rights and privileges of stock ownership in respect of shares of Stock which are subject to Awards
hereunder until such shares have been issued to that person.
14. Employment or Service Rights.
No individual shall have any claim or right to be granted an Award under the Plan or,
having been selected for the grant of an Award, to be selected for a grant of any other Award.
Neither the Plan nor any action taken hereunder shall be construed as giving any individual any
right to be retained in the employ or service of the Company or an Affiliate of the Company.
15. Compliance With Laws.
The obligation of the Company to deliver Stock upon vesting and/or exercise of any Award
shall be subject to all applicable laws, rules, and regulations, and to such approvals by
governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to
the contrary, the Company shall be under no obligation to offer to sell or to sell and shall be
prohibited from offering to sell or selling any shares of Stock pursuant to an Award unless such
shares have been properly registered for sale pursuant to the Securities Act with the Securities
and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to
the Company, that such shares may be offered or sold without such registration
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pursuant to an
available exemption therefrom and the terms and conditions of such exemption have been fully
complied with. The Company shall be under no obligation to register for sale or resale under the
Securities Act any of the shares of Stock to be offered or sold under the Plan or any shares of
Stock issued upon exercise or settlement of Awards. If the shares of Stock offered for sale or
sold under the Plan are offered or sold pursuant to an exemption from registration under the
Securities Act, the Company may restrict the transfer of such shares and may legend the
Stock certificates representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
16. Withholding Obligations.
As a condition to the vesting and/or exercise of any Award, the Committee may require
that a Participant satisfy, through deduction or withholding from any payment of any kind otherwise
due to the Participant, or through such other arrangements as are satisfactory to the Committee,
the minimum amount of all Federal, state and local income and other taxes of any kind required or
permitted to be withheld in connection with such vesting and/or exercise. The Committee, in its
discretion, may permit shares of Stock to be used to satisfy tax withholding requirements and such
shares shall be valued at their Fair Market Value as of the settlement date of the Award; provided,
however, that the aggregate Fair Market Value of the number of shares of Stock that may be used to
satisfy tax withholding requirements may not exceed the minimum statutorily required withholding
amount with respect to such Award.
17. Amendment of the Plan or Awards.
(a) Amendment of Plan. The Board at any time, and from time to time, may amend the
Plan; provided, however, that any such amendment shall be subject to stockholder approval to the
extent that stockholder approval is necessary to satisfy applicable requirements of the Code
(including, but not limited to Section 162(m) thereof), the requirements of any securities exchange
or quotation systems on which the Stock may be listed or quoted or any other applicable law or
regulation.
(b) Amendment of Awards. The Board or the Committee, at any time, and from time to
time, may amend the terms of any one or more Awards; provided, however, that the rights under any
Award shall not be impaired by any such amendment unless the Participant consents in writing.
Notwithstanding the foregoing, except in connection with a corporate transaction involving the
Company (including, without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination,
or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise
price of outstanding Options or stock appreciation rights or cancel outstanding Options or stock
appreciation rights in exchange for cash, other Awards or Options or stock appreciation rights with
an exercise price that is less than the exercise price of the original Options or stock
appreciation rights without stockholder approval.
18. Termination or Suspension of the Plan.
The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the
Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan was
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adopted by the Board. No Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.
19. Miscellaneous.
(a) Participants Outside of the United States. The Committee may modify the terms of
any Award under the Plan made to or held by a Participant who is then a resident or primarily
employed outside of the United States in any manner deemed by the Committee to be necessary or
appropriate in order that such Award shall conform to laws, regulations and customs of the country
in which the Participant is then a resident or primarily employed, or so that the value and other
benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions
applicable as a result of the Participants residence or employment abroad, shall be comparable to
the value of such Award to a Participant who is a resident or primarily employed in the United
States. An Award may be modified
under this Section 19(a) in a manner that is inconsistent with the express terms of the Plan,
so long as such modifications will not contravene any applicable law or regulation or result in
actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is
modified.
(b) No Liability of Committee Members. No member of the Committee shall be personally
liable by reason of any contract or other instrument executed by such member or on his or her
behalf in his or her capacity as a member of the Committee nor for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless each member of the Committee and each
other employee, officer or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in settlement of a claim)
arising out of any act or omission to act in connection with the Plan unless arising out of such
persons own fraud or willful bad faith; provided, however, that approval of the Board shall be
required for the payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Companys certificate or articles of incorporation or
by-laws, each as may be amended from time to time, as a matter of law, or otherwise, or any power
that the Company may have to indemnify them or hold them harmless.
(c) Payments Following Accidents or Illness. If the Committee shall find that any
person to whom any amount is payable under the Plan is unable to care for his or her affairs
because of illness or accident, or is a minor, or has died, then any payment due to such person or
his or her estate (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his or her spouse, child,
relative, an institution maintaining or having custody of such person, or any other person deemed
by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment.
Any such payment shall be a complete discharge of the liability of the Committee and the Company
therefor.
(d) Compliance with Code Section 162(m). It is generally intended that the Plan
comply fully with and meet all of the requirements of Section 162(m) of the Code with respect to
Options granted hereunder. At all times when the Committee determines that
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compliance with the
performance-based compensation exception under Section 162(m) of the Code is required or desired,
all Performance Awards granted under this Plan also shall comply with the requirements of Section
162(m) of the Code, and the Plan must be resubmitted to the stockholders of the Company as
necessary to enable Options, stock appreciation rights and Performance Awards to qualify as
performance-based compensation thereunder (which rules currently require that the stockholders
reapprove the Plan no later than the first stockholders meeting that occurs in the fifth year
following the year in which the stockholders previously approved the Plan). In addition, in the
event that changes are made to Section 162(m) of the Code to permit greater flexibility with
respect to any Award or Awards under the Plan, the Committee may make any adjustments it deems
appropriate. The Committee may, in its discretion, determine that it is advisable to grant Awards
that shall not qualify as performance-based compensation and may grant Awards without satisfying
the requirements of Section 162(m) of the Code.
(e) Compliance with Code Section 409A. It is generally intended that the Plan and all
Awards hereunder either comply with or meet the requirements for an exemption from Section 409A of
the Code and the Plan shall be operated and administered accordingly. No Award (or modification
thereof) shall provide for a deferral of compensation (within the meaning of Section 409A of the
Code) that does not comply with Section 409A of the Code and the Award Agreement shall incorporate
the terms and conditions required by Section 409A of the Code, unless the Committee, at the time of
grant (or modification, as the case may be), provides that the Award is not intended to comply with
Section 409A of the Code. Notwithstanding anything in the Plan to the contrary, the Committee may
amend or vary the terms of Awards under the Plan in order to conform such terms to the requirements
of Section 409A of the Code. To the extent an Award does not provide for a deferral of
compensation (within the meaning of Section 409A of the Code), but may be deferred under a
nonqualified deferred compensation plan
established by the Company, the terms of such nonqualified deferred compensation plan shall
govern such deferral, and to the extent necessary, are incorporated herein by reference.
Notwithstanding any other provisions of the Plan or any Award Agreement, the Company does not
guarantee to any Participant (or any other person with an interest in an Award) that the Plan or
any Award hereunder complies with or is exempt from Section 409A of the Code, and shall not have
any liability to or indemnify or hold harmless any individual with respect to any tax consequences
that arise from any such failure to comply with or meet an exemption under Section 409A of the
Code.
(f) Governing Law. The Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware without reference to the principles of conflicts of laws
thereof.
(g) Funding. No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or
other entity to which contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the existence of a
segregated or separately maintained or administered fund for such purposes. Participants shall
have no rights under the Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional
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compensation by performance of
services, they shall have the same rights as other employees under general law.
(h) Reliance on Reports. Each member of the Committee and each member of the Board
shall be fully justified in relying, acting or failing to act, and shall not be liable for having
so relied, acted or failed to act in good faith, upon any report made by the independent public
accountant of the Company and its Affiliates and upon any other information furnished in connection
with the Plan by any person or persons other than such member.
(i) Titles and Headings. The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.
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