Exhibit 10.2

ADTRAN, INC.

 

2020 DIRECTORS STOCK PLAN

 

effective May 13, 2020

 

 

 

 

 

 

 

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ADTRAN, INC.

2020 DIRECTORS STOCK PLAN

 

ARTICLE I
Purpose

1.1Background.  ADTRAN, Inc. (the “Company”) hereby adopts this new equity
incentive plan for the benefit of its directors to replace certain Prior Plans
that have expired; provided, however, that notwithstanding that replacement, the
Prior Plans shall remain in effect with respect to outstanding awards so long as
any awards thereunder are outstanding.  This new plan shall be known as the
ADTRAN, Inc. 2020 Directors Stock Plan (the “Plan”).    

1.2General Purpose.  The purpose of this Plan is to further the growth and
development of the Company by encouraging Directors who are not employees of the
Company to obtain a proprietary interest in the Company by owning its
stock.  The Company intends that the Plan will provide such Persons with an
added incentive to continue to serve as Directors and will stimulate their
efforts in promoting the growth, efficiency and profitability of the
Company.  The Company also intends that the Plan will afford the Company a means
of attracting individuals of outstanding quality to service on the Board.

1.3Type of Awards Available Under the Plan.  The Plan permits Awards of stock
Options, Restricted Stock and Restricted Stock Units (“RSUs”).  The type of
stock Options permitted under the Plan are nonqualified stock options (“NQSOs”).

1.4Intended Tax Effects of Awards.  The Company intends that Restricted Stock
Awards granted under the Plan are subject to taxation under Code Section
83.  NQSOs are subject to taxation when the NQSO is exercised.  Restricted Stock
Units are subject to taxation when the underlying shares of Common Stock are
issued to the Participant.

1.5Effective Date of the Plan.  The Plan shall be effective on the date of its
approval by the shareholders of the Company at the 2020 annual meeting of
shareholders (the “Effective Date”) in accordance with applicable law
(including, without limitation, approvals required under Rule 16b-3) and any
registration or stock exchange rule.  Notwithstanding the above, no Restricted
Stock Award shall be granted prior to approval of the Plan by the Company’s
shareholders.

1.6Term.  Unless earlier terminated by the Board pursuant to the provisions of
Article IX hereof, the Plan shall remain in effect until the tenth (10th)
anniversary of the Effective Date; provided, however, that notwithstanding its
termination, the Plan shall remain in effect with respect to outstanding Awards
as long as any Awards are outstanding.

1.7Operation, Administration and Definitions.  The operation and administration
of the Plan are subject to the provisions of this Plan document.  Capitalized
terms used in the Plan are defined in Article II below or may be defined within
the Plan.

 

 

 

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1.8Legal Compliance.  The Plan is intended to comply with (a) Code Section 409A,
to the extent any Awards are treated as nonqualified deferred compensation under
Code Section 409A, and (b) the exemption of Awards under the provisions of Rule
16b-3.

ARTICLE II
Definitions

The following words and phrases as used in this Plan shall have the meanings set
forth in this Article unless a different meaning is clearly required by the
context:

2.1“Affiliate” means an entity that, directly or indirectly, controls, is
controlled by, or is under common control with the Company, within the meaning
of Rule 12b-2 of the Exchange Act.

2.2“Award” means any Option, Restricted Stock, or Restricted Stock Unit granted
to a Participant under the Plan.

2.3“Award Agreement” means the written (or electronic) agreement issued by the
Company to the Participant that sets forth the terms and provisions of an Award
granted under the Plan.

2.4“Beneficiary” means, with respect to a Participant, the Person(s) to whom the
Participant’s Award shall be transferred upon the Participant's death,
determined as set forth in Section 10.1.

2.5“Board” means the Board of Directors of the Company.

2.6“Cause” means an act or acts by a Person involving personal dishonesty,
incompetence, willful misconduct, moral turpitude, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses), the use for profit or disclosure
to unauthorized Persons of confidential information or trade secrets of the
Company or its subsidiaries, the breach of any contract with or material written
policy of the Company or its subsidiaries, the unlawful trading in the
securities of the Company or of another corporation based on information gained
as a result of the performance of services for the Company or its subsidiaries,
a felony conviction, or the failure to contest prosecution for a felony,
embezzlement, fraud, deceit or civil rights violations, any of which acts
negatively impact the Company or any of its subsidiaries or cause the Company or
any of its subsidiaries liability or loss, as determined by the Committee in its
sole discretion.

2.7“Change of Control” means the occurrence of any of the following events on or
after the Effective Date of this Plan:

 

(a)

Change in Ownership.  A change in the ownership of the Company occurs on the
date that any one Person, or more than one Person acting as a group, acquires
ownership of stock of the Company that, together with stock held by such Person
or group, constitutes more than fifty percent (50%) of the total fair market
value or total voting power of the stock of the Company.  However, if any one
Person or more than one Person acting as a group, is considered to own more than
fifty percent

 

 

 

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(50%) of the total fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same Person or Persons is
not considered to cause a change in the ownership of the Company or to cause a
change in the effective control of the Company (within the meaning of subsection
(b) below).  An increase in the percentage of stock owned by any one Person, or
Persons acting as a group, as a result of a transaction in which the Company
acquires its stock in exchange for property, will be treated as an acquisition
of stock for purposes of this Section. This applies only when there is a
transfer of stock of the Company (or issuance of stock of the Company) and stock
in the Company remains outstanding after the transaction.

 

(b)

Change in Effective Control.  A change in the effective control of the Company
occurs on the date that either: (1) any one Person, or more than one Person
acting as a group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such Person or Persons) ownership
of stock of the Company possessing thirty-five percent (35%) or more of the
total voting power of the stock of the Company; or (2) a majority of members of
the Board is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of the Board prior to
the date of the appointment or election.  A change in effective control may
occur in any transaction in which either of the two corporations involved in the
transaction has a Change of Control; or

 

(c)

Change in Ownership of a Substantial Portion of Assets.  A change in the
ownership of a substantial portion of the Company’s assets shall occur on the
date that any one Person, or more than one Person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most
recent acquisition by such Person or Persons) assets from the Company that have
a total gross fair market value equal to or more than forty percent (40%) of the
total gross fair market value of all of the assets of the Company immediately
prior to such acquisition or acquisitions. For this purpose, gross fair market
value means the value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.

Notwithstanding the foregoing, if it is determined that an Award hereunder is
subject to Code Section 409A, the Company will not be deemed to have undergone a
Change of Control unless the Company is deemed to have undergone a “change in
ownership,” a “change in effective control,” or a “change in the ownership of a
substantial portion of the assets,” within the meaning of Code Section 409A.

2.8“Code” means the Internal Revenue Code of 1986, as amended.  A reference to
any provision of the Code includes any regulations and formal guidance issued
thereunder and any reference to any successor provision of the Code.

2.9“Committee” means the committee appointed by the Board pursuant to Section
3.2 hereof to administer and interpret the Plan in accordance with Article
III.  The Committee shall (a) consist of two or more individuals each of whom
shall be, to the extent required by Rule 16b-3, a

 

 

 

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“non-employee director” as defined in Rule 16b-3, and (b) satisfy the applicable
requirements of any stock exchange or national market system on which the Common
Stock may then be listed.

2.10“Common Stock” means the common stock of the Company, par value $0.01 per
share.

2.11“Company” means ADTRAN, Inc., a Delaware corporation, and any successor
thereto.

2.12“Director” means an individual who is not an employee of the Company and who
is serving as a member of the Board (i.e., a director of the Company), including
as a director emeritus providing advisory services to the Board.

2.13“Disability” means a Participant is unable to engage in any substantial
gainful activity by reason of any medically-determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12)
months.  A Participant shall be considered disabled only if he furnishes such
proof of Disability as the Committee may reasonably require from time to time.

2.14“Effective Date” means the effective date of this Plan, subject to
shareholder approval as provided in Section 1.5.  

2.15“Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.16“Exercise Price” means the purchase price of the shares of Common Stock
underlying an Option.

2.17“Fair Market Value” of the Common Stock as of a date of determination means
the following:

(a)Stock Listed and Shares Traded.  If the Common Stock is listed and traded on
a national securities exchange (as such term is defined by the Exchange Act) or
on the NASDAQ National Market System on the date of determination, the Fair
Market Value per share shall be the closing price of a share of the Common Stock
on said national securities exchange or NASDAQ National Market System on the
business day immediately preceding the date of determination.  If the Common
Stock is traded in the over-the-counter market, the Fair Market Value per share
shall be the closing price of a share on the business day immediately preceding
the date of determination.

(b)Stock Listed But No Shares Traded.  If the Common Stock is listed on a
national securities exchange or on the NASDAQ National Market System but no
shares of the Common Stock are traded on the date of determination but there
were shares traded on dates within a reasonable period before the date of
determination, the Fair Market Value shall be the closing price of a share of
the Common Stock on the most recent date before the date of determination.  If
the Common Stock is regularly traded in the over-the-counter market but no
shares of the Common Stock are traded on the date of determination (or if
records of such trades are unavailable or burdensome to obtain) but there were
shares traded on dates within a reasonable period before the date of
determination, the Fair Market Value

 

 

 

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shall be the average of the closing bid and asked prices of a share of the
Common Stock on the most recent date before the date of determination on which
trading occurred.

(c)Stock Not Listed.  If the Common Stock is not listed on a national securities
exchange or on the NASDAQ National Market System and is not regularly traded in
the over‑the‑counter market, then the Committee shall determine the Fair Market
Value of the Common Stock in a manner consistent with the requirements of Code
Section 409A.

In any event, the determination of Fair Market Value shall be consistent with
the requirements of Code Section 409A and, in the case of an ISO, in compliance
with Code Section 422.  The Committee's determination of Fair Market Value,
which shall be made pursuant to the foregoing provisions, shall be final and
binding for all purposes of this Plan.

2.18“Family Member” means a Person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
Participant, any Person sharing the Participant’s household (other than a tenant
or employee), a trust in which any one or more of these Persons have more than
fifty percent (50%) of the beneficial interest, a foundation in which any one or
more of these Persons (or the Participant) control the management of assets, and
any other entity in which one or more of these Persons (or the Participant) own
more than fifty percent (50%)  of the voting interests.

2.19“Option” means an option to purchase shares of Common Stock that is granted
under Article V hereof and not an incentive stock option within the meaning of
Code Section 422.

2.20“Participant” means a Director who has been selected to receive an Award, or
with respect to whom an Award is outstanding, under the Plan.

2.21“Person” means any individual, organization, corporation, partnership, trust
or other entity.

2.22“Plan” means this ADTRAN, Inc. 2020 Directors Stock Plan.

2.23“Prior Plans” means the:

 

(a)

ADTRAN, Inc. 2005 Directors Stock Option Plan (expired on May 17, 2015); and

 

(b)

ADTRAN, Inc. 2010 Directors Stock Plan (expired on December 31, 2019).

2.24“Restricted Stock” means an Award of Common Stock that is subject to such
conditions, restrictions and contingencies as the Committee determines and sets
forth in the applicable Award Agreement.

2.25“Restricted Stock Unit” or “RSU” means an Award of a unit representing one
share of Common Stock that, upon satisfaction of certain conditions,
restrictions and contingencies as the Committee determines and sets forth in the
applicable RSU Agreement, shall result in the issuance of one share of Common
Stock.

 

 

 

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2.26“Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act, as
then in effect or any successor provision.

2.27“Separation from Service” means a termination of service by a Participant
with the Company and its Affiliates; provided, that if any Award that is treated
as nonqualified deferred compensation (within the meaning of Code Section 409A),
or any dividend or dividend credit thereon, is to be paid or distributed upon a
Separation from Service, then a Separation from Service shall not occur unless
it qualifies as a “separation from service” within the meaning of Code Section
409A.  Unless otherwise stated in the applicable Award Agreement, a
Participant’s change in position, duties or status (e.g., from director to
consultant, director to employee) shall not result in interrupted or terminated
service, so long as such Participant continues to provide services to the
Company or an Affiliate and a “separation from service” under Code Section 409A
is not deemed to have occurred.  The determination of whether an authorized
leave of absence or absence for military or government service or for any other
reason shall constitute a Separation from Service for purposes of any Award
granted under the Plan shall be determined by the Committee and, if applicable,
in accordance with Code Section 409A, which determination shall be final and
conclusive.

2.28“Securities Act” means the Securities Act of 1933, as amended.

2.29“Total Remuneration” means the total annual compensation (including Awards
under the Plan) which may be paid to a Director for a given year (running from
one annual shareholders’ meeting to the next), as may be modified from time to
time, excluding any additional retainer for acting in certain capacities such as
committee chair or lead director, and any additional meeting fees.  

ARTICLE III
Administration

3.1General Administration.  The Plan shall be administered and interpreted by
the Committee (as designated pursuant to Section 3.2).  Subject to the express
provisions of the Plan, the Committee shall have authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the Award Agreements by which
Awards shall be evidenced (which shall not be inconsistent with the terms of the
Plan), and to make all other determinations necessary or advisable for the
administration of the Plan, all of which determinations shall be final, binding
and conclusive on all Persons.

3.2Appointment of Committee.  The Board shall appoint the Committee from among
its non-employee members to serve at the pleasure of the Board.  The Board from
time to time may remove members from, or add members to, the Committee and shall
fill all vacancies thereon.  

3.3Organization.  The Committee may select one of its members as its chairman
and shall hold its meetings at such times and at such places as it shall deem
advisable.  A majority of the Committee shall constitute a quorum, and such
majority shall determine its actions.  The Committee shall keep minutes of its
proceedings and shall report the same to the Board at least annually.

 

 

 

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3.4Powers of Committee.  The Committee may make one or more Awards under the
Plan.  The Committee shall decide which eligible Directors shall receive an
Award and when to grant an Award, the type of Award that it shall grant and the
number of shares of Common Stock covered by the Award, subject to the terms of
the Plan.  The Committee shall also decide the terms, conditions, performance
criteria, restrictions and other provisions of the Award.  The Committee shall
act by a majority of its then members, at a meeting of the Committee or by
unanimous written consent.  The Committee shall keep adequate records concerning
the Plan and the Committee’s proceedings and acts in such form and detail as the
Committee may decide.

3.5Delegation by Committee.  Unless prohibited by applicable law or the
applicable rules of a stock exchange, the Committee may allocate all or some of
its responsibilities and powers to any one or more of its members.  The
Committee also may delegate some or all of it administrative duties and powers
to any employee or officer of the Company or its Affiliates.  The Committee
hereby delegates to the Company’s Corporate Secretary and the Company’s
executive officers the authority to document any and all Awards made by the
Committee under the Plan by execution of the appropriate Award Agreements.  The
Committee may revoke any such allocation or delegation at any time.

3.6Information to be Furnished to Committee.  In order for the Committee to
discharge its duties, it may require the Company, its Affiliates, Participants
and other Persons entitled to benefits under the Plan to provide it with certain
data and information.

3.7Deferral Arrangement.  The Committee may permit or require the deferral of
payment of any Award, subject to such rules and procedures as it may establish
and in accordance with Code Section 409A. Unless otherwise provided in an Award
Agreement, any such deferral will not include provisions for the payment or
crediting of interest or dividend equivalents.

3.8Indemnification.  In addition to such other rights of indemnification that
apply to them as members of the Board or a committee thereof, the Company shall
indemnify the members of the Committee (and any designees of the Committee, as
permitted under Section 3.5), to the extent permitted by applicable law, against
reasonable expenses (including, without limitation, attorney’s fees) actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal, to which they or any of them may
be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Award awarded hereunder, and against all amounts
paid by them in settlement thereof (provided such settlement is approved to the
extent required by and in the manner provided by the Articles of Incorporation
or the Bylaws of the Company relating to indemnification of the members of the
Board) or paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to such matters as to which it is adjudged in
such action, suit or proceeding that such Committee member or members (or their
designees) did not act in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the Company.

ARTICLE IV
Stock; Eligibility and Annual Grants

4.1Common Stock Subject to Awards.  Common Stock subject to Awards and other
provisions of the Plan shall consist of the following: (a) authorized but
unissued shares of Common

 

 

 

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Stock; (b) authorized and issued shares of Common Stock held by the Company in
its treasury which have been reacquired by the Company; and (c) shares of Common
Stock purchased by the Company in the open market.

4.2Authorized Shares.  Subject to adjustment in accordance with the provisions
of Section 4.3, the maximum number of shares of Common Stock that may be issued
under the Plan for Awards shall equal three hundred seventy three thousand
(373,000) shares of Common Stock, adjusted as follows:

 

(a)

Each Award of stock Options, Restricted Stock or Restricted Stock Units granted
under this Plan will reduce the number of authorized shares available under the
Plan by one (1) share of Common Stock for each share underlying such Award.

 

(b)

Shares of Common Stock underlying an Award under this Plan or Prior Plans that
is cancelled, terminated, expires without exercise, is forfeited, or lapses, for
any reason shall again be available for issuance pursuant to Awards under this
Plan.

 

(c)

Notwithstanding anything to the contrary herein, the following shares shall not
again become available for issuance under the Plan: (1) shares of Common Stock
withheld by, or otherwise remitted to, the Company as full or partial payment of
the Exercise Price to the Company upon exercise of Options granted under the
Plan; and (2) shares of Common Stock withheld by, or otherwise remitted to, the
Company to satisfy a Participant’s tax withholding obligations (if any) upon the
lapse of restrictions on Restricted Stock or RSUs or upon the exercise of Stock
Options or upon any other payment or issuance under the Plan.

The Committee shall establish appropriate methods for determining the number of
shares available for issuance under the Plan and the number of shares that have
been actually issued under the Plan at any time.  In no event shall fractional
shares of Common Stock be issued under the Plan.

 

 

 

4.3Effects of Changes in Capitalization.  

 

(a)

Changes to Common Stock.  If the number of outstanding shares of Common Stock is
increased or decreased or the shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split,
reverse split, combination of shares, exchange of shares, stock dividend or
other distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company occurring
after the Effective Date (“Equity Restructuring”), the number and kinds of
shares for which Awards may be granted under the Plan and/or the Exercise Price
shall be adjusted

 

 

 

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proportionately and accordingly by the Committee; provided, that any such
adjustment shall comply with Code Section 409A, if applicable.  In addition, the
number and kind of shares of Common Stock for which Awards are outstanding shall
be adjusted proportionately and accordingly so that the proportionate interest
of the Participant immediately following such event shall, to the extent
practicable, be the same as immediately before such event.  The conversion of
any convertible securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration.

 

(b)

Change of Control and Other Corporate Transactions. In the event of a merger,
consolidation, reorganization, extraordinary dividend, tender offer for Common
Stock, Change of Control or other change in capital structure of the Company
that is not an Equity Restructuring under subsection (a) above, the Committee
may (but is not required to) make such adjustments with respect to Common Stock
that may be issued pursuant to Awards and the number and/or Exercise Price of
outstanding Awards and take such other action as it deems necessary or
appropriate, including, without limitation, and subject to the requirements of
Code Section 409A, if applicable:

 

(1)

making appropriate provision for the continuation of an Award by substituting on
an equitable basis for the shares of Common Stock then subject to such Award
either the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Change of Control or securities of any
successor or acquiring entity;

 

(2)

upon reasonable prior written notice to the Participant, providing that: (i) the
Stock Options held by such Participant, to the extent then exercisable, must be
exercised within a specified number of days after the date of such notice, at
the end of which period the Stock Options shall terminate without payment,
and/or (ii) a grant of Restricted Stock and/or RSUs Stock must be accepted (to
the extent then subject to acceptance) within a specified number of days after
the date of such notice, at the end of which period the offer of the Restricted
Stock and/or RSUs shall terminate;

 

(3)

terminating an Award, whether vested or unvested, in exchange for a payment
equal to (i) for Restricted Stock and RSUs, the Fair Market Value of the shares
of Common Stock subject to the Award or (ii) for Stock Options, the excess of
the Fair Market Value of the shares of Common Stock subject to the Award over
the Exercise Price, as applicable;

 

(4)

providing that an Award shall become (as applicable) fully vested and
exercisable, and any vesting period or restrictions shall lapse, immediately
prior to the Change of Control; and/or

 

 

 

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(5)

with respect to an Award subject to performance measures, providing that any
incomplete performance periods shall end on the date of such Change of Control
(or other corporate transaction described in this subsection (b)), and the
Committee shall cause the Award to be settled based upon the higher of: (i) the
Participant’s actual attainment of performance goals for the performance period
through the date of the Change of Control (or other corporate transaction
described in this subsection (b)) or (ii) the performance target award.

Notwithstanding anything to the contrary, an Award having an Exercise Price
equal to or greater than the Fair Market Value of the consideration to be paid
per share of Common Stock in the Change of Control may be canceled without
payment of consideration to the applicable Participant.

 

(c)

Limits on Adjustments.  Any issuance by the Company of stock of any class other
than the Common Stock, or securities convertible into shares of stock of any
class, shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of the Common Stock subject to any
Award, except as specifically provided otherwise in this Plan.  The grant of
Awards under the Plan shall not affect in any way the right or authority of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, consolidate or dissolve, or to
liquidate, sell or transfer all or any part of its business or assets.  No
fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share with no
cash payment due therefor.  If the Company issues any rights to subscribe for
additional shares pro rata to holders of outstanding shares of the class or
classes of stock then set aside for the Plan, then each Participant shall be
entitled to the same rights on the same basis as holders of outstanding shares
with respect to such portion of the Participant’s Award as is exercised on or
prior to the record date for determining shareholders entitled to receive or
exercise such rights.  All adjustments the Committee makes under this Plan shall
be final and conclusive.

4.4Individuals Eligible for Awards.  The individuals eligible to receive Awards
hereunder shall be solely those individuals who are Directors and who are not
employees of the Company or any of its Affiliates.  

4.5Annual Grants.  All Awards granted under this Section shall comply in all
respects with the terms and conditions of the Plan.

(a)Initial Grants.  Upon initially becoming a Director, an individual shall be
automatically entitled to receive an Award with a Fair Market Value (in the case
of Options, as such value is determined by the Board in its sole discretion) on
the date of grant equal

 

 

 

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to (i) 50% of the annual grant detailed below in subsection (b) for the calendar
year prior to the calendar year in which the individual initially becomes a
Director or (ii) such other lesser amount as determined in the discretion of the
Board.  A Director who has previously served as a Director and who again becomes
a Director shall not be entitled to an initial grant pursuant to this subsection
(a).  Only a Director who has never served as a Director shall be entitled to an
initial grant pursuant to this subsection (a).  An individual who receives an
initial grant hereunder shall also be entitled to receive an annual grant under
subsection (b) for the calendar year in which he initially becomes a Director.  

(b)Annual Grants.  As of December 31 of each calendar year in which an
individual is a Director, and provided such individual is a Director on such
date, such individual shall be automatically entitled to receive an Award with a
Fair Market Value (in the case of Options, as such value is determined by the
Board in its sole discretion) on the date of grant equal to (i) 50% of the
Director’s Total Remuneration for such calendar year (rounded to the nearest
whole share as of such date) or (ii) such other lesser amount as determined in
the discretion of the Board; but in no event shall any Award have a Fair Market
Value greater than $150,000.

(c)Form of Grants.  All Awards shall be in the form of Restricted Stock unless
the Board, upon recommendation by the Committee, determines that Awards shall be
in the form of Options or Restricted Stock Units.  Any determination to grant
Awards in a form other than Restricted Stock shall be made, in the case of
initial grants under subsection (a), prior to the date the Director becomes
entitled to the Award, and, in the case of annual grants under subsection (b),
before December 31 for Awards for the calendar year ending that December 31.

ARTICLE V
Stock Options

5.1Award Agreement.  An Award of an Option shall be evidenced by an Award
Agreement that specifies the following terms and any additional terms and
conditions determined by the Committee and not inconsistent with the Plan: (a)
the name of the Participant; (b) the total number of shares of Common Stock to
which the Option pertains; (c) the Exercise Price of the Option; (d) the date as
of which the Committee granted the Option; (e) the requirements for the Option
to become exercisable, such as continuous service, time-based schedule, period
and goals for performance measures to be satisfied, additional consideration,
etc.;  (f) the expiration date of the Option; and (g) the Beneficiary of the
Participant.  

5.2Vesting.  Unless a later date is provided in a Participant’s Award Agreement,
each Option shall first become exercisable (i.e., vested) with respect to 100%
of the shares subject to such Option as of the first anniversary of the date the
Option is granted and, prior to said date, the Option shall be unexercisable in
its entirety.  Notwithstanding the foregoing, all Options granted to a
Participant shall become immediately vested and exercisable for 100% of the
number of shares subject to the Options upon the Participant's becoming Disabled
or upon his or her death or upon a Change of Control. In addition, the Committee
may in its discretion in connection with a Participant’s Separation from
Service, accelerate vesting of the Option or permit continued vesting on the
vesting schedule set forth in the Participant’s Award Agreement.  Other than as
provided in

 

 

 

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the preceding sentences, if a Participant Separates from Service, his or her
rights with regard to all non-vested Options shall cease immediately.  

5.3Exercise Price.  The Exercise Price of the shares of Common Stock underlying
each Option shall be the Fair Market Value of the Common Stock on the date the
Option is granted.  

5.4Term of Options.  The terms of Options granted under the Plan shall commence
on the date of grant and shall expire ten (10) years after the date the Option
is granted.

5.5Terms of Exercise.  The exercise of an Option may be for less than the full
number of shares of Common Stock subject to such Option, but such exercise shall
not be made for less than (a) 100 shares or (b) the total remaining shares
subject to the Option, if such total is less than 100 shares.  Subject to the
other restrictions on exercise set forth herein, the unexercised portion of an
Option may be exercised at a later date.

5.6Method of Exercise.  All Options granted hereunder shall be exercised by
written (or electronic) notice on a form prescribed by the Committee and
directed to the Secretary of the Company at its principal place of business or
to such other Person as the Committee may direct.  Each notice of exercise shall
identify the Option that the Participant is exercising (in whole or in part) and
shall be accompanied by payment of the Exercise Price for the number of shares
specified in such notice and by any documents required by Section 8.1.  The
Company shall make delivery of such shares (electronically or in paper form)
within a reasonable period of time; provided that, if any law or regulation
requires the Company to take any action (including, but not limited to, the
filing of a registration statement under the Securities Act and causing such
registration statement to become effective) with respect to the shares specified
in such notice before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to take such action.

5.7Medium and Time of Payment.  The Participant must pay the full Exercise Price
for shares of Common Stock purchased upon the exercise of any Option, and
applicable withholding taxes (if any), at the time of such exercise by one of
the following forms of payment:

(a) in cash or cash equivalents acceptable to the Company;

(b) delivery (on a form acceptable to the Committee) of an irrevocable direction
to a licenses securities broker acceptable to the Company to sell shares of
Common Stock and to deliver all or part of the sales proceeds to the Company in
payment of the Exercise Price;

(c) delivery of shares of Common Stock already owned by the Participant (and for
which the Participant has good title free and clear of any liens and
encumbrances) having a Fair Market Value on the date of surrender equal to the
aggregate Exercise Price and taxes due;

(d) with the Committee’s approval, having the Company withhold shares of Common
Stock that otherwise would be acquired on exercise having a Fair Market Value
equal to the aggregate Exercise Price; or

 

 

 

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(e) any combination of the above forms or any other form of payment permitted by
the Committee.

5.8Effect of Termination of Service, Disability or Death.  Except as provided in
subsections (a), (b) or (c) below or where the Committee approves an extension
as described at the end of this Section, no Option shall be exercisable
following a Participant’s Separation from Service.

(a)Termination of Service.  In the event a Participant Separates from Service
for any reason other than death or Disability, any Option or unexercised portion
thereof granted to him or her shall terminate on and shall not be exercisable
after the earliest to occur of the following: (1) the expiration date of the
Option; (2) three months after the date the Participant Separates from Service
(except as provided in subsection (c)); or (3) the date on which the Company
gives notice to such Participant of termination of his or her service as a
Director if service is terminated by the Company’s shareholders for Cause (a
Participant's resignation in anticipation of termination of service by the
Company or by its shareholders for Cause shall constitute a notice of
termination by the Company).  Notwithstanding the foregoing, in the event that a
Participant Separates from Service for a reason other than death or Disability,
Cause or voluntary resignation at any time after a Change of Control, the term
of all Options of that Participant shall be extended through the maximum term as
described in Section 5.5 above. Prior to the earlier of the dates specified in
the preceding sentences of this subsection (a), the Option shall be exercisable
only in accordance with its terms and only for the number of shares exercisable
on the date of such Separation from Service.

(b)Disability.  Upon the Participant's Separation from Service due to
Disability, any Option or unexercised portion thereof granted to him or her
which is otherwise exercisable shall terminate on and shall not be exercisable
after the earlier to occur of the following: (1) the expiration date of such
Option; or (2) one year after the date on which such Participant Separates from
Service due to Disability (except as provided in subsection (c)).  Prior to the
earlier of such dates, such Option shall be exercisable only in accordance with
its terms and only for the number of shares exercisable on the date such
Participant Separates from Service due to Disability.

(c)Death.  In the event of the death of the Participant (1) while he or she is a
Director, (2) within three months after the date of the Participant’s Separation
from Service (for a reason other than Cause) as provided in subsection (a)
above, or (3) within one year after the date of the Participant’s Separation
from Service due to his or her Disability, any Option or unexercised portion
thereof granted to him or her which is otherwise exercisable may be exercised by
the Participant's Beneficiary at any time prior to the expiration of one year
from the date of death of such Participant, but in no event later than the date
of expiration of the Option.  Such exercise shall be effected pursuant to the
terms of this Section as if such Beneficiary is the named Participant.

Notwithstanding the foregoing, the Committee may, in its discretion, in
connection with a Participant’s Separation from Service, permit an Award to
remain exercisable for the full exercise period set forth in the Award Agreement
or the maximum term as described in

 

 

 

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Section 5.5 above, so long as such extension does not violate Code Section 409A
or other applicable laws.

5.9Restrictions on Transfer and Exercise of Options.  No Option shall be
assignable or transferable by the Participant except by transfer to a
Beneficiary upon the death of the Participant, and any purported transfer (other
than as excepted above) shall be null and void.  After the death of a
Participant and upon the death of the Participant's Beneficiary, an Option shall
be transferable only by will or by the laws of descent and distribution.  During
the lifetime of a Participant, the Option shall be exercisable only by him;
provided, however, that in the event the Participant is incapacitated and unable
to exercise Options, such Options may be exercised by such Participant's legal
guardian, legal representative, fiduciary or other representative whom the
Committee deems appropriate based on applicable facts and circumstances.

5.10Rights as a Shareholder.  A Participant shall have no rights as a
shareholder with respect to shares covered by his or her Option until date of
the issuance of the shares to him or her and only after the Exercise Price of
such shares is fully paid.  Unless specified in Article VII, no adjustment will
be made for dividends or other rights for which the record date is prior to the
date of such issuance.

5.11No Obligation to Exercise Option.  The granting of an Option shall impose no
obligation upon the Participant to exercise such Option.

ARTICLE VI
Restricted Stock and Restricted Stock Units

6.1Award Agreement.  When the Committee awards Restricted Stock or Restricted
Stock Units under the Plan, it shall prepare (or cause to be prepared) an Award
Agreement, effective as of the date of grant, that shall specify the number of
Shares subject to the Award, any vesting or other restrictions that apply to the
Award, and such other provisions as the Committee may determine, which are not
inconsistent with the terms and provisions of the Plan.  

6.2Vesting.  Unless otherwise provided in a Participant’s Award Agreement, each
Award of Restricted Stock or Restricted Stock Units shall become vested (i.e.,
all restrictions shall lapse) on the first anniversary of the date of grant;
provided that if the Participant incurs a Separation from Service, his rights
with regard to all non-vested Restricted Stock or Restricted Stock Units shall
cease immediately.  Notwithstanding the foregoing, Restricted Stock or
Restricted Stock Units subject to time-based vesting shall become 100% vested
immediately upon the death or Disability of the Participant or upon a Change of
Control of the Company.  In addition, the Committee may in its discretion in
connection with a Participant’s Separation from Service, accelerate vesting of
Restricted Stock or Restricted Stock Units or permit continued vesting on the
vesting schedule set forth in the Participant’s Award Agreement; provided,
however, that any such extension must comply with Code Section 409A and the
delay period (as defined in Section 10.13) for specified employees.

6.3Delivery of Restricted Stock.

(a)Issuance.  The Company shall issue the shares of Restricted Stock within a
reasonable period of time after approval of the Award Agreement; provided that
if any law

 

 

 

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or regulation requires the Company to take any action (including, but not
limited to, the filing of a registration statement under the Securities Act and
causing such registration statement to become effective) with respect to such
shares before the issuance thereof, then the date of delivery of the shares
shall be extended for the period necessary to take such action.  As long as any
restrictions apply to the Restricted Stock, the shares of Restricted Stock shall
be held by the Committee in uncertificated form in a restricted account.

(b)Legend.  Unless the certificate representing shares of the Restricted Stock
is deposited with a custodian (as described in this Section), each certificate
shall bear the following legend (in addition to any other legend required by
law):

“The transferability of this certificate and the shares represented hereby are
subject to the restrictions, terms and conditions (including forfeiture and
restrictions against transfer) contained in the ADTRAN, Inc. 2020 Director Stock
Plan and an Award Agreement dated __________, ____, between ________________ and
ADTRAN, Inc.  The Plan and the Award Agreement are on file in the office of the
Corporate Secretary of ADTRAN, Inc.”

Such legend shall be removed or canceled from any certificate evidencing shares
of Restricted Stock as of the date that such shares become nonforfeitable.

(c)Deposit with Custodian.  As an alternative to delivering a stock certificate
to the Participant, the Committee may deposit or transfer such shares
electronically with a custodian designated by the Committee.  The Committee
shall cause the custodian to issue a receipt for the shares to the Participant
for any Restricted Stock so deposited.  The custodian shall hold the shares and
deliver the same to the Participant in whose name the Restricted Stock evidenced
thereby is registered only after such shares become nonforfeitable.

6.4Restrictions on Transfer.  No Restricted Stock or Restricted Stock Unit shall
be assignable or transferable by the Participant except by transfer to a
Beneficiary upon the death of the Participant, and any purported transfer (other
than as excepted above) shall be null and void.  After the death of a
Participant and upon the death of the Participant's Beneficiary, the Restricted
Stock or Restricted Stock Unit (as applicable) shall be transferable only by
will or by the laws of descent and distribution.  

6.5Settlement of RSUs.  Except as otherwise provided in the Award Agreement and
in accordance with Code Section 409A, RSUs shall generally be settled in shares
of Common Stock immediately following the date they vest; provided that the
Committee may specify in the applicable Award Agreement that settlement shall be
in cash or in a combination of Common Stock and cash.

6.6Shareholder Rights.  No shareholder rights shall inure to a Participant who
has been awarded Restricted Stock or Restricted Stock Units until the
restrictions on the Restricted Stock lapse or actual shares of Common Stock are
issued upon settlement of the Restricted Stock Units, as applicable.

 

 

 

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6.7Dividend Credits.  Unless otherwise provided in the Participant’s Award
Agreement, (a) any cash dividends paid on Common Stock underlying the
Participant’s Restricted Stock or Restricted Stock Units during the period of
restriction shall be credited to a bookkeeping account which shall be
hypothetically invested in whole shares of Common Stock; and (b) upon the lapse
of restrictions on the Restricted Stock or Restricted Stock Units, the Company
will immediately pay the Participant the accumulated value of the bookkeeping
account in the form of whole shares of Common Stock, plus any remaining cash.

ARTICLE VII
Adjustments

7.1Recapitalization.  In the event that the outstanding shares of the Common
Stock of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, reclassification, stock split,
combination of shares or dividend payable in shares of the Common Stock, the
following rules shall apply:

(a)The Committee shall make an appropriate adjustment in the number and kind of
shares available for the granting of Awards under the Plan and in the number and
kind of shares granted as part of the annual grants.

(b)The Committee also shall make an appropriate adjustment in the number and
kind of shares underlying outstanding Awards, or portions thereof, that remain
unexercised or subject to restriction; any such adjustment in any outstanding
Options shall be made without change in the total price applicable to the
unexercised portion of such Option and with a corresponding adjustment in the
Exercise Price per share.  No fractional shares shall be issued or optioned in
making the foregoing adjustments, and the number of shares available under the
Plan or the number of shares subject to any outstanding Awards shall be the next
lower number of shares, rounding all fractions downward.

(c)If any rights or warrants to subscribe for additional shares are given pro
rata to holders of outstanding shares of the class or classes of stock then set
aside for the Plan, each Participant shall be entitled to the same rights or
warrants on the same basis as holders of the outstanding shares with respect to
such portion of his Award for which shares have not yet been issued in his or
her name on or prior to the record date or which portion is otherwise not
included in the determination of shareholders entitled to receive or exercise
such rights or warrants.

7.2Reorganization. Subject to any required action by the shareholders, if the
Company shall be a party to any reorganization involving merger, consolidation,
acquisition of the stock or acquisition of the assets of the Company which does
not constitute a Change of Control, and if the agreement memorializing such
reorganization so provides, any outstanding Award granted under the Plan shall
pertain to and apply, with appropriate adjustment as determined by the
Committee, to the securities of the resulting corporation to which a holder of
the number of shares of the Common Stock subject to such Award would have been
entitled.  If such agreement does not so provide: (a) any or all Options granted
hereunder shall become immediately nonforfeitable and fully exercisable or
vested (to the extent permitted under federal or state securities laws) and are

 

 

 

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to be terminated after giving at least 30 days' notice to the Participants to
whom such Options have been granted and (b) any or all unvested Awards of
Restricted Stock or Restricted Stock Units hereunder shall become immediately
fully vested, nonforfeitable and/or payable.

7.3Dissolution and Liquidation.  If the Board adopts a plan of dissolution and
liquidation that is approved by the shareholders of the Company, the Committee
shall give each Participant written notice of such event at least ten (10) days
prior to its effective date, and the rights of all Participants shall become
immediately nonforfeitable and fully exercisable or vested (to the extent
permitted under federal or state securities laws).

7.4Limits on Adjustments.  Any issuance by the Company of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares of the Common Stock subject to any Award, except as specifically
provided otherwise in this Article.  The grant of Awards pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate or dissolve, or to liquidate, sell
or transfer all or any part of its business or assets.  All adjustments the
Committee makes under this Article shall be conclusive.

7.5No Cashouts or Repricings.  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 cancel outstanding Options in exchange for cash, other
Awards or Options with an Exercise Price that is less than the Exercise Price of
the original Options without stockholder approval.

ARTICLE VIII
Agreement by Participant and Securities Registration

8.1Agreement.  If, in the opinion of counsel to the Company, such action is
necessary or desirable, no Award shall be granted to any Participant and no
Option shall be exercisable by a Participant unless, at the time of grant or
exercise, as applicable, such Participant (a) represents and warrants that he or
she will acquire the Common Stock for investment only and not for purposes of
resale or distribution, and (b) makes such further representations and
warranties as are deemed necessary or desirable by counsel to the Company with
regard to holding and resale of the Common Stock.  The Participant shall, upon
the request of the Committee, execute and deliver to the Company an agreement or
affidavit to such effect.  Should the Committee have reasonable cause to believe
that such Participant did not execute such agreement or affidavit in good faith,
the Company shall not be bound by the grant of the Award or by the exercise of
an Option.  All certificates representing shares of Common Stock issued pursuant
to the Plan shall be marked with the following restrictive legend or similar
legend, if such marking, in the opinion of counsel to the Company, is necessary
or desirable:

The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any state and are
held by an "affiliate" (as such term is defined in Rule 144 promulgated by the
Securities

 

 

 

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and Exchange Commission under the Securities Act of 1933, as amended) of the
Company.  Accordingly, these shares may not be sold, hypothecated, pledged or
otherwise transferred except (i) pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and any applicable securities laws
or regulations of any state with respect to such shares, (ii) in accordance with
Securities and Exchange Commission Rule 144, or (iii) upon the issuance to the
Company of a favorable opinion of counsel or the submission to the Company of
such other evidence as may be satisfactory to the Company that such proposed
sale, assignment, encumbrance or other transfer will not be in violation of the
Securities Act of 1933, as amended, or any applicable securities laws of any
state or any rules or regulations thereunder.  Any attempted transfer of this
certificate or the shares represented hereby which is in violation of the
preceding restrictions will not be recognized by the Company, nor will any
transferee be recognized as the owner thereof by the Company.

If the Common Stock is (A) held by a Participant who ceases to be an
"affiliate," as that term is defined in Rule 144 of the Securities Act, or (B)
registered under the Securities Act and all applicable state securities laws and
regulations as provided in Section 8.2, the Committee, in its discretion and
with the advice of counsel, may dispense with or authorize the removal of the
restrictive legend set forth above or the portion thereof which is inapplicable.

8.2Registration.  In the event that the Company in its sole discretion shall
deem it necessary or advisable to register, under the Securities Act or any
state securities laws or regulations, any shares with respect to which Awards
have been granted hereunder, then the Company shall take such action at its own
expense before delivery of the certificates representing such shares to a
Participant.  In such event, and if the shares of Common Stock of the Company
shall be listed on any national securities exchange (as such term is defined by
the Exchange Act) or on the NASDAQ National Market System at the time of the
removal of restrictions from an Award or exercise of any Option, the Company
shall make prompt application at its own expense for the listing on such stock
exchange or the NASDAQ National Market System of the shares of Common Stock to
be issued.

ARTICLE IX
Amendment and Termination

9.1Amendment and Termination By the Board.  Subject to Code Section 409A and
Section 9.2 below, the Board shall have the power at any time to add to, amend,
modify or repeal any of the provisions of the Plan, to suspend the operation of
the entire Plan or any of its provisions for any period or periods or to
terminate the Plan in whole or in part.  In the event of any such action, to the
extent it determines necessary to administer the Plan, the Committee shall
prepare written procedures which, when approved by the Board, shall govern the
administration of the Plan resulting from such addition, amendment,
modification, repeal, suspension or termination.  No Award Agreement may be
amended to reprice or constructively reprice any Award.

9.2Restrictions on Amendment and Termination.  Notwithstanding the provisions of
Section 9.1 above, the following restrictions shall apply to the Board's
authority under Section 9.1 above:

 

 

 

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(a)Prohibition Against Adverse Effects on Outstanding Awards.  No addition,
amendment, modification, repeal, suspension or termination shall adversely
affect, in any way, the rights of a Participant who has an outstanding Award
without the consent of such Participant.  The Committee shall not amend any
Award Agreement that it previously has authorized under the Plan that adversely
affects the Participant’s rights or benefits under an Award without the written
(or electronic) consent of the Participant holding such Award.

(b)Shareholder Approval Required for Certain Modifications.  No modification or
amendment of the Plan may be made without the prior approval of the shareholders
of the Company if such approval is necessary with respect to tax, securities or
other applicable laws or the applicable rules or regulations of any stock
exchange or the NASDAQ National Market System.

ARTICLE X
Miscellaneous Provisions

10.1Beneficiary. Upon a Participant’s death, the Participant’s Beneficiary shall
be determined as follows:

(a)Designation of Beneficiary.  A Participant's Beneficiary shall be the Person
who is last designated in writing by the Participant as such Participant's
Beneficiary hereunder.  A Participant shall designate his or her original
Beneficiary in writing (on paper or electronically) on the form provided by the
Committee.  Any subsequent modification of the Participant's Beneficiary shall
be on the form provided by the Committee.  A designation of Beneficiary shall be
effective when the properly completed form is received and accepted by the
Committee (or its designee), as determined in the Committee's (or its
delegate’s) sole discretion.

(b)No Designated Beneficiary.  If no Beneficiary has been validly designated by
a Participant, or the Beneficiary designated by the Participant is no longer
living or in existence at the time of the Participant's death, then the
Participant's Beneficiary shall be deemed to be the Participant's legal spouse
under applicable state law, or if none, the Participant's estate.

(c)Designation of Multiple Beneficiaries.  A Participant may, consistent with
subsection (a) above, designate more than one Person as a Beneficiary if, for
each such Beneficiary, the Participant also designates a percentage of the
Participant's Award to be transferred to such Beneficiary upon the Participant's
death.  Unless otherwise specified by the Participant, any designation by the
Participant of multiple Beneficiaries shall be interpreted as a designation by
the Participant that each such Beneficiary (to the extent such Beneficiary is
alive or in existence as of the Participant's date of death) should be entitled
to an equal percentage of the Participant's Award.  Each Beneficiary shall have
complete and non-joint rights with respect to the portion of a Participant's
Award to be transferred to such Beneficiary upon the Participant's death.

(d)Contingent Beneficiaries.  A Participant may designate one or more contingent
Beneficiaries to receive all or a portion of the Participant's Award in the
event

 

 

 

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that all of the Participant's original Beneficiaries should predecease the
Participant.  In the event that one or more original Beneficiaries predeceases
the Participant, then the remaining original Beneficiaries specified above shall
be entitled to the share of such deceased Beneficiary in direct proportion to
their designated shares.

10.2Application of Funds.  The proceeds received by the Company from the sale of
the Common Stock subject to the Options granted hereunder will be used for
general corporate purposes.

10.3Notices.  In order for a Participant or other individual to give notice or
other communication to the Committee, the notice or other communication shall be
in the form specified by the Committee and delivered to the location designated
by the Committee in its sole discretion.

10.4Compliance with Rule 16b-3.  This Plan is intended to be in compliance with
the requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange
Act.

10.5Governing Law.  The Plan shall be governed by and shall be construed in
accordance with the laws of the State of Alabama, without regard to any choice
of law principles thereof or of any other jurisdiction.

10.6Additional Provisions By Committee.  The Award Agreements authorized under
the Plan may contain such other provisions as the Committee shall deem
advisable.

10.7Plan Document Controls.  In the event of any conflict between the provisions
of an Award Agreement and the Plan, the Plan shall control.

10.8Gender and Number.  Wherever applicable, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.

10.9Headings.  The titles in this Plan are inserted for convenience of
reference; they constitute no part of the Plan and are not to be considered in
the construction hereof.

10.10Legal References.  Any reference in this Plan to a provision of law which
is later revised, modified, finalized or redesignated, shall automatically be
considered a reference to such revised, modified, finalized or redesignated
provision of law.

10.11No Rights to Perform Services.  Nothing contained in the Plan, or any
modification thereof, shall be construed to give any individual any rights to
perform services for the Company or any of its Affiliates.

10.12Unfunded Arrangement.  The Plan shall not be funded, and except for
reserving a sufficient number of authorized shares to the extent required by law
to meet the requirements of the Plan, the Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any grant under the Plan.

10.13Clawback/Recovery.  Subject to Section 409A, all Awards granted under the
Plan will be subject to clawback, recovery, or recoupment, as determined by the
Committee in its sole discretion, including but not limited to a reacquisition
right with respect to previously granted

 

 

 

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Restricted Stock or other cash or property, (a) as provided in the Company’s
forfeiture policy implemented by the Company from time to time and applicable to
all officers and Directors of the Company on the same terms and conditions,
including without limitation, any such policy adopted to comply with the
requirements of applicable law or the rules and regulations of any stock
exchange applicable to the Company, (b) as is required by the Dodd-Frank Wall
Street Reform and Consumer Protection Act, or other applicable law, (c) as
provided in the applicable Award Agreement, and/or (d) to the extent that the
Committee determines that the Participant has been involved in the altering,
inflating, and/or inappropriate manipulation of performance/financial results or
any other infraction of recognized ethical business standards, or that the
Participant has willfully engaged in any activity injurious to the Company, or
the Participant’s Separation from Service with the Company or its Affiliates is
for Cause.  Compliance with Section 409A of the Code.  Unless otherwise
expressly provided for in an Award Agreement, the Plan and Award Agreements will
be interpreted to the greatest extent possible in a manner that makes the Plan
and the Awards granted hereunder exempt from Section 409A of the Code, and, to
the extent not so exempt, compliant with Section 409A of the Code.  If the
Committee determines that any Award granted hereunder is not exempt from and is
therefore subject to Section 409A of the Code, the Award Agreement evidencing
such Award will incorporate the terms and conditions necessary to avoid the
consequences specified in Section 409A(a)(1) of the Code, and to the extent an
Award Agreement is silent on terms necessary for compliance, such terms are
hereby incorporated by reference into the Award Agreement. Notwithstanding
anything to the contrary in this Plan (and unless the Award Agreement
specifically provides otherwise), if a Participant holding an Award that
constitutes “deferred compensation” under Section 409A of the Code is a
“specified employee” for purposes of Section 409A of the Code, no distribution
or payment of any amount that is due because of a “separation from service” (as
defined in Section 409A of the Code without regard to alternative definitions
thereunder) will be issued or paid before the date that is six (6) months
following the date of such Participant’s “separation from service” (as defined
in Section 409A of the Code without regard to alternative definitions
thereunder) or, if earlier, the date of the Participant’s death, unless such
distribution or payment can be made in a manner that complies with Section 409A
of the Code, and any amounts so deferred will be paid in a lump sum on the day
after such six (6) month period elapses, with the balance paid thereafter on the
original schedule.

*****

ADOPTED BY BOARD OF DIRECTORS

ON March 6, 2020,
EFFECTIVE AS OF MAY 13, 2020