Exhibit 10.1

 

 

 

 

 

 

 

 

 

BUILD-A-BEAR WORKSHOP, INC.

2020 OMNIBUS INCENTIVE PLAN
Effective April 14, 2020

 

 

 

 

 

 

 

 

 

 

 

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BUILD-A-BEAR WORKSHOP, INC.

2020 OMNIBUS INCENTIVE PLAN

 

Table of Contents

 

    Page      

1.

Establishment, Purpose of the Plan and Effect on Prior Plan.

1

2.

Definitions.

1

3.

Stock Subject to the Plan and Annual Award Limits.

5

4.

Administration.

7

5.

Options.

9

6.

Stock Appreciation Rights

11

7.

Other Stock-Based Awards and Cash-Based Awards.

12

8.

Performance Awards.

13

9.

Recoupment of Award.

13

10.

Nontransferability of Awards.

13

11.

Tax Withholding.

13

12.

Adjustments Upon Changes in Capitalization or Corporation Acquisitions.

14

13.

Amendment and Termination.

16

14.

Awards Previously Granted.

18

15.

Dividends and Dividend Equivalents.

18

16.

Effect of Termination of Service on Awards.

18

17.

Term of Plan.

19

18.

Severability.

19

19.

Non-Waiver of Rights.

19

20.

Assignment.

19

21.

No Right To Continued Employment or Other Status.

19

22.

Choice of Law.

19

23.

Awards to Employees of Non-United States Subsidiaries.

20

24.

Section 409A.

20

 

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BUILD-A-BEAR WORKSHOP, INC.

2020 OMNIBUS INCENTIVE PLAN

 

1.

Establishment, Purpose of the Plan and Effect on Prior Plan.

 

A            Establishment. Build-A-Bear Workshop, Inc., a Delaware corporation,
establishes an incentive compensation plan to be known as the Build-A-Bear
Workshop, Inc. 2020 Omnibus Incentive Plan, as set forth in this document. The
Plan permits the grant of various forms of equity and cash-based awards. The
Plan shall become effective upon approval of the Plan by the Board (the
“Effective Date”) and shall remain in effect as provided in Section 17. The Plan
and each Award granted hereunder are conditioned on and shall be of no force or
effect until the Plan is approved by the stockholders of the Company.

 

B.          Plan Purpose. The purpose of the Plan is to provide the Company with
a means to assist in recruiting, retaining and rewarding certain employees,
Directors and consultants and to motivate such individuals to exert their best
efforts on behalf of the Employer by providing incentives through the granting
of Awards. By granting Awards to such individuals, the Company expects that the
interests of the recipients will be better aligned with those of the Employer.

 

C.          Prior Plan. As of the date the Plan is approved by the Company’s
stockholders, the Build-A-Bear Workshop, Inc. 2017 Omnibus Incentive Plan,
effective March 14, 2017 (the “Prior Plan”), will be frozen and no further
awards will be issued thereunder. Awards issued pursuant to the Prior Plan that
are outstanding as of the date of stockholder approval of the Plan shall remain
outstanding and shall be administered in accordance with the terms of the Prior
Plan and applicable award agreements thereunder.

 

2.

Definitions.

 

Unless the context clearly indicates otherwise, the following capitalized terms
shall have the meanings set forth below:

 

 

A.

“Act” means the Securities Exchange Act of 1934, as amended, or any successor
thereto.

 

 

B.

“Award” means a grant under the Plan of an Option, Stock Appreciation Right,
Cash-Based Award, Other Stock-Based Award or Performance Award.

 

 

C.

“Award Agreement” means a written or electronic agreement entered into by the
Company and a Participant, or a written or electronic statement issued by the
Company to a Participant, which in either case contains (either expressly or by
reference to the Plan or any sub-plan created hereunder) the terms and
provisions applicable to an Award granted under the Plan, including any
amendment or modification thereof. The Committee may provide for the use of
electronic, Internet or other non-paper Award Agreements, and the use of
electronic, Internet or other non-paper means for the acceptance thereof and
actions thereunder by a Participant.

 

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D.

“Board” means the Board of Directors of the Company or any duly appointed
Committee thereof.

 

 

E.

“Cash-Based Award” means an Award described in Section 7 as a Cash-Based Award.

 

 

F.

“Change in Control” means (i) the purchase or other acquisition (other than from
the Company) by any person, entity or group of persons, within the meaning of
Section 13(d) or 14(d) of the Act of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of 20% or more of either the
then-outstanding shares of Stock of the Company or the combined voting power of
the Company’s then-outstanding voting securities entitled to vote generally in
the election of Directors, excluding, however, the following: (a) any
acquisition directly from the Company, other than an acquisition by virtue of
the exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company or Subsidiary, (b) any acquisition
by the Company or any Subsidiary, (c) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any entity
controlled by the Company; (ii) individuals who, as of the date hereof,
constitute the Board (and, as of the date hereof, the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board, provided that any
person who becomes a Director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the Directors then comprising the Incumbent Board shall
be, for purposes of this Section, considered as though such person were a member
of the Incumbent Board; (iii) the consummation of a Corporate Transaction;
excluding, however, such a Corporate Transaction pursuant to which all or
substantially all of the individuals and entities who are the beneficial owners,
respectively, of the outstanding shares of common stock of the Company
immediately prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than fifty percent (50%) of, respectively, the outstanding
shares of Stock, and the combined voting power of the then outstanding
securities entitled to vote generally in the election of Directors of the
surviving or acquiring entity resulting from such Corporate Transaction or a
direct or indirect parent entity of the surviving or acquiring entity
(including, without limitation, an entity which as a result of such transaction
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions (as compared to each other) as their ownership, immediately prior to
such Corporate Transaction, of the outstanding shares of Stock of the Company
and outstanding voting securities entitled to vote generally in the election of
Directors, as the case may be; or (iv) a liquidation or dissolution of the
Company. Notwithstanding the foregoing, solely for purposes of an Award subject
to Code Section 409A, if the Award provides for a change in the time or form of
payment upon a Change in Control or provides for the payment of the Award upon a
Change in Control, then no Change in Control shall be deemed to have occurred
upon an event described in this paragraph F unless the event would also
constitute a permissible payment event under Code Section 409A and Treasury
Regulation Section 1.409A-3(i)(5).

 

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G.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor
thereto.

 

 

H.

“Committee” means the Compensation and Development Committee of the Board, or
any committee appointed by the Board in accordance with the Company’s amended
and restated bylaws from among its members for the purpose of administering the
Plan. Members of the Committee shall be “Non-Employee Directors” within the
meaning of Rule 16b-3 under the Act.

 

 

I.

“Company” means Build-A-Bear Workshop, Inc., a Delaware corporation.

 

 

J.

“Corporate Transaction” means (i) a sale of all or substantially all of the
assets of the Company; (ii) a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving
corporation; or (iii) a statutory share exchange involving capital stock of the
Company.

 

 

K.

“Director” means a member of the Board of Directors of the Company.

 

 

L.

“Dividend Equivalents” means a right, granted to a Participant under the Plan,
to receive cash, shares, other Awards or other property equal in value to
dividends paid with respect to shares of Stock.

 

 

M.

“Employer” means the Company and any other entity directly or indirectly
controlling, controlled by, or under common control with, the Company or any
other entity designated by the Board in which the Company has an interest.

 

 

N.

“Fair Market Value” means (i) if the Stock is listed on any established stock
exchange, the closing sales price for such Stock on such exchange for the
Trading Date applicable to the date of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable; or (ii) in the
absence of an established market for the Stock, the value determined in good
faith by the Board based on a reasonable valuation method that is consistent
with the requirements of Code Section 409A and the Treasury Regulations
thereunder.

 

For purposes of determining the Fair Market Value with respect to an Award
received by an employee in connection with an initial hire or a promotion within
the Company, the date of determination shall mean the Trading Date which is such
employee’s first date of hire or promotion. For all other Awards, the date of
determination shall mean the Trading Date on which the Committee (or its
delegate) approves the Award.

 

 

O.

“Incentive Stock Option” means a stock option which is an incentive stock option
within the meaning of Code Section 422.

 

 

P.

“Non-qualified Stock Option” means a stock option which is not an Incentive
Stock Option.

 

 

Q.

“Officer” means an officer of the Company as defined in Rule 16a-1(f) of the
Act.

 

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R.

“Option” means both an Incentive Stock Option and a Non-qualified Stock Option.

 

 

S.

“Other Stock-Based Award” means an Award granted pursuant to Section 7 and
described as an Other Stock-Based Award, including an Award of Restricted Stock
or Restricted Stock Units.

 

 

T.

“Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, at the time of the granting of the
Option, each of the corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain, or such other meaning as
may be hereafter ascribed to it in Code Section 424.

 

 

U.

“Participant” means an employee, Director or consultant of the Employer who is
selected by the Committee to participate in the Plan and be eligible to receive
an Award.

 

 

V.

“Performance Award” means a right to receive an Option, Stock Appreciation
Right, Cash-Based Award or Other Stock-Based Award as determined by the
Committee, subject to satisfying certain performance-based vesting conditions
and other restrictions or limitations as may be set forth in the Plan and the
applicable Award Agreement.

 

 

W.

“Plan” means the Build-A-Bear Workshop, Inc. 2020 Omnibus Incentive Plan.

 

 

X.

“Replacement Award” means an award granted to a Participant to replace the
unvested portion of a then-outstanding Award upon a Change in Control that meets
the requirements set forth in Section 12.B(3).

 

 

Y.

“Restricted Stock” means Stock granted to a Participant subject to a risk of
forfeiture pursuant to Section 7.

 

 

Z.

“Restricted Stock Unit” means a right granted to a Participant that shall be
evidenced by a bookkeeping entry representing the equivalent of one share of
Stock pursuant to Section 7.

 

 

AA.

“Separation from Service” means a “separation from service” as such term is
defined under Code Section 409A and the Treasury Regulations issued thereunder.
Except as otherwise required to comply with Code Section 409A, a Participant
shall be considered not to have had a Separation from Service where the level of
bona fide services performed continues at a level that is more than twenty
percent (20%) of the average level of service performed by the Participant
during the immediately preceding thirty six (36) month period (or if providing
services for less than thirty six (36) months, such lesser period) after taking
into account any services that the Participant provided prior to such date or
that the Company and the Employee reasonably anticipate the Participant may
provide (whether as an Participant or independent contractor) after such date.

 

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BB.

“Six Month Delay” means the required delay in payment to a Participant who is a
“specified employee” of amounts subject to Section 409A that are paid upon
Separation from Service, pursuant to Code Section 409A(a)(2)(B)(i). When a Six
Month Delay is required, the payment date shall be not before the date which is
six months after the date of Separation from Service or, if earlier, the date of
the Participant’s death. The term specified employee shall have the meaning
ascribed to this term under Code Section 409A.

 

 

CC.

“Statutory Option Stock” means any stock acquired through the exercise of an
Incentive Stock Option.

 

 

DD.

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

 

 

EE.

“Stock Appreciation Right” means a stock appreciation right described in
Section 6.

 

 

FF.

“Subsidiary” means any corporation or other legal entity (other than the
Company) in an unbroken chain of corporations or other legal entities beginning
with the Company if, at the time of granting an Award, each of the corporations
or other legal entities other than the last corporation or other legal entity in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock or other equity in one of
the other corporations or other legal entities in such chain, or such other
meaning as may be hereafter ascribed to it in Code Section 424.

 

 

GG.

“Substitute Award” means an Award granted upon the assumption of, or in
substitution or exchange for, outstanding awards granted by a company or other
entity acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines.

 

 

HH.

“Trading Date” means a day on which national stock exchanges are open for
trading.

 

3.

Stock Subject to the Plan and Annual Award Limits.

 

 

A.

Share Reserve. The number of shares of Stock allocated to the Plan and reserved
to satisfy Awards under the Plan as of the Effective Date (the “Share Reserve”)
shall be an aggregate of 1,000,000 shares of Stock (plus shares of Stock that
had remained available under the Prior Plan). The maximum number of shares of
Stock with respect to which Incentive Stock Options may be granted under the
Plan shall be an aggregate of 1,000,000. Awards shall be counted against this
limit as one (1) share of Stock for every one (1) share of Stock subject to the
Awards. For Awards with a variable number of shares of Stock on the grant date,
the number of shares of Stock to be counted against the Share Reserve prior to
the settlement of the Award shall be the maximum number of shares of Stock that
could be received under that particular Award. Notwithstanding the preceding, in
no event shall the number of shares of Stock awarded to Participants under the
Plan, when taken in combination with the number of outstanding shares of Stock
previously issued by the Company, a Parent or Subsidiary, exceed the limit
specified in the Company Certificate of Incorporation, as amended. The Company
may, in its discretion, use shares held in the treasury or shares acquired on
the public market, if applicable, in lieu of authorized but unissued shares.

 

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B.

Share Counting.

 

 

(1)

Shares of Stock subject to an Award granted under the Plan or an Award granted
under the Prior Plan that on or after the Effective Date is forfeited, expires
or is settled for cash (in whole or in part) shall, to the extent of such
forfeiture, expiration or cash settlement, be added to the Share Reserve.

 

 

(2)

Shares subject to Substitute Awards shall not be counted against the Share
Reserve specified in Section 3.A nor shall they reduce the shares of Stock
authorized for grant to a Participant in any calendar year.

 

 

(3)

Notwithstanding anything to the contrary herein, the following shares of Stock
shall not be added to the Share Reserve: (i) shares of Stock tendered by the
Participant in payment of the purchase price of an Option; (ii) shares of Stock
tendered by the Participant or withheld by the Company to satisfy any tax
withholding obligation with respect to Options, Stock Appreciation Rights or
Other Stock-Based Awards; (iii) shares of Stock subject to a Stock Appreciation
Right or Other Stock-Based Awards that are not issued in connection with its
share settlement on exercise or vesting thereof; and (iv) shares of Stock
reacquired by the Company on the open market or otherwise using cash proceeds
from the exercise of Options.

 

 

C.

Effect of Plans Operated by Acquired Companies. If a company acquired by the
Company or any Subsidiary or with which the Company or any Subsidiary combines
has shares available under a pre-existing plan approved by stockholders and not
adopted in contemplation of such acquisition or combination, the shares
available for grant pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination
to determine the consideration payable to the holders of Stock of the entities
party to such acquisition or combination) may be used for Awards under the Plan
and shall not reduce the Share Reserve. Awards using such available shares shall
not be made after the date awards or grants could have been made under the terms
of the pre-existing plan, absent the acquisition or combination, and shall only
be made to individuals who were not eligible to participate in the Plan prior to
such acquisition or combination.

 

 

D.

Annual Award Limits. Subject to adjustment as set forth in Section 12, the
following limits (each an “Annual Award Limit” and, collectively, “Annual Award
Limits”) shall apply to grants of Awards:

 

 

(1)

The maximum aggregate number of shares of Stock for which Options or Stock
Appreciation Rights may be granted to any Participant in any calendar year shall
be 200,000 shares (for avoidance of the doubt, this limit applies, in the
aggregate, to all Awards subject to this paragraph (1)).

 

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(2)

The maximum aggregate number of shares of Stock that may be subject to Other
Stock-Based Awards granted to any one Participant in any calendar year shall be
200,000 shares (for avoidance of doubt, this limit applies, in the aggregate, to
all forms of Awards subject to this paragraph (2)).

 

 

(3)

The maximum aggregate amount that may be paid to any Participant in any calendar
year under a Cash-Based Awards or any other Award that is payable or denominated
in cash shall be $5,000,000 determined as of the date of payout (for avoidance
of doubt, this limit applies in the aggregate, to all forms of Awards subject to
this paragraph (3)). To the extent that any form of Award subject to this
paragraph (3) is to be settled in shares of Stock, either pursuant to the
discretion of the Committee or an election by the applicable Participant,
compliance with the limit established by this paragraph (3) shall be determined
by calculating the dollar value of the shares to be issued in settlement based
on the Fair Market Value of such shares as of the applicable settlement date.

 

 

(4)

Notwithstanding any provision in the Plan to the contrary, the maximum number of
shares of Stock subject to Awards granted during any calendar year to a
non-employee Director, taken together with any cash fees paid during the
calendar year to the non-employee Director in respect of such Director’s service
as a member of the Board during such year (including service as a member or
chair of any committees of the Board), shall not have an aggregate Fair Market
Value determined on the grant date of the applicable Award in excess of
$1,000,000.

 

 

E.

Minimum Vesting Standards. Any Award granted under the Plan shall be subject to
a minimum vesting or exercise period of at least one (1) year. Notwithstanding
the immediately preceding sentence, the Committee may grant Awards covering up
to five percent (5%) of the Share Reserve without respect to the minimum vesting
standards set forth in this Section 3.E.

 

4.

Administration.

 

 

A.

Committee Power and Authority. Subject to any express limitations set forth in
the Plan, the Committee shall have full and exclusive discretionary power and
authority to take such actions as it deems necessary and advisable with respect
to the administration of the Plan including, but not limited to, the following:

 

 

(1)

To determine from time to time which of the persons eligible under the Plan
shall be granted Awards, when and how each Award shall be granted, what type or
combination of types of Awards shall be granted, the provisions of each Award
granted (which need not be identical), including the time or times when a person
shall be permitted to receive shares pursuant to an Award and the number of
shares subject to an Award or the value of an Award;

 

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(2)

To construe and interpret the Plan and Awards granted under it, and to
establish, amend, and revoke rules and regulations for its administration;

 

 

(3)

To correct any defect, omission or inconsistency in the Plan or in an Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective;

 

 

(4)

To approve forms of Award Agreements for use under the Plan;

 

 

(5)

To determine Fair Market Value of a share of Stock;

 

 

(6)

To amend any Award Agreement as permitted under the Plan;

 

 

(7)

To adopt sub-plans and/or special provisions applicable to stock awards
regulated by the laws of a jurisdiction other than and outside of the United
States. Such sub-plans and/or special provisions shall be subject to and
consistent with the terms of the Plan, except to the extent the Committee
determines that different terms and conditions are necessary or desirable to
comply with the laws of a jurisdiction other than and outside of the United
States;

 

 

(8)

To authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award;

 

 

(9)

To determine whether Awards will be settled in shares of Stock, cash or in any
combination thereof;

 

 

(10)

To determine whether Awards will provide for Dividend Equivalents;

 

 

(11)

To establish a program whereby Participants designated by the Committee may
reduce compensation otherwise payable in cash in exchange for Awards under the
Plan;

 

 

(12)

To authorize a program permitting eligible Participants to surrender outstanding
Awards in exchange for newly granted Awards subject to any applicable
stockholder approval requirements;

 

 

(13)

To impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by a Participant of any shares of Stock subject to an
Award, including, without limitation, restrictions under an insider trading
policy and restrictions as to the use of a specified brokerage firm for such
resales or other transfers;

 

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(14)

To waive any restrictions, conditions or limitations imposed on an Award at the
time the Award is granted or at any time thereto including but not limited to
forfeiture, vesting and treatment of Awards upon a termination of employment,
subject to the minimum vesting standards set forth in Section 3.E of the Plan;

 

 

(15)

To permit Participants to elect to defer payments of Awards; provided that any
such deferrals shall comply with applicable requirements of the Code, including
Code Section 409A; and

 

 

(16)

To extend the timing of the settlement or payment of an Award to the extent
permitted under Code Section 409A and other applicable law and rules of the
exchange that is the primary trading market of the Stock.

 

 

B.

Delegation of Authority. The Committee may, to the extent permitted by law,
delegate its responsibilities and authority hereunder to an executive officer of
the Company. Notwithstanding anything herein to the contrary, the Chief
Executive Officer and the Chief Financial Officer are specifically designated
under the Plan to have plenary authority, in their discretion, as applicable, to
also determine individuals, other than themselves or other Officers, to whom,
and the time or times at which, Awards shall be granted and the number of
shares, if applicable, subject to such Award.

 

 

C.

Award Date. An Award granted under the Plan shall be deemed to be made on the
date on which the Committee, by formal action of its members duly recorded in
the records thereof, makes an Award to a Participant (but in no event prior to
the Effective Date); provided that, such Award is evidenced by a written Award
Agreement duly executed on behalf of the Company and on behalf of the
Participant, if applicable, within a reasonable time after the date of the
Committee action. Notwithstanding the foregoing, for an Award granted under the
Plan by Chief Executive Officer or Chief Financial Officer, the date on which
such officer takes action to make an Award to a Participant shall be deemed to
be the determination date.

 

5.

Options.

 

The Committee, in its discretion, may grant Options which are Incentive Stock
Options or Non-qualified Stock Options, as evidenced by the Award Agreement, and
shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:

 

 

A.

Type of Option. Incentive Stock Options may be granted to any Participant
classified by the Committee as an employee of the Company, a Parent or a
Subsidiary. A Non-qualified Stock Option may be granted to any individual
Participant selected by the Committee.

 

 

B.

Option Prices. The purchase price of the Stock under each Option shall not be
less than one hundred percent (100%) of the Fair Market Value of the Stock at
the time of the granting of the Option; provided that, in the case of a
Participant who owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, a Parent or a Subsidiary, the
purchase price of the Stock under each Incentive Stock Option shall not be less
than one hundred ten percent (110%) of the Fair Market Value of the Stock on the
date such Option is granted.

 

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C.

Exercise - Elections and Restrictions. Options may be exercised by delivery to
the Company of a written notice of exercise signed by the proper persons or by
any other form of notice (including electronic notice) approved by the Committee
together with payment in full as described in this Section 5.C.

 

The purchase price for an Option is to be paid in full upon the exercise of the
Option, either (i) in cash; (ii) in the discretion of the Committee, by the
tender to the Company (either actual or by attestation) of shares of Stock
already owned by the Participant having a Fair Market Value equal to the cash
exercise price of the Option being exercised; (iii) in the discretion of the
Committee, by withholding shares of Stock otherwise issuable pursuant to the
Option having a Fair Market Value equal to the cash exercise price of the Option
being exercised; (iv) in the discretion of the Committee, by any other means
allowable pursuant to applicable law; or (v) in the discretion of the Committee,
by any combination of the payment methods specified in clauses (i), (ii), (iii) 
and (iv) hereof; provided that, no shares of Statutory Option Stock may be
tendered in exercise of an Incentive Stock Option unless (a) such shares have
been held by the Participant for at least one (1) year and (b) at least two (2)
years have elapsed since such Incentive Stock Option was granted. The proceeds
of sale of Stock subject to the Option are to be added to the general funds of
the Company or to the shares of the Stock held in its treasury, and used for its
corporate purposes as the Board shall determine, subject to the provisions of
the Plan.

 

 

D.

Option Terms. The term of each Option shall not be more than ten (10) years from
the date of granting thereof or such shorter period as is prescribed in the
Award Agreement; provided that, in the case of a Participant who owns more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, a Parent or a Subsidiary, the term of any Incentive Stock Option
shall not be more than five (5) years from the date of granting thereof or such
shorter period as prescribed in the Award Agreement. Within such limit, Options
will be exercisable at such time or times, and subject to such terms,
restrictions and conditions, as the Committee shall, in each instance, approve,
which need not be uniform for all Participants.

 

 

E.

Fractional Shares. To the extent Options are subject to restrictions, Options
shall vest in whole shares only, and the holder of an Option shall not be deemed
vested in any fractional share regardless of anything to the contrary in any
Award Agreement.

 

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F.

Stockholder Rights. The holder of an Option shall have none of the rights of a
stockholder with respect to the shares subject to Option until such shares shall
be issued to him or her upon the exercise of his or her Option.

 

 

G.

Additional Incentive Stock Option Requirements.

 

 

(1)

Grant Limits. The maximum aggregate Fair Market Value (determined at the time an
Option is granted) of the Stock with respect to which Incentive Stock Options
are exercisable for the first time by a Participant during any calendar year
(under all plans of the Company, a Parent and a Subsidiary) shall not exceed
$100,000.

 

 

(2)

Notice of Disposal. A Participant who disposes of Stock acquired upon the
exercise of an Incentive Stock Option either (i) within two (2) years after the
date of grant of such Incentive Stock Option or (ii) within one (1) year after
the transfer of such shares to the Participant upon exercise, shall notify the
Company of such disposition and of the amount realized upon such disposition.

 

6.

Stock Appreciation Rights

 

The Committee, in its discretion, may grant a Stock Appreciation Right evidenced
by an Award Agreement and shall be subject to the following terms and conditions
and to such other terms and conditions, not inconsistent therewith, as the
Committee shall determine:

 

 

A.

Strike Price. The strike price per share of Stock underlying a Stock
Appreciation Right shall not be less than one hundred percent (100%) of the Fair
Market Value of the Stock on the grant date of the Stock Appreciation Right.

 

 

B.

Settlement of Stock Appreciation Rights. A Stock Appreciation Right shall
entitle the Participant upon settlement to a payment from the Company in an
amount equal to the excess of: (i) the Fair Market Value on the settlement date
of a share of Stock, over (ii) the strike price (i.e., the Fair Market Value of
a share of Stock on the grant date), multiplied by the number of Stock
Appreciation Rights settled. Payment may be made, in the discretion of the
Committee and as provided in the Award Agreement, in (i) Stock; (ii) cash; or
(iii) any combination of Stock and cash. Cash shall be paid for fractional
shares of Stock upon the exercise of a Stock Appreciation Right.

 

 

C.

Term of Stock Appreciation Rights. The term of each Stock Appreciation Right
shall not be more than ten (10) years from the date of granting thereof or such
shorter period as is prescribed in the Award Agreement.

 

 

D.

Stockholder Rights. The holder of a Stock Appreciation Right shall have none of
the rights of a stockholder with respect to the shares subject to the Stock
Appreciation Right until such shares shall be issued to him or her upon the
exercise of his or her Stock Appreciation Right.

 

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E.

Limitations. The Committee may impose such conditions upon the Stock
Appreciation Rights as it determines in its sole discretion. To the extent Stock
Appreciation Rights are subject to restrictions, Stock Appreciation Rights shall
vest in whole shares only, and the holder of a Stock Appreciation Right shall
not be deemed vested in any fractional share regardless of anything to the
contrary in any Award Agreement.

 

7.

Other Stock-Based Awards and Cash-Based Awards.

 

The Committee may, in its sole discretion, grant Awards of Stock, Restricted
Stock, Restricted Stock Units and other Awards that are valued in whole or in
part by reference to the Fair Market Value of Stock. These Awards shall
collectively be referred to herein as Other Stock-Based Awards. The Committee
may also, in its sole discretion, grant Cash-Based Awards, which shall have a
value as may be determined by the Committee.

 

 

A.

General. Other Stock-Based Awards and Cash-Based Awards shall be in such form,
and dependent on such conditions, as the Committee shall determine, including,
but not limited to, the completion of a specified period of service, the
occurrence of an event, or the attainment of performance objectives. Other
Stock-Based Awards and Cash-Based Awards may be granted with or in addition to
other Awards. Subject to the other terms of the Plan, Other Stock-Based Awards
and Cash-Based Awards may be granted to such Participants in such amounts and
upon such terms, restrictions and conditions, and at any time and from time to
time, as shall be determined by the Committee and set forth in an Award
Agreement. If an Other Stock-Based Award or Cash-Based Award is not by its terms
exempt from the requirements of Code Section 409A, then the applicable Award
Agreement shall contain terms and conditions necessary to avoid adverse tax
consequences specified in Code Section 409A.

 

 

B.

Fractional Shares. To the extent Other Stock-Based Awards are subject to
restrictions, Other Stock-Based Awards shall vest in whole shares only, and the
holder of an Other Stock-Based Award shall not be deemed vested in any
fractional share regardless of anything to the contrary in any Award Agreement.

 

 

C.

Stockholder Rights. The holder of Other Stock-Based Awards, except for an Other
Stock-Based Award that is in the form of Restricted Stock, shall have none of
the rights of a stockholder with respect to the Stock subject to such Other
Stock-Based Award until such Stock shall be issued to the holder upon the
settlement of the Other Stock-Based Award. Except as otherwise provided by the
Committee, the holder of Other Stock-Based Awards that is in the form of a
Restricted Stock shall have same rights of a stockholder with respect to the
Stock subject to such Restricted Stock Award, including voting rights and
dividend rights, provided that such dividend rights shall be subject to the
requirements of Section 15.A.

 

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8.

Performance Awards.

 

 

A.

General. A Performance Award shall be subject to performance-based vesting
conditions and other restrictions, based on such factors and occurring over such
period of time as the Committee may determine in its discretion. The Committee
shall determine, in its sole discretion and as provided in the Award Agreement,
the type of underlying Award or Awards subject to the Performance Award,
including an Option, Stock Appreciation Right, Cash-Based Award, or Other
Stock-Based Award. The Committee may provide whether any consideration other
than Services must be received by the Company or any Subsidiary as a condition
precedent to the settlement of a Performance Award.

 

 

B.

Settlement of Performance Award. Following the vesting of a Performance Award,
settlement of the Award and payment to the Participant shall be made in
accordance with the terms of the type of underlying Award subject to the
Performance Award, and may include issuance of Restricted Stock or Restricted
Stock Units under the Plan. If the Performance Award is not by its terms exempt
from the requirements of Code Section 409A, then the applicable Award Agreement
shall contain terms and conditions necessary to avoid adverse tax consequences
specified in Code Section 409A.

 

9.

Recoupment of Award.

 

Any Award granted under the Plan shall be subject to any provisions of: (A)
applicable laws providing for the recoupment or clawback of incentive
compensation; (B) the terms of any Company recoupment, clawback or similar
policy in effect at the time of grant of the Award; and (C) any recoupment,
clawback or similar provisions that may be included in the applicable Award
Agreement.

 

10.

Nontransferability of Awards.

 

Unless otherwise determined by the Committee and expressly set forth in an Award
Agreement, an Award granted under the Plan and all rights thereunder shall, by
its terms, be non-transferable, nonassignable and not subject to encumbrance in
any manner otherwise than by will or the laws of descent and distribution and an
Award may be exercised, if applicable, during the lifetime of the Participant
thereof, only by the Participant or his or her guardian or legal representative.
Notwithstanding the above, the Committee may not provide in an Award Agreement
that an Incentive Stock Option is transferable. Any attempted assignment,
transfer, mortgage, pledge or encumbrance except as herein authorized, shall be
void and of no effect.

 

11.

Tax Withholding.

 

The Committee shall have the right to condition the delivery, vesting and
retention of Stock, cash or other property under an Award upon full satisfaction
by the Participant of all tax withholding requirements with respect to the
Award. The Committee will prescribe such rules for the withholding of federal,
state and local taxes, including social security and Medicare withholding tax,
as it deems necessary. In satisfaction of tax withholding requirements, the
Committee may, but need not, hold back shares of Stock from an Award or permit a
Participant to tender previously owned shares of Stock (but not in excess of the
maximum withholding required by law) or sell any shares of Stock contingently
issued or credited by the Company for the purpose of paying such Award or any
other Award under the Plan to raise the amount necessary to satisfy applicable
withholding requirements.

 

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12.

Adjustments Upon Changes in Capitalization or Corporation Acquisitions.

 

 

A.

Adjustment Upon Changes in Capitalization. Notwithstanding any other provisions
of the Plan, unless otherwise provided in the Award Agreement, the number and
class of shares subject to each outstanding Award and the exercise prices, if
applicable, shall be adjusted, to the same pro rata number of shares and price
as in the original Award Agreement, in the event of changes in the outstanding
Stock by reason of stock dividends, stock splits, reverse stock splits,
recapitalization, mergers, consolidations, statutory share exchange, sale of all
or substantially all assets, split-ups, combinations or exchanges of shares and
the like, and, in the event of any such change in the outstanding Stock, the
aggregate number and class of shares available under the Plan and the maximum
number of shares as to which Awards may be granted to an individual shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive. In the event the Company, a Parent or a Subsidiary enters into a
transaction described in Code Section 424(a) with any other corporation, the
Committee shall, unless otherwise provided in the Award Agreement, grant options
to employees or former employees of such corporation in substitution of options
previously granted to them upon such terms and conditions as shall be necessary
to qualify such grant as a substitution described in Code Section 424(a).

 

 

B.

Effect of a Change in Control. Upon a Change in Control, all then-outstanding
Awards shall be immediately vested and payable in accordance with paragraphs (1)
and (2) below, except as may otherwise be provided in a then-effective written
agreement (including an Award Agreement) between a Participant and the Company.
The immediately preceding sentence shall not apply the extent that a Replacement
Award meeting the requirements of paragraph (3) below is provided to the
Participant to replace an Award subject to Section 12.B(3).

 

 

(1)

Upon a Change in Control, a Participant’s then-outstanding Awards, other than
Options and Stock Appreciation Rights, that are not vested shall become fully
vested and any applicable performance conditions shall be deemed satisfied as if
target performance was achieved, and shall be settled in cash, Stock or a
combination thereof, as determined by the Committee, within thirty (30) days
following such Change in Control (except to the extent that settlement of the
Award must be made pursuant to its original schedule in order to comply with
Code Section 409A).

 

 

(2)

Upon a Change in Control, a Participant’s then-outstanding Options and Stock
Appreciation Rights that are not vested shall immediately become fully vested
and any applicable performance conditions shall be deemed satisfied as if target
performance was achieved, and otherwise treated in accordance with the
applicable Award Agreement. Notwithstanding the immediately preceding the
sentence, the Committee may elect to cancel such outstanding Options or Stock
Appreciation Rights and pay the Participant an amount of cash (less normal
withholding taxes) equal to the excess of (i) the value, as determined by the
Committee, of the consideration (including cash) received by the holders of
Stock for a share of Stock as a result of the Change in Control (or, if the
Company or Stockholders do not receive any consideration as a result of the
Change in Control, the Fair Market Value of the Stock on the day immediately
prior to the Change in Control) over (ii) the exercise price of such Options or
the strike price of such Stock Appreciation Rights, multiplied by the number of
shares of Stock subject to each such Award, in accordance with Code Section 409A
to the extent applicable. No payment shall be made to a Participant for any
Option or Stock Appreciation Right if the exercise price or strike price for
such Option or Stock Appreciation Right, respectively, exceeds the value, as
determined by the Committee, of the consideration (including cash) received by a
holder of a share of Stock upon the Change in Control.

 

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(3)

Upon a Change in Control, a Replacement Award granted to replace the unvested
portion of a then-outstanding Award (the “Replaced Award”) shall meet the
conditions of this Section 12.B(3) if:

 

 

(A)

it is of the same type as the Replaced Award (or, if it is of a different type
as the Replaced Award (such as a deferred cash equivalent award), the Committee,
as constituted immediately prior to the Change in Control, finds such type
acceptable);

 

 

(B)

it has a value at least equal to the Fair Market Value of the Replaced Award;

 

 

(C)

it relates to publicly traded equity securities listed on a U.S. national
securities exchange of the Company or its successor in the Change in Control or
another entity that is affiliated with the Company or its successor following
the Change in Control, except in the case of a Replacement Award granted in the
form of a deferred cash equivalent award;

 

 

(D)

its other terms and conditions are not less favorable to the recipient of the
Replacement Award than the terms and conditions of the Replaced Award (including
the provisions that would apply in the event of a subsequent Change in Control);
and

 

 

(E)

if a Participant incurs an involuntary termination of employment at any time
following the Change in Control, it shall become fully vested and, in the case
of Replacement Awards in the form of (i) an Option or Stock Appreciation Right,
shall be fully exercisable, (ii) a Performance Award, shall be deemed to be
satisfied at target performance and payable upon or within 60 days of such
termination of employment, or (iii) any other Award, shall be payable upon or
within 60 days of such termination of employment. Notwithstanding the foregoing,
with respect to any Replacement Award that is considered nonqualified deferred
compensation subject to Code Section 409A, settlement of such Replacement Award
shall be made pursuant to its original schedule if necessary to comply with Code
Section 409A.

 

The determination of whether the conditions of Section 12.B(3) are satisfied
shall be made by the Committee, as constituted immediately before the Change in
Control, in its sole discretion.

 

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13.

Amendment and Termination.

 

 

A.

Amendment and Termination of the Plan and Awards. Subject to this Section 13 and
Section 14 of the Plan, the Board may at any time amend, suspend or terminate
the Plan, and the Board or Committee may at any time amend, suspend or terminate
any outstanding Award Agreement. Notwithstanding the foregoing, no amendment of
the Plan shall be made without stockholder approval if stockholder approval is
required pursuant to rules promulgated by any stock exchange or quotation system
on which the Stock is listed or quoted or by applicable U.S. state corporate
laws or regulations, or applicable U.S. federal laws or regulations.

 

 

B.

No Repricing of Options and Stock Appreciation Rights. Without the prior
approval of the Company’s stockholders and except as provided for in Section 12,
no Option or Stock Appreciation Right may be (i) amended to reduce the exercise
price; (ii) cancelled in exchange for the grant of any new Option or Stock
Appreciation Right with a lower exercise price; or (iii) cancelled in exchange
for cash, other property or the grant of any new Award at a time when the
exercise price of the Option or Stock Appreciation Right is greater than the
current Fair Market Value of a share of Stock.

 

 

C.

Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events.

 

 

(1)

The Committee may make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 12) affecting
the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent unintended
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan.

 

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(2)

The Committee or its authorized delegate shall retain the discretion to decrease
the amount payable pursuant to a Cash-Based Award below the amount that would
otherwise be payable upon attainment of the applicable performance goal(s) over
a performance period that does not exceed a term of one (1) year, either on a
formula or discretionary basis or any combination, as the Committee or its
authorized delegate determines is appropriate.

 

 

(3)

Any sub-plan may provide that the Committee or its authorized delegate shall
retain the discretion to decrease the amount payable pursuant to a Cash-Based
Award granted under such sub-plan below the amount that would otherwise be
payable upon attainment of the applicable performance goal(s) over a performance
period that does not exceed a term of one (1) year, either on a formula or
discretionary basis or any combination, as the Committee or its authorized
delegate determines is appropriate.

 

 

(4)

The determination of the Committee (or its authorized delegate, if applicable)
as to any adjustments made pursuant to subparagraphs (1), (2) and (3) above
shall be conclusive and binding on Participants under the Plan. By accepting an
Award under the Plan, a Participant agrees to any adjustment to the Award made
pursuant to this Section 13 without further consideration or action.

 

 

D.

Amendment to Conform to Law. Notwithstanding any other provision of the Plan to
the contrary, the Board may amend the Plan and the Board or the Committee may
amend an Award Agreement, to take effect retroactively or otherwise, as deemed
necessary or advisable for the purpose of conforming the Plan or an Award
Agreement to (i) any law relating to plans of this or similar nature, and to the
administrative regulations and rulings promulgated thereunder; (ii) any
applicable exchange requirements; and (iii) any compensation recoupment policy
adopted by the Company. By accepting an Award under the Plan, a Participant
agrees to any amendment made pursuant to this Section 13.D to the Plan and any
Award without further consideration or action.

 

 

E.

Amendment to Avoid Imposition of Tax under Code Section 409A. Without limiting
the generality of the foregoing, to the extent applicable, notwithstanding
anything herein to the contrary, the Plan and Awards issued hereunder shall be
interpreted in accordance with Code Section 409A and Department of Treasury
Regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued after the
Effective Date of the Plan. Notwithstanding any provision of the Plan to the
contrary, in the event that the Committee determines that any amounts payable
hereunder will be taxable to a Participant under Code Section 409A and related
Department of Treasury guidance, prior to payment to such Participant of such
amount, the Company may (i) adopt such amendments to the Plan and Awards and
appropriate policies and procedures, including amendments and policies with
retroactive effect, that the Committee determines necessary or appropriate to
preserve the intended tax treatment of the benefits provided by the Plan and
Awards hereunder and/or (ii) take such other actions as the Committee determines
necessary or appropriate to avoid the imposition of and additional tax under
Code Section 409A. By accepting an Award under the Plan, a Participant agrees to
any amendment made pursuant to this Section 13.E to the Plan and any Award
without further consideration or action.

 

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14.

Awards Previously Granted.

 

Notwithstanding any other provision of the Plan to the contrary, other than
Sections 12 and 13, no termination or amendment of the Plan or an Award
Agreement shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.

 

15.

Dividends and Dividend Equivalents.

 

 

A.

Payment of Dividends on Restricted Stock. With respect to an Award of Restricted
Stock, the Committee may grant or limit the right of a Participant to receive
dividends declared on shares of Stock that are subject to such Award to the
extent the Award is not yet vested. If the Committee grants the right of a
Participant to receive dividends declared on shares subject to an unvested Award
of Restricted Stock, then such dividends shall be subject to the same
performance conditions and service conditions, as applicable, as the underlying
Award. Dividends shall be paid in cash or reinvested in additional shares or
Awards by such formula and at such time and subject to such limitations as may
be determined by the Committee.

 

 

B.

Payment of Dividend Equivalents on Awards Other than Options, Stock Appreciation
Rights and Restricted Stock. Except for Options, Stock Appreciation Rights and
Restricted Stock, the Committee may grant Dividend Equivalents on Restricted
Stock Units or other share equivalents subject to an Award based on the
dividends actually declared and paid on outstanding shares of Stock. The terms
of any Dividend Equivalents will be as set forth in a separate Award Agreement,
including the time and form of payment and whether such Dividend Equivalents
will be credited with interest or deemed to be reinvested in additional
Restricted Stock Units or share equivalents. If the Committee grants the right
of a Participant to receive Dividend Equivalents declared on shares subject to
an unvested Award subject to this Section 15.B, then such Dividend Equivalents
shall be subject to the same performance conditions and service conditions, as
applicable, as the underlying Award.

 

16.

Effect of Termination of Service on Awards.

 

The Committee shall provide in any Award Agreement, or may determine in any
individual case, the circumstances pursuant to which Awards shall be exercised,
vested, paid or forfeited in the event a Participant ceases to provide service
to the Company or any Subsidiary prior to the end of a performance period or
exercise or settlement of such Award. Such provisions shall be determined in the
sole discretion of the Committee, need not be uniform among all Awards, and may
reflect distinctions based on the reasons for termination.

 

18

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17.

Term of Plan.

 

This amendment and restatement of the Plan shall terminate ten (10) years after
the Effective Date and no Award shall be granted hereunder after the expiration
of such ten-year period. Awards outstanding at the termination of the Plan shall
continue in accordance with their terms and shall not be affected by such
termination.

 

18.

Severability.

 

Any word, phrase, clause, sentence or other provision herein which violates or
is prohibited by any applicable law, court decree or public policy shall be
modified as necessary to avoid the violation or prohibition and so as to make
the Plan and any Award Agreement enforceable as fully as possible under
applicable law, and if such cannot be so modified, the same shall be ineffective
to the extent of such violation or prohibition without invalidating or affecting
the remaining provisions herein.

 

19.

Non-Waiver of Rights.

 

The Company’s failure to enforce at any time any of the provisions of the Plan
or any Award Agreement or to require at any time performance by the Participant
of any of the provisions hereof shall in no way be construed to be a waiver of
such provisions or to affect either the validity of the Plan, any Award
Agreement, or any part hereof, or the right of the Company thereafter to enforce
each and every provision in accordance with the terms of the Plan and any Award
Agreement.

 

20.

Assignment.

 

Any Award Agreement shall be freely assignable by the Company and shall inure to
the benefit of, and be binding upon, the Company, its successors and assigns
and/or any other entity which shall succeed to the business presently being
conducted by the Company.

 

21.

No Right To Continued Employment or Other Status.

 

Nothing in the Plan or in any Award granted pursuant to the Plan shall be
considered or construed as creating a contract of employment or any other
relationship for any specified period of time or shall confer on any individual
any right to continue in the employ of the Employer or continue any other
relationship with the Company. The Employer and the Company expressly reserve
the right at any time to dismiss or otherwise terminate its relationship,
whether employment or otherwise, with any Participant free from any liability or
claim under the Plan, except as expressly provided in the applicable Award
Agreement.

 

22.

Choice of Law.

 

The Plan shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to conflicts of law.

 

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23.

Awards to Employees of Non-United States Subsidiaries.

 

The terms of an Award granted to an employee of a non-United States Subsidiary
of the Company shall be governed by the otherwise applicable provisions of the
Plan, unless such provisions are modified by sub-plans or special rules adopted
by the Committee to modify the terms of the Plan as applied to employees of such
non-United States Subsidiary who are residents outside the United States. Such
sub-plans or special rules shall be designed to achieve desired tax or other
objectives in particular jurisdictions outside the United States or achieve
other business objectives in the determination of the Committee. The Committee
may, in its sole discretion, amend the terms of the Plan or Awards with respect
to such Participants in order to conform such terms with the requirements of
local law or to obtain more favorable tax or other treatment for a Participant,
the Company or a Subsidiary.

 

24.

Section 409A.

 

Notwithstanding other provisions of the Plan or any Award Agreements thereunder,
no Award shall be granted, deferred, accelerated, extended, paid out or modified
under the Plan in a manner that would result in the imposition of an additional
tax under Code Section 409A. In the event that it is reasonably determined by
the Committee that, as a result of Code Section 409A, payments in respect of any
Award under the Plan may not be made at the time contemplated by the terms of
the Plan or the relevant Award Agreement, as the case may be, without causing
the Participant holding such Award to be subject to taxation under Code Section
409A, the Company will make such payment on the first day that would not result
in the Participant incurring any tax liability under Code Section 409A; which,
if the Participant is a “specified employee” within the meaning of the Code
Section 409A, shall be the first day following the Six Month Delay beginning on
the date of Participant’s termination of employment. The Company shall use
commercially reasonable efforts to implement the provisions of this Section 24
in good faith; provided that neither the Company, the Committee nor any of the
Company’s employees, Directors or representatives shall have any liability to
any Participant with respect to this Section 24.

 

20