Exhibit 10.1
 
WEGENER CORPORATION
 
2010 INCENTIVE PLAN
 
EFFECTIVE DATE: JANUARY 1, 2010

 
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WEGENER CORPORATION
 
2010 INCENTIVE PLAN
 
EFFECTIVE: JANUARY 1, 2010
 
Table of Contents
 
Section
 
Page
1.
Purpose and Amendment 
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2.
Definitions
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3.
Shares Subject to the Plan
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4.
Grant of Awards and Award Agreements
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5.
Stock Options and Stock Appreciation Rights
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6.
Performance Units
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7.
Restricted Stock
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8.
Deferred Stock
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9.
Certificates for Awards of Stock
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10.
Beneficiary
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11.
Administration of the Plan
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12.
Amendment or Discontinuance
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13.
Adjustments in Event of Change in Common Stock
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14.
Change in Control Event
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15.
Miscellaneous
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WEGENER CORPORATION
2010 INCENTIVE PLAN
EFFECTIVE DATE: JANUARY 1, 2010
 
1.
Purpose.

 
The Wegener Corporation 2010 Incentive Plan has been adopted for the purpose of
attracting and retaining persons of ability as directors, employees or
consultants or advisors of Wegener Corporation and its subsidiaries, motivate
and reward good performance, encourage such employees to continue to exert their
best efforts on behalf of the Company and its subsidiaries and provide
opportunities for stock ownership by such employees in order to increase their
proprietary interest in the Company by providing incentive awards to Key
Employees (as hereinafter defined), whose responsibilities and decisions
directly affect the performance of the Company and its subsidiaries. Such
incentive awards may, in the discretion of the Board or Committee, consist of
common stock of the Company (subject to such restrictions as the Board or
Committee may determine or as provided herein), performance units or stock
appreciation rights payable in such stock or cash, or incentive or nonqualified
stock options to purchase such stock, or any combination of the foregoing, all
as the Board or Committee may determine.
 
2.
Definitions.

 
When used herein, the following terms shall have the following meanings:

“Award” means an award granted to any Eligible Participant or Key Employee in
accordance with the provisions of the Plan in the form of Options, SARS,
Restricted Stock, Deferred Stock or Performance Units, or any combination of the
foregoing.

“Beneficiary” means the beneficiary or beneficiaries designated pursuant to
Section 10 to receive the amount, if any, payable under the Plan upon the death
of an Eligible Participant or Key Employee.

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

“Change in Control Event” shall be as defined in Code §409A (as such Section
shall be amended and further explained from time to time), which generally
provides as set forth below.
 
(a) Change in Ownership. The acquisition by any individual, entity or group (a
“Person”) of ownership of stock of the Company that, together with stock held by
such Person, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company. However, if any Person is considered
to own more than 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 is
not considered to cause a change in ownership of the Company (or to cause a
change in the effective control of the Company). An increase in the percentage
of stock owned by any one Person 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 paragraph. This paragraph 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. (i) The acquisition by any individual, entity
or group during the 12-month period ending on the date of the most recent
acquisition by such Person, of ownership of stock of the Company possessing 35%
or more of the total voting power of the stock of the Company; or (ii) the
replacement of a majority of members of the Board during any 12-month period by
directors whose appointment or election is not endorsed by two-thirds ( 2/3) of
the members of the Board prior to the date of the appointment or election.
 
A change in effective control also may occur in any transaction in which either
of the two corporations involved in the transaction has a “Change in Ownership”
or “Change in Ownership of a Substantial Portion of the Company’s Assets.” If
any one Person is considered to effectively control the Company, the acquisition
of additional control of the Company by the same Person is not considered to
cause a change in the effective control of the Company (or to cause a “Change in
Ownership” of the Company within the meaning of this Section).

 
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(c) Change in Ownership of a Substantial Portion of Assets. The acquisition by
any Person during the 12-month period ending on the date of the most recent
acquisition by such Person, of assets from the Company that have a total gross
fair market value equal to or more than 40% of the total gross fair market value
of all of the assets of the Company immediately prior to such acquisition(s).
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.
 
In the event of any conflict between the summary contained in this Section and
the definition of “Change in Control” as defined in Code Section 409A, Code
Section 409A shall govern. No Change in Control Event shall be deemed to have
occurred in the event of a transfer to an entity that is controlled by the
shareholders of the transferring corporation immediately after the transfer,
within the meaning of IRS Notice 2005-1, Q&A-14(b).
 
“Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended (All citations to sections of the Code are to such sections as they may
from time to time be amended or renumbered).
 
“Committee” means the Committee, if any, appointed by the Board pursuant to
Section 11. If no Committee is appointed by the Board, the Board shall function
as and in place of the Committee.
 
“Company” means Wegener Corporation and its successors and assigns.
 
“Deferred Stock” means Stock credited to an Eligible Participant or Key Employee
under the Plan subject to the requirements of Section 8 and such other
restrictions as the Committee deems appropriate or desirable.
 
“Eligible Participant(s)” shall mean directors, officers, Key Employees of the
Company and its subsidiaries, consultants, advisors and other persons who may
not otherwise be eligible to receive qualified incentive stock options under
Section 422 of the Code.
 
“Fair Market Value” shall mean:
 
(a) if the Stock is actively traded on any national securities exchange, the
closing price at which sales of Stock shall have been sold on the most recent
trading date immediately prior to the date of determination, as reported by any
such exchange selected by the Committee on which the shares of Stock are then
traded; or
 
(b) if the shares of Stock are not actively traded on any such national
securities exchange, the average of the closing high “bid” and low “asked”
prices for the shares of Stock on the over-the-counter market on the most recent
trading date immediately prior to the determination date as determined by the
Committee and reported by such system; or
 
 (c) if there are no “bid” and “asked” prices available or if the shares of
Stock are not traded on the over-the-counter market, the fair market value of a
share of Stock as determined in good faith by the Committee in compliance with
Code Section 409A taking into account such relevant facts and circumstances
deemed by the Committee to be material to the value of the Stock in the hands of
the Eligible Participant or Key Employee, which may include opinions or reports
prepared by independent experts; provided, however, that at the time of grant of
any Award other than an incentive stock option, the Committee, in its sole
discretion, may elect to, and if it so elects, shall irrevocably specify its
commitment to, determine Fair Market Value for all purposes under the Plan with
respect to such Award, based on the “average selling price” of the Stock, within
the meaning of Code Section 409A, as of the date of determination and a period
of up to nine trading days immediately preceding such date, which period must be
specified in the Award.
 
Notwithstanding the above, Fair Market Value of a share of Stock shall be
determined in accordance with all applicable laws, including in the case of
incentive stock options the valuation principles described in Code Section 422
and in all cases in accordance with Code Section 409A.

 
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“Key Employee” means an officer or other key employee of any Participating
Company who, in the judgment of the Committee, is responsible for or contributes
to the management, growth or profitability of the business of any Participating
Company.
 
 “Option” means an option to purchase Stock, including Restricted Stock but not
Deferred Stock, if the Committee so determines, subject to the applicable
provisions of Section 5 and awarded in accordance with the terms of the Plan and
which may be an incentive stock option qualified under Section 422 of the Code
or a nonqualified stock option.
 
“Participating Company” means the Company or any subsidiary or other affiliate
of the Company; provided, however, for incentive stock options only,
“Participating Company” means the Company or any corporation which at the time
such option is granted under the Plan qualifies as a subsidiary of the Company
under the definition of “subsidiary corporation” contained in Section 425(f) of
the Code; and provided further, for nonqualified stock options only,
“Participating Company” means the Company or any other corporation if the
Company is an “eligible issuer of service recipient stock” within the meaning of
Treasury Regulation Section 1.409A-1(b)(5)(iii)(E) with respect to the Eligible
Participants and/or Key Employees of such corporation.
 
“Non-Employee Director” shall mean each such person who is a member of the Board
of Directors of the Company but who is not a full-time employee of the Company.
 
“Performance Unit” means a performance unit subject to the requirements of
Section 6 and awarded in accordance with the terms of the Plan.
 
“Plan” means the Wegener Corporation 2010 Incentive Plan, as the same may be
amended, administered or interpreted from time to time.
 
“Restricted Stock” means Stock delivered under the Plan subject to the
requirements of Section 7 and such other restrictions as the Committee deems
appropriate or desirable; provided, however, in all events, restrictions placed
on such Restricted Stock shall result in the Restricted Stock being
substantially nonvested within the meaning of Treasury Regulation
Section 1.83-3(b).

 “SAR” means a stock appreciation right subject to the appropriate requirements
under Section 5 and awarded in accordance with the terms of the Plan.
 
“Stock” means the $.01 par value common stock of the Company.
 
“Total Disability” means an Eligible Participant or Key Employee is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering
employees of the Company.
 
3.
Shares Subject to the Plan.

 
The aggregate number of shares of Stock which may be awarded under the Plan or
subject to purchase by exercising an Option shall not exceed one million two
hundred fifty thousand (1,250,000) shares. The maximum total number of shares of
Restricted Stock, Deferred Stock and/or Performance Units that may be granted at
full value shall not exceed five hundred thousand (500,000) shares. Such shares
shall be made available from authorized and unissued shares. No repurchased
shares may be issued or delivered under the Plan. The Committee may, in its
discretion, decide to award other securities issued by the Company that are
convertible into Stock or make such other securities subject to purchase by an
Option, in which event the maximum number of shares of Stock into which such
other securities may be converted shall be used in applying the aggregate share
limit under this Section 3 and all provisions of the Plan relating to Stock
shall apply with full force and effect with respect to such convertible
securities. If any shares of Stock awarded or subject to purchase by exercising
an Option under the Plan are not delivered or are reacquired by the Company, for
reasons including, but not limited to, a forfeiture of Restricted Stock or
Deferred Stock or termination, expiration or a cancellation with the consent of
a participant of an Option, SAR or a Performance Unit, such shares of Stock
shall again become available for award under the Plan; provided, however, that
if the Option price of any Option granted under the Plan is satisfied by
tendering shares of the Company’s Stock to the Company (by either actual
delivery or by attestation) or if shares of the Company’s Stock are tendered or
are withheld upon the exercise of the Option to satisfy any applicable tax
withholding, such tendered or withheld Stock will not be available for
re-issuance under the Plan.

 
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4.
Grant of Awards and Award Agreements.

 
(a) Subject to the provisions of the Plan and compliance with Code Section 409A,
the Committee shall, (i) determine and designate from time to time those
Eligible Participants and Key Employees or groups of Eligible Participants and
Key Employees to whom Awards are to be granted; (ii) determine the form or forms
of Award to be granted to any Eligible Participant or Key Employee;
(iii) determine the amount or number of shares of Stock, including Restricted
Stock or Deferred Stock if the Committee so determines, subject to each Award;
(iv) determine the terms and conditions of each Award; (v) determine whether and
to what extent Eligible Participants and Key Employees shall be allowed or
required to defer receipt of any Awards or other amounts payable under the Plan
to the occurrence of a specified date or event; provided, however, that no Award
shall be granted after the expiration of ten years from the effective date of
the Plan.
 
(b) Each Award granted under the Plan shall be evidenced by a written Award
Agreement, in a form approved by the Committee. Such agreement shall be subject
to and incorporate the express terms and conditions, if any, required under the
Plan or as required by the Committee for the form of Award granted and such
other terms and conditions as the Committee may specify.

5.
Stock Options and Stock Appreciation Rights.

 
(a) With respect to Options and SARS, the Committee shall (i) authorize the
grant of incentive stock options, nonqualified stock options, SARs or a
combination of incentive stock options, nonqualified stock options and SARS;
(ii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of an SAR;
(iii) determine whether such Stock shall be Restricted Stock (but not Deferred
Stock), in the Committee’s discretion; (iv) determine the time or times when and
the manner in which each Option shall be exercisable and the duration of the
exercise period; and (v) determine whether or not all or part of each Option may
be canceled by the exercise of an SAR; provided, however, that (A) no Option
shall be granted after the expiration of ten years from the effective date of
the Plan and (B) the aggregate Fair Market Value (determined as of the date an
Option is granted) of the Stock (disregarding any restrictions in the case of
Restricted Stock) for which incentive stock options granted to any Key Employee
under this Plan may first become exercisable in any calendar year shall not
exceed $100,000. The Committee’s determinations made pursuant to (ii) through
(v) of this paragraph shall be set forth in the Award Agreement granting any
Option.
 
 (b) The exercise period for a nonqualified stock option shall not exceed ten
years and one day from the date of grant, and the exercise period for an
incentive stock option or SAR, including any extension which the Committee may
from time to time decide to grant, shall not exceed ten years from the date of
grant; provided, however, that, in the case of an incentive stock option granted
to a Key Employee who, at the time of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company (a “Ten Percent Stockholder”), such period, including extensions, shall
not exceed five years from the date of grant.
 
(c) The Option or SAR exercise price per share shall be determined by the
Committee at the time any Option is granted and set forth in the Award Agreement
granting such Option and shall be not less than (i) in the case of incentive
stock options and any tandem SARs, 100% of the Fair Market Value, or in the case
of an incentive stock option and any tandem SARs granted to a Ten Percent
Stockholder, 110% of the Fair Market Value, on the date the Option and any
tandem SARs are granted; or (ii) in the case of any other Options or SARS, at
least 100% of Fair Market Value, disregarding any restrictions in the case of
Restricted Stock, on the date the Option or SAR is granted.

 
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(d) No part of any Option or SAR may be exercised until (i) the Eligible
Participant or Key Employee who has been granted the Award shall have remained
in the employ or service of a Participating Company for such period, if any,
after the date on which the Option or SAR is granted, as the Committee may
specify, or (ii) achievement of such performance or other criteria, if any, by
the Eligible Participant or Key Employee, the Company or any subsidiary,
affiliate or division of the Company, as the Committee may specify, and the
Committee may further require exercisability in installments.
 
(e) Subject to Section 10(c), except as otherwise provided in the Plan, the
purchase price of the shares as to which an Option shall be exercised shall be
paid to the Company at the time of exercise in the form specified in the Award
Agreement covering such Option, which may provide for payment either in cash or
in such other consideration as the Committee deems appropriate, including Stock,
or, with respect to nonqualified options, Restricted Stock (but not Deferred
Stock), already owned by the optionee, having a total Fair Market Value equal to
the purchase price, or a combination of cash and such other consideration having
a total Fair Market Value equal to the purchase price; provided, however, that
if payment of the exercise price is made in whole or in part in the form of
Restricted Stock, the Stock received upon the exercise of the Option shall be
Restricted Stock, as the case may be, at least with respect to the same number
of shares and subject to the same restrictions or other limitations as the
Restricted Stock paid on the exercise of the Option.
 
 (f) (i) If a Key Employee who has been granted an Option or SAR dies (A) while
an employee of any Participating Company, or (B) within three months after
termination of his or her employment because of his or her Total Disability, his
or her Options or SARs may be exercised, to the extent that the Key Employee
shall have been entitled to do so on the date of his or her death or such
termination of employment, by the person or persons to whom the rights under the
option or SAR pass by will, or if no such person has such right, by his or her
executors or administrators, at any time, or from time to time, within 12 months
after the date of death or within such other period, and subject to such terms
and conditions as the Committee may specify, but not later than the expiration
date specified in Section 5(b) above.
 
(ii) If the Key Employee’s employment by any Participating Company terminates
because of his or her Total Disability and such participant has not died within
the following three months, he or she may exercise his or her Options or SARS,
to the extent that he or she shall have been entitled to do so at the date of
the termination of his or her employment, at any time, or from time to time,
within 12 months after the date of the termination of his or her employment
within such other period, and subject to such terms and conditions as the
Committee may specify, but not later than the expiration date specified in
Section 5(b) above.
 
(iii) If the Key Employee’s employment terminates for any other reason, he or
she may exercise his or her Options or SARs to the extent that he or she shall
have been entitled to do so at the date of the termination of his or her
employment, at any time, or from time to time, within three months after the
date of the termination of his or her employment or within such other period,
and subject to such terms and conditions as the Committee may specify, but not
later than the expiration date specified in Section 5(b) above.
 
 (g) No Option or SAR granted under the Plan shall be transferable other than by
will or by the laws of descent and distribution. During the lifetime of the
optionee, an Option shall be exercisable only by him or her.
 
(h) With respect to an incentive stock option, the Committee shall specify such
terms and provisions as the Committee may determine to be necessary or desirable
in order to qualify such Option as an incentive stock option within the meaning
of Section 422 of the Code.
 
(i) Upon exercise of an SAR, the Eligible Participant or Key Employee shall be
entitled, subject to such terms and conditions as the Committee may specify, to
receive upon exercise thereof the excess of (i) the Fair Market Value of a
specified number of shares of Stock at the time of exercise, as determined by
the Committee, over (ii) a specified amount set forth in the Award Agreement
granting such SAR which shall not, subject to Section 5(j), be less than the
Fair Market Value of such specified number of shares of Stock at the time the
SAR is granted. Upon exercise of an SAR, payment of such excess shall be made as
the Committee shall specify in the Award Agreement at the time of the grant of
the SAR (A) in cash, (B) through the issuance or transfer of whole shares of
Stock, including Restricted Stock (but not Deferred Stock), with a Fair Market
Value, disregarding any restrictions in the case of Restricted Stock, at such
time equal to any such excess, or (C) a combination of cash and shares of Stock
with a combined Fair Market Value at such time equal to any such excess, all as
determined by the Committee; provided, however, a fractional share of Stock
shall be paid in cash equal to the Fair Market Value of the fractional share of
Stock, disregarding any restrictions in the case of Restricted Stock, at such
time. If the full amount of such value is not paid in Stock, then the shares of
Stock representing such portion of the value of the SAR not paid in Stock shall
again become available for award under the Plan.

 
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 (j) If the Award granted to an Eligible Participant or Key Employee allows such
person to elect to cancel all or any portion of an unexercised option by
exercising a related SAR, then the Option price per share of Stock shall be used
as the specified price in Section 5(i), to determine the value of the SAR upon
such exercise, and, in the event of the exercise of such SAR, the Company’s
obligation in respect of such Option or such portion thereof will be discharged
by payment of the SAR so exercised. Any shares of Stock reserved but not
required for such exercise shall be cancelled and shall not be added back into
the total shares available for Awards under the Plan. Any such SAR shall be
transferable only by will or by the laws of descent and distribution. During the
lifetime of the optionee, such SAR shall be exercisable only by him or her.

6.
Performance Units.

 
(a) Upon the Award of a Performance Unit to an Eligible Participant or a Key
Employee, the Committee shall determine a performance period (the “Performance
Period”) of one or more years and shall determine the performance objectives for
such Award of a Performance Unit. Performance objectives may vary from Eligible
Participant/Key Employee to Eligible Participant/Key Employee and shall be based
upon such performance criteria or combination of factors as the Committee may
deem appropriate, including, but not limited to, minimum earnings per share,
return on equity or performance by a subsidiary or division of the Company;
provided, however, in all events such performance criteria shall constitute a
substantial risk of forfeiture within the meaning of Code Section 409A.
Performance Periods may overlap and Eligible Participants and/or Key Employees
may participate simultaneously with respect to Performance Units for which
different Performance Periods are prescribed. The applicable Performance Period
and performance objectives for such Award shall be specified in the written
Award Agreement granting such Performance Unit.
 
(b) Upon the Award of a Performance Unit to an Eligible Participant or a Key
Employee at the beginning of a Performance Period, the Committee shall determine
for each Eligible Participant or Key Employee or group of Eligible Participants
and/or Key Employees eligible for Performance Units with respect to that
Performance Period the range of dollar values, if any, which may be fixed or may
vary in accordance with such performance or other criteria specified by the
Committee, which shall be paid to an Eligible Participant or Key Employee with
respect to such Performance Unit if the relevant measure of Company performance
for the Performance Period is met. Such range of dollar values shall be set
forth in the Award Agreement granting such Performance Unit.
 
 (c) If during the course of a Performance Period there shall occur a
significant event or events (a “Significant Event”) as determined by the
Committee, including, but not limited to, a reorganization of the Company, which
the Committee expects to have a substantial effect on a performance objective
during such Performance Period, the Committee may revise such objective;
provided, however, in all events such revised objective shall constitute a
substantial risk of forfeiture within the meaning of Code Section 409A.
 
(d) If an Eligible Participant or Key Employee terminates service with all
Participating Companies during a Performance Period because of death, Total
Disability, retirement on or after age 65, or at an earlier age with the consent
of the Company, or a Significant Event, as determined by the Committee, that
Eligible Participant or Key Employee shall be entitled, at the end of such
Performance Period, to payment in settlement of each Performance Unit awarded to
such Eligible Participant or Key Employee for such Performance Period (i) based
upon the performance objectives satisfied at the end of such Performance Period
and (ii) prorated for the portion of the Performance Period during which the
Eligible Participant or Key Employee was employed or retained by any
Participating Company. If an Eligible Participant or Key Employee terminates
service with all Participating Companies during a Performance Period for any
other reason, such Eligible Participant or Key Employee shall not be entitled to
any payment with respect to that Performance Period unless the Committee shall
otherwise provide at the time of the Award of such Eligible Participant’s or Key
Employee’s Performance Unit for such Performance Period.

 
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 (e) Each Performance Unit may be paid as specified in the Award Agreement
granting such Performance Unit, which may provide for payment (i) all in cash,
(ii) in Stock, not including Restricted Stock or Deferred Stock, (together with
any cash representing fractional shares of Stock,) with a combined Fair Market
Value at such time equal to the dollar value of such Performance Unit except
that any fractional share of Stock payable shall be paid in cash equal to the
Fair Market Value of the fractional Share of Stock, or (iii) a combination of
Stock and cash, and either as a lump sum payment or in annual installments, each
commencing as soon as practicable after the end of the relevant Performance
Period. If and to the extent the full value of a Performance Unit is not paid in
Stock, then the shares of Stock representing the portion of the value of the
Performance Unit not paid in Stock shall again become available for award under
the Plan.
 
7.
Restricted Stock.

 
(a) Restricted Stock may be received by an Eligible Participant or Key Employee
either as an Award or, if the Award Agreement granting an Option or SAR so
specifies, as the result of an exercise of an Option or SAR. Restricted Stock
shall be subject to a restriction period (after which restrictions shall lapse)
which shall mean a period commencing on the date the Award is granted and ending
on such date or upon the achievement of such performance or other criteria as
the Committee shall determine (the “Restriction Period”). The Committee may
provide for the lapse of restrictions in installments where deemed appropriate.
 
(b) Except as otherwise provided in this Section 7, no shares of Restricted
Stock received by an Eligible Participant or Key Employee shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of during
the Restriction Period; provided, however, the Restriction Period for any
recipient of Restricted Stock shall expire and all restrictions on shares of
Restricted Stock shall lapse upon the recipient’s death, Total Disability,
retirement on or after age 65 or an earlier age specified in the Award Agreement
granting such Restricted Stock.
 
(c) Except as otherwise provided in Section 7(b) above, if an Eligible
Participant or Key Employee terminates employment or service with all
Participating Companies for any reason before the expiration of the Restriction
Period, all shares of Restricted Stock still subject to restriction shall,
unless the Committee otherwise determines, be forfeited by the recipient and
shall be reacquired by the Company, and, in the case of Restricted Stock
purchased through the exercise of an Option, the Company shall refund the
purchase price paid on the exercise of the Option. Upon such forfeiture, such
forfeited shares of Restricted Stock shall again become available for award
under the Plan.
 
(d) The Committee may require, under such terms and conditions as it deems
appropriate or desirable, that the certificates for Restricted Stock delivered
under the Plan be held in custody by a bank or other institution, or that the
Company may itself hold such shares in custody until the Restriction Period
expires or until restrictions thereon otherwise lapse, and may require, as a
condition of any receipt of Restricted Stock, that the recipient shall have
delivered a stock power endorsed in blank relating to the Restricted Stock.
 
(e) Nothing in this Section 7 shall preclude a recipient of Restricted Stock
from exchanging any shares of Restricted Stock subject to the restrictions
contained herein for any other shares of Stock that are similarly restricted.
 
8.
Deferred Stock.

 
(a) Deferred Stock may be credited to an Eligible Participant or Key Employee as
an Award. Deferred Stock shall be subject to a deferral period set forth in the
Award Agreement granting such Deferred Stock, which period shall commence on the
date the Award is granted and end on such date or upon the achievement of such
performance or other criteria as the Committee shall determine (the “Deferral
Period”); provided, however, in all events such performance or other criteria
shall constitute a substantial risk of forfeiture within the meaning of Code
Section 409A. The Committee may provide in the Award Agreement at the time of
the Award of Deferred Stock for the expiration of the Deferral Period in
installments where deemed appropriate.

 
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 (b) Except as otherwise provided in this Section 8, no Deferred Stock awarded
hereunder shall be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of during the Deferral Period; provided, however, the
Deferral Period shall expire upon the recipient’s death, Total Disability,
retirement on or after age 65 or an earlier age specified in the Award Agreement
at the time the Deferred Stock is awarded or on a date or dates that are
nondiscretionary and objectively determinable that is/are set forth in the Award
Agreement at the time the Deferred Stock is Awarded.
 
(c) At the expiration of the Deferral Period, the recipient of Deferred Stock
shall be entitled to receive a certificate pursuant to Section 9 for the number
of shares of Stock equal to the number of shares of Deferred Stock credited on
his or her behalf.
 
(d) Except as otherwise provided in Section 8(b), if an Eligible Participant or
Key Employee terminates employment or service with all Participating Companies
for any reason before the expiration of the Deferral Period, all shares of
Deferred Stock shall, unless the Committee otherwise determines, be forfeited by
the Key Employee or Eligible Participant. Upon such forfeiture, such forfeited
shares of Deferred Stock shall again become available for award under the Plan.
 
9.
Certificates for Awards of Stock; Uncertificated Shares.

 
(a) Subject to Section 7(d), each Eligible Participant or Key Employee entitled
to receive shares of Stock under the Plan shall be issued a certificate for such
shares. Such certificate shall be registered in the name of the Eligible
Participant or Key Employee and shall bear an appropriate legend reciting the
terms, conditions and restrictions, if any, applicable to such shares and shall
be subject to appropriate stop-transfer orders.
 
(b) The Company shall not be required to issue or deliver any certificates for
shares of Stock prior to (i) the listing of such shares on any stock exchange or
quotation system on which the Stock may then be listed and (ii) the completion
of any registration or qualification of such shares under any Federal or state
law, or any ruling or regulation of any government body which the Company shall,
in its sole discretion, determine to be necessary or advisable.
 
(c) All certificates for shares of Stock delivered under the Plan shall also be
subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange or quotation system upon
which the Stock is then listed and any applicable Federal or state securities
laws; and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. The foregoing
provisions of this Section 9(c) shall not be effective if and to the extent that
the shares of Stock delivered under the Plan are covered by an effective and
current registration statement under the Securities Act of 1933, or if and so
long as the Committee determines that application of such provisions is no
longer required or desirable. In making such determination, the Committee may
rely upon an opinion of counsel for the Company.
 
(d) Except for the restrictions on Restricted Stock or Deferred Stock under
Sections 7 and 8, each Eligible Participant or Key Employee who receives an
Award of Stock shall have all of the rights of a stockholder with respect to
such Stock, including the right to vote the Stock and receive dividends and
other distributions; provided, however, no Eligible Participant or Key Employee
awarded an Option, an SAR, Performance Unit or Deferred Stock shall have any
right as a stockholder with respect to any shares subject to such Award prior to
the date of issuance to him or her of a certificate or certificates for such
shares.
 
 (e) Notwithstanding anything in this Plan to the contrary, the Company may, in
its sole discretion, issue shares of Stock or Restricted Stock upon the grant,
exercise, vesting or settlement of an Award pursuant to the direct registration
system, and, in lieu of the issuance of certificated shares, may issue
uncertificated shares, to the account of the Eligible Participant or Key
Employee. Any prior references in this Section 9 to share certificates shall, in
such event, be deemed to refer to uncertificated shares.

 
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10.
Beneficiary.

 
(a) Each Eligible Participant or Key Employee, as the case may be, shall file
with the Committee a written designation, signed by the Eligible Participant or
Key Employee, of one or more persons as the Beneficiary who shall be entitled to
receive the Award, if any, payable under the Plan upon his or her death, and the
designation may name one or more persons as contingent Beneficiaries. An
Eligible Participant or Key Employee may from time to time revoke or change his
or her Beneficiary designation without the consent of any prior Beneficiary by
filing a new designation with the Committee. The last such designation received
by the Committee shall be controlling; provided, however, that no designation,
or change or revocation thereof, shall be effective unless received by the
Committee prior to the Eligible Participant’s or Key Employee’s death, and in no
event shall it be effective as of a date prior to such receipt. Any such
designation, or revocation or change of such designation, shall be in such form
and manner as the Committee shall determine.
 
 (b) If no such Beneficiary designation is in effect at the time of an Eligible
Participant’s or Key Employee’s death, or if no designated Beneficiary survives
the Eligible Participant or Key Employee or if such Beneficiary is not located
by the Committee within one year of the death of the Eligible Participant or Key
Employee or if such designation conflicts with law, such person’s estate shall
be entitled to receive the Award, if any, payable under the Plan upon his or her
death. If the Committee is in doubt as to the right of any person to receive
such Award, the Company may retain such Award, without liability for any
interest thereon, until the Committee determines the rights thereto, or the
Company may pay such Award into any court of appropriate jurisdiction and such
payment shall be a complete discharge of the liability of the Company therefore.
 
(c) Wherever in this Plan the Committee is directed or authorized to pay an
Award to an estate of a deceased participant, the Committee shall pay such Award
to the personal representative of such estate, if any has qualified within 12
months of death, and if not, then to the persons who would be entitled to
receive the Award under the laws of descent and distribution of the State of
Georgia in effect at the date of death of the participant if he or she had died
intestate owning such property in fee simple. The determination by the Committee
shall be final and the Committee shall be fully protected in paying the Award to
the person or persons determined by the Committee in good faith to be entitled
thereto irrespective of whether such payments are made to the person or persons
who are in fact entitled to receive such Award.

11.
Administration of the Plan.

 
(a) The Plan shall be administered by a Committee composed of two or more
persons, as appointed by the Board and serving at the Board’s pleasure, but
unless and until the Committee is actually appointed by the Board, the Board
shall function as and in place of the Committee. Each member of the Committee
shall be a “Non-Employee Director” within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 or successor rule or regulation.
 
 (b) All decisions, determinations or actions of the Committee made or taken
pursuant to grants of authority under the Plan shall be made or taken in the
sole discretion of the Committee and shall be final, conclusive and binding on
all persons for all purposes.
 
(c) The Committee shall have full power, discretion and authority to interpret,
construe, act and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be
final, conclusive and binding on all persons for all purposes.
 
(d) The Committee’s decisions and determinations under the Plan need not be
uniform and may be made selectively among participants in the Plan, whether or
not such participants are similarly situated.
 
(e) The Committee shall keep minutes of its actions under the Plan. The act of a
majority of the members present at a meeting duly called and held shall be the
act of the Committee. Any decision or determination reduced to writing and
signed by all members of the Committee shall be fully as effective as if made by
unanimous vote at a meeting duly called and held.

 
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(f) The Committee may employ such legal counsel, including, without limitation,
independent legal counsel and counsel regularly employed by the Company,
consultants and agents as the Committee may deem appropriate for the
administration of the Plan and may rely upon any opinion received from any such
counsel or consultant and any computations received from any such consultant or
agent. All expenses incurred by the Committee in interpreting and administering
the Plan, including, without limitation, meeting fees and expenses and
professional fees, shall be paid by the Company.
 
(g) No member or former member of the Committee or the Board shall be liable for
any action or determination made in good faith with respect to the Plan or any
Award granted under it. Each member or former member of the Committee or the
Board shall be indemnified and held harmless by the Company against all costs or
expenses (including counsel fees) or liabilities (including any sum paid in
settlement of a claim with the approval of the Board) arising out of any act or
omission to act in connection with the Plan unless arising out of such member’s
own fraud or bad faith. The Company shall pay any member or former member of the
Committee or the Board who is entitled to indemnification under this section the
expenses (including attorney’s fees) incurred in defending any such action taken
against him or her in advance of its final disposition (“hereinafter an
“Advancement of Expenses”); provided, however, that, if the Delaware General
Corporation Law requires, an Advancement of Expenses to any current Committee or
Board member shall be paid only upon receipt by the Company of an undertaking,
by or on behalf of such person, to repay such amounts if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such person is not entitled to be indemnified for such expenses
pursuant to this section. Such indemnification shall be in addition to any
rights of indemnification the members or former members may have as Directors or
under the Bylaws of the Company.
 
12.
Amendment or Discontinuance.

 
The Board may at any time amend or terminate the Plan. The Plan may also be
amended by the Committee, provided that all such amendments shall be reported to
the Board. No amendment shall, without being approved by the affirmative vote of
holders of a majority of the shares voted on such amendment at a meeting of the
stockholders at which a quorum is present, (i) alter the group of persons
eligible for qualified incentive stock options under the Plan, or (ii) increase
the maximum number of shares of Stock which are available for Awards under the
Plan. 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 SARs or cancel outstanding Options or SARs in exchange
for cash, other awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SARs without shareholder
approval. No amendment or termination shall retroactively impair the rights of
any person with respect to an Award. On or after the occurrence of a Change in
Control Event, the Plan may not be amended or terminated until all payments
required by Section 14 are made. All such amendments shall be made in compliance
with Code Section 409A.
 
13.
Adjustments in Event of Change in Common Stock.

 
Subject to compliance with Code Section 409A, in the event of any
recapitalization, reclassification, split-up or consolidation of shares of
Stock, merger or consolidation of the Company or sale by the Company of all or a
substantial portion of its assets, or other event which could distort the
implementation of the Plan or the realization of its objectives, the Committee
may make such appropriate adjustments in the Stock subject to Awards, including
Stock subject to purchase by an Option, or the terms, conditions or restrictions
on Stock or Awards as the Committee deems equitable; provided, however, that no
such adjustments shall be made on or after the occurrence of a Change in Control
Event without the affected participant’s consent.
 
14.
Change in Control Event.

 
Notwithstanding anything else herein to the contrary, the Committee may in its
discretion take any of the following actions with respect to the occurrence of a
Change in Control Event:

 
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(a) All or any portion of any Option or SAR that has not expired and has not
otherwise been exercised shall be cashed out in a lump sum cash payment equal to
the excess, if any, of the Fair Market Value determined on the date of the
Change in Control Event of the shares of Stock, including Restricted Stock,
subject to the Option or SAR that is to be cashed out over the exercise price
for such shares subject to the Option or SAR as specified in the respective
Award Agreement.
 
(b) The Performance Period applicable to any Performance Unit shall end and the
Company shall pay the participant in full settlement of such participant’s
Performance Unit a lump sum amount in cash equal to the dollar value of such
participant’s Performance Unit; provided, however, if the Committee elects to so
provide, the Committee must so specify in the Award Agreement awarding the
Performance Unit at the time of grant.
 
(c) All Restriction Periods applicable to any outstanding Restricted Stock shall
end and the Company shall pay the holder of such Restricted Stock a lump sum
amount in cash equal to the Current Market Value of the Restricted Stock held
by, or on behalf of, the participant in exchange for such Restricted Stock.
 
(d) All Deferral Periods applicable to any Deferred Stock credited to a
participant shall end and the Company shall pay to such participant an amount in
cash equal to the Current Market Value of the number of shares of Deferred Stock
credited to such participant in full settlement of such Deferred Stock;
provided, however, if the Committee elects to so provide, the Committee must so
specify in the Award Agreement awarding the Deferred Stock at the time of grant.
 
 (e) For purposes of this Section 14, “Current Market Value” means the highest
Closing Price (defined below) during the period (the “Reference Period”)
commencing 30 days prior to the Change in Control Event and ending 30 days after
the Change in Control Event; provided, that if the Change in Control Event
occurs as a result of a tender offer or exchange offer, or a merger, purchase of
assets or stock or other transaction approved by stockholders of the Company,
Current Market Value shall mean the higher of (i) the highest Closing Price
during the Reference Period or (ii) the highest price paid per share pursuant to
such tender offer, exchange offer or transaction. The “Closing Price” on any day
during the Reference Period means: (i) if the Stock is actively traded on any
national securities exchange, the closing price at which sales of Stock shall
have been sold on the most recent trading date immediately prior to the date of
determination, as reported by any such exchange selected by the Committee on
which the shares of Stock are then traded; or (ii) if the shares of Stock are
not actively traded on any such exchange, the average of the closing high “bid”
and low “asked” prices for the shares of Stock on the over-the-counter market on
the most recent trading date immediately prior to the determination date as
determined by the Committee and reported by such system; or (iii) if there are
no “bid” and “asked” prices available or if the shares of Stock are not traded
on the over-the-counter market, the fair market value of a share of Stock as
determined in good faith by the Committee in compliance with Code Section 409A
taking into account such relevant facts and circumstances deemed by the
Committee to be material to the value of the Stock in the hands of the Eligible
Participant or Key Employee, which may include opinions or reports prepared by
independent experts.
 
(f) Any payment arising pursuant to this Section 14 shall be made as soon as
practicable after the occurrence of a Change in Control Event, but in no event
later than the close of the calendar year during which the Change in Control
Event occurs.
 
15.
Miscellaneous.

 
(a) Nothing in this Plan or any Award granted hereunder shall confer upon any
employee any right to continue in the employ of any Participating Company or
interfere in any way with the right of any Participating Company to terminate
his or her employment at any time.
 
(b) No Award payable under the Plan shall be deemed salary or compensation for
the purpose of computing benefits under any employee benefit plan or other
arrangement of any Participating Company for the benefit of its employees unless
the Company shall determine otherwise.

 
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(c) No participant shall have any claim to an Award until it is actually granted
under the Plan. To the extent that any person acquires a right to receive
payments from the Company under this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company. All payments of
awards provided for under the Plan shall be paid in cash from the general funds
of the Company; provided, however, that such payments shall be reduced by the
amount of any payments made to the participant or his or her dependents,
beneficiaries or estate from any trust or special or separate fund established
by the Company to assure such payments. The Company shall not be required to
establish a special or separate fund or other segregation of assets to assure
such payments, and, if the Company shall make any investments to aid it in
meeting its obligations hereunder, the participant shall have no right, title or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such
investments. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind between
the Company and any participant. To the extent that any participant acquires a
right to receive payments from the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of the Company.
 
 (d) Absence on leave approved by a duly constituted officer of the Company
shall not be considered interruption or termination of employment for any
purposes of the Plan; provided, however, (i) such leave does not exceed six
months, or if longer, so long as the individual retains a right to reemployment
with the Participating Company under an applicable statute or by contract, and
(ii) that no Award may be granted to an employee while he or she is absent on
leave.
 
 (e) If the Committee shall find that any person to whom any Award, or portion
thereof, is payable under the Plan is unable to care for his or her affairs
because of illness or accident, or is a minor, then any payment due him or her
(unless a prior claim therefore has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his or
her spouse, a child, a relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Company therefore.
 
(f) The right of any person to any Award payable under the Plan may not be
assigned, transferred, pledged or encumbered, either voluntarily or by operation
of law, except as provided in Section 10 with respect to the designation of a
Beneficiary or as may otherwise be required by law. If, by reason of any
attempted assignment, transfer, pledge or encumbrance or any bankruptcy or other
event happening at any time, any amount payable under the Plan would be made
subject to the debts or liabilities of the participant or his or her Beneficiary
or would otherwise devolve upon anyone else and not be enjoyed by the
participant or his or her Beneficiary, then the Committee may terminate such
person’s interest in any such payment and direct that the same be held and
applied to or for the benefit of the participant, his or her Beneficiary or any
other persons deemed to be the natural objects of his or her bounty, taking into
account the expressed wishes of the participant (or, in the event of his or her
death, those of his or her Beneficiary) in such manner as the Committee may deem
proper.
 
(g) Copies of the Plan and all amendments, administrative rules and procedures
and interpretations shall be made available to all participants’ at all
reasonable times at the Company’s headquarters.
 
(h) The Committee may cause to be made, as a condition precedent to the payment
of any Award, or otherwise, appropriate arrangements with the participant or his
or her Beneficiary, for the withholding of any federal, state, local or foreign
taxes.
 
(i) The Plan and the grant of Awards shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required.
 
 (j) All elections, designations, requests, notices, instructions and other
communications from an Eligible Participant or Key Employee, Beneficiary or
other person to the Committee, required or permitted under the Plan, shall be in
such form as is prescribed from time to time by the Committee and shall be
mailed by first class mail or delivered to such location as shall be specified
by the Committee.
 
(k) The terms of the Plan shall be binding upon the Company and its successors
and assigns.
 
(l) Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision
hereof.

 
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(m) The Plan and all Awards granted hereunder shall comply at all times with all
laws and regulations of any governmental authority which may be applicable
thereto (including Code Section 409A). To the extent that an award granted
hereunder is designated as an incentive stock option, it shall comply with Code
Section 422, and all provisions of the Plan and the Award Agreement for such
Option shall be construed in such manner as to effectuate that intent. Any
provision of the Plan or any Award Agreement notwithstanding, a participant
shall not be entitled to receive the benefits of Awards and the Company shall
not be obligated to pay any benefits to such participant if such exercise,
delivery, receipt or payment of benefits would constitute a violation by such
individual or the Company of any provision of any such law or regulation. Any
reference herein to “compliance with the requirements of Code Section 409A” or
words of similar import shall be interpreted to mean application of the terms of
the Plan or any Award, or administration of the Plan or any Award, as the case
may be, in such a manner that no additional income tax is imposed on a
participant pursuant to Code Section 409A(1)(a); provided, however, that this
provision shall not limit the application of the $100,000 limit on incentive
stock options set forth in Section 5(a). If additional guidance is issued under
or modifications are made to Code Section 409A or any other law affecting the
awards issued hereunder, the Committee shall take such actions (including
amending the Plan or any Award Agreement without the necessity of obtaining the
participant’s consent) as it deems necessary, in its sole discretion, to ensure
continued compliance with Code Section 409A.

 
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