EXHIBIT 10.1
AMENDED AND RESTATED
2006 STOCK INCENTIVE PLAN
OF
SANUWAVE HEALTH, INC.
Effective as of January 1, 2010

 

 

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AMENDED AND RESTATED
2006 STOCK INCENTIVE PLAN
OF
SANUWAVE HEALTH, INC.
1. Purpose
This purpose of this amendment and restatement of the 2006 Stock Incentive Plan
of SANUWAVE Health, Inc. (formerly Rub Music Enterprises, Inc.) is to reflect
the provisions of that certain Agreement and Plan of Merger by and among Rub
Music Enterprises, Inc., RME Delaware Merger Sub, Inc., and SANUWAVE, Inc. dated
as of September 25, 2009 (hereinafter, the “Merger Agreement”) to provide for
the issuance of stock options and Common Stock of SANUWAVE Health, Inc. under
this Plan and to provide that SANUWAVE, Inc. shall no longer issue any stock
options or common stock under this Plan. This Plan is amended and restated as of
January 1, 2010. The purpose of the Amended and Restated 2006 Stock Incentive
Plan of SANUWAVE Health, Inc. is to encourage and enable selected employees,
directors and independent contractors of SANUWAVE Health, Inc. and its related
businesses to acquire or to increase their holdings of Common Stock and other
proprietary interests in the Company in order to promote a closer identification
of their interests with those of the Company and its shareholders, thereby
further stimulating their efforts to enhance the efficiency, soundness,
profitability, growth and stockholder value of the Company. This purpose will be
carried out through the granting of Nonstatutory Options and the direct issuance
of shares of Common Stock to selected employees, independent contractors and
directors.
2. Definitions
For the purposes of this Agreement, the following terms shall have the following
meanings:
(a) “Administrator” shall have the meaning provided in Section 3(a).
(b) “Affiliates” as applied to any Person, shall mean any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities (the
ownership of more than 50% of the voting securities of an entity shall for
purposes of this definition be deemed to be “control”), by contract or
otherwise.
(c) “Agreement” shall have the meaning provided in Section 3(b).
(d) “Award” shall mean the grant of an Option or direct issuance of shares of
Common Stock made pursuant to this Plan.
(e) “Board” means the Board of Directors of the Company.
(f) “Cause” means that termination of a Participant’s service with the Company
results from the Participant’s (i) termination for “cause” under the terms of
the Participant’s employment agreement with the Company, if any; (ii) dishonesty
or conviction of a crime; (iii) failure to perform his or her duties to the
satisfaction of the Company; or (iv) engaging in conduct that could be
materially damaging to the Company without a reasonable good faith belief that
such conduct was in the best interest of the Company. The determination of
“Cause” shall be made in a manner consistent with the Participant’s employment
agreement, if any, or in the absence of an employment agreement it shall be made
by the Administrator, which determination shall be final and conclusive.

 

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(g) “Change of Control” shall mean the occurrence of any of the following
events: (1) the sale, exchange, lease or other disposition of all or
substantially all of the assets of the Company to a person or group of related
persons, as such terms are defined or described in Sections 3(a)(9) and 13(d)(3)
of the Exchange Act (other than Prides Capital Partners, LLC and its Affiliates,
NightWatch Capital LLC and is Affiliates, or any group controlled by any of the
foregoing Persons), that will continue the business of the Company in the
future; (2) a merger or consolidation involving the Company in which the voting
securities of the Company owned by the shareholders of the Company immediately
prior to such merger or consolidation do not represent, after conversion if
applicable, more than fifty percent (50%) of the total voting power of the
surviving controlling entity outstanding immediately after such merger or
consolidation; provided that any person who (A) was a beneficial owner (within
the meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange Act
(“Beneficial Owner”)) of the voting securities of the Company immediately prior
to such merger or consolidation, and (B) is a Beneficial Owner of more than 20%
of the securities of the Company immediately after such merger or consolidation,
shall be excluded from the list of “shareholders of the Company immediately
prior to such merger or consolidation” for purposes of the preceding
calculation; or (3) any person or group (other than Prides Capital Partners, LLC
and its Affiliates, NightWatch Capital LLC and its Affiliates, or any group
controlled by any of the foregoing Persons) is or becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the total voting power of the voting
stock of the Company (including by way of merger, consolidation or otherwise)
and the representatives of Prides Capital Partners, LLC and its Affiliates,
NightWatch Capital LLC and its Affiliates, or any group in which any of the
foregoing Persons is a member, individually or in the aggregate, cease to have
the ability to elect a majority of the Board (for the purposes of this clause
(3), a member of a group will not be considered to be the Beneficial Owner of
the securities owned by other members of the group).
(h) “Code” means the Internal Revenue Code of 1986, as amended, and any
regulations issued thereunder from time to time.
(i) “Committee” shall have the meaning provided in Section 3(a).
(j) “Common Stock” means the common stock, par value $0.001, of the Company.
(k) “Common Stockholders Agreement” means the Common Stockholders Agreement
among SANUWAVE, Inc. and certain holders of the Company’s Common Stock,
effective October 24, 2006, as amended from time to time; or such other
shareholders’ agreement as is designated by the Company in the applicable
Agreement at the time of grant.
(l) “Company” means SANUWAVE Health, Inc.
(m) “Effective Date” shall have the meaning provided in Section 4.
(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(o) “Exercise Price” shall have the meaning provided in Section 7.
(p) “Expiration Date” shall have the meaning provided in Section 7.
(q) “Fair Market Value” means Fair Market Value of the shares as determined in
good faith by the Administrator. Except as may otherwise be determined by the
Administrator in good faith, Fair Market Value shall be determined in accordance
with the following provisions: (1) if the shares of Common Stock are listed or
quoted on a national securities exchange, or any regulated quotation service,
such as the Over-the-Counter (OTC) Bulletin Board, the Fair Market Value shall
be the closing price of the shares on such national securities exchange or
regulated quotation service on the date the Award is granted, or if there is no
transaction on such date, then on the trading date nearest following the date of
the Award is granted for which closing price information is available, or (2) if
the shares of Common Stock are not listed or quoted on a national securities or
other regulated quotation service, then the Fair Market Value shall be
determined by the Administrator, acting in good faith, by the reasonable
application of a reasonable valuation method which is consistently applied for
all equity compensation arrangements of the Company and is in compliance with
applicable law, including Code Section 409A.
(r) “Options” shall mean nonstatutory options that do not qualify as incentive
stock options under Code Section 422(b), as described in Section 7.

 

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(s) “Participant” shall have the meaning provided in Section 6(b).
(t) “Person” means an individual, partnership, corporation, business trust,
joint stock company, limited liability company, unincorporated association,
joint venture or other entity of whatever nature.
(u) “Plan” means the 2006 Stock Incentive Plan of SANUWAVE Health, Inc., as it
may be amended from time to time.
(v) “Securities Act” means the Securities Act of 1933, as amended.
3. Administration of the Plan
(a) The Plan shall be administered by the Board. The Board may, in its sole
discretion, delegate all or part of its administrative authority with respect to
the Plan to a committee of the Board (the “Committee”). For purposes herein, the
Board, and, upon its delegation of any administrative responsibilities for the
Plan to the Committee, the Committee, shall be referred to as the
“Administrator.” In the event that the Company shall become subject to the
reporting requirements of the Exchange Act, the Committee shall be comprised
solely of two or more “non-employee directors,” as said term is defined in
Rule 16b-3 under the Exchange Act, unless the Board determines that such
Committee composition is not necessary or advisable.
Any action of the Administrator with respect to the Plan may be taken by a
written instrument signed by all of the members of the Administrator and any
such action so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly held and called.
Subject to the provisions of the Plan and compliance with Code Section 409A, the
Administrator shall have full and sole authority in its discretion to take any
action with respect to the Plan including, without limitation, the authority
(i) to determine all matters relating to Awards, including selection of
individuals to be granted Awards, the number of shares of the Common Stock, if
any, subject to an Awards, and all terms, conditions, restrictions and
limitations of an Award, (ii) to prescribe the form or forms of the agreements
evidencing any Awards granted under the Plan (“Agreement”); (iii) to establish,
amend and rescind rules and regulations for the administration of the Plan; and
(iv) to construe and interpret the Plan and Agreements, to establish and
interpret rules and regulations for administering the Plan and to make all other
determinations deemed necessary or advisable for administering the Plan. The
Administrator shall also have authority, in its sole discretion, to accelerate
the date that any Award which was not otherwise vested shall become vested in
whole or in part without any obligation to accelerate such date with respect to
any other Award granted to any Participant. In addition, the Administrator shall
have the authority and discretion to establish terms and conditions of Awards as
the Administrator determines to be necessary or appropriate to conform to the
applicable requirements or practices of jurisdictions outside of the United
States.
4. Effective Date
The effective date of this amendment and restatement shall be January 1, 2010
(the “Effective Date”) The Plan’s original effective date was October 24, 2006.
Awards may be granted under the amended and restated Plan on and after the
Effective Date.
5. Shares of Stock Subject to the Plan; Award Limitations
(a) The number of shares of Common Stock that may be issued pursuant to Awards
shall be 5,000,000 shares. Such shares shall be authorized but unissued shares
or treasury shares of the Company, or shares purchased on the open market or by
private purchase.
(b) The Company hereby reserves sufficient authorized shares of Common Stock to
meet the grant of Awards hereunder. Any shares subject to an Award which is
subsequently forfeited, expires or is terminated may again be the subject of an
Award granted under the Plan. To the extent that any shares of Common Stock
subject to an Award are not issued to a Participant (or his or her beneficiary)
because the Award is forfeited, canceled, settled in cash, or used to satisfy
applicable tax withholding obligations, such shares shall not be deemed to have
been issued for purposes of determining the maximum number of shares of Common
Stock available for issuance under the Plan. If the purchase price of an Award
granted under the Plan is satisfied by tendering shares of Common Stock, only
the number of shares issued net of the shares of Common Stock tendered shall be
deemed issued for purposes of determining the maximum number of shares of Common
Stock available for issuance under the Plan.

 

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(c) If there is any change in the shares of Common Stock because of a merger,
consolidation or reorganization involving the Company or an Affiliate of the
Company, or if the Board declares a stock dividend or stock split distributable
in shares of Common Stock, or if there is a change in the equity capital
structure of the Company or its Affiliate affecting the Common Stock, the number
of shares of Common Stock reserved for issuance under the Plan shall be
correspondingly adjusted, and the Administrator shall make such adjustments to
Awards or to any provisions of this Plan as provided in Section 9 hereof.
6. Eligibility
An Award may be granted only to an individual who satisfies the following
eligibility requirements on the date the Award is granted:
(a) The individual is either (i) an employee of the Company or an Affiliate,
(ii) a director of the Company or an Affiliate, or (iii) an independent
contractor, consultant or advisor (collectively, “independent contractors”)
providing bona fide services to the Company or an Affiliate. For this purpose,
an individual shall be considered to be an “employee” only if there exists
between the individual and the Company or an Affiliate the legal and bona fide
relationship of employer and employee.
(b) The individual, being otherwise eligible under this Section, is selected by
the Administrator as an individual to whom an Award shall be granted (a
“Participant”).
7. Options
(a) Grant of Options: Subject to the limitations of the Plan, the Administrator
may in its sole and absolute discretion grant Options to such eligible
individuals (determined pursuant to Section 6 hereof), in such numbers, upon
such terms and at such times as the Administrator shall determine. Each Option
grant shall be evidenced by an Agreement specifying all terms and conditions
required by this Plan in the form set forth as Exhibit II attached hereto.
(b) Term: The term of an Option shall commence on the date the Option is
granted, determined as provided in subsection 7(c)(i) below (the “Grant Date”),
and shall expire as set forth in the Option Agreement (or, where no such date is
provided in the individual Agreement, on the tenth (10th) anniversary of the
Grant Date (the “Expiration Date”)), unless terminated earlier on the first to
occur of the following:
(i) The date on which the Participant’s service with the Company is terminated
by the Company for Cause;
(ii) Sixty (60) days after the Participant’s death; or
(iii) Sixty (60) days after the termination of the Participant’s service with
the Company for any reason other than Cause or the Participant’s death, provided
that if during any part of such sixty (60) day period the Option is not
exercisable solely because of the restrictions set forth in Section 13 relating
to “Securities Law Compliance,” the Option shall not expire until the earlier of
the Expiration Date or until it shall have been exercisable for an aggregate
period of sixty (60) days after the termination of the Participant’s service
with the Company.
Upon the Expiration Date, any portion of an Option which has not yet vested and
been exercised shall be immediately forfeited.

 

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(c) Exercise Price: The price per share at which an Option may be exercised (the
“Exercise Price”) shall be established by the Administrator at the time the
Option is granted and shall be set forth in the terms of the Agreement
evidencing the grant of the Option; provided that the Exercise Price shall in no
event be less than the Fair Market Value per share of the Common Stock on the
date the Option is granted. In addition, the following rules shall apply
(i) Options shall be considered to be granted on the date the Administrator acts
to grant the Option or any other date permitted by applicable law and specified
by the Administrator as the date of grant of the Option.
(ii) The Exercise Price shall be adjusted from time to time, as applicable, with
respect to various adjustments in the Company’s equity capital structure, as
provided in Section 9 hereof.
(d) Exercise.

  (i)  
Subject to any limitations set forth in this Plan, a Participant may exercise
the vested portion of his or her Option (determined in accordance with
Section 8) during its term by delivering a Notice of Exercise (in the form
attached hereto as Exhibit I) together with the Exercise Price to the Company’s
Chief Financial Officer, or to such other Person as the Administrator may
designate, during regular business hours, together with such additional
documents as the Company may then reasonably require.

  (ii)  
As a condition of any exercise of an Option, a Participant may be required to
execute and become a party to the Common Stockholders Agreement.

  (iii)  
An Option may be exercised only in exchange for whole shares of stock. To the
extent that a Participant exercises any Option for a fractional share of stock,
he or she will receive an immediate cash payment in an amount equal to the Fair
Market Value of such fractional share.

(e) Method of Payment. Payment of the Exercise Price with respect to the number
of shares being exercised is due in full upon exercise of all or the applicable
part of an Option. A Participant may elect to make payment of the Exercise Price
(i) in cash or by check, or (ii) at the discretion of the Administrator (which
determination by the Administrator is to be given prior to the time of
exercise), by delivery to the Company of other Common Stock. The purchase price
of Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the Company,
shall be paid only by shares of the Common Stock of the Company that have been
held by the Participant for more than six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes). A Participant may, subject to procedures satisfactory to the
Administrator, satisfy such delivery requirement by presenting proof of
beneficial ownership of such Common Stock, in which case the Company shall treat
the Option as exercised without further payment and shall withhold such number
of shares of Common Stock from the Common Stock acquired by the exercise of the
Option. For purposes of the payment of the Exercise Price of the Option by
delivery of shares of Common Stock (or proof of beneficial ownership thereof),
such shares of Common Stock shall have the value per share as of the applicable
exercise date as determined in good faith by the Administrator, which value
shall be applicable both for purposes of payment of the Option exercise price
and the calculation of any taxable income incurred by the Participant as the
result of the Option exercise.
(f) Nontransferability of Options: Options shall not be transferable other than
by will or the laws of interstate succession, except as may be permitted by the
Administrator in a manner consistent with the registration provisions of the
Securities Act of 1933, as amended (the “Securities Act”). Except as may be
permitted by the preceding sentence, an Option shall be exercisable during the
Participant’s lifetime only by him or her or by his or her guardian or legal
representative. The designation of a beneficiary does not constitute a transfer.

 

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(g) Vesting: Options shall vest and become exercisable as provided in the
relevant Agreement. Notwithstanding the immediately preceding sentence, unless
an individual Agreement provides otherwise:
(i) An Option shall not be affected by any change in the terms, conditions or
status of the Participant’s service, provided that the Participant continues to
provide services to the Company or its Affiliates.
(ii) The employment relationship of a Participant shall be treated as continuing
intact for any period that the Participant is on military or sick leave or other
bona fide leave of absence, provided that the period of such leave does not
exceed ninety (90) days, or, if longer, as long as the Participant’s right to
re-employment is guaranteed either by statute or by contract. The employment
relationship of a Participant shall also be treated as continuing intact while
the Participant is not in active service because of disability. The
Administrator shall determine whether a Participant is disabled within the
meaning of this paragraph, and, if applicable, the date of a Participant’s
termination of employment or service for any reason.
(iii) Unless an individual Agreement provides otherwise, if the service of a
Participant is terminated for any reason other than Cause, the Participant shall
be entitled to the portion of the Option that was vested on the date of the
Participant’s termination, and any remaining portion of the Option shall be
forfeited immediately. In the event of the Participant’s death, the person or
persons as shall have acquired the right to the Option by will or by the laws of
intestate succession shall have the same rights the Participant would have had
hereunder.
(iv) Unless an individual Agreement provides otherwise, if the service of the
Participant is terminated for Cause, his or her entire Option (whether or not
vested) shall be immediately forfeited as of the effective time of his or her
termination, as determined by the Administrator.
(v) Notwithstanding the foregoing and subject to compliance with Code
Section 409A and applicable law, the Administrator shall have authority, in its
discretion, to extend the term of an Option or modify the other terms and
conditions of exercise, including but not limited to accelerating the vesting of
all or any part of the Option.
8. Issuance of Stock
Shares of Common Stock may be issued under the Plan through direct and immediate
issuances without any intervening Option grants. Each such stock issuance shall
be evidenced by an Agreement which complies with the terms specified below.
Shares of Common Stock may also be issued under the Plan pursuant to share right
awards which entitle the Participants to receive those shares immediately upon
the attainment of designated performance goals.
(a) Purchase Price: The purchase price per share shall be fixed by the
Administrator, but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the issuance date. Shares of Common
Stock may be granted under the Plan, to the extent permitted by applicable
statutes and regulations, for any of the following items of consideration which
the Administrator may deem appropriate in each individual instance: (i) cash or
check made payable to the Company; (ii) past services rendered to the Company
(or any Affiliate); or (iii) contracts for future services to be rendered to the
Company (or any Affiliate).
(b) Vesting Provisions:
(i) Shares of Common Stock issued under the Plan may, in the discretion of the
Administrator, be fully and immediately vested upon issuance or may vest in one
or more installments over the Participant’s period of service or upon attainment
of designated performance goals. The elements of the vesting schedule applicable
to any unvested shares of Common Stock issued under the Plan shall be determined
by the Administrator and incorporated into the Agreement. Shares of Common Stock
may also be issued under the Plan pursuant to share right awards which entitle
the Participants to receive those shares immediately upon the attainment of
designated performance goals. In no event shall shares be issued to a
Participant later than two and one-half months after the close of the calendar
year in which the designated performance goals and any other vesting conditions
which apply to such shares are satisfied, or in the case of unforeseeable events
as defined in the regulations under Code Section 409A as soon as
administratively practicable thereafter.

 

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(ii) Any new, substituted or additional securities or other property (including
money paid other than as a regular cash dividend) which the Participant may have
the right to receive with respect to the Participant’s unvested shares of Common
Stock by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Company’s receipt of
consideration shall be issued subject to the same vesting requirements
applicable to the Participant’s unvested shares of Common Stock and such escrow
arrangements as the Administrator shall deem appropriate.
(iii) The Participant shall have full stockholder rights with respect to any
shares of Common Stock received by the Participant under this Section 8, whether
or not the Participant’s interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares.
(iv) Should the Participant separate from service while holding one or more
unvested shares of Common Stock issued under this Section 8 or should the
performance objectives not be attained with respect to one or more such unvested
shares of Common Stock, then those shares shall be immediately surrendered to
the Company for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash,
the Company shall repay to the Participant the cash consideration paid for the
surrendered shares.
(v) The Administrator may in its discretion waive the surrender and cancellation
of one or more unvested shares of Common Stock which would otherwise occur upon
the Participant’s separation from service or the non-attainment of the
performance objectives applicable to those shares. Such waiver shall result in
the immediate vesting of the Participant’s interest in the shares of Common
Stock as to which the waiver applies. Such waiver may be effected at any time,
whether before or after the Participant’s separation from service or the
attainment or non-attainment of the applicable performance goals.
(vi) Outstanding share right awards under this Section 8 shall automatically
terminate, and no shares of Common Stock shall actually be issued in
satisfaction of those Awards, if the performance goals established for such
Awards are not attained.
9. Adjustment
(a) In the event of any change in the Common Stock underlying an Award, by
reason of any stock dividend, forward stock split or reverse stock split, then
(i) the number of shares subject to such Award and (ii) the Exercise Price or
purchase price applicable to any Award, shall be proportionately adjusted,
subject to any required action by the Board or the stockholders of the Company
and compliance with applicable law, which in each case the Company agrees to use
its best efforts to effect.
(b) In the event of any change in the Common Stock underlying an Award, by
reason of any reorganization, recapitalization, merger, consolidation, spin-off,
combination, exchange of shares of Common Stock or other corporate exchange, any
distribution to stockholders of Common Stock, or any transaction similar to the
foregoing (but not including either a stock dividend or a stock split, which
shall be addressed under Section 9(a) above), the Board shall make such
substitution or adjustment, if any, as it deems (in its good faith, reasonable
judgment) to be equitable to (i) the class and number of shares underlying such
Award, (ii) the Exercise Price or purchase price applicable to such Award, or
(iii) any other affected terms of such Award.
(c) Any determination, substitution or adjustment made by the Board under this
Section in the exercise of its good faith business judgment shall be final,
binding and conclusive on all persons. The conversion of any debt instruments
that may be converted into the securities of the Company shall not be treated as
a transaction that will cause the Board to make any determination, substitution
or adjustment under this Section.

 

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10. Change of Control
Notwithstanding any other provision of the Plan to the contrary, in the event of
a Change of Control, unless specifically modified by an individual’s Agreement:
(a) All Awards outstanding as of the date of such Change of Control shall become
fully vested.
(b) Notwithstanding the foregoing, in the event of a merger, share exchange,
sale or disposal of substantially all of the assets of the Company,
reorganization or other business combination affecting the Company or its
Affiliate, the Administrator may, in its sole and absolute discretion, determine
that any or all Awards granted pursuant to the Plan shall not vest on an
accelerated basis, if the Board, the surviving corporation or the acquiring
corporation, as the case may be, shall have taken such action, including but not
limited to the assumption of Awards or the grant of substitute awards (in either
case, with substantially similar or equivalent terms as Awards), as in the
opinion of the Administrator is equitable or appropriate to protect the rights
and interests of Participants under the Plan. For the purposes herein, if the
Committee is acting as the Administrator, the Committee authorized to make the
determinations provided for in this Section shall be appointed by the Board,
two-thirds of the members of which shall have been directors of the Company
prior to the sale, merger, share exchange, reorganization or other business
combinations affecting the Company or its Affiliate.
11. Withholding
The Company shall withhold all required local, state and federal taxes from any
amount payable in cash with respect to an Award. The Company shall require any
recipient of an Award payable in shares of the Common Stock to pay to the
Company in cash the amount of any tax or other amount required by any
governmental authority, to be withheld and paid over by the Company to such
authority for the account of such Participant. Notwithstanding the foregoing,
the Participant may satisfy such obligation in whole or in part, and any other
local, state or federal income tax obligations relating to such an Award by
electing (the “Election”) to have the Company withhold shares of Common Stock
from the shares to which the Participant is entitled. The number of shares to be
withheld shall have a Fair Market Value as of the date that the amount of tax to
be withheld is determined (the “Tax Date”) as nearly equal as possible to (but
not exceeding) the amount of such obligations being satisfied. Each Election
must be made in writing to the Administrator in accordance with election
procedures established by the Administrator.
12. Performance-Based Compensation
To the extent that Code Section 162(m) is applicable, the Administrator shall
determine the extent, if any, that Awards conferred under the Plan to Covered
Employees, as such term is defined in Code Section 162(m), comply with the
qualified performance-based compensation exception to employer compensation
deductions set forth in Code Section 162(m).
13. Securities Law Compliance
(a) Notwithstanding anything to the contrary contained herein, a Participant may
not exercise his or her Option or be granted shares of Common Stock unless the
shares of Common Stock issuable upon such exercise or grant are then registered
under the Securities Act or, if such shares of Common Stock are not then so
registered, the Company has determined that such exercise and for issuance would
be exempt from the registration requirements of the Securities Act or the
Participant has provided to the Company an opinion of counsel (in the form and
substance satisfactory to the Company and its counsel) that registration is not
required. The exercise of a Participant’s Option or grant of shares must also
comply with other applicable laws and regulations governing his or her Award,
and a Participant may not exercise his or her Option or be granted shares if the
Company determines that such exercise or grant would not be in material
compliance with such laws and regulations unless the Participant provides to the
Company an opinion of counsel (in the form and substance satisfactory to the
Company and its counsel) that such exercise would be in material compliance with
such laws and regulations.

 

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(b) By exercising his or her Award, a Participant agrees that the Company (or a
representative of the underwriter(s)) may, in connection with the first
underwritten registration of the offering of any equity securities of the
Company under the Securities Act (or any underwritten registration of any
securities of the Company prior to that time), require that the Participant not
sell, dispose of, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale, any shares of Common Stock or other securities of the
Company held by him or her, for a period of time specified by the underwriter(s)
(not to exceed one hundred eighty (180) days) following the effective date of
the registration statement of the Company filed under the Securities Act;
provided that similar restrictions are also imposed on the other holders of the
Common Stock of the Company in connection with such registration. Each
Participant further agrees to execute and deliver such other agreements as may
be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect
thereto. In order to enforce the foregoing covenant, the Company may impose stop
transfer instructions with respect to a Participant’s shares of Common Stock
until the end of such period. The underwriters of the Company’s stock are
intended third party beneficiaries of this Section and shall have the right,
power and authority to enforce the provisions hereof as though they were a party
hereto.
(c) It is the general intent of the Company that transactions under the Plan
which are subject to Section 16 of the Exchange Act shall comply with Rule 16b-3
under the Exchange Act. Notwithstanding anything in the Plan to the contrary,
the Administrator, in its sole and absolute discretion, may bifurcate the Plan
so as to restrict, limit or condition the use of any provision of the Plan to
Participants who are officers or directors subject to Section 16 of the Exchange
Act without so restricting, limiting or conditioning the Plan with respect to
other Participants.
(d) If the Participant is subject to Section 16 of the Exchange Act, shares of
Common Stock directly granted hereunder or acquired upon exercise of an Option
may not, without the consent of the Committee, be disposed of by the Participant
until the expiration of six months after the date the Award was granted.
14. No Right or Obligation of Continued Employment
Nothing contained in the Plan shall confer upon a Participant the right to
continue in the employment or service of the Company or an Affiliate as an
employee, director or independent contractor or interfere in any way with the
right of the Company or an Affiliate to terminate the Participant’s employment
or service at any time. Except as otherwise provided in the Plan or a related
agreement, or required by applicable law, Awards granted under the Plan to
employees of the Company or an Affiliate shall not be affected by any change in
the duties or position of the Participant, as long as such individual remains an
employee of the Company or an Affiliate.
15. Unfunded Plan; Not a Retirement Plan
(a) Neither a Participant nor any other person shall, by reason of the Plan,
acquire any right in or title to any assets, funds or property of the Company or
any Affiliate including, without limitation, any specific funds, assets or other
property which the Company or any Affiliate, in their discretion, may set aside
in anticipation of a liability under the Plan. A Participant shall have only a
contractual right to the Common Stock or amounts, if any, payable under the
Plan, unsecured by any assets of the Company or any Affiliate. Nothing contained
in the Plan shall constitute a guarantee that the assets of such corporations
shall be sufficient to pay any benefits to any person.
(b) In no event shall any amounts accrued, distributable or payable under the
Plan be treated as compensation for the purpose of determining the amount of
contributions or benefits to which any Person shall be entitled under any
retirement plan sponsored by the Company or an Affiliate that is intended to be
a qualified plan within the meaning of Code Section 401(a).
16. Amendment and Termination of the Plan
Except as may be otherwise provided in the Plan, the Plan and any Award granted
pursuant to the Plan, may be amended or terminated at any time by the Board;
provided, that (a) amendment or termination of an Award shall not, without the
consent of the recipient of an Award (except to the extent necessary to comply
with Code Section 409A), adversely affect the rights of the recipient with
respect to an outstanding Award; and (b) approval of an amendment to the Plan by
the shareholders of the Company shall only be required in the event such
stockholder approval of any such amendment is required by applicable law, rule
or regulation.

 

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17. Restrictions on Shares
The Administrator may impose such restrictions on any shares representing Awards
hereunder as it may deem advisable, including without limitation restrictions
under the Securities Act, under the requirements of any national securities
exchange or similar organization and under any blue sky or state securities laws
applicable to such shares and restrictions relating to the qualification of the
Company to be taxed under Subchapter S of the Code. The Company may cause a
restrictive legend to be placed on any certificate issued pursuant to an Award
hereunder in such form as may be prescribed from time to time by applicable laws
and regulations or as may be advised by legal counsel. Shares of Common Stock
acquired under this Plan are subject to the terms and conditions of the
Company’s bylaws, and the Company’s certificate of incorporation, and may also
be subject to the Common Stockholders Agreement, if required by the terms of the
Award. In addition, as a condition to the issuance and delivery of Common Stock
hereunder, or the grant of any benefit pursuant to the terms of the Plan, the
Company may require a Participant or other person to become a party to any other
shareholders’ agreement, buy-sell agreement, redemption agreement, repurchase
agreement, restriction agreement or similar agreement between the Company and
shareholders of the Company or among shareholders of the Company restricting the
transfer of the Common Stock.
18. No Rights as Stockholder
A Participant or his or her legal representative, legatees or distributees shall
not be deemed to be the holder of any shares subject to an Award and shall not
have any rights as a stockholder unless and until certificates for such shares
are issued to him, her or them under the Plan.
19. Delay in Payment
A payment hereunder shall be delayed only as follows:
(a) if the Company reasonably anticipates that its deduction with respect to
such payment would be limited or eliminated by application of Code
Section 162(m), the payment will be made either at the earliest date at which
the Company reasonably anticipates that the deduction of the payment will not be
limited or eliminated by application of Code Section 162(m) or the calendar year
in which the Participant separates from service (within the meaning of Code
Section 409A);
(b) if the Company reasonably anticipates that such payment would violate a term
of a loan agreement to which the Company is a party (or other similar contract
to which the Company is a party) such that the Company would be materially
harmed, and the loan agreement or other similar contract constitutes a bona fide
agreement pursuant to Code Section 409A, the payment will be delayed to the
earliest date at which the Company reasonably anticipates that a payment of such
amount would not cause such violation or that such violation would not cause
material harm to the Company;
(c) if the Company reasonably anticipates that such payment will violate
applicable law, including Federal securities laws, the payment will be delayed
until the earliest date at which the Company reasonably anticipates that the
payment will not cause such violation;
(d) if calculation of such payment is not administratively practicable due to
events beyond the control of the Participant or because the funds of the Company
are not sufficient to make the payment at such time without jeopardizing the
solvency of the Company, the payment will be delayed to the first calendar year
in which the payment is administratively practicable or the funds of the Company
are sufficient to make the payment without jeopardizing the solvency of the
Company;
(e) if there is a good faith dispute as to such payment, or any portion thereof,
the disputed amount will be delayed, to the extent permitted by Code
Section 409A, until the first calendar year in which occurs the earliest of the
Company entering into a legally binding settlement of such dispute with the
Participant, conceding the amount is payable, or being required to make such
payment pursuant to a final and nonappealable judgment or other binding
decision; or

 

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(f) upon such other events and conditions as the Commissioner of the Internal
Revenue Service may prescribe in generally applicable guidance.
Notwithstanding the above, paragraphs (a) and (b) shall not apply until the
later of one year from the effective date of this Plan or the Board’s approval
of this Plan.
20. Applicable Law
The Plan shall be governed by and construed in accordance with the laws of the
State of Georgia, without regard to the conflict of laws provisions of any
state. 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). Any provision of the Plan or any
Agreement notwithstanding, the Participant shall not be entitled to receive the
benefits of Awards and the Company shall not be obligated to pay any benefits to
a 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 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). If additional
guidance is issued under or modifications are made to Code Section 409A or any
other law affecting the Awards issued hereunder, the Administrator shall take
such actions (including amending the Plan or any Agreement without the necessity
of obtaining any Participant’s consent as otherwise required by the Plan) as it
deems necessary, in its sole discretion, to ensure continued compliance with
such law.
21. Board Approval
The Plan is subject to approval by the Board. Awards granted prior to such Board
approval shall be effective only upon approval of the Plan by the Board. This
will certify that the Plan was adopted by vote of the Board of the Company to be
effective as of January 1, 2010.

            /s/ Christopher M. Cashman       Christopher M. Cashman     
President and Chief Executive Officer   

 

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