fs42013a1ex10ix_bgs.htm


Exhibit 10.9







TRANSNETYX HOLDING CORP. 2010 INCENTIVE PLAN







1.           Purpose. The purposes of the Plan are: (a) to promote the interests of the Corporation and its Subsidiaries and its stockholders by strengthening the ability of the Corporation and its Subsidiaries to attract and retain highly competent officers and other key employees; and (b) to provide a means to encourage Stock ownership and proprietary interest in the Corporation.


 


2.           Definitions. Where the context of the Plan permits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:


 


“Award” means the grant of incentive compensation under this Plan to a Participant.


 


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


 


“Change of Control” means:


 


(i)         upon the acquisition by any individual, entity or group, including any Person, of beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of 50% or more of the combined voting power of the then outstanding capital stock of the Corporation that by its terms may be voted on all matters submitted to stockholders of the Corporation generally (“Voting Stock”); provided, however, that the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Corporation (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from the Corporation); (B) any acquisition by the Corporation; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation; or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving the Corporation, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (A), (B) and (C) of subsection (ii) below shall be satisfied;


 


(ii)        upon the consummation of a reorganization, merger or consolidation of the Corporation, or a sale, lease, exchange or other transfer of all or substantially all of the assets of the Corporation; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: (A) all or substantially all of the beneficial owners of the Voting Stock of the Corporation outstanding immediately prior to such transaction continue to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than 50% of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, the Corporation or an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's property or assets, directly or indirectly) (the “Resulting Entity”) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and (B) no Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing 50% or more of the combined voting power of the Corporation's then outstanding securities) beneficially owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding securities of the Resulting Entity; and (C) at least a majority of the members of the board of directors of the Resulting Entity were members of the incumbent board of directors of the Corporation at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or


 




  





 











  






 


(iii)       upon the approval of a plan of complete liquidation or dissolution of the Corporation.


 


“Code” means the Internal Revenue Code of 1986, as amended.


 


“Committee” means the Compensation Committee of the Board and if the Board does not have a Compensation Committee, Committee shall mean the Board or any directors appointed by the Board to administer the Plan.


 


“Corporation” means TRANSNETYX HOLDING CORP., a Delaware corporation, or any successor thereto.


 


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


 


“Fair Market Value” means the price per share determined by the Committee using the reasonable application of a reasonable method.


 


The Committee may determine the Fair Market Value by independent appraisal, provided that the appraisal must value the Stock as of a date that is no more than twelve (12) months before the grant of an Award, and provided further that such appraisal must be updated for any events that occur after the appraisal date and have a material effect on the value of the Stock.  Any informal internal valuation performed must be contained in a written report, performed by a person with valuation knowledge or training who takes into account the following:  (i) the present value of the Corporation’s future cash flows; (ii) private sale price for Stock or equity interests of similarly situated companies; (iii) the value of the Corporation’s tangible and intangible assets; and (iv) any other relevant factors, such as control premiums or marketability discounts, and whether the particular value at market is used by the Corporation for any other material purpose.


 


Any such valuation shall be performed within the twelve (12) months prior to the grant date of the Award and updated for any subsequent events that may materially affect the value of the Stock.


 


A valuation based on a binding formula that is used within a shareholder buy-sell or other similar binding agreement can be used to set prices if such formula price is also used to set the value of the Corporation’s Stock for non-compensatory valuation purposes, and of the buy-sell or other similar agreement governs all such transfers of the Corporation’s Stock.


 




  





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“Incentive Stock Options” means a Stock Option designed to meet the requirements of Code Section 422 or any successor law.


 


 “IPO” the consummation of a registered underwritten public offering of Stock in which the proceeds to the Corporation, net of underwriters’ commissions and all other expenses of the offering (including without limitation accountants’ and attorneys’ fees, filing fees and other expenses of the offering), are not less than [Forty Million Dollars ($40,000,000.00)] pursuant to an effective registration statement under the Securities Act, immediately subsequent to which the Corporation shall be obligated to file annual and quarterly reports with the Securities Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act.







“Nonqualified Stock Option” means a Stock Option that is not an Incentive Stock Option.


 


“Participant” means (i) an employee or consultant of the Corporation or its Subsidiaries; or (ii) a non-employee director or advisor of the Corporation designated by the Committee as eligible to receive an Award under the Plan.


 


 “Performance Unit Awards” means cash incentives subject to the satisfaction of long-term Performance Criteria and granted pursuant to Section 10 below.


 


“Performance Criteria” means business criteria within the meaning of Code Section 162(m), including, but not limited to: revenue; revenue growth; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; operating income; pre-or after-tax income; net operating profit after taxes; economic value added (or an equivalent metric); ratio of operating earnings to capital spending; cash flow (before or after dividends); cash-flow per share (before or after dividends); net earnings; net sales; sales growth; share price performance; return on assets or net assets; return on equity; return on capital (including return on total capital or return on invested capital); cash flow return on investment; total shareholder return; improvement in or attainment of expense levels; and improvement in or attainment of working capital levels or Performance Criteria. Any Performance Criteria may be used to measure the Corporation’s performance as a whole or any of the Corporation’s business units and may be measured relative to a peer group or index.


 


“Performance Period” means the period as designated by the Committee with a minimum of one year and a maximum of five years.


 


“Person” means any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.


 


“Phantom Stock” means an award providing a Participant with the right to receive the value of a share of Stock at a date on or after vesting in accordance with the terms of such grant and/or upon the attainment of Performance Criteria specified by the Committee in the Award in accordance with Section 9 below.


 


“Plan” means the TRANSNETYX HOLDING CORP. 2010 INCENTIVE PLAN.


 


“Restricted Stock” means Stock subject to a vesting condition specified by the Committee in an Award in accordance with Section 9 below.


 




  





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“Resulting Entity” means the entity resulting from a transaction (including, without limitation, the Corporation or an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s property or assets, directly or indirectly).


 


“RSU” means a restricted stock unit providing a Participant with the right to receive Stock at a date on or after vesting in accordance with the terms of such grant and/or upon the attainment of Performance Criteria specified by the Committee in the Award in accordance with Section 9 below.


 


“SAR” means a stock appreciation right granted pursuant to Section 8 below.


 


“Securities Act” means the Securities Act of 1933, as ameneded.


 


“Stock” means a share of common stock of the Corporation that, by its terms, may be voted on all matters submitted to stockholders of the Corporation generally.


 


“Stock Option” means the right to acquire shares of Stock at a certain price that is granted pursuant to Section 7 below. The term Stock Option includes both Incentive Stock Options and Nonqualified Stock Options.


 


“Subsidiary” or “Subsidiaries” means any corporation or entity of which the Corporation owns directly or indirectly, at least 50% of the total voting power or in which it has at least a 50% economic interest, and which is authorized to participate in the Plan.


 


3.           Administration. The Plan will be administered by the Board or the Committee, as the Board may designate from time to time, each of whom shall satisfy such requirements as:


 


(a)           The Committee, if designated by the Board, shall have the discretionary authority to construe and interpret the Plan and any Awards granted thereunder, to establish and amend rules for Plan administration, to change the terms and conditions of Awards at or after grant (subject to the provisions of Section 18 below), to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award granted under the Plan, and to make all other determinations which it deems necessary or advisable for the administration of the Plan.


 


(b)           Awards under the Plan to a Participant may be made subject to the satisfaction of one or more Performance Criteria. Performance Criteria shall be established by the Committee for a Participant (or group of Participants) no later than ninety (90) days after the commencement of each Performance Period (or the date on which 25% of the Performance Period has elapsed, if earlier). The Committee may select one or more Performance Criteria and may apply those Performance Criteria on a corporate-wide or division/business segment basis; provided, however, that the Committee may not increase the amount of compensation payable to a Participant upon the satisfaction of Performance Criteria.


 


(c)           The Committee may authorize one or more officers of the Corporation to select employees to participate in the Plan and to determine the number and type of Awards to be granted to such Participants or to non-employee directors of the Corporation. Any reference in the Plan to the Committee shall include such officer or officers.


 




  





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(d)           The determinations of the Board or the Committee shall be made in accordance with their judgment as to the best interests of the Corporation and its stockholders and in accordance with the purposes of the Plan. Any determination of the Board or the Committee under the Plan may be made without notice or meeting of the Board or the Committee.


 


4.           Participants. Participants may consist of all employees and consultants of the Corporation and its Subsidiaries and all non-employee directors and advisors of the Corporation.  Designation of a Participant in any year shall not require the Board or the Committee to designate that person to receive an Award in any other year or to receive the same type or amount of Award as granted to the Participant in any other year or as granted to any other Participant in any year. The Committee shall consider all factors that it deems relevant in selecting Participants and in determining the type and amount of their respective Awards.


 


5.           Shares Available Under the Plan.


 


(a)           There is hereby reserved for issuance under the Plan an aggregate of __________ shares of Stock.  On the first day of the Corporation’s fiscal year beginning in 2011, and each year thereafter, an additional number of shares of stock may be authorized for the Plan equal to up to five percent (5%) of the outstanding shares of Stock or a lesser amount as determined by the Board or the Committee.  Stock covered by an Award granted under the Plan shall not be counted as used unless and until actually issued and delivered to a Participant. Accordingly, if there is (a) a lapse, expiration, termination or cancellation of any Stock Option or other Award outstanding under this Plan prior to the issuance of Stock thereunder or (b) a forfeiture of any shares of Restricted Stock or Stock subject to Awards granted under this Plan prior to vesting, then the Stock subject to these Stock Options or other Awards shall be added to the Stock available for Awards under the Plan. In addition, any Stock covered by an SAR (including an SAR settled in Stock which the Committee, in its discretion, may substitute for an outstanding Stock Option) shall be counted as used only to the extent Stock is actually issued to the Participant upon exercise of the right. Finally, any Stock exchanged by an optionee as full or partial payment of the exercise price under any Stock Option exercised under the Plan, any Stock retained by the Corporation to comply with applicable income tax withholding requirements, and any Stock covered by an Award which is settled in cash, shall be added to the Stock available for Awards under the Plan.


 


(b)           All Stock issued under the Plan may be either authorized and unissued Stock or issued Stock reacquired by the Corporation. All of the available Stock may, but need not, be issued pursuant to the exercise of Incentive Stock Options; provided, however, notwithstanding a Stock Option’s designation, to the extent that Incentive Stock Options are exercisable for the first time by the Participant during any calendar year with respect to Stock whose aggregate Fair Market Value exceeds $100,000, such Stock Options shall be treated as Nonqualified Stock Options.


 




  





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(c)           [No Participant may receive in any calendar year Awards relating to more than twenty-five percent (25%) of the total number of shares of stock reserved under the Plan.]


 


(d)           The Stock reserved for issuance and the other limitations set forth above shall be subject to adjustment in accordance with Section 13 hereto.


 


6.           Types of Awards, Payments, and Limitations.


 


(a)           Awards under the Plan shall consist of Stock Options, SARs, Restricted Stock, Phantom Stock, Performance Unit Awards, RSUs, and other Stock or cash Awards, all as described below. Payment of Awards may be in the form of cash, Stock, other Awards or combinations thereof as the Committee shall determine, and with the expectation that any Award of Stock shall be styled to preserve such restrictions as it may impose. The Committee, either at the time of grant or by subsequent amendment, and subject to the provisions of Sections 18 and 19 hereto, may require or permit Participants to elect to defer the issuance of Stock or the settlement of Awards in cash under such rules and procedures as the Committee may establish under the Plan.


 


(b)           The Committee may provide that any Awards under the Plan earn dividends or dividend equivalents and interest on such dividends or dividend equivalents.  Such dividends or dividend equivalents may be paid currently or may be credited to a Participant’s Plan account and are subject to the same vesting or Performance Criteria as the underlying Award. Any crediting of dividends or dividend equivalents may be subject to such restrictions and conditions as the Committee may establish, including reinvestment in additional Stock or Stock equivalents.


 


(c)           Awards shall be evidenced by an agreement that sets forth the terms, conditions and limitations of such Award. Such terms may include, but are not limited to, the term of the Award, the provisions applicable in the event the Participant’s employment terminates, and the Corporation’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any Award including without limitation the ability to amend such Awards to comply with changes in applicable law. An Award may also be subject to other provisions (whether or not applicable to similar Awards granted to other Participants) as the Committee determines appropriate, including provisions intended to comply with federal or state securities laws and stock exchange requirements, understandings or conditions as to the Participant’s employment, requirements or inducements for continued ownership of Stock after exercise or vesting of Awards, or forfeiture of Awards in the event of termination of employment shortly after exercise or vesting, or breach of noncompetition or confidentiality agreements following termination of employment.


 


(d)           The Committee may make retroactive adjustments to and the Participant shall reimburse to the Corporation any cash or equity based incentive compensation paid to the Participant where such compensation was predicated upon achieving certain financial results that were substantially the subject of a restatement, and as a result of the restatement it is determined that the Participant otherwise would not have been paid such compensation, regardless of whether or not the restatement resulted from the Participant’s gross misconduct. In each such instance, the Corporation will, to the extent practicable, seek to recover the amount by which the Participant’s cash or equity based incentive compensation for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Corporation will, to the extent permitted by governing law, require reimbursement of any cash or equity based incentive compensation paid to any named executive officer where: (i) the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a substantial restatement, and (ii) in the Committee’s view the officer engaged in fraud or gross misconduct that caused or partially caused the need for the substantial restatement. In each instance described above, the Corporation will, to the extent practicable, seek to recover the described cash or equity based incentive compensation for the relevant period, plus a reasonable rate of interest.


 




  





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(e)           Measurement of the attainment of Performance Criteria may exclude, if the Committee provides in an Award agreement, impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of tax or accounting changes, each as defined by Generally Accepted Accounting Principles and as identified in the financial statements or in the notes to the financial statements.


 


(f)           The Committee, in its sole discretion, may require a Participant to have amounts or Stock that otherwise would be paid or delivered to the Participant as a result of the exercise or settlement of an Award under the Plan credited to a deferred compensation or stock unit account established for the Participant by the Committee on the Corporation’s books of account. In addition, the Committee may permit Participants to defer the receipt of payments of Awards pursuant to such rules, procedures or programs as may be established for purposes of this Plan.


 


(g)           The Committee need not require the execution of any such agreement by a Participant. Acceptance of the Award by the respective Participant shall constitute agreement by the Participant to the terms of the Award.


 


7.           Stock Options.


 


(a)           Stock Options may be granted to Participants, at any time as determined by the Committee. The Committee shall determine the number of shares subject to each Stock Option and whether the Stock Option is an Incentive Stock Option. The exercise price for each Stock Option shall be determined by the Committee but shall not be less than 100% of the Fair Market Value of the Stock on the date the Stock Option is granted unless the Stock Option is a substitute or assumed Stock Option granted pursuant to Section 14 hereto. Each Stock Option shall expire at such time as the Committee shall determine at the time of grant. Stock Options shall be exercisable at such time and subject to such terms and conditions as the Committee shall determine; provided, however, that no Stock Option shall be exercisable later than the tenth anniversary of its grant. The exercise price, upon exercise of any Stock Option, shall be payable to the Corporation in full by: (i) cash payment or its equivalent; (ii) tendering previously acquired Stock purchased on the open market having a Fair Market Value at the time of exercise equal to the exercise price or certification of ownership of such previously-acquired Stock; and (iii) to the extent permitted by applicable law, delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the Corporation the amount of sale proceeds from the Stock Option shares or loan proceeds to pay the exercise price and any withholding taxes due to the Corporation.


 




  





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In the discretion of the Committee, a Participant may elect to receive, without the payment by Participant of any additional consideration, the number of shares computed using the following formula:


 



	 	 	 	 	Y (A - B)
	 	 	X =	 	     A
	 	 	 	 	 
	

Where:

	 	X =	 	The number of shares to be issued to the Participant pursuant to this Section 7;
	 	 	 	 	 
	 	 	Y =	 	The number of shares in respect of which the net issue election is made;
	 	 	 	 	 
	 	 	A =	 	The Fair Market Value of one share of Stock at the time the net issue election is made; and
	 	 	 	 	 
	 	 	B =	 	The Exercise Price.





 


In the discretion of the Committee, after an IPO, payment for any shares subject to a Stock Option may also be made by delivering a properly executed exercise notice to the Corporation, together with a copy of irrevocable instructions to a brokerage firm designated by the Corporation to effect the immediate sale of such options and remit to the Corporation, out of the proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares of Stock as well as the amount of any federal, state, local or foreign withholding taxes.







8.           Stock Appreciation Rights.  SARs may be granted to Participants at any time as determined by the Committee. Notwithstanding any other provision of the Plan, the Committee may, in its discretion, substitute SARs which can be settled only in Stock for outstanding Stock Options. The grant price of a substitute SAR shall be equal to the exercise price of the related Stock Option and the substitute SAR shall have substantive terms (e.g., duration) that are equivalent to the related Stock Option. The grant price of any other SAR shall be equal to the Fair Market Value of the Stock on the date of its grant unless the SARs are substitute or assumed SARs granted pursuant to Section 14 hereto. A SAR may be exercised upon such terms and conditions and for the term the Committee in its sole discretion determines; provided, however, that the term shall not exceed the Stock Option term in the case of a substitute SAR or ten years in the case of any other SAR, and the terms and conditions applicable to a substitute SAR shall be substantially the same as those applicable to the Stock Option which it replaces. Upon exercise of a SAR, the Participant shall be entitled to receive payment from the Corporation in an amount determined by multiplying (a) the difference between the Fair Market Value of a share of Stock on the date of exercise and the grant price of the SAR by (b) the number of shares with respect to which the SAR is exercised. The payment may be made in cash or Stock, at the discretion of the Committee, except in the case of a substitute SAR payment which may be made only in Stock.


 




  





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9.           Restricted Stock, RSUs, and Phantom Stock.


 


(a)           Restricted Stock, RSUs, and Phantom Stock may be awarded or sold to Participants under such terms and conditions as shall be established by the Committee. Restricted Stock, RSUs, and Phantom Stock shall be subject to such restrictions as the Committee determines, including, without limitation, any of the following:


 


(i)           a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period;


 


(ii)          a requirement that the holder forfeit (or in the case of Stock or RSUs sold to the Participant, resell to the Corporation at cost) such Stock, RSUs, or Phantom Stock in the event of termination of employment during the period of restriction; and


 


(iii)         the attainment of Performance Criteria.


 


(b)           All restrictions shall expire at such times as the Committee shall specify, but generally shall require the Participant to complete three years of service to fully vest in the Award.


 


10.           Performance Unit Awards.


 


(a)           The Committee shall designate the Participants to whom Performance Unit Awards are to be awarded and determine the amount of the Award and the terms and conditions of each such Award; provided the Performance Period will not be less than twelve (12) months and to the extent the Award is designed to constitute performance-based compensation under Code Section 162(m), Performance Criteria shall be established within ninety (90) days of beginning of the period of service to which the Performance Criteria relates. Each Performance Unit Award shall entitle the Participant to a payment in cash upon the attainment of Performance Criteria and other terms and conditions specified by the Committee.


 


(b)           Notwithstanding the satisfaction of any Performance Criteria, the amount to be paid under a Performance Unit Award may be adjusted by the Committee on the basis of such further consideration as the Committee in its sole discretion shall determine. The Committee may, in its discretion, substitute actual Stock for the cash payment otherwise required to be made to a Participant pursuant to a Performance Unit Award.


 


11.           Other Stock or Cash Awards. In addition to the incentives described in Sections 6 through 10 above, the Board or the Committee may grant other incentives payable in cash or in Stock under the Plan as it determines to be in the best interests of the Corporation and subject to such other terms and conditions as it deems appropriate; provided an outright grant of Stock will not be made unless it is offered in exchange for cash compensation that has otherwise already been earned by the recipient including without limitation awards earned under the TRANSNETYX HOLDING CORP. Performance-Based Annual Incentive Plan (or any successor annual incentive plan of the Corporation.


 


12.           Change of Control. Except as otherwise determined by the Committee at the time of grant of an Award, upon a Change of Control, all outstanding Stock Options and SARs shall become vested and exercisable; all restrictions on Restricted Stock, RSUs, and Phantom Stock shall lapse; all Performance Criteria shall be deemed achieved at target levels and all other terms and conditions met; all Performance Unit Awards, RSUs, and Phantom Stock shall be paid out as promptly as practicable; and all other Stock or cash Awards shall be delivered or paid.


 




  





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13.           Adjustment Provisions.


 


(a)           In the event of any change affecting the number, class, market price or terms of the Stock by reason of share dividend, share split, recapitalization, reorganization, merger, consolidation, spin-off, disaffiliation of a subsidiary, combination of Stock, exchange of Stock, Stock rights offering, or other similar event, or any distribution to the holders of Stock other than a regular cash dividend, the Committee shall equitably substitute or adjust the number or class of Stock which may be issued under the Plan in the aggregate or to any one Participant in any calendar year and the number, class, price or terms of shares of Stock subject to outstanding Awards granted under the Plan.


 


(b)           In the event of any merger, consolidation or reorganization of the Corporation with or into another corporation which results in the outstanding Stock of the Corporation being converted into or exchanged for different securities, cash or other property, or any combination thereof, there shall be substituted, on an equitable basis, for each share of Stock then subject to an Award granted under the Plan, the number and kind of shares of stock, other securities, cash or other property to which holders of Stock will be entitled pursuant to the transaction.


 


14.           Substitution and Assumption of Awards. The Board or the Committee may authorize the issuance of Awards under this Plan in connection with the assumption of, or substitution for, outstanding Awards previously granted to individuals who become employees of the Corporation or any subsidiary as a result of any merger, consolidation, acquisition of property or stock, or reorganization, upon such terms and conditions as the Committee may deem appropriate. Any substitute Awards granted under the Plan shall not count against the Stock limitations set forth in Section 5 hereto.


 


15.           Nontransferability. Each Award granted under the Plan shall not be transferable other than by will or the laws of descent and distribution, and each Stock Option and SAR shall be exercisable during the Participant’s lifetime only by the Participant or, in the event of disability, by the Participant’s personal representative. In the event of the death of a Participant, exercise of any Award or payment with respect to any Award shall be made only by or to the beneficiary, executor or administrator of the estate of the deceased Participant or the person or persons to whom the deceased Participant’s rights under the Award shall pass by will or the laws of descent and distribution. Subject to the approval of the Committee in its sole discretion, Stock Options may be transferable to charity or to members of the immediate family of the Participant and to one or more trusts for the benefit of such family members, partnerships in which such family members are the only partners, or corporations in which such family members are the only stockholders. Members of the immediate family means the Participant’s spouse, children, stepchildren, grandchildren, parents, grandparents, siblings (including half brothers and sisters), and individuals who are family members by adoption.


 


16.           Taxes. The Corporation shall be entitled to withhold the amount of any tax attributable to any amounts payable or Stock deliverable under the Plan, after giving notice to the person entitled to receive such payment or delivery, and the Corporation may defer making payment or delivery as to any Award, if any such tax is payable, until indemnified to its satisfaction. A Participant may pay all or a portion of any withholding limited to the minimum statutory amount arising in connection with the exercise of a Stock Option or SAR or the receipt or vesting of Stock hereunder by electing to have the Corporation withhold Stock having a Fair Market Value equal to the amount required to be withheld.


 




  





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17.           Duration of the Plan. No Award shall be made under the Plan more than ten (10) years after the date of its adoption by the Board; provided, however, that the terms and conditions applicable to any Stock Option granted on or before such date may thereafter be amended or modified by mutual agreement between the Corporation and the Participant, or such other person as may then have an interest therein.


 


18.           Amendment and Termination. The Board or the Committee may amend the Plan from time to time or terminate the Plan at any time. However, unless expressly provided in an Award or the Plan, no such action shall reduce the amount of any existing Award or change the terms and conditions thereof without the Participant’s consent; provided, however, that the Committee may, in its discretion without the consent of the Participant: (i) substitute SARs which can be settled only in Stock for outstanding Stock Options; (ii) require an Award be deferred pursuant to Section 6 hereto; (iii) change the terms of an Award or the Plan in the event the exercise price upon vesting is more than fair market value of the underlying Stock of the Company; (iv) at any time the Board or  the Committee determines, in its sole discretion, that an amendment is advisable in light of any change in the Code or the regulations issued thereunder or any ruling or pronouncement by the Treasure Department or Internal Revenue Service; or (v) any time the Board or Committee, in its sole discretion, determines it is advisable or necessary in light of any federal or state securities law or other law or regulation. Notwithstanding any provision of the Plan to the contrary, to the extent that Awards under the Plan are subject to the provisions of Code Section 409A, the Plan as applied to those amounts shall be interpreted and administered so that it is consistent with such Code Section, and the Corporation shall obtain stockholder approval of any Plan amendment to the extent necessary to comply with applicable laws, regulations, or stock exchange rules.


 


19.           Other Provisions.


 


(a)           In the event any Award under this Plan is granted to an employee who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Committee may, in its sole discretion: (i) modify the provisions of the Plan as they pertain to such individuals to comply with applicable law, regulation or accounting rules consistent with the purposes of the Plan; and (ii) cause the Corporation to enter into an agreement with any local subsidiary pursuant to which such subsidiary will reimburse the Corporation for the cost of such equity incentives.


 


(b)           Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s employment with the Corporation; nor interfere in any way with the Participant’s right or the Corporation’s right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws and any enforceable agreement between the employee and the Corporation.


 




  





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(c)           No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee, in its discretion, shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock, or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.


 


(d)           In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.


 


(e)           Payments and other benefits received by a Participant under an Award made pursuant to the Plan generally shall not be deemed a part of a Participant’s compensation for purposes of determining the Participant’s benefits under any other employee benefit plans or arrangements provided by the Corporation or a subsidiary, unless the Committee expressly provides otherwise in writing or unless expressly provided under such plan. The Committee shall administer, construe, interpret, and exercise discretion under the Plan and each Award in a manner that is consistent and in compliance with a reasonable, good faith interpretation of all applicable laws, and that avoids (to the extent practicable) the classification of any Award as “deferred compensation” for purposes of Code Section 409A, as determined by the Committee.


 


20.           Governing Law, Venue. The Plan and any actions taken in connection herewith shall be governed by and construed in accordance with the laws of the state of Delaware without regard to any state’s conflict of laws principles.


 


21.           Code Section 409A.  This Plan shall be interpreted and administered consistent with Section 409A of the Code and shall incorporate the terms and provisions required by Section 409A.


 







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