Document:

Exhibit 10.1

 

CANNAE HOLDINGS, INC.

 

2017 OMNIBUS INCENTIVE PLAN

 

(effective as of [·], 2017)

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
Article 1. Establishment, Objectives, and   Duration
    	
1
    
	
 
    	
 
    
	
1.1.
    	
 
    	
Establishment of the Plan
    	
1
    
	
1.2.
    	
 
    	
Objectives of the Plan
    	
1
    
	
1.3.
    	
 
    	
Duration of the Plan
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
Article 2. Definitions
    	
1
    
	
 
    	
 
    
	
Article 3. Administration
    	
5
    
	
 
    	
 
    
	
3.1.
    	
 
    	
The Committee
    	
5
    
	
3.2.
    	
 
    	
Authority of the Committee
    	
5
    
	
3.3.
    	
 
    	
Decisions Binding
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
Article 4. Shares Subject to the Plan;   Individual Limits; and Anti-Dilution Adjustments
    	
6
    
	
 
    	
 
    
	
4.1.
    	
 
    	
Number of Shares Available for   Grants
    	
6
    
	
4.2.
    	
 
    	
Individual Limits
    	
7
    
	
4.3.
    	
 
    	
Adjustments in Authorized   Shares and Awards
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
Article 5. Eligibility and Participation
    	
8
    
	
 
    	
 
    
	
5.1.
    	
 
    	
Eligibility
    	
8
    
	
5.2.
    	
 
    	
Actual Participation
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
Article 6. Options
    	
8
    
	
 
    	
 
    
	
6.1.
    	
 
    	
Grant of Options
    	
8
    
	
6.2.
    	
 
    	
Award Agreement
    	
8
    
	
6.3.
    	
 
    	
Exercise Price
    	
8
    
	
6.4.
    	
 
    	
Duration of Options
    	
8
    
	
6.5.
    	
 
    	
Exercise of Options
    	
9
    
	
6.6.
    	
 
    	
Payment
    	
9
    
	
6.7.
    	
 
    	
Restrictions on Share   Transferability
    	
9
    
	
6.8.
    	
 
    	
Dividend Equivalents
    	
9
    
	
6.9.
    	
 
    	
Termination of Employment or   Service
    	
9
    
	
6.10.
    	
 
    	
Nontransferability of Options
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
Article 7. Stock Appreciation Rights
    	
10
    
	
 
    	
 
    
	
7.1.
    	
 
    	
Grant of SARs
    	
10
    
	
7.2.
    	
 
    	
Exercise of Tandem SARs
    	
10
    
	
7.3.
    	
 
    	
Exercise of Freestanding SARs
    	
10
    
	
7.4.
    	
 
    	
Award Agreement
    	
10
    
	
7.5.
    	
 
    	
Term of SARs
    	
10
    
	
7.6.
    	
 
    	
Payment of SAR Amount
    	
11
    
	
7.7.
    	
 
    	
Dividend Equivalents
    	
11
    
	
7.8.
    	
 
    	
Termination of Employment or   Service
    	
11
    
	
7.9.
    	
 
    	
Nontransferability of SARs
    	
11
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
Article 8. Restricted Stock
    	
11
    
	
 
    	
 
    
	
8.1.
    	
 
    	
Grant of Restricted Stock
    	
11
    
	
8.2.
    	
 
    	
Award Agreement
    	
11
    
	
8.3.
    	
 
    	
Other Restrictions
    	
11
    
	
8.4.
    	
 
    	
Removal of Restrictions
    	
12
    
	
8.5.
    	
 
    	
Voting Rights
    	
12
    
	
8.6.
    	
 
    	
Dividends and Other   Distributions
    	
12
    
	
8.7.
    	
 
    	
Termination of Employment or   Service
    	
12
    
	
8.8.
    	
 
    	
Nontransferability of   Restricted Stock
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
Article 9. Restricted Stock Units and   Performance Shares
    	
12
    
	
 
    	
 
    
	
9.1.
    	
 
    	
Grant of Restricted Stock   Units/Performance Shares
    	
12
    
	
9.2.
    	
 
    	
Award Agreement
    	
12
    
	
9.3.
    	
 
    	
Form and Timing of Payment
    	
13
    
	
9.4.
    	
 
    	
Voting Rights
    	
13
    
	
9.5.
    	
 
    	
Dividend Equivalents
    	
13
    
	
9.6.
    	
 
    	
Termination of Employment or   Service
    	
13
    
	
9.7.
    	
 
    	
Nontransferability
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
Article 10. Performance Units
    	
14
    
	
 
    	
 
    
	
10.1.
    	
 
    	
Grant of Performance Units
    	
14
    
	
10.2.
    	
 
    	
Award Agreement
    	
14
    
	
10.3.
    	
 
    	
Value of Performance Units
    	
14
    
	
10.4.
    	
 
    	
Form and Timing of Payment
    	
14
    
	
10.5.
    	
 
    	
Dividend Equivalents
    	
14
    
	
10.6.
    	
 
    	
Termination of Employment or   Service
    	
14
    
	
10.7.
    	
 
    	
Nontransferability
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
Article 11. Other Awards
    	
15
    
	
 
    	
 
    
	
11.1.
    	
 
    	
Grant of Other Awards
    	
15
    
	
11.2.
    	
 
    	
Payment of Other Awards
    	
15
    
	
11.3.
    	
 
    	
Termination of Employment or   Service
    	
15
    
	
11.4.
    	
 
    	
Nontransferability
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
Article 12. Replacement Awards
    	
15
    
	
 
    	
 
    
	
Article 13. Performance Measures
    	
15
    
	
 
    	
 
    
	
Article 14. Beneficiary Designation
    	
16
    
	
 
    	
 
    
	
Article 15. Deferrals
    	
17
    
	
 
    	
 
    
	
Article 16. Rights of Participants
    	
17
    
	
 
    	
 
    
	
16.1.
    	
 
    	
Continued Service
    	
17
    
	
16.2.
    	
 
    	
Participation
    	
17
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
Article 17. Change in Control
    	
17
    
	
 
    	
 
    
	
Article 18. Additional Forfeiture   Provisions
    	
18
    
	
 
    	
 
    
	
Article 19. Amendment, Modification,   Termination, and Stockholder Approval
    	
18
    
	
 
    	
 
    
	
19.1.
    	
 
    	
Amendment, Modification, and   Termination
    	
18
    
	
19.2.
    	
 
    	
Adjustment of Awards Upon the   Occurrence of Certain Unusual or Nonrecurring Events
    	
18
    
	
19.3.
    	
 
    	
Awards Previously Granted
    	
18
    
	
19.4.
    	
 
    	
Compliance with the Performance-Based   Exception
    	
18
    
	
19.5.
    	
 
    	
No Repricings
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
Article 20. Withholding
    	
19
    
	
 
    	
 
    
	
20.1.
    	
 
    	
Tax Withholding
    	
19
    
	
20.2.
    	
 
    	
Use of Shares to Satisfy   Withholding Obligation
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
Article 21. Indemnification
    	
19
    
	
 
    	
 
    
	
Article 22. Successors
    	
20
    
	
 
    	
 
    
	
Article 23. Limitation on Dividends and   Dividend Equivalents
    	
20
    
	
 
    	
 
    
	
Article 24. Minimum Vesting Period
    	
20
    
	
 
    	
 
    
	
Article 25. Holding Period
    	
20
    
	
 
    	
 
    
	
Article 26. Clawback of Benefits
    	
21
    
	
 
    	
 
    
	
Article 27. Legal Construction
    	
21
    
	
 
    	
 
    
	
27.1.
    	
 
    	
Gender, Number and References
    	
21
    
	
27.2.
    	
 
    	
Severability
    	
21
    
	
27.3.
    	
 
    	
Requirements of Law
    	
21
    
	
27.4.
    	
 
    	
Governing Law
    	
22
    
	
27.5.
    	
 
    	
Non-Exclusive Plan
    	
22
    
	
27.6.
    	
 
    	
Code Section 409A   Compliance
    	
22
    

 

iii

 

Cannae Holdings, Inc.

 

2017 Omnibus Incentive Plan

(as of [·], 2017)

 

Article 1.  Establishment, Objectives, and Duration

 

1.1.         Establishment of the Plan.  Cannae Holdings, Inc., a Delaware corporation (hereinafter referred to as the “Company”), hereby establishes an incentive compensation plan to be known as the “Cannae Holdings, Inc. 2017 Omnibus Incentive Plan” (hereinafter referred to as the “Plan”), effective as of [•], 2017 (the “Effective Date”).  The Plan permits the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Replacement Awards and Other Awards.

 

1.2.         Objectives of the Plan.  The objectives of the Plan are to optimize the profitability and growth of the Company through incentives that are consistent with the Company’s goals and that link the personal interests of Participants to those of the Company’s stockholders.

 

The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants who make or are expected to make significant contributions to the Company’s success and to allow Participants to share in the success of the Company.

 

1.3.         Duration of the Plan.  No Award may be granted under the Plan after the day immediately preceding the tenth anniversary of the Effective Date, or such earlier date as the Board shall determine.  The Plan will remain in effect with respect to outstanding Awards until no Awards remain outstanding.

 

Article 2.  Definitions

 

The following terms, when capitalized, shall have the meanings set forth below:

 

2.1.         “Award” means, individually or collectively, Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, and Other Awards granted under the Plan.

 

2.2.         “Award Agreement” means an agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award.

 

2.3.         “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

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

 

 

2.5.         “Change in Control” means that the conditions set forth in any one of the following subsections shall have been satisfied:

 

(a)           an acquisition immediately after which any Person possesses direct or indirect Beneficial Ownership of 50% or more of either the then outstanding shares of Company common stock (the “Outstanding Company Common Stock”) or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided that the following acquisitions shall be excluded: (i) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or a Subsidiary, or (iv) any acquisition pursuant to a transaction that complies with paragraphs (i), (ii) and (iii) of subsection (c) of this Section 2.5; or

 

(b)           during any period of two consecutive years, the individuals who, as of the beginning of such period, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided that for purposes of this Section 2.5, any individual who becomes a member of the Board subsequent to the beginning of such period and whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or

 

(c)           consummation of a reorganization, merger, share exchange, consolidation or sale or other disposition of all or substantially all of the assets of the Company (“Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant to which:

 

(i)            all or substantially all of the individuals and entities who have Beneficial Ownership, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction will have Beneficial Ownership, directly or indirectly, of more than 50% of, respectively, the outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, the Company or a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Resulting Corporation”) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the 

 

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Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be;

 

(ii)           no Person (other than (1) the Company, (2) an employee benefit plan (or related trust) sponsored or maintained by the Company or Resulting Corporation, or (3) any entity controlled by the Company or Resulting Corporation) will have Beneficial Ownership, directly or indirectly, of 50% or more of, respectively, the outstanding shares of common stock of the Resulting Corporation or the combined voting power of the outstanding voting securities of the Resulting Corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed prior to the Corporate Transaction; and

 

(iii)          individuals who were members of the Incumbent Board will continue to constitute at least a majority of the members of the board of directors of the Resulting Corporation; or

 

(d)           the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

2.6.         “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

2.7.         “Committee” means the entity, as specified in Section 3.1, authorized to administer the Plan.

 

2.8.         “Company” means Cannae Holdings, Inc., a Delaware corporation, and any successor thereto.

 

2.9.         “Consultant” means any consultant or advisor to the Company or a Subsidiary.

 

2.10.       “Director” means any individual who is a member of the Board of Directors of the Company or a Subsidiary.

 

2.11.       “Dividend Equivalent” means, with respect to Shares subject to an Award, a right to be paid an amount equal to the dividends declared and paid on an equal number of outstanding Shares of the same class.

 

2.12.       “Employee” means any employee of the Company or a Subsidiary.

 

2.13.       “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

2.14.       “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.

 

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2.15.       “Fair Market Value” means the fair market value of a Share as determined in good faith by the Committee or pursuant to a procedure specified in good faith by the Committee; provided, however, that if the Committee has not specified otherwise, Fair Market Value shall mean the closing price of a Share as reported in a consolidated  transaction reporting system on the date of valuation, or, if there was no such sale on the relevant date, then on the last previous day on which a sale was reported.

 

2.16.       “Freestanding SAR” means an SAR that is granted independently of any Options, as described in Article 7 herein.

 

2.17.       “Incentive Stock Option” or “ISO” means an Option that is intended to meet the requirements of Code Section 422.

 

2.18.       “Nonqualified Stock Option” or “NQSO” means an Option that is not intended to meet the requirements of Code Section 422.

 

2.19.       “Option” means an Incentive Stock Option or a Nonqualified Stock Option granted under the Plan, as described in Article 6 herein.

 

2.20.       “Other Award” means a cash, Share-based or Share-related Award (other than an Award described in Article 6, 7, 8, 9 or 10 of the Plan) that is granted pursuant to Article 11 herein.

 

2.21.       “Participant” means a current or former Employee, Director or Consultant who has rights relating to an outstanding Award.

 

2.22.       “Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of Code Section 162(m).

 

2.23.       “Performance Period” means the period during which a performance measure must be met.

 

2.24.       “Performance Share” means an Award granted to a Participant, as described in Article 9 herein.

 

2.25.       “Performance Unit” means an Award granted to a Participant, as described in Article 10 herein.

 

2.26.       “Period of Restriction” means the period Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture and are not transferable, as provided in Articles 8 and 9 herein.

 

2.27.       “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof.

 

2.28.       “Replacement Awards” means Awards issued in assumption of or substitution for awards granted under equity-based incentive plans sponsored or maintained by an entity with which the Company engages in a merger, acquisition or 

 

4

 

other business transaction, pursuant to which awards relating to interests in such entity (or a related entity) are outstanding immediately prior to such merger, acquisition or other business transaction (including without limitation the restricted shares of FNFV Group Common Stock outstanding at the time of the redemption of FNFV Group Common Stock).  Except as provided in Section 4.1, for all purposes hereunder, Replacement Awards shall be deemed Awards.

 

2.29.       “Restricted Stock” means an Award granted to a Participant, as described in Article 8 herein.

 

2.30.       “Restricted Stock Unit” means an Award granted to a Participant, as described in Article 9 herein.

 

2.31.       “Share” means a share of common stock of the Company, having a par value of $0.0001 per share, subject to adjustment pursuant to Section 4.3 hereof.

 

2.32.       “Stock Appreciation Right” or “SAR” means an Award granted to a Participant, either alone or in connection with a related Option, as described in Article 7 herein.

 

2.33.       “Subsidiary” means any (i) corporation in which the Company owns, directly or indirectly, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which the Company owns, directly or indirectly, at least fifty percent (50%) of the combined equity thereof, and (ii) other affiliate of the Company that has been designated by the Committee for purposes of the participation of its employees in the Plan.  Notwithstanding the foregoing, for purposes of determining whether any individual may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” shall have the meaning ascribed to such term in Code Section 424(f).

 

2.34.       “Tandem SAR” means an SAR that is granted in connection with a related Option, as described in Article 7 herein.

 

Article 3.  Administration

 

3.1.         The Committee.  The Plan shall be administered by the Compensation Committee of the Board or such other committee as the Board shall select (the “Committee”).  The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board.

 

3.2.         Authority of the Committee.  Except as limited by law or by the Certificate of Incorporation or Bylaws of the Company, and subject to the provisions herein, the Committee shall have full power to select the Employees, Directors and Consultants who shall participate in the Plan; determine the sizes and types of Awards; determine the terms and conditions of Awards in a manner consistent with the Plan; construe and interpret the Plan and any Award Agreement or other agreement or instrument entered into in connection with the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; and, subject to the provisions of Section 19.3 herein, amend the 

 

5

 

terms and conditions of any outstanding Award and Award Agreement.  Further, the Committee shall make all other determinations that may be necessary or advisable for the administration of the Plan.  As permitted by law, the Committee may delegate its authority as identified herein.

 

3.3.         Decisions Binding.  All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Board shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries, its stockholders, Directors, Employees, Consultants and their estates and beneficiaries and any transferee of an Award.

 

Article 4.  Shares Subject to the Plan; Individual Limits; and Anti-Dilution Adjustments

 

4.1.         Number of Shares Available for Grants.

 

(a)           Subject to adjustment as provided in Section 4.3 herein, the maximum number of Shares that may be delivered pursuant to Awards under the Plan shall be 3,900,000, provided that:

 

(i)            Shares that are potentially deliverable under an Award that is canceled, forfeited, settled in cash, expires or is otherwise terminated without delivery of such Shares shall not be counted as having been delivered under the Plan;

 

(ii)           Shares that are held back, tendered or returned to cover the Exercise Price or tax withholding obligations with respect to an Award shall not be counted as having been delivered under the Plan; and

 

(iii)          Shares that have been issued in connection with an Award of Restricted Stock that is canceled or forfeited prior to vesting or settled in cash, causing the Shares to be returned to the Company, shall not be counted as having been delivered under the Plan.

 

Shares delivered pursuant to the Plan may be authorized but unissued Shares, treasury Shares or Shares purchased on the open market. Shares delivered or deliverable pursuant to Replacement Awards shall not reduce the number of Shares available for delivery pursuant to Awards under the Plan.

 

(b)           Subject to adjustment as provided in Section 4.3 herein, all Shares authorized under the Plan and available for grant may be delivered in connection with “full value Awards,” meaning Awards other than Options, SARs, or Other Awards for which the Participant pays the grant date intrinsic value.

 

(c)           Notwithstanding the foregoing, for purposes of determining the number of Shares available for grant as Incentive Stock Options, only Shares that are subject to an Award that expires or is cancelled, forfeited or settled in cash shall be treated as not having been issued under the Plan.

 

6

 

4.2.         Individual Limits.  Subject to adjustment as provided in Section 4.3 herein, the following rules shall apply with respect to Awards and any related dividends or Dividend Equivalents intended to qualify for the Performance-Based Exception:

 

(a)           Options: The maximum aggregate number of Shares with respect to which Options may be granted in any one fiscal year to any one Participant shall be 3,000,000 Shares.

 

(b)           SARs: The maximum aggregate number of Shares with respect to which Stock Appreciation Rights may be granted in any one fiscal year to any one Participant shall be 3,000,000 Shares.

 

(c)           Restricted Stock: The maximum aggregate number of Shares of Restricted Stock that may be granted in any one fiscal year to any one Participant shall be 2,000,000 Shares.

 

(d)           Restricted Stock Units: The maximum aggregate number of Shares with respect to which Restricted Stock Units may be granted in any one fiscal year to any one Participant shall be 2,000,000 Shares.

 

(e)           Performance Shares: The maximum aggregate number of Shares with respect to which Performance Shares may be granted in any one fiscal year to any one Participant shall be 2,000,000 Shares.

 

(f)            Performance Units: The maximum aggregate compensation that can be paid pursuant to Performance Units awarded in any one fiscal year to any one Participant shall be $25,000,000 or a number of Shares having an aggregate Fair Market Value not in excess of such amount.

 

(g)           Other Awards: The maximum aggregate compensation that can be paid pursuant to Other Awards awarded in any one fiscal year to any one Participant shall be $25,000,000 or a number of Shares having an aggregate Fair Market Value not in excess of such amount.

 

(h)           Dividends and Dividend Equivalents: The maximum dividend or Dividend Equivalent that may be paid in any one fiscal year to any one Participant shall be $25,000,000.

 

4.3.         Adjustments in Authorized Shares and Awards.  In the event of any merger, reorganization, consolidation, recapitalization, liquidation, stock dividend, split-up, spin-off, stock split, reverse stock split, share combination, share exchange, extraordinary dividend, or any change in the corporate structure affecting the Shares, such adjustment shall be made in the number and kind of shares that may be delivered under the Plan as set forth in Section 4.1(a) and (b), the individual limits set forth in Section 4.2, and, with respect to outstanding Awards, the number and kind of shares subject to outstanding Awards, the Exercise Price, grant price or other price of shares subject to outstanding Awards, any performance conditions relating to shares, the market price of shares, or per-share results, and other terms and conditions of outstanding 

 

7

 

Awards, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; provided, however, that, unless otherwise determined by the Committee, the number of shares subject to any Award shall always be rounded down to a whole number.

 

Article 5.  Eligibility and Participation

 

5.1.         Eligibility.  Persons eligible to participate in the Plan include all Employees, Directors and Consultants.

 

5.2.         Actual Participation.  Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees, Directors and Consultants, those to whom Awards shall be granted and shall determine the nature and amount of each Award.

 

Article 6.  Options

 

6.1.         Grant of Options.  Subject to the terms and provisions of the Plan, Options may be granted to Participants in such amounts, upon such terms, and at such times as the Committee shall determine.

 

6.2.         Award Agreement.  Each Option grant shall be evidenced by an Award Agreement that shall specify the Exercise Price, the duration of the Option, the number of Shares to which the Option pertains, and such other provisions as the Committee shall determine.  The Award Agreement also shall specify whether the Option is intended to be an ISO or an NQSO.  Options that are intended to be ISOs shall be subject to the limitations set forth in Code Section 422.

 

6.3.         Exercise Price.  The Exercise Price for each grant of an Option under the Plan shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share (of the same class as the Shares that are subject to the Option) on the date the Option is granted; provided, however, that this restriction shall not apply to Replacement Awards or Awards that are adjusted pursuant to Section 4.3 herein. No ISO granted to a Participant who, at the time the ISO is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Subsidiary shall have an Exercise Price that is less than one hundred ten percent (110%) of the Fair Market Value of a Share (of the same class as the Shares that are subject to the ISO) on the date the ISO is granted.

 

6.4.         Duration of Options.  Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary date of its grant.  No ISO granted to a Participant who, at the time the ISO is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Subsidiary shall be exercisable later than the fifth (5th) anniversary of the date of its grant.

 

8

 

6.5.         Exercise of Options.  Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as set forth in the Award Agreement and as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant.

 

6.6.         Payment.  Options granted under this Article 6 shall be exercised by the delivery of a written notice of exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised and specifying the method of payment of the Exercise Price.

 

The Exercise Price of an Option shall be payable to the Company in full: (a) in cash or its equivalent, (b) by tendering Shares or directing the Company to withhold Shares from the Option having an aggregate Fair Market Value at the time of exercise equal to the Exercise Price, (c) by broker-assisted cashless exercise, (d) in any other manner then permitted by the Committee, or (e) by a combination of any of the permitted methods of payment.  The Committee may limit any method of payment, other than that specified under (a), for administrative convenience, to comply with applicable law, or for any other reason.

 

6.7.         Restrictions on Share Transferability.  The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.

 

6.8.         Dividend Equivalents.  An Award of Options shall not provide the Participant with the right to receive Dividend Equivalents.

 

6.9.         Termination of Employment or Service.  Each Participant’s Option Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s employment or, if the Participant is a Director or Consultant, service with the Company and/or a Subsidiary, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options, and may reflect distinctions based on the reasons for termination of employment or service.

 

6.10.       Nontransferability of Options.

 

(a)           Incentive Stock Options.  ISOs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and shall be exercisable during a Participant’s lifetime only by such Participant.

 

(b)           Nonqualified Stock Options.  NQSOs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and shall be exercisable during a Participant’s lifetime only by such Participant.

 

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Article 7.  Stock Appreciation Rights

 

7.1.         Grant of SARs.  Subject to the terms and provisions of the Plan, SARs may be granted to Participants in such amounts, upon such terms, and at such times as the Committee shall determine.  The Committee may grant Freestanding SARs, Tandem SARs, or any combination of these forms of SAR.

 

The Committee shall have complete discretion in determining the number of SARs granted to each Participant (subject to Article 4 herein) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to such SARs.

 

The grant price of a Freestanding SAR shall at least equal the Fair Market Value of a Share (of the same class as the Shares that are subject to the SAR) on the date of grant of the SAR, and the grant price of a Tandem SAR shall equal the Exercise Price of the related Option; provided, however, that this restriction shall not apply to Replacement Awards or Awards that are adjusted pursuant to Section 4.3 herein.

 

7.2.         Exercise of Tandem SARs.  A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable.  To the extent exercisable, Tandem SARs may be exercised for all or part of the Shares subject to the related Option.  The exercise of all or part of a Tandem SAR shall result in the forfeiture of the right to purchase a number of Shares under the related Option equal to the number of Shares with respect to which the SAR is exercised.  Conversely, upon exercise of all or part of an Option with respect to which a Tandem SAR has been granted, an equivalent portion of the Tandem SAR shall similarly be forfeited.

 

Notwithstanding any other provision of the Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR will expire no later than the expiration of the underlying ISO; (ii) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent (100%) of the difference between the Exercise Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to the ISO exceeds the Exercise Price of the ISO.

 

7.3.         Exercise of Freestanding SARs.  Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes upon them and sets forth in the Award Agreement.

 

7.4.         Award Agreement.  Each SAR grant shall be evidenced by an Award Agreement that shall specify the grant price, the term of the SAR, and such other provisions as the Committee shall determine.

 

7.5.         Term of SARs.  The term of an SAR granted under the Plan shall be determined by the Committee, in its sole discretion; provided, however, that such term shall not exceed ten (10) years.

 

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7.6.         Payment of SAR Amount.  Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

 

(a)           the difference between the Fair Market Value of a Share (of the same class as the Shares that are subject to the SAR) on the date of exercise over the grant price; by

 

(b)           the number of Shares with respect to which the SAR is exercised.

 

At the discretion of the Committee, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

 

7.7.         Dividend Equivalents.  An Award of SARs shall not provide the Participant with the right to receive Dividend Equivalents.

 

7.8.         Termination of Employment or Service.  Each SAR Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the SAR following termination of the Participant’s employment or, if the Participant is a Director or Consultant, service with the Company and/or a Subsidiary, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all SARs, and may reflect distinctions based on the reasons for termination of employment or service.

 

7.9.         Nontransferability of SARs.  SARs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and shall be exercisable during a Participant’s lifetime only by such Participant.

 

Article 8.  Restricted Stock

 

8.1.         Grant of Restricted Stock.  Subject to the terms and provisions of the Plan, Restricted Stock may be granted to Participants in such amounts, upon such terms, and at such times as the Committee shall determine.

 

8.2.         Award Agreement.  Each Restricted Stock grant shall be evidenced by an Award Agreement that shall specify the Period(s) of Restriction and, if applicable, Performance Period(s), the number of Shares of Restricted Stock granted, and such other provisions as the Committee shall determine.

 

8.3.         Other Restrictions.  The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock, a requirement that the issuance of Shares of Restricted Stock be delayed, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under applicable laws or under the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Stock.  The Company may retain 

 

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in its custody any certificate evidencing the Shares of Restricted Stock and place thereon a legend and institute stop-transfer orders on such Shares, and the Participant shall be obligated to sign any stock power requested by the Company relating to the Shares to give effect to the forfeiture provisions of the Restricted Stock.

 

8.4.         Removal of Restrictions.  Subject to applicable laws, Restricted Stock shall become freely transferable by the Participant after the last day of the Period of Restriction applicable thereto.  Once Restricted Stock is released from the restrictions, the Participant shall be entitled to receive a certificate evidencing the Shares.

 

8.5.         Voting Rights.  Unless otherwise determined by the Committee and set forth in a Participant’s Award Agreement, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares during the Period of Restriction.

 

8.6.         Dividends and Other Distributions.  During the Period of Restriction, all distributions, including regular cash dividends, paid with respect to Shares of Restricted Stock shall be credited to Participants subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they were paid and shall not be paid unless and until the Shares of Restricted Stock with respect to which such distributions were made vest.

 

8.7.         Termination of Employment or Service.  Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain unvested Restricted Stock following termination of the Participant’s employment or, if the Participant is a Director or Consultant, service with the Company and/or a Subsidiary, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Awards of Restricted Stock, and may reflect distinctions based on the reasons for termination of employment or service.

 

8.8.         Nontransferability of Restricted Stock.  Except as otherwise determined by the Committee, during the applicable Period of Restriction, a Participant’s Restricted Stock and rights relating thereto shall be available during the Participant’s lifetime only to such Participant, and such Restricted Stock and related rights may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated other than by will or by the laws of descent and distribution.

 

Article 9.  Restricted Stock Units and Performance Shares

 

9.1.         Grant of Restricted Stock Units/Performance Shares.  Subject to the terms and provisions of the Plan, Restricted Stock Units and Performance Shares may be granted to Participants in such amounts, upon such terms, and at such times as the Committee shall determine.

 

9.2.         Award Agreement.  Each grant of Restricted Stock Units or Performance Shares shall be evidenced by an Award Agreement that shall specify the applicable Period(s) of Restriction and/or Performance Period(s) (as the case may be), the number of 

 

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Restricted Stock Units or Performance Shares granted, and such other provisions as the Committee shall determine.  The initial value of a Restricted Stock Unit or Performance Share shall be at least equal to the Fair Market Value of a Share (of the same class as the Shares that are subject to the Award) on the date of grant; provided, however, that this  restriction shall not apply to Replacement Awards or Awards that are adjusted pursuant to Section 4.3 herein.

 

9.3.         Form and Timing of Payment.  Except as otherwise provided in Article 17 herein or a Participant’s Award Agreement, payment of Restricted Stock Units or Performance Shares shall be made at a specified settlement date that shall not be earlier than the last day of the Period of Restriction or Performance Period, as the case may be.  The Committee, in its sole discretion, may pay earned Restricted Stock Units and Performance Shares by delivery of Shares or by payment in cash of an amount equal to the Fair Market Value of such Shares (or a combination thereof).  The Committee may provide that settlement of Restricted Stock Units or Performance Shares shall be deferred, on a mandatory basis or at the election of the Participant.

 

9.4.         Voting Rights.  A Participant shall have no voting rights with respect to any Restricted Stock Units or Performance Shares granted hereunder; provided, however, that the Committee may deposit Shares potentially deliverable in connection with Restricted Stock Units or Performance Shares in a rabbi trust, in which case the Committee may provide for pass through voting rights with respect to such deposited Shares.

 

9.5.         Dividend Equivalents.  At the discretion of the Committee, an Award of Restricted Stock Units or Performance Shares may provide the Participant with the right to receive Dividend Equivalents, which, if provided, will be credited to an account for the Participant and will be subject to the restrictions and vesting conditions applicable to such Award, and may be settled in cash and/or Shares, as determined by the Committee in its sole discretion, subject in each case to such terms and conditions as the Committee shall establish. Notwithstanding anything herein to the contrary, any such Dividend Equivalents shall not be paid unless and until the Restricted Stock Units or Performance Shares with respect to which the Dividend Equivalents were made vest.

 

9.6.         Termination of Employment or Service.  Each Award Agreement shall set forth the extent to which the Participant shall have the right to receive a payout with respect to an Award of Restricted Stock Units or Performance Shares following termination of the Participant’s employment or, if the Participant is a Director or Consultant, service with the Company and/or a Subsidiary, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Restricted Stock Units or Performance Shares, and may reflect distinctions based on the reasons for termination of employment or service.

 

9.7.         Nontransferability.  Except as otherwise determined by the Committee, Restricted Stock Units and Performance Shares and rights relating thereto may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.

 

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Article 10.  Performance Units

 

10.1.       Grant of Performance Units.  Subject to the terms and conditions of the Plan, Performance Units may be granted to Participants in such amounts, upon such terms, and at such times as the Committee shall determine.

 

10.2.       Award Agreement.  Each grant of Performance Units shall be evidenced by an Award Agreement that shall specify the number of Performance Units granted, the Performance Period(s), the performance goals and such other provisions as the Committee shall determine.

 

10.3.       Value of Performance Units.  The Committee shall set performance goals in its discretion that, depending on the extent to which they are met, will determine the number and/or value of Performance Units that will be paid out to the Participants.

 

10.4.       Form and Timing of Payment.  Except as otherwise provided in Article 17 herein or a Participant’s Award Agreement, payment of earned Performance Units shall be made following the close of the applicable Performance Period.  The Committee, in its sole discretion, may pay earned Performance Units in cash or in Shares that have an aggregate Fair Market Value equal to the value of the earned Performance Units (or a combination thereof).  The Committee may provide that settlement of Performance Units shall be deferred, on a mandatory basis or at the election of the Participant.

 

10.5.       Dividend Equivalents.  At the discretion of the Committee, an Award of Performance Units may provide the Participant with the right to receive Dividend Equivalents, which, if provided, will be credited to an account for the Participant and subject to the restrictions and vesting conditions applicable to such Award, and may be settled in cash and/or Shares, as determined by the Committee in its sole discretion, subject in each case to such terms and conditions as the Committee shall establish. Notwithstanding anything herein to the contrary, any such Dividend Equivalents shall not be paid unless and until the Performance Units with respect to which the Dividend Equivalents were made vest.

 

10.6.       Termination of Employment or Service.  Each Award Agreement shall set forth the extent to which the Participant shall have the right to receive a payout with respect to an Award of Performance Units following termination of the Participant’s employment or, if the Participant is a Director or Consultant, service with the Company and/or a Subsidiary, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Performance Units and may reflect distinctions based on reasons for termination of employment or service.

 

10.7.       Nontransferability.  Except as otherwise determined by the Committee, Performance Units and rights relating thereto may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.

 

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Article 11.  Other Awards

 

11.1.       Grant of Other Awards.  Subject to the terms and conditions of the Plan, Other Awards may be granted to Participants in such amounts, upon such terms, and at such times as the Committee shall determine.  Types of Other Awards that may be granted pursuant to this Article 11 include, without limitation, the payment of cash or Shares based on attainment of performance goals established by the Committee, the payment of Shares as a bonus or in lieu of cash based on attainment of performance goals established by the Committee, and the payment of Shares in lieu of cash under other Company incentive or bonus programs.

 

11.2.       Payment of Other Awards.  Payment under or settlement of any such Awards shall be made in such manner and at such times as the Committee may determine.

 

11.3.       Termination of Employment or Service.  The Committee shall determine the extent to which the Participant shall have the right to receive Other Awards following termination of the Participant’s employment or, if the Participant is a Director or Consultant, service with the Company and/or a Subsidiary, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, may be included in an agreement entered into with each Participant, but need not be uniform among all Other Awards, and may reflect distinctions based on the reasons for termination of employment or service.

 

11.4.       Nontransferability.  Except as otherwise determined by the Committee, Other Awards and rights relating thereto may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.

 

Article 12.  Replacement Awards

 

Each Replacement Award shall have substantially the same terms and conditions (as determined by the Committee) as the award it replaces; provided, however, that the number of Shares subject to Replacement Awards, the Exercise Price, grant price or other price of Shares subject to Replacement Awards, any performance conditions relating to Shares underlying Replacement Awards, or the market price of Shares underlying Replacement Awards or per-Share results may differ from the awards they replace to the extent such differences are determined to be appropriate and equitable by the Committee, in its sole discretion.

 

Article 13.  Performance Measures

 

The Committee may specify that the attainment of one or more of the performance measures set forth in this Article 13 shall determine the degree of granting, vesting and/or payout with respect to Awards (including any related dividends or Dividend Equivalents) that the Committee intends will qualify for the Performance-Based Exception.  The performance goals to be used for such Awards shall be chosen from among the following performance measure(s): earnings per share, diluted earnings per 

 

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share, economic value created, market share (actual or targeted growth), net income (before or after taxes), operating income, earnings before interest, taxes, depreciation and amortization (EBITDA), earnings before interest, taxes, depreciation, amortization and restructuring costs (EBITDAR), adjusted net income after capital charge, return on assets (actual or targeted growth), return on capital (actual or targeted growth), return on equity (actual or targeted growth), return on investment (actual or targeted growth), revenue (actual or targeted growth), sales (including same store sales), cash flow (including net cash flow and free cash flow), operating margin, share price, share price growth, total stockholder return, book value, book value per share, tangible book value, tangible book value per share, cash book value, cash book value per share, and strategic business criteria consisting of one or more objectives based on meeting specified market penetration goals, productivity measures, geographic business expansion goals, cost targets, customer satisfaction or employee satisfaction goals, goals relating to merger synergies, management of employment practices and employee benefits, or supervision of litigation and information technology, goals relating to acquisitions or divestitures of Subsidiaries and/or other affiliates or joint ventures, and gains (before or after tax) from the sale, disposition, or other monetization or liquidity events relating to Subsidiaries, joint ventures or other entities in which the Company invests.  Each of the performance goals listed under this Article 13 shall be subject to such adjustments as may be specified by the Committee.  The targeted level or levels of performance with respect to such performance measures may be established at such levels and on such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies, and may relate to the Company, business units of the Company, Subsidiaries, or joint ventures or other entities in which the Company invests.  Awards (including any related dividends or Dividend Equivalents) that are not intended to qualify for the Performance-Based Exception may be based on these or such other performance measures as the Committee may determine.

 

Achievement of performance goals in respect of Awards intended to qualify under the Performance-Based Exception shall be measured over a Performance Period, and the goals shall be established not later than ninety (90) days after the beginning of the Performance Period or, if less than (90) days, the number of days that is equal to twenty-five percent (25%) of the relevant Performance Period applicable to the Award.  The Committee shall have the discretion to adjust the determinations of the degree of attainment of the pre-established performance goals; provided, however, that Awards that are designed to qualify for the Performance-Based Exception may not be adjusted upward (the Committee may, in its discretion, adjust such Awards downward).

 

Article 14.  Beneficiary Designation

 

Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit.  Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing during the Participant’s lifetime with the 

 

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Committee.  In the  absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

 

Article 15.  Deferrals

 

If permitted by the Committee, a Participant may defer receipt of amounts that would otherwise be provided to such Participant with respect to an Award, including Shares deliverable upon exercise of an Option or SAR or upon payout of any other Award.  If permitted, such deferral (and the required deferral election) shall be made in accordance with, and shall be subject to, the terms and conditions of the applicable nonqualified deferred compensation plan, agreement or arrangement under which such deferral is made and such other terms and conditions as the Committee may prescribe.

 

Article 16.  Rights of Participants

 

16.1.       Continued Service.  Nothing in the Plan shall:

 

(a)           interfere with or limit in any way the right of the Company or a Subsidiary to terminate any Participant’s employment or service at any time,

 

(b)           confer upon any Participant any right to continue in the employ or service of the Company or a Subsidiary, nor

 

(c)           confer on any Director any right to continue to serve on the Board of Directors of the Company or a Subsidiary.

 

16.2.       Participation.  No Employee, Director or Consultant shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to be selected to receive future Awards.

 

Article 17.  Change in Control

 

Except as otherwise provided in a Participant’s Award Agreement, upon the occurrence of a Change in Control, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges:

 

(a)           any and all outstanding Options and SARs granted hereunder shall become immediately exercisable; provided, however, that the Committee may instead provide that such Awards shall be automatically cashed out upon a Change in Control;

 

(b)           any Period of Restriction or other restriction imposed on Restricted Stock, Restricted Stock Units and Other Awards shall lapse; and

 

(c)           any and all Performance Shares, Performance Units and other Awards (if performance-based) shall be deemed earned at the target level (or if no target level is specified, the maximum level) with respect to all open Performance Periods.

 

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Article 18.  Additional Forfeiture Provisions

 

The Committee may condition a Participant’s right to receive a grant of an Award, to vest in the Award, to exercise the Award, to retain cash, Shares, other Awards, or other property acquired in connection with the Award, or to retain the profit or gain realized by the Participant in connection with the Award, including cash or other proceeds received upon sale of Shares acquired in connection with an Award, upon compliance by the Participant with specified conditions relating to non-competition, confidentiality of information relating to or possessed by the Company, non-solicitation of customers, suppliers, and employees of the Company, cooperation in litigation, non-disparagement of the Company and its officers, directors and affiliates, and other restrictions upon or covenants of the Participant, including during specified periods following termination of employment with or service for the Company and/or a Subsidiary.

 

Article 19.  Amendment, Modification, Termination, and Stockholder Approval

 

19.1.       Amendment, Modification, and Termination.  The Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part; provided, however, that no amendment that requires stockholder approval in order for the Plan to continue to comply with the New York Stock Exchange listing standards or any rule promulgated by the United States Securities and Exchange Commission or any securities exchange on which the securities of the Company are listed shall be effective unless such amendment shall be approved by the requisite vote of stockholders of the Company entitled to vote thereon within the time period required under such applicable listing standard or rule.

 

19.2.       Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.3 hereof) affecting the Company or the financial statements of the Company or of changes in applicable laws,  regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.  With respect to any Awards intended to comply with the Performance-Based Exception, any such adjustments shall be specified at such times and in such manner as will not cause such Awards to fail to qualify under the Performance-Based Exception.

 

19.3.       Awards Previously Granted.  No termination, amendment or modification of the Plan or of any Award shall adversely affect in any material way any Award previously granted under the Plan without the written consent of the Participant holding such Award, unless such termination, modification or amendment is required by applicable law and except as otherwise provided herein.

 

19.4.       Compliance with the Performance-Based Exception.  If it is intended that an Award (and/or any dividends or Dividend Equivalents relating to such Award) comply

 

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with the requirements of the Performance-Based Exception, the Committee may apply any restrictions it deems appropriate such that the Awards (and/or dividends or Dividend Equivalents) maintain eligibility for the Performance-Based Exception.  If changes are made to Code Section 162(m) or regulations promulgated thereunder to permit greater flexibility with respect to any Award or Awards available under the Plan, the Committee may, subject to this Article 19, make any adjustments to the Plan and/or Award Agreements it deems appropriate.

 

19.5.       No Repricings. Notwithstanding anything herein to the contrary, except as provided in Section 4.3 hereof, without first obtaining stockholder approval, (i) the exercise price of outstanding Options and grant price of outstanding SARs may not be reduced, (ii) Options and SARs may not be cancelled and replaced with Options or SARs with a lower exercise price or grant price, (iii) Options and SARs with an exercise or grant price that is equal to or in excess of the Fair Market Value of the underlying Share may not be purchased from Participants for cash or other securities, and (iv) outstanding Options or SARs may not otherwise be amended or modified in a manner that would be treated as a “repricing” under the then applicable rules, regulations or listing requirements adopted by the New York Stock Exchange.

 

Article 20.  Withholding

 

20.1.       Tax Withholding.  The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, domestic or foreign taxes required by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan.

 

20.2.       Use of Shares to Satisfy Withholding Obligation.  With respect to withholding required upon the exercise of Options or SARs, upon the vesting or settlement of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, or upon any other taxable event arising as a result of Awards granted hereunder, the Committee may require or may permit Participants to elect that the withholding requirement be satisfied, in whole or in part, by having the Company withhold, or by tendering to the Company, Shares having a Fair Market Value equal to up to the maximum statutory withholding that is imposed on the transaction (or such lesser amount as is necessary to avoid averse accounting treatment).  Any such elections by a Participant shall be irrevocable, made in writing and signed by the Participant.

 

Article 21.  Indemnification

 

Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company to the fullest extent permitted by Delaware law against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any 

 

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such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own  expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification is subject to the person having been successful in the legal proceedings or having acted in good faith and what is reasonably believed to be a lawful manner in the Company’s best interests.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

Article 22.  Successors

 

All obligations of the Company under the Plan and with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or other event, or a sale or disposition of all or substantially all of the business and/or assets of the Company.

 

Article 23.  Limitation on Dividends and Dividend Equivalents

 

Notwithstanding anything in this Plan to the contrary, if dividends or Dividend Equivalents are granted with respect to any Awards, the dividends or Dividend Equivalents shall be accumulated or reinvested and shall not be paid unless and until applicable vesting conditions are met.

 

Article 24.  Minimum Vesting Period

 

Notwithstanding any other provision of the Plan to the contrary, Awards under the Plan granted after June 14, 2017 shall vest no earlier than the first anniversary of the date the Award is granted; provided, however, that, notwithstanding the foregoing, (i) Awards that result in the issuance of an aggregate of up to five percent (5%) of the Shares available pursuant to Section 3.1(a) may be granted to any one or more Participants without respect to such minimum vesting provisions, and (ii) this Article 24 shall not prevent Awards from vesting due to death, disability or a Change in Control.

 

Article 25.  Holding Period

 

If and when (i) a Participant is an Officer (as defined in Rule 16a-1(f) of the Exchange Act) or holds the title of President of Data and Analytics, President of Origination Technology or President of Servicing Technology, and (ii) the Participant does not hold Shares with a value sufficient to satisfy the applicable stock ownership guidelines of the Company in place at that time, then the Participant must retain at least 50% of (a) any Shares of Restricted Stock that vest and (b) any Shares acquired by the Participant pursuant to an Award of Restricted Stock Units or Performance Units (excluding from the calculation any Shares withheld for purposes of satisfying applicable tax withholding obligations arising in connection with the vesting or settlement of the Award) until such time as the value of the Shares remaining in the Participant’s possession following any sale, assignment, pledge, exchange, gift or other transfer of the 

 

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Shares shall be sufficient to meet any applicable stock ownership guidelines of the Company in place at that time.  For the avoidance of doubt, at any time when a Participant holds, in the aggregate, Shares with a value sufficient to satisfy the applicable stock ownership guidelines of the Company in place at that time, the Participant may enter into a transaction with respect to any Shares acquired by Grantee pursuant to an Award of Restricted Stock, Restricted Stock Units or Performance Units so long as the Participant shall continue to satisfy such stock ownership guidelines following such transaction. This Article 25 may be interpreted, modified or amended by the Committee, in its reasonable discretion, without stockholder approval.

 

Article 26.  Clawback of Benefits

 

The Company may (a) cause the cancellation of any Award, (b) require reimbursement of any Shares or other amounts received pursuant an Award (including, without limitation, any gain realized upon disposition of any Shares acquired pursuant to an Award) by a Participant or related party, and (c) effect any other right of recoupment of equity or other compensation provided under the Plan or otherwise in accordance with any Company policies that currently exist or that may from time to time be adopted or modified in the future by the Company and/or as are required by applicable law (each, a “Clawback Policy”).  By accepting an Award, a Participant is agreeing to be bound by any existing or future Clawback Policy adopted by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company in its discretion (including without limitation any Clawback Policy adopted or amended to comply with applicable laws or stock exchange requirements) and is further agreeing that all of the Participant’s Award Agreements may be (or may be deemed to be) unilaterally amended by the Company, without the Participant’s consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy.

 

Article 27.  Legal Construction

 

27.1.       Gender, Number and References.  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.  Any reference in the Plan to an act or code or to any section thereof or rule or regulation thereunder shall be deemed to refer to such act, code, section, rule or regulation, as may be amended from time to time, or to any successor act, code, section, rule or regulation.

 

27.2.       Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 

27.3.       Requirements of Law.  The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

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27.4.       Governing Law.  To the extent not preempted by federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware, without giving effect to conflicts or choice of law principles.

 

27.5.       Non-Exclusive Plan.  Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable, including other incentive arrangements and awards that do or do not qualify under the Performance-Based Exception.

 

27.6.       Code Section 409A Compliance.  To the extent applicable, it is intended that this Plan and any Awards granted under the Plan comply with the requirements of Code Section 409A and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service (collectively “Section 409A”).  Any provision that would cause the Plan or any Award granted under the Plan to fail to satisfy Section 409A shall have no force or effect until amended to comply with Section 409A, which amendment may be retroactive to the extent permitted by Section 409A.

 

22Exhibit 10.2

 

CANNAE HOLDINGS, INC.

 

INCENTIVE PLAN

 

[·], 2017

 

Section 1. Establishment and Purpose

 

Cannae Holdings, Inc. (hereinafter referred to as the “Company”) hereby establishes a cash incentive compensation plan to be known as the “Cannae Holdings, Inc. Incentive Plan” (hereinafter referred to as the “Plan”).

 

The purpose of the Plan is to help the Company and its Subsidiaries attract and retain highly qualified employees and other service providers and to provide such employees and other service providers with additional financial incentives to promote the success of the Company and its Subsidiaries.

 

The Plan is effective as of [·], 2017. The Plan will remain in effect until such time as it shall be terminated by the Board, pursuant to Section 8 herein.

 

Section 2. Definitions

 

Unless the context requires otherwise, the following words, when capitalized, shall have the meanings ascribed below:

 

(a) “Board” means the Board of Directors of the Company.

 

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

 

(c) “Committee” means the committee established to administer the Plan pursuant to Section 3.

 

(d) “Company” means Cannae Holdings, Inc., and any successor thereto.

 

(e) “Participant” means an individual who is selected by the Committee to participate in the Plan.

 

(f) “Performance Period” means the fiscal year of the Company or such shorter or longer period as determined by the Committee.

 

(g) “Plan” means the Cannae Holdings, Inc. Incentive Plan, as may be amended from time to time.

 

(h) “Subsidiary” means any corporation in which the Company owns, directly or indirectly, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including, without limitation, partnerships and joint ventures) in which the Company owns, directly or indirectly, at least fifty percent (50%) of the combined equity thereof.

 

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Section 3. Administration

 

The Committee will consist of the Compensation Committee of the Board or, in the absence of a Compensation Committee, the Board or such committee as the Board shall select (the “Committee”).  Once appointed, the Committee will serve in its designated capacity until otherwise directed by the Board.  The Plan may be administered by different bodies with respect to different Participants.  Subject to applicable laws and any applicable stock exchange rules, the Committee may delegate to a committee of one or more managers or to one or more employees any of its authority hereunder.  Subject to applicable laws and the provisions of the Plan, and except as otherwise provided by the Board, the Committee shall have full and final authority in its discretion to establish rules and take all actions, including, without limitation, interpreting the terms of the Plan and any related rules or regulations or other documents enacted hereunder and deciding all questions of fact arising in their application, determined by the Committee to be necessary in the administration of the Plan.  Decisions of the Committee shall be final, conclusive and binding on all persons and entities.  Notwithstanding the foregoing, to the extent an incentive award is intended to meet the performance-based compensation exemption under Section 162(m) of the Code, the incentive award will be administered by the Compensation Committee of the Board (or a subcommittee thereof consisting solely of two or more non-employee directors, as that term is used in Treasury Regulations promulgated under Section 162(m)).

 

Section 4. Eligibility

 

Eligibility under the Plan is limited to employees and other individuals who provide services to or for the benefit of the Company and/or its Subsidiaries, and who are designated by the Committee to participate in the Plan.

 

Section 5. Form of Payment

 

Payment of incentive awards under the Plan shall be made in cash.

 

Section 6. Determination of Incentive Awards

 

(a) Designation of Participants, Performance Period and Performance Objectives.  The Committee shall select the Participants to whom incentive awards shall be granted, designate the applicable Performance Period, establish the target incentive award for each Participant, if applicable, and establish the performance objective or objectives that must be satisfied in order for a Participant to receive an incentive award for such Performance Period.  Any such performance objectives will be based upon one or more of the following performance measures, or, if the incentive award is not intended to meet the performance-based compensation exemption under Section 162(m) of the Code, such other performance measures (including, without limitation, individual measures) as determined by the Committee:

 

(i)                                     earnings per share,

 

(ii)                                  diluted earnings per share,

 

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(iii)                               economic value created,

 

(iv)                              market share (actual or targeted growth),

 

(v)                                 net income (before or after taxes),

 

(vi)                              operating income,

 

(vii)                           earnings before interest, taxes, depreciation and amortization (EBITDA),

 

(viii)                        earnings before interest, taxes, depreciation, amortization and restructuring costs (EBITDAR),

 

(ix)                              adjusted net income after capital charge,

 

(x)                                 return on assets (actual or targeted growth),

 

(xi)                              return on capital (actual or targeted growth),

 

(xii)                           return on equity (actual or targeted growth),

 

(xiii)                        return on investment (actual or targeted growth),

 

(xiv)                       revenue (actual or targeted growth),

 

(xv)                          sales (including same store sales),

 

(xvi)                       cash flow (including net cash flow and free cash flow),

 

(xvii)                    operating margin,

 

(xviii)                 share price,

 

(xix)                       share price growth,

 

(xx)                          total stockholder return,

 

(xxi)                       book value,

 

(xxii)                    book value per share,

 

(xxiii)                 tangible book value,

 

(xxiv)                tangible book value per share,

 

(xxv)                   cash book value,

 

(xxvi)                cash book value per share, and

 

(xxvii)             strategic business criteria consisting of one or more objectives based on meeting specified market penetration goals, productivity measures, geographic business expansion goals, cost targets, customer satisfaction or employee satisfaction goals, goals relating to merger synergies, management of employment practices and employee benefits, or supervision of litigation and information technology, goals relating to acquisitions or divestitures of Subsidiaries and/or other affiliates or joint ventures, and gains (before or after tax) from the sale, disposition, or other monetization or liquidity events relating to Subsidiaries, joint ventures or other entities in which the Company invests.

 

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The targeted level or levels of performance with respect to such performance measures may be established at such levels and on such terms as the Committee may determine, in its discretion, performance of the Company, a Subsidiary and/or any individual business units or divisions of the Company or a Subsidiary, and they may be in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies, and may relate to the Company, business units of the Company, Subsidiaries, or joint ventures or other entities in which the Company invests.

 

(b) Payment of Awards. As soon as reasonably practicable after the end of each Performance Period, the Committee shall (i) determine whether the performance objectives for the Performance Period have been satisfied, (ii) determine the amount of the incentive award to be paid to each Participant for such Performance Period and (iii) to the extent the incentive award is intended to meet the performance-based compensation exemption under Section 162(m) of the Code, certify such determination in writing.  Incentive award shall be paid to the Participants following such determination (or, if applicable, certification) by the Committee no later than the 15th day of the third month following the close of the Performance Period with respect to which the awards are made.

 

(c) Maximum Award.  The maximum incentive award that may be paid under the Plan to a participant during any calendar year shall be $25,000,000.

 

(d) Committee Discretion.  Notwithstanding the foregoing, to the extent permitted by applicable law, the Committee shall retain discretion to adjust performance goals, measures and/or targets and the amounts payable with respect to an award, including, without limitation, the discretion to reduce the amount of any incentive award that would otherwise be payable to a Participant, including a reduction in such amount to zero; provided, that the Committee will not exercise such discretion to increase the amount of any incentive award that would otherwise be payable to a Participant to the extent the incentive award is intended to meet the performance-based compensation exemption under Section 162(m) of the Code.

 

Section 7. Termination of Employment

 

Unless otherwise determined by the Committee or specified in an employment or other binding agreement with the Participant, a Participant shall have no right to an incentive award under the Plan for any Performance Period in which the Participant is not actively employed by the Company or a Subsidiary on the last day of the Performance Period to which such award relates.  The Committee, in its sole and absolute discretion, may impose such additional service restrictions as it deems appropriate.

 

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Section 8. Amendment or Termination of the Plan

 

The Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part.

 

Section 9. Taxes

 

Any amount payable to a Participant under this Plan shall be subject to any applicable Federal, state and/or local income and employment taxes and any other amounts that the Company is required at law to deduct and withhold from such payment.

 

Section 10. General Provisions

 

(a) No Rights to Employment. Nothing contained in the Plan shall create any rights of employment in any Participant or in any way affect the right and power of the Company or a Subsidiary to discharge any Participant or otherwise terminate the Participant’s employment at any time with or without cause or to change the terms of employment in any way.

 

(b) Non-Exclusive Plan. The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable.

 

(c) Unfunded Plan. Incentive award under the Plan will be paid from the general assets of the Company, and the rights of Participants under the Plan will be only those of general unsecured creditors of the Company.

 

(d) Non-alienation of Benefits. Except as expressly provided herein, no Participant shall have the power or right to sell, transfer, assign, pledge or otherwise encumber the Participant’s interest under the Plan.

 

(e) Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 

(f) Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or other event, or a sale or disposition of all or substantially all of the business and/or assets of the Company and references to the “Company” herein shall be deemed to refer to such successors.

 

(g) Governing Law. All questions concerning the construction, validity and interpretation of this Plan shall be governed by and construed in accordance with the domestic laws of the State of Delaware applicable to contracts made and to be performed in the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction.

 

(h) Code Section 409A Compliance. To the extent applicable, it is intended that this Plan and any incentive awards granted hereunder comply with, or qualify for an exemption from, the

 

5

 

requirements of Section 409A of the Code and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service (“Section 409A”), and the Plan and any award agreement or other document relating to an award under the Plan shall be interpreted accordingly.  Any provision that would cause the Plan or any incentive award granted hereunder to fail to satisfy Section 409A shall have no force or effect until amended to comply with Section 409A, which amendment may be retroactive to the extent permitted by Section 409A.  Notwithstanding the foregoing, the Company makes no representation or warranty that awards under the Plan will not be subject to (or will comply with) Section 409A of the Code, and in no event shall the Board, the Company or any affiliate of the Company (or their employees, agents, officers, directors, managers, successors or assigns) be liable to any Participant for any failure to comply with Section 409A or an applicable exemption thereunder.

 

(i) Clawback of Benefits. The Company may (1) cause the cancellation of any incentive award, (2) require reimbursement of any incentive award by a Participant, and (3) effect any other right of recoupment of compensation provided under the Plan or otherwise in accordance with any Company policies that currently exist or that may from time to time be adopted or modified in the future by the Company and/or applicable law (each, a “Clawback Policy”).  In addition, a Participant may be required to repay to the Company certain previously paid compensation, provided under the Plan, in accordance with any Clawback Policy.  By accepting an incentive award, a Participant is also agreeing to be bound by any existing or future Clawback Policy adopted by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company in its discretion (including without limitation any Clawback Policy adopted or amended to comply with applicable laws or stock exchange requirements) and is further agreeing that any rights a Participant has under the Plan may be unilaterally amended by the Company, without the Participant’s consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy.

 

6

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