Document:

exhibit101.htm

Exhibit 10.1

CENTENE CORPORATION

Amended and Restated

2003 Stock Incentive Plan

1.      Purpose

 

The purpose of this Amended and Restated 2003 Stock Incentive Plan (the “Plan”) of Centene Corporation, a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing such persons with equity ownership opportunities and performance-based incentives and thereby better aligning the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and any other business venture (including joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).

 

2.      Eligibility

 

All of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted options, restricted stock, restricted stock units and stock appreciation rights (each, an “Award”) under the Plan. Each person who has been granted an Award under the Plan shall be deemed a “Participant.”

 

3.      Administration and Delegation

 

	
  

	
(a)

	
Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable, provided that awards to a director may only be recommended by a committee comprised solely of independent directors and approved only by all independent directors of the board. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.

 

	
  

	
(b)

	
Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a Committee of the Board or the executive officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or executive officers.

 

	
  

	
(c)

	
Delegation to Executive Officers. To the extent permitted by applicable law, the Board may delegate to one or more executive officers of the Company the power to grant Awards to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of the Awards to be granted by such executive officers (including the exercise price of such Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to Awards that the executive officers may grant; provided further, however, that no executive officer shall be authorized to grant Awards to any “executive officer” of the Company, as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act).

 

4.      Stock Available for Awards

 

	
  

	
(a)

	
Number of Shares. Subject to adjustment under Section 7, Awards may be made under the Plan for up to 9,050,000 shares of common stock, $.001 par value per share, of the Company (“Common Stock”). For purposes of counting the number of shares available for the grant of Awards under the Plan,

 

	
  

	
(1)

	
shares of Common Stock covered by independent SARs (as hereinafter defined) shall be counted against the number of shares available for the grant of Awards under the Plan; provided that independent SARs that may be settled in cash only shall not be so counted;

 

	
  

	
(2)

	
if any Award (A) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (B) results in any Common Stock not being issued (including as a result of an independent SAR that was settleable either in cash or in stock actually being settled in cash), the unused Common Stock covered by such Award shall again be available for the grant of Awards under the Plan; provided, however, in the case of Incentive Stock Options (as hereinafter defined), the foregoing shall be subject to any limitations under the Code; and

 

	
  

	
(3)

	
shares of Common Stock tendered to the Company by a Participant to (A) purchase shares of Common Stock upon the exercise of an Award or (B) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards under the Plan. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

 

	
  

	
(b)

	
Sub-limits. Subject to adjustment under Section 8, the following sub-limits on the number of shares subject to Awards shall apply:

 

	
  

	
(1)

	
Per-Participant Limit. The maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan shall be 1,500,000 per calendar year. For purposes of the foregoing limit, the combination of an Option in tandem with a SAR shall be treated as a single Award. The per-Participant limit described in this Section 4(b)(1) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto (“Section 162(m)”).

 

5.      Stock Options

 

	
  

	
(a)

	
General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option that is not intended to be an Incentive Stock Option (as hereinafter defined) shall be designated a “Nonstatutory Stock Option.”

 

	
  

	
(b)

	
Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of Centene Corporation, any of Centene Corporation’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option.

 

	
  

	
(c)

	
Exercise Price. The Board shall establish the exercise price at the time each Option is granted and specify it in the applicable option agreement, provided, however, that the exercise price shall be not less than 100% of the fair market value of the Common Stock, as determined by the Board, at the time the Option is granted.

 

	
  

	
(d)

	
Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement, provided, however, that no Option will be granted for a term in excess of 10 years.

 

	
  

	
(e)

	
Exercise of Option. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in Section 5(f) for the number of shares for which the Option is exercised.

 

	
  

	
(f)

	
Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

 

	
  

	
(1)

	
in cash or by check, payable to the order of the Company;

 

	
  

	
(2)

	
except as the Board may, in its sole discretion, otherwise provide in an option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

 

	
  

	
(3)

	
when the Common Stock is registered under the Exchange Act, by delivery of shares of Common Stock owned by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board in good faith (“Fair Market Value”), provided (i) such method of payment is then permitted under applicable law and (ii) such Common Stock, if acquired directly from the Company was owned by the Participant at least six months prior to such delivery;

 

	
  

	
(4)

	
such other lawful consideration as the Board may determine in its sole discretion, provided that (i) at least an amount equal to the par value of the Common Stock being purchased shall be paid in cash and (ii) no such consideration shall consist in whole or in part of a promissory note or other evidence of indebtedness; or

 

	
  

	
(5)

	
by any combination of the above permitted forms of payment.

 

	
  

	
(g)

	
Substitute Options. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Options in substitution for any options or other stock or stock-based Awards granted by such entity or an affiliate thereof. Substitute Options may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Options contained in the other sections of this Section 5 or in Section 2.

 

6.      Restricted Stock; Restricted Stock Units

 

	
  

	
(a)

	
Grants. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock to be delivered in the future (“Restricted Stock Units”) subject to such terms and conditions on the delivery of the shares of Common Stock as the Board shall determine (each Award for Restricted Stock or Restricted Stock Units, a “Restricted Stock Award”). The Board may also permit an exchange of unvested shares of Common Stock that have already been delivered to a Participant for an instrument evidencing the right to future delivery of Common Stock at such time or times, and on such conditions, as the Board shall specify.

 

	
  

	
(b)

	
Terms and Conditions.

 

	
  

	
(1)

	
The Board shall determine the terms and conditions of any such Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue price, if any.

 

	
  

	
(2)

	
If the Board determines to grant any Restricted Stock Awards designed to satisfy the requirements of Section 162(m)(4)(C) of the Code with respect to remuneration payable to a covered employee as defined in Section 162(m)(3) of the Code (“Covered Employee”) solely on account of one or more performance goals (“Performance Goals”) to be achieved during a performance period (“Performance Period”), the following requirements shall apply:

 

	
  

	
(A)

	
A Committee consisting of two or more outside directors:

 

	
  

	
(i)

	
who are not current employees of the Company or any subsidiary or affiliate of the Company,

 

	
  

	
(ii)

	
who are not former employees of the Company or any subsidiary or affiliate of the Company who receive compensation for prior services (other than benefits under a tax-qualified retirement plan) from the Company or any subsidiary or affiliate of the Company during the taxable year,

 

	
  

	
(iii)

	
who have not been officers of the Company or a subsidiary or affiliate of the Company, and

 

	
  

	
(iv)

	
who do not receive direct or indirect compensation from the Company or any subsidiary or affiliate of the Company in any capacity other than as a director, shall determine and administer the grants provided for under this Section 6(b)(2).

 

	
  

	
(B)

	
(i)

	
The Performance Goals upon which the payment or vesting of an Award to a Covered Employee pursuant to this Section 6(b)(2) shall be limited to the following performance measures (“Performance Measures”):

 

	
  

	
(a)

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

 

	
  

	
(b)

	
earnings per share,

 

	
  

	
(c)

	
net sales or revenue growth,

 

	
  

	
(d)

	
net operating profit,

 

	
  

	
(e)

	
return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue),

 

	
  

	
(f)

	
cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment),

 

	
  

	
(g)

	
earnings before or after taxes, interest, depreciation, and/or amortization,

 

	
  

	
(h)

	
gross or operating margins,

 

	
  

	
(i)

	
productivity ratios,

 

	
  

	
(j)

	
share price (including, but not limited to, growth measures and total shareholder return),

 

	
  

	
(k)

	
expense targets,

 

	
  

	
(l)

	
margins,

 

	
  

	
(m)

	
operating efficiency,

 

	
  

	
(n)

	
market share,

 

	
  

	
(o)

	
customer satisfaction,

 

	
  

	
(p)

	
working capital targets, and

 

	
  

	
(q)

	
economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital).

 

	
  

	
(ii)

	
As the Committee may deem appropriate:

 

	
  

	
(a)

	
any of the foregoing Performance Measure(s) may be used to measure the performance of the Company, a subsidiary, and/or affiliate of the Company as a whole or any business unit of the Company, subsidiary, and/or affiliate or any combination thereof during the Performance Period;

 

	
  

	
(b)

	
any of the foregoing Performance Measures may be used to compare the performance of the Company, a subsidiary and/or affiliate of the Company as a whole or any business unit of the Company, subsidiary and/or affiliate to the performance of a group of comparator companies, or published or special index that the Committee, in its sole discretion, deems appropriate;

 

	
  

	
(c)

	
the Committee may select Performance Measure (j) above as compared to various stock market indices; and

 

	
  

	
(d)

	
the Committee shall have authority to provide for accelerated vesting of any Award based on the achievement of Performance Goals pursuant to the foregoing Performance Measures.

	
 

 

	
  

	
(iii)

	
The Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period:

 

	
  

	
(a)

	
asset write-downs,

 

	
  

	
(b)

	
litigation or claim judgments or settlements,

 

	
  

	
(c)

	
the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results,

 

	
  

	
(d)

	
any reorganization and restructuring programs,

 

	
  

	
(e)

	
extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year,

 

	
  

	
(f)

	
acquisitions or divestitures, and

 

	
  

	
(g)

	
foreign exchange gains and losses.

 

Such inclusions or exclusions shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

 

	
  

	
(C)

	
The Performance Period for any Award pursuant to this Section 6(b)(2) shall not be less than one taxable year of the Company.

 

	
  

	
(D)

	
The maximum number of shares the Committee may grant to a Covered Employee during a taxable year of the Company pursuant to this Section 6(b)(2) shall be 1,000,000 shares.

 

	
  

	
(E)

	
The Performance Goals for any Award pursuant to this Section 6(b)(2) shall be memorialized in writing and furnished to affected Covered Employees not later than 90 days after the beginning of the Performance Period to which they apply.

 

	
  

	
(F)

	
The Committee shall certify in writing the accomplishment of the Performance Goals related to an Award before the Award can become unconditional.

 

	
  

	
(G)

	
Awards that are intended to qualify as Performance-Based Compensation may not be adjusted upward. The Committee shall retain the discretion to adjust such Awards downward, either on a formula or discretionary basis or any combination, as the Committee determines.

 

	
  

	
(H)

	
In the event that applicable tax and/or securities laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval, provided the exercise of such discretion does not violate Code Section 409A. In addition, in the event that the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make such grants without satisfying the requirements of Code Section 162(m) and base vesting on Performance Measures other than those set forth in this Section 6(b)(2).

 

	
  

	
(I)

	
This Section 6(b)(2) is designed to comply with the requirements of Section 162(m)(4)(C) of the Code and regulations issued thereunder and all provisions of this Section 6(b)(2) shall be applied consistent therewith.

 

	
  

	
(c)

	
Stock Certificates. Any stock certificates issued in respect of a Restricted Stock Award, if applicable, shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.

 

7.      Stock Appreciation Rights

 

	
  

	
(a)

	
General. A Stock Appreciation Right (“SAR”) is an Award entitling the holder, upon exercise, to receive an amount in Common Stock determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of Common Stock. The date as of which such appreciation or other measure is determined shall be the exercise date.

 

	
  

	
(b)

	
Grants. SARs may be granted in tandem with, or independently of, Options granted under the Plan. The Board shall establish the exercise price at the time each SAR is granted and specify it in the applicable SAR agreement, provided, however, that the exercise price shall be not less than 100% of the fair market value of the Common Stock, as determined by the Board, at the time the SAR is granted.

 

	
  

	
(1)

	
Tandem Awards. When SARs are expressly granted in tandem with Options, (i) the SAR will be exercisable only at such time or times, and to the extent, that the related Option is exercisable (except to the extent designated by the Board in connection with a Reorganization Event) and will be exercisable in accordance with the procedure required for exercise of the related Option; (ii) the SAR will terminate and no longer be exercisable upon the termination or exercise of the related Option, except to the extent designated by the Board in connection with a Reorganization Event and except that a SAR granted with respect to less than the full number of shares covered by an Option will not be reduced until the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the SAR; (iii) the Option will terminate and no longer be exercisable upon the exercise of the related SAR; and (iv) the SAR will be transferable only with the related Option.

 

	
  

	
(2)

	
Independent SARs. A SAR not expressly granted in tandem with an Option will become exercisable at such time or times, and on such conditions, as the Board may specify in the SAR Award.

 

	
  

	
(c)

	
Exercise. SARs may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board, together with any other documents required by the Board.

 

8.      Adjustments for Changes in Common Stock and Certain Other Events

 

	
  

	
(a)

	
Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a normal cash dividend, (i) the number and class of securities available under the Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the number and class of securities and exercise price per share subject to each outstanding Option, and (iv) the repurchase price per share subject to each outstanding Restricted Stock Award shall be appropriately adjusted by the Company (or substituted Awards may be made, if applicable) to the extent the Board shall determine, in good faith, that such an adjustment (or substitution) is necessary and appropriate. If this Section 8(a) applies and Section 8(c) also applies to any event, Section 8(c) shall be applicable to such event, and this Section 8(a) shall not be applicable.

 

	
  

	
(b)

	
Liquidation or Dissolution. In the event of a proposed liquidation or dissolution of the Company, the Board shall upon written notice to the Participants provide that all then unexercised Options will (i) become exercisable in full as of a specified time at least 10 business days prior to the effective date of such liquidation or dissolution and (ii) terminate effective upon such liquidation or dissolution, except to the extent exercised before such effective date. The Board may specify the effect of a liquidation or dissolution on any Restricted Stock Award granted under the Plan at the time of the grant.

 

	
  

	
(c)

	
Reorganization Events.

 

	
  

	
(1)

	
Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or (b) any exchange of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange transaction.

 

	
  

	
(2)

	
Consequences of a Reorganization Event on Options. Upon the occurrence of a Reorganization Event,the Board shall provide that all outstanding Options shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof). For purposes hereof, an Option shall be considered to be assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair market value to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

 

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate thereof) does not agree to assume, or substitute for, such Options, then the Board shall, upon written notice to the Participants, provide that all then unexercised Options will become exercisable in full as of a specified time prior to the Reorganization Event and will terminate immediately prior to the consummation of such Reorganization Event, except to the extent exercised by the Participants before the consummation of such Reorganization Event; provided, however, that in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share of Common Stock surrendered pursuant to such Reorganization Event (the “Acquisition Price”), then the Board may instead provide that all outstanding Options shall terminate upon consummation of such Reorganization Event and that each Participant shall receive, in exchange therefore, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of shares of Common Stock subject to such outstanding Options (whether or not then exercisable), exceeds (B) the aggregate exercise price of such Options. To the extent all or any portion of an Option becomes exercisable solely as a result of the first sentence of this paragraph, upon exercise of such Option the Participant shall receive shares subject to a right of repurchase by the Company or its successor at the Option exercise price. Such repurchase right (1) shall lapse at the same rate as the Option would have become exercisable under its terms and (2) shall not apply to any shares subject to the Option that were exercisable under its terms without regard to the first sentence of this paragraph.

 

	
  

	
(3)

	
Consequences of a Reorganization Event on Restricted Stock Awards. Upon the occurrence of a Reorganization Event, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company’s successor and shall apply to the cash, securities or other property that the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award.

 

9.      General Provisions Applicable to Awards

 

	
  

	
(a)

	
Transferability of Awards. Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant; provided that the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or family partnership established solely for the benefit of the Participant and/or an immediate family member thereof if, with respect to such proposed transferee, the Company would be eligible to use a registration statement on Form S-8 for the registration of the sale of the Common Stock subject to such Award under the Securities Act of 1933, as amended and provided further that the Company shall not be required to recognize any such transfer until such time as the Participant and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

 

	
  

	
(b)

	
Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

 

	
  

	
(c)

	
Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

 

	
  

	
(d)

	
Termination of Status. The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award.

 

	
  

	
(e)

	
Withholding. Each Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability. Except as the Board may otherwise provide in an Award, when the Common Stock is registered under the Exchange Act, Participants may satisfy such tax obligations in whole or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.

 

	
  

	
(f)

	
Amendment of Award. The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefore another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant, and would not cause adverse tax consequences to the Participant under Section 409A of the Code.

 

	
  

	
(g)

	
Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

 

	
  

	
(h)

	
Vesting of Awards. No Award granted under the Plan after July 19, 2005 to any employee of the Company may vest or become exercisable in increments greater than one-third of the total Award in any period of twelve consecutive months following the date of grant.

 

	
  

	
(i)

	
Repricing of Awards. Unless such action is approved by the Company’s stockholders and does not cause an Award to become subject to Section 409A of the Code: (1) no outstanding Award granted under the Plan may be amended to provide for an exercise price per share that is less than the then-existing exercise price per share of such outstanding Award (other than adjustments pursuant to Section 8), (2) the Board may not cancel any outstanding Award (whether or not granted under the Plan) and grant in substitution therefore new Awards under the Plan covering the same or a different number of shares of Common Stock and having an exercise price per share less than the then-existing exercise price per share of the cancelled Award, and (3) the Board may not repurchase any outstanding Award granted under the Plan at a price greater than the current fair market value of the existing award.  The terms of outstanding awards may not be amended to reduce the exercise price of outstanding Options or SARs or cancel, exchange, substitute, buyout or surrender outstanding Options or SARS in exchange for cash, other awards or Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs without stockholder approval.

 

10.      Miscellaneous

 

	
  

	
(a)

	
No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

 

	
  

	
(b)

	
No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to such Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

 

	
  

	
(c)

	
Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board, but no Award granted to a Participant that is intended to comply with Section 162(m) shall become exercisable, vested or realizable, as applicable to such Award, unless and until the Plan has been approved by the Company’s stockholders to the extent stockholder approval is required by Section 162(m) in the manner required under Section 162(m), including the vote required under Section 162(m). No Awards shall be granted under the Plan after the completion of ten years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted may extend beyond that date.

 

	
  

	
(d)

	
Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, provided that (i) any “material revision” to the Plan (as defined in the New York Stock Exchange Listed Company Manual) must be approved by the Company’s stockholders prior to such revision becoming effective and (ii) to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment shall become exercisable, realizable or vested, as applicable to such Award, unless and until such amendment shall have been approved by the Company’s stockholders if required by Section 162(m), including the vote required under Section 162(m).

 

	
  

	
(e)

	
Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law.exh10-6_16807.htm

    
      EXHIBIT
10.6

    

    FORM
OF INDEMNIFICATION AGREEMENT BETWEEN THE COMPANY AND EACH OF ITS
DIRECTORS

    

    

    INDEMNIFICATION
AGREEMENT

    

    

    THIS AGREEMENT, made and entered into
this _____ day of ___________, by and between North American Galvanizing &
Coatings, Inc., a Delaware corporation (the “Company”), and
____________(“Indemnitee”).

    

    

    W I T N E S S E T
H

    

    

    WHEREAS, the Company desires to retain
and attract as its directors and officers the most capable persons
available;

    

    WHEREAS, Indemnitee is an officer or
director of the Company or of an entity in which the Company directly or
indirectly owns an interest;

    

    WHEREAS, both the Company and
Indemnitee recognize the risk of litigation and other claims being asserted
against companies’ directors and officers;

    

    WHEREAS, the Restated Certificate of
Incorporation, as amended, and Amended and Restated Bylaws of the Company
(together, the “Charter Documents”) provide for indemnification and advancement
of expenses for the Company’s officers and directors, and persons who serve at
its request as officers and directors of other companies, and Indemnitee has
served and continues to serve in such capacity in part in reliance on such
provisions contained in the Charter Documents; and

    

    WHEREAS, in recognition of Indemnitee’s
need for substantial protection against personal liability in order to enhance
Indemnitee’s continued service to the Company in an effective manner,
Indemnitee’s reliance on the Charter Documents, and in part to provide
Indemnitee with specific contractual assurance that the provisions of the
Charter Documents will be applicable to Indemnitee (regardless of, among other
things, any amendment to or revocation of such Charter Documents, any change in
the composition of the Company’s Board of Directors, or any acquisition
transaction relating to the (Company), the Company desires to provide for the
indemnification of and the advancement of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by Delaware law, pursuant to the
terms and conditions of this Agreement.

    

    NOW, THEREFORE, in consideration of the
mutual premises contained herein and of Indemnitee continuing to serve the
Company directly or indirectly, at its request, and intending to be legally
bound hereby, the parties hereto agree as follows:

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              l. 

            	
              Certain
      Definitions:

            

    

    

    (a)           “Change in Control”
shall be deemed to have occurred if (i) any person becomes, after the
date hereof, the “beneficial owner” (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the “1934 Act”), directly or indirectly, of
securities of the Company representing 25%  or more of the total
voting power represented by the Company’s then outstanding Voting Securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Company’s Board of Directors (the
“Board”) and any new director whose election by the Board or nomination for
election by the Company’s stockholders (the “Stockholders”) was approved by a
vote of at least two-thirds of the directors then still in office (who either
were directors at the beginning of the period or whose election or nomination
for election was previously so approved), cease for any reason to constitute a
majority thereof; (iii) a merger or consolidation of the Company with any other
corporation is approved, other than a merger or consolidation which would result
in the Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities or the voting securities of such
surviving entity outstanding immediately after such merger or consolidation; or
(iv) a plan of complete liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially all the Company’s asset is
approved by the Board and a majority of the Stockholders.

    

    (b)           “Claim” shall mean any
threatened, pending or completed action, suit or proceeding, or any inquiry or
investigation, whether civil, criminal, administrative, or investigative and
whether conducted by the Company or any other party.

    

    ( c
)           “Expenses” shall mean
expenses (including attorneys’ fees), judgments, ERISA excise taxes or
penalties, fines and amounts paid in settlement (including all interest,
assessments and all other charges paid or payable in connection with or in
respect of such expenses, judgments, fines, taxes, penalties or amounts paid in
settlement), actually and reasonably incurred by Indemnitee in connection with
an Indemnifiable Event.

    

    (d)           “Indemnifiable Event”
shall main any event or occurrence related to the fact that Indemnitee is or was
a director, officer, employee, agent or fiduciary of the Company, or is or was
serving at the request (expressed or implied) of the Company as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by Indemnitee in any such
capacity.

    

    (e)           “Reviewing
Party”  shall mean any appropriate person or body consisting of
a member or members of the Board or any other person or body appointed by the
Board (including the Independent Counsel referred to in Section 3 below) who is
not a party to the Claim for which Indemnitee is seeking
indemnification.

    

    (f)           “Voting Securities”
shall mean any securities of the Company which vote generally in the election of
directors.

    

    

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    
      	 	
              2. 

            	
              Basic Indemnification
      Arrangement.

            

    

    

    (a)           In
the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in,  a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
permitted by Delaware law (as the same exists as of the date of this Agreement
or hereafter may be amended) and as provided by this Agreement, as soon as
written demand is presented to the Company, against any and all Expenses of such
Claim.

    

    If so requested by Indemnitee, the
Company shall advance (within five (5) business days of such request) any and
all Expenses to Indemnitee before the final disposition of the Claim, upon
receipt by the Company of an undertaking by or on behalf of Indemnitee to repay
such advances if it shall be ultimately determined that Indemnitee is not
entitled to be indemnified under this Agreement or otherwise (each an “Expense
Advance”).  The Company shall make all Expense Advances that
Indemnitee’s defense counsel certifies by affidavit to the Company as be in
reasonable and incurred in defending a Claim (including permissive and
compulsory counterclaims and affirmative defenses).

    

    (b)           Notwithstanding
the foregoing, (i) the obligations of the Company under Section 2(a) shall be
subject to the condition that the Reviewing Party shall not have determined (in
a written legal opinion if the Independent Counsel (as defined below) is
involved) that indemnification of Indemnitee would not be permitted under
applicable law; provided, however, that to be
effective any such denial of indemnification must be in a writing delivered to
Indemnitee stating with particularity the reason or reasons for such denial; and
(ii) the obligations of the Company to make Expense Advances pursuant to Section
2 (a) shall be subject to the condition that, if, when and to the extent that
the Reviewing Party determines that indemnification of Indemnitee would not be
permitted under applicable law, the Company shall be entitled to be reimbursed
by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified
under  applicable law, any determination made by the Reviewing Party
that indemnification of Indemnitee would not be permitted shall not be binding
and Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial  determination is made with respect
thereto.

    

    (c)           If
there has not been a Change in Control, the Reviewing Party shall be selected by
the Board, and if there has been a Change in Control, the Reviewing Party shall
be the Independent Counsel.  If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that indemnification of
Indemnitee or Expense Advances would not be permitted in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation, in any
Delaware court having subject matter jurisdiction thereof and in which venue is
proper, seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such
proceeding.  Any determination by the Reviewing Party otherwise shall
be conclusive and binding on the Company and Indemnitee.

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    3.            
Change in
Control.  The Company agrees that if there is a Change in
Control, then, with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification and Expense Advances under this
Agreement, any other agreement, or the Charter Documents, the Company shall seek
legal advice as to such matters relating to the rights to indemnification and
Expense Advances only from independent counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld), and
who has not performed services for the Company or Indemnitee within the last
five years (other than in connection with such matters relating to the rights to
indemnification and Expense Advances) (the “Independent
Counsel”).  The Independent Counsel, among other things, shall render
its written opinion to the Company and Indemnitee as to whether and to what
extent the Indemnitee would be permitted to be indemnified under applicable
law.  The Company agrees to pay the reasonable fees of the Independent
Counsel and to fully indemnify the Independent Counsel against any and all
expenses (including attorneys’ fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant
hereto.

    

    4,            
Indemnification for
Additional Expenses.   The Company shall indemnify
Indemnitee against any and all expenses (including reasonable attorneys’ fees)
and, if requested by Indemnitee, shall (within five (5) business days of such
request) advance such expenses to Indemnitee, which are incurred by Indemnitee
in connection with any claim asserted against or action brought by Indemnitee
for (i) indemnification or Expense Advance by the Company under this Agreement,
any other agreement, or any provision of the Charter Documents and/or (ii)
recovery under any directors’ and officers’ liability insurance policies
maintained by the Company; provided, however, that
Indemnitee is ultimately determined to be entitled, in whole or in part, to such
indemnification, Expense Advance or insurance recovery.  The Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid Indemnitee under this Section
4 if Indemnitee ultimately is determined not to be entitled to such
indemnification, Expense Advance payment or insurance recovery.

    

    5.            
Partial
Indemnity.   If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for a portion, but not all,
of the Expenses, the Company shall indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled.  Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise in defense of any or all Claims relating in whole or
in part to an Indemnifiable Event or in defense of any issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.

    

    6.            
Burden of
Proof.   In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.

    

    7.            
No
Presumption.  For purposes of this Agreement, the termination
of any Claim, by judgment, order, settlement (whether with or without court
approval, conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that Indemnitee did not meet any applicable
standard of conduct.

    

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    8.            
Non-exclusivity.   The
rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Charter Documents, the corporate law of the State
of Delaware, or otherwise.  To the extent that a change in the
corporate law of the State of Delaware (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Charter Documents and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded.

    

    9.            
Liability
Insurance.   To the extent the company maintains an
insurance policy or policies providing director’ and officers’ liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the Coverage provided for any
Company director or officer of the Company.

    

    10.           Amendment
Waiver.   Except as provided in Section 8 above, no
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto.  No waiver of any
of the provisions of this Agreement shall

    be deemed
or shall constitute a waiver of any of the provisions hereof (whether or not
similar) nor shall such waiver constitute a continuity waiver.

    

    11.           Subrogation.   With
respect to any payments made under this Agreement, the Company shall be
subrogated to the extent of such payments to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do everything
that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

    

    12.           No Duplication of
Payment.  The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the
extent Indemnitee has otherwise actually received payment (under any insurance
policy, the Charter Documents or otherwise) of the amounts otherwise
indemnifiable hereunder.

    

    13.           Binding
Effect.   This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including without limitation any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), heirs, and
personal and legal representatives.  This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as an officer or
director of the Company or of any other enterprise at the Company’s
request.

    

    14.           Severability.
   All of the provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law.

    

    15.           Governing
Law.   This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.

    

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    16.           Headings.                      The
headings in this Agreement are for convenience of reference only and shall not
be deemed to affect any provision of this Agreement.

    

    17.           Counterparts.                                   This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.

    

    EXECUTED
this _______  day of ______________.

    

    

     

    
      	 	
              NORTH
      AMERICAN GALVANIZING & COATINGS, INC.

              

              

              

              By:
      ______________________________________

              Name:

              Title:

              

              

              INDEMNITEE:

              

              

              _________________________________________

            

    

     

    
      
         

      

      
        - 6
-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}]]