Document:

exhibit10-2.htm

Exhibit 10.2 

 

FIRST AMENDMENT TO LEASE

DATED DECEMBER 20, 2010, FOR REFERENCE PURPOSES ONLY, 

BY AND BETWEEN, SUNBELT ENTERPRISES, LLC, SUCCESSOR IN INTEREST TO

SUNBELT ENTERPRISES, AS LESSOR,

AND, CALAMP CORP. A DELAWARE CORPORATION, AS LESSEE

 

WITH RESPECT TO LEASE DATED MARCH 31, 2003, ADDENDUM TO LEASE DATED JUNE 10, 2003, AND REVISED EXHIBIT B DATED SEPTEMBER 26, 2003, BY AND BETWEEN SUNBELT ENTERPRISES, AS LESSOR AND LESSEE FOR THE PREMISES LOCATED AT 1401 RICE AVENUE, OXNARD, CA 93030. 

 

THE LEASE IS FURTHER AMENDED AS FOLLOWS: 

 

1. Lease Term: Paragraph 1.3 of the Lease is hereby amended to provide that the term of the Lease shall be extended and end on June 30, 2016 (the “New Expiration Date”). 

 

2. Base Rent: Paragraph 1.5 of the Lease is hereby amended such that the Base Rent shall be forty-one thousand one hundred sixty-two and 10/100 dollars ($41,162.10) per month effective July 1, 2011. Lessee shall pay Lessor the first month’s Base Rent under this Amendment on or before July 1, 2011. 

 

3. Security Deposit: Paragraph 1.8 of the Lease is amended such that the Security Deposit shall be forty-six thousand three hundred twenty-eight and 31/100 dollars ($46,328.31). Lessor and Lessee acknowledge that Lessor currently holds sixty-four thousand two hundred fifty-six and 45/100 dollars ($64,256.45) as a security deposit under the Lease. Lessor shall credit the difference in the amount of seventeen thousand nine hundred twenty-eight and 14/100 dollars ($17,928.14) towards Lessee’s Base Rent for the month of August 2011. 

 

4. Base Rent Adjustment: Paragraph 51 of the Lease is hereby amended to provide that on July 1, 2012 and on July 1 of each year thereafter the Base Rent payable under Paragraph 2 of this Amendment shall be adjusted as follows: 

 

	July 1, 2012 through June 30, 2013

($42,396.96)	      	Forty-two thousand three hundred ninety-six and 96/100 dollars
	July 1, 2013 through June 30, 2014

($43,668.87)	 	Forty-three thousand six hundred sixty-eight and 87/100 dollars
	July 1, 2014 through June 30, 2015

dollars ($44,978.94)	 	Forty-four thousand nine hundred seventy-eight and 94/100
	July 1, 2015 through June 30, 2016

dollars ($46,328.31) 	 	Forty-six thousand three hundred twenty-eight and 31/100

5. Triple Net (NNN) Charges:

     Paragraphs 4.3 and 7.2 of the Lease and Section 2.3(b) as amended in the Addendum to Lease are hereby amended to provide that Capital Expenditures shall be excluded from the operating expenses for the Premises. 

     Paragraphs 4.3 and 10 of the Lease are hereby amended to provide Lessee shall be exempted from any increases in real estate taxes which the Premises may incur as the result of a sale, refinance, transfer of ownership, or any other “triggering” event, within Lessor’s control, during the Lease Term. The Lessee improvements to be performed by Lessee as provided below, shall be excluded as a “triggering” event and shall not be exempted from any increase in real estate taxes.

 

6. Lessee Improvements: Lessee shall complete Lessee improvements in the Premises in accordance with the Work Letter Agreement attached hereto as Exhibit A. 

 

7. Option to Renew: Lessor hereby grants to Lessee one (1) five (5) year (“Option Term”) option (“Renewal Option”) to further extend the Term of this Lease (“Extended Term”). The Renewal Option shall be exercised by Lessee’s delivery of written notice (“Option Notice”) to Lessor no later than nine (9) calendar months and no earlier than twelve (12) calendar months prior to the expiration of the Term of the Lease as extended herein. Provided that (i) an Event of Default under this Lease is not existing at the time Lessee delivers the Option Notice to Lessor, through and including the time the Option Term is scheduled to commence, and the Lease is in full force and effect, (ii) Lessee has not sublet or assigned more than 50% of the Premises, and (iii) Lessee has properly exercised the Renewal Option as prescribed herein, , the Term of this Lease shall be extended to include the Option Term, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except those conditions that were applicable to the original Term and this Amendment only (such as, but not limited to, any Lessee improvement allowance, abated Rental, options to renew or expand the Premises, and any provisions of the Lease or this Amendment that specifically state that they apply to the original Term or this Amendment only; said terms shall be deleted in their entirety and of no further force and effect during the Option Term set forth in this Paragraph 7).

 

	 	 	 
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     (b) The initial monthly Rental for the Option Term (“Renewal Rental Rate”) shall be adjusted to represent the then current market rental value (“MRV) for similar premises in the Oxnard area, including, without limitation, base rental rate, base rent increases, if any; operating expenses “caps”; concessions that other landlord’s are providing at that time on renewals such as free rent, tenant improvement allowance,, as set forth below, during the Option Term: 

 

     (c)

          (i) Lessor shall provide Lessee with written notice of the MRV within thirty (30) days after Lessor receives the Option Notice. Lessee shall have fifteen (15) days (“Lessee’s Review Period”) after receipt of Lessor’s notice of the new rental within which to accept such rental or to reasonably object to the MRV thereto in writing.

          (ii) In the event Lessee objects, Lessor and Lessee shall attempt to agree upon such MRV Rate within ten (10) days following Lessor’s receipt of Lessee’s objection, but if no written agreement is made between the parties within said ten (10) days, then Lessor and Lessee shall within fifteen (15) days thereafter each select an appraiser of their choice. The two appraisers selected shall immediately select a third mutually acceptable appraiser. All the appraisers shall at least have ten (10) years of experience in working with industrial properties in the Oxnard area and adjacent submarkets.

          (iii) The three appraisers shall within thirty (30) days of the selection of the third appraiser reach a decision as to what the actual MRV for the Premises is and said MRV shall be binding on the parties and thereafter be used by the Parties as the initial monthly Rental for the Option Term.

          (iv) If either of the Parties fails to appoint an appraiser within the specified fifteen (15) days, the appraiser timely appointed by one of them shall reach a decision on his or her own and aid decision shall be binding on the Parties.

          (v) The entire cost of the appraisers shall be equally split between the Parties. 

          (vi) The new MRV shall include the new “Base Rent” for the purpose of calculating any further adjustments set forth in the MRV. 

 

     (d) Once the MRV has been determined by the method set forth above, Lessor and Lessee shall work in good faith to execute an amendment to the Lease prescribing the Renewal Rental Rate, Term extension, and any other changes to the Lease which are part of the defined MRV as set forth herein. Lessee’s failure to execute said Lease amendment within twenty (20) days after Lessor receives notice of Lessee’s acceptance of the Renewal Rental Rate and Lessor’s sending of said amendment to Lessee shall be deemed, at Lessor’s sole discretion, a material default of this Lease. Lessor, at its sole discretion, may render void Lessee’s exercise of said option if within the aforementioned time period Lessor fails to receive the fully executed Lease amendment.

 

8. Option to Terminate: Provided that an Event of Material Default under this Lease is not existing at the time Lessee delivers the Termination Notice to Lessor, beyond any cure and/or grace period, through and including the time the early termination is scheduled to commence, and that this Lease is in full force and effect, Lessee shall have the one time option to terminate the Lease (“Termination Option”) at the end of the thirty-sixth (36th) full month of the Term (“Termination Date”) for the entire Premises only if Lessee has properly exercised each and every condition contained in this Section.

 

     Lessee must give Lessor written notice no less than eight (8) months prior to the end of the thirty-sixth (36th) full month of the lease, specifically on or before October 31, 2013 (“Termination Notice”). Within thirty (30) days following the notice from Lessee, Lessee shall pay to Lessor a termination fee equal to the amount of the unamortized balance (calculated using eight percent (8%) interest) of (i) the amount that Landlord has actually credited to Lessee under the Improvement Allowance set forth in the Lessee Work Letter, and (ii) the amount of the unamortized real estate commissions paid by Lessor to CresaPartners Corporate Real Estate Service Advisors, Broker (collectively the “Termination Fee”). Said Termination Fee shall in no event exceed ninety-nine thousand five hundred thirty and 96/100 dollars ($99,530.96) Lessee shall also continue to pay the Rent due as prescribed in the Lease through the Termination Date.

 

	 	 	 
	Lessor Initials   	 	Lessee Initials   
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This Termination Option shall be personal to Lessee, including any Affiliate as defined below, apply to the original term only and not to any term extensions thereof, and no sub-lessee or assignee (except an Affiliate) shall have the right to exercise such option, except for a Permitted Assignee. If Lessee fails to exercise this option by giving said written notice as set forth above and pay the Termination Fee, Lessee’s right to terminate the Lease shall expire and Lessee shall have no further option to terminate the Lease. Notwithstanding anything to the contrary contained in the Lease, including this Amendment, (A) an entity which is controlled by, controls or is or under common control with Lessee or an affiliate of Lessee or (B) a purchaser of all or substantially all of the assets or a majority of stock or membership interests of Lessee, or of an entity which is controlled by, controls or is under common control with Lessee or an affiliate of Lessee through a purchase, merger, consolidation or reorganization of Lessee by or with another entity (whether such acquisition takes the form of an asset sale, a stock sale or a combination thereof), hereinafter shall be referred to collectively or individually as an "Affiliate". 

 

9. Restoration Areas: Lessee shall not be required to remove or restore any of the existing improvements located in the Premises as of the Commencement Date including any of the additional improvements to be constructed by Lessee in the Premises pursuant to the Lessee Work Letter attached hereto. 

 

10. Roof Rights: Lessee shall have the right to install telecommunications and/or television equipment (antennas and/or dishes), HVAC units, and/or other reasonable equipment (“Roof Equipment”) on the roof of the Building subject to Lessor’s reasonable approval and in accordance with all applicable laws, city ordinances and permits.

     (ii) Lessee acknowledges that the roofing contractor’s warranty of the roof provides that any work done on the roof that in any way damages the waterproofing membrane on the roof shall void the roof warranty unless any damage so occasioned is repaired by the original roofing contractor (“Roofing Contractor”). Therefore, Lessee agrees to employ the Roofing Contractor to make any repairs to the roof caused by the installation or removal of Roof Equipment by Lessee. The fees and charges by the Roofing Contractor for any work in connection with the Roof Equipment shall be market competitive. 

     (iii) The installation and maintenance of the Roof Equipment shall be at Lessee’s sole cost. At the end of the Lease Term, should Lessor require the removal of the Roof Equipment, with the exception of any HVAC units, said removal and any repair required as a result thereof shall be at Lessee’s sole cost.

     (iv) There shall be no additional charge to Lessee during the Lease Term and Option Period(s) for said roof rights. 

 

11. Generator: Lessor shall provide Lessee with an area located in the Project near the electrical room for the Building, for the installation of Lessee’s electrical generator equipment (500 KW, including a diesel tank storage or propane gas, if gas line is not available, and an electrical conduit from the generator to an area in the Premises designated by Lessee,) subject to Lessor’s reasonable approval, which approval shall not be unreasonably withheld, conditioned or delayed, and in accordance with all applicable laws and city ordinances. The installation, repair and maintenance of the generator during the Lease Term and any option period thereof shall be at Lessee’s sole cost. Lessee shall not be required to remove the generator at the end of the Lease Term or early termination of the Lease as applicable. There shall be no additional charge to Lessee during the lease Term and Option Period(s) for said generator rights. 

 

12. Assignment/Sublease: Subject to Paragraph 12 of the Lease, Lessee shall retain fifty percent (50%) of any excess net consideration received during an assignment or sublease after deducting subleasing or assignment costs, including marketing fees, attorney fees, commissions and any improvements required specifically for any assignment or sublease. 

 

13. Legal Rights: Notwithstanding anything in the Lease to the contrary, Lessor will not seek to be appointed Lessee’s attorney-in-fact and Lessor acknowledges that Lessee will not waive any legal rights it may have with respect to the Lease. 

 

14. Confidentiality: Lessor and Lessee agree to keep information with respect to the terms and conditions of this Amendment strictly confidential and not to discuss with anyone other than Lessor’s and Lessee’s owners, employees and consultants.

 

	 	 	 
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15. Except as expressly modified by this Amendment, all other terms, provisions and conditions of the Lease and any prior riders or amendments thereto shall remain the same and in full force and effect. In the event of any conflict between any terms, provisions or conditions of the Lease, as previously amended, and any terms, provisions or conditions of this Amendment, the terms, provisions or conditions of this Amendment shall be and remain controlling.

 

16. Lessee warrants and represents to Lessor that as of the date of this Amendment: (a) Lessor is not in default under the Lease and any prior addendums or amendments, and (b) Lessee does not have any defenses or offsets to payment of Rent (except as set forth in this Amendment) and performance of its obligations under the Lease and any prior riders or amendments as and when the same becomes due. 

 

17. Lessor and Lessee, and each of them, respectively, hereby declare that they have read this Amendment and have either been counseled by an independent attorney at law of their own choosing respecting same, or have had an opportunity to seek legal counsel and have declined said opportunity, and said parties, and each of them, further declare that they understand the terms used herein and the legal significance of same, and have executed this Amendment knowingly, intelligently, voluntarily and without reliance upon any promise, representations, assurances, warranties, terms or conditions other than as are particularly set forth herein above. 

 

18. Each person signing this Amendment on behalf of Lessee warrants and represents that Lessee is a duly authorized and validly existing corporation and that the corporation has the right to enter into this Amendment, that all action necessary for the corporation to enter into this First Amendment and for Amendment to be binding upon the corporation has been taken, that each person executing this Amendment on behalf of the corporation is authorized to do so and that such execution is binding on the corporation. Lessee agrees to deliver to Lessor a certified corporate resolution, a certificate of incumbency and all other documents and instruments necessary to authorize the execution and delivery of this Amendment by the undersigned officers of Lessee when Lessee returns a signed Amendment to Lessor. 

 

 

 

 

CAPITALIZED TERMS USED IN THIS FIRST AMENDMENT WHICH ARE NOT

DEFINED IN THIS FIRST AMENDMENT SHALL HAVE THE MEANING ASCRIBED 

TO THEM IN THE LEASE.

 

	LESSOR:	 	LESSEE:
	SUNBELT ENTERPRISES, LLC	 	CALAMP CORP. A DELAWARE
	 	 	 	CORPORATION
	 	 	 	 	 
	By:  	/s/ Richard Green	 	By: 	/s/ Rick Vitelle
	 	Richard Green,	 	 	Rick Vitelle, CFO
	 	Vice President of Real Estate	 	 	 
	 	 	 	 	 
	By:	/s/ Darryl Zilberstein	 	 	 
	 	Darryl Zilberstein	 	 	 
	 	Director of Leasing	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Date: 1/7/11	 	Date: 1/7/11

	 	 	 
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EXHIBIT A 

 

TO AMENDMENT TO LEASE (“Amendment”) 

 

LESSEE WORK LETTER 

 

     This Lessee Work Letter shall set forth the terms and conditions relating to the renovation of the Lessee improvements in the Premises. This Lessee Work Letter is essentially organized chronologically and addresses the issues of the renovation of the Premises, in sequence, as such issues will arise. 

 

SECTION 1 

 

CURRENT CONDITION OF THE PREMISES 

 

     Lessee acknowledges it is currently in possession of the Premises under an existing Lease between Lessor and Lessee and Lessee accepts the Premises in its current “as is” condition, except for any obligations by Lessor to repair and maintain set forth in the Lease. The improvements to be installed in the Premises shall be designed and constructed pursuant to this Lessee Work Letter.

 

SECTION 2 

 

IMPROVEMENTS 

 

     2.1 Improvement Allowance. Lessee shall be entitled to a one-time improvement allowance (the "Improvement Allowance") in the amount of one hundred forty-seven thousand five and 50/100 dollars ($147,005.50) relating to the design and construction of Lessee's improvements which are permanently affixed to the Premises (the "Improvements"). This Improvement Allowance shall be applied only to new improvements/refurbishing that occurs in the Premises after full execution of the Amendment. In no event shall Lessor be obligated to make disbursements pursuant to this Lessee Work Letter in a total amount which exceeds the Improvement Allowance and in no event shall Lessee be entitled to any credit for any unused portion of the Improvement Allowance for Improvements not completed by December 31, 2011. 

 

     2.2 Disbursement of the Improvement Allowance. The Improvement Allowance shall be credited as rent abatement (“Rent Abatement”) towards Lessee’s Base Rent by Lessor for costs related to the construction of the Improvements as and for the following items and costs (collectively, the "Improvement Allowance Items"): (i) construction and/or refurbishing of new and/or existing restrooms, (ii) construction and/or refurbishing of the existing break room, including but not limited to installation of a ceiling, lighting, electrical, plumbing and HVAC, (iii) painting throughout the Premises, (iv) installation of new flooring including new carpet. Installation of any type of security system, including security cameras are not a permitted improvement under the within Improvement Allowance. If Lessee elects to install a security system or cameras, it shall be at Lessee’s sole cost and expense.

 

          Lessee shall make a request for credit against the Improvement Allowance (“Allowance Request”) by furnishing Lessor with copies of paid invoices and applicable lien releases for work completed for the Improvement Allowance Items. Upon receipt of and reasonable approval by Lessor of the paid invoices and lien releases, Lessor shall credit said approved amount against the next due Base Rent under the Lease. Notwithstanding the foregoing, (i) Lessee shall have the right to begin any work related to the Improvements anytime after the execution of this Amendment by Lessor and Lessee, and such work shall be eligible for the Rent Abatement credit, and (ii) the Rent Abatement credit shall not be applied to Base Rent any earlier than July 1, 2011, but work performed prior to July 1, 2011 but after the execution of this Amendment is still eligible for reimbursement through the Rent Abatement credit. 

 

     2.3 Standard Improvement Package. Lessor has established specifications and standard components (“Specifications”) to be used in the construction of the Improvements in the Premises (collectively, the "Standard Improvement Package"), as set forth in Section 5 below. The quality of Improvements, at Lessee’s sole choice, shall be equal to or of greater quality than the quality of the Specifications,  

 

	 	 	 
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SECTION 3 

 

CONSTRUCTION DRAWINGS

 

     3.1 Selection of Architect/Construction Drawings. Lessee shall retain an architect/space planner (the "Architect") to prepare the "Construction Drawings," as that term is defined in this Section 3.1. Lessee shall also retain the engineering consultants (the "Engineers") (only if necessary as required by applicable governmental authorities) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC and life safety work of the Lessee Improvements. The plans and drawings to be prepared by Architect and the Engineers (if any) hereunder shall be known collectively as the "Construction Drawings." The Construction Drawings shall include specifications and materials to be used for the Improvements. The Architect and Engineers and all Construction Drawings shall be subject to Lessor's reasonable approval, which approval shall not be unreasonably withheld, conditioned or delayed. Lessee and Architect shall verify, in the field the dimensions and conditions as shown on the relevant portions of the base building plans, and Lessee and Architect shall be solely responsible for the same, and Lessor shall have no responsibility in connection therewith. Lessor's review of the Construction Drawings as set forth in this Section 3, shall be for its sole purpose and shall not imply Lessor's review of the same, or obligate Lessor to review the same, for quality, design, Code compliance or other like matters. Accordingly, notwithstanding that any Construction Drawings are reviewed by Lessor or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Lessee by Lessor or Lessor's space planner, architect, engineers, and consultants, Lessor shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings. 

 

     3.2 Lessee shall cause the Construction Drawings to be prepared and submitted to Lessor for Lessor's approval, which approval shall not be unreasonably withheld, conditioned ort delayed. Upon receipt of the Construction Drawings, Lessor shall review within five (5) working days thereafter and advise Lessee in writing, either indicating approval or any required revisions. This procedure will be repeated until a mutually satisfactory set of Construction Drawings have been drawn. Notwithstanding the foregoing, Lessor’s disapproval of the Construction Drawings shall only be limited to reasons if the Improvements in the Construction Drawings adversely affect (i) the condition of the structural elements of the Premises or the Building, (ii) the mechanical, electrical, plumbing, heating, ventilation and air conditioning, and fire and life safety systems or any other Building systems, (iii) the common areas of the Building, or (iv) the occupancy of other tenants in the project.

 

     3.3 Permits. Upon approval of the Construction Drawings by Lessor and prior to the commencement of the construction of the Improvements, Lessee shall cause the Architect to immediately submit the Approved Working Drawings to the appropriate municipal authorities for all applicable building permits necessary to allow "Contractor," to commence and fully complete the construction of the Improvements (the "PERMITS"). No changes, modifications or alterations in the Approved Construction Drawings may be made without the prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed. 

 

SECTION 4 

 

CONSTRUCTION OF THE IMPROVEMENTS 

 

     4.1. Prior to commencement of Lessee’s construction, Lessee shall: 

 

          (i) Furnish a list to Lessor containing the names, addresses, telephone numbers, and contractor’s license numbers of the General Contractor and all subcontractors (union or non-union at Lessee’s sole option) who will be doing Lessee’s construction. All work shall be done only by licensed contractors reasonably approved by Lessor, which approval shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Lessor hereby approves Tasco Construction (“Contractor”) as the general contractor for the Improvements, subject to Contractor furnishing Lessor with (i) evidence that Contractor’s license is valid and active, (ii) evidence that Contractor’s bond is effective, and (iii) an insurance certificate naming Sunbelt Enterprises LLC as an additional insured with the coverage set forth in Paragraph 4.5(iii) below, not less than five (5) days prior to commencing the Construction of the Improvements.

 

          (ii) Meet with Lessee’s General Contractor and Lessor’s Agent to review the scope of work and the projected work schedule.

 

     4.2 Acceptance: "Acceptance of the Work" shall mean that the Project is acceptable to the Lessor and shall occur when each and all of the following events has been accomplished:

 

          (ii) All Labor has been performed and all materials supplied and incorporated into the work of I the Improvements in a good and workmanlike manner. 

 

	 	 	 
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          (iii) The Project and the job site are in a "clean" condition, completely free of all trash, rubbish, debris, dirt, smudges, etc., and all of the Contractor's and subcontractors' tools and equipment, as well as any leftover materials and inventory, have been removed from the Premises and job site. 

          (iv) All persons, firms and corporations, including all laborers, materialmen, suppliers, and subcontractors who have furnished equipment, supplied material or performed work for or in connection with the construction, including but not limited to, all persons who could file a claim of lien, have been paid in full and have submitted their final statements with a waiver of all rights to mechanic's lien, stop notice or recourse against the surety on the bond, if any. Lessee shall cause the Contractor to provide in its contracts with subcontractors and materialmen a provision for waivers of or release of mechanics' liens or waiver of rights to the same and Contractor shall be solely responsible. 

          (v) All work requiring inspection by any governmental authority has been duly inspected and approved by such authority and Lessee shall furnish Lessor with a copy of the signed off building permit. 

 

     4.3 Lessor's Inspection: Lessor or any authorized representative of Lessor shall be permitted, but not obligated, to inspect at any reasonable time:

 

          (i) the work places, operations, machinery and equipment of Lessee's Contractor in connection with, or incidental to, the construction of the Improvements. Upon discovery of any condition Lessor reasonably deems to be unsafe or in violation of a safe standard, Lessor shall notify Lessee of its existence. Upon such notification, Lessee shall cause Contractor to forthwith correct said unsafe condition. Neither the right to make inspections of corrections nor the making thereof, nor any report thereon, shall constitute an undertaking on behalf of, or for the benefit of, Lessee, the Lessee's Contractor or others to determine or warrant that such work places, operations, machinery or equipment are safe or healthful or are in compliance with any law, rule or regulation. 

          (ii) the progress of Lessee’s Contractor in the construction of the Improvements and to inspect the construction to see it is being built to the Specifications of Lessor’s Building Standards or the standards set in Section 2.3(iii) above.

 

     4.4 Indemnity Agreement: Lessee shall indemnify, save harmless and defend Lessor and its agents and employees from and against any and all suits, actions, legal proceedings, claims, demands, damages, costs and expenses, arising out of or by reason of any liability or obligation in any manner caused or occasioned or claimed to be caused or occasioned by, any act, omission, fault, or negligence of Lessee, Lessee's Contractor or anyone acting on his behalf, including, but not limited to, subcontractors and vendors, their subcontractors and sub-vendors, and the employees and agents of any of the foregoing, in connection with or incidental to the work to be performed by Lessee pursuant to this Lease. 

 

     4.5 Provisions of Lease Regarding Construction by Lessee of Lessee Improvements. Lessee shall expressly incorporate the following conditions into each contract entered into with Contractor or any subcontractor and each such contract shall provide that the Contractor or subcontractor assumes the obligations hereof:

 

          (i) Safety Statutes: Contractor expressly covenants to comply with all applicable State safety statutes in the performance of his work hereunder so as not to cause loss or delay, and Contractor shall indemnify and hold Lessor harmless from any liability, claim, demand, fire, loss whatsoever resulting from, arising out of or connected with, Contractor's failure or alleged failure to comply with such statutes, including but not limited to attorney's fees and expenses arising directly or indirectly out of, or by reason of, said noncompliance. 

          (ii) Indemnity Agreement: Contractor shall indemnify, hold harmless and defend Lessor and its agents and employees from and against any and all suits, actions, legal proceedings, claims, demands, damages, costs and expenses, arising out of or by reason of any liability or obligation in any manner caused or occasioned or claimed to be caused or occasioned by , any act, omission, fault, or negligence of Contractor or anyone acting on his behalf, including, but not limited to, subcontractors and vendors, their subcontractors and vendors, and the employees and agents of any of the foregoing, in connection with or incidental to the work to be performed hereunder. 

For the purpose of this indemnification agreement, the term ‘Lessor” shall mean Sunbelt Enterprises, LLC. 

          (iii) Insurance: Contractor, at his own cost and expense, shall procure and maintain during the construction of the Improvements the Insurance referenced below and name Sunbelt Enterprises, LLC as additional insured. 

 

          Worker's Compensation Insurance: A policy of worker's compensation or employer's liability insurance with no less than statutorily required limits issued by an insurance company acceptable to Lessor.  

 

	 	 	 
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          Comprehensive General and Auto Liability Insurance: Policies of Comprehensive General and Auto Liability insurance issued by an insurance company acceptable to Lessor insuring Lessor against loss or liability caused by, or connected with, the performance of Lessee's work by Contractor, his agents, employees, servants, with limits of liability which shall not be less than the following:

 

(a) $500,000 for injury to or death of any one person;

(b) $1,000,000 for injury to or death of two or more persons;

(c) $500,000 for property damage per occurrence; and

(d) $1,000,000 in the aggregate for all accidents. 

 

Such policies shall not exclude: liability for injuries or death caused by vehicle other than automobiles; the collapse of any building or structure; an explosion or explosions; underground wires, conduits, pipes, main sewers or similar items; liability assumed by Contractor under the Contract Documents. 

 

     4.6 Evidence of Insurance: Contractor shall deposit or cause such subcontractor to deposit all Certificates evidencing each policy of insurance required by Section 4.5(iii) with Lessor, for its approval, which approval shall not be unreasonably withheld, conditioned or delayed, not less than five (5) days prior to commencing the Construction, and shall provide that same cannot be cancelled or materially altered with less than thirty (30) days prior written notice to Lessor. 

 

     4.7 Lessee and its Contractors shall be bound by all of the provisions of the Lease and maintain insurance, complying with the provisions of the Lease, at all times after initial entry. 

 

SECTION 5 

 

STANDARD IMPROVEMENT PACKAGE 

 

	I.	 	Demising Partition.
	 	 	 	A.       	6" - 20 gauge steel studs at 16" on center
	 	 	 	B.	5/8", Type "X" drywall - one layer each side of studs.
	 	 	 	C.	Height from floor slab to ceiling grid as required.
	 	 	 	D.	Seismic bracing per code.
	 	 	 	E.	Batt type R-19 fiberglass insulation in wall cavity and blanket layered horizontally, 24" each side over top of wall. Where walls meet exterior windows or window mullions, soundproofing needs to be performed using a gasket or other method approved by building engineer.
	 	 	 	F.	Partition fire-taped smooth and sanded to receive paint.
	 	 	 
	II.	 	Interior Partition.
	 	 	       	A.	Partition Wall.
	 	 	 	 	1.	3-1/2", 25 gauge steel studs at 24" on center.
	 	 	 	 	2.	5/8", Type "X" drywall - one layer each side of studs.
	 	 	 	 	3.	Height from floor slab to ceiling grid, as required.
	 	 	 	 	4.	Seismic bracing per code.
	 	 	 	 	5.	Fast masked and taped at top of wall under ceilings.
	 	 	 	 	6.	Partition fire-taped smooth and sanded to receive paint.
	 	 	 	 	7.	All exposed edges finished with metal trim.
	 	 	 	 	8.	Single piece mullion starter at intersection with window.
	 	 	 	 	9.	Gasket or other approved method by building engineer for sound control where wall meets window or window mullion.
	 	 	 	 	10.       	R-13 Batt insulation in all full height walls, to fill cavities unless specified otherwise.
	 	 	 	B.	Low Wall.
	 	 	 	 	1.	3-1/2", 25 gauge steel studs at 24" on center.
	 	 	 	 	2.	5/8", Type "X" drywall - one layer each side of studs.
	 	 	 	 	3.	Seismic bracing per code.
	 	 	 	 	4.	Fast masked and taped at top of wall under ceiling.
	 	 	 	 	5.	Partition fire-taped smooth and sanded to receive paint.
	 	 	 	 	6.	All exposed edges finished with metal trim.
	 	 	 	 	7.	Posts as required for support.
	 	 	 	 	8.	501 S-metal at top of all walls.
	 	 	 
	III.	       	Interior Door Assembly.
	 	 	 	A.	Door: Plastic laminate.
	 	 	 	B.	Frame: Timely frame.

	 	 	 
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	Page 8 of 11 

 

	 	 	 	C.	 	Hardware:
	 	 	 	 	 	1.	 	Latchset: Schlage L-9010 03A 625, passageway.
	 	 	 	 	 	2.	 	Lockset: Schlage L-9050 03A 625...
	 	 	 	 	 	3.	 	Hinges: Hager 4-1/2 x 4-1/2 1279 US26l.
	 	 	 	 	 	4.	 	Door Stop: Floor stops only.
	 	 	 	 	 	5.	 	Finish: Polished Chrome.
	 	 	 	D.	 	Pair of doors. Add door closure (if required):
	 	 	 	 	 	1.	 	Norton 8501 Aluminum, T-Astragal.
	 	 	 	 	 	2.	 	Glynn Johnson FB-6 manual flush bolts.
	 	 	 	 	 	3.	 	Dust proof strike.
	 	 	 	 	 	4.	 	Pemko 355 CV Smoke Seal.
	  	 	 
	IV.	 	Acoustical Ceiling.
	 	 	 	A.	 	2' x 4' exposed T-bar suspension grid; Donn "DX"; Color: White
	 	 	 	B.	 	Earthquake seismic wires and compression struts per code.
	 	 	 	C.	 	2' x 4' lay-in acoustical ceiling tile: Armstrong "Cortega regular 704A, color white.
	 	 	 	D.	 	High web T-bar.
	 	 	 	 	 	 
	V.	 	Light Fixtures.
	 	 	 	A.	 	2' x 4' Lithonia Light Fixtures.
	 	 	 	B.	 	Seismic wires per code.
	 	 	 	C.	 	Fixture Type: Parabolic
	 	 	 	D.	 	Bulb Type: T-8 Sylvania
	 	 	 	E.	 	Battery backup for emergencies - one per thousand square foot. All emergency exit and egress signs/lighting shall be installed on a separate circuit and not on a shared lighting circuit unless prohibited by code.
	 	 	 	 
	VI.	 	Light Switches/Wall Outlets.
	 	 	 	A.	 	Light Switch Assembly.
	 	 	 	 	 	1.	 	A/B Wall switch in offices (not open areas such as libraries, hallways and where there are cubicles; for such open areas use appropriate model).
	 	 	 	 	 	2.	 	White switch plates.
	 	 	 	B.	 	Electrical Wall Outlet.
	 	 	 	 	 	1.	       	Non dedicated duplex receptacle... Allowance of 3 total dedicated duplex outlets whether new or existing.
	 	 	 	 	 	2.	 	Mounted vertically at +15" A.F.F., minimum to +48" A.F.F., maximum, to center line of outlet.
	 	 	 	 	 	3.	 	Color: White.
	 	 	 	 	 	  
	VII.	 	Electrical Equipment.
	 	 	 	A.	 	Panels: Cutler Hammer panel boards to match existing building component.
	 	 	 	B.	 	Disconnects: Cutler Hammer.
	 	 	 	  
	VIII.	       	Telephone or Data Wall Outlet.
	 	 	       	A.	       	Single gang box in wall, mounted vertically at +15 A.F.F. to center line of box.
	 	 	 	B.	 	3/4" metal conduit from box to 6" above finish ceiling.
	 	 	 	C.	 	Pull string in conduit.
	 	 	 	D.	 	Cable and cover plate by Lessee. (Use plenum-rated cable in return air plenums). Lessee shall arrange for installation by a private telephone/computer vendor. A separate building permit, pulled by the company is required prior to the start of this work. Vendor shall also provide proof of insurance (Workers Compensation and General Liability). Cover plates supplied by the vendor to match electrical outlets in style and color.
	 	 	 	E.	 	Minimum 1" home run to telephone closet, EMT piping required.
	 	 	 	 	 	 
	IX.	 	Heating, Ventilation & Air Conditioning Distribution.
	 	 	Furnish and install all materials and equipment necessary to provide complete and usable air conditioning systems in Lessee spaces including, but not necessarily limited to, the following:
	 	 	 	A.	 	Distribution duct work. Galvanized internally lined rectangular duct, duct sealant, externally wrapped galvanized spiral ducting, silent flexible type ducting for final air distribution not to exceed 7’ in length.

	 	 	 
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	Page 9 of 11 

 

	 	 	 	B.	 	Krueger,” or approved equal, manufactured supply registers, return air and exhaust grilles.
	 	 	 	C.	 	One thermostat per zone (average zone size approx. 750 SF; perimeter and interior zoning).
	 	 	 	D.	 	Connect to main distribution duct using conical tap or 45 degree saddle.
	 	 	 	E.	 	Timer controlled with 2 hour override timers for all after hours use.
	 	 	 	F	 	All full height and demising walls must have an opening in a location and size approved by building or mechanical engineer for return airflow.
	 	 	 	 
	X.	 	Fire Sprinklers.
	 	 	 	A.	 	Semi-recessed chrome head and chrome escutcheon plate.
	 	 	 	B.	 	Complete working drawings, calculations and descriptive data, as required to obtain permits for Lessee fire sprinkler work.
	 	 	 	 
	XI.	 	Illuminated Exit Sign.
	 	 	Lithonia battery back-up white face with green letters, incandescent type Lithonia QMSW3G 120/277 EL; however, see building engineer or electrician for most current update.
	 	 	 	 
	XII.	 	Fire Extinguisher.
	 	 	As required by code.
	 	 	 
	XIII.	 	Fire Life/Safety System.
	 	 	Egress lighting as required by code
	 	 	 
	XIV.	 	Floor Covering.
	 	 	 	A.	 	Carpet: Glue down, Relay 26 oz loop.
	 	 	 	B.	 	Vinyl Composition Tile (VCT): Armstrong Standard, Imperial Tealure 12" x 12".
	 	 	 
	XV.	 	Rubber Base.
	 	 	"Burke," 4" high.
	 	 	 
	XVI.	 	Painting.
	 	 	 	A.	 	One coat pigmented latex sealer.
	 	 	 	B.	 	Two coats Dunn Edwards interior Suprema paint, except at Toilet Rooms, if any, to be two coats eggshell enamel interior latex paint.
	 	 	 	C.	 	One neutral color throughout.
	 	 	 
	XVII.	 	Cabinetry.
	 	 	 	A.	 	Upper and Base Cabinetry: Plastic laminate over medium density fiberboard at all exposed surfaces. Shelving to be Melamine; Color: White unless plans denote differently.
	 	 	 	B.	 	Countertops: Plastic laminate over medium density fiberboard at all exposed surfaces with 4" backsplash and self-edge. Backsplash shall be covered at all sink locations. Standard Wilsonart or Formica colors.
	 	 	 
	XVIII/	       	Plumbing.
	 	 	 	A.	 	Restrooms.
	 	 	       	 	 	1.	       	Walls: FRP-Masonite to meet code. Paint above.
	 	 	 	 	 	2.	 	Floors: Vinyl Composition Tile (VCT): Armstrong Standard, Imperial Tealure 12" x 12".
	 	 	 	 	 	3.	 	Base: 4” Burke.
	 	 	 	 	 	4.	 	Ceilings: 8’ high, dry wall, painted.
	 	 	 	 	 	5.	 	Grab bars to meet code
	 	 	 	 	 	6.	 	Metal framed mirror.
	 	 	 	 	 	7.	 	Handicap bathroom sign
	 	 	 	B.	       	Kitchen area.
	 	 	 	 	 	One single sink with faucet, water heater and drain (see building engineer for current building standards for aforementioned items) for one kitchen area only.
	 	 	 	C.	 	Any concrete coring to be performed shall not be started without building engineer prior approval for potential x-ray to avoid cutting existing conduits.

	 	 	 
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	Page 10 of 11 

 

SECTION 6 

 

MISCELLANEOUS 

 

     6.1 Lessee's Representative. Lessee has designated Garo Sarkissian as its sole representative with respect to the matters set forth in this Lessee Work Letter, who, until further notice to Lessor, shall have full authority and responsibility to act on behalf of the Lessee as required in this Lessee Work Letter. 

 

     6.2 Lessor's Representative. Lessee has designated Richard Green as its sole representative with respect to the matters set forth in this Lessee Work Letter, who, until further notice to Lessee, shall have full authority and responsibility to act on behalf of the Lessor as required in this Lessee Work Letter. 

 

     6.3 Lessor shall not impose any charge of any kind for: profit, utilities, use of parking, overhead, supervision or construction management fee in connection with the construction of the Improvements in the Premise by Lessee. 

 

     6.4 Time of the Essence in This Lessee Work Letter. Unless otherwise indicated, all references herein to a "number of days" shall mean and refer to calendar days. 

 

     6.5 Completion of Improvements during the Term. Lessee hereby agrees and acknowledges that the Improvements in the Premises may be completed during the Term of this Lease and that the performance of such work shall not be deemed a constructive eviction nor shall Lessee be entitled to any abatement of rent in connection therewith. Further, Lessor shall have no liability in connection with any interruption to Lessee's business operations caused by the completion of such Improvements. 

 

	 	 	 
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	Page 11 of 11exhibit4-4.htm

Exhibit 4.4 

 

CALAMP CORP.

2004 INCENTIVE STOCK PLAN 

AS AMENDED AND RESTATED EFFECTIVE JULY 30, 2009

 

1. PURPOSE OF THE PLAN

 

     The purpose of the CalAmp Corp. 2004 Incentive Stock Plan (the "Plan") is to provide a flexible framework that will permit the Board of Directors to develop and implement a variety of stock-based programs based on changing needs of CalAmp Corp. (together with its subsidiaries, the “Company”), its competitive market, and regulatory climate. The Board of Directors and senior management of the Company believe it is in the best interest of the Company's stockholders for officers, employees, and members of the Board of Directors of the Company to own stock in the Company and that such ownership will enhance the Company’s ability to attract highly qualified personnel, to strengthen its retention capabilities, to enhance the long-term performance of the Company and its subsidiaries, to vest in Participants a proprietary interest in the success of the Company and its subsidiaries, and to provide certain “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code. 

 

     Upon its Effective Date, as defined herein, the Plan replaces the Company's 1999 Stock Option Plan. Beginning on such date, the 1999 Stock Option Plan becomes frozen and stock options can no longer be granted thereunder. 

 

2. DEFINITIONS

 

     As used in the Plan, the following definitions apply to the terms indicated below:

 

     (a) “Award Agreement” shall mean a written agreement or other instrument approved by the Committee evidencing an Incentive Award. An Award Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Committee. 

 

     (b) “Board of Directors” shall mean the Board of Directors of the Company.

 

     (c) “Cause” means the occurrence or existence of any of the following with respect to a Participant, as determined by the Committee: (i) unsatisfactory performance of duties or responsibilities, provided that the Company has given the participant written notice specifying the unsatisfactory performance of his or her duties and responsibilities and afforded the participant reasonable opportunity for cure, all as determined by the Committee; (ii) a material breach by the participant of any of his or her material obligations under any employment agreement between the participant and the Company of which the Company has given participant written notice; (iii) willful failure to follow any lawful directive of the Company consistent with the participant's position and duties, after written notice and reasonable opportunity to cure, all as determined by the Committee; (iv) a material breach by the participant of his or her duty not to engage in any transaction that represents, directly or indirectly, self-dealing with the Company (or any Subsidiary) that has not been approved by a majority of the disinterested directors of the Board or of the terms of his or her employment; (v) commission of any willful or intentional act by the participant that reasonably could be expected to injure materially the property, reputation, business or business relationships of the Company or its customers; (vi) the conviction or the plea of nolo contendere or the equivalent in respect of a felony involving moral turpitude; or (vii) the abuse of any controlled substance or the abuse of alcohol or any other non-controlled substance which the Committee reasonably determines renders the participant unfit to serve in his or her capacity as an officer or employee of the Company (or any Subsidiary). 

 

1

 

 

     (d) "Change of Control" shall mean the consummation of the first to occur of (i) the sale, lease or other transfer of all or substantially all of the assets of the Company to any person or group (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended); (ii) the adoption by the stockholders of the Company of a plan relating to the liquidation or dissolution of the Company; (iii) the merger or consolidation of the Company with or into another entity or the merger of another entity into the Company or any Subsidiary thereof with the effect that immediately after such transaction the stockholders of the Company immediately prior to such transaction (or their Related parties) hold less than 50% of the total voting power of all securities generally entitled to vote in the election of directors, managers or trustees of the entity surviving such merger of consolidation; or (iv) the acquisition by any person or group of more than 50% of the voting power of all securities of the Company generally entitled to vote in the election of directors of the Company. 

 

     (e) “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

     (f) “Committee” shall mean the Compensation Committee of the Board of Directors or such other committee as the Board of Directors shall appoint from time to time to administer the Plan; provided, that the Committee shall at all times consist of two or more persons, each of whom shall be a member of the Board of Directors. To the extent required for transactions under the Plan to qualify for the exemptions available under Rule 16b-3 (as defined herein), members of the Committee (or any subcommittee thereof) shall be “non-employee directors” within the meaning of Rule 16b-3. To the extent required for compensation realized from Incentive Awards (as defined herein) under the Plan to be deductible by the Company pursuant to Section 162(m) of the Code, members of the Committee (or any subcommittee thereof) shall be “outside directors” within the meaning of such section.

 

     (g) “Company Stock” shall mean the common stock, par value $.01 per share, of the Company.

 

     (h) “Disability” shall mean: (1) any physical or mental condition that would qualify a Participant for a disability benefit under the long-term disability plan maintained by the Company and applicable to him or her or (2) when used in connection with the exercise of an Incentive Stock Option (as defined herein) following termination of employment, disability within the meaning of Section 422(e)(3) of the Code.

 

     (i) “Division” shall mean a portion of the Company's overall business that is organized and managed as a separate operating unit or business segment of the Company.

 

     (j) “Effective Date” shall mean July 30, 2004.

 

     (k) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

     (l) The “Fair Market Value” of a share of Company Stock with respect to any day shall be the closing price of Company Stock that day as reported on the Nasdaq Global Select Market or on such other securities exchange or reporting system as may be designated by the Committee. In the event that the price of a share of Company Stock shall not be so reported, the Fair Market Value of a share of Company Stock shall be determined by the Committee in its absolute discretion and, to the extent applicable, in a manner consistent with Section 409A and Section 22 of the Code.

 

     (m) “Incentive Award” shall mean an Option, SAR, Restricted Stock Unit, share of Restricted Stock, share of Phantom Stock or Stock Bonus (each as defined herein) granted pursuant to the terms of the Plan.

 

     (n) “Incentive Stock Option” shall mean an Option that is an “incentive stock option” within the meaning of Section 422 of the Code.

 

     (o) “Issue Date” shall mean the date established by the Committee on which certificates representing shares of Restricted Stock shall be issued by the Company pursuant to the terms of Section 9(e).

 

     (p) “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option.

 

     (q) “Option” shall mean an option to purchase shares of Company Stock granted pursuant to Section 7.

 

2

 

  

     (r) “Participant” shall mean an employee, member of the Board of Directors, or consultant of the Company to whom an Incentive Award is granted pursuant to the Plan and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.

 

     (s) "Performance Goal" shall mean vesting targets which may be established by the Committee from time to time and documented in writing in connection with an Incentive Award, which may be based on Qualifying Performance Criteria or other standards of financial performance and/or personal performance evaluations.

 

     (t) A share of “Phantom Stock” shall mean the right, granted pursuant to Section 11, to receive in cash the Fair Market Value of a share of Company Stock.

 

     (u) “Qualifying Performance Criteria” means any one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually (or over such shorter period) or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee: revenue; gross profit; earnings before interest, taxes, depreciation and amortization (EBITDA); operating income; pre-or after-tax income; earnings per share; net cash flow; net cash flow per share; net income; return on sales; return on equity; return on total capital; return on assets; return on net assets employed; economic value added; share price performance; total shareholder return; cash; cash net of debt; improvement in or attainment of specified cost and expense levels; or improvement in or attainment of specified working capital levels. 

 

     (v) “Restatement Effective Date” means the date this amendment and restatement of the Plan was approved and adopted by the Company’s stockholders. 

 

     (w) A share of “Restricted Stock” shall mean a share of Company Stock which is granted pursuant to the terms of Section 9 hereof and which is subject to the restrictions set forth in Section 9(c).

 

     (x) “Restricted Stock Unit” means the right, granted pursuant to Section 10, to receive shares of Company Stock or cash in lieu thereof in the future. 

 

     (y) “Retirement” means termination of employment from the Company or, in the case of a member of the Board of Directors, termination of service to the Company, by a Participant whose: (i) age plus years of service with the Company equal at least 65; and (ii) years of service with the Company equal at least five (5).

 

     (z) “Rule 16b-3” shall mean the rule thus designated as promulgated under the Exchange Act.

 

     (aa) “SAR” shall mean a stock appreciation right granted pursuant to Section 8.

 

     (bb) “Stock Bonus” shall mean a bonus payable in shares of Company Stock granted pursuant to Section 12.

 

     (cc) “Subsidiary” shall mean any corporation or other entity in which, at the time of reference, the Company owns, directly or indirectly, stock or similar interests comprising more than 50 percent of the combined voting power of all outstanding securities of such entity.

 

     (dd) “Vesting Date” shall mean the date established by the Committee on which a Restricted Stock Unit or share of Restricted Stock or Phantom Stock may vest.

 

3

 

  

3. STOCK SUBJECT TO THE PLAN

 

     (a) Shares Available for Awards

 

     Subject to adjustment as provided in Section 3(c), the total number of shares of Company Stock with respect to which Incentive Awards may be granted shall not exceed 6,000,000 shares. Such shares may be authorized but unissued Company Stock or authorized and issued Company Stock held in the Company’s treasury or acquired by the Company for the purposes of the Plan. The Committee may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares pursuant to the Plan.

 

     The grant of an SAR that by its terms is to be settled in cash shall not reduce the number of shares of Company Stock with respect to which Incentive Awards may be granted pursuant to the Plan.

 

     (b) Individual Limitation

 

     Subject to adjustment as provided in Section 3(c) hereof, the total number of Incentive Awards awarded to any one employee during any fiscal year of the Company, shall not exceed 300,000 shares of Company Stock. Determinations under the preceding sentence shall be made in a manner that is consistent with Section 162(m) of the Code and regulations promulgated thereunder. The provisions of this Section 3(b) shall not apply in any circumstance with respect to which the Committee determines that compliance with Section 162(m) of the Code is not necessary.

 

     (c) Adjustment for Change in Capitalization

 

     If there is any change in the outstanding shares of Company Stock by reason of a stock dividend or distribution, stock split-up, recapitalization, combination or exchange of shares, by reason of any extraordinary cash dividend, or by reason of any merger, consolidation, spinoff or other corporate reorganization in which the Company is the surviving corporation, the number of shares available for issuance both in the aggregate and with respect to each outstanding Incentive Award, the price per share under each outstanding Incentive Award, and the limitation set forth in Section 3(b), shall be proportionately adjusted by the Committee, whose determination shall be final and binding. After any adjustment made pursuant to this Section 3(c), the number of shares subject to each outstanding Incentive Award shall be rounded to the nearest whole number.

 

     (d) Re-use of Shares

 

     The following shares of Company Stock shall again become available for Incentive Awards: any shares subject to an Incentive Award that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; any shares of Restricted Stock forfeited; and, if allowed by the Committee as a form of payment of the Option exercise price or the required tax withholding in connection with an Incentive Award, any shares delivered by a Participant to the Company and any shares withheld and retained by the Company.

 

     (e) No Repricing

 

     Other than adjustments made in connection with a transaction or other change in the Company’s capitalization as described in Section 3(c), absent prior stockholder approval, neither the Committee nor the Board of Directors shall have any authority, with or without the consent of the affected holders of Incentive Awards, to “reprice” an Option or SAR after the date of its initial grant. For purposes of the Plan, “repricing” means canceling an Option or SAR to issue a replacement Option or SAR to the Participant at a lower exercise price, reducing the exercise price of an Option or SAR, canceling an Option or SAR in exchange for cash or another type of Incentive Award, or taking any other action that is treated as a “repricing” under generally accepted accounting principles. This paragraph may not be amended, altered or repealed by the Board of Directors or the Committee without approval of the stockholders of the Company.

 

4

 

  

4. ADMINISTRATION OF THE PLAN

 

     The Plan shall be administered by the Committee. The Committee shall from time to time designate the employees of the Company who shall be granted Incentive Awards.

 

     The Committee shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan and the terms of any Incentive Award issued under it and to adopt such rules and regulations for administering the Plan as it may deem necessary or appropriate. The Committee shall determine whether an authorized leave of absence shall constitute termination of employment. Decisions of the Committee shall be final and binding on all parties. The Committee’s determinations under the Plan may, but need not, be uniform and may be made on a Participant-by-Participant basis (whether or not two or more Participants are similarly situated). Notwithstanding anything to the contrary contained herein, the Board of Directors may, in its sole discretion, at any time and from time to time, resolve to administer the Plan, in which case the term “Committee” as used herein shall be deemed to mean the Board of Directors.

 

     The Committee may, in its absolute discretion, without amendment to the Plan, (i) accelerate the date on which any Option or SAR granted under the Plan becomes exercisable, (ii) waive or amend the operation of Plan provisions respecting exercise after termination of employment or otherwise adjust any of the terms of such Option or SAR and (iii) accelerate the Vesting Date or Issue Date, or waive any condition imposed hereunder, with respect to any Restricted Stock Unit or share of Restricted Stock or Phantom Stock or otherwise adjust any of the terms applicable to such Incentive Award.

 

     No member of the Committee shall be liable for any action, omission or determination relating to the Plan, and the Company shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company.

 

5. ELIGIBILITY

 

     The persons who shall be eligible to receive Incentive Awards pursuant to the Plan shall be such officers and salaried employees of the Company and its Subsidiaries (including employees who are also directors and prospective salaried employees conditioned on their becoming salaried employees), non-employee members of the Board of Directors, and such consultants to the Company and its Subsidiaries as the Committee shall select in its discretion.

 

6. AWARDS UNDER THE PLAN; AWARD AGREEMENTS

 

     The Committee may grant Options, SARs, Restricted Stock Units, shares of Restricted Stock, shares of Phantom Stock and Stock Bonuses, in such amounts and with such terms and conditions as the Committee shall determine, subject to the provisions of the Plan.

 

     Each Incentive Award granted under the Plan (except an unconditional Stock Bonus) shall be evidenced by an Award Agreement which shall contain such provisions as the Committee may in its sole discretion deem necessary or desirable. By accepting an Incentive Award, a Participant thereby agrees that the Incentive Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

 

5

 

  

7. OPTIONS

 

     (a) Identification of Options

 

     Each Option shall be clearly identified in the applicable Award Agreement as either a Non-Qualified Stock Option or an Incentive Stock Option. In the absence of such identification, an Option shall be deemed to be a Non-Qualified Stock Option. 

 

     (b) Exercise Price

 

     Each Award Agreement with respect to an Option shall set forth the amount (the “exercise price”) payable by the holder to the Company upon exercise of the Option. The exercise price per share shall be determined by the Committee but shall in no event be less than the Fair Market Value of a share of Company Stock on the date the Option is granted, except as permitted in connection with the issuance of Options in a transaction to which Section 424(a) of the Code applies.

 

     (c) Term and Exercise of Options

 

          (1) Unless the applicable Award Agreement provides otherwise, an Option shall become cumulatively exercisable as to 25% of the shares covered thereby on each of the first, second, third and fourth anniversaries of the date of grant. By way of example and not by way of limitation, the Committee may require, as a condition to the vesting of any Option, that the Participant or the Company achieves such Performance Goals as the Committee may specify. The Committee shall determine the expiration date of each Option; provided, however, that each Option shall be subject to earlier termination, expiration or cancellation as provided in the Plan, and further provided that no Option shall be exercisable more than ten (10) years after the date of grant.

 

          (2) An Option may be exercised for all or any portion of the shares as to which it is exercisable; provided, that no partial exercise of an Option shall be for an aggregate exercise price of less than $1,000 unless such partial exercise represents the entire unexercised portion of the Option or the entire portion of the Option that is then exercisable. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof.

 

          (3) An Option shall be exercised by delivering notice to the Company’s principal office, to the attention of its Secretary (or the Secretary’s designee), no less than one business day in advance of the effective date of the proposed exercise. Such notice shall be accompanied by the applicable Award Agreement, shall specify the number of shares of Company Stock with respect to which the Option is being exercised and the effective date of the proposed exercise and shall be signed by the Participant or other person then having the right to exercise the Option in a manner determined by the Committee. Such notice may be withdrawn at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise. Payment for shares of Company Stock purchased upon the exercise of an Option shall be made on the effective date of such exercise by one or a combination of the following means:

 

               (i) in cash, by certified check, bank cashier’s check or wire transfer;

 

               (ii) through a broker-assisted transaction whereby a broker selected and engaged by the Participant sells shares of Company Stock in an open market transaction and remits to the Company from the sales proceeds on behalf of the Participant the Option exercise price and the required tax withholding amounts; 

 

               (iii) subject to the approval of the Committee, and at the direction of the Participant, through shares retained by the Company in an amount whose aggregate Fair Market Value is equal on the date of exercise to the exercise price, thereby surrendering as payment the portion of the Option that covers the retained shares;

 

6

 

  

               (iv) subject to the approval of the Committee, in shares of Company Stock owned by the Participant and valued at their Fair Market Value on the effective date of such exercise; or

 

               (v) subject to the approval of the Committee, by such other provision as the Committee may from time to time authorize.

 

          (4) Notwithstanding the foregoing, in the case of an Incentive Stock Option exercised pursuant to (3)(iii) above, the number of shares deemed to be used to satisfy the exercise price will not be treated as having been purchased through the exercise of an Incentive Stock Option. 

 

          (5) No shares of Company Stock will be issued until full payment has been made. Any payment in shares of Company Stock shall be effected by the delivery of such shares to the Secretary (or the Secretary’s designee) of the Company, duly endorsed in blank or accompanied by stock powers duly executed in blank, together with any other documents and evidences as the Secretary (or the Secretary’s designee) of the Company shall require. Certificates for shares of Company Stock purchased upon the exercise of an Option shall be issued in the name of the Participant or other person entitled to receive such shares, and delivered to the Participant or such other person as soon as practicable following the effective date on which the Option is exercised.

 

     (d) No Reload Rights

 

     Options granted under this Plan shall not contain any provision entitling the optionee to the automatic grant of additional options in connection with any exercise of the original option.

 

     (e) No Loans 

 

     The Company may not make loans to individual Participants for the purpose of financing the exercise of an Option. 

 

     (f) Limitations on Incentive Stock Options

 

          (1) To the extent that the aggregate Fair Market Value of shares of Company Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of the Company (or any “subsidiary corporation” of the Company within the meaning of Section 424 of the Code) shall exceed $100,000, or such higher value as may be permitted under Section 422 of the Code, such Options shall be treated as Non-Qualified Stock Options. Such Fair Market Value shall be determined as of the date on which each such Incentive Stock Option is granted.

 

          (2) No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or any “subsidiary corporation” of the Company within the meaning of Section 424 of the Code), unless (i) the exercise price of such Incentive Stock Option is at least 110% of the Fair Market Value of a share of Company Stock at the time such Incentive Stock Option is granted and (ii) such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted.

 

     (g) Effect of Termination of Employment

 

          (1) Unless the applicable Award Agreement provides or the Committee shall determine otherwise, in the event that the employment or service of a Participant with the Company shall terminate for any reason other than Cause, Disability, Retirement or death: (i) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is 90 days after such termination, on which date they shall expire; and (ii) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. The 90-day period described in this Section 7(g)(1) shall be extended to one year in the event of the Participant’s death during such 90-day period. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

 

7

 

 

          (2) Unless the applicable Award Agreement provides or the Committee shall determine otherwise, in the event that the employment or service of a Participant with the Company shall terminate on account of the Disability or death of the Participant: (i) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is one year after such termination, on which date they shall expire; and (ii) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

 

          (3) Unless the applicable Award Agreement provides or the Committee shall determine otherwise, in the event that the employment or service of a Participant with the Company shall terminate on account of the Retirement of the Participant: (i) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable for a period of two years from the date of termination, on which date they shall expire; and (ii) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

 

          (4) Unless the applicable Award Agreement provides or the Committee shall determine otherwise, if a Participant’s employment by or service with the Company (or any Subsidiary) is terminated for Cause, any unexercised Stock Option granted to such participant shall be cancelled on the date of such termination, whether or not exercisable on such date. See also Section 20, Cancellation and Rescission of Incentive Awards.

 

     (h) Acceleration of Exercise Date Upon Change in Control

 

     In the event of a Change in Control, the Committee as constituted immediately before such Change in Control may, in its sole discretion, take action to make each Option granted under the Plan and outstanding at such time fully and immediately exercisable upon such Change in Control, and if so accelerated each Option shall remain exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan. In addition, in the event of a potential Change in Control, the Committee may in its discretion cancel any outstanding Options and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Options based upon the price per share of Common Stock to be received by other shareholders of the Company in the Change in Control less the exercise price of each Option.

 

8. SARS

 

     (a) Exercise Price

 

     The exercise price per share of an SAR shall be determined by the Committee at the time of grant, but shall in no event be less than the Fair Market Value of a share of Company Stock on the date of grant.

 

     (b) Benefit Upon Exercise

 

     At the time of granting an SAR, the Committee, in its sole and absolute discretion, shall specify whether the benefit payable upon exercise of the SAR will be paid in shares of Company Stock or in cash, and such form of payment will be made a part of the applicable Award Agreement. The exercise of an SAR with respect to any number of shares of Company Stock shall entitle the Participant to a payment, for each such share, equal to the excess of (i) the Fair Market Value of a share of Company Stock on the exercise date over (ii) the exercise price of the SAR. Payment will be made in shares of Company Stock, valued at their Fair Market Value on the date of exercise, or in cash, as specified in the applicable Award Agreement. Payments shall be made as soon as practicable following exercise of the SAR.

 

8

 

 

     (c) Term and Exercise of SARs

 

          (1) Unless the applicable Award Agreement provides otherwise, an SAR shall become cumulatively exercisable as to 25 percent of the shares covered thereby on each of the first, second, third and fourth anniversaries of the date of grant. By way of example and not by way of limitation, the Committee may require, as a condition to the vesting of any SAR, that the Participant or the Company achieves such Performance Goals as the Committee may specify. The Committee shall determine the expiration date of each SAR. Unless the applicable Award Agreement provides otherwise, no SAR shall be exercisable prior to the first anniversary of the date of grant.

 

          (2) An SAR may be exercised for all or any portion of the shares as to which it is exercisable; provided, that no partial exercise of an SAR shall be for an aggregate exercise price of less than $1,000. The partial exercise of an SAR shall not cause the expiration, termination or cancellation of the remaining portion thereof.

 

          (3) An SAR shall be exercised by delivering notice to the Company’s principal office, to the attention of its Secretary (or the Secretary’s designee), no less than one business day in advance of the effective date of the proposed exercise. Such notice shall be accompanied by the applicable Award Agreement, shall specify the number of shares of Company Stock with respect to which the SAR is being exercised, and the effective date of the proposed exercise, and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise.

 

     (d) Effect of Termination of Employment

 

     The provisions set forth in Section 7(g) with respect to the exercise of Options following termination of employment shall apply as well to such exercise of SARs.

 

     (e) Acceleration of Exercise Date Upon Change in Control

 

     In the event of a Change in Control, the Committee as constituted immediately before such Change in Control may, in its sole discretion, take action to make each SAR granted under the Plan and outstanding at such time fully and immediately exercisable upon such Change in Control, and if so accelerated each SAR shall remain exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan.

 

9. RESTRICTED STOCK UNITS 

 

     (a) Vesting Date

 

     At the time of the grant of Restricted Stock Units, the Committee shall establish a Vesting Date or Vesting Dates with respect to such Restricted Stock Units. The Committee may divide such shares into classes and assign a different Vesting Date for each class. Provided that all conditions to the vesting of a Restricted Stock Unit imposed pursuant to Section 9(c) are satisfied, and except as provided in Section 9(d), upon the occurrence of the Vesting Date with respect to a Restricted Stock Unit, such Restricted Stock Unit shall vest.

 

     (b) Benefit Upon Vesting

 

     Upon the vesting of a Restricted Stock Unit, the Participant shall be entitled to receive one share of Company Stock or an amount in cash equal to the Fair Market Value of a share of Company Stock on the date on which such share of Restricted Stock Unit vests, as determined by the Committee.

 

     (c) Conditions to Vesting

 

     At the time of the grant of Restricted Stock Units, the Committee may impose such restrictions or conditions to the vesting of such shares as it, in its absolute discretion, deems appropriate. By way of example and not by way of limitation, the Committee may require, as a condition to the vesting of any class or classes of Restricted Stock Units, that the Participant or the Company achieves such Performance Goals as the Committee may specify. Notwithstanding anything in this Plan to the contrary, the performance criteria for any Restricted Stock Unit that is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code will be a measure based on one or more Qualifying Performance Criteria selected by the Committee and specified when the Incentive Award is granted. The Committee may, in its discretion, also make grants of Restricted Stock Units which vest over a period of time of at least one year.

 

9

 

 

     (d) Dividends on Restricted Stock Units 

 

     Company Stock underlying Restricted Stock Units shall be entitled to dividends or dividend equivalents only to the extent provided by the Committee. 

 

     (e) Consequences of Vesting

 

     Upon the vesting of a Restricted Stock Unit (other than a Restricted Stock Unit that is settled in cash) pursuant to the terms of the Plan and the applicable Award Agreement, the Company shall cause to be issued a stock certificate, registered in the name of the Participant to whom such Restricted Stock Unit was granted. Notwithstanding the foregoing, such share still may be subject to restrictions on transfer as a result of applicable securities laws.

 

     (f) Effect of Termination of Employment

 

          (1) Unless the applicable Award Agreement or the Committee provides otherwise, Restricted Stock Units that have not vested shall be forfeited upon the Participant’s termination of employment for any reason other than Cause.

 

          (2) In the event of the termination of a Participant’s employment for Cause, all Restricted Stock Units granted to such Participant which have not vested as of the date of such termination shall immediately be forfeited. See also Section 20, Cancellation and Rescission of Incentive Awards. 

 

     (g) Effect of Change in Control

 

     In the event of a Change in Control, the Committee as constituted immediately before such Change in Control may, in its sole discretion, take action to immediately vest upon such Change in Control all outstanding Restricted Stock Units which have not theretofore vested.

 

10. RESTRICTED STOCK

 

     (a) Issue Date and Vesting Date

 

     At the time of the grant of shares of Restricted Stock, the Committee shall establish an Issue Date or Issue Dates and a Vesting Date or Vesting Dates with respect to such shares. The Committee may divide such shares into classes and assign a different Issue Date and/or Vesting Date for each class. If the grantee is employed by the Company on an Issue Date (which may be the date of grant), the specified number of shares of Restricted Stock shall be issued in accordance with the provisions of Section 10(e). Provided that all conditions to the vesting of a share of Restricted Stock imposed pursuant to Section 10(b) are satisfied, and except as provided in Section 10(g), upon the occurrence of the Vesting Date with respect to a share of Restricted Stock, such share shall vest and the restrictions of Section 10(c) shall cease to apply to such share.

 

     (b) Conditions to Vesting

 

     At the time of the grant of shares of Restricted Stock, the Committee may impose such restrictions or conditions to the vesting of such shares as it, in its absolute discretion, deems appropriate. By way of example and not by way of limitation, the Committee may require, as a condition to the vesting of any class or classes of shares of Restricted Stock, that the Participant or the Company achieves such Performance Goals as the Committee may specify. Notwithstanding anything in this Plan to the contrary, the performance criteria for any grant of Restricted Stock that is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code will be a measure based on one or more Qualifying Performance Criteria selected by the Committee and specified when the Incentive Award is granted. The Committee may, in its discretion, also make grants of Restricted Stock which vest over a period of time of at least one year.

 

10

 

 

     (c) Restrictions on Transfer Prior to Vesting

 

     Prior to the vesting of a share of Restricted Stock, no transfer of a Participant’s rights with respect to such share, whether voluntary or involuntary, by operation of law or otherwise, shall be permitted. Immediately upon any attempt to transfer such rights, such share, and all of the rights related thereto, shall be forfeited by the Participant.

 

     (d) Dividends on Restricted Stock

 

     The Committee in its discretion may require that any dividends paid on shares of Restricted Stock shall be held in escrow until all restrictions on such shares have lapsed.

 

     (e) Issuance of Certificates

 

          (1) Reasonably promptly after the Issue Date with respect to shares of Restricted Stock, the Company shall cause to be issued a stock certificate, registered in the name of the Participant to whom such shares were granted, evidencing such shares; provided, that the Company shall not cause such a stock certificate to be issued unless it has received a stock power duly endorsed in blank with respect to such shares. Each such stock certificate shall bear the following legend:

 

     The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture provisions and restrictions against transfer) contained in the CalAmp Corp. 2004 Incentive Stock Plan and related Award Agreement, and such rules, regulations and interpretations as the CalAmp Corp. Compensation Committee may adopt. Copies of the Plan, Award Agreement and, if any, rules, regulations and interpretations are on file in the office of the Secretary of CalAmp Corp., 1401 North Rice Avenue, Oxnard, California 93030. 

 

Such legend shall not be removed until such shares vest pursuant to the terms hereof.

 

          (2) Each certificate issued pursuant to this Section 10(e), together with the stock powers relating to the shares of Restricted Stock evidenced by such certificate, shall be held in escrow by the Company until (i) the restrictions have lapsed and (ii) the income tax and employment tax withholding amounts have been satisfied, as provided for in Section 17 hereof.

 

     (f) Consequences of Vesting

 

     Upon the vesting of a share of Restricted Stock pursuant to the terms of the Plan and the applicable Award Agreement, the restrictions of Section 10(c) shall cease to apply to such share. Reasonably promptly after a share of Restricted Stock vests, the Company shall cause to be delivered to the Participant to whom such shares were granted, a certificate evidencing such share, free of the legend set forth in Section 10(e). Notwithstanding the foregoing, such share still may be subject to restrictions on transfer as a result of applicable securities laws.

 

     (g) Effect of Termination of Employment

 

          (1) Unless the applicable Award Agreement or the Committee provides otherwise, during the 90 days following termination of a Participant’s employment for any reason other than Cause, the Company shall have the right to require the return of any shares to which restrictions on transferability apply, in exchange for which the Company shall repay to the Participant (or the Participant’s estate) any amount paid by the Participant for such shares. In the event that the Company requires such a return of shares, it also shall have the right to require the return of all dividends paid on such shares, whether by termination of any escrow arrangement under which such dividends are held or otherwise.

 

11

 

 

          (2) In the event of the termination of a Participant’s employment for Cause, all shares of Restricted Stock granted to such Participant which have not vested as of the date of such termination shall immediately be returned to the Company, together with any dividends paid on such shares, in return for which the Company shall repay to the Participant any amount paid for such shares. See also Section 20, Cancellation and Rescission of Incentive Awards. 

 

     (h) Effect of Change in Control

 

     In the event of a Change in Control, the Committee as constituted immediately before such Change in Control may, in its sole discretion, take action to immediately vest upon such Change in Control all outstanding shares of Restricted Stock which have not theretofore vested.

 

11. PHANTOM STOCK

 

     (a) Vesting Date

 

     At the time of the grant of shares of Phantom Stock, the Committee shall establish a Vesting Date or Vesting Dates with respect to such shares. The Committee may divide such shares into classes and assign a different Vesting Date for each class. Provided that all conditions to the vesting of a share of Phantom Stock imposed pursuant to Section 11(c) are satisfied, and except as provided in Section 11(d), upon the occurrence of the Vesting Date with respect to a share of Phantom Stock, such share shall vest.

 

     (b) Benefit Upon Vesting

 

     Upon the vesting of a share of Phantom Stock, the Participant shall be entitled to receive in cash, within 30 days of the date on which such share vests, an amount equal to the sum of (i) the Fair Market Value of a share of Company Stock on the date on which such share of Phantom Stock vests and (ii) the aggregate amount of cash dividends paid with respect to a share of Company Stock during the period commencing on the date on which the share of Phantom Stock was granted and terminating on the date on which such share vests.

 

     (c) Conditions to Vesting

 

     At the time of the grant of shares of Phantom Stock, the Committee may impose such restrictions or conditions to the vesting of such shares as it, in its absolute discretion, deems appropriate. By way of example and not by way of limitation, the Committee may require, as a condition to the vesting of any class or classes of shares of Phantom Stock, that the Participant or the Company achieves such Performance Goals as the Committee may specify. Notwithstanding anything in this Plan to the contrary, the performance criteria for any Phantom Stock that is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code will be a measure based on one or more Qualifying Performance Criteria selected by the Committee and specified when the Incentive Award is granted. The Committee may, in its discretion, also make grants of Phantom Stock which vest over a period of time of at least one year. 

 

     (d) Effect of Termination of Employment

 

          (1) Unless the applicable Award Agreement or the Committee provides otherwise, shares of Phantom Stock that have not vested, together with any dividends credited on such shares, shall be forfeited upon the Participant’s termination of employment for any reason other than Cause.

 

          (2) In the event of the termination of a Participant’s employment for Cause, all shares of Phantom Stock granted to such Participant which have not vested as of the date of such termination shall immediately be forfeited, together with any dividends credited on such shares. See also Section 20, Cancellation and Rescission of Incentive Awards. 

 

12

 

 

     (e) Effect of Change in Control

 

     In the event of a Change in Control, the Committee as constituted immediately before such Change in Control may, in its sole discretion, take action to immediately vest upon such Change in Control all outstanding shares of Phantom Stock which have not theretofore vested.

 

12. STOCK BONUSES

 

     In the event that the Committee grants a Stock Bonus, a certificate for the shares of Company Stock comprising such Stock Bonus shall be issued in the name of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such Stock Bonus is payable.

 

13. NON-EMPLOYEE DIRECTOR AWARDS

 

     Each year, on the day of the annual meeting of the stockholders of the Company at which directors of the Company are elected (and, in the case that a person becomes a Non-Employee Director other than at an annual meeting, on such date that the person first becomes a Non-Employee Director), each Non-Employee Director shall receive Incentive Awards in an amount not to exceed 20,000 shares of Company Stock. The specific amount of Incentive Awards to be granted to each Non-Employee Director on such dates will be as determined by the Board of Directors from time to time, subject to this limitation of 20,000 shares of Company Stock on each such date. 

 

     If, on any date upon which Incentive Awards are to be granted pursuant to this Section 13, the number of shares of Company Stock remaining available for issuance under the Plan is less than the total number of shares of Company Stock that otherwise would be covered by such Incentive Awards, in the aggregate, then Incentive Awards for a pro rata amount of the remaining shares of Company Stock available for issuance (rounded to the nearest whole share) shall be awarded to each Non-Employee Director on such date. Incentive Awards granted pursuant to this Section 13 shall generally become exercisable one (1) year from the date of grant or over such longer or shorter period as the Board of Directors may from time to time establish, subject to the discretion of the Committee to accelerate the vesting of Incentive Awards as provided in Section 4 hereof.

 

14. RIGHTS AS A STOCKHOLDER

 

     No person shall have any rights as a stockholder with respect to any shares of Company Stock covered by or relating to any Incentive Award until the date of issuance of a stock certificate with respect to such shares.

 

     Except as otherwise expressly provided in Section 3(c), no adjustment to any Incentive Award shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued.

 

15. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO INCENTIVE AWARD

 

     Nothing contained in the Plan or any Award Agreement shall confer upon any Participant any right with respect to the continuation of employment by the Company or interfere in any way with the right of the Company, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or decrease the compensation of the Participant.

 

     No person shall have any claim or right to receive an Incentive Award hereunder. The Committee’s granting of an Incentive Award to a Participant at any time shall neither require the Committee to grant any other Incentive Award to such Participant or other person at any time nor preclude the Committee from making subsequent grants to such Participant or any other person.

 

     The Plan is intended to be an unfunded plan. Participants are and shall at all times be general creditors of the Company with respect to their Incentive Awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Incentive Awards under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its bankruptcy or insolvency. 

 

13

 

 

     Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of restricted stock or stock options otherwise than under this Plan or an arrangement not intended to qualify under Section 162(m) of the Code, and such arrangements may be either generally applicable or applicable only in specific cases. 

 

16. SECURITIES MATTERS

 

     (a) The Company shall be under no obligation to effect the registration pursuant to the Securities Act of 1933 of any interests in the Plan or any shares of Company Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Company Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of the Nasdaq National Market and any other securities exchange on which shares of Company Stock are traded. Certificates evidencing shares of Company Stock issued pursuant to the terms hereof, may bear such legends, as the Committee or the Company, in its sole discretion, deems necessary or desirable to insure compliance with applicable securities laws.

 

     (b) The transfer of any shares of Company Stock hereunder shall be effective only at such time as counsel to the Company shall have determined that the issuance and delivery of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of the Nasdaq National Market and any other securities exchange on which shares of Company Stock are traded. The Committee may, in its sole discretion, defer the effectiveness of any transfer of shares of Company stock hereunder in order to allow the issuance of such shares to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. The Company shall inform the Participant in writing of the Committee’s decision to defer the effectiveness of a transfer. During the period of such a deferral in connection with the exercise of an Option, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.

 

17. WITHHOLDING TAXES

 

     Whenever cash is to be paid pursuant to an Incentive Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto.

 

     Whenever shares of Company Stock are to be delivered pursuant to an Incentive Award, the amount of any federal, state and local tax withholding requirements must be satisfied by the Participant prior to the issuance of shares by the Company (or, in the case of Restricted Stock, before the release of such shares from escrow). The Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto. With the approval of the Committee, which it shall have sole discretion to grant, a Participant may satisfy the foregoing requirement by (i) electing to have the Company withhold and retain from delivery shares of Company Stock having a value equal to the amount of the tax withholding requirement, or (ii) delivering to the Company already vested and owned shares of Common Stock having a value equal to the amount of the tax withholding requirement. Such shares shall be valued at their Fair Market Value on the date as of which the amount of tax to be withheld is determined (the “Tax Date”). Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Incentive Award. To the extent required for such a withholding of stock to qualify for the exemption available under Rule 16b-3, such an election by a grantee whose transactions in Company Stock are subject to Section 16(b) of the Exchange Act shall be subject to the approval of the Committee in its sole discretion.

 

14

 

 

18. NOTIFICATION OF ELECTION UNDER SECTION 83(b) OF THE CODE

 

     If any Participant shall, in connection with the award of Restricted Stock under the Plan, make the election permitted under Section 83(b) of the Code (i.e., an election to include in gross income in the year of award the amounts specified in Section 83(b)), such Participant shall notify the Company of such election at the time of entering into the Award Agreement pertaining to the Restricted Stock award, and shall concurrently make a payment to the Company of the aggregate income tax and employment tax withholding amount, such payment to be made in cash, by certified check, bank cashier’s check or wire transfer.

 

19. NOTIFICATION UPON DISQUALIFYING DISPOSITION

 

     Each Award Agreement with respect to an Incentive Stock Option shall require the Participant to notify the Company of any disposition of shares of Company Stock issued pursuant to the exercise of such Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions) within ten days of such disposition.

 

20. CANCELLATION AND RESCISSION OF INCENTIVE AWARDS 

 

     Unless the Award Agreement specifies otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred Incentive Awards at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement, or if the Participant engages in any "Detrimental Activity." For purposes of this Section 20, "Detrimental Activity" shall include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company's business, without prior written authorization from the Company, of any confidential information or material, as defined in the Company's Agreement Regarding Confidential Information and Intellectual Property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company; (iii) the failure or refusal to disclose promptly and to assign to the Company, pursuant to the Company's "Confidentiality, Company Property, and Non-Solicitation Agreement" (formerly known as the Company's "Confidential Invention Agreement"), all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company or the failure or refusal to do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in other countries; (iv) activity that results in termination of the Participant's employment for Cause; (v) a violation of any rules, policies, procedures or guidelines of the Company, including but not limited to the Company's Code of Business Conduct and Ethics policy; (vi) any attempt directly or indirectly to induce any employee of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company; (vii) the Participant being convicted of, or entering a guilty plea with respect to, a crime, whether or not connected with the Company; or (viii) any other conduct or act determined to be injurious, detrimental or prejudicial to any interest of the Company.

 

21. AMENDMENT OR TERMINATION OF THE PLAN

 

     The Board of Directors may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that stockholder approval shall be required if and to the extent required by Rule 16b-3 or by any comparable or successor exemption under which the Board of Directors believes it is appropriate for the Plan to qualify, or if and to the extent the Board of Directors determines that such approval is appropriate for purposes of satisfying the requirements of the Nasdaq Global Select Market or any other securities exchange on which shares of Company Stock are traded or Section 162(m) or Section 422 of the Code. Nothing herein shall restrict the Committee’s ability to exercise its discretionary authority pursuant to Section 4, which discretion may be exercised without amendment to the Plan. No action hereunder may, without the consent of a Participant, reduce the Participant’s rights under any outstanding Incentive Award.

 

15

 

 

22. NO OBLIGATION TO EXERCISE

 

     The grant to a Participant of an Option or SAR shall impose no obligation upon such Participant to exercise such Option or SAR.

 

23. TRANSFERS UPON DEATH; NONASSIGNABILITY

 

     Upon the death of a Participant outstanding Incentive Awards granted to such Participant may be exercised only by the executor or administrator of the Participant’s estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution. No transfer of an Incentive Award by will or the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with (a) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and conditions of the Incentive Award that are or would have been applicable to the Participant and to be bound by the acknowledgments made by the Participant in connection with the grant of the Incentive Award.

 

     During a Participant’s lifetime, the Committee may, in its discretion, permit the transfer, assignment or other encumbrance of an outstanding Option or outstanding shares of Restricted Stock; provided that, in the case of an Incentive Stock Option, transferability may be permitted during the Participant's lifetime only to the extent that the Incentive Stock Option retains its qualified status, unless the Committee and the Participant agree otherwise.

 

24. EXPENSES AND RECEIPTS

 

     The expenses of the Plan shall be paid by the Company. Any proceeds received by the Company in connection with any Incentive Award will be used for general corporate purposes.

 

25. FAILURE TO COMPLY

 

     In addition to the remedies of the Company elsewhere provided for herein, failure by a Participant (or beneficiary) to comply with any of the terms and conditions of the Plan or the applicable Award Agreement, unless such failure is remedied by such Participant (or beneficiary) within ten days after notice of such failure by the Committee, shall be grounds for the cancellation and forfeiture of such Incentive Award, in whole or in part, as the Committee, in its sole discretion, may determine.

 

26. EFFECTIVE DATE AND TERM OF PLAN

 

     The Plan shall be effective as of the Effective Date. Unless earlier terminated by the Board of Directors, the right to grant Incentive Awards under the Plan will terminate on the tenth anniversary of the Restatement Effective Date. Incentive Awards outstanding at Plan termination will remain in effect according to their terms and the provisions of the Plan.

 

27. APPLICABLE LAW

 

     Except to the extent preempted by any applicable federal law, the Plan will be construed and administered in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws thereunder.

 

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