Document:

Exhibit 10.3

 

 

ADMINISTRATION AGREEMENT

 

among

 

HARLEY-DAVIDSON MOTORCYCLE TRUST [           ],

 

as Issuer,

 

HARLEY-DAVIDSON CREDIT CORP.,

 

as Administrator,

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

 

as Trust Depositor,

 

and

 

[                 ],

 

as Indenture Trustee

 

Dated as of [         ]

 

 

 

TABLE OF CONTENTS

 

	
SECTION 1.
    	
 
    	
DUTIES OF THE ADMINISTRATOR
    	
 
    	
1
    
	
SECTION 2.
    	
 
    	
RECORDS
    	
 
    	
7
    
	
SECTION 3.
    	
 
    	
COMPENSATION
    	
 
    	
7
    
	
SECTION 4.
    	
 
    	
ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER
    	
 
    	
7
    
	
SECTION 5.
    	
 
    	
INDEPENDENCE OF THE ADMINISTRATOR
    	
 
    	
7
    
	
SECTION 6.
    	
 
    	
NO JOINT VENTURE
    	
 
    	
7
    
	
SECTION 7.
    	
 
    	
OTHER ACTIVITIES OF ADMINISTRATOR
    	
 
    	
8
    
	
SECTION 8.
    	
 
    	
TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR
    	
 
    	
8
    
	
SECTION 9.
    	
 
    	
ACTION UPON TERMINATION, RESIGNATION OR REMOVAL
    	
 
    	
9
    
	
SECTION 10.
    	
 
    	
NOTICES
    	
 
    	
9
    
	
SECTION 11.
    	
 
    	
AMENDMENTS
    	
 
    	
9
    
	
SECTION 12.
    	
 
    	
SUCCESSORS AND ASSIGNS
    	
 
    	
10
    
	
SECTION 13.
    	
 
    	
GOVERNING LAW
    	
 
    	
10
    
	
SECTION 14.
    	
 
    	
HEADINGS
    	
 
    	
10
    
	
SECTION 15.
    	
 
    	
COUNTERPARTS
    	
 
    	
10
    
	
SECTION 16.
    	
 
    	
SEVERABILITY
    	
 
    	
10
    
	
SECTION 17.
    	
 
    	
NOT APPLICABLE TO HARLEY-DAVIDSON IN OTHER CAPACITIES
    	
 
    	
10
    
	
SECTION 18.
    	
 
    	
LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE   TRUSTEE
    	
 
    	
11
    
	
SECTION 19.
    	
 
    	
THIRD-PARTY BENEFICIARY
    	
 
    	
11
    
	
SECTION 20.
    	
 
    	
SURVIVABILITY
    	
 
    	
11
    

 

 

This Administration Agreement, dated as of [              ], among Harley-Davidson Motorcycle Trust [              ] (the “Issuer”), Harley-Davidson Credit Corp. (together with its successors and assigns “Harley-Davidson Credit” and in its capacity as administrator, the “Administrator”), Harley-Davidson Customer Funding Corp. (the “Trust Depositor”) and [                      ], not in its individual capacity but solely as Indenture Trustee (together with its successors and assigns, the “Indenture Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer is issuing the Notes pursuant to the Indenture, dated as of the date hereof (the “Indenture”), between the Issuer and the Indenture Trustee (capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Indenture or the Sale and Servicing Agreement);

 

WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Notes including (i) a Sale and Servicing Agreement, dated as of the date hereof (the “Sale and Servicing Agreement”), among the Issuer, the Indenture Trustee, the Trust Depositor and Harley-Davidson Credit, as servicer (together with its successors and assigns in such capacity, the “Servicer”), and (ii) the Indenture (collectively referred to hereinafter as the “Transaction Documents”);

 

WHEREAS, pursuant to the Transaction Documents, the Issuer and the Owner Trustee are required to perform certain duties in connection with (i) the Notes and the collateral therefor pledged pursuant to the Indenture (the “Collateral”) and (ii) the beneficial ownership interest in the Issuer (the registered holders of such interest being referred to herein as the “Owners”);

 

WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain of the duties of the Issuer and the Owner Trustee referred to in the preceding clause and to provide such additional services consistent with the terms of this Agreement and the Transaction Documents as the Issuer and the Owner Trustee may from time to time request; and

 

WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein;

 

NOW, THEREAFTER, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.                                          Duties of the Administrator.

 

(a)                                 Duties with respect to the Indenture.

 

(i)                                     The Administrator agrees to perform all its duties as Administrator and the duties of the Issuer and the Owner Trustee under the Indenture and the Sale and Servicing Agreement.  In addition, the Administrator shall consult with the Owner Trustee regarding the duties of the Issuer or the Owner Trustee under the Indenture.  The Administrator shall monitor the

 

 

performance  of  the  Issuer  and  shall  advise  the  Owner  Trustee  when  action  is  necessary  to  comply  with  the  respective  duties  of  the  Issuer  and  the  Owner  Trustee  under  the  Indenture.  The  Administrator  shall  prepare  for  execution  by  the  Issuer  or  shall  cause  the  preparation  by  other  appropriate  persons  of,  all  such  documents,  reports,  filings,  instruments,  certificates  and  opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the Indenture.  In furtherance of the foregoing, the Administrator shall take all appropriate action that the Issuer or the Owner Trustee is required to take pursuant to the Indenture including, without limitation, such of the foregoing as are required with respect to the following matters under the Indenture (references are to Sections of the Indenture):

 

(A)                               the duty to cause the Note Register to be kept and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Register (Section 2.04);

 

(B)                               the notification of Noteholders of the final principal payment on their Notes (Section 2.07(b));

 

(C)                               the fixing or causing to be fixed of any special record date and the notification of the Indenture Trustee and Noteholders with respect to special payment dates, if any (Section 2.07(c));

 

(D)                               the preparation of or obtaining of the documents and instruments required for execution and authentication of the Notes and delivery of the same to the Indenture Trustee (Section 2.02);

 

(E)                                the preparation, obtaining or filing of the instruments, opinions and certificates and other documents required for the release of Collateral (Section 2.12);

 

(F)                                 the maintenance of an office for registration of transfer or exchange of Notes (Section 3.02);

 

(G)                               the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Indenture regarding funds held in trust (Section 3.03);

 

(H)                              the direction to the Indenture Trustee to deposit monies with Paying Agents, if any, other than the Indenture Trustee (Section 3.03);

 

(I)                                   the obtaining and preservation of the Issuer’s qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument and agreement included in the Collateral (Section 3.04);

 

(J)                                   the preparation of all supplements and amendments to the Indenture and all financing statements, continuation statements, instruments of further assurance and other

 

2

 

instruments and the taking of such other action as is necessary or advisable to protect the Collateral other than as prepared by the Servicer (Section 3.05);

 

(K)                              the delivery of the Opinion of Counsel on the Closing Date and certain other statements as to compliance with the Indenture (Sections 3.06 and 3.09);

 

(L)                                the identification to the Indenture Trustee in an Officer’s Certificate of a Person with whom the Issuer has contracted to perform its duties under the Indenture (Section 3.07(b));

 

(M)                            the notification of the Indenture Trustee and each Rating Agency of an Event of Termination under the Sale and Servicing Agreement and of the appointment of a Successor Servicer (Section 3.07(d));

 

(N)                               the duty to cause the Servicer to comply with Article Five and Article Nine of the Sale and Servicing Agreement (Section 3.14);

 

(O)                               the preparation and obtaining of documents and instruments required for the release of the Issuer from its obligations under the Indenture (Section 3.10(b) and Section 3.11(b));

 

(P)                                 the delivery of written notice to the Indenture Trustee and each Rating Agency of each Event of Default under the Indenture and each Event of Termination by the Servicer under the Sale and Servicing Agreement (Section 3.18);

 

(Q)                               the delivery of written notice to each Rating Agency of amendments to the Sale and Servicing Agreement (Section 3.21);

 

(R)                               the monitoring of the Issuer’s obligations as to the satisfaction and discharge of the Indenture and the preparation of an Officer’s Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.01);

 

(S)                                 the compliance with any written directive of the Indenture Trustee with respect to the sale of the Collateral in a commercially reasonable manner if an Event of Default shall have occurred and be continuing and the delivery of written notice of such sale to the Rating Agencies (Section 5.04);

 

(T)                                the preparation and delivery of notice to Noteholders [and the Swap Counterparty] of the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee (Section 6.08);

 

(U)                               the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any written instruments necessary in connection with the resignation or removal of the Indenture Trustee or any co-trustee or separate trustee (Sections 6.08 and 6.10);

 

3

 

(V)                               the delivery of notice to the Rating Agencies of a successor Indenture Trustee by merger, conversion or consolidation of the Indenture Trustee (Section 6.09);

 

(W)                            the furnishing of the Indenture Trustee with the names and addresses of Noteholders during any period when the Indenture Trustee is not the Note Registrar (Section 7.01);

 

(X)                               the opening of one or more accounts in the Indenture Trustee’s name, the preparation and delivery of Issuer Orders, Officer’s Certificates and Opinions of Counsel and all other actions necessary with respect to investment and reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);

 

(Y)                               the preparation of an Issuer Request and Officer’s Certificate and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Collateral (Sections 8.04 and 8.05);

 

(Z)                                the preparation of Issuer Orders and the obtaining of Opinions of Counsel with respect to the execution of supplemental indentures and the mailing to the Rating Agencies[, the Swap Counterparty] and the Noteholders of notices with respect to such supplemental indentures (Sections 9.01, 9.02 and 9.03);

 

(AA)                      the execution and delivery of new Notes conforming to any supplemental indenture (Section 9.06);

 

(BB)                      the duty to notify Noteholders [and the Swap Counterparty] of redemption of the Notes or to cause the Indenture Trustee to provide such notification (Section 10.02);

 

(CC)                      the preparation and delivery of all Officer’s Certificates, Opinions of Counsel and Independent Certificates with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.01(a));

 

(DD)                      the preparation and delivery of Officer’s Certificates and the obtaining of Independent Certificates, if necessary, for the release of property from the lien of the Indenture (Section 11.01(b));

 

(EE)                        the preparation and delivery to Noteholders and the Indenture Trustee of any agreements with respect to alternate payment and notice provisions (Section 11.06);

 

(FF)                          the recording of the Indenture, if applicable (Section 11.14); and

 

(GG)                      the appointment of a successor Indenture Trustee (Section 6.08).

 

(ii)                                  The Administrator will:

 

(A)                               except as otherwise expressly provided in the Indenture, which provides for the payment of the Indenture Trustee Fee, pay the Indenture Trustee’s fees and reimburse the

 

4

 

Indenture Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any provision of the Indenture (including the reasonable compensation, expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith;

 

(B)                               indemnify the Indenture Trustee and its agents for, and hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by the Indenture, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Indenture; and

 

(C)                               indemnify the Owner Trustee and its agents for, and hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by the Trust Agreement, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Trust Agreement.

 

(b)                                 Additional Duties.

 

(i)                                     In addition to the duties set forth in Section 1(a)(i), the Administrator (A) shall perform such calculations and shall prepare or shall cause the preparation by other appropriate persons of, and shall execute on behalf of the Issuer [or the Owner Trustee], all such documents, reports, filings, instruments, certificates and opinions that the Issuer or the Owner Trustee are required to prepare, file or deliver pursuant to the Transaction Documents or under Section 5.03 of the Trust Agreement, (B) shall deliver on behalf of the Issuer or the Owner Trustee, all notices required to be delivered to the Rating Agencies pursuant to the Transaction Documents and the Trust Agreement, and (C) at the request of the Owner Trustee shall take all appropriate action that the Issuer or the Owner Trustee are required to take pursuant to the Transaction Documents.  In furtherance thereof, the Owner Trustee shall, on behalf of the Issuer, execute and deliver to the Administrator and to each successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the form of Exhibit A hereto, appointing the Administrator the attorney-in-fact of the Issuer for the purpose of executing on behalf of the Owner Trustee and the Issuer all such documents, reports, filings, instruments, certificates and opinions.  Subject to Section 5, and in accordance with the directions of the Issuer, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Transaction Documents) as are not covered by any of the foregoing provisions and as are expressly requested by the Issuer and are reasonably within the capability of the Administrator.

 

(ii)                                  Notwithstanding anything in this Agreement or the Transaction Documents to the contrary, the Administrator shall be responsible for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Trust’s payments (or allocations of income) to a Certificateholder as contemplated in Section 5.01(d) of the Trust Agreement.  Any such

 

5

 

notice shall specify the amount of any withholding tax required to be withheld by the Owner Trustee pursuant to such provision.

 

(iii)                               Notwithstanding anything in this Agreement or the Transaction Documents to the contrary, the Administrator shall be responsible for performance of the duties of the Owner Trustee set forth in Section 5.03(a), (b), (c), (d), and (e), the penultimate sentence of Section 5.03 and Section 5.04(a) of the Trust Agreement with respect to, among other things, accounting and reports to the Certificateholders; provided, however, that the Owner Trustee shall retain responsibility for the distribution of information forms necessary to enable each Certificateholder to prepare its federal and state income tax returns.

 

(iv)                              If the Administrator or any of its Affiliates is not the sole Certificateholder, the Administrator shall satisfy its obligations with respect to clauses (ii) and (iii) above by retaining, at the expense of the Trust payable by the Administrator, a firm of independent public accountants (the “Accountants”) acceptable to the Owner Trustee, which shall perform the obligations of the Administrator thereunder.

 

(v)                                 The Administrator shall perform the duties of the Administrator specified in Section 10.02 of the Trust Agreement required to be performed in connection with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Administrator under the Trust Agreement.

 

(vi)                              In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Administrator’s opinion, no less favorable to the Issuer than would be available from unaffiliated parties.

 

(c)                                  Non-Ministerial Matters.

 

(i)                                     With respect to matters that in the reasonable judgment of the Administrator are non-ministerial, the Administrator shall not take any action unless within a reasonable time before the taking of such action, the Administrator shall have notified the Owner Trustee of the proposed action and the Owner Trustee shall not have withheld consent or provided an alternative direction.  For the purpose of the preceding sentence, “non-ministerial matters” shall include, without limitation:

 

(A)                               the amendment of or any supplement to the Indenture;

 

(B)                               the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Contracts);

 

(C)                               the amendment, change or modification of any other Transaction Documents;

 

6

 

(D)                               the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees pursuant to the Indenture or the appointment of successor Administrators or a successor Servicer, or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee of its obligations under the Indenture;

 

(E)                                the removal of the Indenture Trustee;

 

[(F)                             the provision of copies of any amendment or supplement to the Interest Rate Swap Agreement to the Rating Agencies; and

 

(G)                               the notification to the Swap Counterparty of any proposed amendment or supplement to any of the Transaction Documents].

 

(ii)                                  Notwithstanding anything to the contrary in this Agreement, the Administrator shall not be obligated to, and shall not, (A) make any payments to the Noteholders [or the Swap Counterparty] under the Transaction Documents, (B) sell the Collateral pursuant to clause (iv) of Section 5.04 of the Indenture, (C) take any other action that the Issuer directs the Administrator not to take on its behalf or (D) take any other action which may be construed as having the effect of varying the investment of the Holders.

 

Section 2.                                          Records.  The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer and the Owner Trustee at any time during normal business hours.

 

Section 3.                                          Compensation.  As compensation for the performance of the Administrator’s obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to a monthly fee which shall be solely an obligation of the Trust Depositor and shall be in an amount as shall be agreeable to the Trust Depositor and the Administrator.

 

Section 4.                                          Additional Information to be Furnished to the Issuer.  The Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer shall reasonably request.

 

Section 5.                                          Independence of the Administrator.  For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder.  Unless expressly authorized by the Issuer, the Administrator shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.

 

Section 6.                                          No Joint Venture.  Nothing contained in this Agreement (i) shall constitute the Administrator and either of the Issuer or the Owner Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.

 

7

 

Section 7.                                          Other Activities of Administrator.  Nothing herein shall prevent the Administrator or its Affiliates from engaging in other business or, in its sole discretion, from acting in a similar capacity as an administrator for any other Person or entity even though such person or entity may engage in business activities similar to those of the Issuer, the Owner Trustee or the Indenture Trustee.

 

Section 8.                                          Term of Agreement; Resignation and Removal of Administrator.  This Agreement shall continue in force until the termination of the Issuer, upon which event this Agreement shall automatically terminate.

 

(a)                                 Subject to Section 8(d) and Section 8(e), the Administrator may resign its duties hereunder by providing the Issuer with at least 60 days’ prior written notice.

 

(b)                                 Subject to Section 8(d) and Section 8(e), the Issuer may remove the Administrator without cause by providing the Administrator with at least 60 days’ prior written notice.

 

(c)                                  Subject to Section 8(d) and Section 8(e), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator if any of the following events shall occur:

 

(i)                                     the Administrator shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall not cure such default within ten days (or, if such default cannot be cured in such time, shall not give within ten days such assurance of cure as shall be reasonably satisfactory to the Issuer);

 

(ii)                                  a court having jurisdiction in the premises shall enter a decree or order for relief, and such decree or order shall not have been vacated within 60 days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or

 

(iii)                               the Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due.

 

The Administrator agrees that if any of the events specified in clauses (ii) or (iii) above shall occur, it shall give written notice thereof to the Issuer and the Indenture Trustee within seven days after the occurrence of such event.

 

(d)                                 No resignation or removal of the Administrator pursuant to this Section shall be effective until (i) a successor Administrator shall have been appointed by the Issuer and (ii) such

 

8

 

successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound hereunder.

 

(e)                                  The appointment of any successor Administrator shall be effective only after the satisfaction of the Rating Agency Condition with respect to the proposed appointment.

 

(f)                                   Subject to Section 8(d) and 8(e), the Administrator acknowledges that upon the appointment of a Successor Servicer pursuant to the Sale and Servicing Agreement, the Administrator shall immediately resign and such Successor Servicer shall automatically become the Administrator under this Agreement.

 

Section 9.                                          Action upon Termination, Resignation or Removal.  Promptly upon the effective date of termination of this Agreement pursuant to Section 8 or the resignation or removal of the Administrator pursuant to Section 8(a), (b) or (c), the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal.  The Administrator shall forthwith upon such termination pursuant to Section 8 deliver to the Issuer all property and documents of or relating to the Collateral then in the custody of the Administrator.  In the event of the resignation or removal of the Administrator pursuant to Section 8(a), (b) or (c), respectively, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.

 

Section 10.                                   Notices.  All notices, demands, certificates, requests and communications hereunder (“notices”) shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, or (b) upon receipt when sent through an overnight courier, or (c) on the date personally delivered to an Authorized Officer of the party to which sent, or (d) on the date transmitted by legible telecopier transmission with a confirmation of receipt, in all cases addressed to the recipient at the address for such recipient set forth in the Sale and Servicing Agreement.

 

Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.

 

Section 11.                                   Amendments.  This Agreement may be amended from time to time by a written amendment duly executed and delivered by the parties hereto, with the written consent of the Owner Trustee but without the consent of the Noteholders [or the Swap Counterparty (but with prior written notice to the Swap Counterparty)], for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders; provided that such amendment will not, in the Opinion of Counsel satisfactory to the Indenture Trustee, materially and adversely affect the interest of any Noteholder [or the Swap Counterparty].  This Agreement may also be amended by the parties hereto with the written consent of the Owner Trustee[, the Swap Counterparty] and the Required Holders for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of Noteholders [and/or the Swap Counterparty]; provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Contracts or distributions that are required to be made for

 

9

 

the benefit of the Noteholders or (ii) reduce the aforesaid percentage of the holders of Notes which are required to consent to any such amendment, without the consent of the holders of all outstanding Notes[; provided, further, that such amendment shall not materially and adversely affect the rights and obligations of the Swap Counterparty or the Issuer under the Interest Rate Swap Agreement unless the Swap Counterparty shall have consented in writing to such amendment (such consent not to be unreasonably withheld or delayed)].  Notwithstanding the foregoing, the Administrator may not amend this Agreement without the permission of the Trust Depositor, which permission shall not be unreasonably withheld.

 

Section  12.                                   Successors and Assigns.  This Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer, the Indenture Trustee and the Owner Trustee and subject to the satisfaction of the Rating Agency Condition in respect thereof.  An assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder.  Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the consent of the Issuer or the Owner Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided that such successor organization executes and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an agreement, in form and substance reasonably satisfactory to the Owner Trustee and the Indenture Trustee, in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder.  Subject to the foregoing, this Agreement shall bind any successors or assigns of the parties hereto.

 

Section 13.                                   Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 14.                                   Headings.  The section and subsection headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement.

 

Section 15.                                   Counterparts.  This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

 

Section 16.                                   Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 17.                                   Not Applicable to Harley-Davidson Credit in Other Capacities.  Nothing in this Agreement shall affect any obligation Harley-Davidson Credit may have in any other capacity.

 

10

 

Section 18.                                   Limitation of Liability of Owner Trustee and Indenture Trustee.

 

(a)                                 Notwithstanding anything contained herein to the contrary, this instrument has been countersigned by [                   ] not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall [                   ] in its individual capacity or any beneficial owner of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder, as to all of which recourse shall be had solely to the assets of the Issuer.  For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles Six, Seven and Eight of the Trust Agreement.

 

(b)                                 Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by [                   ] not in its individual capacity but solely as Indenture Trustee and in no event shall [                   ] have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

 

Section 19.                                   Third-party Beneficiary.  The Owner Trustee is a third-party beneficiary to this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto.  [The Swap Counterparty shall be a third-party beneficiary to the provisions of this Agreement to the extent of any rights specified in this Agreement and may enforce the provisions hereof to such extent as if it were a party hereto.]

 

Section 20.                                   Survivability.  The obligations of the Administrator described in Section 1(a)(ii) hereof shall survive termination of this Agreement.

 

[Section 21.                               Limitation of Rights.  All of the rights of the Swap Counterparty in, to and under this Agreement, if any, shall terminate upon the termination of the Interest Rate Swap Agreement in accordance with the terms thereof and the payment in full of all amounts owing to the Swap Counterparty under the Interest Rate Swap Agreement.]

 

[signature page follows]

 

11

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST
    
	
 
    	
[            ]
    
	
 
    	
 
    
	
 
    	
By:
    	
[                         ],   not in its
    
	
 
    	
 
    	
individual   capacity but solely as Owner
    
	
 
    	
 
    	
Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed   Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HARLEY-DAVIDSON   CUSTOMER FUNDING
    
	
 
    	
CORP.,   as Trust Depositor
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed   Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[                         ],
    
	
 
    	
not   in its individual capacity but solely as
    
	
 
    	
Indenture   Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed   Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HARLEY-DAVIDSON   CREDIT CORP.,
    
	
 
    	
as   Administrator
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed   Name:
    
	
 
    	
 
    	
Title:
    
				

 

Signature Page to Administration Agreement

 

 

LIMITED POWER OF ATTORNEY

 

	
State of Illinois
    	
)
    
	
 
    	
)  SS.
    
	
County of Cook
    	
)
    

 

KNOW ALL PERSONS BY THESE PRESENTS, that [                     ], a [                     ](the “Owner Trustee”), whose principal executive office is located at [                     ] Attention:  [          ], by and through its duly elected and authorized officer,                                                                                   , on behalf of itself and of Harley-Davidson Motorcycle Trust [         ] (the “Trust”) as Issuer under the Administration Agreement, dated as of [            ] (the “Administration Agreement”), among the Trust, Harley-Davidson Customer Funding Corp., [                  ], as Indenture Trustee, and Harley-Davidson Credit Corp., as Administrator, does hereby nominate, constitute and appoint Harley-Davidson Credit Corp., a Nevada corporation, each of its officers from time to time and each of its employees authorized by it from time to time to act hereunder, jointly and each of them severally, together or acting alone, its true and lawful attorney-in-fact, for the Owner Trustee and the Issuer in their name, place and stead, in the sole discretion of such attorney-in-fact, to perform such calculations and prepare or cause the preparation by other appropriate persons of, and to execute on behalf of the Issuer or the Owner Trustee, all such documents, reports, filings, instruments, certificates and opinions that the Issuer or the Owner Trustee is required to prepare, file or deliver pursuant to the Administration Agreement, and to take any and all other action, as such attorney-in-fact may deem necessary or desirable in accordance with the directions of the Owner Trustee and in connection with its duties as Administrator or successor Administrator under the Administration Agreement.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Administration Agreement.

 

The Owner Trustee hereby ratifies and confirms the execution, delivery and performance (whether before or after the date hereof) of the above-mentioned documents, reports, filings, instruments, certificates and opinions, by the attorney-in-fact and all that the attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

 

The Owner Trustee hereby agrees that no person or other entity dealing with the attorney-in-fact shall be bound to inquire into such attorney-in-fact’s power and authority hereunder and any such person or entity shall be fully protected in relying on such power of authority.

 

This Limited Power of Attorney may not be assigned without the prior written consent of the Owner Trustee.  It is effective immediately and will continue until it is revoked.

 

This Limited Power of Attorney shall be governed and construed in accordance with the laws of the State of Illinois without reference to principles of conflicts of law.

 

 

Executed as of this [             ] day of [             ].

 

 

	
 
    	
[                      ],   not in its individual
    
	
 
    	
capacity but solely as Owner Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

CERTIFICATE OF ACKNOWLEDGMENT OF

NOTARY PUBLIC

 

	
State of Delaware
    	
)
    
	
 
    	
)  SS.
    
	
County of New Castle
    	
)
    

 

On                    , 20[  ] before me,                                                                                                                    

 

[Insert name and title of notary]

personally appeared                                                                                                                                       

 

o                                    personally known to me, or

 

o                                    proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are

 

subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument.

 

	
 
    	
WITNESS my hand and official seal.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature:
    	
 
    
	
 
    	
 
    	
Notary Public, State of Delaware
    
	
 
    	
 
    	
My Commission Expires
    	
[SEAL]Exhibit 10.3

 

COLDWATER CREEK INC.
 AMENDED AND RESTATED
 STOCK OPTION/STOCK ISSUANCE PLAN

 

(As Amended and Restated March 25, 2011)

 

ARTICLE ONE
 GENERAL

 

I.              PURPOSE OF THE PLAN

 

This Amended and Restated Stock Option/Stock Issuance Plan (the “Plan”) is intended to promote the interests of Coldwater Creek Inc., a Delaware corporation (the “Corporation”), by providing eligible individuals with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in the service of the Corporation (or its parent or subsidiary corporations). The Plan amends and restates in its entirety the Coldwater Creek Inc. Amended and Restated Stock Option/Stock Issuance Plan, as amended and restated March 25, 2005, effective as of the date set forth in, and subject to the provisions of, Article Five, Section IV.

 

II.            DEFINITIONS

 

A.            For purposes of the Plan, the following definitions shall be in effect:

 

“Award” means a grant of an Option, Restricted Stock, Stock Unit, Unrestricted Stock, or Stock Appreciation Right under the Plan.

 

“Award Agreement” means the agreement between the Corporation and an Optionee or the Participant evidencing the grant of an Award under the Plan.

 

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

 

“Change in Control” means a change in ownership or control of the Corporation effected through either of the following transactions or events:

 

(i)            any “person” (as such term is used in Sections 13(d) and 14(d) of the 1934 Act) becoming the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Corporation representing fifty percent (50%) or more of the total voting power represented by the Corporation’s then outstanding voting securities, other than in connection with a merger or consolidation that would not constitute a Corporate Transaction under clause (i) of the definition thereof ; or

 

(ii)           a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for

 

 

election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time such election or nomination was approved by the Board.

 

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

 

“Common Stock” means shares of the Corporation’s common stock.

 

“Corporate Transaction” means either of the following stockholder-approved transactions to which the Corporation is a party:

 

(i)            a merger or consolidation involving the Corporation, other than a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent directly or indirectly (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation; or

 

(ii)           the approval by the stockholders of the Corporation of a plan of complete liquidation or dissolution of the Corporation or the closing of a sale or disposition by the Corporation of all or substantially all of the Corporation’s assets, other than a sale or disposition to a subsidiary of the Corporation or to an entity, the voting securities of which are owned by the stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation’s voting securities immediately prior to such sale or disposition.

 

“Disability” means the inability of an individual to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

 

“Employee” means an individual who performs services while in the employ of the Corporation or one or more parent or subsidiary corporations, subject to the control and direction of the employer entity not only as to the work to be performed but also as to the manner and method of performance.

 

“Exercise Date” means the date on which the Corporation shall have received written notice of the option or SAR exercise.

 

“Fair Market Value” means the Fair Market Value per share of Common Stock determined in accordance with the following provisions:

 

· If the Common Stock is traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share on the date in question, as such price is reported by the National Association of Securities Dealers on the The NASDAQ Stock l Market. If there is no reported closing selling price for the Common Stock on the date in question, then the

 

2

 

closing selling price on the last preceding date for which such quotation exists shall be determinative of Fair Market Value.

 

· If the Common Stock is at the time listed or admitted to trading on any other national securities exchange, then the Fair Market Value shall be the closing selling price per share on the date in question on the exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no reported sale of Common Stock on such exchange on the date in question, then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists.

 

· If the Common Stock is on the date in question neither listed nor admitted to trading on any national securities exchange, then the Fair Market Value of the Common Stock on such date shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate.

 

“Incentive Option” means a stock option which satisfies the requirements of Code Section 422.

 

“Involuntary Termination” means the termination of any individual’s Service which occurs by reason of:

 

(i)            such individual’s involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or

 

(ii)           such individual’s voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her level of responsibility, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and participation in corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual’s place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Corporation without the individual’s consent.

 

“Misconduct” means the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any parent or subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any parent or subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any parent or subsidiary) may consider as grounds for the dismissal or discharge of any Optionee, Participant or other person in the Service of the Corporation (or any parent or subsidiary).

 

“1933 Act” means the Securities Act of 1933, as amended from time to time.

 

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

 

3

 

“Non-Statutory Option” means a stock option not intended to meet the requirements of Code Section 422.

 

“Optionee” means a person to whom an option is granted under the Discretionary Option/SAR Grant Program.

 

“Participant” means a person who is granted a SAR under the Discretionary Option/SAR Grant Program or who is granted an Award under the Stock Issuance Program.

 

“Plan Administrator” means either the Board, the Primary Committee or a Secondary Committee, to the extent such entity is at the time responsible for the administration of the Plan in accordance with Section IV of Article One.

 

“Primary Committee” means a committee of two (2) or more non-employee Board members appointed by the Board to administer the Plan with respect to Section 16 Insiders.

 

“Restricted Stock” means shares of Common Stock, awarded to a Participant pursuant to the Stock Issuance Program, that are subject to restrictions and to a risk of forfeiture.

 

“Secondary Committee” means a committee of one or more Board members appointed by the Board to administer the Discretionary Option/SAR Grant and Stock Issuance Programs with respect to eligible persons other than Section 16 Insiders.

 

“Section 16 Insiders” means Optionees or Participants who are subject to the reporting and other requirements of Section 16 of the 1934 Act.

 

“Service” means the performance of services on a periodic basis for the Corporation (or any parent or subsidiary corporation) in the capacity of an Employee, a non-employee member of the Board or an independent consultant or advisor, except to the extent otherwise specifically provided in the applicable stock option or Award Agreement.

 

“Stock Appreciation Right” or “SAR” means a right granted to a Participant pursuant to the Discretionary Stock/SAR Program.

 

“Stock Unit” means a unit awarded to a Participant pursuant to the Stock Issuance Program, which represents a right to receive a share of Common Stock in the future, and which may be subject to restrictions and to a risk of forfeiture.

 

“10% Stockholder” means the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation or any parent or subsidiary corporation.

 

“Unrestricted Stock” means shares of Common Stock, awarded to a Participant pursuant to the Stock Issuance Program, that are not subject to a risk of forfeiture.

 

B.            The following provisions shall be applicable in determining the parent and subsidiary corporations of the Corporation:

 

4

 

Any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation shall be considered to be a parent of the Corporation, provided each such corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

Each corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation shall be considered to be a subsidiary of the Corporation, provided each such corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

III.           STRUCTURE OF THE PLAN

 

A.            Stock Programs.    The Plan shall be divided into two separate components: the Discretionary Option/SAR Grant Program specified in Article Two and the Stock Issuance Program specified in Article Three. The Automatic Option Grant Program under Article Four was terminated immediately prior to the 2005 annual meeting of the Corporation’s stockholders. Under the Discretionary Option/SAR Grant Program, eligible individuals may, at the discretion of the Plan Administrator, be granted options or SARs in accordance with the provisions of Article Two. Under the Stock Issuance Program, eligible individuals may, at the discretion of the Plan Administrator, be granted Restricted Stock, Stock Units and/or Unrestricted Stock in accordance with the provisions of Article Three.

 

B.            General Provisions.    Unless the context clearly indicates otherwise, the provisions of Articles One and Five shall apply to the Discretionary Option/SAR Grant Program and the Stock Issuance Program and shall accordingly govern the interests of all individuals under the Plan.

 

IV.           ADMINISTRATION OF THE PLAN

 

A.            The Primary Committee shall have sole and exclusive authority to administer the Discretionary Option/SAR Grant and Stock Issuance Programs with respect to Section 16 Insiders. Administration of the Discretionary Option/SAR Grant and Stock Issuance Programs with respect to all other persons eligible to participate in those programs may, at the Board’s discretion, be vested in the Primary Committee or a Secondary Committee, or the Board may retain the power to administer those programs with respect to all such persons.

 

B.            Members of the Primary Committee or any Secondary Committee shall serve for such period of time as the Board may determine and may be removed by the Board at any time. The Board may also at any time terminate the functions of any Secondary Committee and reassume all powers and authority previously delegated to such committee.

 

C.            Each Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Option/SAR Grant and Stock Issuance Programs and to make such determinations under, and issue such interpretations of, the provisions of such programs and any outstanding

 

5

 

Awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Option/SAR Grant and Stock Issuance Programs under its jurisdiction or any grant of an Award thereunder.

 

V.            ELIGIBILITY

 

A.            The persons eligible to participate in the Discretionary Option/SAR Grant Program under Article Two and the Stock Issuance Program under Article Three shall be limited to the following:

 

1.             officers and other key employees of the Corporation (or its parent or subsidiary corporations) who render services which contribute to the management, growth and financial success of the Corporation (or its parent or subsidiary corporations);

 

2.             non-employee members of the Board; and

 

3.             those consultants or other independent advisors who provide valuable services to the Corporation (or its parent or subsidiary corporations).

 

B.            A Board member shall not vote as a member of the Board or a member of a committee concerning any award, or amendment of any award, to such Board member pursuant to the Discretionary Option/SAR Grant Program or the Stock Issuance Program, other than an award or amendment that applies uniformly to all non-employee Board members and shall absent himself or herself from the discussion of any such award.

 

C.            The Plan Administrator shall have full authority to determine, (i) with respect to the options or SARs granted under the Discretionary Option/SAR Grant Program, which eligible individuals are to receive Awards, the time or times when such Awards are to be granted, the number of shares to be covered by each such Award, in the case of an option grant the status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times at which each granted Award is to become exercisable and the maximum term for which the Award may remain outstanding, and (ii) with respect to the grant of other Awards under the Stock Issuance Program, the type of Award, the number of shares to be issued to each Participant, the vesting schedule (if any) to be applicable to the issued shares and the consideration for which such shares are to be issued.

 

VI.           STOCK SUBJECT TO THE PLAN

 

A.            The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Corporation on the open market. The maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed 20,338,401 shares, which number of authorized shares consists of (i) 16,838,401 shares reserved under the Plan immediately prior to the approval by the Board in March 2011 of the amendment and restatement of the Plan and (ii) 3,500,000 additional shares as authorized by the Board in March 2011 and subject to approval by the stockholders.   No more than 20,338,401 shares of Common Stock may be delivered in the aggregate pursuant to the exercise of Incentive Options granted under the Plan plus, to the extent allowable under Section

 

6

 

422 of the Code and the Treasury Regulations promulgated thereunder, any shares that become available for issuance under the Plan pursuant to subsection C below.

 

B.            In no event shall the aggregate number of shares of Common Stock for which any one individual participating in the Plan may be granted stock options or any other Awards exceed 375,000 shares in the aggregate per calendar year.

 

C.            Should one or more outstanding options or SARs under this Plan expire or terminate for any reason prior to exercise in full, then the shares subject to the portion of each option or SAR not so exercised shall be available for subsequent option grants or other Awards under the Plan. Restricted Stock or Stock Units issued under the Plan and subsequently cancelled or forfeited shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent option grants or other Award grants under the Plan. Should the exercise price of an outstanding option or other Award under the Plan be paid with shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be withheld by the Corporation in satisfaction of the exercise price or withholding taxes incurred in connection with the exercise of an outstanding option or other Award under the Plan or the vesting or delivery of shares under the Plan, then the number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross number of shares for which the option or other Award is exercised or which vest or are delivered, and not by the net number of shares of Common Stock actually issued to the holder of such option or other Award.

 

D.            Should any change be made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, then appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, including as Incentive Options, (ii) the maximum number and/or class of securities for which any one individual participating in the Plan may be granted stock options or other Awards in the aggregate per calendar year, and (iii) the number and/or class of securities and price per share in effect under each option or other Award outstanding under the Plan. Such adjustments to the outstanding options or Awards are to be effected in a manner which shall preclude the enlargement or dilution of rights and benefits under such options. The adjustments determined by the Plan Administrator shall be final, binding and conclusive.

 

ARTICLE TWO
 DISCRETIONARY OPTION/SAR GRANT PROGRAM

 

I.              TERMS AND CONDITIONS OF OPTIONS AND SARS

 

Options and SARs granted pursuant to the Discretionary Option/SAR Grant Program shall be authorized by action of the Plan Administrator and may, at the Plan Administrator’s discretion, in the case of options be either Incentive Options or Non-Statutory Options. Individuals who are not Employees of the Corporation or its parent or subsidiary corporations may only be granted SARs or Non-Statutory Options. Each granted option or SAR shall be evidenced by one or more instruments in the form approved by the Plan Administrator; provided,

 

7

 

however, that each such instrument shall comply with the terms and conditions specified below. Each instrument evidencing an Incentive Option shall, in addition, be subject to the applicable provisions of Section II of this Article Two.

 

A.            Exercise Price.

 

1.             The exercise price per share of Common Stock subject to a SAR or Option shall in no event be less than one hundred percent (100%) of the Fair Market Value of such Common Stock on the grant date.

 

2.             In the case of an option, the exercise price shall become immediately due upon exercise of the option and shall be payable as follows:

 

(i)            in cash or check made payable to the Corporation;

 

(ii)           in shares of Common Stock held by the Optionee for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date;

 

(iii)          to the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a brokerage firm acceptable to the Corporation to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Corporation by reason of such purchase and (b) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction (provided that the Corporation shall have the right to use the book entry method of share recordation in lieu of issuing share certificates; or

 

(iv)          to the extent permitted by the Plan Administrator, any other method that is consistent with applicable laws, regulations and rules.

 

3.             Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date of an option.

 

4.             A SAR shall confer on the Participant a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Common Stock on the date of exercise over (B) the exercise price of the SAR, payable in the form of Common Stock or cash, as determined by the Plan Administrator. The Participant is not required to pay the exercise price to exercise a SAR.

 

B.            Term and Exercise of Options and SARs.    Each option or SAR granted under this Discretionary Option/SAR Grant Program shall be exercisable at such time or times and during such period as is determined by the Plan Administrator and set forth in the instrument evidencing

 

8

 

the grant. No such option or SAR, however, shall have a maximum term in excess of ten (10) years from the grant date.

 

During the lifetime of the Optionee, Incentive Options and SARs shall be exercisable only by the Optionee or Participant and shall not be assignable or transferable by the Optionee or Participant other than by will or by the laws of descent and distribution following the Optionee’s or Participant’s death. However, a Non-Statutory Option may, in connection with the Optionee’s estate plan, be assigned in whole or in part during the Optionee’s lifetime to one or more members of the Optionee’s immediate family or to a trust established exclusively for one or more such family members. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.

 

C.            Termination of Service.

 

1.             Except to the extent otherwise provided pursuant to subsection C.2 below, the following provisions shall govern the exercise period applicable to any options or SARs held by the Optionee or Participant at the time of cessation of Service or death:

 

(i)            Should the Optionee or Participant cease to remain in Service for any reason other than death, Disability or Misconduct, then the period during which each outstanding option and SAR held by such Optionee or Participant is to remain exercisable shall be limited to the three (3)-month period following the date of such cessation of Service.

 

(ii)           Should such Service terminate by reason of Disability, then the period during which each outstanding option and SAR held by the Optionee or Participant is to remain exercisable shall be limited to the twelve (12)-month period following the date of such cessation of Service.

 

(iii)          Should the Optionee or Participant die while holding one or more outstanding options or SARs, then the period during which each such option or SAR is to remain exercisable shall be limited to the twelve (12)-month period following the date of the Optionee’s or Participant’s death. During such limited period, the option or SAR may be exercised by the personal representative of the Optionee’s or Participant’s estate or by the person or persons to whom the option or SAR is transferred pursuant to the Optionee’s or Participant’s will or in accordance with the laws of descent and distribution.

 

(iv)          Should the Optionee’s or Participant’s Service be terminated for Misconduct, then all outstanding options and SARs held by the Optionee or Participant shall terminate immediately and cease to be outstanding.

 

(v)           Under no circumstances, however, shall any such option or SAR be exercisable after the specified expiration date of the option or SAR term.

 

9

 

(vi)          During the applicable post-Service exercise period, the option or SAR may not be exercised in the aggregate for more than the number of vested shares for which the option or SAR is exercisable on the date of the Optionee’s or Participant’s cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option or SAR term, the option or SAR shall terminate and cease to be exercisable for any vested shares for which the option or SAR has not been exercised. However, the option or SAR shall, immediately upon the Optionee’s or Participant’s cessation of Service for any reason, terminate and cease to be outstanding with respect to any option or SAR shares for which the option or SAR is not at that time exercisable or in which the Optionee or Participant is not otherwise at that time vested.

 

(vii)         In the event of an Involuntary Termination following a Corporate Transaction or a Change in Control, the provisions of Section III of this Article Two shall govern the period for which the outstanding options and SARs are to remain exercisable following the Optionee’s or Participant’s cessation of Service and shall supersede any provisions to the contrary in this Section.

 

2.             The Plan Administrator shall have complete discretion, exercisable either at the time the option or SAR is granted or at any time while the option or SAR remains outstanding,

 

· to extend the period of time for which the option or SAR is to remain exercisable following the Optionee’s or Participant’s cessation of Service or death from the limited period in effect under subsection C.1 of this Article Two to such greater period of time as the Plan Administrator shall deem appropriate; provided, that in no event shall such option or SAR be exercisable after the specified expiration date of the option or SAR term; and/or

 

· to permit one or more options or SARs held by the Optionee or Participant under this Article Two to be exercised, during the limited post-Service exercise period applicable under this subsection C., not only with respect to the number of vested shares of Common Stock for which each such option or SAR is exercisable at the time of the Optionee’s or Participant’s cessation of Service but also with respect to one or more subsequent installments in which the Optionee or Participant would otherwise have vested had such cessation of Service not occurred.

 

D.            Stockholder Rights.    An Optionee or Participant shall have no stockholder rights with respect to any shares covered by the option or SAR until such individual shall have exercised the option or SAR, paid the exercise price in the case of an option and become the holder of record of the purchased shares.

 

II.            INCENTIVE OPTIONS

 

Incentive Options may only be granted to individuals who are Employees, and the terms and conditions specified below shall be applicable to all Incentive Options granted under the Plan. Except as modified by the provisions of this Section II, all provisions of Articles One, Two and Five shall be applicable to Incentive Options. Any Options specifically designated as Non-Statutory shall not be subject to the terms and conditions specified below.

 

10

 

 

A.                                   Dollar Limitation.    The aggregate Fair Market Value (determined as of the respective date or dates of grant) of the Common Stock for which one or more options granted to any Employee under this Plan (or any other option plan of the Corporation or its parent or subsidiary corporations) may for the first time become exercisable as incentive stock options under the Federal tax laws during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as incentive stock options under the Federal tax laws shall be applied on the basis of the order in which such options are granted. Should the number of shares of Common Stock for which any Incentive Option first becomes exercisable in any calendar year exceed the applicable One Hundred Thousand Dollar ($100,000) limitation, then that option may nevertheless be exercised in that calendar year for the excess number of shares as a Non-Statutory Option under the Federal tax laws.

 

B.                                     10% Stockholder.    If any individual to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred-ten percent (110%) of the Fair Market Value per share of Common Stock on the grant date, and the option term shall not exceed five (5) years measured from the grant date.

 

III.           CORPORATE TRANSACTION/CHANGE IN CONTROL

 

A.                                   In the event of any Corporate Transaction, each outstanding option and SAR shall automatically accelerate so that each such option and SAR shall, immediately prior to the effective date of the Corporate Transaction, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to such option and SAR, and may be exercised for any or all of those shares as fully-vested shares of Common Stock. However, an outstanding option or SAR shall not so accelerate if and to the extent: (i) such option or SAR is, in connection with the Corporate Transaction, either to be assumed by the successor corporation (or parent thereof) or to be replaced with a comparable option or SAR to relating to shares of the capital stock of the successor corporation (or parent thereof), (ii) such option or SAR is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested option or SAR shares at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such option or SAR (but only to the extent such program would not result in the imposition of additional tax under section 409A of the Code) or (iii) the acceleration of such option or SAR is subject to other limitations imposed by the Plan Administrator at the time of the option or SAR grant. The determination of option and SAR comparability under clause (i) above shall be made by the Plan Administrator, and its determination shall be final, binding and conclusive.

 

B.                                     Immediately following the consummation of the Corporate Transaction, all outstanding options and SARs shall terminate and cease to be outstanding, except to the extent exercised or assumed or replaced by the successor corporation (or parent thereof).

 

C.                                     Each option or SAR which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee or Participant in consummation of such Corporate Transaction had the option or SAR been exercised immediately

 

11

 

prior to such Corporate Transaction. Appropriate adjustments to reflect such Corporate Transaction shall also be made to (i) the exercise price under each outstanding option or SAR, provided the aggregate exercise price for such securities shall remain the same, (ii) the maximum number and/or class of securities available for issuance under the remaining term of the Plan, including as Incentive Options, and (iii) the maximum number and/or class of securities for which any one person may be granted stock options or SARs and other Awards under the Plan per calendar year.

 

D.                                    The Plan Administrator shall have full power and authority in its discretion to grant options or SARs under the Discretionary Option/SAR Grant Program which will automatically accelerate in the event the Optionee’s or Participant’s Service subsequently terminates by reason of an Involuntary Termination within a designated period (not to exceed twelve (12) months) following the effective date of (a) any Change in Control or (b) any Corporate Transaction in which those options or SARs are assumed or replaced (including with a deferred cash incentive) and do not otherwise accelerate. Any options or SARs so accelerated shall remain exercisable for fully-vested shares until the earlier of (i) the expiration of the option or SAR term or (ii) the expiration of the one (1)-year period measured from the effective date of the Involuntary Termination. Notwithstanding the foregoing, the Plan Administrator may provide in the Award Agreements for different provisions to apply to an Award in place of those described in this Section III of Article Two.

 

E.                                      The portion of any Incentive Option accelerated in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the Federal tax laws.

 

F.                                      The outstanding options and SARs shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

ARTICLE THREE
 STOCK ISSUANCE PROGRAM

 

I.              TERMS AND CONDITIONS OF AWARDS OTHER THAN OPTIONS AND SARS

 

In addition to options and SARs, awards of Restricted Stock, Stock Units and Unrestricted Stock may be granted under the Plan. The terms of such Awards shall be set forth in the applicable Award Agreement approved by the Plan Administrator, and shall be consistent with the following conditions:

 

A.                                   Shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration which the Plan Administrator may deem appropriate in each individual instance: (i) cash or check made payable to the Corporation, or (ii)  services rendered to the Corporation (or any Parent or Subsidiary).

 

12

 

B.                                     Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more installments over the Participant’s period of Service or upon attainment of specified performance objectives. In the case of Stock Units, delivery of shares may be made at the time of vesting, or at such later date as is specified by the Plan Administrator. The elements of the vesting schedule applicable to any Restricted Stock or Stock Units issued under the Stock Issuance Program, namely:

 

(i)                                     the Service period to be completed by the Participant or the performance objectives to be attained,

 

(ii)                                  the number of installments in which the shares are to vest,

 

(iii)                               the interval or intervals (if any) which are to lapse between installments,

 

(iv)                              the time at which vested shares shall be delivered to the Participant in the case of Stock Units; and

 

(v)                                 the effect which death, Disability or other event designated by the Plan Administrator is to have upon the vesting schedule,

 

shall be determined by the Plan Administrator and incorporated into the Award Agreement.

 

In the case of an Award, other than an Option or SAR, intended to quafity as “performance-based compensation” under Section 162(m) of the Code, vesting of such Award shall be contingent on the satisfaction of one or more of the stockholder-approved business criteria listed in the Material Terms for Payment of Executive Incentive Compensation approved by the Board on February 12, 2005 (as may be amended from time to time by the Board, subject to stockholder approval as necessary).  The Primary Committee shall establish the applicable performance goals in writing and an objective method for determining the Award earned by a Participant if the goals are attained, while the outcome is substantially uncertain and not later than the 90th day of the performance period (but in no event after 25% of the period of service with respect to which the performance goals relate has elapsed), and shall determine and certify in writing, for each Participant, the extent to which the performance goals have been met prior to payment or vesting of the Award.

 

C.                                     Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to receive with respect to the Participant’s unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be issued subject to (i) the same vesting requirements applicable to the Participant’s unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate.

 

D.                                    The Participant shall have full stockholder rights with respect to any Restricted Stock issued to the Participant under the Stock Issuance Program. Accordingly, the Participant

 

13

 

shall have the right to vote such Restricted Stock and to receive any cash dividends paid on such Restricted Stock.

 

E.                                      The Participant shall not have any stockholder rights with regard to the grant of Stock Units, including the right to vote and to receive any cash dividends, until the shares underlying such Stock Units are delivered to the Participant. However, the Plan Administrator may, on such conditions as it deems appropriate, provide that a Participant will receive a benefit in lieu of cash dividends that would have been payable on any or all shares of Common Stock subject to an Award of Stock Units if such shares of Common Stock had been outstanding. Without limitation, the Plan Administrator may provide for payment to the Participant of amounts representing such dividends, either currently or in the future, or for the investment of such amounts on behalf of the Participant.

 

F.                                      Should the Participant cease to remain in Service while holding one or more shares of Restricted Stock issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for consideration paid in cash or cash equivalents (including the Participant’s purchase-money indebtedness), the Corporation shall repay to the Participant the cash consideration paid for the surrendered shares and shall cancel the unpaid principal balance of any outstanding purchase-money note of the Participant attributable to such surrendered shares. The Award Agreement evidencing a grant of Stock Units shall set forth the effect of a termination of Service on an outstanding grant of Stock Units.

 

G.                                     The Plan Administrator shall have full power and authority, exercisable upon a Participant’s termination of Service, to waive the surrender and cancellation of any or all Restricted Stock or Stock Units (or other assets attributable thereto) at the time held by that Participant, if the Plan Administrator determines such waiver to be an appropriate severance benefit for the Participant.

 

II.            CORPORATE TRANSACTION/CHANGE IN CONTROL

 

A.                                   All Restricted Stock and Stock Units shall immediately vest in full and all shares underlying Stock Units shall be delivered to the Participant, in the event of any Corporate Transaction, except to the extent (i) the Restricted Stock and Stock Units are assumed or replaced with comparable awards or deferred cash incentives by the successor corporation (or parent thereof) in connection with such Corporate Transaction, (ii) the acceleration of delivery of the Shares underlying the Stock Units would not be permitted under Section 409A of the Code, or (ii) such accelerated vesting is precluded by other limitations imposed in the Award Agreement.

 

B.                                     The Plan Administrator shall have the discretionary authority to structure Restricted Stock and Stock Units such that the Awards vest in full (and the shares underlying the Stock Units are delivered) in the event the Participant’s Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed twelve (12) months) following the effective date of (i) any Change in Control or (ii) any Corporate

 

14

 

Transaction in which the Awards are assumed by a successor corporation (or parent thereof). Notwithstanding the foregoing, the Plan Administrator may provide in the Award Agreements for different provisions to apply to an Award in place of those described in this Section II of Article Three.

 

III.           SHARE ESCROW/LEGENDS

 

Restricted Stock may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the Participant’s interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested shares. The book entry method of share recordation may also be used in lieu of issuing share certificates in the discretion of the Plan Administrator.

 

ARTICLE FOUR
 AUTOMATIC OPTION GRANT PROGRAM

 

The Automatic Option Grant Program shall terminate immediately prior to the 2005 Annual Meeting of the Corporation’s stockholders. Options previously granted under the Automatic Option Grant Program will continue to be governed by the terms and conditions of Article Four of the Plan in effect immediately prior to the time the Board approved the March 2005 amendment and restatement, and the general provisions of Article One and Article Five.

 

ARTICLE FIVE
 MISCELLANEOUS

 

I.              RESERVED.

 

II.            AMENDMENT OF THE PLAN AND AWARDS

 

The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall adversely affect the rights and obligations with respect to stock options or other Awards at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws or regulations. In addition, no amendment or modification may be made to an outstanding option or SAR which reduces the option exercise price or SAR exercise price, either by lowering the option exercise price or SAR exercise price or by canceling the outstanding option or SAR and granting a replacement option or SAR with a lower exercise price without the approval of the stockholders of the Corporation, provided, that, this shall not preclude the Plan Administrator from making appropriate adjustments to outstanding options and SARs in connection with a corporate transaction such as a stock split.

 

III.           TAX WITHHOLDING

 

A.                                   The Corporation’s obligation to deliver shares of Common Stock upon the exercise of stock options or other Awards for such shares or the grant, vesting or settlement of

 

15

 

Awards under the Plan shall be subject to the satisfaction by the Participant of all applicable Federal, state and local income tax and employment tax withholding requirements.

 

B.                                     The Plan Administrator may, in its discretion and in accordance with the provisions of this Section III and such supplemental rules as the Plan Administrator may from time to time adopt (including the applicable safe-harbor provisions of Rule 16b-3 of the Securities and Exchange Commission), provide any or all holders of Awards under the Plan with the right to use shares of Common Stock in satisfaction of all or part of the Federal, state and local income and employment withholding tax liabilities incurred by such holders in connection with the exercise of their options or SARs or the grant, vesting or settlement of their Awards (the “Taxes”). Such right may be provided to any such holder in either or both of the following formats:

 

· The holder of the Awards may be provided with the election to have the Corporation withhold, from the shares of Common Stock otherwise issuable upon the exercise or the grant, vesting or settlement of an Award, a portion of those shares with an aggregate Fair Market Value equal to the percentage of the applicable withholding Taxes (not to exceed one hundred percent (100%)) designated by the holder.

 

· The Plan Administrator may, in its discretion, provide the holder of the Option or other Award with the election to deliver to the Corporation, at the time the Award is exercised or the Award is granted, vests or is settled, one or more shares of Common Stock previously acquired by such individual (other than in connection with the option exercise or other event triggering the Taxes) with an aggregate Fair Market Value equal to the percentage of the withholding Taxes incurred in connection with such option exercise or other event (not to exceed one hundred percent (100%)) designated by the holder.

 

IV.           EFFECTIVE DATE AND TERM OF PLAN

 

A.                                   The Plan was amended and restated by the Board on March 25, 2011 to increase the shares authorized for issuance under the Plan, and amend certain other provisions of the Plan. If the Corporation’s stockholders do not approve the March 25, 2011 amendment and restatement, then the provisions of the Plan as in effect immediately prior to the time the Board approved the March 25, 2011 amendment and restatement shall remain in effect, and Awards may continue to be made pursuant to those provisions of the Plan.

 

B.                                     Unless earlier terminated by the Board, the Plan shall terminate on March 24, 2021. All Awards outstanding on the date the Plan terminates shall thereafter continue to have force and effect in accordance with the provisions of Plan and the instruments evidencing such grants.

 

V.            REGULATORY APPROVALS

 

The implementation of the Plan and the granting of any option or other Award under the Plan shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options or other Awards granted under it, and the Common Stock issued pursuant to it.

 

16

 

VI.           USE OF PROCEEDS

 

Any cash proceeds received by the Corporation from the sale of shares pursuant to option grants or other Awards under the Plan shall be used for general corporate purposes.

 

VII.         NO EMPLOYMENT/SERVICE RIGHTS

 

Neither the action of the Corporation in establishing the Plan, nor any action taken by the Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant any individual the right to remain in the employ or service of the Corporation (or any parent or subsidiary corporation) for any period of specific duration, and the Corporation (or any parent or subsidiary corporation retaining the services of such individual) may terminate such individual’s employment or service at any time and for any reason, with or without cause.

 

VIII.        MISCELLANEOUS PROVISIONS

 

A.                                   Except as otherwise expressly provided under the Plan, the right to acquire Common Stock or other assets under the Plan may not be assigned, encumbered or otherwise transferred by any Optionee or Participant.

 

B.                                     The Plan shall be governed by the laws of the State of Idaho without regard to that State’s conflict-of-laws rules.

 

C.                                     The provisions of the Plan shall inure to the benefit of, and be binding upon, the Corporation and its successors or assigns, whether by Corporate Transaction or otherwise, and the Participants and Optionees, the legal representatives of their respective estates, their respective heirs or legatees and their permitted assignees.

 

D.                                    To the extent that the Plan Administrator determines that a Participant would be subject to additional tax imposed on certain deferred compensation arrangements pursuant to Section 409A of Code as a result of any provision of any Award, such provision shall be deemed amended to the minimum extent necessary to avoid application of such additional tax. The Plan Administrator shall determine the nature and scope of such amendment.

 

E.                                      Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by an Optionee or Participant with the Company or any Affiliate, except an agreement, contract, or understanding hereafter entered into that modifies or excludes application of this paragraph (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Optionee or Participant (including groups or classes of Optionees or Participants or beneficiaries of which the Optionee or Participant is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Optionee or Participant (a “Benefit Arrangement”), if the Optionee or Participant is a “disqualified individual,” as defined in Section 280G(c) of the Code, any option, SAR, Restricted Stock or Stock Unit held by that Optionee or Participant and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested:

 

17

 

(i)                                     to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Optionee or Participant under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Optionee or Participant under this Plan to be considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Code as then in effect (a “Parachute Payment”) and

 

(ii)                                  if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Optionee or Participant from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Optionee or Participant without causing any such payment or benefit to be considered a Parachute Payment.

 

In the event that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other rights, payments, or benefits to or for the Optionee or Participant under any Other Agreement or any Benefit Arrangement would cause the Optionee or Participant to be considered to have received a Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount received by the Optionee or Participant as described in clause (ii) of the preceding sentence, then the Optionee or Participant shall have the right, in the Optionee’s or Participant’s sole discretion, to designate those rights, payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Optionee or Participant under this Plan be deemed to be a Parachute Payment, provided such election is provided in a manner that does not result in the imposition of additional tax under Section 409A of the Code.

 

*    *    *    *    *

 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]