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               Exhibit 10.15

               June 9, 2011

               Mr. Paul Blum
142 High Street
Hastings-on-Hudson, NY 10706

               Dear Paul:

               This letter agreement (the “Agreement”) sets forth the terms of your
                  employment at Kenneth Cole Productions, Inc. (the “Company”). The
                  offer contained in this letter is contingent upon full execution by
                  both parties and satisfactory completion of a background check.
                  General terms of employment are as stated in the Company’s Employee
                  Handbook as may be amended from time to time.
               

               
                  	 	 	 	 	 	 	 	 	 

                        	 	 1.	 	 	Effective June 20, 2011, the Company will employ you and you agree to
                              serve as Chief Executive Officer of the Company, reporting to the
                              Executive Chairman of its Board of Directors. You agree to devote
                              your full time and best efforts to the satisfactory performance of
                              such services and duties as the position requires. In conjunction
                              with this Agreement, the Nominating Committee of the Company’s Board
                              of Directors has also recommended that the Board invite you to join
                              the board as an employee member at its next regularly scheduled
                              meeting.
                           	 
	 	 	 	 	 	 
	 	 	 	 	As Chief Executive Officer, you shall have responsibility for and
                              oversight over the Company’s domestic and international business
                              operations, including its: retail, wholesale and licensing
                              businesses, as well as the Company’s human resources, finance,
                              operations, supply chain and marketing (except for the creative
                              elements thereof). All public relations efforts (including events,
                              press releases and strategic communications) shall be subject to
                              approval by Kenneth D. Cole. It is understood that Mr. Cole will
                              retain the title of Chief Creative Officer and creative control over
                              the Brand Studio (to be created in collaboration with you) and the
                              positioning of the brands and its products. He will also continue to
                              direct the Company’s AWEARNESS and other philanthropic
                              initiatives/budgets. Mr. Cole will collaborate with you on the
                              Company’s overall strategic direction and the Company’s Board of
                              Directors will continue to oversee mergers and acquisitions activity
                              concerning or affecting the Company. The Company’s Legal Department
                              will continue to report to Mr. Cole and the Board.
                           	 
	 	 	 	 	 	 
	 	 	 	 	Subject to the terms hereof, the term of your employment under this
                              Agreement shall commence on June 20, 2011 and shall continue, unless
                              sooner terminated under Sections 7A, 7B, 7C or 10 hereof, until June
                              19, 2014. This Agreement shall be automatically extended by one year
                              on June 19, 2014 and on each June 19ththereafter (the “Renewal
                              Date”), unless written notice of non- renewal is given by either you
                              or the Company to the other party at least one hundred (180) days
                              prior to the Renewal Date.
                           	 
	 	 	 	 	 	 
	 	 	 	 	You represent to the Company that the execution and performance by
                              you of this Agreement and your employment hereunder will not breach
                              or constitute a default under any other agreement to which you are a
                              party or by which you are bound.
                           	 
	 	 	 	 	 	 
	 	 2.	 	 	Your compensation shall be as follows:	 
	 	 	 	 	 	 
	 	 	 	 	a.      The annualized base salary for the position is one million
                              dollars ($1,000,000.00) to be paid over twenty-six (26) bi-weekly pay
                              periods. By the end of the first quarter of each fiscal year
                              beginning in 2012, the Compensation Committee of the Company’s Board
                              of Directors (the “Compensation Committee”) shall review your base
                              salary in good faith for possible increase, but in no event may your
                              base salary be decreased.
                           	 
	 	 	 	 	 	 
	 	 	 	 	All compensation in this Agreement will be subject to withholding of
                              all taxes payable with respect thereto and any authorized deductions,
                              including those for such items as insurance contributions.
                           	 
	 	 	 	 	 	 

               
            

         

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	 	 	 	 	b.      Effective upon your commencement date, you will be eligible
                           to participate in the Company’s discretionary executive management
                           bonus plan, which provides for annual awards based upon both the
                           Company’s financial condition and performance and your own
                           performance. Each year you remain employed by the Company, you will
                           be eligible to receive an award up to 100% of the actual base salary
                           paid to you for the prior fiscal year with the opportunity to earn up
                           to 200% of target based on the achievement of predefined performance
                           metrics. No bonus will be paid unless predefined threshold
                           performance metrics are achieved and any bonus will be subject to
                           clawback in certain circumstances as set forth in the Company’s
                           annual incentive program. The award, if any, and the amount thereof,
                           except as otherwise specifically noted in this Paragraph, is in the
                           sole discretion of the Compensation Committee of the Company’s Board
                           of Directors and is contingent upon (i) the attainment of performance
                           goals identified by the Company and (ii) your actively being employed
                           by the Company as Chief Executive Officer on the date that the
                           Company makes bonus payments, which is normally on or about March 1
                           of the following fiscal year.
                        	 
	 	 	 	 	 	 
	 	 	 	 	c.      Upon full execution of this Agreement, the Company will also
                           pay you a signing bonus of one hundred thousand dollars
                           ($100.000.00). This signing bonus must be repaid to the Company if
                           you voluntarily terminate your employment without Good Reason within
                           one (1) year of the effective date of this Agreement.
                        	 
	 	 	 	 	 	 
	 	 3.	 	 	While you are employed by the Company, and subject to the Company’s
                           right to amend, modify or terminate any benefit plan or program, you
                           shall be entitled to the following benefits as well as any other
                           benefit offered to other Company executives generally (other than the
                           Chairman), on terms at least as favorable as such executive:
                        	 
	 	 	 	 	 	 
	 	 	 	 	a.	 	 	Group Health Benefits - participation in the Company’s Health
                           Insurance Plan on the same basis as other executives, subject to
                           customary employee contribution. This is a contributory plan that
                           currently provides medical and dental coverage. The Company may
                           modify these plans at its sole discretion.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	b.	 	 	Supplemental Employee Retirement Plan - participation in the
                           Company’s Supplemental Employee Retirement Plan commencing on the
                           first anniversary of your employment and otherwise in keeping with
                           the terms of the Plan and the Plan documents.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	c.	 	 	Profit Sharing Thrift Plan - participation in the Company’s Employee
                           Profit Sharing Thrift (401(k)) Plan on the first day of the quarter
                           following six months of service.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	d.	 	 	Group Life and Accidental Insurance - coverage under the Company’s
                           Basic Life and Accidental Death and Dismemberment Insurance policy on
                           the first day of the month following after two months of continuous
                           full time service.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	e.	 	 	Business Travel Accident Insurance - coverage under the Company’s
                           Business Travel Accident Insurance Policy.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	f.	 	 	Business Expense - reimbursement for travel, entertainment and other
                           business expenses incurred by you in connection with the Company’s
                           business, all in accordance with the Company’s policies and practices
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	g.	 	 	Vacation - in accordance with Company policy.	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	h.	 	 	Paid Sick Leave - in accordance with Company policy.	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	i.	 	 	Automobile - an automobile allowance of one thousand dollars
                           ($1,000.00) per month.
                        	 
	 	 	 	 	 	 

               

            

         

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	 	 4.	 	 	a.         You will
participate in the Company’s restricted stock
                           plan with the Compensation Committee at its next regularly scheduled
                           meeting issuing you a performance-based grant of one hundred thousand
                           (100,000) shares (the “First Grant”), subject to all of the terms and
                           conditions set forth in the plan documents and award agreements as
                           they may be amended from time to time. You will also receive grants
                           of fifty thousand (50,000) shares in each of the three subsequent
                           years on or about the anniversary of your initial grant, also subject
                           to all of the terms and conditions set forth in the plan documents
                           and award agreements as they may be amended from time to time, except
                           in the event where any such terms and conditions are inconsistent
                           with this Agreement, in which case the terms of this Agreement shall
                           govern. The Compensation Committee will set appropriate, good faith,
                           mutually-agreed performance targets with you by the end of the first
                           quarter of each fiscal year for the shares on which restrictions are
                           lapsing that year. If the relevant performance targets associated
                           with the First Grant are achieved, the restrictions will lapse on
                           twenty-five percent (25%) of the shares on the first two
                           anniversaries of the grant and the remaining fifty percent (50%) on
                           the third anniversary of the grant, all conditioned, except as
                           provided in Sections 7A, 7B and 7C below, upon your continued
                           employment with the Company through the date of the lapse. The First
                           Grant will be issued under the Company’s existing restricted stock
                           plans and will be made pursuant to award agreement(s) in the form
                           attached hereto as Exhibit A, and will be subject to all of the terms
                           and conditions set forth in the plan documents and award agreement(s)
                           as they may be amended from time to time, except that to the extent
                           the award agreement or such terms and conditions are inconsistent
                           with the terms of this Agreement, the terms of this Agreement shall
                           govern.
                        	 
	 	 	 	 	 	 
	 	 	 	 	b.           You will
also participate in the Company’s executive
                           performance stock plan with the Compensation Committee issuing you a
                           performance-based grant of one hundred thousand (100,000) shares (the
                           “Second Grant”, and, collectively with the First Grant, the
                           “Restricted Stock Grants”) at the same time that they make
                           performance-based grants to the rest of the executive team, subject
                           to all of the terms and conditions set forth in the plan documents
                           and award agreements as they may be amended from time to time, except
                           in the event where any such terms and conditions are inconsistent
                           with this Agreement, in which case the terms of this Agreement shall
                           govern. At the time of grant, the Compensation Committee will set
                           appropriate performance targets for the executive team relating to
                           the achievement of goals relating to the Company’s strategic plan. If
                           the relevant performance targets associated with the grants are
                           achieved, the restrictions will lapse on ten percent (10%) of the
                           shares on the first anniversary of the grant, on twenty percent (20%)
                           of the shares on the second anniversary of the grant, on thirty
                           percent (30%) of the shares on the third anniversary of the grant,
                           and the remaining forty percent (40%) on the fourth anniversary of
                           the grant, all conditioned, except as provided in Sections 7A, 7B and
                           7C below, upon your continued employment with the Company as Chief
                           Executive Officer through the date of the lapse. The Second Grant
                           will be issued under the Company’s existing restricted stock plans
                           and will be made pursuant to an award agreement in the form attached
                           hereto as Exhibit B, and will be subject to all of the terms and
                           conditions set forth in the plan documents and award agreement as
                           they may be amended from time to time, except that to the extent the
                           award agreement or such terms and conditions are inconsistent with
                           the terms of this Agreement, the terms of this Agreement shall govern.
                        	 
	 	 	 	 	 	 
	 	 	 	 	During your employment and thereafter for a period of two years, you
                           agree to provide the Company with prior written notice of your
                           intended sale of Company shares.
                        	 
	 	 	 	 	 	 

               

            

         

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	 	 5.	 	 	At its next regularly scheduled meeting, the Compensation Committee
                           will issue to you a sign-on grant of two hundred fifty thousand
                           (250,000) stock options with a strike price at the closing market
                           price on the date of the grant (the “Option Grant”). Ten percent
                           (10%) of the stock options will vest on the first anniversary of the
                           grant, twenty percent (20%) of the stock options will vest on the
                           second anniversary of the grant, thirty percent (30%) of the stock
                           options will vest on the third anniversary of the grant, and the
                           remaining forty percent (40%) of the stock options will vest on the
                           fourth anniversary of the grant, all conditioned, except as provided
                           in Sections 7A, 7B and 7C hereof, upon your continued employment with
                           the Company as its Chief Executive Officer on the vesting dates. The
                           options will remain outstanding for ten (10) years from the date of
                           the grant as long as you remain in the Company’s employ as its Chief
                           Executive Officer, but shall not expire until at least ninety (90)
                           days following any termination of your employment. In the event that
                           this Agreement expires prior to the vesting of these stock options,
                           they will vest immediately and remain outstanding for ninety (90)
                           days following the Agreement’s expiration. The Option Grant will be
                           issued under the Company’s existing stock option plan and be made in
                           the form of an award agreement(s) attached hereto as Exhibit C and
                           will be subject to all of the terms and conditions set forth in the
                           plan documents and the award agreement(s) as they may be amended from
                           time to time, except that to the extent the award agreement or such
                           terms and conditions are inconsistent with the terms of this
                           Agreement, the terms of this Agreement shall govern. You will also be
                           eligible to receive additional stock option grants consistent with
                           any programs that the Company may put in place in the future for
                           senior executives. Unvested stock options cannot be cancelled upon or
                           in connection with any transaction, "Change of Control" or "Limited
                           Change of Control" (as both terms are defined in Paragraph 7C),
                           unless you are paid an amount equal to the excess of the aggregate of
                           the fair market value of the shares subject to the unvested options
                           over the aggregate exercise price of the unvested stock options, or
                           you are provided with substitute stock options with an exercise price
                           and number of shares which are determined in a manner consistent with
                           Section 424 of the Internal Revenue Code of 1986, as amended (the
                           “Code”) and the regulations promulgated thereunder.
                        	 

               

               
                  	 	 	 	 	 	 	 	 	 

                        	 	 	 	 	During your employment and thereafter, you agree to provide the
                              Company with prior written notice of your intended exercise of stock
                              options.
                           	 
	 	 	 	 	 	 
	 	 6.	 	 	If you decide to terminate your employment with the Company, you agree:	 
	 	 	 	 	 	 
	 	 	 	 	a.	 	 	to provide the Company with one hundred eighty (180) days' prior written notice;	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	b.	 	 	to make no public announcement concerning your departure prior to or
                              following your termination date without the consent of the Company;
                              and
                           	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	c.	 	 	to continue to perform faithfully the duties assigned to you on the
                              date of such notice (or such other appropriate duties as the Company
                              may assign to you) from the date of such notice until your
                              termination date.
                           	 
	 	 	 	 	 	 
	 	 	 	 	You acknowledge that the notice period provided for hereunder is for
                              the exclusive benefit of the Company and does not confer any
                              employment obligation on the Company. The Company may elect in its
                              sole discretion during such period: (i) to instruct you not to report
                              to work or perform any services for the Company, while remaining in
                              the employ of the Company or (ii) to terminate your employment,
                              during the notice period. Upon the termination of your employment
                              during the notice period, you shall be entitled only to the payment
                              of the base salary earned and unpaid through such date, a payment in
                              respect of accrued but unused vacation (the “Vacation Payment”), any
                              business expenses otherwise due you, and any payment or benefits you
                              are entitled pursuant to the Company’s employee benefit plans and
                              compensation plan. The earned but unpaid base salary and the Vacation
                              Payment shall be made within 30 days following the termination of
                              your employment. All insurance, benefits and other arrangements
                              provided by the Company shall cease on the last day of the month of
                              the termination of your employment (except as otherwise required by
                              the terms of the applicable plan or by law).
                           	 
	 	 	 	 	 	 
	 	 7A.	 	 	In the event your employment is terminated by the Company for a
                              reason other than Cause, or you terminate your employment for Good
                              Reason (as such terms are defined below), the Company agrees to
                              provide, and you agree to accept, as the sole and exclusive remedy
                              for the termination of your employment, the following severance
                              benefits and arrangements:
                           	 
	 	 	 	 	 	 

               
            

         

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	 	 	 	 	a.	 	 	Continuing bi-weekly payments of your base salary, less deductions
                           required by law, at the rate applicable as of the notice of your
                           termination of employment for one (1) year (the “Severance Period”).
                           In the event that you obtain other employment (or engage in
                           self-employment) during the Severance Period, these bi-weekly
                           payments are subject to an offset and/or reimbursement for any salary
                           or other cash compensation that you receive with respect to the pay
                           period in question. You hereby agree that you have a duty not to
                           compete, as defined in Paragraph 9, but you shall not have any duty
                           to seek other employment during the Severance Period. In order to
                           retain your right to receive and keep payments under this
                           subparagraph, you must notify the Company immediately upon obtaining
                           alternate employment or engaging in self employment.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	b.	 	 	Your group medical and life insurance, as described in Paragraph 3(a)
                           and (d), will be continued throughout the Severance Period (subject
                           to your continuing contributions) or until you become eligible for
                           coverage as the result of your new employment or self-employment,
                           whichever shall first occur. Notwithstanding the foregoing, in the
                           event that the Company reasonably determines that your continuing to
                           participate in health plan on such terms throughout the Severance
                           Period would expose the Company or its health plan to additional
                           taxes or penalties with respect to the provision of such benefits on
                           a discriminatory basis under the Affordable Care Act or otherwise,
                           then the Company may elect to cease your continued participation in
                           the health plan and permit you to elect COBRA continuation coverage,
                           provided, however, that the Company shall then pay you a monthly
                           amount equal to the sum of (i) the difference between the applicable
                           COBRA continuation premium for yourself and your dependents for such
                           month and the corresponding contribution you would have made for such
                           period if you were an employee (the “COBRA Payment”), and (ii) an
                           additional amount (the “Grossup Payment”), such that after paying all
                           applicable income taxes on the COBRA Payment and the Grossup Payment,
                           you are left with an amount equal to the COBRA Payment.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	c.	 	 	You shall also receive (i) any base salary earned but not yet paid,
                           (ii) the Vacation Payment, (iii) any prior-year bonus which has been
                           earned but not paid, (iv) reimbursements for any expenses which have
                           not yet been reimbursed, any (v) any payments and benefits you are
                           entitled to pursuant to the terms of any employee benefit plans and
                           compensation plans in which you participate. The earned but unpaid
                           base salary and the Vacation Payment shall be made within 30 days
                           following the termination of your employment and the prior-year bonus
                           shall be paid to you at the same time as such bonuses are paid to
                           other senior executives of the Company for the prior year.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	d.	 	 	For purposes of the Restricted Stock Grants you shall be deemed to
                           remain employed with the Company and, upon the satisfaction of any
                           applicable performance criteria, the restrictions would lapse on the
                           appropriate portion of the Restricted Stock Grants during the period
                           of salary continuation pursuant to subparagraph (a) above.
                        	 
	 	 	 	 	 	 
	 	 	 	 	It is understood and agreed that in the event you receive benefits
                           under this Paragraph, you shall not be entitled to receive any other
                           compensation or benefits under this Agreement as a result of the
                           termination of your employment hereunder and, as a condition to
                           receiving benefits under this Paragraph, you hereby agree to execute
                           a release prepared by the Company; provided, however, that such
                           release shall not release any claims pertaining to or otherwise limit
                           or restrict your claims (i) regarding any rights you have to be
                           indemnified by the Company or its affiliates in connection with any
                           claim or proceeding or threatened claim or proceeding against you
                           that arises out of or relates to your service as an officer, director
                           or employee, as the case may be, of the Company or your service in
                           any such capacity or similar capacity with any affiliate of the
                           Company and in accordance with the then-existing by-laws of the
                           Company, (ii) pursuant to this Agreement, including, but not limited
                           to, subparagraphs 7A a.-d. above, (iii) relating to any rights you
                           may have as a shareholder of the Company, (iv) for any benefits under
                           an employee benefit plan of the Company in which you participate, or
                           (v) for any previously vested stock options. The Company shall,
                           within five (5) days following the termination of your employment
                           provide you with a form of release satisfying the requirements of
                           this paragraph and, in order to receive the benefits provided above,
                           except earned but unpaid base salary and the Vacation Payment, you
                           shall be required to execute such release and return it to the
                           Company prior to the 60th day following the termination of your employment (such 60 day period
                           being the “Release Period”). Following your execution of the release,
                           you shall have seven (7) days during which you may revoke your
                           agreement (the “Revocation Period”). Any payments due to be paid to
                           you pursuant to the provisions above during the Release Period,
                           except earned but unpaid base salary and the Vacation Payment, shall
                           be delayed until the expiration of the Release Period or the
                           expiration of the Revocation Period, whichever is later and, provided
                           you have executed and returned the release during the Release Period,
                           shall be paid to you on the following business day.
                        	 
	 	 	 	 	 	 

               

            

         

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	 	 7B	 	 	In the event that your employment terminates as a result of your
                           death or Permanent Disability (as defined below), then you (or your
                           estate) shall be entitled to the following:
                        	 
	 	 	 	 	 	 
	 	 	 	 	(i)	 	 	any base salary earned but not yet paid, (ii) the Vacation Payment,
                           (iii) any prior-year bonus which has been earned but not paid, (iv)
                           reimbursements for any expenses which have not yet been reimbursed,
                           and (v) any payments and benefits you are entitled to pursuant to the
                           terms of any employee benefit plans and compensation plans in which
                           you participate. The earned but unpaid base salary and the Vacation
                           Payment shall be made within 30 days following the termination of
                           your employment and the prior-year bonus shall be paid to you at the
                           same time as such bonuses are paid to other senior executives of the
                           Company for the prior year.
                        	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	For purposes of this Agreement, you shall have a "Permanent
                           Disability" only if you are entitled to benefits under the Company’s
                           long-term disability plan in which you participate
                        	 
	 	 	 	 	 	 
	 	 7C	 	 	In the event of a Change of Control of the Company, you may, in your
                           sole discretion within sixty (60) days of such event, deem such event
                           a termination not for Cause for all purposes under this Agreement.
                           "Change of Control" shall mean (except as provided below in this
                           definition) (i) a change in the beneficial ownership at any time by
                           an entity or individual, either directly or indirectly, of equity
                           securities or interests of Kenneth Cole Productions, Inc., the voting
                           power of which constitutes more than fifty percent (50%) or more of
                           the aggregate voting power of the outstanding equity securities or
                           interests, as the case may be, of the subject company, or (ii) any
                           merger, consolidation or reorganization of Kenneth Cole Productions,
                           Inc. in which the stockholders of the subject company immediately
                           before the transaction do not have beneficial ownership of at least
                           fifty percent (50%) of the combined voting power of the voting
                           securities of the surviving entity or its parent immediately after
                           the transaction, or (iii) any sale or transfer of all or
                           substantially all of the assets of Kenneth Cole Productions, Inc. to
                           a purchaser or other transferee in which the stockholders of the
                           subject company immediately before the transaction do not have
                           beneficial ownership of at least fifty percent (50%) of the combined
                           voting power of the voting securities of the surviving entity or its
                           parent immediately after the transaction.
                        	 
	 	 	 	 	 	 
	 	 	 	 	It is understood that, notwithstanding the foregoing, none of the
                           events described in clauses (i) and (ii) of the immediately preceding
                           paragraph shall be deemed a Change of Control if Mr. Kenneth D. Cole
                           remains Chairman of the Company and holds at least thirty percent
                           (30%) of the acquiring company after such transaction or is otherwise
                           the largest shareholder of the surviving entity (any transaction that
                           would be a Change of Control, except for this sentence shall be a
                           "Limited Change of Control" hereunder).  It is further understood
                           that, notwithstanding the foregoing, any transfer of legal or
                           beneficial ownership of outstanding equity interests of the Company
                           to a guardian, executor or other person acting in a similar capacity
                           or to the heirs or estate of Mr. Cole upon the incapacity or death of
                           Mr. Cole shall not constitute a Change of Control.  It is further
                           understood that in the event of any transfer described in the
                           immediately preceding sentence, the restrictions in Paragraph 4 shall
                           continue to apply.
                        	 
	 	 	 	 	 	 
	 	 	 	 	In the event you terminate this Agreement following a Change of
                           Control or a Limited Change of Control, the restrictions in Paragraph
                           9 below shall not apply and all restrictions on the Restricted Stock
                           Grants which would otherwise lapse within the subsequent two years
                           shall lapse immediately (but in no event shall restrictions lapse on
                           less than fifty percent of the shares from the original Restricted
                           Stock Grants) and you shall have same rights with respect to such
                           restricted stock as any other shareholder of the Company, including
                           the right to tender such shares in any tender offer. Furthermore, any
                           outstanding stock options pursuant to the Option Grant which would
                           otherwise vest within the subsequent two years shall become fully
                           vested and exercisable (but in no event shall less than fifty percent
                           of options from the original Option Grant vest) and shall remain
                           exercisable for ninety (90) days following the termination of your
                           employment.
                        	 
	 	 	 	 	 	 
	 	 7D.	 	 	In the event your employment is terminated due to the expiration of
                           this Agreement, the Company agrees to provide, and you agree to
                           accept, as the sole and exclusive remedy for the termination of your
                           employment, the following severance benefits and arrangements:
                        	 
	 	 	 	 	 	 

               

            

         

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	 	 	 	 	a.	 	 	Continuing bi-weekly payments of your base salary, less deductions
                           required by law, at the rate applicable as of the notice of your
                           termination of employment for six (6) months (the “Salary
                           Continuation Period”). In the event that you obtain other employment
                           (or engage in self-employment) during the Salary Continuation Period,
                           these bi-weekly payments are subject to an offset and/or
                           reimbursement for any salary or other cash compensation that you
                           receive with respect to the pay period in question. You hereby agree
                           that you have a duty not to compete, as defined in Paragraph 9, but
                           you shall not have any duty to seek other employment during the
                           Salary Continuation Period. In order to retain your right to receive
                           and keep payments under this subparagraph, you must notify the
                           Company immediately upon obtaining alternate employment or engaging
                           in self employment.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	b.	 	 	Your group medical and life insurance, as described in Paragraph 3(a)
                           and (d), will be continued throughout the Salary Continuation Period
                           (subject to your continuing contributions) or until you become
                           eligible for coverage as the result of your new employment or
                           self-employment, whichever shall first occur. Notwithstanding the
                           foregoing, in the event that the Company reasonably determines that
                           your continuing to participate in health plan on such terms
                           throughout the Severance Period would expose the Company or its
                           health plan to additional taxes or penalties with respect to the
                           provision of such benefits on a discriminatory basis under the
                           Affordable Care Act or otherwise, then the Company may elect to cease
                           your continued participation in the health plan and permit you to
                           elect COBRA continuation coverage, provided, however, that the
                           Company shall then pay you a monthly amount equal to the sum of (i)
                           the difference between the applicable COBRA continuation premium for
                           yourself and your dependents for such month and the corresponding
                           contribution you would have made for such period if you were an
                           employee (the “COBRA Payment”), and (ii) an additional amount (the
                           “Grossup Payment”), such that after paying all applicable income
                           taxes on the COBRA Payment and the Grossup Payment, you are left with
                           an amount equal to the COBRA Payment.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	c.	 	 	You shall also receive (i) any base salary earned but not yet paid,
                           (ii) the Vacation Payment, (iii) any prior-year bonus which has been
                           earned but not paid, (iv) reimbursements for any expenses which have
                           not yet been reimbursed, any (v) any payments and benefits you are
                           entitled to pursuant to the terms of any employee benefit plans and
                           compensation plans in which you participate. The earned but unpaid
                           base salary and the Vacation Payment shall be made within 30 days
                           following the termination of your employment and the prior-year bonus
                           shall be paid to you at the same time as such bonuses are paid to
                           other senior executives of the Company for the prior year.
                        	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	d.	 	 	All unvested options granted in the initial Option Grant shall vest
                           immediately and remain outstanding for ninety (90) days following
                           your termination.
                        	 
	 	 	 	 	 	 
	 	 	 	 	It is understood and agreed that in the event you receive benefits
                           under this Paragraph, you shall not be entitled to receive any other
                           compensation or benefits under this Agreement as a result of the
                           termination of your employment hereunder and, as a condition to
                           receiving benefits under this Paragraph, you hereby agree to execute
                           a release prepared by the Company; provided, however, that such
                           release shall not release any claims pertaining to or otherwise limit
                           or restrict your claims (i) regarding any rights you have to be
                           indemnified by the Company or its affiliates in connection with any
                           claim or proceeding or threatened claim or proceeding against you
                           that arises out of or relates to your service as an officer, director
                           or employee, as the case may be, of the Company or your service in
                           any such capacity or similar capacity with any affiliate of the
                           Company and in accordance with the then-existing by-laws of the
                           Company, (ii) pursuant to this Agreement, including, but not limited
                           to, subparagraphs 7A a.-d. above, (iii) relating to any rights you
                           may have as a shareholder of the Company, (iv) for any benefits under
                           an employee benefit plan of the Company in which you participate or
                           (v) previously vested stock options. The Company shall, within five
                           (5) days following the termination of your employment provide you
                           with a form of release satisfying the requirements of this paragraph
                           and, in order to receive the benefits provided above, except earned
                           but unpaid base salary and the Vacation Payment, you shall be
                           required to execute such release and return it to the Company prior
                           to the 60th day following the termination of your employment (such 60 day period
                           being the “Release Period”). Following your execution of the release,
                           you shall have seven (7) days during which you may revoke your
                           agreement (the “Revocation Period”). Any payments due to be paid to
                           you pursuant to the provisions above during the Release Period,
                           except earned but unpaid base salary and the Vacation Payment, shall
                           be delayed until the expiration of the Release Period or the
                           expiration of the Revocation Period, whichever is later and, provided
                           you have executed and returned the release during the Release Period,
                           shall be paid to you on the following business day.
                        	 
	 	 	 	 	 	 

               

            

         

7

         			

         			

         			

      

      
         
            
               
                  	 	 	 	 	 	 	 	 	 
	 	 8.	 	 	Upon any termination of employment, you agree to provide the Company
                           with appropriate transition in good faith. As the former Chief
                           Executive Officer of the Company, issues may occur to you, or
                           otherwise come to your attention, that are relevant to the ongoing
                           management of the Company. It is assumed that you will continue to
                           alert the Company to these matters in good faith. Upon any
                           termination of employment, you agree to refrain from soliciting any
                           employee of the Company to terminate his/her employment or from
                           hiring any person who was employed by the Company during your tenure
                           for a period of twenty four (24) months thereafter. You also agree to
                           refrain from using any confidential or proprietary information
                           obtained through your employment with the Company. You further agree
                           to refrain from making any statements or comments of a defamatory or
                           disparaging nature to third parties regarding the Company or its
                           officers, directors, personnel or products. The Company agrees that
                           it shall cause its officers, directors and human resources executives
                           to refrain from making any statements or comments of a defamatory or
                           disparaging nature to third parties regarding you.
                        	 
	 	 	 	 	 	 
	 	 9.	 	 	You acknowledge and agree that the Company is only willing to enter
                           into this Agreement (including, but not limited to, the offer of
                           employment, recommendation to be an employee member of the Board of
                           Directors, the compensation and benefits that you will receive during
                           and after your employment) on the condition that you accept the
                           post-employment restrictions set forth herein. You acknowledge and
                           agree that the Company’s business is very competitive and that to
                           protect its legitimate business interests the Company expects and
                           requires that you not compete with it for a period of time. In this
                           regard, you expressly agree that during your employment with the
                           Company and during the later of: (a) any period in which (i) you
                           continue to receive salary payments during any notice period in
                           Paragraph 6, or (ii) if your employment terminates pursuant to
                           Section 7A hereof, the Severance Period or (b) for a period of twelve
                           (12) months following termination of your employment for Cause (the
                           “Non-Competitive Period”), you shall not, directly or indirectly, as
                           owner, partner, joint venture, stockholder, employee, broker, agent,
                           principal, trustee, corporate officer, director, licensor,
                           consultant, or in any other capacity engage in or work for any
                           business on behalf of any Competitor in which you could benefit the
                           Competitor’s business or harm the Company’s business. Notwithstanding
                           the foregoing, after the first six (6) months of the Non-Competitive
                           Period, you may opt to waive your rights to any further payments
                           pursuant to Paragraph 7A above in exchange for release from the
                           restrictions in this Paragraph 9.
                        	 
	 	 	 	 	 	 
	 	 	 	 	The restrictions above shall apply only in the geographic areas for
                           which you had work-related responsibility during the last twelve (12)
                           months of your employment by the Company. The restrictions set forth
                           in this Paragraph do not prohibit you from owning any securities of
                           any corporation which is engaged in such business and is publicly
                           owned and traded but in an amount not to exceed at any one time five
                           (5) percent of any class of stock or securities of such corporation.
                           In addition, you shall not, during the Non-Competitive Period,
                           request or knowingly cause any suppliers or customers with whom the
                           Company or its affiliates has a business relationship to cancel or
                           terminate any such business relationship with the Company or its
                           affiliates.
                        	 
	 	 	 	 	 	 
	 	 	 	 	For purposes of this Paragraph, Competitor shall be defined as any
                           business that is engaged in, or is preparing to become engaged in,
                           the retail or wholesale apparel, footwear or accessories business or
                           other business in which the Company is engaged or preparing to become
                           engaged, or that otherwise materially competes with, or is preparing
                           to compete with, the Company.
                        	 
	 	 	 	 	 	 
	 	 	 	 	Confidential Information as used herein shall mean information
                           concerning the Company that is disclosed to you or otherwise learned
                           by you as a result of you employment by the Company that is not
                           generally known by Competitors, including, but not limited to, such
                           information concerning research and development, trade secrets,
                           sales, products, services, accounts, customers, purchasers of the
                           Company’s products, marketing, packaging, merchandising,
                           distribution, manufacturing, finance, technology, intellectual
                           property (patents, design patents, trademarks, trade dress,
                           copyrights), strategies, business structures, operations, ventures,
                           or other business affairs or plans.
                        	 
	 	 	 	 	 	 
	 	 	 	 	If any portion of the restrictions set forth in this Paragraph
                           should, for any reason, whatsoever, be declared invalid by a court of
                           competent jurisdiction or by any arbitral or administrative
                           determination, the validity or enforceability of the remainder of
                           such restrictions shall not thereby be adversely affected, provided,
                           however, that the Company’s obligation to continue to make salary or
                           other payments or benefits shall also cease coterminously, without
                           affecting the validity of the terms of the release agreement, which
                           shall remain in full force and effect.
                        	 
	 	 	 	 	 	 

               

            

         

8

         			

         			

         			

      

      
         
            
               
                  	 	 	 	 	 	 	 	 	 
	 	 	 	 	You acknowledge that the Company and its affiliates conduct business
                           throughout North, Central and South America, the Middle East, Asia,
                           and Europe, that its sales and marketing prospects are for continued
                           expansion, and that, therefore, the territorial and time limitations
                           set forth in this Paragraph are reasonable and properly required for
                           the adequate protection of the business of the Company and its
                           affiliates. In the event any such territorial or time limitation is
                           deemed to be unreasonable by a court of competent jurisdiction or by
                           any arbitral or administrative determination, you agree to the
                           reduction of the territorial or time limitation to the area or period
                           which such court, administrative agency or arbitrator(s) shall deem
                           reasonable.
                        	 
	 	 	 	 	 	 
	 	 10.	 	 	a.       If your employment is terminated for Cause by the Company,
                           you will not be eligible for any further benefits under this
                           Agreement except (i) your earned but unpaid base salary, (ii) the
                           Vacation Payment, (iii) COBRA, and (iv) anything required by law. The
                           earned but unpaid base salary and the Vacation Payment shall be made
                           within 30 days following the termination of your employment. Cause
                           shall mean (i) your willful misconduct injurious to the Company’s
                           interests, (ii) your willful and material breach of your duties or
                           refusal to follow a reasonable directive from the Board, or (iii)
                           your indictment for or plea of nolo contendere to a felony; provided, however, that in the case of (i) or (ii)
                           above, Cause shall not exist hereunder unless (a) the Company
                           provides you with a reasonably detailed written notice of the
                           event(s) it believes constitute Cause hereunder, (b) you fail to cure
                           such event(s), if curable, within thirty (30) days following your
                           receipt of such written notice and (c) the Board thereafter
                           determines by a majority vote at a meeting of the Board called and
                           held for this purpose that, after permitting you and your counsel an
                           opportunity as to why you believe the alleged event(s) do not
                           constitute Cause at such meeting, that Cause exists hereunder.
                        	 
	 	 	 	 	 	 
	 	 	 	 	b.       Good Reason shall mean any of the following: (i) a material
                           adverse change by the Company in your duties, title, authority or
                           responsibilities as Chief Executive Officer of the Company, except
                           pursuant to Paragraph 6; (ii) a change in the lines of reporting such
                           that you no longer report directly and exclusively to the Board
                           and/or its Chairman; (iii) any reduction in your base salary or a
                           material reduction in your potential bonus formula; (iv) a material
                           breach of this Agreement by the Company; (v) the failure to elect you
                           to the Board pursuant to Paragraph 1 hereof
                           ; or (vi) any requirement that you relocate more than twenty-five
                           (25) miles from your current principal office (other than to a
                           location that does not materially increase your normal commute time).
                           In the event you believe that an event giving rise to potential Good
                           Reason has occurred, (a) you will notify the Company’s Chairman and
                           Board of Directors within ninety (90) days following the event(s)
                           alleged to constitute Good Reason, in writing, setting forth a
                           reasonably detailed explanation of the reasons you believe Good
                           Reason exists, (b) the Company must fail to cure such event(s), if
                           curable, within sixty (60) days following the Company’s receipt of
                           such writing, and (c) you must give notice of your intention to
                           terminate your employment for Good Reason within thirty (30) days
                           following the expiration of the cure period, such termination to take
                           effect within six (6) months thereafter.
                        	 
	 	 	 	 	 	 
	 	 11.	 	 	Should any disagreement, claim or controversy arise between you and
                           the Company with respect to a termination (including, but not limited
                           to, any claim of employment discrimination), the same shall be
                           settled by arbitration in New York, New York before a single
                           arbitrator in accordance with the then-current national rules for
                           resolution of employment disputes of the American Arbitration
                           Association, and the award of the arbitrator with respect to a
                           termination pursuant to this Agreement shall be enforceable in any
                           court of competent jurisdiction and shall be binding upon the parties
                           hereto, except that the Company may seek equitable relief with
                           respect to any breaches of Paragraphs 6 through 10 of this Agreement.
                        	 
	 	 	 	 	 	 
	 	 12.	 	 	The invalidity or unenforceability of any particular provision or
                           provisions of this Agreement shall not affect the other provisions
                           hereof and this Agreement shall be construed in all respects as if
                           such invalid or unenforceable provisions had been omitted.
                        	 
	 	 	 	 	 	 
	 	 13.	 	 	This Agreement constitutes the full and complete understanding and
                           agreement of the parties, supersedes all prior representations,
                           understandings and agreements as to your employment by the Company
                                 and cannot be amended, changed, modified in any respect,
                           without the written consent of the parties, except that the Company
                           reserves the right in its sole discretion to make changes at any time
                           to the other documents referenced in this Agreement.
                        	 
	 	 	 	 	 	 
	 	 14.	 	 	This Agreement shall be binding upon and shall inure to the benefit
                           of successors and assigns of the Company. The Company will obtain the
                           assumption of this Agreement by any successor to the Company, and the
                           failure of the Company to obtain such assumption shall constitute a
                           material breach of this Agreement.
                        	 
	 	 	 	 	 	 
	 	 15.	 	 	This Agreement shall be governed by and construed in accordance with
                           the laws of the State of New York, without regard to its provisions
                           as to choice of laws, except insofar as the Federal Arbitration Act
                           applies.
                        	 
	 	 	 	 	 	 

               

            

         

9

         			

         			

         			

      

      
         
            
               
                  	 	 	 	 	 	 	 	 	 
	 	 16.	 	 	You may not assign your rights or duties under this Agreement without
                           the prior written consent of the Company, but the Company may assign
                           this Agreement without prior notice to or consent from you to an
                           affiliate of the Company or to a successor, provided that Company
                           shall remain liable under this Agreement in the event that such
                           purchaser does not honor the terms of this Agreement.
                        	 
	 	 	 	 	 	 
	 	 17.	 	 	During the term of this Agreement and thereafter, the Company agrees
                           to indemnify and hold you and your heirs and representatives
                           harmless, to the maximum extent permitted by law and in accordance
                           with the then-existing by-laws of the Company (identical in scope to
                           the indemnification provided to the Executive Chairman), against any
                           and all damages, costs, liabilities, losses and expenses (including
                           reasonable attorneys' fees) as a result of any claim or proceeding,
                           or threatened claim or proceeding, against you that arises out of or
                           relates to your service as an officer, director or employee, as the
                           case may be, of the Company, or your service in any such capacity or
                           similar capacity with an affiliate of the Company or other entity at
                           the request of the Company, both prior to after the date of this
                           agreement, and to advance to you and your heirs or representatives
                           such expenses upon written request. During the term of this Agreement
                           and thereafter, the Company shall also provide you with coverage
                           under its current directors' and officers' liability policy to the
                           same extent as its other senior executives.
                        	 
	 	 	 	 	 	 
	 	 18.	 	 	The provisions contained in Paragraphs 6 through 9 and 17 shall
                           survive any termination of this Agreement and shall remain in effect
                           as long as is necessary to give effect thereto.
                        	 
	 	 	 	 	 	 
	 	 19.	 	 	This Agreement is intended to comply with the requirements of Section
                           409A of the Code (“Section 409A”), and the Company and you hereby
                           agree to amend this agreement as and when necessary or desirable to
                           conform to or otherwise properly reflect any guidance issued under
                           Section 409A after the date hereof without violating Section 409A. In
                           case any one or more provisions of this Agreement fails to comply
                           with the provisions of Section 409A, the remaining provisions of this
                           Agreement shall remain in effect, and this Agreement shall be
                           administered and applied as if the non-complying provisions were not
                           part of this Agreement. The Company and you in that event shall
                           endeavor to agree upon a reasonable substitute for the non-complying
                           provisions, to the extent that a substituted provision would not
                           cause this agreement to fail to comply with Section 409A, and, upon
                           so agreeing, shall incorporate such substituted provisions into this
                           Agreement, provided, however, such amendment does not result in
                           increased cost to the Company. In the event that any payment or
                           benefit made hereunder or under any compensation plan, program or
                           arrangement of the Company would constitute payments or benefits
                           pursuant to a non-qualified deferred compensation plan within the
                           meaning of Section 409A and, at the time of your "separation from
                           service" you are a "specified employee" within the meaning of Section
                           409A, then any such payments or benefits shall be delayed until the
                           six-month anniversary of the date of your "separation from service".
                           Each payment made under this Agreement shall be designated as a
                           "separate payment" within the meaning of Section 409A. All
                           reimbursements and in-kind benefits provided under this Agreement
                           shall be made or provided in accordance with the requirements of
                           Section 409A to the extent that such reimbursements or in-kind
                           benefits are subject to Section 409A. All reimbursements for expenses
                           paid pursuant hereto that constitute taxable income to you shall in
                           no event be paid later than the end of the calendar year next
                           following the calendar year in which you incur such expense or pay
                           such related tax. Unless otherwise permitted by Section 409A, the
                           right to reimbursement or in-kind benefits under this Agreement shall
                           not be subject to liquidation or exchange for another benefit and the
                           amount of expenses eligible for reimbursement, or in-kind benefits,
                           provided during any taxable year shall not affect the expenses
                           eligible for reimbursement, or in-kind benefits to be provided,
                           respectively, in any other taxable year.
                        	 
	 	  	 

               

               This offer of employment is contingent upon your review and execution
                  of all of the Company’s standard new-hire paperwork, including, but
                  not necessarily limited to:
               

               
                  •IRS Form W-4 (for tax withholding purposes)
                  

                  •Form I-9 (concerning legal eligibility for employment)
                  

                  •Acknowledgment of receipt of Employee Handbook and Arbitration Agreement
                  

                  •Employee Code of Conduct
                  

               

               We are enclosing a copy of the requisite new-hire paperwork with this
                  Agreement. In any event, you should familiarize yourself with it
                  before you sign this Agreement or otherwise accept employment with us.
               

            

         

10

         			

         			

         			

      

      
         
            
                 

                 

               If the foregoing is agreeable to you, please sign both copies of this
                  Agreement and return them to me. A fully executed original will be
                  returned to you.
               

               
                  	 	 	 	 	 	 	 	 	 

                        	 	 	 	 	Very truly yours,	 
	 	  	 
	 	 	 	 	KENNETH COLE PRODUCTIONS, INC.	 
	 	  	 
	 	    	 
	 	  	 
	 	 	 	 	/s/ Kenneth D. Cole	 	 	 	 
	 	 	 	 	By: Kenneth D. Cole	 	 	 	 
	 	  	 
	 	  	 

               
               Agreed to and accepted this

               9th day of June, 2011

               /s/ Paul Blum

               Paul Blum

            

         

11a6812217ex10-1.htm

EXHIBIT 10.1

THE STANDARD REGISTER COMPANY

2011 EQUITY INCENTIVE PLAN

1.  Purpose:  The purpose of The Standard Register Company 2011 Equity Incentive Plan (the "Plan") is to promote the best interests of The Standard Register Company (together with any successor thereto, the "Company") and its shareholders by providing Key Employees of the Company and its Affiliates (as defined below), and certain members of the Company's Board of Directors who are not employees of the Company, with an opportunity to acquire a, or increase their, proprietary interest in the Company. It is intended that the Plan will promote continuity of management and increased incentive and personal interest in the welfare of the Company by those Key Employees who are primarily responsible for shaping and carrying out the long-range plans of the Company and securing the Company's continued growth and financial success. Also, by encouraging stock ownership by directors, the Company seeks to attract and retain on its Board of Directors persons of exceptional competence and to furnish an added incentive for them to continue their association with the Company.

 

2.  Definitions:  As used in the Plan, the following terms shall have the respective meanings set forth below:

 

Affiliate: Any entity that, directly or through one or more intermediaries, is controlled by, controls, or is under common control with, the Company.

 

Award: Any Option, Stock Appreciation Right, Restricted Stock, Restricted Share Unit, or Performance Share or other award granted under the Plan.

 

Award Agreement: Any written agreement, contract or other instrument or document evidencing any Award granted under the Plan.

 

Board:  The Company’s Board of Directors.

 

Cause: The willful repeated or habitual misconduct of a Participant, the embezzlement or theft of corporate funds, conviction of a felony, the breach of any trade secrecy or similar statutory or contractual confidentiality provisions, the direct or indirect competition with the Company's business or other breach of any noncompetition agreement with the Company, and/or "cause" as defined in any employment agreement to which a Participant is a party.

 

Change in Control:  The event which shall be deemed to have occurred if any "person," as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or (ii) a trustee under the John Q. Sherman Testamentary Trust or the William C. Sherman Testamentary Trust or the William C. Sherman Intervivos Trust dated December 29, 1939, becomes the "beneficial owner," as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company's then outstanding securities.

 

Code:  The Internal Revenue Code of 1986, as amended from time to time.

 

 

  

  

  

 

Commission:  The Securities and Exchange Commission.

 

Committee:  A committee of the Board (including any applicable subcommittee thereof) designated by such Board to administer the Plan in whole or in part, consisting of not less than two Non-Employee Directors, each of whom shall qualify as a "non-employee director" within the meaning of Rule 16b-3 and as an "outside director" under Section 162(m)(4)(C) of the Code or any successor provisions thereto.  Unless otherwise directed by the Board, the Committee shall be the Board’s standing Compensation Committee.

 

Exchange Act:  The Securities Exchange Act of 1934, as amended from time to time.

 

Fair Market Value:  With respect to Shares, as of any given date, the reported closing sale prices of Shares on the New York Stock Exchange on that date, or on the most recent trading date on which sales of Shares were reported if none were reported on that date.  With respect to any property other than Shares, and for Shares if they are then no longer publicly traded, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee.

 

Good Reason.  The occurrence of one or more of the following circumstances following a Change in Control without the Participant’s express written consent, which circumstance(s) are not remedied by the Company within 30 days of its receipt of a written notice from the Participant describing the applicable circumstances in detail (which notice must be provided by the Participant within 90 days of the Participant obtaining knowledge of the applicable circumstances): (i) any material change in the Participant’s duties, responsibilities, authority, reporting structure, title, office or status; (ii) a material reduction of the Participant’s base salary or bonus eligibility; (iii) a geographical relocation of the Participant’s principal office location by more than 50 miles; (iv) any material breach by the Company of any material contractual obligation of the Company to the Participant; (v) the Participant’s Permanent and Total Disability; or (vi) the failure by the Company or any successor to the Company to assume or confirm all of the Participant’s Awards outstanding at the time of a Change in Control on a basis which is economically equivalent to the Participant, or to assume or confirm any other material contractual obligations of the Company to the Participant, following a Change in Control.

 

Incentive Stock Option:  An option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code (or any successor provision thereto).

 

Key Employee:  Any officer or other key employee of the Company or of any Affiliate who is responsible for or contributes to the management, growth or profitability of the business of the Company or any Affiliate, as determined by the Committee in its discretion.

 

Non-Employee Director:  Any member of the Company's Board of Directors who is not an employee of the Company or of any Affiliate.

 

Non-Qualified Stock Option:  An option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

 

Option:  An Incentive Stock Option or a Non-Qualified Stock Option.

 

 

  

  

  

 

Participant:  A Key Employee or Non-Employee Director who is granted an Award under the Plan.

 

Performance Goal:  Any one or more of the following performance criteria, either individually, alternatively or in any combination, and subject to such modifications or variations as specified by the Committee, applied to either the Company as a whole or to a business unit or subsidiary entity thereof, either individually, alternatively or in any combination, and measured over a period of time including any portion of a year, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee:  cash flow; cash flow from operations; earnings (including, but not limited to, earnings before interest, taxes, depreciation and amortization); earnings per share, diluted or basic, earnings per share from continuing operations; net assets turnover; inventory turnover; capital expenditures; debt; debt reduction; working capital; return on investment; return on sales; net or gross sales; market share; cost of capital; change in assets; expense reduction levels; productivity; delivery performance; safety record; stock price; return on equity; total stock holder return; return on capital; return on assets or net assets; revenue; income or net income; operating income or net operating income; operating profit or net operating profit; gross margin, operating margin or profit margin; and completion of acquisitions, business expansion, product diversification, new or expanded market penetration and other non-financial operating and management performance objectives.

 

Performance Period:  Any period for which Performance Goal(s) or goals have been established with respect to an Award.

 

Performance Share:  Any Award granted under Section 6(d) of the Plan that will be paid out as a Share upon the achievement of specified Performance Goals (which, in specified circumstances, may be a Restricted Security).

 

Permanent and Total Disability:  Any medically determinable physical or mental impairment rendering an individual unable to engage in any substantial gainful activity, which disability can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

 

Person:  Any individual, corporation, partnership, association, joint-stock company, limited liability company, trust, unincorporated organization or government or political subdivision thereof.

 

Qualifying Termination.  The termination of a Participant’s employment or status as a Non-Employee Director which is initiated at any time within the 24 calendar months after the effective date of a Change in Control (i) by the Company (or its successor) for any reason other than Cause or due to the Participant’s Permanent and Total Disability or (ii) by the Participant for Good Reason.

 

Released Securities:  Shares with respect to which all applicable restrictions have expired, lapsed or been waived.

 

 

  

  

  

 

Restricted Securities:  Awards under which issued and outstanding Shares are held subject to certain restrictions pursuant to the Plan or an Award Agreement.

 

Retained Dividends.  Dividends otherwise payable with respect to Shares subject to an outstanding Award which are to be held by the Company for such purpose for later payment when and if the Award results in the actual issuance of Shares or as otherwise specified herein or in the Award Agreement.

 

Restricted Stock:  Any Share granted under Section 6(c) of the Plan.

 

Restricted Stock Unit.  An Award granted under Section 6(e) of the Plan which provides for the issuance of Shares to a Participant who remains a Key Employee or Independent Director for the period(s) of time specified in the Award Agreement.

 

Rule 16b-3:  Rule 16b-3 as promulgated by the Commission under the Exchange Act, or any successor rule or regulation thereto.

 

Shares:  Shares of Common Stock of the Company, and such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(d) of the Plan.

 

Stock Appreciation Right:  Any right granted under Section 6(b) of the Plan.

 

3.  Administration:  The Plan shall be administered by the Committee; provided, however, that if at any time the Committee shall not be in existence, the functions of the Committee as specified in the Plan shall be exercised by the Board and all references to the Committee herein shall include the Board. The Committee may delegate specific aspects of its administrative authority hereunder to one or more subcommittees, provided the members thereof meet all legal or regulatory qualifications applicable to their respective subcommittees’ delegated responsibilities, and all references herein to the Committee shall include any such subcommittees.  To the extent permitted by applicable law, the Board may delegate to another committee of the Board or to one or more senior officers of the Company any or all of the authority and responsibility of the Committee with respect to the Plan, other than with respect to Participants who are subject to Section 16 of the Exchange Act or Section 162(m) of the Code. To the extent that the Board has delegated to such other committee or one or more officers the authority and responsibility of the Committee, all references to the Committee herein shall include such other committee or one or more officers.

 

Subject to the terms of the Plan and applicable laws and without limitation by reason of enumeration, the Committee shall have full discretionary power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards granted to Participants; (iv) determine the terms and conditions of any Award granted to a Participant; (v) determine whether, to what extent and under what circumstances Awards granted to Participants may be settled or exercised in cash, Shares, other securities, other Awards or other property, and the method or methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (vi) determine whether, to what extent and under what circumstances cash, Shares, other Awards and other amounts payable with respect to an Award granted to Participants under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan (including, without limitation, any Award Agreement); (viii) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time or from time to time, and shall be final, conclusive and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder and any employee of the Company or of any Affiliate.

 

 

  

  

  

 

 

4.  Shares Available for Award:

 

   (a)  Total Shares Available. The total number of Shares reserved and available for distribution pursuant to Awards granted under the Plan shall be 5,780,000 provided, however, that any Shares issued to Participants pursuant to Awards in any form other than Options or Stock Appreciation Rights shall be counted against such 5,780,000 Share limit as two Shares for every one Share actually issued pursuant to such Award other than a Option or Stock Appreciation Right.

 

   (b)      Accounting for Awards. The number of Shares covered by an Award under the Plan, or to which such Award relates, shall be counted on the date of grant of such Award against the number of Shares available for granting Awards under the Plan.  If, after the effective date of the Plan, any Shares covered by an Award granted under the Plan, or to which any Award relates, are forfeited or if an option otherwise terminates, expires or is cancelled prior to the delivery of all of the Shares or of other consideration issuable or payable pursuant to such Award, then the number of Shares counted against the number of Shares available under the Plan in connection with the grant of such Award, to the extent of any such forfeiture, termination, expiration or cancellation, shall again be available for granting of additional Awards under the Plan.  Any Shares otherwise issuable to a Participant upon the exercise of an Award which the Participant elects to have withheld or not issued by the Company in lieu of the Participant’s payment of any consideration such Participant is required to pay shall be deemed to have been issued for purposes of the Plan and therefore no longer available for future grant under the Plan. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares and/or treasury Shares as designated by the Committee.

 

   (c)      Individual Limitation. The maximum number of Shares with respect to which Awards may be granted under this Plan to any single Participant in any fiscal year of the Company shall be 1,500,000 in the case of Options and Stock Appreciation Rights and 750,000 in the case of Restricted Stock, Performance Shares, and Restricted Share Units.

 

   (d)  Adjustments. In the event the Company effects a stock dividend or other distribution in the form of Shares or other Company securities, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event that affects all of the Company’s outstanding Common Stock, then the Committee shall proportionately adjust any or all of (i) the number and type of Shares subject to the Plan and which thereafter may be made the subject of Awards under the Plan; (ii) the number and type of Shares subject to outstanding Awards; and (iii) the grant, purchase or exercise price with respect to any Award; provided, further, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such authority would cause the Plan to violate Section 422(b) of the Code (or any successor provision thereto); and provided further that the number of Shares subject to any Award payable or denominated in Shares shall always be a whole number.

 

 

  

  

  

 

 

5.  Eligibility:  Any Key Employee, including any executive officer or employee-director of the Company or of any Affiliate, and any Non-Employee Director, shall be eligible to be designated a Participant.

 

6.  Awards:

 

       (a)     Option Awards. The Committee is hereby authorized to grant Options to Key Employees and Non-Employee Directors upon the terms and conditions set forth below and such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine in its discretion; provided, however, that Non-Employee Directors may not be granted Incentive Stock Options.

 

(i)  Exercise Price. The exercise price per share of an Option granted pursuant to this Section 6(a) shall be determined by the Committee; provided, however, that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant.  Upon exercise of an Option, the exercise price shall be payable in cash or, unless otherwise provided by the Committee in the Award Agreement, by the surrender of Shares previously owned by the Participant or the withholding of Shares to be issued upon the exercise of the Option, or in any combination thereof, or in such other form as the Committee may authorize from time to time. All such Shares so surrendered or withheld shall be valued at their Fair Market Value on the date of surrender or withholding.

 

(ii)  Option Term.  The term of each Option shall be fixed by the Committee; provided, however, that in no event shall the term of any Option exceed a period of ten years from the date of its grant.

 

(iii)    Exercisability.  An Option shall become exercisable in such manner and within such period or periods and in such installments or otherwise as shall be determined by the Committee; provided, however, that regardless of any other exercise or vesting period specified in any Award Agreement with respect to any Option, each Option granted under the Plan to a Participant shall become immediately exercisable in full for a period of time equal to the lesser of one year or the remainder of the Option term automatically upon the occurrence of a Qualifying Termination of the Participant.

 

(iv)    Termination of Options.  An Option will terminate as follows:

 

A.  Upon exercise or expiration by its term.

 

 

  

  

  

 

B.  Upon termination of a Participant’s employment or status as a Non-Employee Director for Cause, all Options then held by such Participant shall immediately terminate.  Except as provided in Subsections 6(a)(iv) D, E and F, upon termination of employment or status as a Non-Employee Director for reasons other than Cause, the then-exercisable portion of any Option will terminate on the 90th day after the date of termination, and the portion of any Option not then exercisable will terminate on the date of termination of employment or status as a Non-Employee Director.  For purposes of the Plan, a leave of absence approved by the Company shall not be deemed to be a termination of employment.

 

C.  Subject to any limitation imposed by Section 422 of the Code, all Incentive Stock Options which have been outstanding for at least 12 months will vest in their entirety and be exercisable for the full number of shares called for by the Option upon termination of employment if such termination is due to retirement in accordance with the Company's normal retirement policy after age 62, death, or upon the occurrence of a Permanent and Total Disability.

 

D.      Unless otherwise provided in the applicable Award Agreement and subject to Subsection 6(a)(iv)E, all Nonqualified Stock Options shall continue to vest and be exercisable after termination of employment in accordance with the terms upon which they were originally granted if such termination of employment is due to retirement (including retirement which also constitutes a Qualifying Termination) in accordance with the Company's normal retirement policy after age 62.

 

E.        Unless otherwise provided in the applicable Award Agreement, if a Participant holding an Option dies or becomes subject to a Permanent and Total Disability while employed by the Company or within 90 days after termination of employment, such Option may be exercised, to the extent exercisable as of the date of the occurrence of the event which triggers the operation of this paragraph, at any time within one year after the date of such Participant’s termination of employment, by the estate or guardian of such Participant or by those persons to whom the Option may have been transferred by will or by the laws of descent and distribution.

 

F.       If a Participant holding an Option violates any terms of any written employment or noncompetition agreement between the Company and the Participant or the Participant is otherwise terminated for Cause, all existing Options held by such Participant will terminate.  In addition, if at the time of any such violation or termination the Participant has exercised Options but has not yet received certificates for the Shares to be issued, the Company may void the Option and its exercise.  Any such action by the Company shall be in addition to any other rights or remedies available to the Company in such circumstances.

 

(v)  Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code (or any successor provision thereto) and any regulations promulgated thereunder. Notwithstanding any provision in the Plan to the contrary, no Incentive Stock Option may be granted hereunder after the tenth anniversary of the adoption of the Plan by the Board.

 

 

  

  

  

 

(b)    Stock Appreciation Rights.

 

(i)  Issuance.  The Committee is hereby authorized to grant Stock Appreciation Rights to Key Employees and Non-Employee Directors. Subject to the terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of the Fair Market Value of one Share on the date of exercise over the grant price of the Stock Appreciation Right as specified by the Committee, which shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right.

 

(ii)  Terms and Conditions.  Subject to the terms of the Plan, the grant price, term, methods of exercise, methods of settlement (including whether the Participant will be paid in cash, Shares, other securities, other Awards, or other property or any combination thereof), and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee in its discretion; provided, however, that in no event shall the term of any Stock Appreciation Right exceed a period of ten years from the date of its grant, and provided further that regardless of any other exercise or vesting period specified in any Award Agreement with respect to any Stock Appreciation Right, each Stock Appreciation Right granted under the Plan to a Participant shall become immediately exercisable in full for a period of time equal to the lesser of one year or the remainder of the Stock Appreciation Right term automatically upon the occurrence of a Qualifying Termination of the Participant.  The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate.

 

(iii)  Continued Vesting after Termination.  Unless otherwise provided in the Applicable Award Agreement:

 

A.  Subject to Subsection 6(b)(iii)B, each Stock Appreciation Right will continue to vest and be exercisable after termination of employment in accordance with the terms upon which it was originally granted if such termination of employment is due to retirement (including retirement which also constitutes a Qualifying Termination) in accordance with the Company’s normal retirement policy after age 62.

 

B.  If a Participant holding a Stock Appreciation Right dies or becomes subject to a Permanent and Total Disability while employed by the Company or within 90 days after termination of employment for reasons other than Cause, such Stock Appreciation Right may be exercised, to the extent exercisable as of the date of such Participant’s death or the date such Participant first becomes subject to a Permanent and Total Disability, at any time within one year after such date, by the estate or guardian of such Participant or by the those persons to whom the Option may have been transferred by will or by the laws of descent and distribution.

 

C.  If a Participant holding a Stock Appreciation Right violates any terms of any written employment or noncompetition agreement between the Company and the Participant, or the Participant is otherwise terminated for Cause, all existing Stock Appreciation Rights held by such Participant will terminate.  In addition, if at the time of any such violation or termination the Participant has given a notice of exercise of the Stock Appreciation Right but has not yet received payment therefor, the Company may void the Stock Appreciation Right and its exercise.  Any such action by the Company shall be in addition to any other rights or remedies available to the Company in such circumstances.

 

  

  

  

 

(c)  Restricted Stock Awards.

 

(i)      Issuance. The Committee is hereby authorized to grant Awards of Restricted Stock to Key Employees and Non-Employee Directors.

 

(ii)  Restrictions.  Shares of Restricted Stock granted to Participants shall be subject to such restrictions as the Committee may impose in its discretion (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate in its discretion; provided, however, that in the event of the Qualifying Termination of a Participant (A) in the case of Shares of Restricted Stock which are subject to time vesting or other restriction time period specified in the applicable Award Agreement, each Share of Restricted Stock granted under such Award Agreement to such Participant immediately shall become a Released Security and (B) in the case of Shares of Restricted Stock which are subject to a Performance Period, a prorated number of Shares of Restricted Stock shall immediately become Released Securities, based upon the percentage of the maximum performance goals contained in the applicable Award Agreement represented by the Company’s and the Participant’s actual performance through the date of the Change in Control which preceded the Qualifying Termination.

 

(iii)     Registration.  Any Restricted Stock granted under the Plan to a Participant may be evidenced in such manner as the Committee may deem appropriate in its discretion, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Shares of Restricted Stock granted under the Plan to a Participant, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend (as determined by the Committee) referring to the terms, conditions and restrictions applicable to such Restricted Stock.

 

(iv)     Dividends.  All dividends declared by the Company which would otherwise be payable with respect to outstanding Restricted Stock shall be held by the Company as Retained Dividends which shall be paid to the Participant when and as the Restricted Stock becomes Released Securities, or shall be forfeited when and as Restricted Stock is forfeited.

 

(v)     Payment Of Restricted Stock. At the end of the applicable restriction period relating to Restricted Stock granted to a Participant, one or more stock certificates for the appropriate number of Shares of Released Securities, free of restrictions imposed under the Plan and the Award Agreement plus an amount of cash equal to all Retained Dividends associated with such Released Securities, shall be delivered to the Participant or, if the Participant received stock certificates representing the Restricted Stock at the time of grant, the legends placed on such certificates shall be removed.

 

(vi)    Forfeiture.  Except as otherwise determined by the Committee in its discretion, upon termination of employment or status as a Non-Employee Director of a Participant (as determined under criteria established by the Committee in its discretion) for any reason during the applicable restriction period, all Shares of Restricted Stock still subject to restriction under the Plan or an Award Agreement, and all Retained Dividends associated with such Shares, shall be forfeited by the Participant; provided, however, that the Committee may, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock held by a Participant.

 

  

  

  

 

(d)      Performance Share Awards.

 

(i)       Issuance. The Committee is hereby authorized to grant Awards of Performance Shares to Key Employees and Non-Employee Directors.

 

(ii)      Performance Goals and Other Terms.  The Committee shall determine in its discretion the Performance Period, the Performance Goal(s) to be achieved during any Performance Period, the proportion of payments, if any, to be made for performance between the minimum and full performance levels, the restrictions applicable to Shares constituting Restricted Securities to be received upon payment of Performance Shares (if Performance Shares are to be delivered in such manner), and any other terms, conditions and rights relating to a grant of Performance Shares the Committee deems appropriate; provided, however, that regardless of any other requirements or restrictions specified in an Award Agreement with respect to Performance Shares, upon the occurrence of a Qualifying Termination of a Participant each Performance Share granted under the Plan to such Participant shall become immediately payable to the extent provided in the last sentence of this Section 6(d)(ii). In the case of a Performance Share Award held by a Participant who is the subject of a Qualifying Termination, the number of Performance Shares to be issued to the Participant shall be proportionately adjusted from the maximum potential number available under the applicable Award based upon the Company’s actual performance through the date of the Change in Control which preceded the Qualifying Termination as a percentage of the relevant maximum performance goals set forth in the applicable Award Agreement.

 

(iii)     Rights and Benefits During the Performance Period.  The Committee may provide that during the Performance Period, an amount of money equal to all dividends declared by the Company during the Performance Period which would be payable with respect to the Performance Shares if the Performance Shares would then have been issued and outstanding, shall be retained and held by the Company as Retained Dividends which shall be paid to the Participant if and when such Shares are issued by the Company and delivered to the Participant.  Participants shall have no voting rights with respect to Performance Shares held by them.

 

(iv)    Adjustments with Respect to Performance Shares.  With respect to Awards that are intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code and to the extent consistent with Section 162(m) and the regulations promulgated thereunder, the Committee shall, unless otherwise determined by the Committee at the time the Performance Goals are established, adjust the Performance Goals to exclude the adverse affect of any of the following events that occur during a Performance Period: the impairment of tangible or intangible assets; litigation or claim judgments or settlements; changes in tax law, accounting principles or other such laws or provisions affecting reported results; business combinations, reorganizations and/or restructuring programs that have been approved by the Board; reductions in force and early retirement incentives; and any extraordinary, unusual, infrequent or non-recurring items separately identified in the financial statements and/or notes thereto in accordance with generally accepted accounting principles. Notwithstanding the foregoing and with respect to Awards that are not intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, the Committee may, in its discretion, adjust Performance Goals as it considers necessary or appropriate.

 

 

  

  

  

 

(v)     Delivery of Performance Shares. As soon as is reasonably practicable following the end of the applicable Performance Period (but in no event later than two months and ten days following the end of the applicable Performance Period), one or more certificates representing the number of Shares equal to the number of Performance Shares payable shall be registered in the name of and delivered to the Participant; provided, however, that any Shares of Restricted Securities payable in connection with Performance Shares shall, pending the expiration, lapse, or waiver of the applicable restrictions, be evidenced in the manner set forth in Section 6(c)(iii) hereof.

 

(e)  Restricted Share Units.

 

(i)      Issuance.  The Committee is hereby authorized to grant Awards of Restricted Share Units to Key Employees and Non-Employee Directors.

 

(ii)      Delivery Period(s) and Other Terms.  The Committee shall determine in its discretion the period(s) of time during which the Participant must remain either a Key Employee or an Non-Employee Director in order to become entitled to the delivery of Shares with respect to the Restricted Share Unit, the restrictions applicable to Shares of Restricted Securities upon the attainment of such periods (if Restricted Stock Units are to be satisfied in such manner), and any other terms, conditions and rights relating to a grant of Restricted Share Units the Committee deems appropriate.

 

(iii)     Rights and Benefits Prior to Delivery.  The Committee may provide that during the period after the date of an Award of Restricted Share Unit is made and prior to the delivery of Shares with respect to such Award, an amount of money equal to all dividends declared by the Company during such period which would be payable with respect to the Shares underlying such Award where such Shares then outstanding shall be held by the Company as Retained Dividends which shall be paid to the Participant if and when such Shares are issued by the Company and delivered to the Participant.  Participants shall have no voting rights with respect to Shares underlying Restricted Share Units until such time as such Shares are issued and delivered.

 

(iv)    Delivery of Shares Underlying Restricted Share Units.  Within 30 days following the end of a period described in Section 6(e)(ii) above, one or more certificates representing the Shares issuable under the applicable Award Agreement shall be registered in the name of and delivered to the Participant; provided, however, that any Shares issued as Restricted Securities shall, pending the expiration, lapse or waiver of the applicable restrictions, be evidenced in the manner determined by the Committee.

 

  

  

  

 

(f)   Other Awards.

 

(i)  Other Stock-Based Awards. Other awards, valued in whole or in part by reference to, or otherwise based on, Shares may be granted either alone or in addition to or in conjunction with other Awards for such consideration, if any, and in such amounts and having such terms and conditions as the Committee may determine.

 

(ii)    Other Benefits. The Committee shall have the right to provide types of benefits under the Plan in addition to those specifically listed if the Committee believes that such benefits would further the purposes for which the Plan was established.

 

(g)  General.

 

(i)  No Consideration for Awards.  Awards shall be granted to Participants for no cash consideration unless otherwise determined by the Committee.

 

(ii)     Award Agreements. Each Award granted under the Plan shall be evidenced by an Award Agreement in such form or forms (consistent with the terms of the Plan) as shall have been approved by the Committee.  The provisions of the various Award Agreements entered into under the Plan need not be identical.

 

(iii)    Awards May be Granted Separately or Together. Awards to Participants under the Plan may be granted either alone or in addition to, in tandem with, or in substitution for, any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to, or in tandem with, other Awards, or in addition to, or in tandem with, awards granted under any other plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

 

(iv)    Forms of Payment Under Awards.  Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award to a Participant may be made in such form or forms as the Committee shall determine, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee in its discretion. Such rules and procedures may include, without limitation, provision for the payment or crediting of interest on installment or deferred payments.

 

(v)      Limits on Transfer of Awards. No Award (other than Released Securities), and no right under any such Award, shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or by the laws of descent and distribution (or, in the case of an Award of Restricted Securities, to the Company); provided, however, that a Participant at the discretion of the Committee may be entitled, in the manner established by the Committee, (A) to designate a beneficiary or beneficiaries to exercise his or her rights, and to receive any property distributable, with respect to any Award upon the death of the Participant or (B) to transfer any Award. No Award (other than Released Securities), and no right under any such Award, may be pledged, alienated, attached or otherwise, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.

 

 

  

  

  

 

(vi)     Term of Awards.  Except as otherwise provided in the Plan, the term of each Award shall be for such period as may be determined by the Committee.

 

(vii)    Share Certificates; Representation.  In addition to any other restrictions imposed pursuant to Section 6 hereof, all certificates for Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Commission, the New York Stock Exchange or any stock exchange or other market upon which such Shares are then listed or traded, and any applicable federal or state securities laws, rules and regulations and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. The Committee may require each Participant or other Person who acquires Shares under the Plan by means of an Award originally made to a Participant to represent to the Company in writing that such Participant or other Person is acquiring the Shares without a view to the distribution thereof.

 

(viii)  Requirement of Notification of Election Under Section 83(b) of the Code.  If a Participant, in connection with the acquisition of Shares under the Plan, is permitted to make the election permitted under Section 83(b) of the Code (i.e., an election to include in gross income in the year of transfer the amount specified in Code Section 83(b) notwithstanding the continuing transfer restrictions) and the Participant makes such an election, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under the authority of Code Section 83(b).

 

(ix)    Requirement of Notification Upon Disqualifying Disposition Under Section 421(b) of the Code.  If any Participant shall make any disposition of Shares issued pursuant to the exercise of Incentive Stock Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten days thereof.

 

(x)  Termination for Cause.  In the event of the termination of the employment, directorship (as applicable) of a Participant that is for Cause, any Award held by such Participant, to the extent not theretofore exercised, shall forthwith terminate.  If within one year of a Participant's exercise, vesting or realization of income with respect to any Award, such Participant is terminated for Cause (or if still employed by the Company or serving as a Non-Employee Director, engages in any activity that would constitute a basis for a termination for Cause or within one year of a termination for reasons other than Cause, is determined to have engaged in activities as an employee or director that would have constituted Cause), then any gain realized by the Participant from the realization event shall be paid by the Participant to the Company upon notice from the Company.  Such gain shall be determined on a gross basis, without reduction from any taxes incurred, as of the date of the realization event, without regard to any subsequent change in the Fair Market Value of a Share.  The Company shall have the right to offset such gain against any amounts otherwise owed to the Participant by the Company (whether as wages, vacation pay, or pursuant to any benefit plan or other compensatory arrangement).

 

 

  

  

  

 

(xi)    Change of Status.  Awards shall not be affected by any change of employment or directorship (as applicable) so long as the Participant continues to be an employee or Non-Employee Director (as applicable) of the Company or an Affiliate.  The Award Agreement may contain such provisions as the Committee shall approve with reference to the effect of approved leaves of absence.

 

(xii)   Waiver of Conditions.  The Committee may in whole or in part, waive any conditions or other restrictions with respect to any award.

 

(xiii)  Award Repricing.  Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards, or replacement Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights, without shareholder approval.

 

7.      Amendment and Termination of the Plan; Correction of Defects and Omissions

 

    (a)  Amendments To And Termination Of The Plan. The Board may at any time amend, alter, suspend, discontinue or terminate the Plan; provided, however, that shareholder approval of any amendment of the Plan shall also be obtained if otherwise required by: (i) the Code or any rules promulgated thereunder (in order to allow for Incentive Stock Options to be granted under the Plan); (ii) the quotation or listing requirements of the New York Stock Exchange or any securities exchange or market on which the Shares are then traded or listed (in order to maintain the quotation or the listing of the Shares thereon); (iii) the amendment proposes to increase the number of shares available under the Plan; or (iv) would eliminate the requirement of obtaining shareholder approval of Award repricings contained in Section 6(g)(xiii). To the extent permitted by applicable law and subject to such shareholder approval as may be required above, the Committee may also amend the Plan, provided that any such amendments shall be reported to the Board. Neither termination nor amendment of the Plan shall detrimentally affect or change the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards shall continue in force and effect after termination of the Plan except as they may lapse or be terminated by their own terms and conditions.

 

    (b)     Correction of Defects, Omissions and Inconsistencies. The Committee may in its discretion correct any defect, supply any omission or reconcile any inconsistency in any Award or Award Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect.

 

 

  

  

  

 

8.      General Provisions:

 

        (a)     No Rights To Awards. No Key Employee, Non-Employee Director, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Key Employees, Non-Employee Directors, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each Participant.

 

    (b)     Withholding. No later than the date as of which an amount first becomes includable in the gross income of a Participant for federal income tax purposes with respect to any Award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations arising with respect to Awards to Participants under the Plan may be settled with Shares previously owned by the Participant.  The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and any Affiliate shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. The Committee may establish such procedures as it deems appropriate for the settling of withholding obligations with Shares.

 

    (c)      No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

 

    (d)  Rights and Status of Recipients of Awards. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of or as a Non-Employee Director of the Company or any Affiliate. Further, the Company or any Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. Except for rights accorded under the Plan and under any applicable Award Agreement, Participants shall have no rights as holders of Shares as a result of the granting of Awards hereunder.  Notwithstanding any other provisions of this Plan, in no event will the continuation of the term of any Award beyond the date of termination of a Participant's employment or status as a Non-Employee Director allow the Participant, or his or her beneficiaries or heirs, to accrue additional rights under the Plan, or to acquire more Shares under an Award, than could have been accrued or acquired on the day of termination, except to the extent expressly permitted under this Plan.

 

    (e)      Unfunded Status of The Plan. Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company or the Committee and any Participant or other Person. To the extent any Person holds any right by virtue of a grant under the Plan, such right (unless otherwise determined by the Committee) shall be no greater than the right of an unsecured general creditor of the Company.

 

    (f)      Dodd-Frank Compliance.  The Company is required under applicable provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and regulations of the Securities and Exchange Commission promulgated thereunder to adopt and maintain a policy, applicable in the event of an accounting restatement by the Company due to the Company’s material noncompliance with any financial reporting requirement under applicable securities laws, requiring the Company to recover amounts paid to its executive officers as incentive-based compensation that exceed the compensation they would have received from the Company if such accounting restatement had not occurred.  Participants who are executive officers of the Company shall be required, as a condition to the receipt of any Awards under this Plan, to acknowledge the applicability of the Company’s Dodd-Frank policy to them and to agree to surrender to the Company any amounts such policy may require the Company to recover from them in the event of a covered accounting restatement.

 

 

  

  

  

 

    (g)     Governing Law.  The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the internal laws of the State of Ohio and applicable federal law.

 

    (h)     Severability. If any provision of the Plan or any Award Agreement or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan, any Award Agreement or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan, any Award Agreement or the Award, such provision shall be stricken as to such jurisdiction, Person or Award, and the remainder of the Plan, any such Award Agreement and any such Award shall remain in full force and effect.

 

    (i)  No Fractional Shares. No fractional Shares or other securities shall be issued or delivered pursuant to the Plan, any Award Agreement or any Award, and the Committee shall determine (except as otherwise provided in the Plan) whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights thereto shall be cancelled, terminated or otherwise eliminated.

 

    (j)  Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

9.      Effective Date of the Plan:  The Plan shall be effective as of __________, 2011, the date it was first adopted by the Board, subject, however, to the approval thereof by the Company’s shareholders within 12 months following the date of its adoption by the Board.

 

10.  Term of the Plan:  No Award shall be granted under the Plan following the tenth anniversary of the effective date of the Plan. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date and, to the extent set forth in the Plan, the authority of the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award, or to waive any conditions or restrictions with respect to any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date.

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