Document:

Exhibit 10.11

 

AMENDED AND RESTATED
 EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into May 10, 2011, by and between  Granite City Food & Brewery Ltd., a corporation duly organized and existing under the laws of the State of Minnesota, with a place of business at 5402 Parkdale Drive, Suite 101, Minneapolis, Minnesota 55416 (hereinafter referred to as the “Company”), and Steven J. Wagenheim, a resident of Hennepin County, Minnesota (hereinafter referred to as “Executive”).  This Agreement shall become effective upon the Closing (as defined in the Stock Purchase Agreement by and between the Company and Concept Development Partners LLC, dated February 8, 2011, as amended).  If the Closing shall not have occurred on or before December 31, 2011, this Agreement shall be void and of no effect.

 

ARTICLE 1

 

EMPLOYMENT

 

1.01                           Executive has been employed by the Company pursuant to a written contract of employment dated June 15, 2005, as amended by Amendment No. 1 thereto dated December 30, 2008, Amendment No. 2 thereto dated October 5, 2009 and Amendment No. 3 thereto dated June 17, 2010 (collectively, the “2005 Agreement”), which agreement ended on December 31, 2007, but has been extended since that date.  The Company hereby agrees to further extend the employment of Executive as President and Founder of the Company, and Executive hereby accepts and agrees to such employment on the terms and conditions of this Agreement.  This Agreement supersedes the 2005 Agreement.

 

1.02                           Executive shall generally have the authority and responsibilities of president of the Company, as are set forth in Exhibit A, and shall also render such additional services and duties as may be reasonably requested of him from time to time by the Company’s Board of Directors (the “Board”) and the Company’s chief executive officer.

 

1.03                           Executive shall report to the chief executive officer of the Company and shall generally be subject to direction, orders and advice of the chief executive officer and the Board.  The Company retains the discretion to transfer or reassign Executive to another executive position or to other executive duties, and any such transfer or reassignment shall not affect the enforcement of this Agreement.

 

ARTICLE 2

 

BEST EFFORTS OF EXECUTIVE

 

2.01                           Executive agrees that he will at all times faithfully, industriously, and to the best of his ability, experience, and talents, perform all of the duties that may be required of and from him pursuant to the express and implicit terms of this Agreement, to the reasonable satisfaction of the Company.

 

 

ARTICLE 3

 

TERM OF EMPLOYMENT

 

3.01                           Executive’s employment pursuant to this Agreement shall continue for a term ending on December 31, 2012 (the “Termination Date”).  The term of the Executive’s employment shall automatically be extended for successive one year periods unless the Company or Executive elects not to extend employment by giving written notice to the other not less than sixty (60) days prior to the Termination Date or the end of any extension periods.  If Executive’s employment continues beyond the Termination Date after either party has given notice not to extend for an additional year, such employment shall continue on an at-will basis under the remaining terms and conditions of this Agreement, as amended hereby, and as the same may be amended from time to time with the consent of the Company and Executive, except that Section 4.02 shall be inapplicable and incentive compensation payable to Executive, if any, shall be only as fixed by the Company’s Compensation Committee (“Committee”).  Executive’s base compensation under this Agreement shall continue at Executive’s current monthly base compensation rate for each month worked and prorated for any partial month during which employment continues.

 

ARTICLE 4

 

COMPENSATION AND BENEFITS

 

4.01                           During the term, Executive shall be paid a base annual salary at the rate of Three Hundred Thousand ($300,000), payable monthly in accordance with the Company’s current, established pay periods, reduced by all deductions and withholdings required by law and as otherwise specified by Executive.  The Company shall cause the Committee to review Executive’s performance and base salary level each year during the term, commencing 2012.  Executive’s salary may be increased (but not decreased), in the sole discretion of the Committee.  In the event Executive’s employment shall, for any reason, terminate during the term, Executive’s final monthly base salary payment shall be made on a pro-rated basis as of the last day of the month in which such employment terminated.

 

4.02                           Executive shall be entitled to annual incentive bonus payments (“Annual Incentive Compensation”) in the amounts and based upon achievement of the Company’s annual financial performance goals as set forth in Exhibit B to this Agreement.  The amount, if any, of Annual Incentive Compensation shall be computed for each year during the term of this Agreement in accordance with the following procedures:

 

(a)                                  At the close of each fiscal quarter, the Company shall determine whether the performance goals set forth in Exhibit B have been achieved as of the end of each calendar quarter (“Budget Year to Date”).

 

(b)                                 A Tentative Incentive Compensation Payment (“TICP”) shall be computed at the end of each calendar quarter based on the Budget Year to Date.

 

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(c)                                  The amount computed for the quarter shall be reduced by one-half (the “Retained Amount”), and reduced further by any amounts previously paid to the Executive during the calendar year.  The TICP shall not be reduced below zero.  The TICP so computed shall be paid to the Executive within sixty (60) days of the end of the calendar quarter.  The Retained Amount may become payable as described below.

 

(d)                                 Upon receipt by the Company of its audited financial statements, the Annual Incentive Compensation due Executive, if any, shall be computed based on Exhibit B and based on the Budget Year to Date.  This amount shall be reduced by the TICPs made to Executive.  The Annual Incentive Compensation will be paid within thirty (30) days of its determination as described above and shall be payable from the Retained Amount, plus any additional amount paid by the Company.  In the event that the Company determines that the TICPs made to the Executive exceeds the Annual Incentive Compensation, the Company shall notify Executive of the amount, if any, of such overpayment.  The Executive shall have thirty (30) days to repay the Company.

 

4.03                           Executive shall be eligible to receive such fringe benefits as are, and may be, made available to other executive employees of the Company from time to time in the sole discretion of the Board, but only to the extent Executive meets the eligibility requirements therefor.  The Company is not obligated to provide or continue any benefits to its employees and may, without any prior notice, discontinue any benefit now provided or as may be provided in the future, within the sole discretion of the Board.

 

4.04                           Executive agrees that any and all bonuses or equity compensation awards paid, awarded or vested after September 21, 2009, shall be subject to the Board of Director’s Policy on the Recoupment of Bonuses and Incentive or Equity Based Compensation Related to Certain Financial Restatements dated September 21, 2009, and that such policy is hereby deemed to be incorporated by reference into this Agreement.  Executive further agrees that Company may, to the extent permitted by applicable law, require the Executive to reimburse the Company for any and all bonuses or equity compensation awards, the severance payments provided for under Article 7 of this Agreement, and base salary payments provided for under Section 6.05 of this Agreement that are paid, awarded or vested after September 21, 2009, in the event of a material breach by Executive of his obligations under Article 8 or Article 9 of this Agreement.  In the event Executive fails to make prompt reimbursement of any such bonuses or equity compensation, severance payments or base salary payments previously paid, awarded or vested, the Company may, to the extent permitted by applicable law, deduct the amount required to be reimbursed from Executive’s compensation otherwise due under this Agreement.  The obligations contained in this Section 4.04 shall survive the termination of this Agreement indefinitely.

 

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ARTICLE 5

 

VACATION AND LEAVE OF ABSENCE

 

5.01                           Executive shall be entitled to three weeks of paid vacation per year, in addition to the Company’s normal holidays.  Vacation time will be scheduled taking into account the Executive’s duties and obligations at the Company.  Sick leave and all other leaves of absence will be in accordance with the Company’s stated personnel policies.

 

ARTICLE 6

 

TERMINATION

 

6.01                           The Company may, subject to applicable law, terminate Executive’s employment by giving Executive two (2) months notice if Executive, due to sickness or injury, is prevented from carrying out his essential job functions for a period of six (6) months or longer.  In the event of such termination, Executive shall receive only that compensation earned through the date of termination; provided, however, that Executive shall be entitled to all or a portion of any bonus due Executive pursuant to any bonus plan or arrangement established prior to termination, to the extent earned or performed through the date of termination based upon the requirements or criteria of such plan or arrangement, as the Board shall in good faith determine.

 

6.02                           Executive’s employment will be deemed terminated upon the death of Executive.  In the event of such termination, Executive shall receive compensation earned through the date of termination; provided, however, that Executive shall be entitled to all or a portion of any bonus due Executive pursuant to any bonus plan or arrangement established prior to termination, to the extent earned or performed based upon the requirements or criteria of such plan or arrangement, as the Board shall in good faith determine.

 

6.03                           Any other provision of this Agreement notwithstanding, the Company may terminate Executive’s employment upon written notice if the termination is based on any of the following events that constitute Cause:

 

(a)                                  Any commission or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct by Executive that has or can reasonably be expected to have a detrimental effect on the Company; or

 

(b)                                 Any fraud, misappropriations or embezzlement by Executive or intentional material damage to the property or business of the Company by Executive; or

 

(c)                                  Executive’s failure to perform his duties and responsibilities in accordance with the provisions of this Agreement, or Executive’s violation of specific written directions of the Board or the Company’s chief executive officer.

 

In the event of such termination, and notwithstanding any contrary provision otherwise stated, Executive shall receive only his base salary earned through the date of termination.

 

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6.04                           The employment of Executive shall in no event be considered to have been terminated for Cause if the termination of his employment took place:

 

(a)                                  as a result of an act or omission which occurred more than 360 days prior to Executive having been given notice of the termination of his employment for such act or omission, unless the commission of such act or such omission could not at the time of such commission or omission have been known to a member of the Board (other than Executive, if he is then a member of the Board), in which case there shall not be termination for Cause if notice of termination took place more than 360 days from the date that the commission of such act or such omission was or could reasonably have been so known; or

 

(b)                                 as a result of a continuing course of action which commenced and was or reasonably could have been known to a member of the Board (other than Executive) more than 360 days prior to notice having been given to Executive of the termination of his employment.

 

6.05                        In the event the employment of Executive is terminated prior to the Termination Date by the Company without Cause (and other than as outlined in Sections 6.01 and 6.02) or by Executive with Good Reason as defined in Section 7.03, the Company will pay Executive the remainder of Executive’s base salary due through the Termination Date.  Such payments will be made on a monthly basis commencing with the first month following Executive’s termination.  Such payments shall be in addition to any payment which shall be due Executive pursuant to Section 7.01 as amended; shall not be deemed to be “cash severance-type benefits” under Section 7.01; and shall not reduce amounts to which Executive is entitled upon a termination under Article 7.  Notwithstanding the above, if Executive terminates employment due to Section 7.03(d), payment shall be delayed for six (6) months and the delayed payments will be paid in a lump sum without interest the first month following such six month delay.

 

ARTICLE 7

 

SEVERANCE; CHANGE IN CONTROL

 

7.01                           The Company, its successors or assigns, will pay Executive as severance pay a lump sum (the “Severance Payment”) amount equal to twelve (12) months of Executive’s monthly base salary for full-time employment at the time of Executive’s termination:

 

(a)                                  if (i) there has been a Change in Control of the Company (as defined in Section 7.04), and (ii) Executive is an active and full-time employee at the time of the Change in Control, and (iii) within twelve (12) months following the date of the Change in Control, Executive’s employment is involuntarily terminated for any reason (including Good Reason (as definition Section 7.03)), other than for Cause or death or disability.  If prior to a Change in Control (a) Executive’s employment is involuntarily terminated by the Company without cause or (b) Executive terminates his employment for Good Reason, and such termination for Good Reason (x) occurred at the request of a person who indicated an intention, or taken steps reasonably calculated, to effect a Change in Control or (y) otherwise

 

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occurred in connection with, or in anticipation of, a Change in Control which actually occurs, then the termination of Executive’s employment shall be deemed to have occurred immediately following a Change in Control; or

 

(b)                                 if the employment of Executive is terminated by the Company without Cause at any time, or Executive terminates his employment for “Good Reason” at any time.  For the purposes of this Section 7.01(b) such termination may occur before, on, or after the Termination Date and “Good Reason” shall be as defined in Section 7.03, except that no “Change in Control” need occur.

 

(c)                                  if (i) a Change in Control (as defined in Section 7.04) occurred prior to Executive commencing his employment with the Company, and (ii) at the time of the Change in Control Executive had accepted employment with the Company as indicated by his execution of this Agreement and as a result he was no longer employed by his previous employer, and (iii) the Company decided to not commence Executive’s employment as a result of the Change in Control.

 

Nothing in this Section 7.01 shall limit the authority of the Committee or Board to terminate Executive’s employment in accordance with Section 6.03.  Payment of the Severance Payment pursuant to this Section 7.01, less customary withholdings, shall be made in one lump sum within thirty (30) days of Executive’s termination or resignation; however, such payments will be delayed for six (6) months if Executive terminates employment due to Section 7.03(d) and the delayed payments will be paid in a lump sum without interest the first month following such six month delay.  In addition, the Severance Payment shall be reduced by the amount of cash severance-type benefits to which Executive may be entitled pursuant to any other cash severance plan, agreement, policy or program of the Company or any of its subsidiaries; including any payment for post-employment restrictions; provided, however, that if the amount of cash severance benefits payable under such other severance plan, agreement, policy or program is greater than the Severance Payment payable pursuant to this Agreement, Executive will be entitled to receive the amounts payable under such other plan, agreement, policy or program which exceeds the Severance Payment.  Without limiting other payments which would not constitute “cash severance-type benefits” hereunder, any cash settlement of stock options, accelerated vesting of stock options and retirement, pension and other similar benefits shall not constitute “cash severance-type benefits” for purposes of this Section 7.01.

 

7.02                           If the Company is obligated to pay the Severance Payment provided in Section 7.01, and if Executive timely elects to continue his group health and dental insurance coverage pursuant to applicable COBRA/continuation law and the terms of the respective benefit plans, the Company will (a) pay on Executive’s behalf the premiums for such coverage for the lesser of twelve (12) months or such time as Executive’s COBRA/continuation rights expire and (b) cause the immediate vesting of any unvested stock options then held by Executive.

 

7.03                           “Good Reason” will be deemed to have occurred if, after a Change in Control:

 

(a)                                  the Company, its successors or assigns, places the Executive in a position, or gives the Executive principal duties or responsibilities materially different from that provided in Sections 1.02 or 1.03 above;

 

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(b)                                 the Company, its successors or assigns, relocates Executive to a location that is more than fifty (50) miles from the Company’s current headquarters in Minnesota;

 

(c)                                  the Company, its successors or assigns, materially reduces Executive’s base salary contrary to the provisions of Section 4.01 hereof or fails to pay Executive any material compensation or fringe benefits to which Executive is entitled within ten (10) business days of the due date;

 

(d)                                 a successor company fails or refuses to assume the Company’s obligations under this Agreement; or

 

(e)                                  the Company, its successors or assigns, breaches any of its material obligations under this Agreement and does not correct any such breach within thirty (30) days of receiving notice thereof from Executive.

 

If Executive intends to terminate this Agreement for Good Reason:  (i) he must give the Company written notice of the facts or events giving rise to Good Reason at least sixty (60) days prior to such termination, and such notice must be given within ninety (90) days following the facts or event alleged to give rise to Good Reason; and (ii) such grounds for Good Reason must continue and not be remedied for a period of thirty (30) days or more following the Company’s receipt of such notice.  The failure to give such notice shall be deemed a waiver of the right to terminate this Agreement for Good Reason based on such fact or event.

 

7.04                           For the purposes of this Agreement, “Change in Control” shall mean any one of the following:

 

(a)                                  an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of 50% or more of either:

 

(1)                                  the then outstanding capital stock of the Company (“Stock”); or

 

(2)                                  the combined voting power of the Company’s outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisitions shall not constitute a Change in Control:

 

(i)                                     any acquisition directly from the Company;

 

(ii)                                  any acquisition by the Company or Subsidiary;

 

(iii)                               any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or

 

(iv)                              any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the

 

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Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or

 

(b)                                 individuals who, during any twelve (12) month period, who constitute the Board (the “Incumbent Board”), cease to constitute a majority of the Board.  Individuals nominated or whose nominations are approved by the Incumbent Board and subsequently elected shall be deemed for this purpose to be members of the Incumbent Board;

 

(c)                                  approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Stock and other voting securities either legally or beneficially;

 

(d)                                 the sale, transfer or other disposition of all or substantially all of the Company’s assets; or

 

(e)                                  a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation.

 

A “Change in Control” shall not be deemed to occur with respect to Executive if the merger, sale, transfer or an acquisition of a 50% or greater interest is to or by a group that includes Executive, nor shall it be deemed to occur if at least 50% of the Stock and other voting securities owned before the occurrence are beneficially owned subsequent to the occurrence by a group that includes Executive, nor shall it be deemed to occur upon consummation of the transactions contemplated by (i) the Stock Purchase Agreement by and between the Company and Concept Development Partners LLC, dated February 8, 2011, as amended or (ii) the Stock Repurchase Agreement between DHW Leasing, L.L.C., Donald A. Dunham, Jr., Charles J. Hey, Dunham Capital Management Company, L.L.C., Concept Development Partners LLC and the Company, dated February 8, 2011, as amended.

 

7.05                           Notwithstanding any other provision of this Agreement to the contrary, the parties to this Agreement intend that this Agreement shall satisfy the applicable requirements, if any, of Section 409A of the Code (“Section 409A”) in a manner that will preclude the imposition of the penalties described in Section 409A.  The parties agree that the Agreement shall be deemed modified as may become necessary (as determined by the Company in its discretion) to satisfy the requirements described above.

 

7.06                           In addition to the Severance Payment payable pursuant to Section 7.01, the Company will pay Executive a pro-rata portion of any bonus pursuant to any bonus plan or arrangement established or mutually agreed-upon prior to termination, to the extent earned

 

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through the date of termination, based upon the requirements or criteria of such bonus plan or arrangement, as the Board shall in good faith determine.  Such pro-rated bonus, shall be payable at the time and in the manner payable to other executives of the Company who participate in such plan or arrangement.

 

7.07                           All severance payments made under this Article 7, including those paid under Sections 7.01, 7.02 and 7.06, shall be conditioned upon Executive’s signing and not rescinding a separation agreement and release in a form acceptable to the Company, which agreement shall include, at a minimum, a full and general release of all claims to the greatest extent allowed by applicable law, a covenant not to sue, and an agreement to be reasonably available for consultation and assistance to the Company during any period in which severance is paid, and an agreement to return to the Company all Company property and copies thereof in any form or media.

 

7.08                           Executive acknowledges that he has waived and is not entitled to any bonus payments or Annual Incentive Compensation through the Company’s 2009 fiscal year.

 

7.09                           For avoidance of doubt, if Executive’s employment is terminated without Cause or by Executive for Good Reason, Executive shall be entitled to receive the Severance Payment provided in Section 7.01 and receive his base salary through the Termination Date.  If the Company elects to not extend Executive’s employment beyond the Termination Date or any extension thereof and terminates Executive’s employment, such termination shall be a termination without Cause for the purposes of Section 7.01.

 

ARTICLE 8

 

NONDISCLOSURE

 

8.01                           Except as permitted or directed by the Company or as may be required in the proper discharge of Executive’s employment hereunder, Executive shall not, during the term of employment or at any time thereafter, divulge, furnish or make accessible to anyone or use in any way any confidential, trade secret or proprietary information of the Company, including without limitation, whether or not reduced to writing, customer lists, customer files or information, pricing information, expansion information, recipes, formulas, planning and financial information, contracts, sales and marketing information, business strategy or opportunities for new or developing business, which Executive has prepared, acquired or become acquainted with during his employment by the Company.  Executive acknowledges that the above-described knowledge or information is the property of the Company that constitutes a unique and valuable asset and represents a substantial investment by the Company, and that any disclosure or other use of such knowledge or information, other than for the sole benefit of the Company, would be wrongful and would cause irreparable harm to the Company.  Executive agrees to at all times maintain the confidentiality of such knowledge or information, to refrain from any acts or omissions that would reduce its value to the Company, and to take and comply with reasonable security measures to prevent any accidental or intentional disclosure or misappropriation.  Upon termination of Executive’s employment for any reason, Executive shall promptly return to the Company all such confidential, trade secret and proprietary information,

 

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including all copies thereof, then in Executive’s possession, control or influence, whether prepared by Executive or others.

 

8.02                           The foregoing obligations of confidentiality shall not apply to any knowledge or information the entirety of which is now published or subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of this Agreement by Executive or a breach of a confidentiality obligation owed to the Company by any third party.

 

8.03                           In the event of a breach or threatened breach by Executive of the provisions of this Article 8, the Company shall be entitled to an injunction restraining Executive from directly or indirectly disclosing, disseminating, lecturing upon, publishing or using such confidential, trade secret or proprietary information (whether in whole or in part) and restraining Executive from rendering any services or participating with any person, firm, corporation, association or other entity to whom such knowledge or information (whether in whole or in part) has been disclosed, without the posting of a bond or other security.  Nothing herein shall be construed as prohibiting the Company from pursuing any other equitable or legal remedies available to it for such breach or threatened breach, including the recovery of damages from Executive.  Executive agrees that the Company shall be entitled to recover its costs of litigation, expenses and attorney fees incurred in enforcing this Agreement.

 

8.04                           Executive understands and agrees that any violation of this Article 8 while employed by the Company may result in immediate disciplinary action by the Company, including termination of employment pursuant to Section 6.03 hereof.

 

8.05                           The provisions of this Article 8 shall survive termination of this Agreement indefinitely.

 

ARTICLE 9

 

NONCOMPETITION AND NON-RECRUITMENT

 

9.01                           The Company and Executive recognize and agree that: (i) Executive has received, and will in the future receive, substantial amounts of highly confidential and proprietary information concerning the Company, its business, customers, executives and vendors; (ii) as a consequence of using or associating himself with the Company’s name, goodwill, and reputation, Executive will develop personal and professional relationships with the Company’s current and prospective customers, clients and vendors; and (iii) provision for non-competition and non-recruitment obligations by Executive is critical to the Company’s continued economic well-being and protection of the Company’s confidential and proprietary business information.  In light of these considerations, this Article 9 sets forth the terms and conditions of Executive’s obligations of non-competition and non-recruitment during the term of and subsequent to the termination of this Agreement and/or Executive’s employment for any reason.

 

9.02                           Unless the obligation is waived or limited by the Company as set forth herein, Executive agrees that during the term of Executive’s employment pursuant to this Agreement and for a period of twelve (12) months following termination of Executive’s employment for any reason, Executive will not directly or indirectly: (a) solicit or do competitive business with any

 

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person or entity that is or was a customer or vendor of the Company within the twelve (12) months prior to the date of termination; or (b) engage within the North American markets in which the Company engages in business at the time of termination, in any similar or related business activity in competition with the Company’s direct line of business as conducted at the time of Executive’s termination.  Among all other competitive actions that are likewise restricted, Executive shall not cause or attempt to cause any existing or prospective customer, client or account who then has a relationship with the Company for current or prospective business to divert, terminate, limit or in any adverse manner modify, or fail to enter into any actual or potential business with the Company.

 

9.03                           At its sole option, the Company may, by express written notice to Executive, waive or limit the time and/or geographic area in which Executive cannot engage in competitive activity or the scope of such competitive activity.

 

9.04                           For a period of twelve (12) months following termination of Executive’s employment for any reason, Executive will not initiate or participate in any other employer’s recruitment or hiring of any of the Company’s executives.

 

9.05                           Executive agrees that breach by him of the provisions of this Article 9 will cause the Company irreparable harm that is not fully remedied by monetary damages.  In the event of a breach or threatened breach by Executive of the provisions of this Article 9, the Company shall be entitled to an injunction restraining Executive from directly or indirectly competing or recruiting as prohibited herein, without posting a bond or other security.  Nothing herein shall be construed as prohibiting the Company from pursuing any other equitable or legal remedies available to it for such breach or threatened breach, including the recovery of damages from Executive.  Executive agrees that the Company shall be entitled to recover its costs of litigation, expenses and attorney fees incurred in enforcing this Agreement.

 

9.06                           Executive understands and agrees that any violation of this Article 9 while employed by the Company may result in immediate disciplinary action by the Company, including termination of employment pursuant to Section 6.03 hereof.

 

9.07                           The obligations contained in this Article 9 shall survive the termination of this Agreement indefinitely.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.01                     Governing Law.  This Agreement shall be governed and construed according to the laws of the State of Minnesota without regard to conflicts of law provisions.

 

10.02                     Successors.  This Agreement is personal to Executive and Executive may not assign or transfer any part of his rights or duties hereunder, or any compensation due to him hereunder, to any other person or entity.  This Agreement may be assigned by the Company and the Company may require any successors or assigns to expressly assume and agree to perform the Company’s obligations under this Agreement.

 

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10.03                     Waiver.  The waiver by the Company of the breach or nonperformance of any provision of this Agreement by Executive will not operate or be construed as a waiver of any future breach or nonperformance under any such provision of this Agreement or any similar agreement with any other executive.

 

10.04                     Modification.  This Agreement supersedes, revokes and replaces any and all prior oral or written understandings, if any, between the parties relating to the subject matter of this Agreement.  The parties agree that this Agreement: (a) is the entire understanding and agreement between the parties; and (b) is the complete and exclusive statement of the terms and conditions thereof, and there are no other written or oral agreements in regard to the subject matter of this Agreement.  This Agreement shall not be changed or modified except by a written document signed by the parties hereto.

 

10.05                     Severability and Blue Penciling.  To the extent that any provision of this Agreement shall be determined to be invalid or unenforceable as written, the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  If any particular provision of this Agreement shall be adjudicated to be invalid or unenforceable, the Company and Executive specifically authorize the tribunal making such determination to edit the invalid or unenforceable provision to allow this Agreement, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy.

 

10.06                     Any dispute or controversy arising under this Agreement shall, at the request of any party hereto be resolved by binding arbitration by a single arbitrator selected by employer and Executive, with arbitration governed by The United States Arbitration Act (Title 9, U.S. Code).  Such arbitrator shall be a disinterested person who is either an attorney, retired judge or labor relations arbitrator.  In the event employer and Executive are unable to agree upon such arbitrator, the arbitrator shall, upon petition by either the Company or Executive, be designated by a judge of the Hennepin County District Court.  The arbitrator shall have the authority to make awards of damages as would any court in Minnesota having jurisdiction over a dispute between employer and Executive, except that the arbitrator may not make an award of exemplary damages or consequential damages.  In addition, the Company and Executive agree that all other matters arising out of Executive’s employment relationship with the Company shall be arbitrable, unless otherwise restricted by law.

 

(a)                                  In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel.

 

(b)                                 The arbitrator, in his or her discretion, may award legal fees and expenses and costs of the arbitration, including the arbitrator’s fee, to an prevailing party.

 

(c)                                  In the event of noncompliance or violation, as the case may be, of Article 8 or Article 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate, if it and such court reasonably determines that the Company would have no adequate remedy at law for such violation or noncompliance.

 

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IN WITNESS WHEREOF the following parties have executed the above instrument the day and year first above written.

 

	
 
    	
GRANITE CITY FOOD & BREWERY LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Joel C. Longtin
    
	
 
    	
 
    	
Joel   C. Longtin
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Steven J. Wagneheim
    
	
 
    	
 
    	
Steven   J. Wagenheim
    

 

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EXHIBIT A

 

The president’s primary  responsibility will be to provide a leadership role in managing the Company’s guest experience.  Coordinating with the CEO, Chief Concept Officer (CCO), and COO, the president and founder will supervise and coordinate everything that the guest experiences at Granite City.  This will include food, menu and menu design, facility design, décor, branding and marketing.  He will be the Company’s lead guest advocate and ambassador to communities that we serve.  He will report to the CEO.  Highlights of specific areas of responsibilities include:

 

·                  Work with the CEO and CCO to develop the Company’s vision and to assist this executive team to develop strategies for achieving this plan.  Once approved by the board, the president and founder will articulate these plans to management as directed by the CEO.

 

·                  Assist the CEO in developing, implementing, and following-up on marketing and positioning strategies that drive customer traffic and revenue.

 

·                  Work closely with the CCO in managing external resources to identify potential new restaurant locations.

 

·                  Work closely with the CCO in identifying brand extensions for Granite City.

 

·                  Identify and manage the non-traditional site potential for selling Granite City beer, including sports venues, airports, fairs and mobile truck-based event sales.

 

·                  Represent the Company as directed by the CEO in matters of investor relations and community relations.

 

·                  Analyze the efficacy and return on invested capital of programs, campaigns, strategies regarding marketing, positioning, discounting, pricing, menu, décor, branding, and alternative revenue sources.

 

·                  Collaborate with the CEO and the executive management team regarding various operating, funding and growth strategies as outlined by the CEO.

 

14

 

EXHIBIT B

 

	
 
    	
 
    	
2011
    	
 
    
	
ANNUAL INCENTIVE COMPENSATION AT TARGET*
    	
 
    	
 
    	
 
    
	
Sales
    	
 
    	
$
    	
42,000
    	
 
    
	
Income Before Occupancy (IBO)
    	
 
    	
$
    	
70,000
    	
 
    
	
General and Administrative Expense less Stock   Option Expense (Adjusted G&A)
    	
 
    	
$
    	
21,000
    	
 
    
	
Earnings Per Share less Stock Option Expense and Exit   Costs (Adjusted EPS)
    	
 
    	
$
    	
7,000
    	
 
    
	
Total at Target Across Each Performance Metric
    	
 
    	
$
    	
140,000
    	
 
    

 

*Specific Annual Incentive Compensation Metrics:

 

	
Performance Metric
    	
;x
    	
Maximum
    	
;x
    	
Over
   Perform
    	
;x
    	
Target
    	
;x
    	
Under
   Perform
    	
;x
    	
Threshold
    	
;x
    	
Minimum
    	
;x
    
	
Sales
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
Performance v. Budget
    	
;x
    	
105.0
    	
%
    	
102.5
    	
%
    	
100
    	
%
    	
97.5
    	
%
    	
95.0
    	
%
    	
94.7
    	
%
    
	
Bonus Discount/Multiple
    	
;x
    	
120
    	
%
    	
110
    	
%
    	
100
    	
%
    	
66
    	
%
    	
33
    	
%
    	
0
    	
%
    
	
Bonus Potential
    	
;x
    	
$
    	
50,400
    	
;x
    	
$
    	
46,200
    	
;x
    	
$
    	
42,000
    	
;x
    	
$
    	
27,720
    	
;x
    	
$
    	
13,860
    	
;x
    	
$
    	
0
    	
;x
    
	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
IBO
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
Performance v. Budget
    	
;x
    	
112.8
    	
%
    	
107.2
    	
%
    	
100
    	
%
    	
96.4
    	
%
    	
91.8
    	
%
    	
91.5
    	
%
    
	
Bonus Discount/Multiple
    	
;x
    	
150
    	
%
    	
125
    	
%
    	
100
    	
%
    	
66
    	
%
    	
33
    	
%
    	
0
    	
%
    
	
Bonus Potential
    	
;x
    	
$
    	
105,000
    	
;x
    	
$
    	
87,500
    	
;x
    	
$
    	
70,000
    	
;x
    	
$
    	
46,200
    	
;x
    	
$
    	
23,100
    	
;x
    	
$
    	
0
    	
;x
    
	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
Adjusted G&A
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
Performance v. Budget
    	
;x
    	
84.0
    	
%
    	
92.2
    	
%
    	
100
    	
%
    	
107.2
    	
%
    	
114.0
    	
%
    	
118.4
    	
%
    
	
Bonus Discount/Multiple
    	
;x
    	
150
    	
%
    	
125
    	
%
    	
100
    	
%
    	
66
    	
%
    	
33
    	
%
    	
0
    	
%
    
	
Bonus Potential
    	
;x
    	
$
    	
31,500
    	
;x
    	
$
    	
26,250
    	
;x
    	
$
    	
21,000
    	
;x
    	
$
    	
13,860
    	
;x
    	
$
    	
6,930
    	
;x
    	
$
    	
0
    	
;x
    
	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
Adjusted EPS
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    	
;x
    
	
Performance v. Budget
    	
;x
    	
85.3
    	
%
    	
91.2
    	
%
    	
100
    	
%
    	
105.9
    	
%
    	
108.8
    	
%
    	
109.2
    	
%
    
	
Bonus Discount/Multiple
    	
;x
    	
150
    	
%
    	
125
    	
%
    	
100
    	
%
    	
66
    	
%
    	
33
    	
%
    	
0
    	
%
    
	
Bonus Potential
    	
;x
    	
$
    	
10,500
    	
;x
    	
$
    	
8,750
    	
;x
    	
$
    	
7,000
    	
;x
    	
$
    	
4,620
    	
;x
    	
$
    	
2,310
    	
;x
    	
$
    	
0
    	
;x
    

 

As illustrated in the table above, Annual Incentive Compensation for 2011 can range from $0 at “minimum” performance across each metric to $46,200 at “threshold” performance across each metric to $92,400 for “under perform” performance across each metric to $140,000 for “target” performance across each metric to $168,700 for “over perform” performance across each metric to $197,400 for “maximum” performance across each metric.

 

15Exhibit 10.1

 

CEPHALON, INC.

 

2011 EQUITY COMPENSATION PLAN

 

(Effective as of February 1, 2011)

 

The purpose of the Cephalon, Inc. 2011 Equity Compensation Plan (the “Plan”) is to provide (i) designated employees of Cephalon, Inc. (the “Company”) and its subsidiaries, (ii) certain consultants and advisors who perform valuable services for the Company or its subsidiaries and (iii) non-employee members of the Board of Directors of the Company (the “Board”), with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards, as set forth herein.  The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefiting the Company’s stockholders, and will align the economic interests of the participants with those of the stockholders.  The Plan has been amended and restated as of February 1, 2011, subject to stockholder approval of the Plan.  The amended and restated Plan applies to all Grants (as defined in Section 2) made on or after the date that the stockholders approve the amended and restated Plan (the “2011 Restatement Date”).

 

1.             Administration

 

(a)           Committee.  The Plan shall be administered by a committee, which may consist of “outside directors” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and related Treasury regulations and “non-employee directors” as defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  However, the Board may ratify or approve any grants as it deems appropriate.

 

(b)           Committee Authority.  The Committee shall have the sole authority to (i) determine the individuals to whom grants shall be made under the Plan, (ii) determine the type, size and terms of the grants to be made to each such individual, (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any previously issued grant, so long as no previously granted option is repriced, replaced, or regranted through cancellation, or by lowering the option exercise price of a previously granted option, unless the stockholders of the Company provide prior approval, and (v) deal with any other matters arising under the Plan.

 

(c)           Committee Determinations.  The Committee shall have full power and authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion.  The Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder.  All powers of the Committee shall be executed in its

 

1

 

sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.

 

2.             Grants

 

Awards under the Plan may consist of grants of incentive stock options as described in Section 5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred to as “Options”) and stock awards as described in Section 7 (“Stock Awards”) (hereinafter collectively referred to as “Grants”).  All Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Committee deems appropriate and as are specified in writing by the Committee to the individual in a grant instrument or an amendment to the grant instrument (the “Grant Instrument”).  The Committee shall approve the form and provisions of each Grant Instrument.  Grants under a particular Section of the Plan need not be uniform as among the grantees.

 

3.             Shares Subject to the Plan

 

(a)           Shares Limits.

 

(1)           Shares Authorized.  Subject to adjustment as described below, the aggregate number of shares of common stock of the Company (“Company Stock”) that may be issued or transferred under the Plan is 17,450,000 shares; provided, however, that after May 10, 2011, no more than 700,000 shares of Company Stock may be issued pursuant to Stock Awards that are granted under the Plan after such date.

 

(2)           Annual Individual Maximum.  The maximum aggregate number of shares of Company Stock that shall be subject to Grants made under the Plan to any individual during any calendar year shall not exceed 500,000 shares, subject to adjustment as described below.

 

(3)           Source of Shares for Issuance.  Shares issuable pursuant to the exercise of Options and the grant or payment of Stock Awards may be delivered out of the authorized but unissued shares of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company on the open market for purposes of the Plan.

 

(4)           Share Counting.  For administrative purposes, when the Committee makes a Grant payable in Company Stock, the Committee shall reserve shares of Company Stock equal to the maximum number of shares of Company Stock that may be payable under the Grant.  If and to the extent Options granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised or if any Stock Awards are forfeited or terminated, or otherwise are not paid in full, the shares subject to such Grants which have not been issued shall again be available for purposes of the Plan.  Shares of Company Stock withheld in payment of the Exercise Price (as defined in Section 5) of an Option or withheld for purposes of satisfying tax withholding obligations with respect to Grants under the Plan shall not be available for re-issuance or transfer under the Plan.  To the extent that any Grants are paid in

 

2

 

cash and not shares of Company Stock, such Grants shall not count against the share limits in subsection (1) above.  The preceding sentences of this Section shall apply only for purposes of determining the aggregate number of shares of Company Stock subject to Grants but shall not apply for purposes of determining the maximum number of shares of Company Stock with respect to which Grants may be granted to any individual participant under the Plan.  For the avoidance of doubt, if shares of Company Stock are repurchased on the open market with the proceeds of the Exercise Price of Options, such shares may not again be made available for issuance under the Plan.

 

(b)           Adjustments.  If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation, (iii) by reason of a reclassification or change in par value, or (iv) by reason of any other extraordinary or unusual event affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of Company Stock available for Grants, the maximum number of shares of Company Stock that any individual participating in the Plan may be granted as Options or Stock Awards in any year, the number of shares covered by outstanding Grants, the kind of shares issued under the Plan, and the price per share of such Grants shall be equitably adjusted by the Committee, in such manner as the Committee deems appropriate, to reflect any increase or decrease in the number of, or change in the kind or value of, the issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under the Plan and such outstanding Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.  In addition, in the event of a Change in Control (as defined in Section 11) or Corporate Transaction (as defined in Section 11), the provisions of Section 11 shall apply.  Any adjustments to outstanding Grants shall be consistent with section 409A or 422 of the Code, to the extent applicable.  Any adjustments determined by the Committee shall be final, binding and conclusive.

 

4.             Eligibility for Participation

 

(a)           Eligible Persons.  All employees of the Company and its subsidiaries (“Employees”), including Employees who are officers or members of the Board, and members of the Board who are not Employees (“Non-Employee Directors”) shall be eligible to participate in the Plan.  Consultants and advisors who perform services for the Company or any of its subsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if the Key Advisors render bona fide services to the Company or its subsidiaries, the services are not in connection with the offer and sale of securities in a capital-raising transaction, and the Key Advisors do not directly or indirectly promote or maintain a market for the Company’s securities.

 

(b)           Selection of Grantees.  The Committee shall select the Employees, Non-Employee Directors and Key Advisors to receive Grants and shall determine the number of shares of Company Stock subject to a particular Grant in such manner as the Committee

 

3

 

determines.  Employees, Key Advisors and Non-Employee Directors who receive Grants under this Plan shall hereinafter be referred to as “Grantees.”

 

(c)           Prospective Employees, Non-Employee Directors and Key Advisors.  Options and Stock Awards may be granted to a prospective Employee, Non-Employee Director or Key Advisor conditioned upon, and the date of grant shall be no earlier than, the date such person becomes an Employee, Non-Employee Director or Key Advisor.

 

5.             Granting of Options

 

(a)           Number of Shares.  Subject to the limitations set forth in Section 3, the Committee shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees, Non-Employee Directors and Key Advisors.

 

(b)           Type of Option and Price.

 

(i)            The Committee may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock Options that are not intended so to qualify or any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein.  Incentive Stock Options may be granted only to Employees.  Nonqualified Stock Options may be granted to Employees, Non-Employee Directors and Key Advisors.

 

(ii)           The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be determined by the Committee and may be equal to or greater than the Fair Market Value (as defined below) of a share of Company Stock on the date the Option is granted; provided, however, that an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent or subsidiary of the Company, unless the Exercise Price per share is not less than one hundred ten percent (110%) of the Fair Market Value of Company Stock on the date of grant.

 

(iii)  If the Company Stock is publicly traded, then the Fair Market Value per share shall be determined as follows: (x) if the principal trading market for the Company Stock is a national securities exchange, the last reported sale price thereof during regular trading hours on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, or (y) if the Company Stock is not principally traded on such exchange or market, the mean between the last reported “bid” and “asked” prices of Company Stock on the relevant date, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Committee determines.  If the Company Stock is not publicly traded or, if publicly traded, is not subject to reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value per share shall be as determined by the Committee.

 

4

 

(c)           Option Term.  The Committee shall determine the term of each Option.  The term of any Option shall not exceed ten (10) years from the date of grant.  However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, or any parent or subsidiary of the Company, may not have a term that exceeds five (5) years from the date of grant.

 

(d)           Exercisability of Options.  Options shall become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument.  The Committee may impose such additional restrictions or conditions on the exercisability of Options or on the shares of Company Stock issuable upon exercise of the Options as it shall determine and specify in the Grant Instrument.  The Committee may accelerate the exercisability of any or all outstanding Options at any time for any reason.

 

(e)           Exercise of Options.  A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company.  The Grantee shall pay the Exercise Price for an Option as specified by the Committee (x) in cash or by check, (y) with the approval of the Committee, by withholding shares of Company Stock subject to the Option, by delivering shares of Company Stock owned by the Grantee or by attestation (on a form prescribed by the Committee) to ownership of shares of Company Stock (in each case, such shares of Company Stock shall have an aggregate Fair Market Value on the date of exercise equal to the Exercise Price), or (z) to the extent permitted by applicable law, by such other method as the Committee may approve.   Shares of Company Stock used to exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option.  The Grantee shall pay the Exercise Price and the amount of any withholding tax due (pursuant to Section 9) as specified by the Committee.

 

(f)            Limits on Incentive Stock Options.  Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, within the meaning of section 424(f) of the Code, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option.  An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or a parent or subsidiary.

 

6.             Grants to Non-Employee Directors

 

Unless otherwise determined by the Board, a Non-Employee Director shall be entitled to receive Nonqualified Stock Options in accordance with this Section 6.

 

(a)           Initial Grant.  Each Non-Employee Director who first becomes a member of the Board will receive a grant of a Nonqualified Stock Option to purchase 15,000 shares of Company Stock, immediately upon his or her becoming a member of the Board, according to such terms as the Board, in its sole discretion, may deem appropriate.

 

5

 

(b)           Annual Grants.  On each date that the Company holds its annual meeting of stockholders each Non-Employee Director in office immediately after the annual election of directors (including any directors first elected at such meeting) will receive a grant of a Nonqualified Stock Option to purchase 15,000 shares of Company Stock according to such terms as the Board, in its sole discretion, may deem appropriate.  The date of grant of such annual Grants shall be the date of such annual meeting of stockholders.

 

(c)           Discretionary Grants.  In addition to the grants provided under subsections 6(a) and 6(b), Non-Employee Directors shall be eligible to receive grants of Nonqualified Stock Options and Stock Award under the Plan at such times, in such amounts and according to such terms as the Board, in its sole discretion, may deem appropriate.

 

(d)           Acceleration.  Upon the occurrence of a Corporate Transaction or upon Involuntary Termination (as defined in Section 11) of a director within thirty-six (36) months following a Change in Control, each Nonqualified Stock Option of such director shall automatically accelerate and become fully exercisable as to all shares subject to such Option and shall remain exercisable until the expiration of the Option term or earlier surrender of such Option.

 

(e)           Except as otherwise provided in this Section 6, the Nonqualified Stock Options granted to Non-Employee Directors shall be subject to the provisions of this Plan applicable to Nonqualified Stock Options granted to other persons.

 

7.             Stock Awards

 

The Committee may issue or transfer shares of Company Stock to an Employee, a Non-Employee Director or a Key Advisor under a Stock Award, upon such terms as the Committee deems appropriate.  The following provisions are applicable to Stock Awards:

 

(a)           General Requirements.  Shares of Company Stock issued or transferred pursuant to Stock Awards may be issued or transferred for such cash consideration, if any, and subject to such restrictions, if any, as determined by the Committee.  The Committee may establish conditions under which restrictions on Stock Awards shall lapse over a period of time or according to such other criteria as the Committee deems appropriate.  The period of time during which the Stock Award will remain subject to restrictions will be designated in the Grant Instrument as the “Restriction Period.”

 

(b)           Number of Shares.  Subject to the limitations set forth in Section 3, the Committee shall determine the number of shares of Company Stock to be issued or transferred pursuant to, or subject to, a Stock Award and the restrictions applicable to such shares.

 

(c)           Requirement of Employment or Service.  If the Grantee ceases to be employed by, or provide service to, the Company or any of its subsidiaries or any other entity owned or controlled by the Company, during a period designated in the Grant Instrument as the Restriction

 

6

 

Period, or if other specified conditions are not met, the Stock Award shall terminate as to all shares covered by the award as to which the restrictions have not lapsed, and the Stock Award, and those shares of Company Stock, shall be immediately forfeited and returned to the Company.  The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

 

(d)           Stock Awards in the Form of Stock Units.  The Committee may grant a Stock Award to an Employee, a Non-Employee Director or a Key Advisor in the form of a stock unit that represents the right of the Grantee to receive shares of Company Stock or a cash amount based on the Fair Market Value of shares of Company Stock, as determined by the Committee.  Stock Awards that are granted in the form of stock units shall be paid in shares of Company Stock or in cash, or in a combination of the two, as determined by the Committee, and shall be subject to such terms and conditions as are determined by the Committee and set forth in the applicable Grant Instrument.

 

(e)           Restrictions on Transfer and Legend on Stock Certificate.  During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of the Stock Award except to a Successor Grantee under subsection 10(a).  Each certificate for Stock Awards shall contain a legend giving appropriate notice of the restrictions in the Grant.  The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed.  The Committee may determine that the Company will not issue certificates for Stock Awards until all restrictions on such shares have lapsed, or that the Company will retain possession of certificates for Stock Awards until all restrictions on such shares have lapsed.

 

(f)            Right to Vote and to Receive Dividends.  Except as otherwise determined by the Committee and specified in the Grant Instrument, during the Restriction Period, the Grantee shall not have the right to vote shares subject to Stock Awards or to receive any dividends or other distributions paid on such shares, until all restrictions on such shares have lapsed.  With respect to Stock Awards in the form of stock units, the Committee may grant dividend equivalents (“Dividend Equivalents”) that give the Grantee the right to receive an amount determined by multiplying the number of stock units subject to a Stock Award by the per-share dividend paid by the Company on Company Stock, under such terms and conditions as the Committee deems appropriate.  Dividend Equivalents may be payable in cash or shares of Company Stock or in a combination of the two, as determined by the Committee. The Committee may provide that Dividend Equivalents shall be payable based on the achievement of specific performance goals. Any Dividend Equivalents with respect to performance-based stock units shall vest and be paid only if and to the extent the underlying stock units vest and are paid, unless otherwise determined by the Committee.

 

(g)           Lapse of Restrictions.  All restrictions imposed on Stock Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Committee.  The Committee may determine, as to any or all Stock Awards, that the restrictions shall lapse without regard to any Restriction Period.

 

7

 

8.             Qualified Performance-Based Compensation.  The Committee may determine that Stock Awards granted to an Employee shall be considered “qualified performance-based compensation” under section 162(m) of the Code.  The following provisions shall apply to Grants of Stock Awards that are to be considered “qualified performance-based compensation” under section 162(m) of the Code:

 

(a)           Performance Goals.

 

(i)            When Stock Awards that are to be considered “qualified performance-based compensation” are granted, the Committee shall establish in writing (A) the objective performance goals that must be met, (B) the performance period during which the performance will be measured, (C) the threshold, target and maximum amounts that may be paid if the performance goals are met, and (D) any other conditions that the Committee deems appropriate and consistent with the Plan and section 162(m) of the Code.

 

(ii)           The business criteria may relate to the Grantee’s business unit or the performance of the Company and its parents and subsidiaries as a whole, or any combination of the foregoing.  The Committee shall use objectively determinable performance goals based on one or more of the following criteria:  stock price, earnings per share, net earnings, operating earnings, earnings before income taxes, EBITDA (earnings before income tax expense, interest expense, and depreciation and amortization expense), return on assets, stockholder return, return on equity, growth in assets, unit volume, sales or market share, or strategic business criteria consisting of one or more objectives based on meeting specified revenue goals, market penetration goals, geographic business expansion goals, cost targets or goals relating to acquisitions or divestitures.

 

(b)           Establishment of Goals.  The Committee shall establish the performance goals in writing either before the beginning of the performance period or during a period ending no later than the earlier of (i) ninety (90) days after the beginning of the performance period or (ii) the date on which twenty-five percent (25%) of the performance period has been completed, or such other date as may be required or permitted under applicable regulations under section 162(m) of the Code.  The performance goals shall satisfy the requirements for “qualified performance-based compensation,” including the requirement that the achievement of the goals be substantially uncertain at the time they are established and that the goals be established in such a way that a third party with knowledge of the relevant facts could determine whether and to what extent the performance goals have been met.  The Committee shall not have discretion to increase the amount of compensation that is payable upon achievement of the designated performance goals.

 

(c)           Announcement of Grants.  The Committee shall certify and announce the results for each performance period to all Grantees after the announcement of the Company’s financial results for the performance period.  If and to the extent that the Committee does not certify that the performance goals have been met, the grants of Stock Awards for the performance period shall be forfeited or shall not be made, as applicable.

 

8

 

(d)           Death, Disability or Other Circumstances.  The Committee may provide that Stock Awards shall be payable or restrictions on such Grants shall lapse, in whole or in part, in the event of the Grantee’s death or Disability during the performance period, or under other circumstances consistent with the Treasury regulations and rulings under section 162(m) of the Code.

 

9.             Withholding of Taxes

 

(a)           Required Withholding.  All Grants under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements.  The Company may require that the Grantee or other person receiving or exercising Grants pay to the Company the amount of any federal, state or local taxes that the Company is required to withhold with respect to such Grants, or the Company may deduct from other wages paid by the Company the amount of any withholding taxes due with respect to such Grants.

 

(b)           Election to Withhold Shares.  If the Committee so permits, a Grantee may elect to satisfy the Company’s income tax withholding obligation with respect to a Grant by having shares withheld up to an amount that does not exceed the Grantee’s minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.  The election must be in a form and manner prescribed by the Committee and may be subject to the prior approval of the Committee.  The Committee may also require such share withholding with respect to particular Grants.

 

10.           Transferability of Grants

 

(a)           Nontransferability of Grants.  Except as provided below, only the Grantee may exercise rights under a Grant during the Grantee’s lifetime.  A Grantee may not transfer those rights except by will or by the laws of descent and distribution or, with respect to Grants other than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to a domestic relations order (as defined under the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the regulations thereunder).  When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee (“Successor Grantee”) may exercise such rights.  A Successor Grantee must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and distribution.

 

(b)           Transfer of Nonqualified Stock Options.  Notwithstanding the foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with applicable securities laws, according to such terms as the Committee may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

 

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11.           Certain Corporate Transactions and Changes in Control

 

(a)           Change in Control.  As used in subsection 11(d) below, a “Change in Control” shall be deemed to have occurred if there is a change in ownership or control of the Company effected through the consummation of either of the following transactions:

 

(i)            the direct or indirect acquisition by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than thirty percent (30%) of the combined voting power of the Company’s outstanding securities; or

 

(ii)           a change in the composition of the Board over a period of twenty-four (24) months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (x) have been Board members continuously since the beginning of such period, or (y) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (x) who were still in office at the time such election or nomination was approved by the Board.

 

(b)           Corporate Transaction.  As used in subsection 11(d) below, “Corporate Transaction” shall mean the consummation of either of the following stockholder-approved transactions to which the Company is a party:

 

(i)            a merger or consolidation in which securities possessing more than fifty percent (50%) of the combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or

 

(ii)           the sale, transfer or other disposition of more than seventy-five percent (75%) of the Company’s assets in a single or related series of transactions.

 

(c)           Involuntary Termination.  As used in subsection 11(d) below, “Involuntary Termination” shall mean the termination of the service of any Grantee of the Company or any successor thereto which occurs by reason of:

 

(i)            such individual’s involuntary dismissal or discharge by the Company or the successor thereto for reasons other than Misconduct (as defined below), or

 

(ii)           such individual’s voluntary resignation, in either case following:

 

(A)          a change in his or her position with the Company or the successor thereto which materially reduces his or her level of responsibility,

 

(B)           a reduction in his or her level of compensation (including base salary, significant fringe benefits and the target level of any non-discretionary and 

 

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objective-standard incentive payment or bonus award) by more than ten percent (10%) in the aggregate; or

 

(C)           a relocation of such individual’s place of employment by more than fifty (50) miles, only if such change, reduction or relocation is effected by the Company or the successor thereto without the individual’s consent.

 

With respect to this subsection 11(c)(ii), the Grantee must provide written notice of termination to the Company citing the reason for resignation within thirty (30) days after the event giving rise to the resignation.  The Company shall have a period of thirty (30) days in which it may correct the act or failure to act that constitutes the grounds for resignation as set forth in the Grantee’s notice of termination.  If the Company does not correct the act or failure to act, the Grantee must terminate his or her employment for the reason cited in the notice of termination within thirty (30) days after the end of the cure period, in order for the termination to be considered an “Involuntary Termination” for purposes of the Plan.

 

For purposes of this definition, the term “Misconduct” means the commission of any act of fraud, embezzlement or dishonesty by the Grantee, any unauthorized use or disclosure by such individual of confidential information or trade secrets of the Company or its successor, or any other intentional misconduct by such individual adversely affecting the business or affairs of the Company or its successor in a material manner.  The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Company or its successor may consider as grounds for the dismissal or discharge of any Grantee or its successor.

 

(d)           Consequences of Certain Corporate Transactions and Changes in Control

 

(i)            In the event of any Corporate Transaction, each Option which is at the time outstanding under this Plan and each Stock Award to which the restrictions have not lapsed shall automatically accelerate so that each such Option shall, immediately prior to the specified effective date for such Corporate Transaction, become fully exercisable with respect to the total number of shares of Company Stock at the time subject to such Option and may be exercised for all or any portion of such shares as fully-vested shares and all restrictions applicable to the Stock Award shall lapse.  However, the vesting of an outstanding Grant under this Plan shall not so accelerate nor shall the restrictions so lapse if and to the extent:

 

(A)          such Grant is, in connection with such Corporate Transaction, either to be assumed by the successor corporation or parent thereof or to be replaced with an option or stock award for shares of the capital stock of the successor corporation or parent thereof having comparable value and terms;

 

(B)           such Grant is to be replaced with a cash incentive option or award of the successor corporation which preserves the Option spread or Stock Award value existing at the time of such Corporate Transaction and provides for subsequent payout in accordance with the same terms and conditions, including without limitation, the same vesting schedule applicable to such Grant;

 

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(C)           such Grant is to be replaced by a grant under another incentive program which the Committee determines is reasonably equivalent in value; or

 

(D)          the acceleration of the vesting period under such Option or the lapse of restrictions with respect to such Stock Award is subject to other limitations imposed by the Committee at the time of the Grant.

 

The determination of comparability under subsections 11(d)(i)(A), (B) or (C) above shall be made by the Committee, and its determination shall be final, binding and conclusive.

 

(ii)           Upon a Grantee’s cessation of service by reason of an Involuntary Termination within thirty-six (36) months after a Corporate Transaction in which his or her outstanding options or grants are assumed or replaced pursuant to subsection 11(d)(i)(A), (B) or (C) above, each such option or grant under subsection 11(d)(i)(A) shall automatically accelerate and become fully exercisable and all restrictions applicable to such grants shall lapse, with respect to the total number of shares of stock at the time subject to such option or grant and the cash incentive program under subsection 11(d)(i)(B) or other incentive program under subsection 11(d)(i)(C) shall become fully vested.  In addition, upon a Grantee’s cessation of service by reason of an Involuntary Termination within thirty-six (36) months after a Change in Control, each Option shall automatically accelerate and become fully exercisable and all restrictions applicable to Stock Awards shall lapse, with respect to the total number of shares of Company Stock at the time subject to such Grant.  The Option as so accelerated shall remain exercisable until the earlier of the expiration of the Option term or the expiration of the one (1)-year period measured from the date of such Involuntary Termination.

 

(iii)          Immediately following the consummation of a Corporate Transaction, all outstanding Grants under this Plan shall terminate and cease to remain outstanding, except to the extent assumed by the successor corporation or its parent company.

 

(iv)          Each outstanding Grant under this Plan that is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the number and class of securities which would have been issued to the Grantee, upon consummation of such Corporate Transaction, had (in the case of an Option) such person exercised the Option immediately prior to such Corporate Transaction.  In the case of an Option, appropriate adjustments shall also be made to the exercise price payable per share, provided the aggregate exercise price payable for such securities shall remain the same.  In addition, the class and number of shares available for issuance under the Plan on both an aggregate and participant basis following the consummation of such Corporate Transaction shall be appropriately adjusted.

 

(v)           The provisions of subsection 11(d)(i) shall not operate as a limitation on the Committee’s discretionary authority, exercisable either at the time of the Grant or at any time while the Grant remains outstanding, to provide for the automatic acceleration of one or more 

 

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outstanding Options, or the lapse of all restrictions applicable to a Stock Award upon the occurrence of any change in the Company’s organization, ownership or structure not otherwise within the definition of a Corporate Transaction or a Change in Control.  The Committee also shall have full power and authority to condition any such Option acceleration, restriction lapse and the termination of any outstanding repurchase rights upon the Grantee’s cessation of service by reason of an Involuntary Termination within a specified period following any such event.  Any Options accelerated in connection with any such event shall remain fully exercisable until the expiration or sooner termination of the Option term or the surrender or cancellation of such Option.

 

(vi)          The acceleration or substitution of Grants under this Section 11 shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

(vii)         The portion of any Incentive Stock Option accelerated under this subsection 11(d) in connection with a Corporate Transaction or Change in Control intended to comply with section 424 of the Code shall remain exercisable as an incentive stock option under the Federal tax laws only to the extent the dollar limitation specified in subsection 5(f) is not exceeded.  To the extent such dollar limitation is exceeded, such option shall be exercisable as a nonqualified stock option under the Federal tax laws.

 

12.           Limitations on Issuance or Transfer of Shares.

 

No Company Stock shall be issued or transferred in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance or transfer of such Company Stock have been complied with to the satisfaction of the Committee.  The Committee shall have the right to condition any Grant made to any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Company Stock as the Committee shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions.  Certificates representing shares of Company Stock issued or transferred under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.

 

13.           Amendment and Termination of the Plan

 

(a)           Amendment.  The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without stockholder approval if such approval is required in order to comply with the Code or other applicable laws, or to comply with applicable stock exchange requirements.

 

(b)           No Repricing without Stockholder Approval.  Notwithstanding anything in the Plan to the contrary, except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, 

 

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recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the Committee may not reprice Options, nor may the Board amend the Plan to permit repricing of Options, unless the stockholders of the Company provide prior approval for such repricing.

 

(c)           Stockholder Re-Approval Requirement.  If Stock Awards are granted as “qualified performance-based compensation” under Section 8 above, the Plan must be reapproved by the stockholders no later than the first stockholders meeting that occurs in the fifth year following the year in which the stockholders previously approved the provisions of Section 8, if required by section 162(m) of the Code or the regulations thereunder.

 

(c)           Termination of Plan.  The Plan shall terminate on the day immediately preceding the tenth anniversary of February 1, 2011 unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders.  Incentive Stock Options shall not be granted after the date that is ten (10) years after the date on which the Board adopts the 2011 restatement of the Plan or the 2011 Restatement Date, whichever is earlier.

 

(d)           Termination and Amendment of Outstanding Grants.  A termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Committee acts under subsection 19(b).  The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant.  Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended under subsection 19(b) or may be amended by agreement of the Company and the Grantee consistent with the Plan, and subject to subsection 12(b) above.

 

(e)           Governing Document.  The Plan shall be the controlling document.  No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner.  The Plan shall be binding upon and enforceable against the Company and its successors and assigns.

 

14.           Funding of the Plan

 

This Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Grants under this Plan.  In no event shall interest be paid or accrued on any Grant, including unpaid installments of Grants.

 

15.           Rights of Participants

 

Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or other person to any claim or right to be granted a Grant under this Plan.  Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Company or any other employment rights.

 

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16.           No Fractional Shares

 

No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any Grant.  The Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

17.           Headings

 

Section headings are for reference only.  In the event of a conflict between a title and the content of a Section, the content of the Section shall control.

 

18.           Effective Date of the Plan.

 

The Plan, as amended and restated, is effective as of February 1, 2011, subject to stockholder approval.

 

19.           Miscellaneous

 

(a)           Grants in Connection with Corporate Transactions, Changes in Control and Otherwise.  Nothing contained in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees of the Company, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other awards outside of this Plan.  Without limiting the foregoing, the Committee may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company or any of its subsidiaries in substitution for a stock option or Stock Award grant made by such corporation.  The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives.  The Committee shall prescribe the provisions of the substitute grants.

 

(b)           Compliance with Law.

 

(i)            The Plan, the exercise of Options and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required.  With respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act.  In addition, it is the intent of the Company that Incentive Stock Options comply with the applicable provisions of section 422 of the Code, that Grants of “qualified performance-based compensation” comply with the applicable provisions of section 162(m) of the Code and that, to the extent applicable, Grants comply with the requirements of section 409A of the Code.  To the extent that any legal requirement of section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code as set forth in the Plan ceases to be 

 

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required under section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code, that Plan provision shall cease to apply.  The Committee may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation, subject to subsection 12(b) above.  The Committee may also adopt rules regarding the withholding of taxes on payments to Grantees.  The Committee may, in its sole discretion, agree to limit its authority under this Section.

 

(ii)           The Plan is intended to comply with the requirements of section 409A of the Code, to the extent applicable.  Each Grant shall be construed and administered such that the Grant either (A) qualifies for an exemption from the requirements of section 409A of the Code or (B) satisfies the requirements of section 409A of the Code.  If a Grant is subject to section 409A of the Code, (I) distributions shall only be made in a manner and upon an event permitted under section 409A of the Code, (II) payments to be made upon a termination of employment shall only be made upon a “separation from service” under section 409A of the Code, (III) unless the Grant specifies otherwise, each installment payment shall be treated as a separate payment for purposes of section 409A of the Code, and (IV) in no event shall a Grantee, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with section 409A of the Code.

 

(iii)          Any Grant that is subject to section 409A of the Code and that is to be distributed to a Key Employee (as defined below) upon separation from service shall be administered so that any distribution with respect to such Award shall be postponed for six (6) months following the date of the Grantee’s separation from service, if required by section 409A of the Code.  If a distribution is delayed pursuant to section 409A of the Code, the distribution shall be paid within fifteen (15) days after the end of the six (6)-month period.  If the Grantee dies during such six (6)-month period, any postponed amounts shall be paid within ninety (90) days of the Grantee’s death.  The determination of Key Employees, including the number and identity of persons considered Key Employees and the identification date, shall be made by the Committee or its delegate each year in accordance with section 416(i) of the Code and the “specified employee” requirements of section 409A of the Code.

 

(c)           Company Policies.  All Grants under the Plan shall be subject to the applicable provisions of any applicable clawback or recoupment policies, share trading policies and other policies that may be approved by the Board, as such policies may be in effect from time to time.

 

(d)           Governing Law.  The validity, construction, interpretation and effect of the Plan and Grant Instruments issued under the Plan shall be governed and construed by and determined in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflict of laws provisions thereof.

 

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