Document:

exv10w3

Exhibit 10.3

INTEVAC, INC.

2004 EQUITY INCENTIVE PLAN

AS AMENDED, FEBRUARY 2010

     1. Purposes of the Plan. The purposes of this Plan are:

	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and
	 
	 	•	 	to promote the success of the Company’s business.

          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Stock Appreciation Rights, Performance Units and Performance Shares.

     2. Definitions. As used herein, the following definitions will apply:

          (a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.

          (b) “Affiliated SAR” means a SAR that is granted in connection with a related Option,
and which automatically will be deemed to be exercised at the same time that the related Option is
exercised.

          (c) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

          (d) “Award” means, individually or collectively, a grant under the Plan of Options,
SARs, Restricted Stock, Performance Units or Performance Shares.

          (e) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

          (f) “Awarded Stock” means the Common Stock subject to an Award.

          (g) “Board” means the Board of Directors of the Company.

          (h) “Change in Control” means the occurrence of any of the following events:

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               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities; or

               (ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets;

               (iii) A change in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors”
means directors who either (A) are Directors as of the effective date of the Plan, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but will not include an
individual whose election or nomination is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company); or

               (iv) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.

          (i) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.

          (j) “Committee” means a committee of Directors appointed by the Board in accordance
with Section 4 of the Plan.

          (k) “Common Stock” means the common stock of the Company, or in the case of
Performance Units, the cash equivalent thereof.

          (l) “Company” means Intevac, Inc., a California corporation, or any successor thereto.

          (m) “Consultant” means any natural person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

          (n) “Cost of Sales as a Percentage of Sales” means as to any Performance Period, the
Company’s cost of sales stated as a percentage of sales, determined in accordance with generally
accepted accounting principles.

          (o) “Director” means a member of the Board.

          (p) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.

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          (q) “Earnings Per Share” means as to any Performance Period, the Company’s Profit
After Tax, divided by a weighted average number of common shares outstanding and dilutive common
equivalent shares deemed outstanding, determined in accordance with generally accepted accounting
principles.

          (r) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company will be sufficient to constitute “employment” by the Company.

          (s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (t) “Exchange Program” means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have lower exercise
prices and different terms), Awards of a different type, and/or cash, and/or (ii) the exercise
price of an outstanding Award is reduced. The terms and conditions of any Exchange Program will be
determined by the Administrator in its sole discretion.

          (u) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system on the day of
determination, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock will be the mean between
the high bid and low asked prices for the Common Stock on the day of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems reliable; or

               (iii) In the absence of an established market for the Common Stock, the Fair Market Value will
be determined in good faith by the Administrator.

          (v) “Fiscal Year” means the fiscal year of the Company.

          (w) “Free Cash Flow” means as to any Performance Period, the Company’s earnings
before interest, taxes, depreciation and amortization (EBITDA), determined in accordance with
generally accepted accounting principles.

          (x) “Freestanding SAR” means a SAR that is granted independently of any Option.

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          (y) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

          (z) “Inside Director” means a Director who is an Employee.

          (aa) “Marketing and Sales Expenses as a Percentage of Sales” means as to any
Performance Period, the Company’s marketing and sales expenses stated as a percentage of sales,
determined in accordance with generally accepted accounting principles.

          (bb) “Net Income as a Percentage of Sales” means as to any Performance Period, the
Company’s net income stated as a percentage of sales, determined in accordance with generally
accepted accounting principles.

          (cc) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.

          (dd) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

          (ee) “Operating Margin” means as to any Performance Period, the Company’s net
operating income divided by Revenues, determined in accordance with generally accepted accounting
principles.

          (ff) “Option” means a stock option granted pursuant to the Plan.

          (gg) “Outside Director” means a Director who is not an Employee.

          (hh) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (ii) “Participant” means a Service Provider who holds an outstanding Award granted
under the Plan.

          (jj) “Performance Goals” means the goal(s) (or combined goal(s)) determined by the
Committee (in its discretion) to be applicable to a Participant with respect to an Award. As
determined by the Committee, the Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the following measures: (a) Cost of
Sales as a Percentage of Sales, (b) Earnings Per Share, (c) Free Cash Flow, (d) Marketing and Sales
Expenses as a Percentage of Sales, (e) Net Income as a Percentage of Sales, (f) Operating Margin,
(g) Revenue, (h) Total Shareholder Return and (i) Working Capital. The Performance Goals may
differ from Participant to Participant and from Award to Award. Any criteria used may be measured,
as applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to,
passage of time and/or against another company or companies), (iii) on a per-share basis, (iv)
against the performance of the Company as a whole or a segment of the Company and/or (v) on a
pre-tax or after-tax basis. Prior to the latest possible date that will not jeopardize an Award’s
qualification as “performance-based compensation” under Section 162(m) of the Code, the Committee
shall

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determine whether any element(s) or item(s) shall be included in or excluded from the
calculation of any Performance Goal with respect to any Participants.

          (kk) “Performance Period” means the time period of any Fiscal Year or such longer
period as determined by the Committee in its sole discretion during which the performance
objectives must be met.

          (ll) “Performance Share” means an Award granted to a Participant pursuant to Section
10.

          (mm) “Performance Unit” means an Award granted to a Participant pursuant to Section
10.

          (nn) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.

          (oo) “Plan” means this 2004 Equity Incentive Plan.

          (pp) “Profit After Tax” means as to any Performance Period, the Company’s income after
taxes, determined in accordance with generally accepted accounting principles.

          (qq) “Restricted Stock” means shares of Common Stock issued pursuant to a Restricted
Stock award under Section 8 of the Plan or issued pursuant to the early exercise of an Option.

          (rr) “Revenue” means as to any Performance Period, the Company’s net revenues
generated from third parties, determined in accordance with generally accepted accounting
principles.

          (ss) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

          (tt) “Section 16(b)” means Section 16(b) of the Exchange Act.

          (uu) “Service Provider” means an Employee, Director or Consultant.

          (vv) “Share” means a share of the Common Stock, as adjusted in accordance with Section
13 of the Plan.

          (ww) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with an Option, that pursuant to Section 9 is designated as a SAR.

          (xx) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing,
as defined in Section 424(f) of the Code.

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          (yy) “Tandem SAR” means a SAR that is granted in connection with a related Option, the
exercise of which will require forfeiture of the right to purchase an equal number of Shares under
the related Option (and when a Share is purchased under the Option, the SAR will be canceled to the
same extent).

          (zz) “Total Shareholder Return” means as to any Performance Period, the total return
(change in share price plus reinvestment of any dividends) of a Share.

          (aaa) “Unvested Awards” shall mean Options or Restricted Stock that (i) were granted
to an individual in connection with such individual’s position as an Employee and (ii) are still
subject to vesting or lapsing of Company repurchase rights or similar restrictions.

          (bbb) “Working Capital” means the Company’s current assets minus current liabilities,
determined in accordance with generally accepted accounting principles.

     3. Stock Subject to the Plan.

          (a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be optioned and sold under the Plan is 3,400,000
Shares plus (a) the number of shares which have been reserved but not issued under the Company’s
1995 Stock Option/Stock Issuance Plan (the “1995 Plan”) as of the effective date of the Plan, and
(b) any Shares returned to the 1995 Plan as a result of termination of options or repurchase of
Shares issued under such plan, with the maximum number of Shares to be added to the Plan pursuant
to clauses (a) and (b) equal to 1,500,000 Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock. Shares shall not be deemed to have been issued pursuant to the Plan with
respect to any portion of an Award that is settled in cash. Upon payment in Shares pursuant to the
exercise of an SAR, the number of Shares available for issuance under the Plan shall be reduced
only by the number of Shares actually issued in such payment. If the exercise price of an Option
is paid by tender to the Company, or attestation to the ownership, of Shares owned by the
Participant, the number of Shares available for issuance under the Plan shall be reduced by the
gross number of Shares for which the Option is exercised. Notwithstanding anything to the contrary
herein, the total number of Shares subject to Awards other than Options or SARs that were granted
at per Share exercise prices equal to 100% of Fair Market Value per Share on the grant date may not
exceed 20% of the Shares reserved for issuance under the Plan.

          (b) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Exchange Program, or, with respect to Options,
Restricted Stock, Performance Shares or Performance Units, is forfeited back to or repurchased by
the Company, the unpurchased Shares (or for Awards other than Options and SARs, the forfeited or
repurchased Shares) which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated). With respect to SARs, only Shares actually issued
pursuant to an SAR shall cease to be available under the Plan; all remaining Shares under SARs
shall remain available for future grant or sale under the Plan (unless the Plan has terminated).
However, Shares that have actually been issued under the Plan under any Award shall not be returned
to the Plan and shall not become available for future distribution under the Plan, except that if
unvested Shares of Restricted Stock, Performance Shares or Performance Units are repurchased by the
Company or are forfeited to the Company, such Shares shall become available

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for future grant under the Plan. To the extent an Award under the Plan is paid out
in cash rather than stock, such cash payment shall not result in reducing the number of Shares
available for issuance under the Plan.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.

               (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Options granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

               (iv) Other Administration. Other than as provided above, the Plan will be administered
by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable
Laws.

          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Awards may be granted hereunder;

               (iii) to determine the number of Shares to be covered by each Award granted hereunder;

               (iv) to approve forms of agreement for use under the Plan;

               (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;

               (vi) to institute an Exchange Program;

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               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

               (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws and/or qualifying for preferred tax treatment under applicable foreign laws;

               (ix) to modify or amend each Award (subject to Section 17(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of Awards longer than
is otherwise provided for in the Plan;

               (x) to allow Participants to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares or cash to be issued upon exercise or vesting of an Award that
number of Shares or cash having a Fair Market Value equal to the minimum amount required to be
withheld. The Fair Market Value of any Shares to be withheld will be determined on the date that
the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares
or cash withheld for this purpose will be made in such form and under such conditions as the
Administrator may deem necessary or advisable;

               (xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

               (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award;

               (xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.

          (c) Exchange Program. Notwithstanding anything in this Plan to the contrary, the
Administrator shall not have the authority to institute an Exchange Program without the consent of
the shareholders.

          (d) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.

     5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Stock Appreciation
Rights, Performance Units and Performance Shares may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees.

     6. Limitations.

          (a) Each Option will be designated in the Award Agreement as either an Incentive Stock Option
or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be
taken

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into account in the order in which they were granted. The Fair Market Value of the Shares
will be determined as of the time the Option with respect to such Shares is granted.

          (b) The following limitations will apply to grants of Options and Stock Appreciation Rights
with an exercise price equal to or exceeding 100% of Fair Market Value on the grant date:

               (i) No Service Provider will be granted, in any Fiscal Year, Options or SARs to purchase more
than 200,000 Shares.

               (ii) In connection with his or her initial service, a Service Provider may be granted Options
or SARs to purchase up to an additional 300,000 Shares, which will not count against the limit set
forth in Section 6(b)(i) above.

               (iii) The foregoing limitations will be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 13.

               (iv) If an Option or SAR is cancelled in the same Fiscal Year in which it was granted (other
than in connection with a transaction described in Section 13), the cancelled Option or SAR will be
counted against the limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.

     7. Stock Options.

          (a) Term of Option. The term of each Option will be stated in the Award Agreement. In
the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be
five (5) years from the date of grant or such shorter term as may be provided in the Award
Agreement.

          (b) Option Exercise Price and Consideration.

               (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option will be determined by the Administrator, subject to the following:

                    (1) In the case of an Incentive Stock Option

                         a) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair
Market Value per Share on the date of grant.

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                         b) granted to any Employee other than an Employee described in paragraph (a) immediately
above, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on
the date of grant.

                    (2) In the case of a Nonstatutory Stock Option, the per Share exercise price will be
determined by the Administrator. In the case of a Nonstatutory Stock Option intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.

                    (3) Notwithstanding the foregoing, Incentive Stock Options may be granted with a per Share
exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant
to a merger or other corporate transaction.

               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.

               (iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
note; (4) other Shares, provided Shares acquired directly or indirectly from the Company, (A) have
been owned by the Participant and not subject to substantial risk of forfeiture for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option will be exercised; (5)
consideration received by the Company under a cashless exercise program implemented by the Company
in connection with the Plan; (6) a reduction in the amount of any Company liability to the
Participant, including any liability attributable to the Participant’s participation in any
Company-sponsored deferred compensation program or arrangement; (7) any combination of the
foregoing methods of payment; or (8) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

          (c) Exercise of Option.

               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will
be exercisable according to the terms of the Plan and at such times and under such conditions as
determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.

                    An Option will be deemed exercised when the Company receives: (x) written or electronic notice
of exercise (in accordance with the Award Agreement) from the person entitled to exercise the
Option, and (y) full payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be
issued in the name of the Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse. Until the Shares are issued (as

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evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a stockholder will exist
with respect to the Awarded Stock, notwithstanding the exercise of the Option. The Company will
issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 13 of the Plan.

                    Exercising an Option in any manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.

          (d) Termination of Relationship as a Service Provider. If a Participant ceases to be a
Service Provider, other than upon the Participant’s death or Disability, the Participant may
exercise his or her Option within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for three (3) months
following the Participant’s termination. Unless otherwise provided by the Administrator, if on the
date of termination the Participant is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option will revert to the Plan. If after termination the
Participant does not exercise his or her Option within the time specified by the Administrator, the
Option will terminate, and the Shares covered by such Option will revert to the Plan.

          (e) Disability of Participant. If a Participant ceases to be a Service Provider as a
result of the Participant’s Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.

          (f) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has
been designated prior to Participant’s death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Participant, then such Option may be exercised by the
personal representative of the Participant’s estate or by the person(s) to whom the Option is
transferred pursuant to the Participant’s will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the
Administrator, if at the time of death Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If
the

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Option is not so exercised within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.

          (g) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares an Option previously granted based on such terms and conditions as the
Administrator shall establish and communicate to the Participant at the time that such offer is
made.

     8. Restricted Stock.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine provided
that during any Fiscal Year, no Service Provider shall receive more than 125,000 Shares of
Restricted Stock except that such Service Provider may receive up to an additional 175,000 Shares
of Restricted Stock in the fiscal year of the Company in which his or her service as a Service
Provider first commences.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an
Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such
other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the
Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as
escrow agent until the restrictions on such Shares have lapsed.

          (c) Transferability. Except as provided in this Section 8, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

               (i) General Restrictions. The Administrator may set restrictions based upon the
achievement of specific performance objectives (Company-wide, departmental, or individual),
applicable federal or state securities laws, or any other basis determined by the Committee in its
discretion.

               (ii) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the
Committee, in its discretion, may set restrictions based upon the achievement of Performance Goals.
The Performance Goals shall be set by the Committee on or before the latest date permissible to
enable the Restricted Stock to qualify as “performance-based compensation” under Section 162(m) of
the Code. In granting Restricted Stock which is intended to qualify under Section 162(m) of the
Code, the Committee shall follow any procedures determined by it from time to time to be necessary
or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code
(e.g., in determining the Performance Goals).

     (e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of
Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from
escrow as soon as practicable after the last day of the Period of Restriction. The

-12-

 

Administrator, in its discretion, may accelerate the time at which any restrictions will lapse
or be removed.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

     9. Stock Appreciation Rights.

          (a) Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be
granted to Service Providers at any time and from time to time as will be determined by the
Administrator, in its sole discretion. The Administrator may grant Affiliated SARs, Freestanding
SARs, Tandem SARs, or any combination thereof.

          (b) Number of Shares. The Administrator will have complete discretion to determine the
number of SARs granted to any Service Provider, subject to the limits set forth in Section 6.

          (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of
the Plan, will have complete discretion to determine the terms and conditions of SARs granted under
the Plan; provided, however, that no SAR may have a term of more than ten (10) years from the date
of grant. However, the exercise price of Tandem or Affiliated SARs will equal the exercise price of
the related Option.

          (d) Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the right to exercise the equivalent
portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares for
which its related Option is then exercisable. With respect to a Tandem SAR granted in connection
with an Incentive Stock Option: (a) the Tandem SAR will expire no later than the expiration of the
underlying Incentive Stock Option; (b) the value of the payout with respect to the Tandem SAR will
be for no more than one hundred percent (100%) of the difference between the exercise price of the
underlying Incentive Stock Option and the Fair Market Value of the Shares subject to the underlying
Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the Tandem SAR will be
exercisable only when the Fair Market Value of the Shares subject to the Incentive Stock Option
exceeds the Exercise Price of the Incentive Stock Option.

-13-

 

          (e) Exercise of Affiliated SARs. An Affiliated SAR will be deemed to be exercised upon
the exercise of the related Option. The deemed exercise of an Affiliated SAR will not necessitate a
reduction in the number of Shares subject to the related Option.

          (f) Exercise of Freestanding SARs. Freestanding SARs will be exercisable on such terms
and conditions as the Administrator, in its sole discretion, will determine.

          (g) SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will
specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms
and conditions as the Administrator, in its sole discretion, will determine.

          (h) Expiration of SARs. An SAR granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.
Notwithstanding the foregoing, the rules of Sections 7(d), 7(e) and 7(f) also will apply to SARs.

          (i) Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to
receive payment from the Company in an amount determined by multiplying:

               (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

               (ii) The number of Shares with respect to which the SAR is exercised.

     At the discretion of the Administrator, the payment upon SAR exercise may be in cash, in
Shares of equivalent value, or in some combination thereof.

          (j) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares a Stock Appreciation Right previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Participant at the time that
such offer is made.

     10. Performance Units and Performance Shares.

          (a) Grant of Performance Units/Shares. Subject to the terms and conditions of the
Plan, Performance Units and Performance Shares may be granted to Service Providers at any time and
from time to time, as will be determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in determining the number of Performance Units and
Performance Shares granted to each Service Provider, provided that during any Fiscal Year, (a) no
Service Provider shall receive Performance Units having an initial value greater than $750,000,
except that such Service Provider may receive Performance Units in the fiscal year of the Company
in which his or her service as an Employee first commences with an initial value no greater than
$750,000, and (b) no Service Provider shall receive more than 125,000 Performance Shares, except
that such Service Provider may receive up to an additional 175,000 Performance Shares in the fiscal
year of the Company in which his or her service as a Service Provider first commences. The
Administrator will have complete discretion in determining the conditions that must be satisfied.

-14-

 

          (b) Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

          (c) Performance Objectives and Other Terms. The Administrator will set performance
objectives in its discretion which, depending on the extent to which they are met, will determine
the number or value of Performance Units/Shares that will be paid out to the Service Providers.
Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify
the Performance Period, and such other terms and conditions as the Administrator, in its sole
discretion, will determine. The Administrator may set performance objectives based upon the
achievement of Company-wide, divisional, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Administrator in its discretion.

          (d) Section 162(m) Performance Objectives. For purposes of qualifying grants of
Performance Units and/or Performance Shares as “performance-based compensation” under Section
162(m) of the Code, the Committee, in its discretion, may determine that the performance objectives
applicable to Performance Units and/or Performance Shares shall be based on the achievement of
Performance Goals. The Performance Goals shall be set by the Committee on or before the latest date
permissible to enable the Performance Units and/or Performance Shares to qualify as
“performance-based compensation” under Section 162(m) of the Code. In granting Performance Units
and/or Performance Shares which are intended to qualify under Section 162(m) of the Code, the
Committee shall follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Performance Units and/or Performance Shares under
Section 162(m) of the Code (e.g., in determining the Performance Goals).

          (e) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of
Performance Units/Shares earned by the Participant over the Performance Period, to be determined as
a function of the extent to which the corresponding performance objectives have been achieved.
After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce
or waive any performance objectives for such Performance Unit/Share.

          (f) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.

          (g) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.

     11. Leaves of Absence. Unless the Administrator provides otherwise, vesting of Awards
granted hereunder will be suspended during any unpaid leave of absence, such that vesting shall
cease on the first day of any unpaid leave of absence and shall only recommence upon return to
active service. A Service Provider will not cease to be an Employee in the case of (i) any leave of

-15-

 

absence approved by the Company or (ii) transfers between locations of the Company or between
the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave
may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence approved by the Company
is not so guaranteed, then three months following the 91st day of such leave any Incentive Stock
Option held by the Participant will cease to be treated as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option.

     12. Transferability of Awards. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator
deems appropriate.

     13. Adjustments; Dissolution or Liquidation; or Change in Control.

          (a) Adjustments. Subject to any required action by the shareholders of the Company,
the number of Shares covered by each outstanding Award, the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an Award and the number of Shares
as well as the price per share of Common Stock covered by each such outstanding Award and the
162(m) annual share issuance limits under Section 3, 6, 8(a), 9(b) and 10(a) shall be
proportionately adjusted for any increase or decrease in the number of issued Shares resulting from
a stock split, reverse stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of consideration.” Such
adjustment shall be made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of Shares subject
to an Award.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Administrator in its discretion may
provide for a Participant to have the right to exercise his or her Option or SAR until ten (10)
days prior to such transaction as to all of the Awarded Stock covered thereby, including Shares as
to which the Award would not otherwise be exercisable. In addition, the Administrator may provide
that any Company repurchase option or forfeiture rights applicable to any Award shall lapse 100%,
and that any Award vesting shall accelerate 100%, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised (with respect to Options and SARs) or vested (with respect to other Awards), an Award
will terminate immediately prior to the consummation of such proposed action.

          (c) Change in Control.

-16-

 

               (i) Stock Options and SARS. In the event of a Change in Control, each outstanding
Option and SAR shall be assumed or an equivalent option or SAR substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or SAR, the Participant shall fully vest
in and have the right to exercise the Option or SAR as to all of the Awarded Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option or SAR becomes
fully vested and exercisable in lieu of assumption or substitution in the event of a Change in
Control, the Administrator shall notify the Participant in writing or electronically that the
Option or SAR shall be fully vested and exercisable for a period of fifteen (15) days from the date
of such notice, and the Option or SAR shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or SAR shall be considered assumed if, following the Change
in Control, the option or stock appreciation right confers the right to purchase or receive, for
each Share of Awarded Stock subject to the Option or SAR immediately prior to Change in Control,
the consideration (whether stock, cash, or other securities or property) received in the Change in
Control by holders of Common Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if such consideration
received in the Change in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option or SAR, for each Share of Awarded
Stock subject to the Option or SAR, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by holders of Common
Stock in the Change in Control. Notwithstanding anything herein to the contrary, an Award that
vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be
considered assumed if the Company or its successor modifies any of such performance goals without
the Participant’s consent; provided, however, a modification to such performance goals only to
reflect the successor corporation’s post-Change in Control corporate structure will not be deemed
to invalidate an otherwise valid Award assumption.

               (ii) Restricted Stock, Performance Shares and Performance Units. In the event of a
Change in Control, each outstanding Restricted Stock, Performance Share and Performance Unit award
shall be assumed or an equivalent Restricted Stock, Performance Share and Performance Unit award
substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the Restricted Stock,
Performance Share or Performance Unit award, the Participant shall fully vest in the Restricted
Stock, Performance Share or Performance Unit including as to Shares (or with respect to Performance
Units, the cash equivalent thereof) which would not otherwise be vested. For the purposes of this
paragraph, a Restricted Stock, Performance Share and Performance Unit award shall be considered
assumed if, following the Change in Control, the award confers the right to purchase or receive,
for each Share (or with respect to Performance Units, the cash equivalent thereof) subject to the
Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change in Control by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received, for each Share

-17-

 

and each unit/right to acquire a Share subject to the Award, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the Change in Control. Notwithstanding anything herein to
the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more
performance goals will not be considered assumed if the Company or its successor modifies any of
such performance goals without the Participant’s consent; provided, however, a modification to such
performance goals only to reflect the successor corporation’s post-Change in Control corporate
structure will not be deemed to invalidate an otherwise valid Award assumption.

     14. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

     15. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

     16. Term of Plan. Subject to Section 20 of the Plan, the Plan will become effective
upon its adoption by the Board. It will continue in effect for a term of ten (10) years unless
terminated earlier under Section 17 of the Plan.

     17. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

          (b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to
exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to
the date of such termination.

     18. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any

-18-

 

such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     19. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

     20. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval
will be obtained in the manner and to the degree required under Applicable Laws.

-19-Exhibit 10.1

Exhibit 10.1

Gannett Co., Inc.

Compensation for Non-Employee Directors

Annual Fees

Each director is entitled to receive an annual retainer fee of $45,000. The presiding director is
entitled to receive an additional annual retainer fee of $25,000 and each committee chair is
entitled to receive an additional annual retainer fee of $15,000.

In lieu of receiving their annual retainer fees in cash, directors may elect to receive their fees
in:

(1) Shares of restricted stock worth 110% of the applicable cash fee, based on the closing
market price of the Company’s common stock on the grant date. These restricted shares
generally vest at a rate of 1/4th of the shares per quarter after the grant date,
receive dividends and are held by the Company for the benefit of the director until he or
she leaves the board at which time vested shares are delivered to the director; or

(2) Options to purchase that number of shares of the Company’s common stock equal to four
times the number of shares that would have been issued if the applicable fee had been paid
in shares of restricted stock. These options generally vest at a rate of 1/4th of
the shares per quarter after the grant date, have an exercise price equal to the closing
market price of a share of the Company’s common stock on the grant date, and are exercisable
for a period of eight years from the grant date.

In addition, upon each annual meeting of shareholders, each director is entitled to receive a
long-term award of either 2,000 shares of restricted stock or options to purchase 8,000 shares of
the Company’s common stock. These long-term awards vest as follows:

(1) Restricted shares generally vest at a rate of 1/36th of the shares per month,
receive dividends and are held by the Company for the benefit of the director until he or
she leaves the board at which time the vested shares are delivered to the director; and

(2) Options generally vest at a rate of 1/4th of the shares on each anniversary
of the grant date, have an exercise price equal to the closing market price of a share of
the Company’s common stock on the grant date, and are exercisable for a period of eight
years from the grant date.

Meeting Fees

Directors receive $2,000 for each board meeting attended and $1,000 for each committee meeting
attended.

In lieu of receiving their meeting fees in cash, directors may elect to receive their fees in:

(1) Shares of restricted stock worth 110% of the applicable cash fee, based on the closing
market price of the Company’s common stock on the grant date. These restricted shares are
fully vested on the grant date, receive dividends and are held by the Company for the
benefit of the director until he or she leaves the board at which time the vested shares are
delivered to the director; or

(2) Options to
purchase that number of shares of the Company’s common stock equal to four
times the number of shares that would have been issued if the applicable fee had been paid
in shares of restricted stock. These options are fully vested on the grant date, have an
exercise price

 

 

 

equal to the closing market price of a share of the Company’s common stock on
the grant date, and are exercisable for a period of eight years from the grant date.

Special Vesting Rules

Upon the retirement of a non-employee director due to the age of service limitations set forth in
the Company’s bylaws, the director’s restricted stock would vest immediately and, for any
non-employee director who completed at least three full years of service on the board, the options
would vest immediately. Options and restricted stock also automatically vest upon a change of
control of the Company. If a non-employee director ceases to be a director for reasons other than
the age of service limitations set forth in the Company’s bylaws, the director’s unvested shares of
restricted stock and unvested options are forfeited, except that, if the director leaves after
having completed (i) at least three full years of service on the board, his or her options will
vest for one additional year and he or she will have that extra year to exercise any vested
options, (ii) at least six full years of service on the board, he or she will have two years of
added vesting and exercise time, and (iii) nine or more full years of service on the board, he or
she will receive three years of added vesting and exercise time. All unvested options will
continue to vest during such post-termination exercise period in accordance with the option’s
original vesting schedule.

Deferral

Directors may elect to defer their cash or restricted stock fees under the Company’s Deferred
Compensation Plan, which for cash fee deferrals provides for ten deemed investment options,
including mutual funds and a Company common stock fund. Deferred fees paid as restricted stock must
be invested in the Company’s common stock fund of the Deferred Compensation Plan.

Other Compensation

Directors receive travel accident insurance of $1,000,000 and a match from the Gannett Foundation
of charitable gifts made by directors up to a maximum of $10,000 each year.

Expenses

Directors are reimbursed for their reasonable expenses of attending board and committee meetings.

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