Document:

chtl_8k-ex1002.htm

Exhibit 10.2

 

CHINA TEL GROUP, INC.

2011 STOCK OPTION AND INCENTIVE PLAN

 

	
1.

	
Purpose of Plan.

 

The purpose of this 2011 Stock Option and Incentive Plan (“Plan”) is to advance the interests of China Tel Group, Inc. (the “Company”) and its stockholders by enabling the Company and its Subsidiaries to attract and retain qualified individuals through opportunities for equity participation in the Company, and to reward those individuals who contribute to the Company’s achievement of its economic objectives.

 

	
2.

	
Definitions.

 

The following terms will have the meanings set forth below, unless the context clearly otherwise requires:

 

2.1. “Award” means an Option, Restricted Stock Award, Performance Stock Award, unrestricted Award of Common Stock, or Stock Appreciation Right granted to an Eligible Recipient pursuant to the Plan.

 

2.2. “Board” means the Company’s Board of Directors.

 

2.3. “Broker Exercise Notice” means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver stock certificates to be issued upon such exercise directly to such broker or dealer or its nominee.

 

2.4. “Cause” means (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or any Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii) any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Participant’s overall duties, (iv) any material breach of any confidentiality or non-compete agreement entered into with the Company or any Subsidiary, or (v) with respect to a particular Participant, any other act or omission that constitutes “cause” as that term may be defined in any employment, consulting or similar agreement between such Participant and the Company or any Subsidiary, provided that, in case of any conflict between the meaning of “cause” as defined in this stock option plan and as defined in any employment, consulting or similar agreement, the meaning which benefits the Company or any Subsidiary shall control over the meaning which benefits the Participant.

 

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

 

2.6. “Committee” means the group of individuals administering the Plan, as provided in Section 3 of the Plan. 

 

2.7. “Common Stock” means the Series A common stock of the Company, par value $0.001 per share.  The number and kind of shares of stock or other securities into which such Common Stock may be changed is in accordance with Section 4.3 of the Plan. 

 

  

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2.8. “Disability” means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code.  Notwithstanding the foregoing, to the extent an Award is subject to Section 409A and payment or settlement of the Award may be accelerated as a result of a Participant’s Disability, Disability will have the meaning ascribed to it under Section 409A.

 

2.9. “Eligible Recipients” means all employees, officers and directors of the Company or any Subsidiary, and any consultants and advisors to the Company or any Subsidiary.

 

2.10. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

2.11. “Executive” means a “covered employee” within the meaning of Section 162(m)(3) or any other Eligible Recipient designated by the Committee for purposes of exempting compensation payable under the Plan from the deduction limitations of Section 162(m).

 

2.12. “Fair Market Value” means, with respect to the Common Stock, as of any date:  (i) the mean between the reported high and low sale prices of the Common Stock at the end of the regular trading session if the Common Stock is listed, admitted to unlisted trading privileges, or reported on any national securities exchange, or on The Nasdaq Stock Market, The Nasdaq Capital Market, the OTC Markets Group, Inc., the OTC Bulletin Board, Pink Sheets LLC, or other comparable service on such date (or, if no shares were traded on such day, as of the next preceding day on which there was such a trade); or (ii)  if the Common Stock is not so listed or reported, such price as the Committee determines in good faith in the exercise of its reasonable discretion.  

 

2.13. “Incentive Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.

 

2.14. “Net-Share Payment” means (i) payment for shares of Common Stock to be purchased upon exercise of an Option by holding back an amount of shares to be issued upon such exercise equal in value to the amount of the exercise price and/or (ii) payment of  withholding and employment-related tax obligations in accordance with Section 12.2 of the Plan by holding back shares to be issued upon the grant, exercise or vesting of an Award (including an Option) equal in value to the amount of the required tax obligations.  

 

2.15. “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock Option.

 

2.16. “Option” means an Incentive Stock Option or a Non-Statutory Stock Option. 

 

2.17. “Participant” means an Eligible Recipient who receives one or more Awards under the Plan. 

 

2.18. “Performance Criteria” means the performance criteria that may be used by the Committee in granting Awards where the grant, vesting, or exercisability of the Award is contingent upon achievement of such performance goals as the Committee may determine in its sole discretion.  The Committee may select one criterion or multiple criteria for measuring performance, and the measurement may be based upon Company, Subsidiary, division, business unit or subunit or asset group performance, or the individual performance of the Eligible Recipient, either absolute or by relative comparison to other companies, other Eligible Recipients or any other external measure of the selected criteria.

 

  

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(a) In order to preserve the deductibility of an Award under Section 162(m), the Committee may determine that any Award granted pursuant to the Plan to a Participant that is or is expected to become an Executive will be conditioned on performance goals that are based on any of the following:

 

(i) Net income measures (including but not limited to earnings, net earnings, operating earnings, earnings before taxes, EBIT (earnings before interest and taxes), EBITA (earnings before interest, taxes, and amortization) EBITDA (earnings before interest, taxes, depreciation, and amortization), and earnings per share); 

 

(ii) Stock price measures (including but not limited to growth measures and total stockholder return (stock price plus reinvested dividends) relative to a defined comparison group or target and price-earnings multiples); 

 

(iii) Cash flow measures (including but not limited to net cash flow, net cash flow before financing activities, economic value added (or equivalent metric), debt reduction, debt to equity ratio, or establishment or material modification of a credit facility);

 

(iv) Return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity); 

 

(v) Operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes, and production efficiency); 

 

(vi) Expense measures (including but not limited to finding, development, and lifting costs, overhead cost and general and administrative expense);

 

(vii) Asset measures (including but not limited to a specified target, or target growth in market capitalization or market value, proceeds from dispositions, strategic acquisitions, or raising capital);

 

(viii) Relative performance measures (including but not limited to relative performance to a comparison group or index designated by the Committee and market share);

 

(ix) Corporate values measures (including but not limited to ethics, environmental, legal, regulatory, and safety); and

 

(x) Any combination of the above.

 

If an Award is made on this basis, the Committee will establish goals prior to the beginning of the period for which the Performance Criteria relate (or at a later date to the extent permitted under Section 162(m) but not later than 90 days after the commencement of the period of services to which the Performance Criteria relate).  The Committee has the right for any reason to reduce (but not increase) the Award, notwithstanding the achievement of a specified goal.  Any payment of an Award granted with Performance Criteria under this subparagraph (a) will be conditioned on the written certification of the Committee in each case that the Performance Criteria and any other material conditions were satisfied.

 

  

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(b) To the extent that Section 409A is applicable, (i) performance-based compensation will also be contingent on the satisfaction of pre-established organizational or individual Performance Criteria relating to a performance period of at least 12 consecutive months in which the Participant performs services and (ii) Performance Criteria will be established not later than 90 calendar days after the beginning of any performance period to which the Performance Criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. 

 

2.19. “Performance Stock Awards” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan and that is subject to the future achievement of Performance Criteria.

 

2.20. “Previously Acquired Shares” means shares of Common Stock that are already owned by the Participant.

 

2.21. “Restricted Stock Award” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 7 of the Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of Section 7 and which may be subject to the future achievement of Performance Criteria.

 

2.22. “Section 162(m)” means Code section 162(m) and the Treasury Regulations and other guidance promulgated thereunder.

 

2.23. “Section 409A” means Code section 409A and the Treasury Regulations and other guidance promulgated thereunder.

 

2.24. “Securities Act” means the Securities Act of 1933, as amended.

 

2.25. “Stock Appreciation Right” means a right to receive payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the right is exercised over a specified base price, all as determined by the Committee in its discretion.

 

2.26. “Subsidiary” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee.

 

	
3.

	
Plan Administration.

 

3.1. The Committee.  The Plan will be administered by the Board or by a committee of the Board.  Any committee administering the Plan may consist of any member of the Board; however, if the Company has a class of its equity securities registered under Section 12 of the Exchange Act and it is required under the rules of any exchange upon which the Common Stock is traded, the committee will consist solely of two or more members of the Board who are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act.  If necessary for relief from the limitation under Section 162(m) and that relief is sought by the Company, the committee administering the Plan will consist of “outside directors” within the meaning of Section 162(m).  Such a committee, if established, will act by majority approval of the members (unanimous approval with respect to action by written consent), and a majority of the members of such a committee will constitute a quorum.  As used in the Plan, “Committee” will refer to the Board or to such a committee, if established.  To the extent consistent with applicable corporate law of the Company’s jurisdiction of incorporation and except as required for compliance with Section 162(m), the Committee may delegate to any officers of the Company the duties, power and authority of the Committee under the Plan pursuant to such conditions or limitations as the Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are subject to Section 16 of the Exchange Act.  The Committee may exercise its duties, power and authority under the Plan in its sole and absolute discretion without the consent of any Participant or other party, unless the Plan specifically provides otherwise.  Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Award granted under the Plan. 

 

  

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3.2. Authority of the Committee.

 

(a) In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without limitation, the following:  (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Award, any exercise price, the manner in which Awards will vest or become exercisable and whether Awards will be granted in tandem with other Awards) and the form of written agreement, if any, evidencing each such Award; (iii) the time or times when Awards will be granted; (iv) the duration of each Award; and (v) the restrictions and other conditions to which the payment or vesting of Awards may be subject.  In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Award in the form of cash, Common Stock or any combination of both.

 

(b) Subject to Section 3.2(d), below, the Committee will have the authority under the Plan to amend or modify the terms of any outstanding Award in any manner, including, without limitation, the authority to modify the number of shares or other terms and conditions of an Award, extend the term of an Award, accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Award, accept the surrender of any outstanding Award or, to the extent not previously exercised or vested, authorize the grant of new Awards in substitution for surrendered Awards; provided, however, that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification.

 

(c) In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other change in corporate structure or shares; (ii) any purchase, acquisition, sale, disposition or write-down of a significant amount of assets or a significant business; (iii) any change in accounting principles or practices, tax laws or other such laws or provisions affecting reported results; or (iv) any other similar change, in each case with respect to the Company or any other entity whose performance is relevant to the grant, vesting, or payment of an Award, the Committee may, without the consent of any affected Participant, amend or modify the vesting or payment criteria (including Performance Criteria) of any outstanding Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division or other subunit thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee) following such event as prior to such event and make any such other adjustments to any outstanding Awards that the Committee deems appropriate, including, without limitation, accelerating vesting, substituting Awards, or assuming Awards; provided, however, that the amended or modified terms are permitted by the Plan as then in effect and that the amended or modified terms do not violate the provisions of Section 162(m), Section 409A, or, to the extent applicable, Code Section 424.

 

  

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(d) Notwithstanding any other provision of the Plan other than Section 4.3, if prohibited by the rules of any exchange upon which the Common Stock is listed, the Committee may not, without prior approval of the Company’s stockholders, seek to effect any re-pricing of any previously granted Options or Stock Appreciation Rights.

 

	
4.

	
Shares Available for Issuance.

 

4.1. Maximum Number of Shares Available; Certain Restrictions on Awards.  Subject to adjustment as provided in Section 4.3 of the Plan, the maximum number of shares of Common Stock that will be available for issuance under the Plan will be 75,000,000 shares, of which 75,000,000 shares may be available for use in connection with Incentive Options.  No more than 30,000,000 shares of Common Stock may be the subject of Awards that are not Options or Stock Appreciation Rights.  The aggregate number of shares with respect to which an Award or Awards may be granted to any one Participant in any one taxable year of the Company may not exceed 50,000,000 shares of Common Stock.  The shares available for issuance under the Plan may, at the election of the Committee, be either treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

 

4.2. Accounting for Awards.  Shares of Common Stock that are issued under the Plan or that are subject to outstanding Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan; provided, however, that shares subject to an Award that lapses, expires, is forfeited (including issued shares forfeited under a Restricted Stock Award) or for any reason is terminated unexercised or unvested or is settled or paid in cash or any form other than shares of Common Stock will automatically again become available for issuance under the Plan.  To the extent that the exercise price of any Option, or withholding or employment-related tax obligations associated with an Option or other Award, are paid by tender or attestation as to ownership of Previously Acquired Shares or by holding back shares pursuant to a Net-Share Payment, only the number of shares of Common Stock issued net of the number of shares tendered, attested to or held back will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan.  To the extent that an Award can only be settled in cash, it will not reduce the number of shares available under the Plan.

 

4.3. Adjustments to Shares and Awards.  In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares or any other change in the corporate structure or shares of the Company, the Committee, acting in its discretion, may make such adjustment as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan and, in order to prevent dilution or enlargement of the rights of Participants, the number and kind of securities or other property (including cash) subject to outstanding Awards and the exercise price of outstanding Options and base price of outstanding Stock Appreciation Rights.

 

  

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5.

	
Participation.

 

Participants in the Plan will be those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of economic objectives of the Company or its Subsidiaries.  Eligible Recipients may be granted from time to time one or more Awards, singly or in combination or in tandem with other Awards, as may be determined by the Committee in its sole discretion.  Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the date of any related agreement with the Participant.

 

	
6.

	
Options.

 

6.1. Grant.  An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions, including the satisfaction of Performance Criteria, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion.  The Committee may designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.  To the extent that any Option that is intended to be an Incentive Stock Option fails or ceases for any reason to qualify as an “incentive stock option” for purposes of Section 422 of the Code, such Option will continue to be outstanding for purposes of the Plan but will be deemed to be a Non-Statutory Stock Option.

 

6.2. Exercise Price.  The per share price to be paid by a Participant upon exercise of an Option will be determined by the Committee in its discretion at the time of the Option grant; provided, however, that such price will not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant (110% of the Fair Market Value with respect to an Incentive Stock Option if, at the time such Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

 

6.3. Exercisability and Duration.  An Option will become exercisable at such times and in such installments and upon such terms and conditions as may be determined by the Committee in its sole discretion (including without limitation (i) the achievement of one or more of the Performance Criteria and/or (ii) that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain period); provided, however, that no Option may be exercisable after 10 years from its date of grant (five years from its date of grant in the case of an Incentive Stock Option if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company). 

 

6.4. Payment of Exercise Price.  The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, by Net-Share Payment, by tender or attestation as to ownership of Previously Acquired Shares that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, or by a combination of such methods. For purposes of such payment, Previously Acquired Shares tendered or covered by an attestation and shares held back pursuant to a Net-Share Payment will be valued at their Fair Market Value on the exercise date.

 

  

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6.5. Manner of Exercise.  An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company at its principal executive office and by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan.

 

	
7.

	
Restricted Stock Awards.

 

7.1. Grant.  An Eligible Recipient may be granted one or more Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion.  The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards as it deems appropriate, including, without limitation, (i) the achievement of one or more of the Performance Criteria and/or (ii) that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain period.

 

7.2. Rights as a Stockholder; Transferability.  Except as provided in Sections 7.1, 7.3, 7.4 and 13.3 of the Plan, a Participant will have all voting, dividend, liquidation and other rights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award under this Section 7 upon the Participant becoming the holder of record of such shares as if such Participant were a holder of record of shares of unrestricted Common Stock.

 

7.3. Dividends and Distributions.  Unless the Committee determines otherwise in its sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant or at any time after the grant of the Restricted Stock Award), any dividends or distributions (other than regular quarterly cash dividends) paid with respect to shares of Common Stock subject to the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the shares to which such dividends or distributions relate.  The Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions.

 

7.4. Enforcement of Restrictions.  To enforce the restrictions referred to in this Section 7, the Committee may place a legend on the stock certificates referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company’s transfer agent.

 

	
8.

	
Performance Stock Awards.  

 

8.1. Grant. An Eligible Recipient may be granted one or more Performance Stock Awards under the Plan, and the issuance of shares of Common Stock pursuant to such Performance Stock Awards will be subject to such terms and conditions as are consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, including, but not limited to, the achievement of one or more of the Performance Criteria.

 

8.2. Restrictions on Transfers.  The right to receive shares of Performance Stock Awards on a deferred basis may not be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution.

 

  

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9.

	
Unrestricted Stock Awards.

 

The Committee may, in its sole discretion, grant an Award of shares of Common Stock free from any restrictions under this Plan to any Eligible Recipient.

 

	
10.

	
Stock Appreciation Rights.

 

10.1. Grant. An Eligible Recipient may be granted one or more Stock Appreciation Rights under the Plan subject to such terms and conditions, if any, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, including, but not limited to, the achievement of one or more of the Performance Criteria.

 

10.2. Exercise.  A Participant may exercise a vested Stock Appreciation Right by giving written notice of the exercise to the Company stating the number of shares subject to the exercise.  Upon receipt of the notice and subject to the Committee’s election to pay cash as provided in Section 10.3, the Company will deliver a certificate or certificates for Common Stock and/or a cash payment in accordance with Section 10.3.

 

10.3. Number of Shares or Amount of Cash.  The Committee may provide that a Stock Appreciation Right will be settled in cash or Common Stock.  If the Committee does not specify that a Stock Appreciation Right can be settled in cash, that Stock Appreciation Right will be settled in shares of Common Stock except as determined by the Committee in its discretion.  The amount of Common Stock that may be issued pursuant to the exercise of a Stock Appreciation Right will be determined by dividing (a) the total number of shares of Common Stock as to which the Stock Appreciation Right is exercised, multiplied by the amount by which the Fair Market Value (or other specified valuation) of the Common Stock on the exercise date exceeds the base price (which may not be less than the Fair Market Value of the Common Stock on the date of grant) by (b) the Fair Market Value of the Common Stock on the exercise date; provided that fractional shares will not be issued and will instead be paid in cash.  In lieu of issuing Common Stock upon the exercise of a Stock Appreciation Right, the Committee in its sole discretion may elect to pay the cash equivalent of the Fair Market Value of the Common Stock on the exercise date for any or all of the shares of Common Stock that would otherwise be issuable upon the exercise of the Stock Appreciation Right.

 

	
11.

	
Effect of Termination of Employment or Other Service. 

 

11.1. Termination Due to Death or Disability.  Subject to Sections 11.3 and 11.4 of the Plan, in the event a Participant’s employment or other service with the Company and all Subsidiaries is terminated by reason of death or Disability:

 

(a) All outstanding Options and Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of six months after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not exercisable as of such termination will be forfeited and terminate;

 

(b) All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

 

(c) All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

 

  

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11.2. Termination for Reasons Other than Death or Disability.  Subject to Sections 11.3 and 11.4 of the Plan, in the event a Participant’s employment or other service with the Company and all Subsidiaries is terminated for any reason other than death or Disability, or a Participant is in the employ of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Participant continues in the employ of the Company or another Subsidiary):

 

(a) All outstanding Options and Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three months after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not exercisable as of such termination will be forfeited and terminate;

 

(b) All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

 

(c) All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

 

11.3. Modification of Rights Upon Termination.  Notwithstanding the other provisions of this Section 11, upon a Participant’s termination of employment or other service with the Company and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time on or after the date of grant, including following such termination), cause Options and Stock Appreciation Rights (or any part thereof) then held by such Participant to become or continue to become exercisable and/or remain exercisable following such termination of employment or service, and Restricted Stock Awards and Performance Stock Awards then held by such Participant to vest and/or continue to vest or become free of restrictions and conditions to issuance, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee.

 

11.4. Effects of Actions Constituting Cause.  Notwithstanding anything in the Plan to the contrary, in the event that a Participant is determined by the Committee, acting in its sole discretion, to have committed any action which would constitute Cause as defined in Section 2.4, irrespective of whether such action or the Committee’s determination occurs before or after termination of such Participant’s employment or service with the Company or any Subsidiary, all rights of the Participant under the Plan and any agreements evidencing an Award then held by the Participant shall terminate and be forfeited without notice of any kind.  The Company may defer the exercise of any Option or Stock Appreciation Right or the vesting of any Restricted Stock Award or Performance Stock Award for a period of up to 45 days in order for the Committee to make any determination as to the existence of Cause.

 

11.5. Determination of Termination of Employment or Other Service.  Unless the Committee otherwise determines in its sole discretion, a Participant’s employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company or the Subsidiary for which the Participant provides employment or service, as determined by the Committee in its sole discretion based upon such records.

 

	
12.

	
Payment of Withholding and Employment-Related Tax Obligations.

 

12.1. General Rules.  The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, foreign, state and local withholding and employment-related tax requirements attributable to an Award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an Award or a disqualifying disposition of stock received upon exercise of an Incentive Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to an Award.

 

  

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12.2. Special Rules.  The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 12.1 of the Plan by electing to tender or by attestation as to ownership of Previously Acquired Shares that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, by delivery of a Broker Exercise Notice, by Net-Share Payment, or a combination of such methods.  For purposes of satisfying a Participant’s withholding or employment-related tax obligation, Previously Acquired Shares tendered or covered by an attestation and shares held back pursuant to a Net-Share Payment will be valued at their Fair Market Value on the date of tender, attestation, or holding back. 

 

	
13.

	
Rights of Eligible Recipients and Participants; Transferability.

 

13.1. Employment or Service.  Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employ or service of the Company or any Subsidiary.

 

13.2. Rights as a Stockholder.  As a holder of Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares.  Except as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to such Awards as to which there is a record date preceding the date the Participant becomes the holder of record of such shares, except as the Committee may determine in its discretion.

 

13.3. Restrictions on Transfer.  

 

(a) Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by subsections (b) and (c) below, no right or interest of any Participant in an Award prior to the exercise (in the case of Options or Stock Appreciation Rights) or vesting (in the case of Restricted Stock Awards or Performance Stock Awards) of such Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

 

(b) A Participant will be entitled to designate a beneficiary to receive an Award upon such Participant’s death, and in the event of such Participant’s death, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 11 of the Plan) may be made by, such beneficiary.  If a deceased Participant has failed to designate a beneficiary, or if a beneficiary designated by the Participant fails to survive the Participant, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 10 of the Plan) may be made by, the Participant's legal representatives, heirs, devisees and legatees.  If a deceased Participant has designated a beneficiary and such beneficiary survives the Participant but dies before complete payment of all amounts due under the Plan or exercise of all exercisable Options and Stock Appreciation Rights, then such payments will be made to, and the exercise of such Options and Stock Appreciation Rights may be made by, the legal representatives, heirs, devisees and legatees of the beneficiary.

 

  

11

  

(c) Upon a Participant’s request, the Committee may, in its sole discretion, permit a transfer of all or a portion of a Non-Statutory Stock Option or Stock Appreciation Right, other than for value, to such Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, any person sharing such Participant’s household (other than a tenant or employee), a trust in which any of the foregoing have more than 50% of the beneficial interests, a foundation in which any of the foregoing (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than 50% of the voting interests.  Any permitted transferee will remain subject to all the terms and conditions applicable to the Participant prior to the transfer.  A permitted transfer may be conditioned upon such requirements as the Committee may, in its sole discretion, determine, including, but not limited to execution and/or delivery of appropriate acknowledgements, opinion of counsel, or other documents by the transferee.

 

13.4. Non-Exclusivity of the Plan.  Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable.

 

	
14.

	
Securities Laws and Other Restrictions.

 

Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock under the Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable securities laws of a state or foreign jurisdiction or an exemption from such registration under the Securities Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from any other U.S. or foreign regulatory body which the Committee, in its sole discretion, deems necessary or advisable.  The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities laws or other restrictions.

 

	
15.

	
Plan Amendment, Modification and Termination.

 

The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendments to the Plan will be effective without approval of the Company’s stockholders if: (i) stockholder approval of the amendment is then required pursuant to Section 422 of the Code or, if applicable, the rules of any stock exchange or The Nasdaq Stock Market or similar regulatory body; or (ii) such amendment seeks to modify Section 3.2(d) of the Plan.  No termination, suspension or amendment of the Plan may adversely affect any outstanding Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Sections 3.2(c), 4.3, 12 and 13 of the Plan.

 

  

12

  

	
16.

	
Duration of the Plan.

 

The Plan will terminate at midnight on December 31, 2020, and may be terminated prior to such time by Board action.  No Award will be granted after termination of the Plan.  Awards outstanding upon termination of the Plan may continue to be exercised, or become free of restrictions, according to their terms.

 

	
17.

	
Miscellaneous.

 

17.1. Governing Law.  Except to the extent expressly provided herein or in connection with other matters of corporate governance and authority (all of which shall be governed by the laws of the Company’s jurisdiction of incorporation), the validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the State of Nevada notwithstanding the conflicts of laws principles of any jurisdictions.

 

17.2. Compliance with Section 409A.  Each Award issued under the Plan is intended to be exempt from or comply with Section 409A and will be interpreted accordingly.  Where payment of an Award to a “specified employee” is triggered by a “separation from service” (terms as defined in Section 409A), payment will be delayed for six months following the specified employee’s separation from service.

 

17.3. Successors and Assigns.  The Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company and the Participants.

 

	
18.

	
Prior Stock Option Plan Superseded.  

 

The Plan supersedes and replaces entirely the Company’s 2008 Stock Option Plan adopted by the Company on October 27, 2008, which is declared to be of no further force and effect (no options having ever been issued under said 2008 Stock Option Plan).

 

  

13

  

 

 

STOCK OPTION AGREEMENT

 

CHINA TEL GROUP, INC.

2011 STOCK INCENTIVE PLAN

 

THIS STOCK OPTION AGREEMENT (this “Agreement”) is made by and between CHINA TEL GROUP, INC. (the “Company”), and ____________________ (“Optionee”) as of ________________, 2011, pursuant to the China Tel Group, Inc. 2011 Stock Incentive Plan (the “Plan”), which is incorporated by reference herein in its entirety.

 

RECITALS 

 

The Committee, acting on behalf of the Company, wishes to grant Optionee an Option to purchase ____________________ shares of the Company’s $0.001 par value common stock (“Common Stock”) on the terms and subject to the conditions set forth below and in the Plan.

 

Capitalized terms used in this Agreement and not otherwise defined in this Agreement will have the meaning assigned to them in the Plan.

 

AGREEMENT

 

It is hereby agreed as follows:

 

1. Grant of Option.  Effective April __, 2011 (the “Grant Date”), the Company hereby grants to Optionee an Option to purchase up to ____________________ shares of Series A Common Stock (the “Shares”) at an exercise price per share of $_________ upon the terms and conditions set forth in this Agreement and the Plan.  The Option is not intended to be treated as an Incentive Stock Option within the meaning of the Plan and Section 422 of the Internal Revenue Code to the extent it otherwise qualifies as such.

 

2. Option Term.  Unless terminated sooner, the Option will expire if and to the extent it is not exercised ten years from the date of this Agreement. 

 

3. Vesting.  The Option is fully vested on the date of issuance, subject to termination or forfeiture in accordance with the terms of the Plan.

 

4. Method of Exercise.  The Option may be exercised in whole or in part by Optionee by giving written notice to the Company of the election to purchase and of the number of whole Shares Optionee elects to purchase and by paying the exercise price for the Shares together with the amount, if any, deemed by the Committee to enable the Company to satisfy any withholding or employment-tax obligations attributable to the exercise.  A partial exercise of the Option may not be for less than 100 Shares.  The exercise price and any other required amount must be paid in cash or by certified or bank cashier’s check payable to the Company or pursuant to any other method permitted by the Committee in accordance with the Plan.

 

  

1

  

 

5. Effect of Termination of Employment or Other Service.  If an Optionee’s employment or other service with the Company (or a Subsidiary) terminates, the effect of the termination on the Optionee’s rights to acquire Shares under this Agreement will be as set forth in Section 11 of the Plan.  

 

6. Restrictions on Transfer of Option.  The Option will not be transferable, either voluntarily or by operation of law, except as provided in Section 13.3 of the Plan.  

 

7. Rights as a Stockholder.  Optionee will not be entitled to the privileges of stock ownership as to any Shares not actually issued and delivered to Optionee.  No Shares may be purchased upon the exercise of the Option unless and until, in the opinion of the Company’s counsel, any then-applicable requirements of the Plan, this Agreement, any laws, any governmental or regulatory agencies having jurisdiction, and of any exchanges upon which the stock of the Company may be listed have been fully complied with.

 

8. No Right to Employment.  Nothing contained in this Agreement obligates the Company to employ or have another relationship with Optionee for any period or interfere in any way with the right of the Company to reduce Optionee’s compensation or to terminate the employment of or relationship with Optionee at any time.

 

9. Miscellaneous.

 

9.1. Binding Effect, Successors.  This Agreement shall bind and inure to the benefit of the successors, assigns, transferees, agents, personal representatives, heirs and legatees of the respective parties.

 

9.2. Further Acts.  Each party will perform any further acts and execute and deliver any documents which may be necessary to carry out the provisions of this Agreement and to comply with applicable law.

 

9.3. Amendment.  This Agreement may be amended at any time by the written agreement of the Company and the Optionee.

 

9.4. Choice of Law and Severability.  This Agreement shall be construed, enforced and governed by the laws of the State of Nevada.  The invalidity of any provision of this Agreement will not affect any other provision of this Agreement, which will remain in full force and effect.

 

9.5. Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission if the notice or communication is delivered prior to 3:30 p.m. (California time) on any day except Saturday, Sunday and any day that is a federal legal holiday in the United States (“Business Day”) via facsimile at the facsimile number set forth below or via electronic mail at the address set forth below, (b) the next Business Day after the date of transmission if the notice or communication is delivered on a day that is not a Business Day or later than 3:30 p.m. (California time) on any Business Day via facsimile at the facsimile number set forth below or via electronic mail at the address set forth below, (c) the 2nd Business Day following the date transmitted if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom the notice is required to be given.  All notices and demands to Optionee or the Company may be given to them at the following addresses:

 

  

2

  

	
If to Optionee:

	
____________________

	  	
___________________

	  	
___________________

	  	
Fax: _______________

	  	
Electronic Mail: __________________

	  	  
	
If to Company:

	
China Tel Group, Inc.

	  	
12526 High Bluff Drive, Suite 155

	  	
San Diego, California 92130

	  	
Attn: George Alvarez, CEO

	  	
Fax: (760) 359-7040

	  	
E- Mail: galvarez@chinatelgroup.com

 

The parties may designate in writing from time to time such other place or places that notices and demands may be given.

 

9.6. Entire Agreement.  This Agreement, as governed by and interpreted in accordance with the Plan, constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, this Agreement supersedes all prior and contemporaneous agreements and understandings of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as set forth or referred to herein.  No supplement, modification or waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby.  No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

9.7. Grant Subject to Terms of Plan and this Agreement.  The Optionee acknowledges and agrees that the grant of the Option is made pursuant to and governed by the terms of the Plan and this Agreement.  Optionee, by execution of this Agreement, acknowledges having received a copy of the Plan.  The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan.  In the case of a conflict between the terms of the Plan and this Agreement, the terms of the Plan will control.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

  

3

  

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set forth above.

 

 

	 	
“COMPANY”

 

CHINA TEL GROUP, INC.,

a Nevada corporation

 

By: _______________________________________

      George Alvarez, Chief Executive Officer

“OPTIONEE”

 

__________________________________________

(Signature of Optionee)

___________________________________________

(Printed Name of Optionee)

 

 

  

 

 

 

 

4exhibit10_1.htm

 

 Intermec, Inc.

2008 Long-Term Performance Share Program

 

Agreement for the Award Period

January 1,  [YEAR] through December 31, [YEAR]

 

 

This Performance Share Unit Agreement (the “Agreement”) is made as of __________, 20___ between Intermec, Inc., a Delaware corporation (the “Company”), and [NAME]   (the “Participant”).

 

WHEREAS, the Intermec, Inc. 2008 Omnibus Incentive Plan (the “Plan”) was adopted by the Board of Directors of the Company on March 19, 2008, and was approved by the stockholders of the Company on May 23, 2008; and

 

WHEREAS, the Committee has adopted the 2008 Long-Term Performance Share Program, as amended (the “Program”), as a sub-plan of the Plan and authorized the Award represented by this Agreement;

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants hereinafter set forth, and other good and valuable consideration, the Company and the Participant hereby agree as follows:

 

Article 1.  Award

 

The Participant is hereby awarded, as a matter of separate inducement and agreement, and not in lieu of salary or other compensation for services,  [TOTAL SHARES GRANTED]  Performance Share Units (the “Target Award”), on the terms and conditions hereinafter set forth.  The number of Performance Share Units (“PSUs”) that the Participant may earn under this Agreement shall range from 0% to 200% of the Target Award (the “Earned PSUs”), as determined by the achievement of the performance measures set forth in Article 3 of this Agreement.  The Earned PSUs shall be paid in shares of the common stock, par value $.01 per share, of the Company (the “Common Stock”) as set forth in Article 6 of this Agreement.  The Participant shall have no obligation to pay the Company additional consideration for the Earned PSUs.

 

The Plan and the Program, copies of which have been made available to the Participant, are incorporated herein by reference and made part of this Agreement as if fully set forth herein. Capitalized terms used in this Agreement that are not defined herein shall have the meanings assigned to such terms in the Plan and the Program. This Agreement is subject to, and the Company and the Participant agree to be bound by, all of the terms and conditions of the Plan and the Program as the same exist at the time this Agreement became effective. The Plan and the Program shall control in the event there is any express conflict between the terms hereof and the Plan or the Program and with respect to such matters as are not expressly covered in this Agreement. The Company hereby reserves the right to alter, amend, modify, restate, suspend or terminate the Plan, the Program and this Agreement in accordance with Section 16.1 of the Plan, but no such subsequent amendment, modification, restatement, or termination of the Plan, the Program or this Agreement shall adversely affect in any material way the Participant’s rights under this Agreement without the Participant’s written consent.  This Agreement shall be subject, without further action by the Company or the Participant, to such amendment, modification, or restatement.

 

Article 2.  Measurement Period, Performance Period and Award Period

For all purposes of this Agreement, “Measurement Period” means January 1, [YEAR] through December 31, [YEAR], “Performance Period” means January 1, [YEAR] through December 31, [YEAR] and “Award Period” means January 1, [YEAR] through December 31, [YEAR].

 

Article 3.  Achievement of Performance Measures

The number of Earned PSUs to be earned under this Agreement shall be based upon the achievement of the following Performance Period performance measures set by the Committee, and measured with respect to the Measurement Period as of December 31, [YEAR]:

 

          [PERFORMANCE MEASURES AND DETERMINATION OF ACHIEVEMENT]

Article 4. Termination/Forfeiture Provisions

Except as otherwise provided below in this Article 4, a Participant shall be eligible for payment of Earned PSUs, as determined in Article 3, only if the Participant’s employment with the Company or a Related Company continues through the end of the Award Period.

 

In the event of a Participant’s termination of employment as a result of death or disability prior to the end of the Award Period,  the former employee (or beneficiary)  will be entitled to receive a payout of Earned PSUs on the same basis as other Participants, provided that (1) such amount shall be  prorated for the number of full months worked during the Award Period as a percentage of the total number of full months in the Award Period and (2) payout shall be made within 21⁄2 months after the later of the termination or the certification by the Committee of payouts for the Award Period, notwithstanding the requirement applicable generally that no payout is due unless the Participant  remains employed until the end of the Award Period.  In no event, however, will payment occur later than the time provided in Article 6.

 

The effect of a Change of Control on PSUs shall be governed by the terms of the Company's change of control policy applicable to the Participant (either the Executive Change of Control Policy for the Plan or the Standard Change of Control Policy for the Plan, effective January 7, 2009).

 

Article 5. Rights as a Stockholder

During the Award Period, the Participant shall have no rights of a stockholder with respect to the PSUs or the Earned PSUs.  Notwithstanding the foregoing, the Participant shall be entitled to receive any dividend equivalents declared by the Board, as provided in the Program.

 

 

  

  

 

  

 

Article 6. Form and Timing of Payment

Except as set forth in Article 4 or in the Program, payment of Earned PSUs shall be made in the form of shares of Common Stock within 21⁄2 months following the close of the Award Period.  The Company shall direct its transfer agent to issue to the Participant, in uncertificated form, the number of unrestricted shares of Common Stock that are payable to the Participant under the Agreement.

 

Article 7. Nontransferability

 

PSUs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  The Participant’s rights under this Agreement shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative.

Article 8. Administration

 

It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, the Program and this Agreement, all of which shall be binding upon the Participant.

 

Article 9.  Withholding.

 

No later than the date as of which an amount first becomes includable in the  gross income of the Participant for federal income tax purposes with respect to any Earned PSUs, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local, or foreign taxes of any kind required by law to be withheld by the Company with respect to such amount (the “Mandatory Withholding Taxes”). The obligations of the Company hereunder shall be conditional on such payment or arrangements. Notwithstanding the foregoing, to the maximum extent permitted by applicable law, the Company has the right to retain, without notice to the Participant, from the total number of shares of Common Stock issuable and deliverable to the Participant pursuant to this Agreement, or from salary or other amounts payable to the Participant, the number of shares or cash having a value not less than the Mandatory Withholding Taxes; the Company currently intends to satisfy such Mandatory Withholding Taxes by retaining shares of Common Stock otherwise issuable under this Award (up to the minimum statutory amount required to be withheld by the Company).

 

 

Regardless of any action the Company takes with respect to any or all of the Mandatory Withholding Taxes, the Participant acknowledges that the ultimate liability for all withholding taxes legally due by the Participant is and remains the Participant’s responsibility and that the Company (a) makes no representations or undertakings regarding the treatment of any withholding taxes in connection with any aspect of the Earned PSUs , including the grant or other vesting of the Earned PSUs , the subsequent sale of shares of Common Stock received upon vesting of the Earned PSUs, if any, and the receipt of any dividends or dividend equivalents; and (b) does not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate the Participant’s liability for withholding taxes.

 

Article 10. Miscellaneous

 

A.         The Participant understands and acknowledges that the Participant is one of a limited number of employees of the Company and its Related Companies who have been selected to receive grants of PSUs and that the Participant’s Award is considered Company confidential information. The Participant hereby covenants and agrees not to disclose the Award of PSUs pursuant to this Agreement to any other person except (i) the Participant’s immediate family and legal or financial advisors who agree to maintain the confidentiality of this Agreement, (ii) as required in connection with the administration of this Agreement and the Plan as it relates to this Award or under applicable law, and (iii) to the extent the terms of this Award have been publicly disclosed.

 

B.         The grant of PSUs to the Participant in any year shall give the Participant neither any right to similar grants in future years nor any right to be retained in the employ of the Company or its Related Companies, such employment being terminable to the same extent as if the Program and this Agreement were not in effect. The right and power of the Company and its Related Companies to dismiss or discharge the Participant is specifically and unqualifiedly unimpaired by this Agreement.

 

C.         Each notice relating to this Agreement shall be in writing and delivered in person or by mail to the Company at its office, 6001 36th Avenue West, Everett, WA 98203-1264, to the attention of the Company’s Secretary or at such other address as the Company may specify in writing to the Participant by a notice delivered in accordance with this paragraph. All notices to the Participant shall be delivered to the Participant at the Participant’s address in the Company’s records or at such other address as the Participant may specify in writing to the Secretary of the Company by a notice delivered in accordance with this paragraph.

 

D.         This Agreement, including the provisions of the Plan and the Program incorporated by reference herein, comprises the whole Agreement between the parties hereto with respect to the subject matter hereof, and shall be governed by and construed in accordance with the laws of the State of Washington, U.S.A., without reference to principles of conflicts of law.  This Agreement shall become effective when it has been executed or accepted electronically by the Company and the Participant.  For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant of the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Washington, U.S.A., and agree that such litigation shall be conducted only in the courts of Washington, U.S.A., or the federal courts for the United States for the Western District of Washington, and no other courts where this grant is made and/or to be performed.

 

E.         This Agreement shall inure to the benefit of and be binding upon each successor of the Company and, to the extent specifically provided herein and in the Plan and the Program, shall inure to the benefit of and shall be binding upon the Participant’s heirs, legal representatives, and successors.

 

F.         If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement.

 

G.         This Agreement may be executed in separate counterparts, each of which when so executed and delivered will be an original, but all of which together will constitute one and the same instrument. In pleading or proving this Agreement, it will not be necessary to produce or account for more than one such counterpart.

 

H.         The Company may, in its sole discretion, decide to deliver any documents related to the PSUs granted under, and participation in, the Program or future PSUs that may be granted under the Program by electronic means or to request the Participant’s consent to participate in the Program by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Program through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

 

 

I.           Payments made pursuant to this Agreement are intended to qualify for an exemption from Section 409A of the Code.  Notwithstanding any other provision in this Agreement and the Plan, the Company, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement, the Program  or the Plan so that the Award granted hereunder to the Participant qualifies for exemption from or complies with Section 409A; provided, however, that the Company makes no representations that the Agreement or the Award shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to the Award.  The Participant, by executing this Agreement, shall be deemed to have waived any claim against the Company and its affiliates with respect to any such tax, economic and legal consequences.  Also notwithstanding the foregoing, if at the time of a scheduled vesting or payout date under the Agreement, the Participant is a “specified employee” of the Company within the meaning of that term under Section 409A and as determined by the Company, and payment would be treated as a payment made on “separation from service” within the meaning of that term under Section 409A, then, if such delayed commencement is otherwise required in order to avoid a prohibited distribution under Section 409A, the payment shall be delayed until the date which is six months after the date of such separation from service or if earlier the date of the Participant's death.

 

 

IN WITNESS WHEREOF, this Agreement is executed by the Participant and by the Company through its duly authorized officer as of the day and year first above written.

 

INTERMEC, INC.

By:                                                                                            

Patrick J. Byrne

           Chief Executive Officer and President

PARTICIPANT:

IMPORTANT

PLEASE ACCEPT ELECTRONICALLY OR

SIGN AND RETURN PROMPTLY

                                                                                                  

          [NAME]

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