Document:

ex44.htm

Exhibit 4.4

CIMETRIX INCORPORATED

2006 LONG-TERM INCENTIVE PLAN

 

Combined Amendment and Restatement of 1998 Incentive Stock Option and Director Stock Option Plans

 

Cimetrix, Incorporated, a Nevada corporation (the “Company”), hereby adopts the Cimetrix Incorporated 2006 Long-Term Incentive Plan (the “Plan”) as a combined amendment and restatement of the Cimetrix Incorporated 1998 Incentive Stock Option Plan and Cimetrix Incorporated Director Stock Option Plan (collectively the “Prior Plans”).   On and after the Restatement Effective Date as defined below, this Plan shall supersede and replace the separate Prior Plans in their entirety and no further options or awards shall be granted under the Prior Plans.  Notwithstanding the foregoing, any options or other awards that were granted under the Prior Plans and are outstanding immediately prior to the Restatement Effective Date shall continue to be governed by, and shall remain subject to the provisions of, the applicable Prior Plan and applicable option or award agreement as in effect prior to the Restatement Effective Date.  This Plan does not amend or modify any option or award granted under the Prior Plans.

 

1.           PURPOSE OF THE PLAN

 

           The purpose of the Plan is to assist the Company and its Subsidiaries in attracting and retaining selected individuals to serve as directors, employees, consultants and/or advisors of the Company who are expected to contribute to the Company's success and to achieve long-term objectives which will inure to the benefit of all shareholders of the Company through the additional incentives inherent in the Awards hereunder.

 

2.           DEFINITIONS

 

2.1.           “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award, Performance Award, Other Stock Unit Award or any other right, interest or option relating to Shares or other property (including cash) granted pursuant to the provisions of the Plan.

 

2.2.           “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder, including through an electronic medium.

 

2.3.           “Board” shall mean the board of directors of the Company.

 

2.4.           “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

2.5.           “Committee” shall mean the Compensation Committee of the Board, consisting of no fewer than two Directors, each of whom is (i) a “Non-Employee Director” within the meaning of Rule 16b-3 of the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code, and (iii) an “independent director” for purpose of the rules and regulations of the NASDAQ Stock Market (or such other principal securities market on which the Shares are traded).

 

2.6.           “Company” shall mean Cimetrix Incorporated, a Nevada corporation, and its successors and assigns.

 

2.7.           “Covered Employee” shall mean an employee of the Company who is a “covered employee” within the meaning of Section 162(m) of the Code.

 

2.8.           “Director” shall mean a non-employee member of the Board.

 

2.9.           “Dividend Equivalents” shall have the meaning set forth in Section 12.5.

 

2.10.           “Employee” shall mean any employee of the Company or any Subsidiary and any prospective employee conditioned upon, and effective not earlier than, such person’s becoming an employee of the Company or any Subsidiary.  Solely for purposes of the Plan, an Employee shall also mean any consultant or advisor who provides services to the Company or any Subsidiary, so long as such person (i) renders bona fide services that are not in connection with the offer and sale of the Company's securities in a capital-raising transaction and (ii) does not directly or indirectly promote or maintain a market for the Company's securities.

 

  

  

  

 

2.11.           “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

2.12.           “Fair Market Value” shall mean, with respect to any property other than Shares, the market value of such property determined by such methods or procedures as shall be established from time to time by the Committee.  The Fair Market Value of Shares as of any date shall be the per Share average of the high and low trading prices of the Shares as reported on the NASDAQ Stock Market on that date (or if there were no reported prices on such date, on the last preceding date on which the prices were reported) or, if the Company is not then listed on the NASDAQ Stock Market, on such other principal securities exchange on which the Shares are traded.  If the Shares are not listed on the NASDAQ Stock Market or any other exchange, Fair Market Value shall be the average of the highest and lowest reported asked prices for the Shares as reported by the NASDAQ OTC Bulletin Board system, or any other over-the-counter market system in which the Shares are primarily traded, for the last preceding date on which there was a sale of Shares in that market.  If the Company is not listed on the NASDAQ Stock Market, any other securities exchange, the NASDAQ OTC Bulletin Board system or any other over-the-counter market system, the Fair Market Value of Shares shall be determined by the Committee in good faith using appropriate criteria.

 

2.13.           “Freestanding Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

 

2.14.           “Limitations” shall have the meaning set forth in Section 10.5.

 

2.15.           “Option” shall mean any right granted to a Participant under the Plan allowing such Participant to purchase Shares at such price or prices and during such period or periods as the Committee shall determine.

 

2.16.           “Other Stock Unit Award” shall have the meaning set forth in Section 8.1.

 

2.17.           “Participant” shall mean an Employee or Director who is selected by the Committee to receive an Award under the Plan.

 

2.18.           “Payee” shall have the meaning set forth in Section 13.1.

 

2.19.           “Performance Award” shall mean any Award of Performance Shares or Performance Units granted pursuant to Article 9.

 

2.20.           “Performance Period” shall mean that period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

 

2.21.           “Performance Share” shall mean any grant pursuant to Article 9 of a unit valued by reference to a designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

2.22.           “Performance Unit” shall mean any grant pursuant to Section 9 of a unit valued by reference to a designated amount of property other than Shares (or cash), which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

2.23.           “Permitted Assignee” shall have the meaning set forth in Section 12.3.

 

2.24.           “Prior Plans” shall mean, collectively, the Cimetrix Incorporated 1998 Incentive Stock Option Plan and Cimetrix Incorporated Director Stock Option Plan, as amended prior to the Restatement Effective Date.

 

  

  

  

2.25.           “Restatement Effective Date” shall have the meaning set forth in Section 13.13.

 

2.26.           “Restricted Stock” shall mean any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such other restrictions as the Committee in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.

 

2.27.           “Restricted Stock Award” shall have the meaning set forth in Section 7.1.

 

2.28.           “Shares” shall mean the shares of common stock, $0.0001 par value, of the Company.

 

2.29.           “Stock Appreciation Right” shall mean the right granted to a Participant pursuant to Section 6.

 

2.30.            “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

 

2.31.           Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

 

2.32.           “Tandem Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

 

2.32.           “Vesting Period” shall have the meaning set forth in Section 7.1.

 

3.           SHARES SUBJECT TO THE PLAN

 

3.1           Number of Shares.  (a)  Subject to adjustment as provided in Section 12.2, a combined total of 6,250,000 Shares are authorized for grant under the Plan and Prior Plans.  Any Shares that are subject to Awards under this Plan or which have been or are in the future issued pursuant to options or awards previously granted under the Prior Plans shall be counted against the 6,250,000 Share limit.  Consequently, subject to adjustment as provided in Section 12.2, the total number of Shares that may be issued under this Plan and the Prior Plans shall not exceed 6,250,000.

 

(b)           If any Shares subject to an Award are forfeited or any Award is settled for cash, the Shares shall, to the extent of such forfeiture or cash settlement, again be available for Awards under the Plan.  Without limitation, the following Shares shall be added to the Shares authorized for grant under paragraph (a) of this Section: (i) Shares subject to an Option or Stock Appreciation Right that is forfeited or expires at the conclusion of its term without being exercised, (ii) Shares tendered by the Participant or withheld by the Company in payment of the purchase price of an Option, (iii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award, (iv) Shares repurchased by the Company with Option proceeds, and (v) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof.

 

  

  

  

(c)           Substitute Awards shall not reduce the Shares authorized for grant under the Plan or authorized for grant to a Participant in any calendar year.  Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination.

 

3.2.           Character of Shares.  Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares purchased in the open market or otherwise.

 

4.             ELIGIBILITY AND ADMINISTRATION

 

4.1.           Eligibility.  Any Employee or Director shall be eligible to be selected as a Participant.

 

4.2.           Administration.  (a) The Plan shall be administered by the Committee.  Subject to the other provisions of the Plan and such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, the Committee shall have full power and authority to: (i) select the Employees and Directors to whom Awards may from time to time be granted hereunder; (ii) determine the type or types of Awards, not inconsistent with the provisions of the Plan, to be granted to each Participant hereunder; (iii) determine the number of Shares to be covered by each Award granted hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award granted hereunder; (v) determine whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other property; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other property and other amounts payable with respect to an Award made under the Plan shall be deferred either automatically or at the election of the Participant; (vii) determine whether, to what extent and under what circumstances any Award shall be canceled or suspended; (viii) interpret and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including any Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall deem desirable to carry it into effect; (x) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) determine whether any Award, other than an Option or Stock Appreciation Right, will have Dividend Equivalents; and (xii) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

 

(b)           Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Participant, and any Subsidiary.   A Participant or other holder of an Award may contest a decision or action of the Committee with respect to such person or Award only on the grounds that such decision is arbitrary and capricious or unlawful, and any review of such decision or action shall be limited to determining whether the Committee’s decision or action was arbitrary and capricious or unlawful.  A majority of the members of the Committee may determine its actions and fix the time and place of its meetings.

 

(c)           The full Committee may also delegate to a subcommittee of the Committee the right to grant Awards to Employees who are not Directors or officers of the Company and the authority to take action on behalf of the Committee pursuant to the Plan to cancel or suspend Awards to Employees who are not Directors or officers of the Company.  Any action within the scope of its authority by such a subcommittee under Section 4.2(c) shall be deemed for all purposes under the Plan to have been taken by the full Committee and references in the Plan to the Committee shall be deemed to include the subcommittee unless the context otherwise requires.

 

5.           OPTIONS

 

5.1.           Grant of Options.  Options may be granted hereunder to Participants either alone or in addition to other Awards granted under the Plan.  Any Option shall be subject to the terms and conditions of this Article and to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable.

 

  

  

  

 

5.2.           Award Agreements.  All Options granted pursuant to this Article shall be evidenced by a written Award Agreement in such form and containing such terms and conditions as the Committee shall determine which are not inconsistent with the provisions of the Plan.  The terms of Options need not be the same with respect to each Participant.  Granting an Option pursuant to the Plan shall impose no obligation on the recipient to exercise such Option.  Any individual who is granted an Option pursuant to this Article may hold more than one Option granted pursuant to the Plan at the same time.

 

5.3.           Option Price.  Other than in connection with Substitute Awards, the option price per each Share purchasable under any Option granted pursuant to this Article shall not be less than 100% of the Fair Market Value of such Share on the date of grant of such Option.

 

5.4.           Option Term.  The term of each Option shall be fixed by the Committee in its sole discretion; provided that no Option shall be exercisable after the expiration of seven (7) years from the date the Option is granted, except in the event of death or disability.

 

5.5.           Exercise of Options.  Vested Options granted under the Plan shall be exercised by the Participant or by a Permitted Assignee thereof (or by the Participant’s executors, administrators, guardian or legal representative, as may be provided in an Award Agreement) as to all or part of the Shares covered thereby, by the giving of written notice of exercise to the Company or its designated agent, specifying the number of Shares to be purchased, accompanied by payment of the full purchase price for the Shares being purchased.  Unless otherwise provided in an Award Agreement, full payment of such purchase price shall be made at the time of exercise and shall be made (a) in cash or cash equivalents (including certified check or bank check or wire transfer of immediately available funds), (b) by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value), (c) with the consent of the Committee, by delivery of other consideration (including, where permitted by law and the Committee, other Awards) having a Fair Market Value on the exercise date equal to the total purchase price, (d) with the consent of the Committee, by withholding Shares otherwise issuable in connection with the exercise of the Option, (e) through any other method specified in an Award Agreement, or (f) any combination of any of the foregoing.  The notice of exercise, accompanied by such payment, shall be delivered to the Company at its principal business office or such other office as the Committee may from time to time direct, and shall be in such form, containing such further provisions consistent with the provisions of the Plan, as the Committee may from time to time prescribe.  In no event may any Option granted hereunder be exercised for a fraction of a Share.  No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such issuance.

 

5.6.           Form of Settlement.  In its sole discretion, the Committee may provide, at the time of grant, that the Shares to be issued upon an Option's exercise shall be in the form of Restricted Stock or other similar securities, or may reserve the right so to provide after the time of grant.

 

5.7.           Incentive Stock Options.  The Committee may grant Options intended to qualify as “incentive stock options” as defined in Section 422 of the Code, to any employee of the Company or any Subsidiary, subject to the requirements of Section 422 of the Code.  Solely for the purposes of determining whether Shares are available for the grant of “incentive stock options” under the Plan, the maximum aggregate number of Shares with respect to which “incentive stock options” may be issued under the Plan shall be 6,250,000 Shares, less any Shares issued under the Prior Plans, and subject to adjustment as provided in Section 12.2.

 

  

  

  

6.           STOCK APPRECIATION RIGHTS

 

6.1.           Grant and Exercise.  The Committee may provide Stock Appreciation Rights (a) in conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (“Tandem Stock Appreciation Right”), (b) in conjunction with all or part of any Award (other than an Option) granted under the Plan or at any subsequent time during the term of such Award, or (c) without regard to any Option or other Award (a “Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in its sole discretion.

 

6.2.           Terms and Conditions.  Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, including the following:

 

(a)           Upon the exercise of a Stock Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value of one Share on the date of exercise or such other amount as the Committee shall so determine at any time during a specified period before the date of exercise over (ii) the value of a Share on the date of grant (“Base Amount”), or in the case of a Tandem Stock Appreciation Right granted on the date of grant of the related Option, as specified by the Committee in its sole discretion, which Base Amount, except in the case of Substitute Awards or in connection with an adjustment provided in Section 12.2, shall not be less than the Fair Market Value of one Share on such date of grant of the right or the related Option, as the case may be.

 

(b)           Upon the exercise of a Stock Appreciation Right, the Committee shall determine in its sole discretion whether payment shall be made in cash, in whole Shares or other property, or any combination thereof.

 

(c)           Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or at any time thereafter before exercise or expiration of such Option.

 

(d)           Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the option price at which Shares can be acquired pursuant to the Option.  In addition, (i) if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies, and (ii) no Tandem Stock Appreciation Right granted under the Plan to a person then subject to Section 16 of the Exchange Act shall be exercised during the first six (6) months of its term for cash, except as provided in Article 11.

 

(e)           Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised.

 

(f)           The provisions of Stock Appreciation Rights need not be the same with respect to each recipient.

 

(g)          The Committee may impose such other conditions or restrictions on the terms of exercise and the exercise price of any Stock Appreciation Right, as it shall deem appropriate.  Notwithstanding the foregoing provisions of this Section 6.2(g), but subject to Section 12.2, a Freestanding Stock Appreciation Right shall generally have the same terms and conditions as Options, including (i) a Base Amount per Share not less than Fair Market Value on the date of grant to an employee of the Company or a Subsidiary, and (ii) a term not greater than seven (7) years.

 

(h)          The Committee may impose such terms and conditions on Stock Appreciation Rights granted in conjunction with any Award (other than an Option) as the Committee shall determine in its sole discretion.

 

  

  

  

 

7.           RESTRICTED STOCK AWARDS

 

7.1.           Grants.  Awards of Restricted Stock may be issued hereunder to Participants either alone or in addition to other Awards granted under the Plan (a “Restricted Stock Award”), and such Restricted Stock Awards shall also be available as a form of payment of Performance Awards and other earned cash-based incentive compensation.  A Restricted Stock Award shall be subject to vesting restrictions imposed by the Committee covering a period of time specified by the Committee (the “Vesting Period”).   The Committee has absolute discretion to determine whether any consideration (other than services) is to be received by the Company or any Subsidiary as a condition precedent to the issuance of Restricted Stock.

 

7.2.           Award Agreements.  The terms of any Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan.  The terms of Restricted Stock Awards need not be the same with respect to each Participant

 

7.3.           Rights of Holders of Restricted Stock.  Beginning on the date of grant of the Restricted Stock Award and subject to execution of the Award Agreement, the Participant shall become a shareholder of the Company with respect to all Shares subject to the Award Agreement and shall have all of the rights of a shareholder, including the right to vote such Shares and the right to receive distributions made with respect to such Shares; provided, however, that except as otherwise provided in an Award Agreement any Shares or any other property (other than cash) distributed as a dividend or otherwise with respect to any Restricted Stock as to which the restrictions have not yet lapsed shall be subject to the same restrictions as such Restricted Stock.

 

7.4.           Minimum Vesting Period.  Except for certain limited situations (including the death, disability or retirement of the Participant, or a Change in Control as defined in Article 11), or special circumstances determined by the Committee, such as the achievement of performance objectives, Restricted Stock Awards subject solely to the continued employment of employees of the Company or a Subsidiary shall have a Vesting Period of not less than three (3) years from date of grant (but permitting pro rata vesting over such time); provided that such minimum Vesting Period shall not be applicable to (i) grants to new hires to replace forfeited awards from a prior employer, or (ii) grants of Restricted Stock in payment of Performance Awards and other earned cash-based incentive compensation. Subject to the foregoing minimum Vesting Period requirements, the Committee may, in its sole discretion and subject to the limitations imposed under Section 162(m) of the Code and the regulations thereunder in the case of a Restricted Stock Award intended to comply with the performance-based exception under Code Section 162(m), waive the forfeiture period and any other conditions set forth in any Award Agreement subject to such terms and conditions as the Committee shall deem appropriate.  The minimum Vesting Period requirements of this Section shall not apply to Restricted Stock Awards granted to Directors or to any consultants or advisors who provide services to the Company or any Subsidiary.

 

8.           OTHER STOCK UNIT AWARDS

 

8.1.           Grants.  Other Awards of units having a value equal to an identical number of Shares (“Other Stock Unit Awards”) may be granted hereunder to Participants, in addition to other Awards granted under the Plan.  Other Stock Unit Awards shall also be available as a form of payment of other Awards granted under the Plan and other earned cash-based incentive compensation.

 

8.2.           Award Agreements.  The terms of Other Stock Unit Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan.  The terms of such Awards need not be the same with respect to each Participant.

 

8.3.           Vesting.  Except for certain limited situations (including the death, disability or retirement of the Participant, or a Change in Control as defined in Article 11), or special circumstances determined by the Committee, such as the achievement of performance objectives, Other Stock Unit Awards subject solely to the continued employment of employees of the Company or any Subsidiary shall be subject to a vesting period determined by the Committee of not less than three (3) years from date of grant (but permitting pro rata vesting over such time); provided, that such minimum vesting period shall not be applicable to (i) grants to new hires to replace forfeited awards from a prior employer, or (ii) grants of Other Stock Unit Awards in payment of Performance Awards and other earned cash-based incentive compensation.  Subject to the foregoing minimum vesting period requirements,

 

  

  

  

the Committee may, in its sole discretion and subject to the limitations imposed under Section 162(m) of the Code and the regulations thereunder in the case of a Other Stock Unit Award intended to comply with the performance-based exception under Code Section 162(m), waive the forfeiture period and any other conditions set forth in any Award Agreement subject to such terms and conditions as the Committee shall deem appropriate.  The minimum vesting period requirements of this Section shall not apply to Other Stock Unit Awards granted to Directors or to any consultants or advisors who provide services to the Company or any Subsidiary.

 

8.4.           Payment.  Except as provided in Article 10 or as maybe provided in an Award Agreement, Other Stock Unit Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee at the time of payment.  Other Stock Unit Awards may be paid in a lump sum or in installments or, in accordance with procedures established by the Committee, on a deferred basis subject to the requirements of Section 409A of the Code.

 

9.           PERFORMANCE AWARDS

 

9.1.           Grants.  Performance Awards in the form of Performance Shares or Performance Units, as determined by the Committee in its sole discretion, may be granted hereunder to Participants, for no consideration or for such minimum consideration as may be required by applicable law, either alone or in addition to other Awards granted under the Plan. The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 10.2.

 

9.2.           Award Agreements.  The terms of any Performance Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan, including whether such Awards shall have Dividend Equivalents. The terms of Performance Awards need not be the same with respect to each Participant.

 

9.3.           Terms and Conditions.  The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award.  The amount of the Award to be distributed shall be conclusively determined by the Committee.

 

9.4.           Payment.  Except as provided in Article 11 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period.  Performance Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee at the time of payment.  Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis subject to the requirements of Section 409A of the Code.

 

10.           CODE SECTION 162(m) PROVISIONS

10.1.           Covered Employees.  Notwithstanding any other provision of the Plan, if the Committee determines at the time a Restricted Stock Award, a Performance Award or an Other Stock Unit Award is granted to a Participant who is, or is likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that this Article 10 is applicable to such Award.

 

10.2.           Performance Criteria.  If the Committee determines that a Restricted Stock Award, a Performance Award or an Other Stock Unit Award is subject to this Article 10, the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one or any combination of the following: net sales; revenue; revenue growth; operating income; pre- or after-tax income (before or after allocation of corporate overhead and bonus); net earnings; earnings per share; net income; division, group or corporate financial goals; return on equity; total shareholder return; return on assets or net assets; attainment of strategic and operational initiatives; appreciation in and/or maintenance of the price of the Shares or any other publicly-traded securities of the Company; market share; gross profits; earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization); economic value-added models; comparisons with various stock

 

  

  

  

market indices; reductions in costs; cash flow (before or after dividends) cash flow per share (before or after dividends); return on capital (including return on total capital or return on invested capital; cash flow return on investment; improvement in or attainment of expense levels or working capital levels; cash margins; and revenue per employee.  Such performance goals also may be based solely by reference to the Company’s performance or the performance of a Subsidiary, division, business segment or business unit of the Company, or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies.  The Committee may also exclude charges related to an event or occurrence which the Committee determines should appropriately be excluded, including (a) reorganizations, restructurings and discontinued operations, (b) other extraordinary non-recurring items, (c) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, or (d) the cumulative effects of tax or accounting changes in accordance with generally accepted accounting principles.  Such performance goals shall be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of the Code, and the regulations thereunder.

 

10.3.           Adjustments.  Notwithstanding any provision of the Plan (other than Article 11), with respect to any Restricted Stock, Performance Award or Other Stock Unit Award that is subject to this Section 10, the Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance goals, except in the case of the death or disability of the Participant or as otherwise determined by the Committee in special circumstances.

 

10.4.           Restrictions.  The Committee shall have the power to impose such other restrictions on Awards subject to this Article as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m) of the Code.

 

10.5.           Limitations on Grants to Individual Participants.  Subject to adjustment as provided in Section 12.2, no Participant may be granted (i) Options or Stock Appreciation Rights during any rolling 36-month period with respect to more than 2,000,000 Shares or (ii) Restricted Stock, Performance Awards and/or Other Stock Unit Awards that are denominated in Shares in any rolling 36-month period with respect to more than 2,000,000 Shares (the “Limitations”).  In addition to the foregoing, the maximum dollar value payable to any Participant in any rolling 12-month period with respect to Performance Awards is $1,000,000.  If an Award is cancelled, the cancelled Award shall continue to be counted toward the applicable Limitations.

 

11.           CHANGE IN CONTROL PROVISIONS

 

11.1.           Impact on Certain Awards.  Award Agreements may provide that in the event of a Change in Control of the Company (as defined in Section 11.3): (i) Options and Stock Appreciation Rights outstanding as of the date of the Change in Control shall be cancelled and terminated without payment therefore if the Fair Market Value of one Share as of the date of the Change in Control is less than the per Share Option exercise price or Stock Appreciation Right grant price, and (ii) all Performance Awards shall be considered to be earned and payable (either in full or pro rata based on the portion of Performance Period completed as of the date of the Change in Control), and any deferral or other restriction shall lapse and such Performance Awards shall be immediately settled or distributed.

 

11.2.           Assumption or Substitution of Certain Awards.  (a)  Unless otherwise provided in an Award Agreement, in the event of a Change in Control of the Company  in which the successor company assumes or substitutes for an Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award, if a Participant’s employment with such successor company (or a subsidiary thereof) terminates within the time period following such Change in Control set forth in the Award Agreement and under the circumstances specified in the Award Agreement: (i) Options and Stock Appreciation Rights outstanding as of the date of such termination of employment will immediately vest, become fully exercisable, and may thereafter be exercised for a period of time set forth in the Award Agreement, (ii) restrictions and deferral limitations on Restricted Stock shall lapse and the Restricted Stock shall become free of all restrictions and limitations and become fully vested, and (iii) the restrictions and deferral limitations and other conditions applicable to any Other Stock Unit Awards or any other Awards shall lapse, and such Other Stock Unit Awards or such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant.  For the purposes of this Section 11.1, an Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award shall be considered assumed or substituted for if following the Change in Control the Award confers the right

 

  

  

  

to purchase or receive, for each Share subject to the Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such 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 transaction constituting a Change in Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award, for each Share subject thereto, will be solely common stock of the successor company substantially equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control.  The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.

 

(b)           Unless otherwise provided in an Award Agreement, in the event of a Change in Control of the Company in which the successor company does not assume or substitute for an Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award: (i) Options and Stock Appreciation Rights outstanding as of the date of the Change in Control shall immediately vest and become fully exercisable, (ii) restrictions and deferral limitations on Restricted Stock shall lapse and the Restricted Stock shall become free of all restrictions and limitations and become fully vested, and (iii) the restrictions and deferral limitations and other conditions applicable to any Other Stock Unit Awards or any other Awards shall lapse, and such Other Stock Unit Awards or such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant.

 

(c)           Notwithstanding any other provision of the Plan, the Committee, in its discretion, may determine that, upon the occurrence of a Change in Control of the Company, each Option and Stock Appreciation Right outstanding shall terminate within a specified number of days after notice to the Participant, and/or that each Participant shall receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such Share immediately prior to the occurrence of such Change in Control over the exercise price per share of such Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property (including the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine.

 

11.3.           Change in Control.  For purposes of the Plan, unless otherwise provided in an Award Agreement, Change in Control means the occurrence of any one of the following events:

 

(a)           During any twenty-four (24) month period, individuals who, as of the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the beginning of such period whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

 

(b)           any “person” (as such term is defined in the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that the event described in this paragraph (b) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions:  (i) by the Company or any subsidiary, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary, (iii) by any underwriter temporarily holding securities pursuant to an offering of such securities, (iv) pursuant to a Non-Qualifying Transaction, as defined in paragraph (c) below, or (v) by any person of Voting Securities from the Company, if a majority of the Incumbent Board approves in advance the acquisition of beneficial ownership of 50% or more of Company Voting Securities by such person;

 

  

  

  

(c)           the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its subsidiaries that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination:  (i) more than 60% of the total voting power of (A) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (B) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination; (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation); and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”);

 

(d)           the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or the consummation of a sale of all or substantially all of the Company’s assets; or

 

(e)           the occurrence of any other event that the Board determines by a duly approved resolution constitutes a Change in Control.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any person acquires beneficial ownership of more than 50% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur.

12.           GENERALLY APPLICABLE PROVISIONS

 

12.1.           Amendment and Termination of the Plan.  The Board may, from time to time, alter, amend, suspend or terminate the Plan as it shall deem advisable, subject to any requirement for shareholder approval imposed by applicable law, including the rules and regulations of the principal securities exchange or market on which the Shares are traded) provided that the Board may not amend the Plan in any manner that would result in noncompliance with Rule 16b-3 of the Exchange Act; and further provided that the Board may not, without the approval of the Company's shareholders, amend the Plan to (a) increase the number of Shares that may be the subject of Awards under the Plan (except for adjustments pursuant to Section 12.2), (b) expand the types of awards available under the Plan, (c) materially expand the class of persons eligible to participate in the Plan, (d) amend any provision of Section 5.3, or (e) amend any provision of Section 10.5.  In addition, no amendments to, or termination of, the Plan shall in any way impair the rights of a Participant under any Award previously granted without such Participant's consent.

 

12.2.           Adjustments.  In the event of any merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the Shares or the value thereof, such adjustments and other substitutions shall be made to the Plan and to Awards as the Committee, in its sole discretion, deems equitable or appropriate taking into consideration the accounting and tax consequences, including such adjustments in the aggregate number, class and kind of securities that may be delivered under the Plan, the Limitations, the maximum number of Shares that may be issued under “incentive stock options” and, in the aggregate or to any one Participant, in the number, class, kind and option or exercise price of securities subject to outstanding Awards granted under the Plan (including, if the Committee deems appropriate, the substitution of

 

  

  

  

similar options to purchase the shares of, or other awards denominated in the shares of, another company) as the Committee may determine to be appropriate in its sole discretion; provided, however, that the number of Shares subject to any Award shall always be a whole number.

 

12.3.           Transferability of Awards.  Except as provided below, and except as otherwise authorized by the Committee in an Award Agreement, no Award and no Shares subject to Awards described in Article 8 that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution, and such Award may be exercised during the life of the Participant only by the Participant or the Participant’s guardian or legal representative.  Notwithstanding the foregoing if provided for in an Award Agreement, a Participant may assign or transfer an Award with the consent of the Committee (each transferee thereof, a “Permitted Assignee”) (a) to the Participant’s spouse, children, or grandchildren (including any adopted step children and grandchildren); (b) to a trust or partnership for the benefit of one or more person referred to in clause (a); or (c) for charitable donations;  provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and the Award Agreement relating to the transferred Award and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall remain bound by the terms and conditions of the Plan.  The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section. Any transfer of an Award or Shares in violation of this Section 12.3 shall be null and void.

 

12.4.           Termination of Employment.  The Committee shall determine and set forth in each Award Agreement whether any Awards granted in such Award Agreement will continue to be exercisable, and the terms of such exercise, on and after the date that a Participant ceases to be employed by or to provide services to the Company or any Subsidiary (including as a Director), whether by reason of death, disability, voluntary or involuntary termination of employment or services, or otherwise.  The date of termination of a Participant’s employment or services will be determined by the Committee, which determination will be final.

 

12.5.           Deferral; Dividend Equivalents.  The Committee shall be authorized to establish procedures pursuant to which the payment of any Award may be deferred.  Subject to the provisions of the Plan and any Award Agreement, the recipient of an Award (including any deferred Award) other than an Option or Stock Appreciation Right may, if so determined by the Committee, be entitled to receive, currently or on a deferred basis, cash, stock or other property dividends, or cash payments in amounts equivalent to cash, stock or other property dividends on Shares (“Dividend Equivalents”) with respect to the number of Shares covered by the Award, as determined by the Committee, in its sole discretion.  The Committee may provide that such amounts and Dividend Equivalents (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested and may provide that such amounts and Dividend Equivalents are subject to the same vesting or performance conditions as the underlying Award.

 

13.           MISCELLANEOUS

 

13.1.           Tax Withholding.  The Company shall have the right to make all payments or distributions pursuant to the Plan to a Participant (or a Permitted Assignee thereof) (any such person, a “Payee”) net of any applicable federal, state and local taxes required to be paid or withheld as a result of (a) the grant of any Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the delivery of Shares or cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event occurring pursuant to the Plan.  The Company or any Subsidiary shall have the right to withhold from wages or other amounts otherwise payable to such Payee such withholding taxes as may be required by law, or to otherwise require the Payee to pay such withholding taxes.  If the Payee shall fail to make such tax payments as are required, the Company or its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Payee or to take such other action as may be necessary to satisfy such withholding obligations.  The Committee shall be authorized to establish procedures for election by Participants to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value) that have been owned for a period of at least six months (or such other period to avoid accounting charges against the Company’s earnings), or by directing the Company to retain Shares (up to the Participant’s minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) otherwise deliverable in connection with the Award.

 

  

  

  

13.2.           Right of Discharge Reserved; Claims to Awards.  Nothing in the Plan nor the grant of an Award hereunder shall confer upon any Employee or Director the right to continue in the employment or service of the Company or any Subsidiary or affect any right that the Company or any Subsidiary may have to terminate the employment or service of (or to demote or to exclude from future Awards under the Plan) any such Employee or Director at any time for any reason “at will.”  Except as specifically provided by the Committee, the Company shall not be liable for the loss of existing or potential profit from an Award granted in the event of termination of an employment or other relationship.  No Employee or Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Employees or Participants under the Plan.

 

13.3.           Prospective Recipient.  The prospective recipient of any Award under the Plan shall not, with respect to such Award, be deemed to have become a Participant, or to have any rights with respect to such Award, until and unless such recipient shall have executed an agreement or other instrument evidencing the Award and delivered a copy thereof to the Company, and otherwise complied with the then applicable terms and conditions of the Plan and Award Agreement.

 

13.4.           Substitute Awards.  Notwithstanding any other provision of the Plan, the terms of Substitute Awards may vary from the terms set forth in the Plan to the extent the Committee deems appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted.

 

13.5.           Cancellation of Award.  Notwithstanding anything to the contrary contained herein, all outstanding Awards granted to any Participant shall be canceled if the Participant, without the consent of the Company, while employed by the Company or any Subsidiary or after termination of such employment or service, establishes a relationship with a competitor of the Company or any Subsidiary or engages in activity that is in conflict with or adverse to the interest of the Company or any Subsidiary, as determined by the Committee in its sole discretion.  The Committee may provide in an Award Agreement that if within the time period specified in the Agreement the Participant establishes a relationship with a competitor or engages in an activity referred to in the preceding sentence, the Participant will forfeit any gain realized on the vesting or exercise of the Award and must repay such gain to the Company.

 

13.6.           Stop Transfer Orders.  All certificates for Shares delivered under the Plan pursuant to any Award shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.  Any provision herein to the contrary notwithstanding, the Company shall have no obligation to issue any Shares pursuant to an Award if the Committee determines in good faith that such issuance would violate applicable federal, state or foreign securities laws.

 

13.7.           Nature of Payments.  All Awards made pursuant to the Plan are in consideration of services performed or to be performed for the Company or any Subsidiary, division or business unit of the Company.  Any income or gain realized pursuant to Awards under the Plan and any Stock Appreciation Rights constitute a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable law, as compensation for purposes of any of the employee benefit plans of the Company or any Subsidiary except as may be determined by the Committee or by the Board or board of directors of the applicable Subsidiary.

 

13.8.           Other Plans.  The Plan constitutes an amendment and restatement combining the separate Prior Plans effective as of the Restatement Effective Date.  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.  This restatement of the Prior Plans shall not affect any option or award under the Prior Plans that was outstanding immediately prior to the Restatement Effective Date.  Any such Prior Plan option or award shall continue to be governed by the provisions of the applicable Prior Plan and the applicable option or award agreement thereunder.

 

13.9.           Severability.  If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect.  If the making of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under the Plan.

 

  

  

  

 

13.10.           Construction.  As used in the Plan, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

 

13.11.           Unfunded Status of the Plan.  The Plan is intended to constitute an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.  In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the Shares or payments in lieu of or with respect to Awards hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.

 

13.12.           Governing Law.  The Plan and all determinations made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Utah, without reference to principles of conflict of laws, and construed accordingly.

 

13.13.           Effective Date of Restatement; Termination of Plan.  The Board has approved and adopted the Plan contingent upon its approval by the shareholders of the Company.  Accordingly, the Plan shall become effective on the date the holders of a majority the Shares voted at a duly constituted meeting of the shareholders of the Company approve the Plan (the “Restatement Effective Date”).  This Plan shall be null and void and of no effect, however, and the Prior Plans shall continue in existence without regard to the other provisions of this Plan document, if the foregoing condition is not fulfilled by February 1, 2007.  No Award shall be granted under the Plan until the shareholders of the Company approve the Plan.  Awards may be granted under the Plan at any time and from time to time following the Restatement Effective Date until the tenth anniversary of the Restatement Effective Date, on which date the Plan will expire except as to Awards then outstanding under the Plan.  Such outstanding Awards shall remain in effect until they have been exercised or terminated, or have expired.

 

13.14.           Foreign Employees.  Awards may be granted to Participants who are foreign nationals or employed outside the United States, or both, on such terms and conditions different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy.  The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company's obligation with respect to tax equalization for Employees on assignments outside their home country.

 

13.15.           Compliance with Section 409A of the Code. This Plan is intended to comply and shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent.  To the extent that an Award or the payment, settlement or deferral thereof is subject to Section 409A of the Code, the Award shall be granted, paid, settled or deferred in a manner that will comply with Section 409A of the Code, including regulations or other guidance issued with respect thereto, except as otherwise determined by the Committee.  Any provision of this Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A of the Code.

 

13.16.           Captions.  The captions in the Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.exhibit42.htm - Generated by SEC Publisher for SEC Filing

                                                                                                                                                    Exhibit 4.2

RESTATED

 

BY-LAWS

 

OF

 

SPHERION CORPORATION

 

(As amended through February 19, 2008)

 

ARTICLE I

STOCKHOLDERS

 

            Section 1.01    Annual Meetings.

 

            (a)        Annual meetings of the stockholders of the Corporation shall be held on the third Tuesday of May of each year, if not a legal holiday, and if a legal holiday, then on the next secular day following, at ten o’clock in the morning (10:00 a.m.) of that day, or at such other date and time as determined by the Board of Directors and stated in the notice of meeting.

 

            (b)        If present at the meeting, the Chairman of the Board shall serve as chairman of the meeting.  If the Chairman of the Board is not present at the meeting, the President shall serve as chairman of the meeting.  If the President is not present at the meeting, a majority of the members of the Board of Directors present at the meeting shall select a chairman of the meeting.

 

            (c)        At each annual meeting the stockholders shall elect qualified successors for directors whose terms have expired or are due to expire within six months after the date of the meeting and may transact any other business described in Subsection (d) of this Section 1.01; provided, however, that no business with respect to which special notice is required by law shall be transacted unless such notice shall have been given.

 

            (d)       At the annual meeting of stockholders only such business shall be conducted, and only such proposals shall be acted upon, as shall have been properly brought before the annual meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by a stockholder of the Corporation in accordance with the procedures set forth in this Subsection (d) of Section 1.01.   For business or a proposal to be properly brought before an annual meeting of stockholders by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 50 days nor more than 75 days prior to the scheduled date of the annual meeting, regardless of any postponement, deferral or adjournment of that meeting to a later date; provided, however, that if less than 60 days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder to be timely must be so delivered or mailed and received not later than the close of business on the 10th day following the earlier of (i) the day on which such notice of the date of the meeting was mailed or (ii) the day on which such public 

 

 

disclosure was made. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before an annual meeting of stockholders (i) a description, in 500 words or less, of the business or proposal desired to be brought before the annual meeting, (ii) the name and address, as such information appears on the Corporation’s books, of the stockholder proposing such business and any other stockholder known by such stockholder to be supporting such proposal, (iii) the class and number of shares of the Corporation that are beneficially owned by such stockholder and each other stockholder to be supporting such proposal on the date of such stockholder’s notice, (iv) a description, in 500 words or less, of any interest of the stockholder in such proposal, and (v) a representation that the stockholder is a holder of record of stock of the Corporation and intends to appear in person or by proxy at the meeting to present the proposal specified in the notice.  The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that the business or proposal was not properly brought before the meeting in accordance with these procedures, and if the chairman should so determine the chairman shall so declare to the meeting and any such business or proposal not properly brought before the meeting shall not be transacted.  Notwithstanding the foregoing, nothing in this Section 1.01 shall be interpreted or construed to require the inclusion of information about any stockholder business or proposal in any proxy statement distributed by, at the direction of, or on behalf of, the Board of Directors.

 

            Section 1.02    Special Meetings.  

 

            (a)        Special meetings of stockholders may be called only by a majority of the Board of Directors, the Chairman of the Board or the President of the Corporation.  Any such call for a special meeting shall be in writing, signed by the persons making the same and delivered to the Secretary of the Corporation, and shall state the time, the day, the place and the purpose or purposes of the proposed meeting.  The business transacted at a special meeting of stockholders shall be limited to the purposes stated in the notice of the meeting.  The stockholders of the Corporation shall not be entitled, as a matter of right, to require the Board of Directors to call a special meeting of the stockholders or to bring business before a special meeting of stockholders.

 

            (b)        If present at the meeting, the Chairman of the Board shall serve as chairman of the meeting.  If the Chairman of the Board is not present at the meeting, the President shall serve as chairman of the meeting.  If the President is not present at the meeting, a majority of the members of the Board of Directors present at the meeting shall select a chairman of the meeting.

 

            Section 1.03    Place of Meetings.  Each meeting of the stockholders shall be held at the principal executive office of the Corporation or at such other place, within or without the State of Delaware, as may be designated by the Board of Directors, the Chairman of the Board or the President.

 

            Section 1.04    Adjournments.  Any meeting of the stockholders may be adjourned from time to time to another date, time and place.  If any meeting of the stockholders is so adjourned, no notice as to such adjourned meeting need be given if the date, time and place at which the meeting will be reconvened are announced at the time of adjournment.

 

 

 

            Section 1.05    Notice of Meetings.  Unless otherwise required by law, written notice of each meeting of the stockholders, stating the date, time and place and, in the case of a special meeting, the purpose or purposes, shall be given at least 10 days and not more than 60 days prior to the meeting to every holder of shares entitled to vote at such meeting, except as specified in Section 1.04 or as otherwise permitted by law.  If action is proposed to be taken that might entitle stockholders to payment for their shares, the notice shall include a statement of that purpose and to that effect.

 

            Section 1.06    Waiver of Notice.  A stockholder may waive notice of the date, time, place and purpose or purposes of a meeting of stockholders.  A waiver of notice by a stockholder entitled to notice is effective whether given before, at or after the meeting, and whether given in writing, orally or by attendance.  Attendance by a stockholder at a meeting is a waiver of notice of that meeting, unless the stockholder objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened, or objects before a vote on an item of business because the item may not lawfully be considered at that meeting and does not participate in the consideration of the item at that meeting.

 

            Section 1.07    Voting Rights; Acts of Stockholders.  

 

            (a)        At all meetings of stockholders, every stockholder having the right to vote shall be entitled to vote in person, or by proxy in accordance with Section 1.09.  Unless otherwise provided by the Certificate of Incorporation, each stockholder shall have one vote for each share of stock entitled to vote at such meeting registered in the stockholder’s name on the books of the Corporation.  At all meetings of stockholders, the voting may be by voice vote, except that, unless otherwise provided by the Certificate of Incorporation, any qualified voter may demand a vote by ballot on any matter, in which event such vote shall be taken by ballot.  If a stockholder votes without designating the proportion or number of shares voted in a particular way, such stockholder shall be deemed to have voted all of the shares in that way.

 

            (b)        Directors shall be elected by a plurality of the votes of the stock present in person or represented by proxy at the meeting and entitled to vote on the election of directors.  Except when the Certificate of Incorporation or these By-laws specifically provide for a different vote on a particular matter, or when a greater vote is required by law, regulation or rules of any applicable stock exchange, the affirmative vote of the majority of the stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders.

 

            Section 1.08    Fixing Record Date.  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date for any such determination of stockholders.  Such date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action; provided, however, that the Board of Directors may fix a new record date for any adjourned meeting.  If no record date is fixed, one shall be determined in accordance with the provisions of law.

 

 

            Section 1.09    Proxies.  

 

            (a)        A stockholder may cast or authorize the casting of a vote by filing a written appointment of a proxy with an officer of the Corporation at or before the meeting at which the appointment is to be effective.  The stockholder may sign or authorize the written appointment by telegram, cablegram or other means of electronic transmission setting forth or submitted with information sufficient to determine that the stockholder authorized such transmission.  Any copy, facsimile, telecommunication or other reproduction of the original of either the writing or transmission may be used in lieu of the original, provided that it is a complete and legible reproduction of the entire original.  No proxy shall be valid after expiration of three years from the date thereof unless otherwise provided in the proxy.  Every proxy shall be revocable at the pleasure of the stockholder executing it, except as otherwise provided in such proxy or required by law.

 

            (b)        A stockholder voting by proxy authorized to vote on less than all items of business considered at the meeting shall be considered to be present and entitled to vote only with respect to those items of business for which the proxy has authority to vote.  A proxy who is given authority by a stockholder who abstains with respect to an item of business shall be considered to have authority to vote on that item of business.

 

            Section 1.10    Quorum.

 

            (a)        A majority of the stock issued and outstanding and entitled to vote thereat, the holders of which are present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of any business, except as otherwise required by law, by the Certificate of Incorporation or by these By-laws.  

 

(b)         At any meeting at which a quorum shall not be present, the holders of a majority of the stock present in person or represented by proxy at such meeting shall have power successively to adjourn the meeting from time-to-time to a specified time and place, without notice to anyone other than announcement at the meeting, until a quorum shall be present in person or by proxy.  At such adjourned meeting at which a quorum shall be present in person or by proxy, any business may be transacted which might have been transacted at the original meeting which was adjourned.  If the adjournment is for more than 30 days, or if after adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

            (c)        When a quorum is once present to organize a meeting, it will not be deemed broken by the subsequent withdrawal of any stockholders.

 

            

 

 

 

 

 

 

 

 

ARTICLE II

DIRECTORS

 

            Section 2.01    Qualifications.  Except as may otherwise be required by law or provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, the members of which shall be at least 21 years of age.  Directors shall be natural persons and, unless required by the Certificate of Incorporation, need not be stockholders.  Each Director shall hold office until his successor shall have been elected and qualified or until his earlier resignation and removal.  Each Director, upon his election, shall be deemed to have qualified by filing with the Corporation his written acceptance of such office, which shall be placed in the minute book, or by his attendance at, or consent to action in lieu of, any regular or special meeting of directors.

 

            Section 2.02    Number.  The Board of Directors shall consist of a number of directors as determined from time to time solely by a resolution adopted by an affirmative vote of a majority of the entire Board of Directors.

 

            Section 2.03    Newly Created Directorships and Vacancies (Amended November 11, 2003).   Unless otherwise provided in the Certificate of Incorporation, any newly created directorship resulting from an increase in the number of directors and any vacancy occurring on the Board for any reason may be filled until the next annual meeting by a majority vote of the remaining directors, even if less than a quorum, or by a sole remaining director.  If there are no directors in office, then an election of directors may be held in the manner provided by statute.  No decrease in the number of directors shall shorten the term of any incumbent directors.  

 

            Section 2.04    Nominations.

 

            (a)        Nominations of persons for election to the Board of Directors may be made at an annual meeting of stockholders or special meeting of stockholders called by the Board of Directors for the purpose of electing directors.  Nominations may be made only  (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section 2.04. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 50 days nor more than 75 days prior to the scheduled date of the stockholders’ meeting, regardless of any postponement, deferral or adjournment of that meeting to a later date; provided, however, that if less than 60 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so delivered or mailed and received not later than the close of business on the 10th day following the earlier of (i) the day on which such notice of the date of the meeting was mailed or (ii) the day on which such public disclosure was made.

 

            (b)        A stockholder’s notice to the Secretary shall set forth: (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the class and number of shares of the Corporation which are 

 

 

beneficially owned by such person on the date of such stockholder’s notice, and (D) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, or any statute or regulation successor thereto (the “Exchange Act”), including without limitation such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (ii) as to the stockholder giving notice, (A) the name and address, as such information appears on the Corporation’s books, of such stockholder and any other stockholders known by such stockholder to be supporting such nominee(s), (B) the class and number of shares of the Corporation which are beneficially owned by such stockholder and each other stockholder known by such stockholder to be supporting such nominee(s) on the date of such stockholder notice, and (C) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; and (iii) a description of all arrangements or understandings between the stockholder and each nominee and other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder.

 

            (c)        Subject to the rights, if any, of the holders of any series of Preferred Stock then outstanding, no person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.04. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this Section 2.04, and if the chairman should so determine the chairman shall so declare to the meeting and the defective nomination shall be disregarded.

 

            Section 2.05    Resignation.  Any director may resign at any time.  Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Board of Directors, the President or the Secretary.  The acceptance of a resignation shall not be necessary to make it effective.

 

            Section 2.06    Place of Meetings; Means of Participation.

 

            (a)        Each meeting of the Board of Directors shall be held at the principal executive office of the Corporation or at such other place as may be designated in the notice of meeting.

 

            (b)        Any director or directors may participate in a Board of Directors meeting by any means of communication through which the director, other directors so participating and all directors, if any, physically present at the meeting may simultaneously hear each other during the meeting.  A director so participating shall be deemed present in person at the meeting.

 

            Section 2.07    Chairman of the Board.  The directors may elect one of their members to be Chairman of the Board of Directors.  The Chairman shall be subject to the control of and may be removed by the Board of Directors. The Chairman shall preside at all meetings of the stockholders and directors at which the Chairman is present and shall perform such other duties as may from time to time be assigned to the Chairman by the Board of Directors.  

 

 

 

            Section 2.08    Notice of Meetings of the Board.

 

            (a)        Regular meetings of the Board of Directors may be held without notice at such places and times as shall be determined from time to time by a resolution of a majority of the full Board of Directors. Any business may be transacted at a regular meeting.

 

            (b)        Special meetings of the Board of Directors may be held upon written notice to each director and may be called by the Chairman of the Board, the President or by two or more of the members of the Board.  Written notice of each special meeting of the Board of Directors, stating the place, day, and hour of the meeting, shall be mailed to each director at least two days before the day on which the meeting is to be held, or shall be sent to each director by telegram, facsimile or electronically or delivered personally, at least one day before the day on which the meeting is to be held.  The notice may be given by any person or persons having the authority to call the meeting.  Any special meeting of the Board of Directors shall be a legal meeting without any notice thereof having been given if all directors shall be present thereat.

 

            Section 2.09    Waiver of Notice; Previously Scheduled Meetings.

 

            (a)        A director of the Corporation may waive notice of the date, time and place of a meeting of the Board of Directors.  A waiver of notice by a director entitled to notice is effective whether given before, at or after the meeting, and whether given in writing, orally or by attendance.  Attendance by a director at a meeting is a waiver of notice of that meeting, unless the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and thereafter does not participate in the meeting.

 

            (b)        If the date, time and place of a Board of Directors meeting have been announced at a previous meeting of the Board of Directors, no notice is required.  Notice of an adjourned meeting need not be given other than by announcement at the meeting at which adjournment is taken of the date, time and place at which the meeting will be reconvened.

 

            Section 2.10    Quorum.  Except as otherwise required by law or specified in the Certificate of Incorporation or these By-laws, the presence of a majority of the directors currently holding office shall be necessary to constitute a quorum for the transaction of business.  In the absence of a quorum, a majority of the directors present may adjourn a meeting from time to time without further notice until a quorum is present.  If a quorum is present when a duly called or held meeting is convened, the directors present may, except as otherwise required by law or specified in the Certificate of Incorporation or these By-laws, continue to transact business until conclusion of the meeting, even though the withdrawal of a number of the directors originally present leaves less than the proportion or number otherwise required for a quorum.

 

            Section 2.11    Acts of Board of Directors.  Except as otherwise required by law or specified in the Certificate of Incorporation or these By-laws, the Board of Directors shall take action by the affirmative vote of a majority of the directors present at a duly held Board of Directors meeting.

 

 

 

 

            Section 2.12    Action Without a Meeting.  Except as otherwise required by law or specified in the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting by written action signed by all of the directors.  The written action will be effective when signed by all of the directors, unless a different effective time is provided in the written action.

 

Section 2.13    Committees.

 

            (a)        A resolution approved by the affirmative vote of a majority of the Board of Directors may establish committees having the authority of the Board of Directors in the management of the business of the Corporation only to the extent provided in the resolution.  Committees shall be subject at all times to the direction and control of the Board of Directors.

 

            (b)        A committee shall consist of one or more directors, appointed by affirmative vote of a majority of the directors present at a duly held Board of Directors meeting.  The Board of Directors may designate, by affirmative vote of a majority of the directors present at a duly held Board of Directors meeting, one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

 

            (c)        Sections 2.05 to 2.12 of these By-laws shall apply to committees and members of committees to the same extent as those sections apply to the Board of Directors and directors.

 

            (d)       Minutes, if any, of committee meetings shall be made available upon request to members of the committee and to any director.

 

            Section 2.14    Compensation.  The Board of Directors may fix the compensation, if any, of directors and of committee members.  However, nothing contained herein shall be construed to preclude any director from serving the Corporation in any other capacity and receiving his or her regular compensation therefore.

 

ARTICLE III

OFFICERS

 

            Section 3.01  Officers.

 

(a)        Who Shall Constitute.  The officers of the Corporation shall consist of the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, and the Treasurer, each of whom shall be elected by the Board of Directors at their first meeting after the annual meeting of the stockholders.  The Board of Directors may also designate additional assistant vice presidents, assistant secretaries and assistant treasurers.  Officers may be members of the Board of Directors.  Any number of offices may be held by the same person.  An officer shall be deemed qualified when the officer enters upon the duties of the office to which the officer has been elected or appointed and furnishes any bond required by the Board; but the Board may also require the officer’s written acceptance and promise faithfully to discharge the duties of such office.

 

 

 

 

 

            (b)        Chief Executive Officer.  Unless otherwise determined by the Board of Directors, the Chief Executive Officer shall have such general executive powers and duties of supervision and management as are usually vested in the office of the Chief Executive Officer of the Corporation and he or she shall carry into effect all directions and resolutions of the Board of Directors.  The Chief Executive Officer shall have such other or further duties and authority as may be prescribed elsewhere in these By-laws or from time-to-time by the Board of Directors.

 

            (c)        President.

                  

(i)         Unless otherwise determined by the Board of Directors, the President shall be the Chief Executive Officer of the Corporation.  If the President and the Chief Executive Officer are not the same person, the President shall be responsible for the day-to-day management of the business and affairs of the Corporation, shall enjoy all other powers commonly incident to the office, and shall perform such duties as may from time to time be assigned by the Board of Directors.  During the absence or disability of the Chief Executive Officer, it shall be the duty of the President to perform the duties of Chief Executive Officer.

 

(ii)        The President may, but shall not be required to, execute all bonds, notes, debentures, mortgages, and other instruments for and in the name of the Corporation, and may cause the corporate seal to be affixed thereto.

 

(iii)       Unless the Board of Directors otherwise provides, the President, or any person designated by the President, shall have full power and authority on behalf of the Corporation (a) to attend and to vote or take action at any meeting of the holders of securities of corporations in which the Corporation may hold securities, and at such meetings shall possess and may exercise any and all rights and powers incident to being a holder of such securities and which as the holder thereof the Corporation may have possessed and exercised if present, and (b) to execute and deliver waivers of notice and proxies for and in the name of the Corporation with respect to any such securities held by the Corporation.

 

(iv)       The President shall have such other or further duties and authority as may be prescribed elsewhere in these By-laws or from time-to-time by the Board of Directors.

 

            (d)       Vice Presidents.  In the absence of the President or in the event of the President’s disability, inability, or refusal to act, the Vice President (or in the event there be more than one vice president, the Vice Presidents in the order designated by the Board, or in the absence of any designation, then in the order of their election) shall perform the duties and exercise the powers of the President, and shall perform such other duties as the Board of Directors may from time-to-time prescribe.

 

            (e)        Secretary and Assistant Secretary. 

 

            (i)         The Secretary may attend all sessions of the Board of Directors and all meetings of the stockholders, and shall record or cause to be recorded all votes taken and the minutes of all proceedings in a minute book of the Corporation to be kept for that purpose.  The Secretary shall perform like duties for committees when requested to do so by the Board of Directors or any such committee.

 

 

                (ii)           It shall be the principal responsibility of the Secretary to give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, but this responsibility shall not lessen the authority of others to give such notice as is authorized elsewhere in these By-laws.

 

            (iii)       The Secretary shall see that all books, records, lists, and information, or duplicates, required to be maintained in the State of Delaware or elsewhere, are so maintained.

 

            (iv)       The Secretary shall keep in safe custody the seal of the Corporation and shall have the authority to affix the seal to any instrument requiring it, and when so affixed, the Secretary shall attest the seal by the Secretary’s signature.  The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by such officer’s signature.

 

            (v)        The Secretary shall perform such other duties and have such other authority as may be prescribed elsewhere in these By-laws or from time-to-time by the Board of Directors or the President of the Corporation, under whose direct supervision the Secretary shall be.

 

            (vi)       In the absence of the Secretary or in the event of the Secretary’s disability, inability, or refusal to act, the Assistant Secretary (or in the event there be more than one assistant secretary, the assistant secretaries in the order designated by the Board of Directors or in the absence of any designation, then in the order of their election) may perform the duties and exercise the powers of the Secretary, and shall perform such other duties as the Board of Directors may from time-to-time prescribe.

 

            (f)        Treasurer and Assistant Treasurer.  

 

            (i)         The Treasurer shall have responsibility for the safekeeping of the funds and securities of the Corporation, shall keep or cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall keep, or cause to be kept, all other books of account and accounting records of the Corporation.  The Treasurer shall deposit or cause to be deposited all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors, the President, or by any officer of the Corporation to whom such authority has been granted by the Board of Directors.

 

            (ii)        The Treasurer shall disburse, or permit to be disbursed the funds of the Corporation as may be ordered, or authorized generally, by the Board of Directors, and shall render to the President of the Corporation and the directors whenever they may require it, an account of all his or her transactions as Treasurer and of those under the Treasurer’s jurisdiction, and of the financial condition of the Corporation.

 

            (iii)       The Treasurer shall perform such other duties and shall have such other responsibility and authority as may be prescribed elsewhere in these By-laws or from time-to-time by the Board of Directors.

 

 

 

 

 

            (iv)       The Treasurer shall have the general duties, powers, and responsibilities of a treasurer of a corporation.  If required by the Board of Directors, the Treasurer shall give the Corporation a bond in a sum and with one or more sureties satisfactory to the Board, for the faithful performance of the duties of the Treasurer’s office, and for the restoration to the Corporation, in the case of his or her death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in his or her possession or under the Treasurer’s control which belong to the Corporation.

 

            (v)        In the absence of the Treasurer or in the event of the Treasurer’s disability, inability, or refusal to act, the Assistant Treasurer (or in the event there be more than one assistant treasurer, the assistant treasurers in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) may perform the duties and exercise the powers of the treasurer, and shall perform such other duties and have such other authority as the Board of Directors may from time-to-time prescribe.

 

            Section 3.02    Other Officers.  The President may from time to time appoint one or more natural persons to hold such other non-executive offices of the Corporation as the President deems necessary or advisable for the operation and management of the Corporation.  A person appointed to any such office shall have such powers, rights, duties and responsibilities as may be prescribed by the President from time to time.

 

            Section 3.03    Delegation of Duties.  If an officer of the Corporation shall be absent or unable or unwilling to act, or for other reason that the Board of Directors may deem sufficient, the Board of Directors may, by an affirmative vote of a majority of the full Board of Directors, delegate for the time being some or all of the functions, duties, powers, and responsibilities of any officer to any other officer, or to any other agent or employee of the Corporation or other responsible person.

 

Section 3.04    Term.

 

            (a)        Each Officer shall hold office until the next annual meeting after his or her installation in such office or for such other time as the Board of Directors may specify at the time of his or her election or appointment, or until the earlier of his or her death, resignation or removal.

 

            (b)        Each other officer of the Corporation shall hold office until his or her successor is chosen and has qualified or until the earlier of his or her death, resignation or removal.

 

            (c)        An officer may resign at any time by giving written notice to the Corporation.  The resignation is effective without acceptance when the notice is given to the Corporation, unless a later effective date is specified in the notice.

 

            (d)       An officer may be removed at any time, with or without cause, by a resolution duly adopted by the Board of Directors.

 

            (e)        A vacancy in an Office because of death, resignation, removal, disqualification or other cause may be filled by the Board of Directors.

 

 

 

            Section 3.05    Compensation.  Except as otherwise required by law, compensation of all Officers of the Corporation shall be fixed by, or under authority of, the Board of Directors or any such committee to which the Board delegates such responsibility.

 

            Section 3.06    Delegation of Authority.  The Board of Directors may delegate to the President or other Officer or employee of the Corporation, authority to hire, discharge, fix, and modify the duties, salary, or other compensation of employees of the Corporation under their jurisdiction, and the Board of Directors may delegate to such Officer or employee similar authority with respect to obtaining and retaining for the Corporation the services of attorneys, accountants and other experts.

 

ARTICLE IV

INDEMNIFICATION

 

            Section 4.01    Indemnification.

 

            (a)        Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (whether or not by or in the right of the Corpora­tion), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust, limited liability company or other enterprise (including an employee benefit plan), shall be entitled to be indemnified by the Corporation to the full extent then permitted by law against expenses (including attorneys’ fees and expenses), judgments, fines (including excise taxes assessed on a person with respect to an employee benefit plan) and amounts paid in settlement incurred by that person in connection with such action, suit or proceeding.  Such right of indemnifi­cation shall inure whether or not the claim asserted is based on matters which antedate the adoption of this Section 4.01.  Such right of indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs and personal representatives of such person.  The indemnification provided by this Section 4.01 shall not be deemed exclusive of any other rights which may be provided now or in the future under any provision currently in effect or hereafter adopted of the Certificate of Incorporation or the By-laws, or by any agreement, vote of stockholders, resolution of disinterested directors, provision of law or otherwise.  Notwithstanding the foregoing, the Corporation shall be required to indemnify a person in connection with the proceeding initiated by such person only if such proceeding was authorized by the Board of Directors.

 

            (b)        The right of indemnification conferred by this Section 4.01 shall also include the right of such persons to be paid in advance by the Corporation for their expenses to the fullest extent permitted by the laws of the State of Delaware.  The right to indemnification conferred on persons by this section shall be a contractual right.

 

            (c)        The rights to indemnification and to the advancement of expenses conferred in this Section 4.01 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation or these By-laws, agreement, vote of stockholders or disinterested directors or otherwise.  References in this 

 

 

Section 4.01 to the laws of the State of Delaware shall mean such laws as from time to time in effect.

 

            (d)       Neither any amendment or repeal of the foregoing provisions of this Section 4.01 or the provisions of Section 4.02 below, nor adoption of any provision of the Certificate of Incorporation or these By-laws which is inconsistent with the foregoing provisions of this Section  4.01 or the provisions of Sections 4.02 and 4.03 below shall adversely affect any right or protection for a person existing at the time of such amendment, repeal or adoption.

 

            Section 4.02    Procedure.  

 

            (a)        Any indemnification under this Article IV shall be made no later than 30 days after receipt by the Corporation of the written request of a director or officer or former director or officer.

 

            (b)        (i)         In addition to the provisions of Section 4.02(c), in the event that a Change in Control (as defined below) has occurred and the Corporation has not honored the written request of the director or officer or former director or officer seeking indemnification within 30 days after receipt of such notice, the person seeking indemnification may request that his request be reviewed by Independent Legal Counsel (as defined below) chosen by the person seeking indemnification and not reasonably objected to by the Board of Directors (whose fees and expenses shall be paid by the Corporation).  Independent Legal Counsel shall have 10 days after receipt of such request to deliver a written opinion as to the availability of the indemnification provided under this Article IV as it applies to the particular request of the person seeking indemnification.

 

                        (ii)        “Change of Control” shall mean a change in control of the Corporation of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Corporation is then subject to such reporting requirement; provided that, without limitation, such a change of control shall be deemed to have occurred if (i) any “person” (as such term is used in Section 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same portions as their ownership of stock of the Corporation, is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 30% or more of the total voting power represented by the Corporation’s then outstanding shares of capital stock entitled to vote (the “Voting Securities”), or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election to the Board of Directors or nomination for election by the Corporation’s stockholders who were approved by a vote of at least 2/3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Corporation outstanding (or by being converted into any voting 

 

 

securities of the surviving entity) at least 80% of the total voting power represented by all Voting Securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of (in one transaction or a series of transactions) all or substantially all of the Corporation’s assets.

 

                        (iii)       “Independent Legal Counsel” shall mean legal counsel other than an attorney, or a firm having associated with an attorney, who has been retained by or who has performed services for the Corporation or the person seeking indemnification within the previous three years.

 

            (c)        The right to indemnification under this Article IV shall be enforceable by the director or officer or former director or officer in any court of competent jurisdiction.  The burden of proving that indemnification is not appropriate shall be on the Corporation.  The expense (including attorneys’ fees and expenses) incurred by the director or officer or former director or officer in connection with successfully establishing his right to indemnification, in whole or in part, in any such action (or in any action or claim brought by such officer or director to recover under any insurance policy or policies referred to in Section 4.03) shall also be indemnified by the Corporation.

 

            Section 4.03    Insurance.  The Corporation may purchase and maintain insurance on behalf of any person in such person’s official capacity against any liability asserted against and incurred by such person in or arising from that capacity, regardless of whether the Corporation would otherwise be required to indemnify the person against the liability.

 

ARTICLE V

SHARES

 

Section 5.01    Certificated Shares.

 

            (a)        The shares of the Corporation shall be represented by a certificate, unless and until the Board of Directors of the Corporation adopts a resolution permitting shares to be uncertificated.

 

            (b)        Notwithstanding the adoption of a resolution providing for uncertificated shares, any  certificate evidencing shares of the Corporation shall be signed by (i) the President or any Vice President and (ii) the Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary, but when a certificate is signed by a transfer agent or a registrar, the signatures of such officers upon such certificate may be facsimiles, engraved or printed.  If a person signs or has a facsimile signature placed upon a certificate while an officer, transfer agent or registrar of the Corporation, the certificate may be issued by the Corporation even if the person has ceased to serve in that capacity before the certificate is issued, with the same effect as if the person had that capacity at the date of its issue.

 

 

            (c)        A certificate evidencing shares issued by the Corporation shall, if the Corporation is authorized to issue shares of more than one class or series, set forth upon the face or back of the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge, a full statement of the designations, preferences, limitations and relative rights of the shares of each class or series authorized to be issued, so far as they have been determined, and the authority of the Board of Directors to determine the relative rights and preferences of subsequent classes or series.

 

            Section 5.02    Declaration of Dividends and Other Distributions.  The Board of Directors shall have the authority to declare dividends and other distributions upon the shares of the Corporation to the extent permitted by law and subject to the provisions of the Certificate of Incorporation.

 

            Section 5.03    Transfer of Shares.  Transfers of stock shall be made only upon the transfer books of the Corporation, kept at the office of the Corporation or respective transfer agents designated to transfer the several classes of stock, and, in the case of certificated shares,  before a new certificate is issued the old certificate shall be surrendered for cancellation.  Until and unless the Board of Directors appoints some other person, firm, or corporation as its transfer agent or transfer clerk (and upon the revocation of any such appointment, thereafter until a new appointment is similarly made) the Secretary of the Corporation without the necessity of any formal action of the Board, or any person designated by the Secretary, shall perform all of the duties thereof.

 

            Section 5.04    Lost or Destroyed Certificates.  A new certificate evidencing shares may be issued in the place of any certificate theretofore issued by the Corporation alleged to have been lost or destroyed, and the directors may, in their discretion, require the owner of the lost or destroyed certificate, or his legal representatives, to give the Corporation a bond in such sum as they may direct, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of any such certificate or the issuance of any such new certificate.

 

ARTICLE VI

MISCELLANEOUS

 

            Section 6.01    Execution of Instruments.

 

            (a)        All deeds, mortgages, bonds, checks, contracts and other instruments pertaining to the business and affairs of the Corporation shall be signed on behalf of the Corporation by an Officer or by such other person or persons as may be designated from time to time by the Board of Directors or the President.

 

            (b)        If a document must be executed by persons holding different offices or functions and one person holds such offices or exercises such functions, that person may execute the document in more than one capacity if the document indicates each such capacity.

 

            Section 6.02    Advances. The Corporation may, without a vote of the Board of Directors, advance money to its directors, officers or employees to cover expenses that can reasonably be anticipated to be incurred by them in the performance of their duties and for which they would be entitled to reimbursement in the absence of an advance.

 

 

 

            Section 6.03    Corporate Seal.  The seal of the Corporation, if any, shall be a circular embossed seal having inscribed thereon the name of the Corporation, the year of its creation and the following words:

“Corporate Seal Delaware”

 

            Section 6.04    Fiscal Year.  The fiscal year of the Corporation shall be determined by the Board of Directors.

 

            Section 6.05    Amendments.  These By-laws may be amended by the Board of Directors or by the affirmative vote of stockholders owning a majority of the outstanding common stock of the Corporation.  

 

            Section 6.06    References to Certificate of Incorporation.  References to the Certificate of Incorporation in these By-laws shall include all amendments thereto or changes thereof unless specifically excepted.

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