Document:

exhibit1016.htm

    Indemnification
Agreement

    

    This Indemnification Agreement
("AGREEMENT") is made as of this_____ day of ________ , 2010, by and between AVX
Corporation, a Delaware corporation (the "COMPANY"), and
___________________________________ ("INDEMNITEE").

    

    WHEREAS, the Company and
Indemnitee recognize the significant cost of directors' and officers' liability
insurance and the general reductions in the coverage of such
insurance;

    

    WHEREAS, The Company's
Certificate of Incorporation (the "Certificate of Incorporation" ) authorizes
the Company to provide indemnification of agents for breach of duty to the
Company and its stockholders through bylaw provisions or through agreements with
the agents, or otherwise, to the extent provided therein,

    

    WHEREAS,  The
Company' s bylaws (the "Bylaws" ) require that the Company indemnify its
directors, and empowers the Company to indemnify its officers, employees and
agents, as authorized by the Delaware General Corporation Law, as amended (the
"Code" ), under which the Company is organized, and such Bylaws expressly
provide that the indemnification provided therein is not exclusive and
contemplate that the Company may enter into separate agreements with its
directors, officers and other persons to set forth specific indemnification
provisions.

    

    WHEREAS,  Indemnitee
does not regard the protection currently provided by applicable law, the
Company' s Certificate of Incorporation, the Company' s Bylaws and available
insurance as adequate, and the Company has determined that Indemnitee and other
directors, officers, employees and agents of the Company may not be willing to
serve or continue to serve in such capacities without additional
protection.

    

    WHEREAS, the Company and
Indemnitee further recognize the substantial increase in corporate litigation in
general, subjecting officers and directors to expensive litigation risks at the
same time as the coverage of liability insurance has been changing over time;
and

    

    WHEREAS, the Company desires
to attract and retain the services of highly qualified individuals, such as
Indemnitee, to serve as officers and directors of the Company and to indemnify
its officers and directors so as to provide them with the maximum protection
permitted by law.

    

    NOW, THEREFORE, in
consideration for Indemnitee's services as an officer or director of the
Company, the Company and Indemnitee hereby agree as follows:

    

    1. INDEMNIFICATION.

    

    
      	
               
      

            	
              (a)

            	
              Third Party
      Proceedings. The Company shall indemnify Indemnitee if Indemnitee
      is or was a party or is threatened to be made a party to any threatened,
      pending or completed action, suit, proceeding or any alternative dispute
      resolution mechanism, whether civil, criminal, administrative or
      investigative (other than an action by or in the right of the Company) by
      reason of the fact that Indemnitee is or was a director, officer, employee
      or agent of the Company, or any subsidiary of the Company, or by reason of
      the fact that Indemnitee is or was serving at the request of the Company
      as a director, officer, employee or agent of another corporation,
      partnership, joint venture, trust or other enterprise, against expenses
      (including attorneys' fees), judgments, fines and amounts paid in
      settlement (if such settlement is approved in advance by the Company,
      which approval shall not be unreasonably withheld) actually and reasonably
      incurred by Indemnitee in connection with such action, suit or proceeding
      if Indemnitee acted in good faith and in a manner Indemnitee reasonably
      believed to be in or not opposed to the best interests of the Company,
      and, with respect to any criminal action or proceeding, had no reasonable
      cause to believe Indemnitee's conduct was unlawful. The termination of any
      action, suit or proceeding by judgment, order, settlement, conviction, or
      upon a plea of nolo contendere or its equivalent, shall not, of itself,
      create a presumption that Indemnitee did not act in good faith and in a
      manner which Indemnitee reasonably believed to be in or not opposed to the
      best interests of the Company, and, with respect to any criminal action or
      proceeding, had reasonable cause to believe that Indemnitee's conduct was
      unlawful.

            

    

    
      
        

      

    

    
    

    
      	
               
      

            	
              (b)

            	
              Proceedings By or in the Right
      of the Company. The Company shall indemnify Indemnitee if
      Indemnitee was or is a party or is threatened to be made a party to any
      threatened, pending or completed action or suit by or in the right of the
      Company or any subsidiary of the Company to procure a judgment in its
      favor by reason of the fact that Indemnitee is or was a director, officer,
      employee or agent of the Company, or any subsidiary of the Company, or by
      reason of the fact that Indemnitee is or was serving at the request of the
      Company as a director, officer, employee or agent of another corporation,
      partnership, joint venture, trust or other enterprise, against expenses
      (including attorneys' fees) and, to the fullest extent permitted by law,
      amounts paid in settlement actually and reasonably incurred by Indemnitee
      in connection with the defense or settlement of such action or suit if
      Indemnitee acted in good faith and in a manner Indemnitee reasonably
      believed to be in or not opposed to the best interests of the Company,
      except that no indemnification shall be made in respect of any claim,
      issue or matter as to which Indemnitee shall have been adjudged to be
      liable to the Company unless and only to the extent that the Court of
      Chancery of the State of Delaware or the court in which such action or
      suit was brought shall determine upon application that, despite the
      adjudication of liability but in view of all the circumstances of the
      case, Indemnitee is fairly and reasonably entitled to indemnity for such
      expenses which the Court of Chancery of the State of Delaware or such
      other court shall deem proper.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Mandatory Payment of
      Expenses. To the extent that Indemnitee has been successful on the
      merits or otherwise in defense of any action, suit or proceeding referred
      to in Subsections (a) and (b) of this Section 1, or in defense of any
      claim, issue or matter therein, Indemnitee shall be indemnified against
      expenses (including attorneys' fees) actually and reasonably incurred by
      Indemnitee in connection therewith.

            

    

    

    2. CONSIDERATION. The Company
acknowledges that good and valuable consideration, including services as an
officer or director has been received from the Indemnitee.

    

    3. EXPENSES; INDEMNIFICATION
PROCEDURE.

    

    
      	
               
      

            	
              (a)

            	
              Advancement of
      Expenses. The Company shall advance all expenses incurred by
      Indemnitee in connection with the investigation, defense, settlement or
      appeal of any civil or criminal action, suit or proceeding referenced in
      Section 1(a) or (b) hereof (but not amounts actually paid in settlement of
      any such action, suit or proceeding). Indemnitee hereby undertakes to
      repay such amounts advanced only if, and to the extent that, it shall
      ultimately be determined that Indemnitee is not entitled to be indemnified
      by the Company as authorized hereby. The advances to be made hereunder
      shall be paid by the Company to Indemnitee within thirty (30) days
      following delivery of a written request therefor by Indemnitee to the
      Company.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Notice/Cooperation by
      Indemnitee. Indemnitee shall, as a condition precedent to his right
      to be indemnified under this Agreement, give the Company notice in writing
      as soon as practicable of any claim made against Indemnitee for which
      indemnification will or could be sought under this Agreement. Notice to
      the Company shall be directed to the Secretary of the Company at the
      address shown on the signature page of this Agreement (or such other
      address as the Company shall designate in writing to Indemnitee). Notice
      shall be deemed received three business days after the date postmarked if
      sent by domestic certified or registered mail, properly addressed, five
      business days if sent by airmail to a country outside of North America;
      otherwise notice shall be deemed received when such notice shall actually
      be received by the Company. In addition, Indemnitee shall give the Company
      such information and cooperation as it may reasonably require and as shall
      be within Indemnitee's power.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (c)

            	
              Procedure. Any
      indemnification and advances provided for in Section 1 and this Section 3
      shall be made no later than thirty (30) days after receipt of the written
      request of Indemnitee. If a claim under this Agreement, under any statute,
      or under any provision of the Company's Certificate of Incorporation or
      Bylaws providing for indemnification, is not paid in full by the Company
      within thirty (30) days after a written request for payment thereof has
      first been received by the Company, Indemnitee may, but need not, at any
      time thereafter bring an action against the Company to recover the unpaid
      amount of the claim and, subject to Section 14 of this Agreement,
      Indemnitee shall also be entitled to be paid for the expenses (including
      attorneys' fees) of bringing such action. It shall be a defense to any
      such action (other than an action brought to enforce a claim for expenses
      incurred in connection with any action, suit or proceeding in advance of
      its final disposition) that Indemnitee has not met the standards of
      conduct which make it permissible under applicable law for the Company to
      indemnify Indemnitee for the amount claimed. However, Indemnitee shall be
      entitled to receive interim payments of expenses pursuant to Subsection
      3(a) unless and until such defense may be finally adjudicated by court
      order or judgment from which no further right of appeal exists. It is the
      parties' intention that if the Company contests Indemnitee's right to
      indemnification, the question of Indemnitee's right to indemnification
      shall be for the court to decide, and neither the failure of the Company
      (including its Board of Directors, any committee or subgroup of the Board
      of Directors, independent legal counsel, or its stockholders) to have made
      a determination that indemnification of Indemnitee is proper in the
      circumstances because Indemnitee has met the applicable standard of
      conduct required by applicable law, nor an actual determination by the
      Company (including its Board of Directors, any committee or subgroup of
      the Board of Directors, independent legal counsel, or its stockholders)
      that Indemnitee has not met such applicable standard of conduct, shall
      create a presumption that Indemnitee has or has not met the applicable
      standard of conduct.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Notice to Insurers. If,
      at the time of the receipt of a notice of a claim pursuant to Section 3(b)
      hereof, the Company has director and officer liability insurance in
      effect, the Company shall give prompt notice of the commencement of such
      proceeding to the insurers in accordance with the procedures set forth in
      the respective policies. The Company shall thereafter take all necessary
      or desirable action to cause such insurers to pay, on behalf of the
      Indemnitee, all amounts payable as a result of such proceeding in
      accordance with the terms of such
policies.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Selection of Counsel.
      In the event the Company shall be obligated under Section 3(a) hereof to
      pay the expenses of any proceeding against Indemnitee, the Company, if
      appropriate, shall be entitled to assume the defense of such proceeding,
      with independent counsel approved by Indemnitee, upon the delivery to
      Indemnitee of written notice of its election to do so. After delivery of
      such notice, approval of such counsel by Indemnitee and the retention of
      such counsel by the Company, the Company will not be liable to Indemnitee
      under this Agreement for any fees of counsel subsequently incurred by
      Indemnitee with respect to the same proceeding, provided that (i)
      Indemnitee shall have the right to employ his counsel in any such
      proceeding at Indemnitee's expense; and (ii) if (A) the employment of
      counsel by Indemnitee has been previously authorized by the Company, (B)
      Indemnitee shall have reasonably concluded that there may be a conflict of
      interest between the Company and Indemnitee in the conduct of any such
      defense, or (C) the Company shall not, in fact, have employed counsel to
      assume the defense of such proceeding, then the fees and expenses of
      Indemnitee's counsel shall be at the expense of the
    Company.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. ADDITIONAL INDEMNIFICATION RIGHTS;
NONEXCLUSIVITY.

    

    
      	
               
      

            	
              (a)

            	
              Scope. Notwithstanding
      any other provision of this Agreement, the Company hereby agrees to
      indemnify the Indemnitee to the fullest extent permitted by law,
      notwithstanding that such indemnification is not specifically authorized
      by the other provisions of this Agreement, the Company's Certificate of
      Incorporation, the Company's Bylaws or by statute. In the event of any
      change, after the date of this Agreement, in any applicable law, statute,
      or rule which expands the right of a Delaware corporation to indemnify a
      member of its board of directors or an officer, such changes shall be,
      ipso facto, within the purview of Indemnitee's rights and Company's
      obligations, under this Agreement. In the event of any change in any
      applicable law, statute or rule which narrows the right of a Delaware
      corporation to indemnify a member of its board of directors or an officer,
      such changes, to the extent not otherwise required by such law, statute or
      rule to be applied to this Agreement shall have no effect on this
      Agreement or the parties' rights and obligations
  hereunder.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Nonexclusivity. The
      indemnification provided by this Agreement shall not be deemed exclusive
      of any rights to which Indemnitee may be entitled under the Company's
      Certificate of Incorporation, its Bylaws, any agreement, any vote of
      stockholders or disinterested Directors, the General Corporation Law of
      the State of Delaware, or otherwise, both as to action in Indemnitee's
      official capacity and as to action in another capacity while holding such
      office. The indemnification provided under this Agreement shall continue
      as to Indemnitee for any action taken or not taken while serving in an
      indemnified capacity even though he may have ceased to serve in such
      capacity at the time of any action, suit or other covered
      proceeding.

            

    

    

    5. PARTIAL INDEMNIFICATION. If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the expenses, judgments, fines or
penalties actually or reasonably incurred by him in the investigation, defense,
appeal or settlement of any civil or criminal action, suit or proceeding, but
not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such expenses, judgments, fines or
penalties to which Indemnitee is entitled.

    

    6. MUTUAL ACKNOWLEDGEMENT. Both
the Company and Indemnitee acknowledge that in certain instances, Federal law or
applicable public policy may prohibit the Company from indemnifying its
directors and officers under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.

    

    7. OFFICER AND DIRECTOR LIABILITY
INSURANCE. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with reputable insurance companies
providing the officers and directors of the Company with coverage for losses
from wrongful acts, or to ensure the Company's performance of its
indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against
the protection afforded by such coverage. In all policies of director and
officer liability insurance, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits as are accorded to
the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer. Notwithstanding the foregoing, the Company shall have
no obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a subsidiary or parent of the Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

            8.
SEVERABILITY. Nothing in
this Agreement is intended to require or shall be construed as requiring the
Company to do or fail to do any act in violation of applicable law. The
Company's inability, pursuant to court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement. The provisions
of this Agreement shall be severable as provided in this Section 8. If this
Agreement or any portion hereof shall be invalidated on any ground by any court
of competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its
terms.

    

    

    9. EXCEPTIONS. Any other
provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement:

    

    
      	
               
      

            	
              (a)

            	
              Claims Initiated by
      Indemnitee. To indemnify or advance expenses to Indemnitee with
      respect to proceedings or claims initiated or brought voluntarily by
      Indemnitee and not by way of defense, except with respect to proceedings
      brought to establish or enforce a right to indemnification under this
      Agreement or any other statute or law or otherwise as required under
      Section 145 of the Delaware General Corporation Law, but such
      indemnification or advancement of expenses may be provided by the Company
      in specific cases if the Board of Directors has approved the initiation or
      bringing of such suit; or

            

    

    

    
      	
               
      

            	
              b)

            	
              Lack of Good Faith. To
      indemnify Indemnitee for any expenses incurred by the Indemnitee with
      respect to any proceeding instituted by Indemnitee to enforce or interpret
      this Agreement, if a court of competent jurisdiction determines that each
      of the material assertions made by the Indemnitee in such proceeding was
      not made in good faith or was frivolous;
or

            

    

    

    
      	
               
      

            	
              (c)

            	
              Insured Claims. To
      indemnify Indemnitee for expenses or liabilities of any type whatsoever
      (including, but not limited to, judgments, fines, ERISA excise taxes or
      penalties, and amounts paid in settlement) which have been paid directly
      to Indemnitee by an insurance carrier under a policy of officers' and
      directors' liability insurance maintained by the Company;
    or

            

    

    

    
      	
               
      

            	
              (d)

            	
              Claims Under Section
      16(b). To indemnify Indemnitee for expenses and the payment of
      profits arising from the purchase and sale by Indemnitee of securities in
      violation of Section 16(b) of the Securities Exchange Act of 1934, as
      amended, or any similar successor
statute.

            

    

    

    10. CONSTRUCTION OF CERTAIN
PHRASES.

    

    
      	
               
      

            	
              (a)

            	
              Company. For purposes
      of this Agreement, references to the "Company" shall include, in addition
      to the resulting corporation, any constituent corporation (including any
      constituent of a constituent) absorbed in a consolidation or merger which,
      if its separate existence had continued, would have had power and
      authority to indemnify its directors, officers, and employees or agents,
      so that if Indemnitee is or was a director, officer, employee or agent of
      such constituent corporation, or is or was serving at the request of such
      constituent corporation as a director, officer, employee or agent of
      another corporation, partnership, joint venture, trust or other
      enterprise, Indemnitee shall stand in the same position under the
      provisions of this Agreement with respect to the resulting or surviving
      corporation as Indemnitee would have with respect to such constituent
      corporation if its separate existence had
  continued.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Other Enterprises. For
      purposes of this Agreement, references to "other enterprises" shall
      include employee benefit plans; references to "fines" shall include any
      excise taxes assessed on Indemnitee with respect to an employee benefit
      plan; and references to "serving at the request of the Company" shall
      include any service as a director, officer, employee or agent of the
      Company which imposes duties on, or involves services by, such director,
      officer, employee or agent with respect to an employee benefit plan, its
      participants, or beneficiaries; and if Indemnitee acted in good faith and
      in a manner Indemnitee reasonably believed to be in the interest of the
      participants and beneficiaries of an employee benefit plan, Indemnitee
      shall be deemed to have acted in a manner "not opposed to the best
      interests of the Company" as referred to in this
  Agreement.

            

    

    
      
        

      

    

    
    

    
      	
               
      

            	
              (c)

            	
              Proceedings. For
      purposes of this Agreement, the term " proceeding" shall be broadly
      construed and shall include, without limitation, any threatened, pending,
      or completed action, suit, arbitration, alternate dispute resolution
      mechanism, investigation, inquiry, administrative hearing or any other
      actual, threatened or completed proceeding, whether brought in the right
      of the Company or otherwise and whether of a civil, criminal,
      administrative or investigative nature, and whether formal or informal in
      any case, in which Indemnitee was, is or will be involved as a party or
      otherwise by reason of: (i) the fact that Indemnitee is or was a director
      or officer of the Company; (ii) the fact that any action taken by
      Indemnitee or of any action on Indemnitee' s part while acting as
      director, officer, employee or agent of the Company; or (iii) the fact
      that Indemnitee is or was serving at the request of the Company as a
      director, officer, employee or agent of another corporation, partnership,
      joint venture, trust, employee benefit plan or other enterprise, and in
      any such case described above, whether or not serving in any such capacity
      at the time any liability or expense is incurred for which
      indemnification, reimbursement, or advancement of expenses may be provided
      under this Agreement.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Subsidiary. For
      purposes of this Agreement, the term " subsidiary" means any corporation
      or limited liability company of which more than 50% of the outstanding
      voting securities or equity interests are owned, directly or indirectly,
      by the Company and one or more of its subsidiaries, and any other
      corporation, limited liability company, partnership, joint venture, trust,
      employee benefit plan or other enterprise of which Indemnitee is or was
      serving at the request of the Company as a director, officer, employee,
      agent or fiduciary.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Independent Counsel.
      For purposes of this Agreement, the term "independent counsel" means a law
      firm, or a partner (or, if applicable, member) of such a law firm, that is
      experienced in matters of corporation law (specifically including
      litigation and indemnification of agents) and neither presently is, nor in
      the past five (5) years has been, retained to represent: (i) the Company
      or Indemnitee in any matter material to either such party, or (ii) any
      other party to the proceeding giving rise to a claim for indemnification
      hereunder. Notwithstanding the foregoing, the term " independent counsel"
      shall not include any person who, under the applicable standards of
      professional conduct then prevailing, would have a conflict of interest in
      representing either the Company or Indemnitee in an action to determine
      Indemnitee' s rights under this
Agreement.

            

    

    

    11. COUNTERPARTS. This Agreement
may be executed in one or more counterparts, each of which shall constitute an
original.

    

    12. SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon the Company and its successors and assigns, and
shall inure to the benefit of Indemnitee and Indemnitee's estate, heirs, legal
representatives and assigns.

    

    13. ATTORNEYS' FEES. In the event
that any action is instituted by Indemnitee under this Agreement to enforce or
interpret any of the terms hereof, Indemnitee shall be entitled to be paid all
court costs and expenses, including reasonable attorneys' fees, incurred by
Indemnitee with respect to such action, unless as a part of such action, the
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee as a basis for such action were not made in good faith or
were frivolous. In the event of an action instituted by or in the name of the
Company under this Agreement or to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and expenses,
including attorneys' fees, incurred by Indemnitee in defense of such action
(including with respect to Indemnitee's counterclaims and cross-claims made in
such action), unless as a part of such action the court determines that each of
Indemnitee's material defenses to such action were made in bad faith or were
frivolous.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    14. NOTICE. Except as otherwise
provided herein, all notices or other communications shall be delivered
personally (effective upon receipt) or by reputable overnight delivery service
(effective  upon delivery), or by certified mail, postage prepaid,
return receipt requested (effective 3 days after posting), and in all cases a
copy shall be forwarded by email at the addresses shown in this Agreement or as
amended.  Notice shall be provided as follows:

    

    To
Company:

    

    AVX
Corporation

    One AVX
Blvd.

    Fountain
Inn, SC 29644

    Attn:
Secretary

    

    

    With a
copy to:

    

    AVX
Corporation

    PO Box
867

    Myrtle
Beach, SC 29578

    Attn:
Vice President for Business and Legal Affairs

    

    To
Indemnitee:

    

    _______________________________

    _______________________________

    _______________________________

    _______________________________

    

    

    Either
party may change notice address by sending a notice pursuant to this
paragraph

    

    15. CONSENT TO JURISDICTION. The
Company and Indemnitee each hereby irrevocably consent to the jurisdiction of
the courts of the State of Delaware for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement and agree
that any action instituted under this Agreement shall be brought only in the
state courts of the State of Delaware.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    16. CHOICE OF LAW. This Agreement
shall be governed by and its provisions construed in accordance with the laws of
the State of Delaware, as applied to contracts between Delaware residents
entered into and to be performed entirely within Delaware without regard to the
conflict of law principles thereof.  THE PARTIES SHALL NOT RAISE IN
CONNECTION THEREWITH, AND HEREBY WAIVE, ANY DEFENSES BASED UPON THE VENUE, THE
INCONVENIENCE OF THE FORUM, THE LACK OF PERSONAL JURISDICTION, THE SUFFICIENCY
OF SERVICE OF PROCESS OR THE LIKE IN ANY SUCH ACTION OR
SUIT.

    

    17. PERIOD OF LIMITATIONS. No
legal action shall be brought and no cause of action shall be asserted by or in
the right of the Company against Indemnitee, Indemnitee's estate, spouse, heirs,
executors or personal or legal representatives after the expiration of two years
from the date of accrual of such cause of action, and any claim or cause of
action of the Company shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.

    

    18. SUBROGATION. In the event of
payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee, who shall execute
all documents required and shall do all acts that may be necessary to secure
such rights and to enable the Company effectively to bring suit to enforce such
rights.

    

    19. ACKNOWLEDGMENT OF READING AND
COMPREHENSION. Each party represents, warrants and acknowledges that
(i) it has read this Agreement, (ii) it has given mature and careful thought to
this Agreement, (iii) it has been given the opportunity to review this Agreement
independently with legal counsel, (iv) it fully understands and agrees to its
terms, (v) it has entered into and executed this Agreement of its own choice and
free will and in accordance with its own judgment, and (vi) it has been
represented by counsel in connection with the negotiation and execution of this
Agreement or has had the ability to retain counsel and has chosen not to do
so.

    

    20.           PRESUMPTION. In the event
of an ambiguity in or dispute regarding the interpretation of this instrument,
the interpretation shall not be resolved by any rule providing for
interpretation against the party who causes the uncertainty to exist or against
the drafting party

    

    21.           NO RELIANCE. In signing this
Agreement, no party has relied on or been induced to execute this Agreement by
any statements, representations, agreements or promises, oral or written, made
by any other party, their agents, employees, servants or attorneys, or anyone
else, other than the statements expressly written in this
Agreement.

    

    22.           AMENDMENT AND TERMINATION. No
amendment, modification, termination or cancellation of this Agreement shall be
effective unless it is in writing signed by both the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.

    

    23. INTEGRATION AND ENTIRE
AGREEMENT. This Agreement sets forth the entire understanding between the
parties hereto and supersedes and merges all previous written and oral
negotiations, commitments, understandings and agreements relating to the subject
matter hereof between the parties hereto.

    .

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above
written.

    

    AVX
CORPORATION                                            INDEMNITEE:

    By:

    

    _______________________________                    _______________________________

    Name:                                                                        Name:

    Title:                                                                           Title:

    

    An
authorized officerplan.htm

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ABRAXAS PETROLEUM CORPORATION

 

 

2005 NON-EMPLOYEE DIRECTORS LONG-TERM EQUITY INCENTIVE PLAN

 

 

(As Amended March 17, 2009 and March 16, 2010)

 

  

  

  

 

ABRAXAS PETROLEUM CORPORATION

 

 

2005 NON-EMPLOYEE DIRECTORS LONG-TERM EQUITY INCENTIVE PLAN

 

 

TABLE OF CONTENTS

 

	
PART I

	  	  	  
	
PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES

	
1

	  	
SECTION 1.

	
Purpose of this Plan

	
1

	  	
SECTION 2.

	
Definitions

	
1

	  	
SECTION 3.

	
Administration of this Plan

	
4

	  	
SECTION 4.

	
Shares Subject to this Plan

	
5

	  	
SECTION 5.

	
Adjustments to Shares Subject to this Plan.

	
6

	  	  	  	  
	
PART II

	  	  	  
	
SPECIFIC TERMS APPLICABLE TO OPTIONS AND STOCK AWARDS

	
7

	  	
SECTION 6.

	
General Eligibility; Maximum Annual Participant

Award and Formula Awards.

	
7

	  	
SECTION 7.

	
Procedure for Exercise of Awards; Rights as a Stockholder.

	
7

	  	
SECTION 8.

	
Expiration of Awards.

	
8

	  	
SECTION 9.

	
Effect of Change of Control

	
9

	  	  	  	  
	
PART III

	  	  	  
	
SPECIFIC TERMS APPLICABLE TO OPTIONS AND STOCK AWARDS

	
9

	  	
SECTION 10.

	
Grant, Terms and Conditions of Options

	
9

	  	
SECTION 11.

	
Grant, Terms and Conditions of Stock Awards.

	
10

	  	  	  	  
	
PART IV

	  	  	  
	
TERM OF PLAN AND STOCKHOLDER APPROVAL

	
10

	  	
SECTION 12.

	
Term of Plan

	
10

	  	
SECTION 13.

	
Amendment and Termination of this Plan.

	
10

	  	
SECTION 14.

	
Stockholder Approval

	
11

	  	  	  	  
	
PART V

	  	  	  
	
MISCELLANEOUS

	
11

	  	
SECTION 15.

	
Unfunded Plan

	
11

	  	
SECTION 16.

	
Representations and Legends

	
11

	  	
SECTION 17.

	
Assignment of Benefits

	
12

	  	
SECTION 18.

	
Governing Laws

	
12

	  	
SECTION 19.

	
Application of Funds

	
12

	  	
SECTION 20.

	
Right of Removal

	
12

 

 

  

  

  

 

ABRAXAS PETROLEUM CORPORATION

 

 

2005 Non-Employee Directors Long-Term Equity Incentive Plan

 

PART I

 

 

PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES

 

SECTION 1.                      Purpose of this Plan. The purposes of this Plan are (a) to attract and retain members of the Board of Directors, and (b) to promote the growth and success of the Company’s business, (i) by aligning the long-term interests of the Company’s Directors with those of the Company’s stockholders by providing an opportunity to acquire an interest in the Company and (ii) by providing both rewards for exceptional performance and long term incentives for future contributions to the success of the Company and its Subsidiaries.

 

 

This Plan permits the grant of Nonqualified Stock Options or Restricted Stock, at the discretion of the Committee and as reflected in the terms of the Award Agreement.  Each Award will be subject to conditions specified in this Plan.

 

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

 

(a)           “Active Status” shall mean that the Director has not been removed from the Board for cause by the Company’s stockholders as provided in the Company’s Articles of Incorporation, as amended, and Bylaws, as amended.

 

(b)            “Award” shall mean any award or benefits granted under this Plan, including Options and Restricted Stock.

 

(c)           “Award Agreement” shall mean a written or electronic agreement between the Company and the Participant setting forth the terms of the Award.

 

(d)           “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

 

(e)           “Board” shall mean the Company’s Board of Directors.

 

(f)           “Change of Control” shall mean the first day that any one or more of the following conditions shall have been satisfied:

 

(i)           the sale, transfer, or assignment to, or other acquisition by any other entity or entities, of all or substantially all of the Company’s assets and business in one or a series of related transactions;

 

(ii)           a third person, including a “group” as determined in accordance with Section 13(d) or 14(d) of the Exchange Act, obtains the Beneficial Ownership of Common Stock having thirty percent (30%) or more of the then total number of votes that may be cast for the election of members of the Board; or

 

  

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(iii)           a cash tender or exchange offer, merger, consolidation, reorganization or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (each a “Transaction”) in connection with the Company, as a result of which the persons who are then members of the Board before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company after the Transaction.

 

(g)           “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(h)           “Committee” shall mean the Compensation Committee appointed by the Board.

 

(i)           “Common Stock” shall mean the common stock of the Company, par value $0.01 per share.

 

(j)           “Company” shall mean Abraxas Petroleum Corporation, a Nevada corporation, and any successor thereto.

 

(k)           “Director” shall mean a member of the Board and, except with respect to the ability to vote on any issues before the Board or the delegation of authority from the Board, shall also be deemed to include advisory directors.

 

(l)           “Effective Date” shall mean the date on which the Company’s stockholders have approved this Plan in accordance with applicable NASDAQ rules.

 

(m)           “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(n)           “Fair Market Value” shall mean the closing price per share of the Common Stock on the NASDAQ as to the date specified (or the previous trading day if the date specified is a day on which no trading occurred), or if NASDAQ shall cease to be the principal exchange or quotation system upon which the shares of Common Stock are listed or quoted, then such exchange or quotation system upon which the Company elects to list or quote its shares of Common Stock.

 

(o)           “FLSA” shall mean the Fair Labor Standards Act of 1938, as amended.

 

(p)           “Independent Director” shall mean a Director who: (i) meets the independence requirements of the NASDAQ, or if the NASDAQ shall cease to be the principal exchange or quotation system upon which the shares of Common Stock are listed or quoted, then such exchange or quotation system upon which the Company elects to list or quote its shares of Common Stock; (ii) qualifies as an “outside director” under Section 162(m) of the Code; (iii) qualifies as a “non-employee director” under Rule 16b-3 promulgated under the Exchange Act; and (iv) satisfies independence criteria under any other applicable laws or regulations relating to the issuance of Shares to Non-Employee Directors.

 

  

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(q)           “Maximum Annual Participant Award” shall have the meaning set forth in Section 6(b).

 

(r)           “Misconduct” shall mean the removal from the Board for cause.

 

(s)           “NASDAQ” shall mean the NASDAQ Capital Market.

 

(t)           “Nominating and Corporate Governance Committee” shall mean the Nominating and Corporate Governance Committee appointed by the Board.

 

(u)           “Non-Employee Director” shall mean a Director who is not a common law employee of the Company or any Subsidiary of the Company.

 

(v)           “Option” shall mean a stock option granted pursuant to Section 10 of this Plan.

 

(w)           “Optionee” shall mean a Participant who has been granted an Option.

 

(x)           “Participant” shall mean any Non-Employee Director granted an Award.

 

(y)           “Plan” shall mean this Abraxas Petroleum Corporation 2005 Non-Employee Directors Long-Term Equity Incentive Plan, including any amendments thereto.

 

(z)           “Reprice” shall mean the adjustment or amendment of the exercise price of Options or previously awarded whether through amendment, cancellation, replacement of grants or any other means.

 

(aa)           “Restricted Stock” shall mean a grant of Shares pursuant to Section 11 of this Plan.

 

(bb)           “Retirement” shall mean ceasing to be a Director pursuant to election by the Company’s stockholders or by voluntary resignation with the approval of the Board’s chair after having served continuously on the Board for at least six years.

 

(cc)           “SEC” shall mean the Securities and Exchange Commission.

 

(dd)           “Share” shall mean one share of Common Stock, as adjusted in accordance with Section 5 of this Plan.

 

(ee)           “Subcommittee” shall have the meaning set forth in Section 3(d).

 

(ff)           “Subsidiary” shall mean a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, a limited liability company, partnership or other entity in which the Company controls fifty percent (50%) or more of the voting power or equity interests, or an entity with respect to which the Company possesses the power, directly or indirectly, to direct or cause the direction of the management and policies of that entity, whether through the Company’s ownership of voting securities, by contract or otherwise.

 

  

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SECTION 3.                       Administration of this Plan.

 

(a)           Authority.  This Plan shall be administered by the Committee.  The Committee shall have full and exclusive power to administer this Plan on behalf of the Board,

 

subject to such terms and conditions as the Committee may prescribe.  Notwithstanding anything herein to the contrary, the Committee’s power to administer this Plan, and actions the Committee takes under this Plan, shall be limited by the provisions set forth in the Committee’s charter, as such charter may be amended from time to time, and the further limitation that certain actions may be subject to review and approval by either the full Board or a panel consisting of all of the Independent Directors of the Company.

 

(b)           Powers of the Committee.                                           Subject to the other provisions of this Plan, the Committee shall have the authority, in its discretion:

 

(i)           to determine the Participants, to whom Awards, if any, will be granted hereunder;

 

(ii)           to grant Options and Restricted Stock to Participants and to determine the terms and conditions of such Awards, including the determination of the Fair Market Value of the Shares, the number of Shares to be represented by each Award and the vesting schedule, the exercise price, the timing of such Awards, and to modify or amend each Award, with the consent of the Participant when required;

 

(iii)           to construe and interpret this Plan and the Awards granted hereunder;

 

(iv)           to prescribe, amend, and rescind rules and regulations relating to this Plan, including the form of Award Agreement, and manner of acceptance of an Award, such as correcting a defect or supplying any omission, or reconciling any inconsistency so that this Plan or any Award Agreement complies with applicable law, regulations and listing requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purposes of this Plan or any Award Agreement;

 

(v)           to accelerate or defer (with the consent of the Participant) the exercise or vested date of any Award;

 

(vi)           to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously granted by the Committee; and

 

(vii)           to make all other determinations deemed necessary or advisable for the administration of this Plan;

 

 

provided, that, no consent of a Participant is necessary under clauses (i) or (v) if a modification, amendment, acceleration, or deferral, in the reasonable judgment of the Committee confers a benefit on the Participant or is made pursuant to an adjustment in accordance with Section 5.

 

  

4

  

 

    (c)            Effect of Committee’s Decision. All decisions, determinations, and interpretations of the Committee shall be final and binding on all Participants, the Company (including its Subsidiaries), any stockholder and all other persons.

 

(d)           Delegation. Consistent with the Committee’s charter, as such charter may be amended from time to time, the Committee may delegate its authority and duties under this Plan to one or more separate committees consisting of members of the Committee or other Directors who are Independent Directors (any such committee a “Subcommittee”), and such actions shall be treated for all purposes as if taken by the Committee; provided that the grant of Awards shall be made in accordance with parameters established by the Committee.  Any action by any such Subcommittee within the scope of such delegation shall be deemed for all purposes to have been taken by the Committee.

 

SECTION 4.                       Shares Subject to this Plan.

 

(a)           Reservation of Shares. The shares of Common Stock reserved under this Plan shall be 1,500,000 shares of Common Stock.  If an Award expires, is forfeited or becomes unexercisable for any reason without having been exercised in full, the undelivered Shares which were subject thereto shall, unless this Plan shall have been terminated, become available for future Awards under this Plan.  Without limiting the foregoing, unless this Plan shall have been terminated, Shares underlying an Award that has been exercised, either in part or in full, including any Shares that would otherwise be issued to a Participant that are used to satisfy any withholding tax obligations that arise with respect to any Award, shall become available for future Awards under this Plan except to the extent Shares were issued in settlement of the Award.  The Shares may be authorized but unissued, or reacquired shares of Common Stock.  The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of this Plan.

 

(b)           Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on which the Company completes the corporate action relating to the grant of such Award and all conditions to the grant have been satisfied, provided that conditions to the exercise of an Award shall not defer the date of grant.  Notice of a grant shall be given to each Participant to whom an Award is so granted within a reasonable time after the determination has been made.

 

(c)           Securities Law Compliance. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated under either such Acts, and the requirements of any stock exchange or quotation system upon which the Shares may then be listed or quoted, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

 

  

5

  

(d)           Substitutions and Assumptions. The Board or the Committee shall have the right to substitute or assume Awards in connection with mergers, reorganizations, separations, or other transactions to which Section 424(a) of the Code applies, provided such substitutions and assumptions are permitted by Section 424 of the Code and the regulations promulgated thereunder.  The number of Shares reserved pursuant to Section 4(a) may be increased by the corresponding number of Awards assumed and, in the case of a substitution, by the net increase in the number of Shares subject to Awards before and after the substitution.

 

SECTION 5.                       Adjustments to Shares Subject to this Plan.

 

(a)           Adjustments.  If the outstanding shares of Common Stock shall be changed into or exchanged for a different number or kind of shares of stock or other securities or property of the Company or of another corporation (whether by reason of merger, consolidation, recapitalization, reclassification, split up, combination of shares or otherwise), or if the number of such shares of Common Stock shall be increased by a stock dividend or stock split, there shall be substituted for or added to each share of Common Stock theretofore reserved for the purposes of this Plan, whether or not such shares are at the time subject to outstanding Awards, the number and kind of shares of stock or other securities or property into which each outstanding share of Common Stock shall be so changed or for which it shall be so exchanged, or to which each such share shall be entitled, as the case may be.  Outstanding Awards shall also be considered to be appropriately amended as to price and other terms as may be necessary or appropriate to reflect the foregoing events.  If there shall be any other change in the number or kind of the outstanding shares of Common Stock, or of any stock or other securities or property into which such Common Stock shall have been changed, or for which it shall have been exchanged, and if the Committee shall in its sole discretion determine that such change equitably requires an adjustment in the number or kind or price of the shares then reserved for the purposes of this Plan, or in any Award theretofore granted or which may be granted under this Plan, then such adjustment shall be made by the Committee and shall be effective and binding for all purposes of the Plan.  In making any such substitution or adjustment pursuant to this Section 5, fractional shares may be ignored.

 

(b)           Amendments.  The Committee shall have the power, in the event of any merger or consolidation of the Company with or into any other corporation, or the merger or consolidation of any other corporation with or into the Company, to amend all outstanding Awards to permit the exercise thereof in whole or in part at anytime, or from time to time, prior to the effective date of any such merger or consolidation and to terminate each such Award as of such effective date.

 

(c)           No Other Adjustment.  Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to an Award.

 

  

6

  

PART II

 

 

TERMS APPLICABLE TO ALL AWARDS

 

SECTION 6.                       General Eligibility; Maximum Annual Participant Award and Formula Awards.

 

        (a)           Awards. Awards may be granted only to Participants who are Non-Employee Directors.

 

(b)           Maximum Annual Participant Award. The aggregate number of Shares with respect to which an Award or Awards may be granted to any one Participant in any one taxable year of the Company (the “Maximum Annual Participant Award”) shall not exceed 100,000 shares of Common Stock (subject to adjustment as set forth in Section 5(a)) pursuant to the Awards to be granted pursuant to Section 6(c) and Section 6(d).

 

(c)           Formula Awards.  Each year at the first regular meeting of the Board of Directors immediately following the Company’s annual stockholders meeting for that year, each Non-Employee Director at the time of such Board meeting, shall be granted Awards of 10,000 shares of Common Stock (subject to adjustment as set forth in Section 5(a)), unless the Committee shall decide otherwise prior to or at such Board meeting.  The Awards granted pursuant to this Section 6(c) are intended to compensate each Non-Employee Director for that Non-Employee Director’s participation in Board and Committee meetings during the Company’s previous calendar year.  Any Non-Employee Director who leaves the Board (including ceasing to be an advisory Director) prior to the date of the first regular meeting of the Board of Directors shall not be entitled to any Awards under this Section 6(c).

 

(d)           Other Director Awards. For Non-Employee Directors who are appointed to the Board after the Effective Date of the Plan, the Board may grant an Award to the Non-Employee Director and the terms and conditions of that grant shall be determined by the Committee.  In addition, at any other time, the Board may grant an Award to a Non-Employee Director and the terms and conditions of that grant shall be determined by the Committee.  The Awards granted pursuant to this Section 6(d) are intended to compensate each Non-Employee Director for that Non-Employee Director’s commitment to the Board of Directors by aligning the long-term interests of the Company’s Directors with those of the Company’s stockholders.

 

SECTION 7.                       Procedure for Exercise of Awards; Rights as a Stockholder.

 

(a)           Procedure. An Award shall be exercised when written, electronic or verbal notice of exercise has been given to the Company, or the brokerage firm or firms approved by the Company to facilitate exercises and sales under this Plan, in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been received by the Company or the brokerage firm or firms, as applicable.  The notification to the brokerage firm shall be made in accordance with procedures of such brokerage firm approved by the Company.  Full payment may, as authorized by the Committee, consist of any consideration and method of payment allowable under Section 7(b) of this Plan.  The Company shall issue (or

 

  

7

  

cause to be issued) such share certificate promptly upon exercise of the Award.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the share certificate is issued, except as provided in Section 5 of this Plan.

 

(b)           Method of Payment. The consideration to be paid for any Shares to be issued upon exercise or other required settlement of an Award, including the method of payment, shall be determined by the Committee at the time of settlement and which forms may include (without limitation): (i) with respect to an Option, a request that the Company or the designated brokerage firm conduct a cashless exercise of the Option; (ii) cash; and (iii) tender of shares of Common Stock owned by the Participant in accordance with rules established by the Committee from time to time.  Shares used to pay the exercise price shall be valued at their Fair Market Value on the exercise date.  Payment of the aggregate exercise price by means of tendering previously-owned shares of Common Stock shall not be permitted when the same may, in the reasonable opinion of the Company, cause the Company to record a loss or expense as a result thereof.

 

(c)           Withholding Obligations.  To the extent required by applicable federal, state, local or foreign law, the Committee may and/or a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to any Option or Restricted Stock or any sale of Shares.  The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied.  These obligations may be satisfied by having the Company withhold a portion of the Shares that otherwise would be issued to a Participant under such Award or by tendering Shares previously acquired by the Participant in accordance with rules established by the Committee from time to time.

 

(d)           Stockholder Rights. Except as otherwise provided in this Plan, until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the share certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares subject to the Award, notwithstanding the exercise of the Award.

 

(e)           Non-Transferability of Awards. An Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in exchange for consideration, except that an Award may be transferred by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant; unless the Committee permits further transferability, on a general or specific basis, in which case the Committee may impose conditions and limitations on any permitted transferability.

 

SECTION 8.                       Expiration of Awards.

 

(a)           Expiration, Termination or Forfeiture of Awards. Unless otherwise provided in the applicable Award Agreement or any severance agreement, vested Awards granted under this Plan shall expire, terminate, or otherwise be forfeited as follows:

 

  

8

  

(i)           three (3) months after the date the Company delivers a notice of termination of a Participant’s Active Status, other than in circumstances covered by (ii), (iii) or (iv) below;

 

(ii)           immediately upon termination of a Participant’s Active Status for Misconduct;

 

(iii)           twelve (12) months after the date of the death of a Participant whose Active Status terminated as a result of his or her death; and

 

(iv)           thirty-six (36) months after the date on which the Participant ceased performing services as a result of Retirement.

 

(b)           Extension of Term. Notwithstanding subsection (a) above, the Committee shall have the authority to extend the expiration date of any outstanding Option in circumstances in which it deems such action to be appropriate (provided that no such extension shall extend the term of an Option beyond the date on which the Option would have expired if no termination of the Participant’s Active Status had occurred).

 

SECTION 9.                       Effect of Change of Control. Notwithstanding any other provision in this Plan to the contrary, the following provisions shall apply unless otherwise provided in the most recently executed agreement between the Participant and the Company, or specifically prohibited under applicable laws, or by the rules and regulations of any applicable governmental agencies or national securities exchanges or quotation systems.

 

(a)           Acceleration. Awards of a Participant shall be Accelerated (as defined in Section 9(b)) upon the occurrence of a Change of Control.

 

(b)           Definition. For purposes of this Section 9, Awards of a Participant being “Accelerated” means, with respect to such Participant:

 

(i)           any and all Options shall become fully vested and immediately exercisable, and shall remain exercisable throughout their entire term; and

 

(ii)           any restriction periods and restrictions imposed on Restricted Stock shall lapse.

 

PART III

 

 

SPECIFIC TERMS APPLICABLE TO OPTIONS AND STOCK AWARDS

 

SECTION 10.                       Grant, Terms and Conditions of Options.

 

(a)           Term of Options. The term of Options shall be at the discretion of the Committee.

 

(b)           Option Exercise Prices. The per Share exercise price under an Option shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.  In no event shall the Board or the Committee be permitted to Reprice an Option after the date of grant without stockholder approval.

 

  

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(c)           Vesting. Options granted pursuant to this section 10 shall vest pursuant to the periods, terms and conditions determined by the Committee in its sole discretion.  To the extent Options vest and become exercisable in increments, such Options shall cease vesting as of the termination of such Optionee’s Active Status for reasons other than Retirement or death, in each of which cases such Options shall immediately vest in full.

 

         (d)           Exercise. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Committee at the time of grant, and as are permissible under the terms of this Plan.  An Option may not be exercised for a fraction of a Share.

 

SECTION 11.                       Grant, Terms and Conditions of Stock Awards.

 

(a)           Designation. Restricted Stock may be granted either alone, in addition to, or in tandem with other Awards granted under this Plan.  After the Committee determines that it will offer Restricted Stock, it will advise the Participant in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions, including vesting, if any, related to the offer, including the number of Shares that the Participant shall be entitled to receive or purchase, the price to be paid, if any, and, if applicable, the time within which the Participant must accept the offer.  The offer shall be accepted by execution of an Award Agreement or as otherwise directed by the Committee.  The term of each award of Restricted Stock shall be at the discretion of the Committee.

 

(b)           Vesting.   The Committee shall determine the time or times within which an Award of shares of Restricted Stock may be subject to forfeiture, the vesting schedule and the rights to acceleration thereof, and all other terms and conditions of the Award.  Subject to the applicable provisions of the Award Agreement and this Section 11, upon termination of a Participant’s Active Status for any reason, all Restricted Stock subject to the Award Agreement may vest or be forfeited in accordance with the terms and conditions established by the Committee as specified in the Award Agreement.

 

PART IV

 

 

TERM OF PLAN AND STOCKHOLDER APPROVAL

 

SECTION 12.                       Term of Plan. This Plan shall become effective as of the Effective Date.  It shall continue in effect until the tenth anniversary of the Effective Date or until terminated under Section 14 of this Plan or extended by an amendment approved by the stockholders of the Company pursuant to Section 14(a).

 

SECTION 13.                       Amendment and Termination of this Plan.

 

(a)           Amendment and Termination. The Board or the Committee may amend or terminate this Plan from time to time in such respects as the Board may deem advisable (including, but not limited, to amendments which the Board deems appropriate to enhance the Company’s ability to claim deductions related to stock option exercises); provided, that to the extent required by the Code or the 

 

  

10

  

rules of the NASDAQ, such other exchange upon which the Company’s Common Stock is either quoted or traded, or the SEC, stockholder approval shall be required for any material amendment of this Plan.  Subject to the foregoing, it is specifically intended that the Board or Committee may amend this Plan without stockholder approval to comply with legal, regulatory and listing requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purpose of this Plan or any Award Agreement.

(b)           Effect of Amendment or Termination. Any amendment or termination of this Plan shall not affect Awards already granted and such Awards shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company.

 

SECTION 14.                       Stockholder Approval. The effectiveness of this Plan is subject to approval by the stockholders of the Company in accordance with applicable NASDAQ rules.

 

PART V

 

MISCELLANEOUS

 

SECTION 15.                       Unfunded Plan.  The adoption of this Plan and any setting aside of amounts by the Company with which to discharge its obligations hereunder shall not be deemed to create a trust.  The benefits provided under this Plan shall be a general, unsecured obligation of the Company payable solely from the general assets of the Company, and neither a Participant nor the Participant’s beneficiaries or estate shall have any interest in any assets of the Company by virtue of this Plan.  Nothing in this Section 15 shall be construed to prevent the Company from implementing or setting aside funds in a grantor trust subject to the claims of the Company’s creditors.  Legal and equitable title to any funds set aside, other than any grantor trust subject to the claims of the Company’s creditors, shall remain in the Company and any funds so set aside shall remain subject to the general creditors of the Company, present and future.  Any liability of the Company to any Participant with respect to an Award shall be based solely upon contractual obligations created by this Plan and the Award Agreements.

 

SECTION 16.                       Representations and Legends.  The Committee may require each person purchasing shares pursuant to an Award under this Plan to represent to and agree with the Company in writing that the purchaser is acquiring the shares without a view to distribution thereof.  In addition to any legend required by this Plan, the certificate for such shares may include any legend which the Committee deems appropriate to reflect a restriction on transfer.

 

All certificates for shares of Common Stock delivered under this Plan shall be subject to such stock transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the SEC, any stock exchange upon which the Common Stock is listed, applicable federal or state securities laws, and any applicable corporate law, and the Committee may cause the legend or legends to be put on any such certificates to make appropriate reference to such restriction.

 

  

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SECTION 17.                       Assignment of Benefits.  No Award or other benefits payable under this Plan shall, except as otherwise provided under this Plan or as specifically provided by law, be subject in any manner to anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge.  Any attempt to anticipate, alienate, attach, sell, transfer, assign, pledge, encumber or charge, any such benefit shall be void, and any such benefit shall not in any manner be subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled to such benefit, nor shall such benefit be subject to attachment or legal process for or against that person.

 

SECTION 18.                                Governing Laws.  This Plan and actions taken in connection herewith shall be governed, construed and enforced in accordance with the laws of the State of Nevada.

 

SECTION 19.                       Application of Funds.  The proceeds received by the Company from the sale of shares of Common Stock pursuant to Awards granted under this Plan will be used for general corporate purposes.

 

SECTION 20.                       Right of Removal.  Nothing in this Plan or in any Award or Award Agreement shall confer upon any Non-Employee Director or any other individual the right to continue as a Director of the Company, or affect any right the Company or the Company’s stockholders may have to remove the Non-Employee Director as a Director at any time for any reason.

 

 

  

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