Document:

ex4-2.htm

    
      

      

    

    Exhibit
4.2

    

     

    PERVASIP
CORP.

    2010 EQUITY INCENTIVE
PLAN

     

    This
Pervasip Corp. 2010 Equity Incentive Plan (the “Plan”) is established
by Pervasip Corp., a New York corporation (the “Company”), effective
as of April 21, 2010 (the “Effective
Date”).  Capitalized terms not otherwise defined shall have the
meanings set forth in Section 25.

     

    1.           Purpose.  The
Plan is intended to provide qualifying Employees (including officers and
Directors), Independent Directors and Consultants with equity ownership in the
Company, thereby strengthening their commitment to the success of the Company,
promoting the identity of interests between the Company’s shareholders and such
Employees, Independent Directors and Consultants and stimulating their efforts
on behalf of the Company, and to assist the Company in attracting and retaining
talented personnel.

     

    2.           Scope of the
Plan.  Subject to adjustment in accordance with Section 20, the
total number of Shares for which grants under the Plan shall be available is
5,000,000.  If any Shares subject to any Award granted hereunder are
forfeited or such Award otherwise terminates without the issuance of such Shares
or for other consideration in lieu of such Shares, the Shares subject to such
Award, to the extent of any such forfeiture or termination, shall again be
available for grant under the Plan.  Shares awarded under the Plan may
be treasury shares or newly-issued shares.

     

    3.           Administration.

     

    (a)           The
Plan shall be administered by a Committee which shall consist of at least two or
more members of the Board, all of whom, so long as the Company remains a Public
Company, shall qualify as “non-employee directors” under Section (b)(3)(i) of
Rule 16b-3.  The number of members of the Committee may from time to
time be increased or decreased, and so long as the Company remains a Public
Company, shall be subject to such conditions, as the Board deems appropriate to
permit transactions in Shares pursuant to the Plan to satisfy such conditions of
Rule 16b-3 as then in effect.

     

    (b)           Subject
to the express provisions of the Plan, the Committee has full and final
authority and discretion as follows:

     

    (i)           to
determine when and to whom Awards should be granted and the terms, conditions
and restrictions applicable to each Award, including, without limitation, (A)
the exercise price of the Award, (B) the method of payment for Shares purchased
upon the exercise of the Award, (C) the method of satisfaction of any tax
withholding obligation arising in connection with the Award, (D) the timing,
terms and conditions of the exercisability of the Award or the vesting of any
Shares acquired upon the exercise thereof, (E) the time of the expiration of the
vesting of any Shares acquired upon the exercise thereof, (F) the effect of the
Grantee’s termination of employment or service with the Company on any of the
foregoing, (G) all other terms, conditions and restrictions applicable to the
Award or such Shares not inconsistent with the terms of the Plan, (H) the
benefit payable under any SAR or Performance Share, and (I) whether or not
specific Awards shall be identified with other specific Awards, and if so
whether they shall be exercisable cumulatively with, or alternatively to, such
other specific Awards;

     

    (ii)           to
determine the amount, if any, that a Grantee shall pay for Restricted Shares,
whether to permit or require the payment of cash dividends thereon to be
deferred and the terms related thereto, when Restricted Shares (including
Restricted Shares acquired upon the exercise of any Award) shall be forfeited
and whether such Shares shall be held in escrow;

     

    
      
        
        

      

      
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    (iii)           to
interpret the Plan and to make all determinations necessary or advisable for the
administration of the Plan;

     

    (iv)           to
make, amend and rescind rules, guidelines and policies relating to the Plan, or
to adopt supplements to, or alternative versions of, the Plan, including,
without limitation, rules with respect to the exercisability and forfeitability
of Awards upon the termination of employment or service of a
Grantee;

     

    (v)           to
determine the terms, conditions and restrictions of all Award Agreements (which
need not be identical) and, with the consent of the Grantee, to amend any such
Award Agreement at any time, among other things, to permit transfers of such
Awards to the extent permitted by the Plan, except that the consent of the
Grantee shall not be required for any amendment which (A) does not adversely
affect the rights of the Grantee or (B) is necessary or advisable (as determined
by the Committee) to carry out the purpose of the Award as a result of any
change in applicable law;

     

    (vi)           to
cancel, with the consent of the Grantee, outstanding Awards and to grant new
Awards in substitution therefor;

     

    (vii)           to
accelerate the exercisability of, and to accelerate or waive any or all of the
terms, conditions and restrictions applicable to, any Award or any group of
Awards for any reason and at any time, including in connection with a
termination of employment (other than for Cause);

     

    (viii)           subject
to Section 6(c), to extend the time during which any Award or group of Awards
may be exercised;

     

    (ix)           to
make such adjustments or modifications to Awards to Grantees working outside the
United States as are advisable to fulfill the purposes of the Plan;

     

    (x)           to
impose such additional terms, conditions and restrictions upon the grant,
exercise or retention of Awards as the Committee may, before or concurrent with
the grant thereof, deem appropriate; and

     

    (xi)           to
take any other action with respect to any matters relating to the Plan for which
it is responsible.

     

    The
determination of the Committee on all matters relating to the Plan or any Award
Agreement shall be final.

     

    4.           Indemnification and
Reimbursement.  Service as a member of the Committee or any
other duly appointed subcommittee shall constitute service as a Board member,
and such members shall accordingly be entitled to full indemnification and
reimbursement as Board members for their service as members of the Committee or
any other duly appointed subcommittee.  No Committee or other duly
appointed subcommittee member shall be liable for any act or omission made in
good faith with respect to the Plan or any Award granted under the
Plan.

     

    5.           Eligibility.  The
Committee may, in its discretion, grant Awards to any Eligible Person, whether
or not he or she has previously received an Award, except in the case of an ISO,
which can only be granted to an Employee of the Company or any
Subsidiary.

     

     

    
      
        
        

      

      
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    6.           Conditions to
Grants.

     

    (a)           General
Conditions.  Awards shall be evidenced by written Award
Agreements specifying the number of Shares covered thereby, in such form as the
Committee shall from time to time establish.  Award Agreements may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

     

    (i)           The
Grant Date of an Award shall be the date on which the Committee grants the Award
or such later date as specified in advance by the Committee;

     

    (ii)           In
the case of an Award of options, the Option Term shall under no circumstances
extend more than ten (10) years after the Grant Date and shall be subject to
earlier termination as herein provided; and

     

    (iii)           Any
terms and conditions of an Award not set forth in the Plan shall be set forth in
the Award Agreement related to that Award.

     

    (b)           Grant of
Options.  No later than the Grant Date of any option, the
Committee shall determine the Option Price of such option.  Subject to
Section 6(c), the Option Price of an option may be the Fair Market Value of a
Share on the Grant Date or may be less than or more than that Fair Market
Value.  An option shall be exercisable for unrestricted Shares, unless
the Award Agreement provides that it is exercisable for Restricted
Shares.

     

    (c)           Grant of
ISOs.  At the time of the grant of any option, the Committee
may, in its discretion, designate that such option shall be made subject to
additional restrictions to permit the option to qualify as an “incentive stock
option” under the requirements of Section 422 of the Code.  Any option
designated as an ISO:

     

    (i)           shall
have an Option Price that is not less than the Fair Market Value of a Share on
the Grant Date and, if granted to a Ten Percent Owner, have an Option Price that
is not less than 110% of the Fair Market Value of a Share on the Grant
Date;

     

    (ii)           shall
be for a period of not more than ten (10) years and, if granted to a Ten Percent
Owner, not more than five (5) years, from the Grant Date and shall be subject to
earlier termination as provided herein or in the applicable Award
Agreement;

     

    (iii)           shall
meet the limitations of this subparagraph 6(c)(iii).  If the aggregate
Fair Market Value of Shares with respect to which ISOs first become exercisable
by a Grantee in any calendar year exceeds the limit determined in accordance
with the provisions of Section 422 of the Code (the “Limit”) taking into
account Shares subject to all ISOs granted by the Company that are held by the
Grantee, the excess will be treated as nonqualified options.  To
determine whether the Limit is exceeded, the Fair Market Value of Shares subject
to options shall be determined as of the Grant Dates of the
options.  In reducing the number of options treated as ISOs to meet
the Limit, the most recently granted options will be reduced
first.  If a reduction of simultaneously granted options is necessary
to meet the Limit, the Committee may designate which Shares are to be treated as
Shares acquired pursuant to an ISO;

     

    (iv)           shall
be granted within ten (10) years from the Effective Date;

     

    (v)           shall
require the Grantee to notify the Committee of any disposition of any Shares
issued upon the exercise of the ISO under the circumstances described in Section
421(b) of the Code (relating to certain disqualifying dispositions, a “Disqualifying
Disposition”), within ten (10) business days after such Disqualifying
Disposition; and

     

    
      
        
        

      

      
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    (vi)           unless
otherwise permitted by the Code, shall by its terms not be assignable or
transferable other than by will or the laws of descent and distribution and may
be exercised, during the Grantee’s lifetime, only by the Grantee, except that
the Grantee may, in accordance with Section 7, designate in writing a
beneficiary to exercise his or her ISOs after the Grantee’s death.

     

    (d)           Grant of
SARs.

     

    (i)           When
granted, SARs may, but need not, be identified with a specific option, specific
Restricted Shares, or specific Performance Shares of the Grantee (including any
option, Restricted Shares, or Performance Shares granted on or before the Grant
Date of the SARs) in a number equal to or different from the number of SARs so
granted.  If SARs are identified with Shares subject to an option,
with Restricted Shares, or with Performance Shares, then, unless otherwise
provided in the applicable Award Agreement, the Grantee’s associated SARs shall
terminate upon (A) the expiration, termination, forfeiture, or cancellation of
such option, Restricted Shares or Performance Shares, (B) the exercise of such
option or Performance Shares, or (C) the date such Restricted Shares become
nonforfeitable.

     

    (ii)           The
strike price (the “Strike Price”) of any
SAR shall equal, for any SAR that is identified with an option, the Option Price
of such option, or for any other SAR, one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date of such SAR, except that the Committee
may (A) specify a higher Strike Price in the Award Agreement or (B) provide that
the benefit payable upon exercise of any SAR shall not exceed such percentage of
the Fair Market Value of a Share on such Grant Date as the Committee shall
specify.

     

    (e)           Grant of Performance
Shares.

     

    
      	
              (i)  

            	
              Before
      the grant of Performance Shares, the Committee
  shall:

            

    

     

    (A)           determine
objective performance goals, which may consist of any one or more of the
following goals deemed appropriate by the Committee:  earnings (either
in the aggregate or on a per share basis), operating income, cash flow, EBITDA
(earnings before interest, taxes, depreciation and amortization), return on
equity, indices related to EVA (economic value added), per share rate of return
on the Common Stock (including dividends), general indices relative to levels of
general customer service satisfaction, as measured through various
randomly-generated customer service surveys, market share (in one or more
markets), customer retention rates, market penetration rates, revenues,
reductions in expense levels, the attainment by the Common Stock of a specified
market value for a specified period of time, and any other object performance
goal deemed appropriate by the Committee, in each case where applicable to be
determined either on a company-wide basis, individual basis or in respect of any
one or more business units, and the amount of compensation under the goals
applicable to such grant;

     

    (B)           designate
a period for the measurement of the extent to which performance goals are
attained, which may begin simultaneously with, prior to or following the Grant
Date (the “Performance
Period”); and

     

    (C)           assign
a performance percentage to each level of attainment of performance goals during
the Performance Period, with the percentage applicable to minimum attainment
being zero percent and the percentage applicable to maximum attainment to be
determined by the Committee from time to time (the “Performance
Percentage”).

     

    (ii)           If
a Grantee is promoted, demoted, or transferred to a different business unit of
the Company during a Performance Period, then, to the extent the Committee
determines any one or more of the performance goals, Performance Period or
Performance Percentage are no longer appropriate, the Committee may make any
changes thereto as it deems appropriate in order to make them
appropriate.

     

     

    
      
        
        

      

      
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    (iii)           When
granted, Performance Shares may, but need not, be identified with Shares subject
to a specific option, specific Restricted Shares or specific SARs of the Grantee
granted under the Plan in a number equal to or different from the number of the
Performance Shares so granted.  If Performance Shares are so
identified, then, unless otherwise provided in the applicable Award Agreement,
the Grantee’s associated Performance Shares shall terminate upon (A) the
expiration, termination, forfeiture or cancellation of the option, Restricted
Shares or SARs with which the Performance Shares are identified, (B) the
exercise of such option or SARs, or (C) the date Restricted Shares become
nonforfeitable.

     

    (f)           Grant of Restricted
Shares.

     

    (i)           The
Committee shall determine the amount, if any, that a Grantee shall pay for
Restricted Shares, subject to the following sentence.  The Committee
shall require the Grantee to pay at least the Minimum Consideration for each
Restricted Share.  Such payment shall be made in full by the Grantee
before the delivery of the shares and in any event no later than ten (10)
business days after the Grant Date.  In the discretion of the
Committee and to the extent permitted by law, payment may also be made in
accordance with Section 9.

     

    (ii)           The
Committee may, but need not, provide that all or any portion of a Grantee’s
Restricted Shares, or Restricted Shares acquired upon exercise of an option,
shall be forfeited:

     

    (A)           except
as otherwise specified in the Plan or the Award Agreement, upon the Grantee’s
termination of employment within a specified time period after the Grant Date;
or

     

    (B)           if
the Company or the Grantee does not achieve specified performance goals (if any)
within a specified time period after the Grant Date and before the Grantee’s
termination of employment; or

     

    (C)           upon
failure to satisfy such other conditions as the Committee may specify in the
Award Agreement.

     

    (iii)           If
Restricted Shares are forfeited and the Grantee was required to pay for such
shares or acquired such Restricted Shares upon the exercise of an option, the
Grantee shall be deemed to have resold such Restricted Shares to the Company at
a price equal to the lesser of (A) the amount paid by the Grantee for such
Restricted Shares or (B) the Fair Market Value of the Restricted Shares on the
date of forfeiture, which shall be paid to the Grantee in cash as soon as
administratively practicable.  Such Restricted Shares shall cease to
be outstanding and shall no longer confer on the Grantee thereof any rights as a
shareholder of the Company, from and after the date of the event causing the
forfeiture, whether or not the Grantee accepts the Company’s tender of payment
for such Restricted Shares.

     

    (iv)           The
Committee may provide that the certificates for any Restricted Shares (A) shall
be held (together with a stock power executed in blank by the Grantee) in escrow
by the Secretary of the Company until such Restricted Shares become
nonforfeitable or are forfeited or (B) shall bear an appropriate legend
restricting the transfer of such Restricted Shares.  If any Restricted
Shares become nonforfeitable, the Company shall cause certificates for such
shares to be issued without such legend.

     

    (v)           At
the time of a grant of Restricted Shares, the Committee may require the payment
of cash dividends thereon to be deferred and, if the Committee so determines,
reinvested in additional Restricted Shares.  Stock dividends or
deferred cash dividends issued with respect to Restricted Shares shall be
subject to the same restrictions and other terms as apply to the Restricted
Shares with respect to which such dividends are issued.  The Committee
may in its discretion provide for payment of interest on deferred cash
dividends.

     

     

    
      
        
        

      

      
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    (g)           Grant of Compensatory
Shares.  The Committee may grant Compensatory Shares to any
Eligible Person.

     

    7.           Non-Transferability.  An
Award granted hereunder shall not be assignable or transferable other than by
will or the laws of descent and distribution and may be exercised during the
Grantee’s lifetime only by the Grantee or his or her guardian or legal
representative, except that, subject to Section 6(c) in respect of ISOs, a
Grantee may, if permitted by the Committee, in its discretion, (a) designate in
writing a beneficiary to exercise an Award after his or her death (if that
designation has been received by the Company prior to the Grantee’s death) and
(b) transfer the Award to one or more members of the Grantee’s Immediate Family
or any other individuals or entities.

     

    8.           Exercise.

     

    (a)           Exercise of
Options.

     

    (i)           Subject
to Section 6, each option shall become exercisable at such time or times as may
be specified by the Committee from time to time in the applicable Award
Agreement.

     

    (ii)           An
option shall be exercised by the delivery to the Company during the Option Term
of (A) a written notice of intent to purchase a specific number of Shares
subject to the option in accordance with the terms of the option by the person
entitled to exercise the option and (B) payment in full of the Option Price of
such specific number of Shares in accordance with Section
8(a)(iii).

     

    (iii)           Payment
of the Option Price may be made by any one or more of the following
means:

     

    (A)           cash,
check, or wire transfer;

     

    (B)           with
the approval of the Committee, Mature Shares, valued at their Fair Market Value
on the date of exercise;

     

    (C)           with
the approval of the Committee, Restricted Shares held by the Grantee for at
least six (6) months prior to the exercise of the option, each such share valued
at the Fair Market Value of a Share on the date of exercise;

     

    (D)           so
long as the Company remains a Public Company, in accordance with procedures
previously approved by the Company, through the sale of the Shares acquired on
exercise of the option through a bank or broker-dealer to whom the Grantee has
submitted an irrevocable notice of exercise and irrevocable instructions to
deliver promptly to the Company the amount of sale or loan proceeds sufficient
to pay for such Shares, together with, if requested by the Company, the amount
of federal, state, local or foreign withholding taxes payable by Grantee by
reason of such exercise; or

     

    (E)           in
the discretion of the Committee, payment may also be made in accordance with
Section 9.

     

    (F)           with
the approval of the Committee, in any combination of the foregoing or such other
manner determined by the Committee.

     

     

    
      
        
        

      

      
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    The
Committee may in its discretion specify that, if any Restricted Shares are used
to pay the Option Price (“Tendered Restricted
Shares”), (A) all the Shares acquired on exercise of the option shall be
subject to the same restrictions as the Tendered Restricted Shares, determined
as of the date of exercise of the option or (B) a number of Shares acquired on
exercise of the option equal to the number of Tendered Restricted Shares shall
be subject to the same restrictions as the Tendered Restricted Shares,
determined as of the date of exercise of the option.

     

    (b)           Exercise of
SARs.

     

    (i)           Subject
to Section 6(d), (A) each SAR not identified with any other Award shall become
exercisable at such time or times as may be specified by the Committee from time
to time in the applicable Award Agreement and (B) except as otherwise provided
in the applicable Award Agreement, each SAR which is identified with any other
Award shall become exercisable as and to the extent that the option or
Restricted Shares with which such SAR is identified may be exercised or becomes
nonforfeitable, as the case may be.

     

    (ii)           
SARs shall be exercised by delivery to the Company of written notice of intent
to exercise a specific number of SARs.  Unless otherwise provided in
the applicable Award Agreement, the exercise of SARs that are identified with
Shares subject to an option or Restricted Shares shall result in the
cancellation or forfeiture of such option or Restricted Shares, as the case may
be, to the extent of such exercise.

     

    (iii)           The
benefit for each SAR exercised shall be equal to (A) the Fair Market Value of a
Share on the date of such exercise, minus (B) the Strike Price specified in such
SAR.  Such benefit shall be payable in cash, except that the Committee
may provide in the Award Agreement that benefits may be paid wholly or partly in
Shares.

     

    (c)           Payment of Performance
Shares.  Unless otherwise provided in the Award Agreement with
respect to an Award of Performance Shares, if the minimum performance goals
applicable to such Performance Shares have been achieved during the applicable
Performance Period, then the Company shall pay to the Grantee of such Award that
number of Shares equal to the product of:

     

    (i)           the
sum of (A) number of Performance Shares specified in the applicable Award
Agreement and (B) the number of additional Shares that would have been issuable
if such Performance Shares had been Shares outstanding throughout the
Performance Period and the stock dividends, cash dividends (except as otherwise
provided in the Award Agreement), and other property paid in respect of such
Shares had been reinvested in additional Shares as of each dividend payment
date, multiplied by

     

    (ii)           the
Performance Percentage achieved during such Performance Period.

     

    The
Committee may, in its discretion, determine that cash be paid in lieu of some or
all of such Shares.  The amount of cash payable in lieu of a Share
shall be determined by valuing such Share at its Fair Market Value on the
business day immediately preceding the date such cash is to be
paid.  Payments pursuant to this Section 8 shall be made as soon as
administratively practical after the end of the applicable Performance
Period.  Any Performance Shares with respect to which the performance
goals shall not have been achieved by the end of the applicable Performance
Period shall expire.

     

     

    
      
        
        

      

      
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    9.           Loans.  The
Committee may in its discretion allow a Grantee to defer payment to the Company
of all or any portion of (a) the Option Price of an option, (b) the purchase
price of Restricted Shares, or (c) any taxes associated with the exercise,
nonforfeitability of, or payment of benefits in connection with, an
Award.  Any such payment deferral by the Company shall be on such
terms and conditions as the Committee may determine, except that a Grantee shall
not be entitled to defer the payment of such Option Price, purchase price, or
any related taxes unless the Grantee (a) enters into a binding obligation to pay
the deferred amount and (b) other than with respect to treasury shares, pays
upon exercise of an option or grant of Restricted Shares, as applicable, an
amount at least equal to the Minimum Consideration therefor.  If the
Committee has permitted a payment deferral in accordance with this Section 9,
then the Committee may require the immediate payment of such deferred amount
upon the Grantee’s termination of employment or if the Grantee sells or
otherwise transfers his or her Shares purchased pursuant to such
deferral.  The Committee may at any time in its discretion forgive the
repayment of any or all of the principal of, or interest on, any such deferred
payment obligation.

     

    10.           Notification under Section
83(b).  If the Grantee, in connection with the exercise of any
option or the grant of Restricted Shares, makes the election permitted under
Section 83(b) of the Code to include in such Grantee’s gross income in the year
of transfer the amounts specified in Section 83(b) of the Code, then such
Grantee shall notify the Company, in writing, of such election within ten (10)
days after filing the notice of the election with the Internal Revenue Service,
in addition to any filing and notification required pursuant to regulations
issued under Section 83(b) of the Code.  The Committee may, in
connection with the grant of an Award or at any time thereafter, prohibit a
Grantee from making the election described in this Section 10.

     

    11.           Mandatory Tax
Withholding.

     

    (a)           Whenever
under the Plan, Shares are to be delivered upon exercise or payment of an Award
or upon Restricted Shares becoming nonforfeitable, or any other event with
respect to rights and benefits hereunder, the Company shall be entitled to
require (i) that the Grantee remit an amount in cash, or in the Company’s
discretion, Mature Shares or any other form of consideration, sufficient to
satisfy all federal, state and local tax withholding requirements related
thereto (“Required
Withholding”), (ii) the withholding of such Required Withholding from
compensation otherwise due to the Grantee or from any Shares due to the Grantee
under the Plan, or (iii) any combination of the foregoing.

     

    (b)           Any
Grantee who makes a Disqualifying Disposition or an election under Section 83(b)
of the Code shall remit to the Company an amount sufficient to satisfy all
resulting Required Withholding, except that in lieu of or in addition to the
foregoing, the Company shall have the right to withhold such Required
Withholding from compensation otherwise due to the Grantee or from any Shares or
other payment due to the Grantee under the Plan.

     

    (c)           Any
surrender by a Section 16 Grantee of previously owned shares of Common Stock to
satisfy tax withholding arising upon exercise of the Award must comply with the
applicable provisions of Rule 16b-3(e) under the 1934 Act.

     

    12.           Elective Share
Withholding.  At the Company’s discretion, a Grantee may, with
the prior consent of the Committee, elect the withholding by the Company of a
portion of the Shares otherwise deliverable to such Grantee upon the exercise of
an Award or upon Restricted Shares becoming nonforfeitable (each, a “Taxable Event”)
having a Fair Market Value equal to the minimum amount necessary to satisfy the
Required Withholding liability attributable to the Taxable Event.

     

    13.           Termination of
Employment.

     

    (a)           For
Cause.  Except as otherwise provided by the Committee in an
Award Agreement, if a Grantee’s employment is terminated for Cause, (i) the
Grantee’s Restricted Shares (and any SARs identified therewith) that are then
forfeitable shall on the date of the Grantee’s termination of employment be
forfeited on such date, subject to the provisions of Section 6(f)(iii) regarding
repayment of certain amounts to the Grantee; and (ii) any unexercised option,
SAR or Performance Share shall terminate effective immediately upon such
termination of employment.

     

     

     

    
      
        
        

      

      
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    (b)           On Account of
Death.  Except as otherwise provided by the Committee in the
Award Agreement, if a Grantee’s employment terminates on account of death,
then:

     

    (i)        the
Grantee’s Restricted Shares (and any SARs identified therewith) that are then
forfeitable shall on the date of the Grantee’s termination of employment be
forfeited on such date;

     

    (ii)           any
unexercised option or SAR, to the extent exercisable on the date of such
termination of employment, may be exercised, in whole or in part, within the
first twelve (12) months after such termination of employment (but only during
the Option Term) after the death of the Grantee by (A) his or her personal
representative or by the person to whom the option or SAR, as applicable, is
transferred by will or the applicable laws of descent and distribution, (B) the
Grantee’s designated beneficiary, or (C) a Permitted Transferee;
and

     

    (iii)           any
unexercised Performance Shares may be exercised in whole or in part, at any time
within six (6) months after such termination of employment on account of the
death of the Grantee, by (A) his or her personal representative or by the person
to whom the Performance Shares are transferred by will or the applicable laws of
descent and distribution, (B) the Grantee’s designated beneficiary, or (C) a
Permitted Transferee, except that the benefit payable with respect to any
Performance Shares for which the Performance Period has not ended as of the date
of such termination of employment on account of death shall be equal to the
product of Fair Market Value of such Performance Shares multiplied successively
by each of the following:

     

    (A)           a
fraction, the numerator of which is the number of months (including as a whole
month any partial month) that has elapsed since the beginning of such
Performance Period until the date of such termination of employment and the
denominator of which is the number of months (including as a whole month any
partial month) in the Performance Period; and

     

    (B)           a
percentage determined in the discretion of the Committee that would be earned
under the terms of the applicable Award Agreement assuming that the rate at
which the performance goals have been achieved as of the date of such
termination of employment would continue until the end of the Performance
Period, or, if the Committee elects to compute the benefit after the end of the
Performance Period, the Performance Percentage, as determined by the Committee,
attained during the Performance Period for such Performance Shares.

     

    (c)           On Account of
Disability.  Except as otherwise provided by the Committee in
the Award Agreement, if a Grantee’s employment terminates on account of
Disability, then:

     

    (i)           the
Grantee’s Restricted Shares (and any SARs identified therewith) that are then
forfeitable shall on the date of the Grantee’s termination of employment be
forfeited on such date;

     

    (ii)           any
unexercised option or SAR, to the extent exercisable on the date of such
termination of employment, may be exercised in whole or in part, within the
first twelve (12) months after such termination of employment (but only during
the Option Term) by the Grantee, or by (A) his or her personal representative or
by the person to whom the option or SAR, as applicable, is transferred by will
or the applicable laws of descent and distribution, (B) the Grantee’s designated
beneficiary, or (C) a Permitted Transferee; and

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iii)           any
unexercised Performance Shares may be exercised in whole or in part, at any time
within six (6) months after such termination of employment on account of
Disability by the Grantee, or by (A) his personal representative or by the
person to whom the Performance Shares are transferred by will or the applicable
laws of descent and distribution, (B) the Grantee’s designated beneficiary, or
(C) a Permitted Transferee, except that the benefit payable with respect to any
Performance Shares for which the Performance Period has not ended as of the date
of such termination of employment on account of Disability shall be equal to the
product of the Fair Market Value of the Performance Shares multiplied
successively by each of the following:

     

    (A)           a
fraction, the numerator of which is the number of months (including as a whole
month any partial month) that have elapsed since the beginning of such
Performance Period until the date of such termination of employment and the
denominator of which is the number of months (including as a whole month any
partial month) in the Performance Period; and

     

    (B)           a
percentage determined in the discretion of the Committee that would be earned
under the terms of the applicable Award Agreement assuming that the rate at
which the performance goals have been achieved as of the date of such
termination of employment would continue until the end of the Performance
Period, or, if the Committee elects to compute the benefit after the end of the
Performance Period, the Performance Percentage, as determined by the Committee,
attained during the Performance Period for such Performance Shares.

     

    (d)           Any Reason Other Than For
Cause Or On Account of Death or Disability.  Except as
otherwise provided by the Committee in the Award Agreement, if a Grantee’s
employment terminates for any reason other than for Cause, or on account of
death or Disability, then:

     

    (i)           the
Grantee’s Restricted Shares (and any SARs identified therewith), that are then
forfeitable shall on the date of the Grantee’s termination of employment be
forfeited on such date;

     

    (ii)           any
unexercised option or SAR (other than a SAR identified with a Restricted Share
or Performance Share), to the extent exercisable immediately before the
Grantee’s termination of employment, may be exercised in whole or in part, not
later than three (3) months after such termination of employment (but only
during the Option Term); and

     

    (iii)           the
Grantee’s Performance Shares (and any SARs identified therewith) shall terminate
effective immediately upon such termination of employment.

     

    14.           Substituted
Awards.  If the Committee cancels any Award (whether granted
under the Plan or any plan of any entity acquired by the Company or a
Subsidiary), the Committee may, in its discretion, substitute a new Award
therefor upon such terms and conditions consistent with the Plan as the
Committee may determine, except that (a) the Option Price of any new option, and
the Strike Price of any new SAR, shall not be less than one hundred percent
(100%) (one hundred ten percent (110%) in the case of an incentive stock option
granted to a Ten Percent Owner) of the Fair Market Value of a Share on the date
of the grant of the new Award; and (b) the Grant Date of the new Award shall be
the date on which such new Award is granted.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    15           Securities Law
Matters.

     

    (a)           If
the Committee deems necessary to comply with any applicable securities law, the
Committee may require a written investment intent representation by the Grantee
and may require that a restrictive legend be affixed to certificates for
Shares.  If, based upon the advice of counsel to the Company, the
Committee determines that the exercise or nonforfeitability of, or delivery of
benefits pursuant to, any Award would violate any applicable provision of (i)
federal or state securities laws or (ii) the listing requirements of any
national exchange or national market system on which are listed any of the
Company’s equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as applicable, but the Company shall use all
reasonable efforts to cause such exercise, nonforfeitability or delivery to
comply with all such provisions at the earliest practicable date.

     

    (b)           Grants
of options to Section 16 Grantees shall comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder for
such grants to qualify for exemption from liability under Section 16(b) of the
1934 Act.

     

    16.           No Employment
Rights.  Neither the establishment of the Plan nor the grant of
any Award shall (a) give any Grantee the right to remain employed by the Company
or any Subsidiary or to any benefits not specifically provided by the Plan or
(b) modify the right of the Company or any Subsidiary to modify, amend, or
terminate the Plan or any other employee benefit plan or employment
agreement.

     

    17.           No Rights as a
Shareholder.  A Grantee shall not have any rights as a
shareholder of the Company with respect to the Shares (other than Restricted
Shares) which may be deliverable upon exercise or payment of an Award until such
Shares have been delivered to him or her.  Restricted Shares, whether
held by a Grantee or in escrow by the Company, shall confer on the Grantee all
rights of a shareholder of the Company, except as otherwise provided in the Plan
or applicable Award Agreement.

     

    18.           Nature of
Payments.  Awards shall be special incentive payments to the
Grantee and shall not be taken into account in computing the amount of salary or
compensation of the Grantee for purposes of determining any pension, retirement,
death or other benefit under (a) any pension, retirement, profit-sharing, bonus,
insurance or other employee benefit plan of the Company or any Subsidiary or (b)
any agreement between (i) the Company or any Subsidiary and (ii) the Grantee,
except as such plan or agreement shall otherwise expressly provide.

     

    19.           Non-uniform
Determinations.  The Committee’s determinations under the Plan
need not be uniform and may be made by the Committee selectively among persons
who receive, or are eligible to receive, Awards, whether or not such persons are
similarly situated.  Without limiting the generality of the foregoing,
the Committee shall be entitled to enter into non-uniform and selective Award
Agreements as to (a) the identity of the Grantees, (b) the terms and provisions
of Awards, including, without limitation, vesting and manner of payment of
purchase price upon exercise, and (c) the treatment of terminations of
employment.

     

    20.           Adjustments.  The
Committee shall make equitable adjustment of:

     

    (a)           the
aggregate number of Shares available under the Plan for Awards and the aggregate
number of Shares for which Awards may be granted to any individual Grantee in
any calendar year pursuant to the second sentence of Section 2;

     

    (b)           the
number of Shares, SARs or Performance Shares covered by an Award;
and

     

    (c)           the
Option Price of all outstanding options and the Strike Price of all outstanding
SARs;

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    to
reflect a stock dividend, stock split, reverse stock split, share combination,
recapitalization, merger, consolidation, spin-off, split-off, reorganization,
rights offering, liquidation or similar event of or by the Company.

     

    21.           Amendment of the
Plan.  The Committee may from time to time, in its discretion,
amend the Plan without the approval of the Company’s shareholders, except (a) as
such shareholder approval may be required under the listing requirements of any
securities exchange or national market system on which are listed the Company’s
equity securities and (b) that the Committee may not without the approval of the
Company’s shareholders amend the Plan to increase the total number of shares
reserved for the purposes of the Plan (other than in accordance with Section
20).

     

    22.           Termination of the
Plan.  The Plan shall continue in effect until the earlier of
its termination by the Committee or the date on which all of the shares of
Common Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the agreements
evidencing Awards granted under the Plan have lapsed.  However, all
Awards shall be granted, if at all, within ten (10) years from the earlier of
the date the Plan is adopted by the Committee or the date the Plan is duly
approved by the shareholders of the Company.  Notwithstanding the
foregoing, if the maximum number of shares of Common Stock issuable pursuant to
the Plan has been increased at any time, all Awards shall be granted, if at all,
no later than the last day preceding the ten (10) year anniversary of the
earlier of (a) the date on which the latest such increase in the maximum number
of shares of Common Stock issuable under the Plan was approved by the
shareholders of the Company or (b) the date such amendment was adopted by the
Committee.  No termination shall affect any Award then outstanding
under the Plan.

     

    23.           No Illegal
Transactions.  The Plan and all Awards granted pursuant to it
are subject to all applicable laws and regulations.  Notwithstanding
any provision of the Plan or any Award, Grantees shall not be entitled to
exercise, or receive benefits under any Award, and the Company shall not be
obligated to deliver any Shares or deliver benefits to a Grantee, if such
exercise or delivery would constitute a violation by the Grantee or the Company
of any applicable law or regulation.

     

    24.           Constructive
Sales.  The Grantee shall not directly or indirectly, through
related parties or otherwise, “short” or “short against the box” (as those terms
are generally understood in the securities markets), or otherwise directly or
indirectly (through derivative instruments or otherwise) dispose of or hedge,
any securities of the Company issuable upon exercise of such Grantee’s
Award(s).

     

    25.           Definitions.  The
terms set forth below have the indicated meanings which are applicable to both
the singular and plural forms thereof:

     

    “Award” shall mean
options, including ISOs, Restricted Shares, Compensatory Shares, SARs or
Performance Shares granted under the Plan.

     

    “Award Agreement”
shall mean the written agreement by which an Award shall be
evidenced.

     

    “Board” shall mean the
Board of Directors of the Company.

     

    “Cause”, with respect
to any employee or consultant of the Company shall have the meaning set forth in
such person’s employment or consulting agreement or, in the absence of such an
agreement or if such term is not defined in such agreement, shall mean any one
or more of the following, as determined by the Committee (in the case of a
Section 16 Grantee) or the Chief Executive Officer or President of the Company
(in the case of any other Grantee):

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (i)           a
Grantee’s commission of a crime that is likely to result in injury to the
Company or a Subsidiary;

     

    (ii)           the
material violation by the Grantee of written policies of the Company or a
Subsidiary;

     

    (iii)           the
habitual neglect by the Grantee in the performance of his or her duties to the
Company or a Subsidiary; or

     

    (iv)           a
Grantee’s willful misconduct or inaction in connection with his or her duties to
the Company or a Subsidiary resulting in a material injury to the Company or a
Subsidiary.

     

    “Code” shall mean the
Internal Revenue Code of 1986, as amended or superseded, and the regulations and
rulings thereunder.  Reference to a particular section of the Code
shall include references to successor provisions.

     

    “Committee” shall mean
the committee of the Board appointed pursuant to Section 3(a), or if not so
appointed or unable to act or with reference to Awards to Independent Directors,
shall mean the entire Board.

     

    “Common Stock” shall
mean the common stock, $0.10 par value per share, of the Company.

     

    “Compensatory Shares”
shall mean Shares that are awarded to a Grantee without cost and without
restrictions either as a bonus, in lieu of cash compensation for services
rendered to the Company or for any other compensatory purpose.

     

    “Consultant” shall
mean any person, including a Director, who is engaged by the Company or any
Parent, Subsidiary or Affiliate thereof to render services to or for the benefit
of the Company and is compensated for such services, including any member of the
Advisory Board of the Company.

     

    “Director” shall mean
a member of the Board.

     

    “Disability” shall
mean a permanent and total disability, within the meaning of  Section
22(e)(3) of the Code.

     

    “Effective Date” shall
mean the date set forth in the first paragraph hereof.

     

    “Eligible Person”
shall mean any Employee, Consultant or Director of the Company or any
Subsidiary, including any prospective Employee or Employee on an approved leave
of absence or layoff, if such leave or layoff does not qualify as a
Disability.

     

    “Employee” shall mean
any person treated as an employee (including officers and directors) in the
records of the Company (or Subsidiary) and who is subject to the control and
direction of the Company (or Subsidiary) with regard to both the work to be
performed and the manner and method of performance.  The payment of a
director’s fee by the Company (or Subsidiary) to a Director shall not be
sufficient to constitute “employment” of the Director by the Company (or
Subsidiary).

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    “Fair Market Value”
per share of Common Stock on any relevant date shall mean such value as
determined in accordance with the following provisions:

     

    (i)           If
the Common Stock is at that time listed on a national securities exchange, then
the Fair Market Value shall mean the closing selling price per share of Common
Stock on the exchange on which such Common Stock is principally traded on the
relevant date or, if there were no sales on that date, the closing selling price
of such Common Stock on the last preceding date on which there were
sales.

     

    (ii)           If
the Common Stock is at that time traded on the Nasdaq Market®,
Nasdaq Small Cap MarketSM or
OTC Bulletin Board®, as
the case may be, then the Fair Market Value shall mean the closing selling price
per share of Common Stock on the relevant date, as the price is reported by the
National Association of Securities Dealers on the Nasdaq Market®,
Nasdaq Small Cap MarketSM or
OTC Bulletin Board®, as
the case may be, or any successor system.  If there is no closing
selling price for the Common Stock on the relevant date, then the Fair Market
Value shall mean the closing selling price on the last preceding date for which
such quotation exists.

     

    (iii)           If
the Common Stock is neither listed on any national securities exchange nor
traded on the Nasdaq Market®,
Nasdaq Small Cap MarketSM or
OTC Bulletin Board®, then
the Fair Market Value shall mean that value determined by the Committee after
taking into account such factors as the Committee shall in good faith deem
appropriate.

     

    “Grant Date” shall
have the meaning specified in Section 6(a).

     

    “Grantee” shall mean a
person who has been granted an Award or any Permitted Transferee.

     

    “ISO” shall mean an
incentive stock option within the meaning of Section 422 of the
Code.

     

    “Immediate Family”
shall mean, with respect to a particular Grantee, the Grantee’s spouse, children
and grandchildren.

     

    “Independent Director”
shall mean a member of the Board who in not an Employee of the
Company.

     

    “Mature Shares” shall
mean Shares for which the holder thereof has good title, free and clear of all
liens and encumbrances, and which such holder has held for at least six (6)
months.

     

    “Minimum
Consideration” shall mean par value per Share or such other amount that
is from time to time considered to be minimum consideration under applicable
law.

     

    “1934 Act” shall mean
the Securities Exchange Act of 1934, as amended.  References to a
particular section of the 1934 Act or rule thereunder, include references to
successor provisions.

     

    “Option Price” shall
mean the per share exercise price of an option.

     

    “Option Term” shall
mean the period beginning on the Grant Date of an option and ending on the
expiration date of such option, as specified in the Award Agreement for such
option and as may, in the discretion of the Committee and consistent with the
provisions of the Plan, be extended from time to time.

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    “Performance Shares”
shall mean an Award to a Grantee pursuant to Section 6(e).

     

    “Permitted Transferee”
shall mean a person to whom an Award may be transferred or assigned in
accordance with Section 7.

     

    “Public Company” shall
mean any entity issuing any class of equity securities that has been, or is
required to be, registered under Section 12 of the 1934 Act.

     

    “Restricted Shares”
shall mean Shares that are subject to forfeiture if the Grantee does not satisfy
the conditions specified in the Award Agreement applicable to those
Shares.

     

    “Rule 16b-3” shall
mean Rule 16b-3 of the SEC under the 1934 Act, as amended from time to time,
together with any successor rule.

     

    “SAR” shall mean a
stock appreciation right.

     

    “SEC” shall mean the
Securities and Exchange Commission.

     

    “Section 16 Grantee”
shall mean a person who is subject to potential liability under Section 16(b) of
the 1934 Act with respect to transactions involving equity securities of the
Company.

     

    “Share” shall mean a
share of Common Stock.

     

    “Strike Price” shall
have the meaning specified in Section 6(d)(ii).

     

    “Subsidiary” shall
mean a subsidiary corporation, as defined in Section 424(f) of the Code (with
the Company being treated as the employer corporation for purposes of this
definition).

     

    “Ten Percent Owner”
shall mean a person who owns capital stock (including stock treated as owned
under Section 424(d) of the Code) possessing more than ten percent of the total
combined Voting Power of all classes of capital stock of the Company or any
Subsidiary.

     

    “Voting Power” shall
mean the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors.

     

    26.           Controlling
Law.  The law of the State of New York, except its law with
respect to choice of law, shall control all matters relating to the
Plan.

    

    27.           Severability.  If
any part of the Plan is declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
other part of the Plan.  Any Section or part of a Section so declared
to be unlawful or invalid shall, if possible, be construed in a manner which
will given effect to the terms of such Section to the fullest extent possible
while remaining lawful and valid.

     

     

    
      
        
        

      

      
        15ex10-1.htm

Exhibit 10.1

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

This Second Amendment, made as of July 21, 2010, by and between Minerals Technologies Inc., a Delaware corporation (the “Employer”) and Joseph C. Muscari (the “Executive”).

WHEREAS, the Employer and the Executive previously entered into an employment agreement, dated November 27, 2006, which was subsequently amended by the First Amendment thereto, dated as of December 18, 2008 (as amended thereby, the “Employment Agreement”); and

WHEREAS, the Employer and the Executive now wish to amend the Employment Agreement to extend its expiration date and make certain conforming revisions in connection therewith.

NOW, THEREFORE, the Employer and the Executive hereby amend the Employment Agreement, effective July 21, 2010, as follows:

1.           The second sentence of Section 1(a) is hereby amended to read as follows:

For purposes of this Agreement, “Term” shall mean a period of six (6) years beginning on the Commencement Date and ending on the day before the sixth anniversary thereof, but not earlier than March 1, 2013.

2.           Section 1(c) is hereby amended by adding the following sentence at the end thereof:

The awards to be made in 2012 will vest in 2013 on the first anniversary of each award.

3.           The first three sentences of the second paragraph of Section 3 are hereby amended to read as follows:

Following March 1, 2012, Employer will provide the Executive with a pre-tax Lump Sum Payment (LSP), as agreed between Employer and Executive at the Commencement Date, in the amount of $3,950,000 which will replace certain retirement benefits which Executive would have earned had he remained with his prior company.  This LSP shall be calculated as the present value, as of March 1, 2012, of an annual joint & survivor annuity for the lives of the Executive and his spouse, should he predecease her, of approximately $65,000 per year for each year of continuous employment.  The LSP will be paid to the Executive in a single lump sum payment as soon as administratively practicable, but no later than 90 days, following March 1, 2012, if he is continuously employed by the Employer through such date.

[Remainder of Page Intentionally Left Blank]

  

  

  

*           *           *

IN WITNESS WHEREOF, the Employer and the Executive have executed and delivered this amendment effective as of the date shown above.

MINERALS TECHNOLOGIES INC.

	
 By:

	
/s/ Thomas J. Meek

	  	
 July 21, 2010

	  	
Thomas J. Meek

	  	
 Date

	  	
Vice President, General Counsel and Secretary

	  	  
	  	  	  	  
	
By:

	
/s/ D. Randy Harrison

	  	
 July 21, 2010

	  	
D. Randy Harrison

	  	
 Date

	  	
Sr. Vice-President of Organization and Human Resources

	  	  
	  	  	  	  
	
By:

	
/s/ Michael F. Pasquale

	  	
 July 21, 2010

	  	
 Michael F. Pasquale

	  	
 Date

	  	
 Chairman, Minerals Technologies Inc. Compensation Committee

	  	  
	  	  	  	  
	
Agreed to by:

	  	  
	  	  	  	  
	  	
/s/ Joseph C. Muscari

	  	
 July 21, 2010

	  	
Joseph C. Muscari

	  	
 Date

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