Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment #4 to Form S-1 7 33K
2: EX-4.2 Form of Shareholder's Rights Agreement 52 241K
3: EX-5.1 Opinion of Maples and Calder 2 8K
4: EX-8.1 Opinion of Sonnenschein Nathe & Rosenthal 1 7K
5: EX-10.1 Garmin Ltd. 2000 Equity Incentive Plan 29 126K
EXHIBIT 10.1
Garmin Ltd.
2000 Equity Incentive Plan
Page
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Table of Contents
Article 1. Establishment, Objectives and Duration............................. 1
1.1. Establishment of the Plan............................................. 1
1.2. Objectives of the Plan................................................ 1
1.3. Duration of the Plan.................................................. 1
Article 2. Definitions........................................................ 1
Article 3. Administration..................................................... 7
3.1. Board and Committee................................................... 7
3.2. Powers of the Board................................................... 7
Article 4. Shares Subject to the Plan......................................... 9
4.1. Number of Shares Available............................................ 9
4.2. Adjustments in Authorized Shares......................................10
4.3. Newly Issued Shares or Treasury Shares................................10
Article 5. Eligibility and General Conditions of Awards.......................10
5.1. Eligibility...........................................................10
5.2. Grant Date............................................................10
5.3. Maximum Term..........................................................10
5.4. Award Agreement.......................................................10
5.5. Restrictions on Share Transferability.................................11
5.6. Termination of Affiliation............................................11
5.7. Nontransferability of Awards..........................................13
Article 6. Stock Options......................................................14
6.1. Grant of Options......................................................14
6.2. Award Agreement.......................................................14
6.3. Option Price..........................................................14
6.4. Grant of Incentive Stock Options......................................15
6.5. Exercise of Options...................................................16
Article 7. Stock Appreciation Rights..........................................16
7.1. Grant of SARs.........................................................16
7.2. Exercise of SARs......................................................17
7.3. Payment of SAR Benefit................................................17
Article 8. Restricted Shares..................................................17
8.1. Grant of Restricted Shares............................................17
8.2. Award Agreement.......................................................17
8.3. Consideration.........................................................17
8.4. Effect of Forfeiture..................................................17
8.5. Escrow; Legends.......................................................18
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Article 9. Performance Units and Performance Shares...........................18
9.1. Grant of Performance Units and Performance Shares.....................18
9.2. Value/Performance Goals...............................................18
9.3. Payment of Performance Units and Performance Shares...................18
9.4. Form and Timing of Payment of Performance Units and Performance
Shares..............................................................18
Article 10. Bonus Shares and Deferred Shares..................................19
10.1. Bonus Shares..........................................................19
10.2. Deferred Shares.......................................................19
Article 11. Beneficiary Designation...........................................19
Article 12. Deferrals.........................................................19
Article 13. Rights of Employees...............................................20
13.1. Employment............................................................20
13.2. Participation.........................................................20
Article 14. Amendment, Modification, and Termination..........................20
14.1. Amendment, Modification, and Termination..............................20
14.2. Adjustments Upon Certain Unusual or Nonrecurring Events...............20
14.3. Awards Previously Granted.............................................20
Article 15. Withholding.......................................................20
15.1. Mandatory Tax Withholding.............................................20
15.2. Notification under Code Section 83(b).................................21
Article 16. Equity Incentive Plans of Foreign Subsidiaries....................21
Article 17. Additional Provisions.............................................21
17.1. Successors............................................................21
17.2. Gender and Number.....................................................21
17.3. Severability..........................................................21
17.4. Requirements of Law...................................................21
17.5. Securities Law Compliance.............................................22
17.6. No Rights as a Shareholder............................................22
17.7. Nature of Payments....................................................22
17.8. Governing Law.........................................................22
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Garmin Ltd.
2000 Equity Incentive Plan
Article 1. Establishment, Objectives and Duration
1.1. Establishment of the Plan. Garmin Ltd., a Cayman Islands corporation
(the "Company"), hereby establishes an incentive compensation plan to be known
as the Garmin Ltd. 2000 Equity Incentive Plan (the "Plan"). The Plan was adopted
by the Board of Directors of the Company (the "Board"), on October 20, 2000, and
was approved by the shareholders of the Company on October 24, 2000. The Plan is
effective as of November 1, 2000 (the "Effective Date").
1.2. Objectives of the Plan. The Plan is intended to allow employees of
the Company and its Subsidiaries to acquire or increase equity ownership in the
Company, or to be compensated under the Plan based on growth in the Company's
equity value, thereby strengthening their commitment to the success of the
Company and stimulating their efforts on behalf of the Company, and to assist
the Company and its Subsidiaries in attracting new employees and retaining
existing employees. The Plan is also intended to optimize the profitability and
growth of the Company through incentives which are consistent with the Company's
goals; to provide incentives for excellence in individual performance; and to
promote teamwork.
1.3. Duration of the Plan. The Plan shall commence on the Effective Date
and shall remain in effect, subject to the right of the Board to amend or
terminate the Plan at any time pursuant to Article 14 hereof, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings set
forth below:
2.1. "Article" means an Article of the Plan.
2.2. "Award" means Options, Restricted Shares, Bonus Shares, Deferred
Shares, SARs, Performance Units or Performance Shares granted under the Plan.
2.3. "Award Agreement" means a written agreement by which an Award is
evidenced.
2.4. "Beneficial Owner" has the meaning specified in Rule 13d-3 of the SEC
under the Exchange Act.
2.5. "Board" has the meaning set forth in Section 1.1.
2.6. "Bonus Shares" means Shares that are awarded to a Grantee without
cost and without restrictions in recognition of past performance (whether
determined by reference to another employee benefit plan of the Company or
otherwise) or as an incentive to become an employee of the Company or a
Subsidiary.
2.7. "Cause" means, unless otherwise defined in an Award Agreement,
(a) a Grantee's conviction of, plea of guilty to, or plea of nolo
contendere to a felony or other crime that involves fraud, dishonesty or
moral turpitude,
(b) any willful action or omission by a Grantee which would
constitute grounds for immediate dismissal under the employment policies of
the Company or the Subsidiary by which Grantee is employed, including but
not limited to intoxication with alcohol or illegal drugs while on the
premises of the Company or any Subsidiary, or violation of sexual
harassment laws or the internal sexual harassment policy of the Company or
the Subsidiary by which Grantee is employed,
(c) a Grantee's habitual neglect of duties, including but not limited
to repeated absences from work without reasonable excuse, or
(d) a Grantee's willful and intentional material misconduct in the
performance of his duties that results in financial detriment to the
Company or any Subsidiary;
provided, however, that for purposes of clauses (b), (c) and (d), Cause shall
not include any one or more of the following: bad judgment, negligence or any
act or omission believed by the Grantee in good faith to have been in or not
opposed to the interest of the Company (without intent of the Grantee to gain,
directly or indirectly, a profit to which the Grantee was not legally entitled).
A Grantee who agrees to resign his from affiliation with the Company or a
Subsidiary in lieu of being terminated for Cause may be deemed to have been
terminated for Cause for purposes of this Plan.
2.8. "Change of Control" means, unless otherwise defined in an Award
Agreement, any one or more of the following:
(a) any Person other than (i) a Subsidiary, (ii) any employee benefit
plan (or any related trust) of the Company or any of its Subsidiaries or
(iii) any Excluded Person, becomes the Beneficial Owner of 25% or more of
the common shares of the Company or of Voting Securities representing 25%
or more of the combined voting power of the Company (such a person or
group, a "25% Owner"), except that (i) no Change of Control shall be deemed
to have occurred solely by reason of such beneficial ownership by a
corporation with respect to which both more than 70% of the common shares
of such corporation and Voting Securities representing more than 70% of the
aggregate voting power of such corporation are then owned, directly or
indirectly, by the persons who were the direct or indirect owners of the
common shares and Voting Securities of the Company immediately before such
acquisition in substantially the same proportions as their ownership,
immediately before such acquisition, of the common shares and Voting
Securities of the Company, as the case may be and (ii) such corporation
shall not be deemed a 25% Owner; or
(b) the Incumbent Directors (determined using the Effective Date as
the baseline date) cease for any reason to constitute at least a majority
of the directors of the Company then serving; or
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(c) approval by the shareholders of the Company of a merger,
reorganization, consolidation, or similar transaction, or a plan or
agreement for the sale or other disposition of all or substantially all of
the consolidated assets of the Company or a plan of liquidation of the
Company (any of the foregoing transactions, a "Reorganization Transaction")
which, based on information included in the proxy and other written
materials distributed to the Company's stockholders in connection with the
solicitation by the Company of such shareholder approval, is not expected
to qualify as an Exempt Reorganization Transaction; or
(d) the consummation by the Company of a Reorganization Transaction
that for any reason fails to qualify as an Exempt Reorganization
Transaction as of the date of such consummation, notwithstanding the fact
that such Reorganization Transaction was expected to so qualify as of the
date of such shareholder approval.
The definition of "Change of Control" may be amended at any time prior to the
occurrence of a Change of Control, and such amended definition shall be applied
to all Awards granted under the Plan whether or not outstanding at the time such
definition is amended, without requiring the consent of any Grantee.
Notwithstanding the occurrence of any of the foregoing events, (a) a Change of
Control shall be deemed not to have occurred with respect to any Section 16
Person if such Section 16 Person is, by agreement (written or otherwise), a
participant on such Section 16 Person's own behalf in a transaction which causes
the Change of Control to occur, (b) an IPO shall not be deemed to be a Change of
Control, and (c) a Change of Control shall not occur with respect to a Grantee
if, in advance of such event, the Grantee agrees in writing that such event
shall not constitute a Change of Control.
2.9. "Change of Control Value" means the Fair Market Value of a Share on
the date of a Change of Control.
2.10. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and regulations and rulings thereunder. References to a particular
section of the Code include references to successor provisions of the Code or
any successor statute.
2.11. "Committee" has the meaning set forth in Article 3.
2.12. "Company" has the meaning set forth in Section 1.1.
2.13. "Deferred Shares" means Shares that are awarded to a Grantee on a
deferred basis pursuant to Section 10.2.
2.14. "Disability" means a permanent and total disability, within the
meaning of Code Section 22(e)(3), as determined by the Board in good faith, upon
receipt of medical advice from one or more individuals, selected by the Board,
who are qualified to give professional medical advice.
2.15. "Effective Date" has the meaning set forth in Section 1.1.
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2.16. "Eligible Person" means any employee (including any officer) of the
Company or any Subsidiary, including any such employee who is on an approved
leave of absence or has been subject to a disability which does not qualify as a
Disability.
2.17. "Exchange Act" means the Securities Exchange Act of 1934, as
amended. References to a particular section of the Exchange Act include
references to successor provisions.
2.18. "Excluded Person" means any Person who, along with such Person's
Affiliates and Associates (as such terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act) is the Beneficial Owner of
15% or more of the Shares outstanding as of the Effective Date.
2.19. "Exempt Reorganization Transaction" means a Reorganization
Transaction which results in the Persons who were the direct or indirect owners
of the outstanding common shares and Voting Securities of the Company
immediately before such Reorganization Transaction becoming, immediately after
the consummation of such Reorganization Transaction, the direct or indirect
owners of both more than 70% of the then-outstanding common shares of the
Surviving Corporation and Voting Securities representing more than 70% of the
aggregate voting power of the Surviving Corporation, in substantially the same
respective proportions as such Persons' ownership of the common shares and
Voting Securities of the Company immediately before such Reorganization
Transaction.
2.20. "Fair Market Value" means (A) with respect to any property other
than Shares, the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the Board, and (B)
with respect to Shares, as of any date other than the IPO Date, the average of
the high and low trading prices on such date on the NASDAQ National Market
System (or, if no sale of Shares was reported for such date, on the next
preceding date on which a sale of Shares was reported), (i) if the Shares are
not listed on the NASDAQ NMS, the average of the high and low trading prices of
the Shares on such date on the New York Stock Exchange Composite Transactions
Tape (or, if no sale of Shares was reported for such date, on the next preceding
date on which a sale of Shares was reported), (ii) if the Shares are not listed
on the NASDAQ NMS or the New York Stock Exchange, the average of the high and
low trading prices of the Shares on such other national exchange on which the
Shares are principally traded or as reported by the NASDAQ Stock Market, or
similar organization, or if no such quotations are available, the average of the
high bid and low asked quotations in the over-the-counter market; in either case
for such date (or if no such transactions in Shares were reported for such date,
on the next preceding date on which a sale of Shares was reported); or (iii) in
the event that there shall be no public market for the Shares, the fair market
value of the Shares as determined by the Board. Solely as of the IPO Date, Fair
Market Value of a Share is the price to the public pursuant to the form of final
prospectus used in connection with the IPO, as indicated on the cover page of
such prospectus or otherwise.
2.21. "Freestanding SAR" means an SAR that is granted independently of any
other Award.
2.22. "Good Reason" means any action by the Company or the Subsidiary
employing a Grantee which results in any of the following without the Grantee's
consent: (a) a material
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diminution or other material adverse change in the Grantee's position, authority
or duties, (b) requiring the Grantee to be based at any office or location more
than 50 miles from the location where he or she was previously based; (c) a
material diminution in the Grantee's compensation in the aggregate, other than a
diminution applicable to all similarly situated employees.
2.23. "Grant Date" has the meaning set forth in Section 5.2.
2.24. "Grantee" means an individual who has been granted an Award.
2.25. "including" or "includes" mean "including, without limitation," or
"includes, without limitation", respectively.
2.26. "Incumbent Directors" means, as of any specified baseline date,
individuals then serving as members of the Board who were members of the Board
as of the date immediately preceding such baseline date; provided that any
subsequently-appointed or elected member of the Board whose election, or
nomination for election by shareholders of the Company or the Surviving
Corporation, as applicable, was approved by a vote or written consent of a
majority of the directors then comprising the Incumbent Directors shall also
thereafter be considered an Incumbent Director, unless the initial assumption of
office of such subsequently-elected or appointed director was in connection with
(i) an actual or threatened election contest, including a consent solicitation,
relating to the election or removal of one or more members of the Board, (ii) a
"tender offer" (as such term is used in Section 14(d) of the Exchange Act), or
(iii) a proposed Reorganization Transaction.
2.27. "IPO" means an initial public offering of Shares as contemplated in
the registration statement on Form S-1 filed by the Company with the Securities
and Exchange Commission on September 11, 2000.
2.28. "IPO Date" means the effective date of the underwriting agreement
between the Company and the underwriters of the IPO.
2.29. "Option" means an option granted under Article 6 of the Plan,
including an incentive stock option.
2.30. "Option Price" means the price at which a Share may be purchased by
a Grantee pursuant to an Option.
2.31. "Option Term" means 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, consistent with the provisions of
the Plan, be extended from time to time by the Board prior to the expiration
date of such Option then in effect.
2.32. "Performance Period" has the meaning set forth in Section 9.2.
2.33. "Performance Share" or "Performance Unit" has the meaning set forth
in Article 9.
2.34. "Period of Restriction" means the period during which the transfer
of Restricted Shares is limited in some way (based on the passage of time, the
achievement of performance
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goals, or upon the occurrence of other events as determined by the Board) or
the Shares are subject to a substantial risk of forfeiture, as provided in
Article 8.
2.35. "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.36. "Plan" has the meaning set forth in Section 1.1.
2.37. "Reorganization Transaction" has the meaning set forth in Section
2.7(c).
2.38. "Required Withholding" has the meaning set forth in Article 15.
2.39. "Restricted Shares" means Shares that are subject to transfer
restrictions and are subject to forfeiture if conditions specified in the Award
Agreement applicable to such Shares are not satisfied.
2.40. "Rule 16b-3" means Rule 16b-3 promulgated by the SEC under the
Exchange Act, together with any successor rule, as in effect from time to time.
2.41. "SAR" means a stock appreciation right.
2.42. "SEC" means the United States Securities and Exchange Commission, or
any successor thereto.
2.43. "Section" means, unless the context otherwise requires, a Section of
the Plan.
2.44. "Section 16 Person" means a person who is subject to obligations
under Section 16 of the Exchange Act with respect to transactions involving
equity securities of the Company.
2.45. "Share" means a common share, $0.01 par value, of the Company.
2.46. "Strike Price" of any SAR shall equal, for any Tandem SAR (whether
granted at the same time as or after the grant of the related Option), the
Option Price of such Option, or for any other SAR, 100% of the Fair Market Value
of a Share on the Grant Date of such SAR; provided that the Board may specify a
higher Strike Price in the Award Agreement.
2.47. "Subsidiary" means with respect to any Person (a) any corporation of
which more than 50% of the Voting Securities are at the time, directly or
indirectly, owned by such Person, and (b) any partnership or limited liability
company in which such Person has a direct or indirect interest (whether in the
form of voting power or participation in profits or capital contribution) of
more than 50%.
2.48. "Substitute Option" has the meaning set forth in Section 6.3.
2.49. "Surviving Corporation" means the corporation resulting from a
Reorganization Transaction or, if Voting Securities representing at least 50% of
the aggregate voting power of
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such resulting corporation are directly or indirectly owned by another
corporation, such other corporation.
2.50. "Tandem SAR" means an SAR that is granted in connection with a
related Option, the exercise of which shall require cancellation of the right to
purchase a Share under the related Option (and when a Share is purchased under
the related Option, the Tandem SAR shall similarly be canceled).
2.51. "Termination of Affiliation" occurs on the first day on which an
individual is for any reason no longer providing services to the Company or any
Subsidiary in the capacity of an employee, or with respect to an individual who
is an employee of a Subsidiary, the first day on which such Subsidiary ceases to
be a Subsidiary.
2.52. "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors,
but not including any other class of securities of such corporation that may
have voting power by reason of the occurrence of a contingency.
Article 3. Administration
3.1. Board and Committee. Subject to Article 14, and to Section 3.2, the
Plan shall be administered by the Board, or a committee of the Board appointed
by the Board to administer the Plan ("Plan Committee"). To the extent the Board
considers it desirable for transactions relating to Awards to be eligible to
qualify for an exemption under Rule 16b-3 after the IPO, the Plan Committee
shall consist of two or more directors of the Company, all of whom qualify as
"non-employee directors" within the meaning of Rule 16b-3. To the extent the
Board considers it desirable for compensation delivered pursuant to Awards to be
eligible to qualify for an exemption from the limit on tax deductibility of
compensation under Section 162(m) of the Code after the IPO, the Plan Committee
shall consist of two or more directors of the Company, all of whom shall qualify
as "outside directors" within the meaning of Code Section 162(m). The number of
members of the Plan Committee shall from time to time be increased or decreased,
and shall be subject to such conditions, including, but not limited to having
exclusive authority to make certain grants of Awards or to perform such other
acts, in each case as the Board deems appropriate to permit transactions in
Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3 or Code
Section 162(m) as then in effect.
Any references herein to "Board" are, except as the context requires
otherwise, references to the Board or the Plan Committee, as applicable.
3.2. Powers of the Board. Subject to the express provisions of the Plan,
the Board has full and final authority and sole discretion as follows:
(a) taking into consideration the reasonable recommendations of
management, to determine when, to whom and in what types and amounts Awards
should be granted and the terms and conditions applicable to each Award,
including the Option Price, the Option Term, the benefit payable under any
SAR, Performance Unit or Performance Share, and whether or not specific
Awards shall be granted in connection with other specific Awards,
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and if so whether they shall be exercisable cumulatively with, or
alternatively to, such other specific Awards;
(b) to determine the amount, if any, that a Grantee shall pay for
Restricted Shares, whether and on what terms to permit or require the
payment of cash dividends thereon to be deferred, when Restricted Shares
(including Restricted Shares acquired upon the exercise of an Option) shall
be forfeited and whether such shares shall be held in escrow;
(c) to construe and interpret the Plan and to make all determinations
necessary or advisable for the administration of the Plan;
(d) to make, amend, and rescind rules relating to the Plan, including
rules with respect to the exercisability and nonforfeitability of Awards
upon the Termination of Affiliation of a Grantee;
(e) to determine the terms and conditions 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; provided 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 Board) to carry out the
purpose of the Award as a result of any new or change in existing
applicable law;
(f) to cancel, with the consent of the Grantee, outstanding Awards
and to grant new Awards in substitution therefor;
(g) to accelerate the exercisability (including exercisability within
a period of less than six months after the Grant Date) of, and to
accelerate or waive any or all of the terms and conditions applicable to,
any Award or any group of Awards for any reason and at any time, including
in connection with a Termination of Affiliation;
(h) subject to Section 5.3, to extend the time during which any Award
or group of Awards may be exercised;
(i) to make such adjustments or modifications to Awards to Grantees
who are working outside the United States as are advisable to fulfill the
purposes of the Plan or to comply with applicable local law, and to
authorize foreign Subsidiaries to adopt plans as provided in Article 16;
(j) to delegate to any member of the Board or committee of Board
members such of its powers as it deems appropriate, including the power to
sub-delegate, except that only a member of the Board of Directors of the
Company (or a committee thereof) may grant Awards from time to time to
specified categories of Eligible Persons in amounts and on terms to be
specified by the Board; provided that after the IPO, no such grants shall
be made other than by the Board of Directors of the Company or the
Committee to individuals who are then Section 16 Persons or other than by
the Committee to individuals who are then or are deemed likely to become a
"covered employee" within the meaning of Code Section 162(m);
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(k) to delegate to officers, employees or independent contractors of
the Company matters involving the routine administration of the Plan and
which are not specifically required by any provision of this Plan of to be
performed by the Board of Directors of the Company;
(l) to delegate its duties and responsibilities under the Plan with
respect to foreign Subsidiary plans, except its duties and responsibilities
with respect to Section 16 Persons, and (A) the acts of such delegates
shall be treated hereunder as acts of the Board and (B) such delegates
shall report to the Board regarding the delegated duties and
responsibilities;
(m) to impose such additional terms and conditions upon the grant,
exercise or retention of Awards as the Board may, before or concurrently
with the grant thereof, deem appropriate, including limiting the percentage
of Awards which may from time to time be exercised by a Grantee; and
(n) to take any other action with respect to any matters relating to
the Plan for which it is responsible.
All determinations on any matter relating to the Plan or any Award
Agreement may be made in the sole and absolute discretion of the Board, and all
such determinations of the Board shall be final, conclusive and binding on all
Persons. No member of the Board shall be liable for any action or determination
made with respect to the Plan or any Award.
Article 4. Shares Subject to the Plan
4.1. Number of Shares Available.
(a) Plan Limit. Subject to Section 4.3 and to adjustment as provided in
Section 4.2, the number of Shares hereby reserved for delivery under the Plan is
3,500,000. The number of Shares over which SARs may be granted is 350,000. The
number of Shares over which Performance Units may be granted is 175,000. The
maximum number of Shares that may be delivered as Restricted Shares is 35,000,
and the maximum number of Bonus Shares that may be awarded is 35,000. If any
Shares subject to an Award granted hereunder are forfeited or an Award or any
portion thereof otherwise terminates or is settled without the issuance of
Shares, or in the case of SARs and Performance Units, without the payment of
cash, the Shares subject to such Award, to the extent of any such forfeiture,
termination or settlement, shall again be available for grant under the Plan. If
any Shares are withheld for the payment of taxes related to an Award, such
Shares, to the extent of any such withholding, shall again be available or shall
increase the number of Shares available, as applicable, for grant under the
Plan. The Board may from time to time determine the appropriate methodology for
calculating the number of Shares issued pursuant to the Plan.
(b) Individual Limit. No Grantee may be granted Options, Restricted
Shares, Bonus Stock or Deferred Shares, Performance Units or Performance Shares
in Shares, or any combination thereof, an aggregate number of Shares under the
Plan that exceeds 400,000 shares in any 5-year period. In any 5-year period, no
Grantee may receive SARs, Performance Units or Performance
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Shares relating to more than 100,000 Shares under the Plan. If a previously
granted Option, SAR, Performance Unit or Performance Share is forfeited,
canceled or repriced, such forfeited, canceled or repriced Option, SAR,
Performance Share or Performance Unit, as the case may be, shall continue to be
counted against the maximum number of Shares, SARs, Performance Units or
Performance Shares that may be delivered to any Grantee over the life of the
Plan.
4.2. Adjustments in Authorized Shares. In the event that the Board
determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, share split,
reverse share split, subdivision, consolidation or reduction of capital,
reorganization, merger, scheme of arrangement, split-up, spin-off or combination
involving the Company or repurchase or exchange of Shares or other rights to
purchase Shares or other securities of the Company, or other similar corporate
transaction or event that occurs at any time after the IPO Date affects the
Shares such that any adjustment is determined by the Board to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Board shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or property of the Company or any Person that is a
party to a Reorganization Transaction with the Company) with respect to which
Awards may be granted, (ii) the number and type of Shares (or other securities
or property of the Company or any Person that is a party to a Reorganization
Transaction with the Company) subject to outstanding Awards, and (iii) the grant
or exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award or the
substitution of other property for Shares subject to an outstanding Award;
provided, that the number of Shares subject to any Award denominated in Shares
shall always be a whole number.
4.3. Newly Issued Shares or Treasury Shares. Shares delivered in
connection with Awards may be newly issued or may be treasury shares.
Article 5. Eligibility and General Conditions of Awards
5.1. Eligibility. The Board may grant Awards to any Eligible Person,
whether or not he or she has previously received an Award.
5.2. Grant Date. The Grant Date of an Award shall be the date on which
the Board grants the Award or such later date as specified by the Board in the
Award Agreement.
5.3. Maximum Term. Subject to the following proviso, the Option Term or
other period during which an Award may be outstanding shall not extend more than
10 years after the Grant Date, and shall be subject to earlier termination as
herein specified; provided, that any deferral of a cash payment or of the
delivery of Shares that is permitted or required by the Board pursuant to
Article 12 may, if so permitted or required by the Board, extend more than 10
years after the Grant Date of the Award to which the deferral relates.
5.4. Award Agreement. To the extent not set forth in the Plan, the terms
and conditions of each Award (which need not be the same for each grant or for
each Grantee) shall be set forth in an Award Agreement.
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5.5. Restrictions on Share Transferability. The Board may include in the
Award Agreement such restrictions on any Shares acquired pursuant to the
exercise or vesting of an Award as it may deem advisable, including restrictions
under applicable federal securities laws.
5.6. Termination of Affiliation. Except as otherwise provided in an Award
Agreement (including an Award Agreement as amended by the Board pursuant to
Section 3.2), and subject to the provisions of Section 14.1, the extent to which
the Grantee shall have the right to exercise, vest in, or receive payment in
respect of an Award following Termination of Affiliation shall be determined in
accordance with the following provisions of this Section 5.6.
(a) For Cause. If a Grantee has a Termination of Affiliation for
Cause:
(i) the Grantee's Restricted Shares and Deferred Shares that are
forfeitable immediately before such Termination of Affiliation shall
automatically be forfeited on such date, subject in the case of
Restricted Shares to the provisions of Section 8.4 regarding repayment
of certain amounts to the Grantee;
(ii) the Grantee's Deferred Shares that were vested immediately
before such Termination of Affiliation shall promptly be settled by
delivery to such Grantee of a number of unrestricted Shares equal to
the aggregate number of such vested Deferred Shares, and
(iii) any unexercised Option or SAR, and any Performance Share
or Performance Unit with respect to which the Performance Period has
not ended immediately before such Termination of Affiliation, shall
terminate effective immediately upon such Termination of Affiliation.
(b) On Account of Death or Disability. If a Grantee has a
Termination of Affiliation on account of death or Disability:
(i) the Grantee's Restricted Shares that were forfeitable
immediately before such Termination of Affiliation shall thereupon
become nonforfeitable;
(ii) the Grantee's Deferred Shares that were forfeitable
immediately before such Termination of Affiliation shall thereupon
become nonforfeitable and the Company shall, unless otherwise provided
in an Award Agreement, promptly settle all Deferred Shares, whether or
not forfeitable, by delivery to the Grantee (or, after his or her
death, to his or her personal representative or beneficiary designated
in accordance with Article 11) of a number of unrestricted Shares
equal to the aggregate number of the Grantee's Deferred Shares;
(iii) any unexercised Option or SAR, whether or not exercisable
immediately before such Termination of Affiliation, shall be fully
exercisable and may be exercised, in whole or in part, at any time up
to one year after such Termination of Affiliation (but only during the
Option Term) by the Grantee or, after his or her death, by (A) his or
her personal representative or the person to whom the Option or SAR,
as applicable, is transferred by will or the applicable laws of
descent and distribution, or (B) the Grantee's beneficiary designated
in accordance with Article 11; and
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(iv) the benefit payable with respect to any Performance Share
or Performance Unit with respect to which the Performance Period has
not ended immediately before such Termination of Affiliation on
account of death or Disability shall be equal to the product of the
Fair Market Value of a Share as of the date of such Termination of
Affiliation or the value of the Performance Unit specified in the
Award Agreement (determined as of the date of such Termination of
Affiliation), as applicable, multiplied successively by each of the
following:
(1) 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 Affiliation and the denominator of
which is the number of months (including as a whole month any
partial month) in the Performance Period; and
(2) a percentage determined by 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 Affiliation would continue
until the end of the Performance Period, or, if the Board elects
to compute the benefit after the end of the Performance Period,
the Performance Percentage, as determined by the Board, attained
during the Performance Period.
(c) Change of Control Period. If a Grantee has a Termination of
Affiliation during the period ("Change of Control Period") commencing on a
Change of Control and ending on the first anniversary of the Change of
Control, which Termination of Affiliation is initiated by the Company or a
Subsidiary other than for Cause, or initiated by the Grantee for Good
Reason, then
(i) the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;
(ii) the Grantee's Deferred Shares that were forfeitable shall
thereupon become nonforfeitable and the Company shall immediately
settle all Deferred Shares, whether or not previously forfeitable, by
delivery to such Grantee of a number of unrestricted Shares equal to
the aggregate number of the Grantee's Deferred Shares;
(iii) any unexercised Option or SAR, whether or not exercisable
on the date of such Termination of Affiliation, shall thereupon be
fully exercisable and may be exercised, in whole or in part for three
months following such Termination of Affiliation; and
(iv) the Company shall immediately pay to the Grantee, with
respect to any Performance Share or Performance Unit with respect to
which the Performance Period has not ended as of the date of such
Termination of Affiliation, a cash payment equal to the product of (A)
in the case of a Performance Share, the Change of Control Value or (B)
in the case of a Performance Unit, the value of the Performance
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Unit specified in the Award Agreement, as applicable, multiplied
successively by each of the following:
(1) a fraction, the numerator of which is the number of whole and
partial months that have elapsed between the beginning of such
Performance Period and the date of such Termination of Affiliation and
the denominator of which is the number of whole and partial months in
the Performance Period; and
(2) a percentage equal to a greater of (x) the target percentage,
if any, specified in the applicable Award Agreement or (y) the maximum
percentage, if any, 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 Affiliation would continue until the end of the
Performance Period.
(d) Any Other Reason. If a Grantee has a Termination of Affiliation
for any reason other than for Cause, death or Disability, and other than
under the circumstances described in Section 5.6(c), then:
(i) the Grantee's Restricted Shares and Deferred Shares, to the
extent forfeitable immediately before such Termination of Affiliation,
shall thereupon automatically be forfeited, subject in the case of
Restricted Shares to the provisions of Section 8.4 regarding repayment
of certain amounts to the Grantee;
(ii) the Grantee's Deferred Shares that were not forfeitable
immediately before such Termination of Affiliation shall promptly be
settled by delivery to the Grantee of a number of unrestricted Shares
equal to the aggregate number of the Grantee's vested Deferred Shares;
(iii) any unexercised Option or SAR, to the extent exercisable
immediately before such Termination of Affiliation, shall remain
exercisable in whole or in part for three months after such
Termination of Affiliation (but only during the Option Term) by the
Grantee or, after his or her death, by (A) his or her personal
representative or the person to whom the Option or SAR, as applicable,
is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's beneficiary designated in
accordance with Article 11; and
(iv) any Performance Shares or Performance Units with respect to
which the Performance Period has not ended as of the date of such
Termination of Affiliation shall terminate immediately upon such
Termination of Affiliation.
5.7. Nontransferability of Awards.
(a) Except as provided in Section 5.7(c) below, each Award, and each
right under any Award, shall be exercisable only by the Grantee during the
Grantee's lifetime, or, if permissible under applicable law, by the
Grantee's guardian or legal representative.
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(b) Except as provided in Section 5.7(c) below, no Award (prior to the
time, if applicable, Shares are issued in respect of such Award), and no
right under any Award, may be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Grantee otherwise than by will
or by the laws of descent and distribution (or in the case of Restricted
Shares, to the Company) and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Subsidiary; provided, that the
designation of a beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance.
(c) To the extent and in the manner permitted by the Board, and
subject to such terms and conditions as may be prescribed by the Board, a
Grantee may transfer an Award to (a) a child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-
in-law, or sister-in-law of the Grantee, (including adoptive
relationships), (b) any person sharing the Grantee's household (other than
a tenant or employee), (c) a trust in which persons described in (a) or (b)
have more than 50% of the beneficial interest, (d) a foundation in which
persons described in (a) or (b) or the Grantee own more than 50% of the
voting interests; provided such transfer is not for value. The following
shall not be considered transfers for value: (i) a transfer under a
domestic relations order in settlement of marital property rights; and (ii)
a transfer to an entity in which more than 50% of the voting interests are
owned by persons described in (a) or (b) above or the Grantee, in exchange
for an interest in that entity.
Article 6. Stock Options
6.1. Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to any Eligible Person in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Board. Without limiting the generality of the foregoing, the Board may grant to
any Eligible Person, or permit any Eligible Person to elect to receive, an
Option in lieu of or in substitution for any other compensation (whether payable
currently or on a deferred basis, and whether payable under this Plan or
otherwise) which such Eligible Person may be eligible to receive from the
Company or a Subsidiary, which Option may have a value (as determined by the
Board under Black-Scholes or any other option valuation method) that is equal to
or greater than the amount of such other compensation.
6.2. Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the Option Term, the number of
shares to which the Option pertains, the time or times at which such Option
shall be exercisable and such other provisions as the Board shall determine.
6.3. Option Price. The Option Price of an Option under this Plan shall be
determined by the Board, and shall be no less than 100% of the Fair Market Value
of a Share on the Grant Date; provided, however, that any Option ("Substitute
Option") that is (x) granted to a Grantee in connection with the acquisition
("Acquisition"), however effected, by the Company of another corporation or
entity ("Acquired Entity") or the assets thereof, (y) associated with an option
to purchase shares of stock or other equity interest of the Acquired Entity or
an affiliate thereof ("Acquired Entity Option") held by such Grantee immediately
prior to such Acquisition, and
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(z) intended to preserve for the Grantee the economic value of all or a portion
of such Acquired Entity Option, may be granted with such Option Price as the
Board determines to be necessary to achieve such preservation of economic value.
6.4. Grant of Incentive Stock Options.
(a) At the time of the grant of any Option to an Eligible Person who is an
employee of the Company or a Subsidiary, the Board may designate that such
option shall be made subject to additional restrictions to permit it to qualify
as an "incentive stock option" under the requirements of Section 422 of the
Code. Any option designated as an incentive stock option:
(i) shall not be granted to a person who owns shares (including shares
treated as owned under Section 424(d) of the Code) possessing more than 10%
of the total combined voting power of all classes of shares of the Company;
(ii) shall be for a term of not more than 10 years from the Grant
Date, and shall be subject to earlier termination as provided herein or in
the applicable Award Agreement;
(iii) shall not have an aggregate Fair Market Value (determined for
each incentive stock option at its Grant Date) of Shares with respect to
which incentive stock options are exercisable for the first time by such
Grantee during any calendar year (under the Plan and any other employee
stock option plan of the Grantee's employer or any parent or Subsidiary
thereof ("Other Plans")), determined in accordance with the provisions of
Section 422 of the Code, which exceeds $100,000 (the "$100,000 Limit");
(iv) shall, if the aggregate Fair Market Value of a Share (determined
on the Grant Date) with respect to the portion of such grant which is
exercisable for the first time during any calendar year ("Current Grant")
and all incentive stock options previously granted under the Plan and any
Other Plans which are exercisable for the first time during a calendar year
("Prior Grants") would exceed the $100,000 Limit, be exercisable as
follows:
(A) the portion of the Current Grant which would, when added to
any Prior Grants, be exercisable with respect to Shares which would
have an aggregate Fair Market Value (determined as of the respective
Grant Date for such options) in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable for the
first time by the Grantee in the first subsequent calendar year or
years in which it could be exercisable for the first time by the
Grantee when added to all Prior Grants without exceeding the $100,000
Limit; and
(B) if, viewed as of the date of the Current Grant, any portion
of a Current Grant could not be exercised under the preceding
provisions of this Subsection (iv) during any calendar year commencing
with the calendar year in which it is first exercisable through and
including the last calendar year in which it may by its terms be
exercised, such portion of the Current Grant shall not be an incentive
stock option, but shall be exercisable as a separate Option at such
date or dates as are provided in the Current Grant;
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(v) shall be granted within 10 years from the earlier of the date the
Plan is adopted or the date the Plan is approved by the shareholders of the
Company;
(vi) shall require the Grantee to notify the Board of any disposition
of any Shares issued pursuant to the exercise of the incentive stock option
under the circumstances described in Section 421(b) of the Code (relating
to certain disqualifying dispositions), within 10 days of such disposition;
and
(vii) 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; provided, however, that
the Grantee may, to the extent provided in the Plan in any manner specified
by the Board, designate in writing a beneficiary to exercise his incentive
stock option after the Grantee's death.
Notwithstanding the foregoing, the Board may, without the consent of the
Grantee, at any time before the exercise of an option (whether or not an
incentive stock option), take any action necessary to prevent such option from
being treated as an incentive stock option.
6.5. Exercise of Options. Options shall be exercised by the delivery of a
written notice of exercise to the Manager of Benefits of the Company or the
Subsidiary by whom the Grantee is or was most recently employed, setting forth
the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares made by cash, personal check or wire
transfer or, subject to the approval of the Board pursuant to procedures
approved by the Board, (i) through the sale of the Shares acquired on exercise
of the Option through a 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 (ii) through simultaneous sale through a broker of Shares acquired
on exercise, as permitted under Regulation T of the Federal Reserve Board.
The exercise of an Option shall require cancellation of a number of related
Tandem SARs equal to the number of Shares with respect to which the Option is
exercised.
Article 7. Stock Appreciation Rights
7.1. Grant of SARs. Subject to the terms and conditions of the Plan, SARs
may be granted to any Eligible Person at any time and from time to time as shall
be determined by the Board. The Board may grant Freestanding SARs, Tandem SARs,
or any combination thereof. Each grant of an SAR shall be evidenced by an Award
Agreement, which shall specify the number of SARs granted to each Grantee
(subject to Article 4), the Strike Price thereof, and, consistent with the other
provisions of this Article 7 and of the Plan, such other terms and conditions
pertaining to such SARs as the Board may determine. Tandem SARs shall expire no
later than the expiration of the underlying Option.
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7.2. Exercise of SARs. SARs shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares over which
the SAR is to be exercised. Tandem SARs (a) may be exercised with respect to all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option; (b) may be
exercised only with respect to the Shares for which its related Option is then
exercisable; and (c) may be exercised only when the Fair Market Value of the
Shares subject to the Option exceeds the Option Price of the Option. The value
of the payment with respect to the Tandem SAR may be no more than 100% of the
difference between the Option Price of the underlying Option and the Fair Market
Value of the Shares subject to the underlying Option at the time the Tandem SAR
is exercised.
7.3. Payment of SAR Benefit. Upon exercise of an SAR, the Grantee shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) the excess of the Fair Market Value of a Share on the date of
exercise over the Strike Price;
by
(b) the number of Shares with respect to which the SAR is exercised;
provided that the Board may provide in the Award Agreement that the benefit
payable on exercise of an SAR shall not exceed such percentage of the Fair
Market Value of a Share on the Grant Date as the Board shall specify. As
determined by the Board, the payment upon SAR exercise may be in cash, in Shares
which have an aggregate Fair Market Value (as of the date of exercise of the
SAR) equal to the amount of the payment, or in some combination thereof, as set
forth in the Award Agreement.
Article 8. Restricted Shares
8.1. Grant of Restricted Shares. Subject to the terms and provisions of the
Plan, the Board, at any time and from time to time, may grant Restricted Shares
to any Eligible Person in such amounts as the Board shall determine.
8.2. Award Agreement. Each grant of Restricted Shares shall be evidenced by
an Award Agreement, which shall specify the Period(s) of Restriction, the number
of Restricted Shares granted, and such other provisions as the Board shall
determine. The Board may impose such conditions or restrictions on any
Restricted Shares as it may deem advisable, including restrictions based upon
the achievement of specific performance goals (Company-wide, divisional,
Subsidiary or individual), time-based restrictions on vesting or restrictions
under applicable securities laws.
8.3. Consideration. The Board shall determine the amount, if any, that a
Grantee shall pay for Restricted Shares. Such payment shall be made in full by
the Grantee before the delivery of the shares and in any event no later than 10
business days after the Grant Date for such shares.
8.4. Effect of Forfeiture. If Restricted Shares are forfeited, and if the
Grantee was required to pay for such shares or acquired such Restricted Shares
upon the exercise of an Option,
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the Grantee shall be deemed to have resold such Restricted Shares to the Company
at a price equal to the lesser of (x) the amount paid by the Grantee for such
Restricted Shares, or (y) the Fair Market Value of a Share on the date of such
forfeiture. The Company shall pay to the Grantee the required amount as soon as
is administratively practical. 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.
8.5. Escrow; Legends. The Board may provide that the certificates for any
Restricted Shares (x) 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 (y) 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.
Article 9. Performance Units and Performance Shares
9.1. Grant of Performance Units and Performance Shares. Subject to the
terms of the Plan, Performance Units or Performance Shares may be granted to any
Eligible Person in such amounts and upon such terms, and at any time and from
time to time, as the Board shall determine. Each grant of Performance Units or
Performance Shares shall be evidenced by an Award Agreement which shall specify
the terms and conditions applicable to the Performance Units or Performance
Shares, as the Board determines.
9.2. Value/Performance Goals. Each Performance Unit shall have an initial
value that is established by the Board at the time of grant. Each Performance
Share shall have an initial value equal to the Fair Market Value of a Share on
the date of grant. The Board shall set performance goals which, depending on the
extent to which they are met, will determine the number or value of Performance
Units or Performance Shares that will be paid to the Grantee. For purposes of
this Article 9, the time period during which the performance goals must be met
shall be called a "Performance Period."
9.3. Payment of Performance Units and Performance Shares. Subject to the
terms of this Plan, after the applicable Performance Period has ended, the
holder of Performance Units or Performance Shares shall be entitled to receive a
payment based on the number and value of Performance Units or Performance Shares
earned by the Grantee over the Performance Period, determined as a function of
the extent to which the corresponding performance goals have been achieved.
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 Board
determines appropriate, the Board may adjust, change or eliminate the
performance goals or the applicable Performance Period as it deems appropriate
in order to make them appropriate and comparable to the initial performance
goals or Performance Period.
9.4. Form and Timing of Payment of Performance Units and Performance
Shares. Payment of earned Performance Units or Performance Shares shall be made
in a lump sum
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following the close of the applicable Performance Period. The Board may cause
earned Performance Units or Performance Shares to be paid in cash or in Shares
(or in a combination thereof) which have an aggregate Fair Market Value equal to
the value of the earned Performance Units or Performance Shares at the close of
the applicable Performance Period. Such Shares may be granted subject to any
restrictions deemed appropriate by the Board. The form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.
As determined by the Board, a Grantee may be entitled to receive any
dividends declared with respect to Shares which have been earned in connection
with grants of Performance Units or Performance Shares but not yet distributed
to the Grantee. In addition, a Grantee may, as determined by the Board, be
entitled to exercise his or her voting rights with respect to such Shares.
Article 10. Bonus Shares and Deferred Shares
10.1. Bonus Shares. Subject to the terms of the Plan, the Board may grant
Bonus Shares to any Eligible Person, in such amount and upon such terms and at
any time and from time to time as shall be determined by the Board.
10.2. Deferred Shares. Subject to the terms and provisions of the Plan,
Deferred Shares may be granted to any Eligible Person in such amounts and upon
such terms, and at any time and from time to time, as shall be determined by the
Board. The Board may impose such conditions or restrictions on any Deferred
Shares as it may deem advisable, including time-vesting restrictions and
deferred payment features. The Board may cause the Company to establish a
grantor trust to hold Shares subject to Deferred Share Awards. Without limiting
the generality of the foregoing, the Board may grant to any Eligible Person, or
permit any Eligible Person to elect to receive, Deferred Shares in lieu of or in
substitution for any other compensation (whether payable currently or on a
deferred basis, and whether payable under this Plan or otherwise) which such
Eligible Person may be eligible to receive from the Company or a Subsidiary.
Article 11. Beneficiary Designation
Each Grantee under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of the Grantee's death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Grantee, shall be in a form prescribed by the
Company, and will be effective only when filed by the Grantee in writing with
the Company during the Grantee's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Grantee's death shall be paid to
the Grantee's estate.
Article 12. Deferrals
The Board may permit or require a Grantee to defer receipt of the payment
of cash or the delivery of Shares that would otherwise be due by virtue of the
exercise of an Option or SAR, the lapse or waiver of restrictions with respect
to Restricted Shares, the satisfaction of any requirements or goals with respect
to Performance Units or Performance Shares, the grant of
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Bonus Shares or the expiration of the deferral period for Deferred Shares. If
any such deferral is required or permitted, the Board shall establish rules and
procedures for such deferrals.
Article 13. Rights of Employees
13.1. Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Grantee's employment at any time,
nor confer upon any Grantee the right to continue in the employ of the Company.
13.2. Participation. No employee shall have the right to be selected to
receive an Award, or, having been so selected, to be selected to receive a
future Award.
Article 14. Amendment, Modification, and Termination
14.1. Amendment, Modification, and Termination. Subject to the terms of
the Plan, the Board of Directors of the Company may at any time and from time to
time, alter, amend, suspend or terminate the Plan in whole or in part without
the approval of the Company's shareholders, except to the extent the Board of
Directors of the Company determines it is desirable to obtain approval of the
Company's shareholders, to retain eligibility for exemption from the limitations
of Code Section 162(m), to have available the ability for Options to qualify as
ISOs, to comply with the requirements for listing on any exchange where the
Company's Shares are listed, or for any other purpose the Board of Directors of
the Company deems appropriate.
14.2. Adjustments Upon Certain Unusual or Nonrecurring Events. The Board
may make adjustments in the terms and conditions of Awards in recognition of
unusual or nonrecurring events (including the events described in Section 4.2)
affecting the Company or the financial statements of the Company or of changes
in applicable laws, regulations, or accounting principles, whenever the Board
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
14.3. Awards Previously Granted. Notwithstanding any other provision of
the Plan to the contrary (but subject to Section 2.8 and Section 14.2), no
termination, amendment or modification of the Plan shall adversely affect in any
material way any Award previously granted under the Plan, without the written
consent of the Grantee of such Award.
Article 15. Withholding
15.1. 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 (x) that the Grantee remit an amount
in cash sufficient to satisfy all federal, state, local and foreign tax
withholding requirements related thereto ("Required Withholding"), (y) the
withholding of such Required Withholding from compensation otherwise due to
the Grantee or from any Shares or other payment due to the Grantee under
the Plan or (z) any combination of the foregoing.
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(b) Any Grantee who makes a disqualifying disposition of an incentive
stock option granted under the Plan or who makes an election under Section
83(b) of the Code shall remit to the Company an amount sufficient to
satisfy all resulting Required Withholding; provided 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.
15.2. Notification under Code 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 of such election
within 10 days of 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 Board may, in connection
with the grant of an Award or at any time thereafter prior to such an election
being made, prohibit a Grantee from making the election described above.
Article 16. Equity Incentive Plans of Foreign Subsidiaries
The Board may authorize any foreign Subsidiary to adopt a plan for granting
Awards ("Foreign Equity Incentive Plan"). All awards granted under such Foreign
Equity Incentive Plans shall be treated as grants under the Plan. Such Foreign
Equity Incentive Plans shall have such terms and provisions as the Board permits
not inconsistent with the provisions of the Plan and which may be more
restrictive than those contained in the Plan. Awards granted under such Foreign
Equity Incentive Plans shall be governed by the terms of the Plan except to the
extent that the provisions of the Foreign Equity Incentive Plans are more
restrictive than the terms of the Plan, in which case such terms of the Foreign
Equity Incentive Plans shall control.
Article 17. Additional Provisions
17.1. Successors. All obligations of the Company under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise of all or substantially
all of the business or assets of the Company.
17.2. Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
17.3. 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 give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
17.4. Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by
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any governmental agencies or stock exchanges as may be required. 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 other 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.
17.5. Securities Law Compliance.
(a) If the Board deems it necessary to comply with any applicable
securities law, or the requirements of any stock exchange upon which Shares
may be listed, the Board may impose any restriction on Shares acquired
pursuant to Awards under the Plan as it may deem advisable. All
certificates for Shares delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Board may deem advisable under the rules,
regulations and other requirements of the SEC, any stock exchange upon
which Shares are then listed, any applicable securities law, and the Board
may cause a legend or legends to be placed on any such certificates to
refer to such restrictions. If so requested by the Company, the Grantee
shall represent to the Company in writing that he or she will not sell or
offer to sell any Shares unless a registration statement shall be in effect
with respect to such Shares under the Securities Act of 1993 or unless he
or she shall have furnished to the Company evidence satisfactory to the
Company that such registration is not required.
(b) If the Board determines that the exercise of, or delivery of
benefits pursuant to, any Award would violate any applicable provision of
securities laws or the listing requirements of any stock exchange upon
which any of the Company's equity securities are then listed, then the
Board may postpone any such exercise or delivery, as applicable, but the
Company shall use all reasonable efforts to cause such exercise or delivery
to comply with all such provisions at the earliest practicable date.
17.6. No Rights as a Shareholder. A Grantee shall not have any rights as
a shareholder with respect to the Shares (other than Restricted Shares) which
may be deliverable upon exercise or payment of such Award until such shares have
been delivered to him or her. Restricted Shares, whether held by a Grantee or in
escrow by the Secretary of the Company, shall confer on the Grantee all rights
of a shareholder of the Company, except as otherwise provided in the Plan or
Award Agreement. Unless otherwise determined by the Board at the time of a grant
of Restricted Shares, any cash dividends that become payable on Restricted
Shares shall be deferred and, if the Board so determines, reinvested in
additional Restricted Shares. Except as otherwise provided in an Award
Agreement, any share dividends and 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 Board may provide for payment of interest on deferred cash
dividends.
17.7. 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
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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.
17.8. Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the State of Kansas other than its laws respecting
choice of law.
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Garmin Ltd.
2000 Equity Incentive Plan (the "Plan")
UK Appendix (the "UK Appendix")
If the Board decides to grant an Option to an Eligible Person who is a resident
of the United Kingdom within the meaning of the Double Taxation Treaty between
the United Kingdom and the United States of America and whose emoluments are
liable to be paid under deduction of tax pursuant to Section 203 of the United
Kingdom Income and Corporation Taxes Act 1988 (the "Taxes Act") and designates
the Option as a UK-approved Option, the rules of the Plan shall apply with the
following modifications:
1 Delete all provisions in the Plan relating to Restricted Shares, Bonus
Shares, Deferred Shares, SARs, Performance Units and Performance Shares. The
definition of "Award" for the purposes of the Plan shall be a reference to
"Options" only.
2 In Section 1.1, insert at the end of the paragraph "Provided however that no
UK-approved Option may be granted prior to the day on which the UK Appendix
is approved by the Inland Revenue."
3 Substitute the definition of "Eligible Person" in Section 2.16 with "means
any employee of a Participating Company (who is not a director of a
Participating Company) or any Full-Time Director who is not precluded by
paragraph 8 of Schedule 9 (material interest in a close company) from
participating in the UK Appendix."
4 In the definition of "Fair Market Value" in Section 2.20, substitute the
definition with "means, for the purposes of the UK Appendix and any UK-
approved Option granted thereunder, the closing price of Shares on the Grant
Date (or on the last preceding trading date if Shares are not traded on such
date) provided that the Shares are listed on the New York Stock Exchange;
where otherwise, it shall be the market value of the Shares as determined in
accordance with the provisions of Part VIII of the United Kingdom Taxation
of Chargeable Gains Act 1992 and agreed in advance for the purposes of the
UK Appendix with the Shares Valuation Division of the Inland Revenue."
5 Substitute the definition of "Share" in Section 2.45 with "means a common
share, $0.01 par value, of the Company which complies with paragraphs 10 to
14 of Schedule 9."
6 Delete Sections 3.2(e), (f), (g), (h) and (i).
7 In Section 4.1(b), substitute with:
"Individual Limit for UK-approved Options. Any UK-approved Option shall be
limited and take effect so that the aggregate Fair Market Value of the
Shares which a Grantee may acquire by exercise of that Option and any Shares
which he may acquire by exercise of any other options then held by him under
any Approved Scheme shall not exceed (Pounds)30,000 or such other amount as
may be the limit imposed from time to time pursuant to paragraph 28 of
Schedule 9. For this purpose, the Fair Market Value of Shares shall be
calculated as at the date each option was granted or such earlier date as
may have been agreed in writing with the Inland Revenue."
8 In Section 4.2, insert at the end of the paragraph, "PROVIDED ALWAYS that no
adjustment pursuant to this Section may be made to a UK-approved Option
without the prior written approval of the Inland Revenue."
9 In Section 5.2, delete the words "or such later date as specified by the
Board in the Award Agreement".
10 In Section 5.3, end the paragraph with "herein specified" in line 3 and
delete all the words thereafter.
1
11 Delete Section 5.5.
12 Replace Section 5.7(a) with "No UK-approved Option may be assigned or
transferred but following the death of a Grantee, a UK-approved Option may
be exercised by his personal representatives, or a beneficiary designated by
the personal representatives, if so provided in the relevant Award Agreement
for such period as is stated therein but which shall not exceed one year
from the date of death."
13 Delete Section 5.7(b) and (c).
14 Insert as new Section 5.8:
"Term of Exercise. No UK-approved Option may be exercised by a Grantee at
any time when he is, or by the personal representatives of a Grantee who at
the date of his death was, prohibited from such exercise by virtue of the
provisions of paragraph 8 of Schedule 9 (material interest in a close
company)."
15 Insert as new Section 5.9:
"Exchange of Options. Pursuant to the provisions of paragraph 15 of
Schedule 9, it is hereby provided that if any company ("the Acquiring
Company"):
(i) obtains Control (as defined for the purposes of the UK Appendix) of a
company (whether or not the Company) whose shares are for the time
being Shares for the purposes of the UK Appendix ("a Relevant
Company") as a result of making such an offer as is referred to in
sub-paragraph 15(1)(a) of Schedule 9; or
(ii) obtains Control (as defined for the purposes of the UK Appendix) of a
Relevant Company in pursuance of a compromise or arrangement
sanctioned by the Court under Section 425 of the United Kingdom
Companies Act 1985; or
(iii) becomes bound or entitled to acquire shares in a Relevant Company
under Sections 428 to 430F of the United Kingdom Companies Act 1985,
a Grantee may, within the appropriate period as defined in sub-paragraph
15(2) of Schedule 9, by agreement with the Acquiring Company, release his
rights under the UK Appendix ("the Old Rights") in consideration of the
grant to him of rights ("the New Rights") which are equivalent for the
purposes of sub-paragraph 15(3) of Schedule 9 to the Old Rights but relate
to shares in a different company ("the New Company") (whether the Acquiring
Company itself or some other company falling within sub-paragraph (b) or (c)
of paragraph 10 of Schedule 9). With respect to the New Rights, these rules
shall be read and construed as though references to the Company and Shares
were references to the New Company and to shares in the New Company."
16 In Section 6.3, end the paragraph with the words "Grant Date" in line 3 and
delete all the words appearing thereafter.
17 Delete Section 6.4.
18 In Section 6.5, end the paragraph with the words "wire transfer" in line 5
and delete the rest of the words appearing thereafter. Add the following
sentence:
"Within 30 days of receipt of a written notice of exercise and the
appropriate remittance, the Board shall allot or procure the transfer of the
Shares in respect of which the Option has been validly exercised and shall
issue a definitive certificate in respect of the Shares allotted or
transferred, unless the Board considers that such allotment or transfer
would not be lawful in the relevant jurisdiction."
19 Delete Article 11.
20 Delete Article 12.
2
21 At the end of Section 14.1, insert "For as long as the Company wishes the UK
Appendix to remain an Approved Scheme, no amendment to the UK Appendix shall
take effect without the prior written approval of the Inland Revenue, and if
the Board determines that the UK Appendix shall cease to be so approved, it
shall notify the Inland Revenue immediately."
22 Delete Section 14.2.
23 Insert a new Article 18 as follows:
Definitions
Unless the context otherwise requires, the following words and expressions
shall have the following meanings in the UK Appendix:
"Approved Scheme" means a share option scheme, not being a savings-related
share option scheme, established by the Company or any Associated Company of
the Company and approved by the Inland Revenue under Schedule 9;
"Associated Company" has the meaning given by Section 416 of the Taxes Act;
"Control" has the meaning given by Section 840 of the Taxes Act;
"Full-Time Director" means a director of a Participating company who is
required to devote to his duties not less than 25 hours per week (excluding
meal breaks);
"Inland Revenue" means the United Kingdom Board of Inland Revenue;
"Participating Company" means the Company and any other company under the
Control of the Company;
"Schedule 9" means Schedule 9 to the Taxes Act;
"Taxes Act" means the United Kingdom Income and Corporation Taxes Act 1988;
"UK-approved Option" means an option to acquire Shares granted pursuant to
the UK Appendix and, for the purposes of the UK Appendix, all references in
the Plan to Options shall, unless the context otherwise requires, be taken
as referring to UK-approved Options.
3
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
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This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
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| | |
Filed on: | | 12/1/00 |
| | 11/1/00 | | 4 |
| | 10/24/00 | | 4 |
| | 10/20/00 | | 4 |
| | 9/11/00 | | 8 | | | | | S-1 |
| List all Filings |
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