Registration of Securities Issued in a Business-Combination Transaction — Form S-4 Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: S-4 Berry Plastics Holding Corp S-4 HTML 2.69M
2: EX-3.1 Articles of Incorporation/Organization or By-Laws HTML 28K
3: EX-3.2 Articles of Incorporation/Organization or By-Laws HTML 13K
4: EX-3.3 Articles of Incorporation/Organization or By-Laws HTML 49K
5: EX-3.4 Articles of Incorporation/Organization or By-Laws HTML 22K
6: EX-4.1 Instrument Defining the Rights of Security Holders HTML 1.09M
7: EX-4.2 Instrument Defining the Rights of Security Holders HTML 36K
8: EX-4.3 Instrument Defining the Rights of Security Holders HTML 158K
9: EX-4.4 Instrument Defining the Rights of Security Holders HTML 247K
10: EX-4.5 Instrument Defining the Rights of Security Holders HTML 176K
11: EX-5.1 Opinion re: Legality HTML 34K
12: EX-10.1 Material Contract HTML 873K
21: EX-10.10 Material Contract HTML 42K
22: EX-10.11 Material Contract HTML 42K
23: EX-10.12 Material Contract HTML 38K
24: EX-10.13 Material Contract HTML 61K
25: EX-10.14 Material Contract HTML 61K
26: EX-10.15 Material Contract HTML 61K
27: EX-10.19 Material Contract HTML 22K
13: EX-10.2 Material Contract HTML 238K
28: EX-10.22 Material Contract HTML 22K
14: EX-10.3 Material Contract HTML 322K
15: EX-10.4 Material Contract HTML 911K
16: EX-10.5 Material Contract HTML 36K
17: EX-10.6 Material Contract HTML 160K
18: EX-10.7 Material Contract HTML 48K
19: EX-10.8 Material Contract HTML 91K
20: EX-10.9 Material Contract HTML 46K
29: EX-12.1 Statement re: Computation of Ratios HTML 44K
30: EX-21.1 Subsidiaries of the Registrant HTML 13K
31: EX-23.2 Consent of Experts or Counsel HTML 11K
32: EX-25.1 Statement re: Eligibility of Trustee HTML 102K
33: EX-99.1 Miscellaneous Exhibit HTML 37K
34: EX-99.2 Miscellaneous Exhibit HTML 120K
The
purpose of this Plan is to strengthen Berry Plastics Group, Inc., a Delaware
corporation (the “Company”), by providing an incentive to its and its
Subsidiaries’ employees, officers, consultants and directors and thereby
encouraging them to devote their abilities and industry to the success of the
Company’s business enterprise. It is intended that this purpose be achieved by
extending to employees, officers, consultants and directors of the Company
and
its Subsidiaries an added long-term incentive for high levels of performance
and
unusual efforts through the grant of options to acquire shares of the Company’s
common stock.
2.Definitions.
For
purposes of the Plan:
2.1“Award”
means a Stock Award or grant of Options or SARs pursuant to the terms of the
Plan.
2.2“Affiliate”
means, with respect to any entity, any other entity, directly or indirectly,
controlled by, controlling or under common control with such
entity.
2.3“Agreement”
means the written agreement between the Company and a Grantee of an Award,
evidencing the grant of an Option, SAR or Stock Award, as applicable, and
setting forth the terms and conditions thereof.
2.4“Board”
means the Board of Directors of the Company.
2.5“BPC”
means BPC Holding Corporation, a Delaware corporation.
2.6“Cause”
means:
(a) in
the
case of a Grantee whose employment with the Company or its Subsidiaries is
subject to the terms of an employment agreement between such Grantee and the
Company or its Subsidiaries, which employment agreement includes a definition
of
“Cause,” the meaning set forth in such employment agreement during the period
that such employment agreement remains in effect; provided, however, that
notwithstanding the foregoing, to the extent the employment agreement defines
“Cause” to include the commission of, indictment for, conviction of or plea of
no contest to a felony or other crime, in no event shall such commission,
indictment, conviction or plea constitute Cause hereunder unless the act
constituted a crime that is (a) a serious felony (or equivalent classification)
under applicable law or (b) a crime against the Company or its Subsidiaries;
and
(b) in
all
other cases, the Grantee’s (a) intentional failure or refusal to perform
reasonably assigned duties, (b) dishonesty, willful misconduct or gross
negligence in the performance of the Grantee’s duties to the Company or its
Subsidiaries, (c) involvement in a
-1-
transaction
in connection with the performance of the Grantee’s duties to the Company or its
Subsidiaries which transaction is adverse to the interests of the Company
or its
Subsidiaries and which is engaged in for personal profit, (d) willful violation
of any law, rule or regulation in connection with the performance of the
Grantee’s duties to the Company or its Subsidiaries (other than misdemeanor
traffic violations or similar minor offenses), (e) indictment for, conviction
of
or plea of no contest to any crime that is (1) a serious felony (or equivalent
classification) under applicable law or (2) a crime against the Company or
its
Subsidiaries or (f) action or inaction materially adversely affecting the
Company or its Subsidiaries.
2.7“Change
in Capitalization” means any change in the Shares or exchange of Shares for a
different number or kind of shares or other securities of the Company or another
corporation, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of warrants or
rights or debentures, stock dividend, stock split or reverse stock split, cash
dividend, property dividend, combination or exchange of shares, repurchase
of
shares, change in corporate structure or otherwise.
2.8 A
“Change
in Control” means the occurrence of any of the following events:
(a) An
acquisition of any voting securities of the Company (the “Voting Securities”) by
any “Person” (as the term person is used for purposes of Section 13(d) or 14(d)
of the Exchange Act), immediately after which such Person has (i) “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than fifty percent (50%) of the then outstanding Shares or the combined
voting power of the Company’s then outstanding Voting Securities or (ii) the
power to elect a majority of the Board without the vote of any Investors;
provided,
however,
that in
determining whether a Change in Control has occurred pursuant to this Section
2.8 (a), an acquisition of Shares or Voting Securities by (i) the Company or
any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly,
by
the Company (a “Related Entity”) or (ii), any Investors or any Affiliates of any
Investors, shall not constitute a Change in Control;
(b) The
consummation of a merger, consolidation or reorganization of, with or into
the
Company or in which securities of the Company are issued (a “Merger”), unless
such Merger is a “Non-Control Transaction.” A “Non-Control Transaction” shall
mean a Merger where immediately following the Merger the Investors or any
Affiliates of the Investors own, directly or indirectly, fifty percent (50%)
or
more of the combined voting power of the outstanding voting securities of (x)
the corporation resulting from the Merger (the “Surviving Corporation”) if fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly, by another Person or (y) if more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities
of
the Surviving Corporation is Beneficially Owned, directly or indirectly, by
another Person (a “Parent Corporation”), the ultimate Parent Corporation or (z)
an IPO; or
(c) The
sale
or other disposition of all or substantially all of the assets of the Company,
BPC or Berry Plastics Corporation to any Person, other than (i) a transfer
to a
Related Entity or under conditions that would constitute a Non-Control
Transaction if the
-2-
disposition
of assets is regarded as a Merger for this purpose or (ii) the distribution
to
the Company’s stockholders of the stock of a Related Entity or any other
assets.
2.9“Closing”
and “Closing Date” have the meanings given such terms in the Agreement and Plan
of Merger, dated as of June 28, 2006, by and between BPC, BPC Acquisition Corp.,
and the Company.
2.10“Code”
means the Internal Revenue Code of 1986, as amended.
2.11“Committee”
means a committee, as described in Section 3.1, appointed by the Board from
time
to time to administer the Plan and to perform the functions set forth
herein.
2.12“Company”
means Berry Plastics Group, Inc.
2.13“Corporate
Transaction” means any of the following events:
(a) consummation
of any merger or consolidation of the Company with or into another corporation;
or
(b) consummation
of any sale of all or substantially all of the assets of the Company, BPC or
Berry other than a transfer of the Company’s assets to a Subsidiary of the
Company.
2.14“Disability”
means:
(a) in
the
case of a Grantee whose employment with the Company or a Subsidiary is subject
to the terms of an employment agreement between such Grantee and the Company
or
Subsidiary, which employment agreement includes a definition of “Disability,”
the meaning set forth in such employment agreement during the period that such
employment agreement remains in effect; and
(b) in
all
other cases, a physical or mental infirmity which impairs the Grantee’s ability
to perform substantially his or her duties for a period of ninety (90) days
in
any three-hundred and sixty-five (365) day period.
2.15“EBITDA”
means the consolidated income of the Company before interest, taxes,
depreciation, amortization, gain or loss on the disposal of assets, acquisition
or attempted acquisition-related expenses and other non-cash charges (including,
without limitation, revaluations of vested stock options required by generally
accepted accounting principles, to the extent deducted in computing consolidated
income, but excluding any non-cash charge that requires an accrual or reserve
for cash expenditures in future periods or which involve a cash expenditure
in a
prior period (determined in accordance with generally accepted accounting
principles, consistently applied, with inventory valued on a “first-in,
first-out” basis).
-3-
2.16“EBITDA
Target” means, with respect to a fiscal year of the Company or a portion
thereof, the EBITDA target for such year or a portion thereof, based on which
a
Fixed Priced Option or Fixed Priced SAR may vest, as set forth in an
Agreement.
2.17“Eligible
Individual” means any director, officer, employee or consultant of the Company
or a Subsidiary who is designated by the Committee as eligible to receive
Awards.
2.18“Escalating
Priced Option” means an Option with an initial exercise price per Share on the
date the Option is granted equal to the Fair Market Value of a Share, which
exercise price shall increase at a rate of 15% per year as set forth in the
Agreement evidencing such Option.
2.19“Escalating
Priced SAR” means a SAR with an initial exercise price per Share on the date the
SAR is granted equal to the Fair Market Value of a Share, which exercise price
shall increase at a rate of 15% per year as set forth in the Agreement
evidencing such SAR.
2.20“Excess
EBITDA” shall have the meaning set forth in Section 6.3.
2.21“Excess
Year” shall have the meaning set forth in Section 6.3.
2.22“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
2.23“Fair
Market Value” on any date means the value of the Shares determined in good faith
by the Board or the Committee.
2.24“Fixed
Priced Option” means an Option with an exercise price per Share that, subject to
Sections 11 and 12 hereof, does not change and is equal to the Fair Market
Value
of a Share on the date such Option is granted.
2.25“Fixed
Priced SAR” means a SAR with an exercise price per Share that, subject to
Sections 11 and 12 hereof, does not change and is equal to the Fair Market
Value
of a Share on the date such SAR is granted..
2.26“Grantee”
means an individual to whom an Award is granted under the Plan.
2.27“Investors”
means any Person (as the term person is used for purposes of Section 13(d)
or
14(d) of the Exchange Act) who owns Shares immediately following the
Closing.
2.28“IPO”
means the initial underwritten offering of the Shares pursuant to a registration
statement (other than a Form S-8 or any successor form) declared effective
with
the Securities and Exchange Commission.
2.29“IRR
Event” means a transaction constituting a Change in Control, pursuant to which
each of the Investors attain a
-4-
32.5%
compounded annual rate of return based on the price per Share paid by the
Investors at the Closing Date and the price per Share obtained upon the Change
in Control, as appropriately adjusted for any Change in
Capitalization.
2.30“Missed
Year” shall have the meaning set forth in Section 6.3.
2.31“Option”
means a stock option granted under the Plan, which is not an “incentive stock
option” within the meaning of Section 422 of the Code.
2.32“Optionee”
means a person under the Plan to whom an Option has been granted under the
Plan.
2.33“Parent”
means any corporation which is a parent corporation (within the meaning of
Section 424(e) of the Code) with respect to the Company.
2.34“Performance
Period” means the period set forth in an Agreement over which an Award may
become vested and exercisable based on the achievement by the Company of EBITDA
Targets.
2.35“Permitted
Transferee” means a Grantee’s spouse, parents, children (whether natural or
adopted), stepchildren and grandchildren and the spouses of such parents,
children, stepchildren and grandchildren (the Grantee’s “Immediate Family”), a
trust solely for the benefit of members of the Grantee’s Immediate Family (a
“Family Trust”) and a partnership in which members of the Grantee’s Immediate
Family and/or Family Trusts are the only partners.
2.36“Plan”
means the Berry Plastics Group, Inc. 2006 Equity Incentive Plan, as amended
and/or restated from time to time.
2.37“Redundancy”
means the termination of the employment of a Grantee within six months following
a material acquisition or disposition by the Company, provided that the Board
determines in good faith that such acquisition or disposition resulted in the
elimination of, or a redundancy in, the Grantee’s position.
2.38“Retirement”
means the retirement of a Grantee from the employment of the Company and all
of
its Subsidiaries on or after attaining the age of 60 with ten years of service
with the Company and/or one or more of its subsidiaries.
2.39“SAR”
means a stock appreciation right granted under the Plan, pursuant to which
the
grantee of such stock appreciation right is entitled, upon exercise thereof,
to
receive an amount in cash equal to the product of (i) the excess of the Fair
Market Value of one Share on the date of exercise over the exercise price of
such stock appreciation right, multiplied by (ii) the number of Shares in
respect of which the stock appreciation right has been exercised.
2.40“Section
409A” shall mean Section 409A of the Code and any guidance or regulations with
respect thereto.
2.41“Securities
Act” means the Securities Act of 1933, as amended.
-5-
2.42“Sell”
means to sell, or in any other way directly or indirectly transfer, assign,
distribute, pledge, hypothecate, encumber or otherwise dispose of, either
voluntarily or involuntarily; and the terms “Sale” and “Sold” shall have
meanings correlative to the foregoing.
2.43“Shares”
means the common stock, par value $0.01 per share, of the Company and any other
securities into which such shares are changed or for which such shares are
exchanged.
2.44“Stock
Award” means an award of the right to purchase Shares under Section 8 of the
Plan.
2.45“Subsidiary”
means any entity, whether or not incorporated, in which the Company directly
or
indirectly owns fifty percent (50%) or more of the outstanding equity or other
ownership interests.
3.Administration.
3.1 The
Plan
shall be administered by the Committee, which shall hold meetings at such times
as may be necessary for the proper administration of the Plan. The Committee
shall keep minutes of its meetings. A quorum shall consist of not fewer than
two
members of the Committee and a majority of a quorum may authorize any action.
Any decision or determination reduced to writing and signed by all of the
members of the Committee shall be as fully effective as if made by a majority
vote at a meeting duly called and held. The Committee shall consist of at least
two members of the Board and may consist of the entire Board. Subject to
applicable law, the Committee may delegate its authority under the Plan to
any
other person or persons.
3.2 No
member
of the Committee shall be liable for any action, failure to act, determination
or interpretation made in good faith with respect to this Plan or any
transaction hereunder. The Company hereby agrees to indemnify each member of
the
Committee for all costs and expenses and, to the extent permitted by applicable
law, any liability incurred in connection with defending against, responding
to,
negotiating for the settlement of or otherwise dealing with any claim, cause
of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
3.3 Subject
to the express terms and conditions set forth herein, the Committee shall have
the power from time to time to:
(a) determine
those Eligible Individuals to whom Awards shall be granted under the Plan and
the number of Shares subject to such Awards and to prescribe the terms and
conditions (which need not be identical) of each such Award, including the
exercise price per Share, the vesting schedule and the duration of Options
and
SARs, and make any amendment or modification to any Agreement consistent with
the terms of the Plan;
(b) to
construe and interpret the Plan and the Awards granted hereunder and to
establish, amend and revoke rules and regulations for the administration of
the
Plan, including, but not limited to, correcting any defect or supplying any
omission, or reconciling
-6-
any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable and otherwise to make the Plan fully
effective. All decisions and determinations by the Committee in the exercise
of
this power shall be final, binding and conclusive upon the Company, its
Subsidiaries, the Grantees, and all other persons having any interest
therein;
(c) to
determine the duration and purposes for leaves of absence which may be granted
to a Grantee on an individual basis without constituting a termination of
employment or service for purposes of the Plan;
(d) to
exercise its discretion with respect to the powers and rights granted to it
as
set forth in the Plan; and
(e) generally,
to exercise such powers and to perform such acts as are deemed necessary or
advisable to promote the best interests of the Company with respect to the
Plan.
4.Stock
Subject to the Plan; Grant Obligations and Limitations.
4.1 Subject
to Section 11 of the Plan, the maximum number of Shares that may be made the
subject of Fixed Priced Options and Fixed Priced SARs granted under the Plan
is
384,838. Subject to Section 11 of the Plan, the maximum number of Shares that
may be made the subject of Escalating Priced Options and Escalating Priced
SARs
granted under the Plan is 192,414. Subject to Section 11 of the Plan, the
maximum number of Shares that may be made the subject of Stock Awards granted
under the Plan is 942,258. The Company shall reserve for the purposes of the
Plan, out of its authorized but unissued Shares or out of Shares held in the
Company’s treasury, or partly out of each, such number of Shares as shall be
determined by the Board. The Committee may in its sole discretion elect to
grant
Options that are intended to qualify as “incentive stock options” within the
meaning of Section 422 of the Code (“ISOs”); provided,
however,
that
Options with respect to at least 95% of the Shares that may be made subject
to
Options under the Plan shall be nonqualified stock options not intended to
qualify as ISOs.
4.2 Upon
the
granting of an Option or SAR, the number of Shares available under Section
4.1
for the granting of further Options and SARs of the same type (i.e.,
Fixed
Priced Options/SARs or Escalating Priced Options/SARs) shall be reduced by
the
number of Shares in respect of which the Option or SAR is granted or
denominated.
4.3 Whenever
any outstanding Option or SAR or portion thereof expires, is canceled, is
settled in cash (including the settlement of tax withholding obligations using
Shares) or is otherwise terminated for any reason without having been exercised
or payment having been made in respect of the entire Option or SAR, the Shares
allocable to the expired, canceled, settled or otherwise terminated portion
of
the Option or SAR may again be the subject of Options or SARs granted hereunder
of the same type of Option or SAR (i.e.,
Fixed
Priced Options/SARs or Escalating Priced Options/SARs) so expired, cancelled,
settled or otherwise terminated.
4.4 The
Committee shall grant Options and SARs with respect to at least 486,300 Shares
as of the Closing Date.
-7-
5.Option
and SAR Grants.
Subject
to the provisions of the Plan, the Committee shall have full and final authority
to select those Eligible Individuals who will receive Options and/or SARs and
to
determine the terms and conditions of the grant to such Eligible Individuals,
including the number of Shares subject to each Option and SAR, the term of
the
Option and/or SAR (which shall not exceed ten (10) years from the date of grant)
and any other terms or conditions not inconsistent with the Plan that the
Committee determines. The terms and conditions of each Option and SAR shall
be
set forth in an Agreement. The Committee may, subsequent to the granting of
any
Option or SAR, extend the term thereof, but in no event shall the term as so
extended exceed the maximum term set forth in the first sentence of this Section
5.
6.Vesting
and Exercisability of Options and SARs.
6.1 Unless
earlier terminated pursuant to the terms of the Plan or an Agreement, or as
otherwise provided in an Agreement, each Escalating Priced Option and each
Escalating Priced SAR shall vest and become exercisable with respect to twenty
percent of the Shares subject to such Option or SAR on an annual basis,
beginning with the year commencing January 1, 2007 (the “Initial Vesting Date”).
Twenty percent of the Shares subject to such Option or SAR shall have vested
by
the first anniversary of the Initial Vesting Date, and an additional twenty
percent of the Shares subject to such Options or SARs shall be vested by each
of
the second, third, fourth and fifth anniversaries of the Initial Vesting
Date.
6.2 Unless
earlier terminated pursuant to the terms of the Plan or an Agreement, or as
otherwise provided in an Agreement, each Fixed Priced Option and Fixed Priced
SAR shall vest and become exercisable either (i) with respect to twenty percent
of the Shares subject to such Option or SAR on an annual basis, beginning with
the Initial Vesting Date (i.e., twenty percent of the Shares subject to such
Option or SAR shall have vested by the first anniversary of the Initial Vesting
Date, and an additional twenty percent of the Shares subject to such Option
or
SAR shall be vested by each of the second, third, fourth and fifth anniversaries
of the Initial Vesting Date), or (ii) subject to Section 6.3, based on the
achievement by the Company of EBITDA Targets over the Performance Period as
set
forth in an Agreement. Fifty percent of the aggregate number of Shares subject
to Fixed Priced Options and Fixed Priced SARs granted to an Optionee shall
be
subject to time based vesting under Section 6.2(i) and the remaining fifty
percent shall be subject to performance based vesting under Section
6.2(ii).
6.3 Unless
earlier terminated pursuant to the terms of the Plan or an Agreement, or as
otherwise provided in an Agreement, with respect to each Fixed Priced Option
and
Fixed Priced SAR, in the event that the EBITDA Target for any fiscal year or
portion thereof in a Performance Period is not achieved (such fiscal year,
a
“Missed Year”) and the EBITDA Target with respect to (x) the immediately
preceding fiscal year (except in the case that the Missed Year is the first
fiscal year in the Performance Period), or (y) the immediately following fiscal
year (except in the case that the Missed Year is the last year in such
Performance Period), is exceeded (each such immediately preceding or immediately
following year, an “Excess Year”), then the excess of EBITDA over the EBITDA
Target for such Excess Year or Excess Years (the excess with respect to an
Excess Year, the “Excess EBITDA”) shall be applied to the Missed Year, and if
the application of such Excess
-8-
EBITDA
results in EBITDA with respect to the Missed Year equal to or in excess of
the
EBITDA Target with respect to such Missed Year, then the number of Shares
that
failed to vest by reason of the Company’s failure to achieve the EBITDA Target
for the Missed Year shall become vested on the date the Committee determines
that such EBITDA Target with respect to the Missed Year was achieved with
the
application of such Excess EBITDA; provided,
with
respect to any Excess Year, Excess EBITDA for such year may only be applied
to
one Missed Year; provided,
further,
that
the Grantee remains employed by the Company or one of its Subsidiaries for
the
duration of any such Excess Year and the Missed Year to which any such Excess
EBITDA is applied.
6.4 Unless
earlier terminated pursuant to the terms of the Plan, or as otherwise provided
in an Agreement, with respect to each Fixed Priced Option and Fixed Priced
SAR,
on the ninth anniversary of the date such Option or SAR is granted it shall
become vested and exercisable to the extent not already vested.
6.5 EBITDA
Targets for each fiscal year or portion thereof during a Performance Period
shall be established by the Committee on or prior to the date an Option or
SAR
is granted and shall be set forth on a schedule attached to the Agreement
evidencing such Option or SAR and may be adjusted from time to time thereafter
by the Committee in its sole discretion to take into account acquisitions,
divestitures, significant deviations in capital expenditures or leasing or
other
extraordinary events.
6.6 Notwithstanding
the foregoing, the Committee may grant an Option or SAR after the Closing Date
to a Grantee that was employed by the Company as of the Closing Date, and such
Option or SAR may have an adjusted vesting schedule that causes the Option
or
SAR to be treated, for purposes of vesting, as if it were granted as of the
Closing Date. The Committee may accelerate the exercisability of any Option
or
SAR or portion thereof at any time.
7.Method
of Exercise; Rights of Optionees.
7.1 The
exercise of an Option or SAR shall be made only by a written notice delivered
in
person or by mail to the Secretary of the Company at the Company’s principal
executive office, specifying the number of Shares with respect to which such
Option or SAR is to be exercised and, to the extent applicable, accompanied
by
payment therefore and otherwise in accordance with the Agreement pursuant to
which the Option or SAR was granted. Unless otherwise determined by the
Committee and except as otherwise set forth in an Agreement, the exercise price
paid with respect to the exercise of an Option or SAR shall be paid in cash.
If
requested by the Committee, the Grantee shall deliver the Agreement evidencing
the Option or SAR to the Secretary of the Company who shall endorse thereon
a
notation of such exercise and return such Agreement to the Grantee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of
an
Option or SAR and the number of Shares (or, in the case of SARs, the cash
equivalent thereof) that may be purchased upon exercise shall be rounded to
the
nearest number of whole Shares (or, in the case of SARs, the cash equivalent
thereof).
7.2 No
Optionee shall be deemed for any purpose to be the owner of any Shares subject
to any Option unless and until (a) the Option shall have been exercised pursuant
to the terms thereof, (b) the Company shall have issued and delivered Shares
to
the Optionee,
-9-
and
(c)
the Optionee’s name shall have been entered as a stockholder of record on the
books of the Company.
8.Stock
Awards.
8.1 Stock
Awards may be granted under the Plan at any time and from time to time. Each
Stock Award shall be evidenced by an Agreement that shall be executed by the
Company and the grantee of such Stock Award. The Agreement shall specify the
terms and conditions of the Stock Award, including without limitation the number
of Shares covered by the Stock Award, the purchase price, if any, for such
Shares (the “Purchase Price”) and the deadline for the purchase of such
Shares.
8.2 The
Purchase
Price if
any,
at which each Share covered by the Stock Award may be purchased upon exercise
of
a Stock Award shall be determined by the Committee and set forth in the
applicable Agreement. The Company will not be obligated to issue certificates
evidencing Shares purchased under this Section 8 unless and until it receives
full payment of the aggregate Purchase Price therefor and all other conditions
to the purchase, as determined by the Committee, have been satisfied. The
Purchase Price of any Shares subject to a Stock Award must be paid in full
at
the time of the purchase.
9.Non-Transferability.
No
Award
shall be Sold, transferred or otherwise disposed of by the Grantee otherwise
than by will or by the laws of descent and distribution, and an Award shall
be
exercisable during the lifetime of such Grantee only by the Grantee or his
or
her guardian or legal representative. Notwithstanding the foregoing, the
Committee may set forth in the Agreement evidencing an Award at the time of
grant or permit thereafter, that the Award may be transferred for estate
planning purposes to a Permitted Transferee. For purposes of this Plan, a
Permitted Transferee of an Award shall be deemed to be the Grantee. The terms
of
an Award shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Grantee.
10.Effect
of a Termination of Employment.
10.1 If
the
employment or engagement of the Grantee is terminated for any reason other
than
for Cause (or to the extent set forth in an Agreement, other than by reason
of
death, Disability or Redundancy), the portion of the Option or SAR that is
not
then vested and exercisable shall immediately terminate. Except as set forth
in
an Agreement, to the extent the Option or SAR is vested and exercisable as
of
the date of such termination of employment or engagement, the Option or SAR
shall remain exercisable for a period of ninety (90) days immediately following
such termination of employment or engagement, after which time the Option or
SAR
shall automatically terminate in full.
10.2 If
the
employment or engagement of a Grantee is terminated for Cause (i) any Options
or
SARs granted to the Grantee hereunder shall immediately terminate in full and
no
rights thereunder may be exercised, (ii) the Company shall have the right to
purchase from such Grantee and the Grantee (or his successor or representative,
as the case may be) shall be required to Sell to the Company, at the election
of
the Company at any time following such termination,
-10-
any
of
the Shares acquired by the Grantee upon the exercise of an Option or Stock
Award, at a per Share purchase price equal to the lesser of (x) the Fair
Market
Value of a Share on the date of such purchase by the Company, and (y) the
exercise price or Purchase Price paid by the Grantee, if any and (iii) the
Grantee (or his successor or representative, as the case may be) shall, at
the
election of the Company at any time following such termination of employment,
be
required to pay to the Company with respect to each SAR exercised prior to
such
date, an amount in cash equal to the greater of (x) any proceeds received
by the
Grantee pursuant to the exercise of such SAR and (y) the amount, if any,
by
which the Fair Market Value of a Share on the date of exercise of such SAR
exceeded the Fair Market Value of a Share on the date the Company elects
to
receive such payment.
10.3 Prior
to
an IPO, upon the termination of the employment or engagement of a Grantee for
any reason other than Cause, the Company shall have the right to purchase from
such Grantee and the Grantee (or his successor or representative, as the case
may be) shall be required to Sell to the Company, at the election of the
Company, all Shares acquired by the Grantee pursuant to the exercise of an
Option or Stock Award, which Shares have been held by the Grantee for at least
six months, at a per Share purchase price equal to the Fair Market Value of
a
Share on the date of such purchase. The Company’s right of repurchase described
herein shall expire one year following the later of (i) the date on which the
Grantee’s employment is terminated or (ii) the date on which the Shares being
purchased by the Company were acquired by the Grantee.
11.Adjustment
Upon Changes In Capitalization.
11.1 In
the
event of a Change in Capitalization, the Committee shall make appropriate
equitable adjustments, to (i) the maximum number and class of Shares or other
stock or securities with respect to which Awards may be granted under the Plan
and (ii) the number and class of Shares or other stock or securities which
are
subject to outstanding Options and SARs granted under the Plan and the exercise
price or Purchase Price therefor, if applicable; provided,
that in
the event of any extraordinary dividend (other than the payment of any
management fees to the Investors), such equitable adjustments (x) shall preserve
the Grantee’s rights substantially proportionate to his or her rights existing
immediately prior to such extraordinary dividend (but subject to the limitations
and restrictions on such existing rights), and (y) shall comply in all respects
with Section 409A..
11.2 If,
by
reason of a Change in Capitalization, an Optionee shall be entitled to exercise
an Option with respect to new, additional or different shares of stock or
securities of the Company or any other corporation, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Option, as the case may be, prior to such Change in
Capitalization.
12.Effect
of Certain Transactions.
12.1 Except
as
otherwise provided in an Agreement evidencing an Award at the time of grant,
in
the event of a Corporate Transaction, each outstanding Award shall be assumed
or
an equivalent award or right substituted by the successor or surviving
corporation or a Parent or Subsidiary of the successor or surviving corporation
(the “Successor Corporation”); provided,
however,
that,
-11-
unless
otherwise determined by the Committee, such Awards shall remain subject to
all
of the conditions, restrictions and performance criteria which were applicable
to such Awards prior to such assumption or substitution. For the purpose
of this
Section 12.1, the Award shall be considered assumed if, following the Corporate
Transaction, the Award confers the right to purchase or receive, for each
Share
subject to the Award immediately prior to the Corporate Transaction, the
consideration (whether stock, cash or other securities or property) received
in
the merger or sale of assets by holders of Shares for each Share held on
the
effective date of the transaction (and if holders were offered a choice of
consideration, of the type of consideration chosen by the holders of a majority
of the outstanding Shares). All Options and SARs shall terminate and cease
to
remain outstanding immediately following the consummation of a Corporate
Transaction, except to the extent assumed or substituted by the Successor
Corporation.
12.2 Notwithstanding
anything to the contrary contained herein, in the event of a Corporate
Transaction pursuant to which each outstanding Award is not assumed or an
equivalent award or right substituted by the successor or surviving corporation,
the Committee shall (a) authorize the redemption of the unexercised vested
portion of the Awards for a consideration per Share equal to the excess of
(i)
the consideration payable per Share in connection with such Corporate
Transaction, over (ii) the exercise price per Share or Purchase Price subject
to
the Award, and (b) terminate the unvested portion of such Award.
12.3 The
Agreement evidencing an Award shall set forth the effect, if any, of a Change
in
Control or IRR Event on an Award.
12.4 Upon
the
consummation date of an IPO, the exercise price per Share with respect to each
Escalating Priced Option and Escalating Priced SAR shall be increased by a
percentage equal to the product of (i) 15% multiplied by (ii) a fraction, the
numerator of which is the number of days since the last increase in the exercise
price of the Option or SAR and the denominator of which is 365, and shall be
fixed at such level for the remainder of the term of the Option or
SAR.
13.Plan
Amendment or Termination; Modification of Awards.
13.1 The
Plan
shall terminate on the day preceding the tenth anniversary of the date of its
adoption by the Board and no Award may be granted thereafter. The Board may
sooner terminate the Plan and the Board may at any time and from time to time
amend, modify or suspend the Plan; provided,
however,
that:
(a) no
such
amendment, modification, suspension or termination shall impair or adversely
alter any Awards theretofore granted under the Plan, except with the consent
of
the Grantee, nor shall any amendment, modification, suspension or termination
deprive any Grantee of any Shares which he or she may have acquired through
or
as a result of the Plan; and
(b) to
the
extent necessary under any applicable law, regulation or exchange requirement,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law, regulation or exchange
requirement.
13.2 No
modification of an Award shall adversely alter or impair any rights or
obligations under the Award without the consent of the Grantee.
-12-
14.Non-Exclusivity
of the Plan.
The
adoption of the Plan by the Board shall not be construed as amending, modifying
or rescinding any previously approved incentive arrangement or as creating
any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of stock
options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
15.Limitation
of Liability.
As
illustrative of the limitations of liability of the Company, but not intended
to
be exhaustive thereof, nothing in the Plan shall be construed to:
(a) give
any
person any right to be granted an Award other than at the sole discretion of
the
Committee;
(b) give
any
person any rights whatsoever with respect to Shares except as specifically
provided in the Plan;
(c) limit
in
any way the right of the Company or any Subsidiary to terminate the employment
of any person at any time; or
(d) be
evidence of any agreement or understanding, expressed or implied, that the
Company will employ any person at any particular rate of compensation or for
any
particular period of time.
16.Regulations
and Other Approvals; Governing Law.
16.1 Except
as
to matters of federal law, the Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of
the
State of Delaware without giving effect to conflicts of laws principles
thereof.
16.2 The
obligation of the Company to sell or deliver Shares with respect to Awards
granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and
the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.
16.3 Each
Award is subject to the requirement that, if at any time the Committee
determines, in its discretion, that the listing, registration or qualification
of Shares issuable pursuant to the Plan is required by any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or
in
connection with, the grant of an Award or the issuance of Shares, no Awards
shall be granted or payment made or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected
or
obtained free of any conditions not acceptable to the Committee.
-13-
17.Multiple
Agreements.
The
terms
of each Award may differ from other Awards granted under the Plan at the same
time, or at different times. The Committee may also grant more than one Award
to
a given Eligible Individual during the term of the Plan, either in addition
to,
or in substitution for, one or more Award previously granted to that Eligible
Individual.
18.Withholding
of Taxes.
At
such
times as a Grantee recognizes taxable income in connection with the receipt
of
Shares or cash or other property hereunder (a “Taxable Event”), the Grantee
shall pay to the Company an amount equal to the minimum statutory withholding
taxes in connection with the Taxable Event (the “Withholding Taxes”) prior to
the issuance of such Shares or the payment of such cash or other property.
The
Committee may provide in the Agreement at the time of grant, or at any time
thereafter, that the Grantee, in satisfaction of the obligation to pay
Withholding Taxes to the Company, may elect to have withheld a portion of the
Shares then issuable to him or her having an aggregate Fair Market Value equal
to the Withholding Taxes.
18.Code
Section 409A Compliance.
To
the
extent applicable, it is intended that this Plan and any Awards granted
hereunder comply with the requirements of Section 409A of the Code and any
related regulations or other guidance promulgated with respect to that section
by the U.S. Department of the Treasury or the Internal Revenue Service. Any
provision that would cause the Plan or any Award granted under the Plan to
fail
to satisfy Section 409A will have no force or effect until amended to comply
with Section 409A, which amendment may be retroactive to the extent permitted
by
Section 409A; provided, however, that the present value of Awards granted to
Participants after such modification shall not be materially less than the
present value of the Awards granted to Participant prior to the
modification.
