SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[_] Confidential, For Use of the Commission only (as permitted by Rule For Use
of the Commission only (as permitted by Rule 14c-5(d)(2)) 14c-5(d)(2))
[_] Definitive Information Statement
BTHC VI, INC.
(Name of Registrant as Specified in Its Charter)
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[X] No Fee Required
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
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the form or schedule and the date of its filing.
(1) Amount previously paid:
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BTHC VI, INC.
12890 Hilltop Road
Argyle, Texas 76226
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY __, 2007
A Special Meeting of Stockholders of BTHC VI, Inc., a Delaware corporation,
will be held at the Company's principal executive offices located at 12890
Hilltop Road, Argyle, Texas 76226, on May __, 2007, at 9:00 a.m., local time,
for the following purposes:
(i) To approve amendments to our Cerificate of Incorporation to (a) implement a
1-for-1.67 reverse split of the outstanding shares of our Common Stock and
(b) increase our total authorized stock from 40,000,000 to 100,000,000
shares of Common Stock;
(ii) To approve the BTHC VI, Inc. Long-Term Incentive Plan; and
(iii) To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on April __, 2007 as
the record date for determining the stockholders entitled to notice of and to
vote at the Special Meeting and any adjournment or postponement thereof.
Shares of Common Stock can be voted at the meeting only if the holder is
present at the meeting in person or by a valid proxy. WE ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
/s/ Timothy P. Halter
Timothy P. Halter
Chief Executive Officer
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INFORMATION STATEMENT
BTHC VI, INC.
12890 Hilltop Road
Argyle, Texas 76226
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is being mailed on or about May __, 2007, to the
holders of record (the "Stockholders") of the outstanding common stock, par
value $.001 per share ("Common Stock"), of BTHC VI, Inc., a Delaware corporation
(the "Company"), in connection with a special meeting (the "Special Meeting")
that will be held at the Company's principal executive offices located at 12890
Hilltop Road, Argyle, Texas 76226, on May __, 2007, at 10:00 a.m. (local time).
The Board of Directors has fixed the close of business on April __, 2007 (the
"Record Date"), as the record date for determining the Stockholders entitled to
notice of and to vote at the Special Meeting and any adjournment or postponement
thereof. Except as otherwise indicated by the context, references in this
information statement to "Company," "we," "us," or "our" are references to BTHC
VI, Inc.
At the Special Meeting, the Stockholders will be asked to consider
proposals to amend our Certificate of Incorporation (the "Amendments") to effect
the following:
(i) the implementation of a 1-for-1.67 reverse split of the outstanding shares
of our Common Stock (the "Reverse Split");
(ii) an increase in our total authorized stock from 40,000,000 to 100,000,000
shares of Common Stock.
A copy of the Certificate of Amendment to be filed with the state of Delaware to
effect the Amendments is attached to this Information Statement as Appendix A.
Stockholders will also be asked at the Special Meeting to consider a
proposal to approve the BTHC VI, Inc. Long-Term Incentive Plan (the "Plan"). A
copy of the Plan is attached to this Information Statement as Appendix B.
Each share of Common Stock is entitled to one vote per share. We had, as of
the Record Date, 500,000 shares of Common Stock outstanding, meaning that there
will be 500,000 votes eligible to be cast at the Special Meeting. Each of the
proposals regarding the Amendments requires the affirmative vote of at least a
majority of the shares of Common Stock entitled to vote thereon, or at least
250,000 affirmative votes, to be adopted. The proposal to approve the Plan
requires for approval the affirmative vote of the holders of a majority of the
total number of shares of Common Stock present in person or represented by proxy
and entitled to vote thereon and actually voted on the proposal. Abstentions are
counted for the purposes of determining whether a quorum is achieved and for
determining the number of shares which are present in person or represented by
proxy at the Special Meeting. Consequently, an abstention has the same effect as
a vote against a proposal, as each abstention is one less vote in favor of the
proposal. Broker non-votes in respect of any proposal are not counted for
purposes of determining whether a proposal has received the requisite approval.
Stockholders have no right to cumulative voting as to any matter.
Halter Financial Investments, L.P. ("HFI"), which holds 350,000 shares of
Common Stock, or a majority of our Common Stock and a majority of the
outstanding Common Stock entitled to vote at the Special Meeting, has advised us
that it presently intends to vote in favor of the proposals to approve the
Amendments and the proposal to approve the Plan. It is anticipated, therefore,
that the proposals regarding the Amendments and the proposal regarding the Plan
will be approved.
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GENERAL INFORMATION
This Information Statement is being first mailed on or about May __, 2007
to Stockholders of the Company by the board of directors to provide material
information regarding the Special Meeting.
Only one Information Statement is being delivered to two or more
Stockholders who share an address unless we have received contrary instruction
from one or more of such Stockholders. We will promptly deliver, upon written or
oral request, a separate copy of this Information Statement to a security holder
at a shared address to which a single copy of the document was delivered. If you
would like to request additional copies of this Information Statement, or if in
the future you would like to receive multiple copies of information statements
or proxy statements, or annual reports, or, if you are currently receiving
multiple copies of these documents and would, in the future, like to receive
only a single copy, please so instruct us by writing to the corporate secretary
at the Company's executive offices at the address specified above.
PLEASE NOTE THAT WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
The entire cost of furnishing this Information Statement will be borne
by the Company. We will request brokerage houses, nominees, custodians,
fiduciaries and other like parties to forward this Information Statement to the
beneficial owners of the Common Stock held of record by them.
AUTHORIZATION BY THE BOARD OF DIRECTORS
On May __, 2007, our board of directors (the "Board of Directors")
unanimously adopted resolutions declaring the advisability of the Amendments and
the Plan and recommended that the Stockholders approve (i) the Amendments set
forth in the Certificate of Amendment provided herewith as Appendix A and (ii)
the Plan, a copy of which is provided herewith as Appendix B.
The Reverse Split will reduce the number of issued and outstanding shares
of our Common Stock and effectively increase the number of authorized and
unissued shares of our Common Stock available for future issuance. The Reverse
Split has been implemented for the primary purpose of facilitating a combination
transaction (the "Transaction") with a privately held business with which the
Company has entered into a non-binding letter of intent dated as of April 18,
2007 (the "LOI").
The increase in our total authorized Common Stock has been also been
effected to facilitate the Transaction. In addition, the increase in our total
authorized Common Stock will also provide us with greater flexibility with
respect to our capital structure for such purposes as additional equity
financings and future stock-based acquisitions.
The Plan has also been effected to facilitate the Transaction.
Additionally, the Plan will allow the Board of Directors the ability to provide
compensatory awards to attract and retain officers, other employees, directors,
consultants and other independent contractors after the Transaction has been
completed.
MAJORITY STOCKHOLDERS
HFI, which holds 350,000 shares of Common Stock, or a majority of our
Common Stock and a majority of the outstanding Common Stock entitled to vote at
the Special Meeting, has advised us that it presently intends to vote in favor
of the proposals to approve the Amendments and the proposal to approve the Plan.
It is anticipated, therefore, that the proposals regarding the Amendments and
the proposal regarding the Plan will be approved. Information regarding HFI is
set forth below:
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Consenting Stockholder Number of Shares % of total
--------------------------------------- ---------------------------- -----------
Halter Financial Investments, L.P.*
12890 Hill Top Road 350,000* 70.0%
Argyle, Texas 76226
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Total: 350,000 70.0%
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* Halter Financial Investments, L.P. is a Texas limited partnership of
which Halter Financial Investments GP, LLC, a Texas limited liability company,
is the sole general partner. HFI holds 350,000 shares of our Common Stock. The
limited partners of HFI are: (i) TPH Capital, L.P., a Texas limited partnership,
of which TPH Capital GP, LLC, a Texas limited liability company, is the general
partner, of which Timothy P. Halter is the sole member; (ii) Bellfield Capital
Partners, L.P., a Texas limited partnership, of which Bellfield Capital
Management, LLC, a Texas limited liability company, is the sole general partner,
of which David Brigante is the sole member; (iii) Colhurst Capital LP, a Texas
limited partnership, of which Colhurst Capital GP, LLC, a Texas limited
liability company, is the general partner, of which George L. Diamond is the
sole member; and (iv) Rivergreen Capital, LLC, a Texas limited liability
company, of which Marat Rosenberg is the sole member. As a result, each of the
foregoing persons may be deemed to be a beneficial owner of the shares held of
record by HFI.
The Company will file the Certificate of Amendment with the Delaware
Secretary of State. The Certificate of Amendment will become effective upon such
filing, and we anticipate that such filing will occur after the proposals
regarding the Amendments are approved at the Special Meeting on May __, 2007.
The Plan will become effective on May __, 2007 after approval by the
Stockholders.
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
The Company's authorized capital currently consists of 40,000,000 shares of
Common Stock and 10,000,000 shares of preferred stock, par value $.001 per share
(the "Preferred Stock").
Each share of Common Stock entitles its record holder to one (1) vote per
share held. Holders of Common Stock do not have cumulative voting, conversion,
redemption rights or preemptive rights to acquire additional shares.
At the close of business on the Record Date, the Company had 500,000 shares
of Common Stock issued and outstanding and no shares of Preferred Stock issued
and outstanding.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's capital stock immediately before and after
the effectuation of the Reverse Split by:
o each Stockholder known by the Company to be the beneficial owner of
more than 5% of the Company's outstanding securities prior to and
after the closing of the transactions contemplated by the Reverse
Split;
o each current director of the Company;
o each of the named executive officers of the Company listed in the
Company's Annual Report on Form 10-K for the year ended December 31,
2006; and
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o all current directors and executive officers as a group.
Unless otherwise specified, the address of each of the persons set forth
below is in care of BTHC VI, Inc., 12890 Hilltop Road, Argyle, Texas 76226.
Before effectiveness of the Reverse Split (2) After effectiveness of the Reverse Split (3)
Name and Address of Amount of Beneficial Percent of Common Amount of Beneficial
Beneficial Owner (1) Ownership Stock Ownership Percent of Common Stock
-------------------- --------- ----- --------- -----------------------
Timothy P. Halter (4) 350,000 70.0% 209,581 70.0%
David Brigante (4) 350,000 70.0% 209,581 70.0%
George Diamond (4) 350,000 70.0% 209,581 70.0%
Marat Rosenberg (4) 350,000 70.0% 209,581 70.0%
Olga Guerra 58,294 11.7% 34,907 11.7%
Directors and officers
as a group (5) 350,000 70.0% 209,581 70.0%
(1) Beneficial ownership has been determined in accordance with the rules
of the SEC and generally includes voting or investment power with
respect to securities. Except as otherwise provided herein, each of
the beneficial owners listed above has direct ownership of and sole
voting power and investment power with respect to the shares of Common
Stock.
(2) A total of 500,000 shares of Common Stock are considered to be
outstanding pursuant to Rule 13d-3(d)(1) under the Exchange Act. For
each beneficial owner above, any options exercisable within 60 days
have been included in the denominator for purposes of determining
percentage ownership.
(3) Based on 300,000 shares of Common Stock outstanding after the
consummation of the Reverse Split.
(4) The referenced shares of Common Stock are owned by Halter Financial
Investments, L.P. HFI is a Texas limited partnership of which Halter
Financial Investments GP, LLC, a Texas limited liability company, is
the sole general partner. The limited partners of HFI are: (i) TPH
Capital, L.P., a Texas limited partnership, of which TPH Capital GP,
LLC, a Texas limited liability company, is the general partner, of
which Timothy P. Halter is the sole member; (ii) Bellfield Capital
Partners, L.P., a Texas limited partnership, of which Bellfield
Capital Management, LLC, a Texas limited liability company, is the
sole general partner, of which David Brigante is the sole member;
(iii) Colhurst Capital LP, a Texas limited partnership, of which
Colhurst Capital GP, LLC, a Texas limited liability company, is the
general partner, of which George L. Diamond is the sole member; and
(iv) Rivergreen Capital, LLC, a Texas limited liability company, of
which Marat Rosenberg is the sole member. As a result, each of the
foregoing persons may be deemed to be a beneficial owner of the shares
held of record by HFI.
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(5) Timothy P. Halter is the Company's sole director and officer.
PROPOSALS TO APPROVE
THE AMENDMENT OF OUR CERTIFICATE OF INCORPORATION
On May __, 2007, our Board of Directors approved, subject to receiving the
approval of the holders of a majority of the outstanding Common Stock,
amendments to our Certificate of Incorporation to (i) effect a 1-for-1.67
Reverse Split of Common Stock and (ii) increase our total authorized stock from
40,000,000 to 100,000,000 shares of Common Stock. HFI has advised us that it
presently intends to vote in favor of the proposals to approve the Amendments.
It is anticipated, therefore, that the proposals regarding the Amendments will
be approved.
1. Adoption of 1-for-1.67 Reverse Stock Split
Our Board of Directors unanimously approved, subject to Stockholder
approval, the 1-for-1.67 Reverse Split of our Common Stock, which will be
effectuated in conjunction with the adoption of the Amendments.
The Reverse Split will reduce the number of issued and outstanding shares
of our Common Stock. The Reverse Split will become effective on the Effective
Date, which occurs when the Certificate of Amendment is filed with the Secretary
of State of the State of Delaware. We expect to file the Certificate of
Amendment on May __, 2007.
Purposes for Reverse Split and Effect on Common Stock
The Reverse Split of the outstanding shares of our Common Stock will reduce
the number of issued and outstanding shares of our Common Stock. The Reverse
Split has been implemented to facilitate the Transaction.
On the Effective Date, every 1.67 shares of Common Stock will automatically
be combined and changed into one share of Common Stock. No additional action on
our part or any Stockholder will be required in order to effect the Reverse
Split. Certificates that represent pre-Reverse Split shares will automatically,
and without any action on the part of any person, represent approximately 60% of
such pre-Reverse Split shares following the Effective Date.
No fractional shares of post-Reverse Split Common Stock will be issued to
any stockholder. Accordingly, Stockholders of record who would otherwise be
entitled to receive fractional shares of post-Reverse Split Common Stock will,
upon surrender of their certificates representing shares of pre-Reverse Split
Common Stock, receive a full share of our Common Stock.
We will obtain a new CUSIP number for our Common Stock at the time of the
Reverse Split. Following the effectiveness of the Reverse Split, every 1.67
shares of Common Stock presently outstanding, without any action on the part of
the stockholder, will represent one share of Common Stock. Subject to the
provisions for elimination of fractional shares, as described above,
consummation of the Reverse Split will not result in a change in the relative
equity position or voting power of the holders of Common Stock.
Federal Income Tax Consequences of the Reverse Split
The combination of 1.67 shares of pre-Reverse Split Common Stock into one
share of post-Reverse Split Common Stock should be a tax-free transaction under
the Internal Revenue Code of 1986, as amended (the "Code"), and the holding
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period and tax basis of the pre-Reverse Split Common Stock will be transferred
to the post-Reverse Split Common Stock.
This discussion should not be considered as tax or investment advice, and
the tax consequences of the Reverse Split may not be the same for all
Stockholders. Stockholders should consult their own tax advisors to know their
individual federal, state, local and foreign tax consequences.
2. Increase of Authorized Common Stock of the Company
The terms of the newly authorized shares of Common Stock will be identical
to those of the currently outstanding shares of Common Stock. The authorization
of additional shares of Common Stock will not alter the current number of issued
shares. However, because holders of Common Stock have no preemptive rights to
purchase or subscribe for any unissued stock of the Company, the issuance of any
newly authorized shares of Common Stock will reduce the current Stockholders'
percentage ownership interest in the total outstanding shares of Common Stock.
Depending upon the circumstances under which newly authorized shares of Common
Stock are issued, Stockholders may experience a reduction in stockholders'
equity per share and voting power. The relative rights and limitations of the
shares of Common Stock will remain unchanged.
Purpose for Increase and Effects of Increase on Authorized Common Stock
The increase in our total authorized shares of Common Stock has been
effected for the primary purpose of facilitating the Transaction. In addition,
the increase in our total authorized stock will also provide us with greater
flexibility with respect to our capital structure for such purposes as
additional equity financings and future stock-based acquisitions.
The increase in the number of authorized but unissued shares of Common
Stock will enable the Company, without further Stockholder approval, to issue
shares from time to time as may be required for proper business purposes, such
as raising additional capital for ongoing operations, business and asset
acquisitions, stock splits and dividends, present and future employee benefit
programs, and other corporate purposes. Having a substantial number of
authorized but unissued shares of Common Stock that are not reserved for
specific purposes will allow us to take prompt action with respect to corporate
opportunities that develop, without the delay and expense of convening a meeting
of stockholders or obtaining the written consent of stockholders for the purpose
of approving an increase in our capitalization. It is not the present intention
of our Board of Directors to seek stockholder approval prior to any issuance of
shares of Common Stock that would become authorized by the Amendments unless
otherwise required by law or regulation.
While the Board of Directors may entertain and seek future financing and
acquisition opportunities, there are no definitive financing transactions or
business or asset acquisitions contemplated at this time, and the amendment to
our Certificate of Incorporation was not proposed with the intent that
additional shares be utilized in any specific financing transaction or business
or asset acquisition, other than in connection with the Transaction.
The increase in the authorized number of shares of Common Stock could have
other effects on the Stockholders, depending upon the nature and circumstances
of any future issuances of authorized but unissued shares. The increase could
have an anti-takeover effect, in that additional shares could be issued (within
the limits imposed by applicable law) in one or more transactions that could
make a change in control or takeover of the Company more difficult. For example,
additional shares could be issued by the Company so as to dilute the stock
ownership or voting rights of persons seeking to obtain control of the Company.
Similarly, the issuance of additional shares to certain persons allied with the
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Company's management could have the effect of making it more difficult to remove
the Company's current management by diluting the stock ownership or voting
rights of persons seeking to cause such removal.
Your Board of Directors recommends a vote FOR the proposals to approve the
Amendments.
PROPOSAL TO APPROVE
BTHC VI, INC. LONG-TERM INCENTIVE PLAN
On May __, 2007, our Board of Directors adopted, subject to receiving the
approval of the holders of a majority of the outstanding Common Stock, the BTHC
VI, Inc. Long-term Incentive Plan. HFI has advised us that it presently intends
to vote in favor of the proposal to approve the Plan. It is anticipated,
therefore, that the proposal regarding the Plan will be approved.
The Plan authorizes the Board of Directors, or a committee thereof, to
provide equity-based compensation in the form of stock options, stock
appreciation rights ("SARs"), restricted stock, restricted stock units,
performance shares and units, and other stock-based awards for the purpose of
attracting and retaining officers, other employees, directors, consultants and
other independent contractors of the Company (and its subsidiaries) and to
provide persons incentives and rewards for performance. The Plan has been
adopted to facilitate the Transaction or, if such Transaction does not occur any
other potential business combination. The following summary is a brief
description of the Plan. This summary is qualified in its entirety by reference
to the Plan and is to be interpreted solely in accordance with the Plan, a copy
of which is attached as Appendix B to this Information Statement.
o Plan Limits. Total awards under the Plan are limited to 3,035,000
shares of Common Stock ("Common Shares"), after giving effect to the
Reverse Split. The Plan also limits the aggregate number stock options
and SARs that may be granted to any one participant in a calendar year
to 750,000 and the aggregate number of shares of restricted stock and
restricted stock units subject to the achievement of Management
Objectives (as defined below), performance shares and shares
underlying other equity-based awards that may be granted to any one
participant in a calendar year to 750,000. And, under the Plan, no
participant will receive performance units in any calendar year having
a value at the date of grant in excess of $3 million.
o No Repricing. Option repricing is prohibited without stockholder
approval under the Plan.
o Other Features.
o The Plan also provides that no stock options or SARs will be granted
with an exercise or base price less than the fair market value of the
Common Stock on the date of grant.
o The Plan is designed to allow awards made under the Plan to qualify as
performance-based compensation under Section 162(m) of the Internal
Revenue Code.
o It is intended that the Board of Directors will delegate to a
committee of the Board (the "Committee") (consisting of only
independent directors) administration of the Plan after the
Transaction or any other future transaction. Pursuant to such
delegation, the Committee will have all of the powers and authority of
the Board of Directors as described herein.
Summary of the Plan
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Shares Available Under the Plan. As stated above, subject to adjustment as
provided in the Plan, the number of Common Shares that may be issued or
transferred under the Plan will not exceed 3,035,000 Common Shares (after giving
effect to the Reverse Split) plus any shares underlying awards granted under the
Plan that expire or are forfeited or are cancelled. Shares covered by an award
granted under the Plan shall not be counted as used unless and until they are
actually issued and delivered to a participant. Without limiting the generality
of the foregoing, the number of Common Shares available will be adjusted to
account for shares relating to awards that expire, are forfeited, terminated or
cancelled without the issuance of Common Shares and to awards settled in cash in
lieu of Common Shares. Shares issued under the Plan may be shares of original
issuance or treasury shares or a combination of the foregoing. The Plan contains
a number of limits on the number of Common Shares that can be issued, including
to any one participant in a calendar year as described above. Further, the Plan
limits the aggregate number of Common Shares that may be issued or transferred
by the Company upon the exercise of incentive stock options ("ISOs") to
3,035,000 Common Shares (after giving effect to the Reverse Split). The limits
contained in the Plan are subject to certain adjustments as provided in the Plan
in the event of stock splits, stock dividends, the issuance of rights and
certain other events.
Eligibility. Officers, other employees, directors, consultants and other
independent contractors of the Company and its subsidiaries or any person who
has agreed to commence serving in any of those capacities within 90 days of the
date of grant may be selected by the Board to receive benefits under the Plan.
Types of Awards Authorized. The Plan provides for the granting of dividend
equivalents, option rights, SARs, restricted stock, restricted stock units,
performance shares, performance units and other awards that may be denominated
or payable in, valued in whole or in part by reference to or otherwise based on
or related to, the Common Shares or factors that may influence the value of its
Common Shares. Awards granted under the plan will be upon such terms as may be
approved by the Committee and set forth in an evidence of award. An evidence of
award will contain such terms and provisions, consistent with the plan, as the
Committee may approve, including provisions for the acceleration of vesting or
satisfaction of other requirements upon the occurrence of certain events
including change in control events. Stock options and SARs will not be granted
with an exercise price or base price, as the case may be, less than the market
value per share. No option right or appreciation right may be exercisable more
than 10 years from the date of grant.
Management Objectives. The Plan contemplates that the Board will establish
"Management Objectives" for purposes of performance shares and performance
units. When so determined, option rights, SARs, restricted stock, restricted
stock units, other awards under the Plan or dividend credits may also specify
Management Objectives that must be achieved as a condition to exercising such
rights in the case of options and SARs and to result in termination or early
termination of the restrictions applicable to such shares in the case of
restricted stock and restricted stock units. Management Objectives may be
described in terms of either company-wide objectives or objectives that are
related to the performance of the individual participant or a subsidiary,
division, department, region or function. To the extent that Section 162(m) of
the Internal Revenue Code may apply to a grant or award, the Board may provide,
in connection with the setting of Management Objectives, that any evaluation of
performance may include or exclude certain items, including but not limited to,
asset write downs, litigation or claim judgments or settlements, the effect of
changes in tax laws, accounting principles or other laws or provisions affecting
reported results, any reorganization and restructuring programs, extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
and/or in management's discussion and analysis of financial condition and
results of operations appearing in the Company's annual report to stockholders
for the applicable year, acquisitions or divestitures and foreign exchange gains
and losses. To the extent such inclusions or exclusions affect the awards to
"covered employees" (as defined in the Plan) and Section 162(m) of the Internal
Revenue Code would apply to such awards, they will be prescribed in a form that
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meets the requirements of Section 162(m) of the Internal Revenue Code for
deductibility.
Management Objectives applicable to any award to a participant who is, or
is determined by the Board likely to become, a "covered employee" within the
meaning of Section 162(m) of the Internal Revenue Code, will be limited to
specified levels of or relative peer company performance in any one or more of
the following objectives, or any combination thereof, as determined by the
Committee in its sole discretion: adjusted net earnings, cash flow (including
free cash flow), cost of capital, cost reduction, customer service, debt
reduction, development milestone achievement, earnings and earnings growth
(including earnings per share and earning before taxes and earnings before
interest and taxes), economic value added, establishment of partnerships and
collaborations, financing proceeds, gross profit, inventory management, market
share, market value added, net income, operating profit and operating income,
partnership milestone achievement, productivity improvement, profit after taxes,
project execution, quality, recruitment and development of associates, reduction
of fixed costs, return on assets and return on net assets, return on equity,
return on invested capital, sales and sales growth, successful start-up of new
facility, successful acquisition/divestiture, total stockholder return and
improvement of stockholder return, unit volume, unit cost, pricing and working
capital.
If the Board determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
it conducts its business, or other events or circumstances render the Management
Objectives unsuitable, the Board may in its discretion modify such Management
Objectives or the minimum acceptable level of achievement, in whole or in part,
as the Board deems appropriate and equitable, except in the case of a "covered
employee" where such action would result in the loss of the otherwise available
exemption under Section 162(m) of the Internal Revenue Code. In such case, the
Board may not make any modification of the Management Objectives or minimum
acceptable level of achievement with respect to such "covered employee."
Administration and Amendments. The Plan is to be administered by the Board
of Directors, except that the Board has the authority to delegate any or all of
its powers under the Plan to the Committee or another committee of the Board (or
a subcommittee thereof). It is intended that the Board of Directors will
delegate to the Committee administration of the Plan after the consummation of
the Transaction, if it occurs. The Committee would be authorized to interpret
the Plan and related agreements and other documents. The Committee may amend the
Plan from time to time without further approval by the Company's stockholders,
except where the amendment (1) would materially increase the benefits accruing
to participants under the Plan, (2) would materially increase the number of
securities which may be issued under the Plan, (3) would materially modify the
requirements for participation in the Plan or (4) must otherwise be approved by
the stockholders of the Company in order to comply with applicable legal
requirements or the requirements of the principal national securities exchange
upon which the Common Shares are traded or quoted.
Change in Control. An evidence of award under the Plan may provide that,
upon a Change in Control (as defined in the Plan), any awards that are
outstanding as of the date of the Change in Control that are subject to vesting
requirements and that are not then vested, shall become fully vested, all
then-outstanding option rights and SARs will be fully vested and immediately
exercisable and all restrictions and other conditions prescribed by the Board,
if any, with respect to grants of restricted stock, restricted stock units,
performance shares performance units and other awards granted pursuant to the
Plan will automatically lapse, expire and terminate and all such awards will be
deemed to be fully earned.
Transferability. Except as otherwise determined by the Board of Directors,
no option right or SAR or other derivative security granted under the Plan is
transferable by a participant except, upon death, by will or the laws of descent
and distribution. Except as otherwise determined by the Board of Directors,
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option rights and SARs are exercisable during the optionee's lifetime only by
him or her or by his or her guardian or legal representative.
Adjustments. The number of Common Shares authorized under the Plan, subject
to various limits contained in the Plan covered by outstanding awards under the
Plan and, if applicable, the prices per share applicable thereto, will be
adjusted in the event of stock dividends, extraordinary dividends, stock splits,
combinations of shares, recapitalizations, mergers, consolidations, spin-offs,
split-offs, spin-outs, split-ups, reorganizations, liquidations, issuances of
rights or warrants, and similar events. In the event of any such transaction or
event or in the event of a Change in Control, the Board of Directors, in its
discretion, may provide in substitution for any or all outstanding awards under
the Plan such alternative consideration (including cash), if any, as it, in good
faith, may determine to be equitable in the circumstances and may require the
surrender of all awards so replaced. The Board of Directors will also make or
provide for such adjustments in the number of shares available under the Plan
and the other limitations contained in the Plan as the Board may determine
appropriate to reflect any transaction or event described above. The Plan also
provides that, without limiting the generality of the foregoing, in the event
that the Company issues warrants or other rights to acquire Common Shares on a
pro rata basis to all stockholders, the Board will make such adjustments in the
number of shares authorized under the Plan and in the limits contained in the
Plan as it may determine to be equitable, including proportionately increasing
the number of authorized shares or any such limit.
Withholding Taxes. To the extent that the Company is required to withhold
federal, state, local or foreign taxes in connection with any payment made or
benefit realized by a participant or other person under the Plan, and the
amounts available to the Company for such withholding are insufficient, it will
be a condition to the receipt of such payment or the realization of such benefit
that the participant or such other person make arrangements satisfactory to the
Company for payment of the balance of such taxes required to be withheld, which
arrangements (in the discretion of the Board of Directors) may include
relinquishment of a portion of such benefit.
Termination. No grant will be made under the Plan more than 10 years the
date on which the Plan is first approved by the Company's stockholders, but all
grants made on or prior to such date will continue in effect thereafter subject
to the terms thereof and of the Plan.
Federal Income Tax Consequences
The following is a brief summary of some of the federal income tax
consequences of certain transactions under the Plan based on federal income tax
laws in effect on January 1, 2007. This summary is not intended to be complete
and does not describe state or local tax consequences.
Tax Consequences to Participants
Non-Qualified Option Rights. In general, (1) no income will be recognized
by an optionee at the time a non-qualified option right is granted, (2) at the
time of exercise of a non-qualified option right, ordinary income will be
recognized by the optionee in an amount equal to the difference between the
option price paid for the shares and the fair market value of the shares, if
unrestricted, on the date of exercise, and (3) at the time of sale of shares
acquired pursuant to the exercise of a non-qualified option right, appreciation
(or depreciation) in value of the shares after the date of exercise will be
treated as either short-term or long-term capital gain (or loss) depending on
how long the shares have been held.
Incentive Option Rights. No income generally will be recognized by an
optionee upon the grant or exercise of an ISO. The exercise of an ISO, however,
may result in alternative minimum tax liability. If Common Shares are issued to
the optionee pursuant to the exercise of an ISO, and if no disqualifying
disposition of such shares is made by such optionee within two years after the
date of grant or within one year after the transfer of such shares to the
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optionee, then upon sale of such shares, any amount realized in excess of the
option price will be taxed to the optionee as a long-term capital gain and any
loss sustained will be a long-term capital loss.
If Common Shares acquired upon the exercise of an ISO are disposed of prior
to the expiration of either holding period described above, the optionee
generally will recognize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the fair market value of such shares at the time
of exercise (or, if less, the amount realized on the disposition of such shares
if a sale or exchange) over the option price paid for such shares. Any further
gain (or loss) realized by the participant generally will be taxed as short-term
or long-term capital gain (or loss) depending on the holding period.
Stock Appreciation Rights. No income will be recognized by a participant in
connection with the grant of a tandem SAR or a free-standing SAR. When the SAR
is exercised, the participant normally will be required to include as taxable
ordinary income in the year of exercise an amount equal to the amount of cash
received and the fair market value of any unrestricted Common Shares received on
the exercise.
Restricted Stock. The recipient of restricted stock generally will be
subject to tax at ordinary income rates on the fair market value of the
restricted stock (reduced by any amount paid by the participant for such
restricted stock) at such time as the shares are no longer subject to forfeiture
or restrictions on transfer for purposes of Section 83 of the Internal Revenue
Code ("Restrictions"). However, a recipient who so elects under Section 83(b) of
the Internal Revenue Code within 30 days of the date of transfer of the shares
will have taxable ordinary income on the date of transfer of the shares equal to
the excess of the fair market value of such shares (determined without regard to
the Restrictions) over the purchase price, if any, of such restricted stock. If
a Section 83(b) election has not been made, any dividends received with respect
to restricted stock that is subject to the Restrictions generally will be
treated as compensation that is taxable as ordinary income to the participant.
Restricted Stock Units. No income generally will be recognized upon the
award of restricted stock units. The recipient of a restricted stock unit award
generally will be subject to tax at ordinary income rates on the fair market
value of unrestricted Common Shares on the date that such shares are transferred
to the participant under the award (reduced by any amount paid by the
participant for such restricted stock units), and the capital gains/loss holding
period for such shares will also commence on such date.
Performance Shares and Performance Units. No income generally will be
recognized upon the grant of performance shares or performance units. Upon
payment in respect of the earn-out of performance shares or performance units,
the recipient generally will be required to include as taxable ordinary income
in the year of receipt an amount equal to the amount of cash received and the
fair market value of any unrestricted Common Shares received.
Tax Consequences to the Company or Subsidiary
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company or the subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income meets the test of reasonableness,
is an ordinary and necessary business expense, is not an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code and is
not disallowed by the $1 million limitation on certain executive compensation
under Section 162(m) of the Internal Revenue Code.
Compliance with Section 409A of the Internal Revenue Code
The American Jobs Creation Act of 2004, enacted on October 22, 2004,
revised the federal income tax law applicable to certain types of awards that
may be granted under the Plan. To the extent applicable, it is intended that the
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Plan and any grants made under the Plan comply with the provisions of Section
409A of the Internal Revenue Code. The Plan and any grants made under the Plan
will be administered in a manner consistent with this intent, and any provision
of the Plan that would cause the Plan or any grant made under the Plan to fail
to satisfy Section 409A shall have no force and effect until amended to comply
with Section 409A (which amendment may be retroactive to the extent permitted by
Section 409A and may be made by the Company without the consent of the
participants). Any reference to Section 409A will also include any proposed,
temporary or final regulations, or any other guidance, promulgated with respect
to such Section by the U.S. Department of the Treasury or the Internal Revenue
Service.
New Plan Benefits
It is not possible to determine specific amounts that may be awarded in the
future under the Plan. No awards will be made under the Plan unless the
Transaction or any similar transaction is consummated.
Your Board of Directors recommends a vote FOR the proposal to approve the
Plan.
DISSENTER'S RIGHTS
Under Delaware law, holders of our Common Stock are not entitled to
dissenter's rights of appraisal with respect to the proposed Amendments or the
approval of the Plan.
OTHER INFORMATION
For more detailed information on the Company, you may refer to our periodic
filings made with the SEC from time to time. Copies of these documents are
available on the SEC's EDGAR database at www.sec.gov and copies of which may be
obtained by writing our secretary at the address specified above.
-13-
APPENDIX A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BTHC VI, INC.
BTHC VI, INC., a corporation duly organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify that:
1. The Certificate of Incorporation of the Corporation is hereby amended by
deleting the provisions of "Section 1. Authorization of Shares" thereof and
inserting the following in lieu thereof:
"The total number of shares that the Corporation shall have
authority to issue is 110,000,000 shares, consisting of
100,000,000 shares of common stock, having a par value of
$.001 per share ("Common Stock"), and 10,000,000 shares of
preferred stock, having a par value of $.001 per share
("Preferred Stock").
Upon this Certificate of Amendment of Certificate of
Incorporation becoming effective pursuant to the General
Corporation Law of the State of Delaware (the "Effective
Time"), each share of the corporation's Common Stock, par
value $.001 per share (the "Old Common Stock"), issued and
outstanding immediately prior to the Effective Time will
automatically be reclassified into 1/1.67th of a share of
Common Stock, par value $.001 per share, of the Corporation
(the "New Common Stock"). Each certificate that theretofore
represented shares of Old Common Stock represented by such
certificate shall thereafter represent that number of shares
of New Common Stock into which the shares of Old Common
Stock represented by such certificate shall have been
reclassified; provided, that each person holding of record a
stock certificate or certificates that represented shares of
Old Common Stock shall receive, upon surrender of such
certificate or certificates, a new certificate or
certificates evidencing and representing the number of
shares of New Common Stock to which such person is entitled
under the foregoing reclassification. No fractional shares
of New Common Stock will be issued to any stockholder.
Accordingly, stockholders of record who would otherwise be
entitled to receive fractional shares of New Common Stock
will receive a full share of New Common Stock."
2. The foregoing amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, BTHC VI, Inc. has caused this Certificate to be
executed by Timothy P. Halter, its President, on this day of May, 2007.
BTHC VI, Inc.
By: ____________________________________
Name: Timothy P. Halter
Office: President
APPENDIX B
BTHC VI, INC.
LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of this Long-Term Incentive Plan is to attract and
retain officers, other employees, Directors, consultants and other independent
contractors of BTHC VI, Inc., a Delaware corporation (the "Company"), and its
Subsidiaries and to provide to such persons incentives and rewards for
performance.
2. Definitions. As used in this Plan,
(a) "Appreciation Right" means a right granted pursuant to Section 5 of
this Plan, and will include both Free-Standing Appreciation Rights and
Tandem Appreciation Rights.
(b) "Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of a Free-Standing Appreciation Right or
a Tandem Appreciation Right.
(c) "Board" means the Board of Directors of the Company and, to the extent
of any delegation by the Board to a committee (or subcommittee
thereof) pursuant to Section 10 of this Plan, such committee (or
subcommittee).
(d) "Change in Control" has the meaning set forth in Section 12 of this
Plan.
(e) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(f) "Common Shares" means the shares of common stock, par value $0.001 per
share, of the Company or any security into which such Common Shares
may be changed by reason of any transaction or event of the type
referred to in Section 11 of this Plan.
(g) "Company" means BTHC VI, Inc., a Delaware corporation and its
successors.
(h) "Covered Employee" means a Participant who is, or is determined by the
Board to be likely to become, a "covered employee" within the meaning
of Section 162(m) of the Code (or any successor provision).
(i) "Date of Grant" means the date specified by the Board on which a grant
of Option Rights, Appreciation Rights, Performance Shares, Performance
Units or other awards contemplated by Section 9 of this Plan, or a
grant or sale of Restricted Stock, Restricted Stock Units, or other
awards contemplated by Section 9 of this Plan will become effective
(which date will not be earlier than the date on which the Board takes
action with respect thereto).
(j) "Director" means a member of the Board of Directors of the Company.
(k) "Effective Date" means the date of approval of the Plan by the
Company's stockholders.
(l) "Evidence of Award" means an agreement, certificate, resolution or
other type or form of writing or other evidence approved by the Board
that sets forth the terms and conditions of the awards granted. An
Evidence of Award may be in an electronic medium, may be limited to
notation on the books and records of the Company and, with the
approval of the Board, need not be signed by a representative of the
Company or a Participant.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.
(n) "Free-Standing Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in tandem with
an Option Right.
(o) "Incentive Stock Options" means Option Rights that are intended to
qualify as "incentive stock options" under Section 422 of the Code or
any successor provision.
(p) "Incumbent Directors" means the individuals who, as of the Effective
Date, are Directors of the Company and any individual becoming a
Director subsequent to the Effective Date whose election, nomination
for election by the Company's stockholders, or appointment was
approved by a vote of at least two-thirds of the then Incumbent
Directors (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee
for director, without objection to such nomination), including,
without limitation, after consummation of the proposed transaction
(the "Transaction") contemplated by that certain non-binding letter of
intent, dated as of April 18, 2007, to which the Company is a party;
provided, however, that an individual shall not be an Incumbent
Director if such individual's election or appointment to the Board
occurs as a result of an actual or threatened election contest (as
described in Rule 14a-12(c) of the Exchange Act) with respect to the
election or removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board.
(q) "Management Objectives" means the measurable performance objective or
objectives established pursuant to this Plan for Participants who have
received grants of Performance Shares or Performance Units or, when so
determined by the Board, Option Rights, Appreciation Rights,
Restricted Stock, Restricted Stock Units, dividend credits and other
awards pursuant to this Plan. Management Objectives may be described
in terms of Company-wide objectives or objectives that are related to
the performance of the individual Participant or of a Subsidiary,
division, department or function within the Company or a Subsidiary.
The Board may provide, in connection with the setting of the
Management Objectives, that any evaluation of performance may include
or exclude certain items that may occur during any fiscal year,
including, but not limited to the following: (i) asset write downs;
(ii) litigation or claim judgments or settlements; (iii) the effect of
changes in tax laws, accounting principles, or other laws or
provisions affecting reported results; (iv) any reorganization and
restructuring programs; (v) extraordinary nonrecurring items as
described in Accounting Principles Board Opinion No. 30 and/or in
management's discussion and analysis of financial condition and
2
results of operations appearing in the Company's annual report to
stockholders for the applicable year; (vi) acquisitions or
divestitures; and (vii) foreign exchange gains and losses. To the
extent such inclusions or exclusions affect the awards to Covered
Employees, they shall be prescribed in a form that meets the
requirements of Section 162(m) of the Code for deductibility and the
Management Objectives applicable to any award to a Covered Employee
will be based on specified levels of, or relative peer company
performance in any one or more of the following objectives, or any
combination thereof, as determined by the Board in its sole
discretion:
(i) Adjusted net earnings
(ii) Cash flow (including free cash flow)
(iii) Cost of capital
(iv) Cost reduction
(v) Customer service
(vi) Debt reduction
(vii) Development milestone achievement
(viii) Earnings and earnings growth (including earnings per share
and earnings before taxes and earnings before interest and
taxes)
(ix) Economic value added
(x) Establishment of partnerships and collaborations
(xi) Financing proceeds
(xii) Gross profit
(xiii) Inventory management
(xiv) Market share
(xv) Market value added
(xvi) Net income
(xvii) Operating profit and operating income
(xviii) Partnership milestone achievement
(xix) Productivity improvement
(xx) Profit after taxes
(xxi) Project execution
(xxii) Quality
(xxiii) Recruitment and development of associates
(xxiv) Reduction of fixed costs
(xxv) Return on assets and return on net assets
(xxvi) Return on equity
(xxvii) Return on invested capital
(xxviii) Sales and sales growth
(xxix) Successful start-up of new facility
(xxx) Successful acquisition/divestiture
(xxxi) Total stockholder return and improvement of stockholder
return
(xxxii) Unit volume
(xxxiii) Unit cost
(xxxiv) Pricing
(xxxv) Working capital
3
If the Board determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
it conducts its business, or other events or circumstances render the Management
Objectives unsuitable, the Board may in its discretion modify such Management
Objectives or the related levels of achievement, in whole or in part, as the
Board deems appropriate and equitable, except in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code. In such case, the Board will not
make any modification of the Management Objectives or the level or levels of
achievement with respect to such Covered Employee.
(r) "Market Value per Share" means, as of any particular date, the closing
sales price of the Common Shares or, as determined by the Board, the
average closing sales price of the Common Shares over a period of time,
either before or after any particular date, of one to ten days, as reported
on the Nasdaq Stock Market (including, without limitation, the Nasdaq
Global Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market, as applicable) or, if not listed on such exchange, on any other
national securities exchange on which the Common Shares are listed or, if
not listed on any such other national securities exchange, the NASD OTC
Bulletin Board or any other quotation facility on which the Common Shares
are quoted. If there is no regular trading market for such Common Shares,
the Market Value per Share shall be determined by the Board.
(s) "Non-Employee Director" means a Director who is not an employee of the
Company or any Subsidiary.
(t) "Optionee" means the optionee named in an Evidence of Award evidencing an
outstanding Option Right.
(u) "Option Price" means the purchase price payable on exercise of an Option
Right.
(v) "Option Right" means the right to purchase Common Shares upon exercise of
an option granted pursuant to Section 4 of this Plan.
(w) "Participant" means a person who is selected by the Board to receive
benefits under this Plan and who is at the time an officer or other
employee of the Company or any one or more of its Subsidiaries, or who has
agreed to commence serving in such capacities within 90 days of the Date of
Grant, or who is a consultant or other independent contractor, or a
Non-Employee Director of the Company or a Subsidiary.
(x) "Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 8 of
this Plan within which the Management Objectives relating to such
Performance Share or Performance Unit are to be achieved.
(y) "Performance Share" means a bookkeeping entry that records the equivalent
of one Common Share awarded pursuant to Section 8 of this Plan.
4
(z) "Performance Unit" means a bookkeeping entry awarded pursuant to Section 8
of this Plan that records a unit equivalent to $1.00 or such other value as
is determined by the Board.
(aa) "Plan" means this BTHC VI, Inc. Long-Term Incentive Plan, as may be amended
from time to time.
(bb) "Restricted Stock" means Common Shares granted or sold pursuant to Section
6 of this Plan as to which neither the substantial risk of forfeiture nor
the prohibition on transfers has expired.
(cc) "Restriction Period" means the period of time during which Restricted Stock
Units are subject to restrictions, as provided in Section 7 of this Plan.
(dd) "Restricted Stock Unit" means an award made pursuant to Section 7 of this
Plan of the right to receive Common Shares or cash at the end of a
specified period.
(ee) "Spread" means the excess of the Market Value per Share on the date when an
Appreciation Right is exercised, or on the date when Option Rights are
surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.
(ff) "Subsidiary" means a corporation, company or other entity (i) at least 50
percent of whose outstanding shares or securities (representing the right
to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the
case in a partnership, joint venture or unincorporated association), but at
least 50 percent of whose ownership interest representing the right
generally to make decisions for such other entity is, now or hereafter,
owned or controlled, directly or indirectly, by the Company except that for
purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, "Subsidiary" means any
corporation in which at the time the Company owns or controls, directly or
indirectly, at least 50 percent of the total combined voting power
represented by all classes of stock issued by such corporation.
(gg) "Tandem Appreciation Right" means an Appreciation Right granted pursuant to
Section 5 of this Plan that is granted in tandem with an Option Right.
(hh) "2007 Stock Split" means the approximately 1-for-1.67 reverse stock split
of Common Shares that is expected to occur on or about the Effective Date.
(ii) "Voting Stock" means securities entitled to vote generally in the election
of directors.
3. Shares Available Under the Plan.
(a) Maximum Shares Available Under Plan. Subject to adjustment as provided in
Section 11 of this Plan, the number of Common Shares that may be issued or
transferred (i) upon the exercise of Option Rights or Appreciation Rights,
(ii) in payment of Restricted Stock and released from substantial risks of
5
forfeiture thereof, (iii) as Restricted Stock Units, (iv) in payment of
Performance Shares or Performance Units that have been earned, (v) as
awards contemplated by Section 9 of this Plan, or (vi) in payment of
dividend equivalents paid with respect to awards made under the Plan will
not exceed in the aggregate 3,035,000 Common Shares (after giving effect to
the 2007 Stock Split). Common Shares covered by an award granted under the
Plan shall not be counted as used unless and until they are actually issued
and delivered to a Participant. Without limiting the generality of the
foregoing, the number of Common Shares available under this Plan will be
adjusted to account for shares relating to awards that expire, are
forfeited, terminated or cancelled without the issuance of Common Shares
and to awards settled in cash in lieu of Common Shares. Shares issued under
the Plan may be shares of original issuance or treasury shares or a
combination of the foregoing.
(b) Life of Plan Limits.
(i) Notwithstanding anything in this Section 3, or elsewhere in this Plan,
to the contrary and subject to adjustment as provided in Section 11 of
this Plan, the aggregate number of Common Shares actually issued or
transferred by the Company upon the exercise of Incentive Stock
Options will not exceed 3,035,000 Common Shares (after giving effect
to the 2007 Stock Split).
(ii) Awards will not be granted under Section 9 of the Plan to the extent
they would involve the issuance of more than 3,035,000 shares in the
aggregate (after giving effect to the 2007 Stock Split).
(c) Individual Participant Limits. Notwithstanding anything in this Section 3,
or elsewhere in this Plan to the contrary, and subject to adjustment as
provided in Section 11 of this Plan:
(i) No Participant will be granted Option Rights or Appreciation Rights,
in the aggregate, for more than 750,000 Common Shares during any
calendar year.
(ii) No Participant will be granted Restricted Stock or Restricted Stock
Units that specify Management Objectives, Performance Shares or other
awards under Section 9 of this Plan, in the aggregate, for more than
750,000 Common Shares during any calendar year.
(iii) Notwithstanding any other provision of this Plan to the contrary, in
no event will any Participant in any calendar year receive an award of
Performance Units having an aggregate maximum value as of their
respective Dates of Grant in excess of $3,000,000.
(d) Impact of Election on the Limit. If, under this Plan, a Participant has
elected to give up the right to receive compensation in exchange for Common
Shares based on fair market value, such Common Shares will be counted
against the number of shares available in Section 3(a) above.
6
4. Option Rights. The Board may, from time to time and upon such terms and
conditions as it may determine, authorize the granting to Participants of
options to purchase Common Shares. Each such grant will be subject to all of the
requirements contained in the following provisions:
(a) Each grant will specify the number of Common Shares to which it pertains
subject to the limitations set forth in Section 3 of this Plan.
(b) Each grant will specify an Option Price per share, which may not be less
than the Market Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable (i) in
cash or by check acceptable to the Company or by wire transfer of
immediately available funds, (ii) by the actual or constructive transfer to
the Company of Common Shares owned by the Optionee having a value at the
time of exercise equal to the total Option Price (or other consideration
authorized pursuant to Section 4(d)), (iii) by a combination of such
methods of payment, or (iv) by such other methods as may be approved by the
Board.
(d) The Board may determine, at the Date of Grant, that payment of the Option
Price of any Option Right (other than an Incentive Stock Option) may also
be made in whole or in part in the form of Restricted Shares or other
Common Shares that are forfeitable or subject to restrictions on transfer.
Unless otherwise determined by the Board at the Date of Grant, whenever any
Option Price is paid in whole or in part by means of any of the forms of
consideration specified in this Section 4(d), the Common Shares received
upon the exercise of the Option Rights shall be subject to the same risks
of forfeiture or restrictions on transfer as may correspond to any that
apply to the consideration surrendered; provided, however, that such risks
of forfeiture or restrictions on transfer shall apply only to the same
number of Common Shares received by the Optionee as applied to the
forfeitable or restricted Common Shares surrendered by the Optionee.
(e) To the extent permitted by law, any grant may provide for deferred payment
of the Option Price from the proceeds of sale through a bank or broker on a
date satisfactory to the Company of some or all of the shares to which such
exercise relates.
(f) To the extent permitted by law, any grant may provide for payment of the
Option Price, at the election of the Optionee, in installments, with or
without interest, upon terms determined by the Board.
(g) Successive grants may be made to the same Participant whether or not any
Option Rights previously granted to such Participant remain unexercised.
(h) Each grant will specify the period or periods of continuous service by the
Optionee with the Company or any Subsidiary that is necessary before the
Option Rights or installments thereof will become exercisable. A grant of
Option Rights may provide for the earlier exercise of such Option Rights in
the event of the retirement, death or disability of a Participant or a
Change in Control.
7
(i) Any grant of Option Rights may specify Management Objectives that must be
achieved as a condition to the exercise of such rights.
(j) Option Rights granted under this Plan may be (i) options, including,
without limitation, Incentive Stock Options, that are intended to qualify
under particular provisions of the Code, (ii) options that are not intended
so to qualify, or (iii) combinations of the foregoing. Incentive Stock
Options may only be granted to Participants who meet the definition of
"employees" under Section 3401(c) of the Code.
(k) The exercise of an Option Right will result in the cancellation on a share-
for-share basis of any Tandem Appreciation Right authorized under Section 5
of this Plan.
(l) No Option Right will be exercisable more than 10 years from the Date of
Grant.
(m) The Board may, at the Date of Grant of any Option Rights (other than
Incentive Stock Options), provide for the payment of dividend equivalents
to the Optionee on either a current or deferred or contingent basis or may
provide that such equivalents shall be credited against the Option Price.
(n) Each grant of Option Rights will be evidenced by an Evidence of Award. Each
Evidence of Award shall be subject to this Plan and shall contain such
terms and provisions, consistent with this Plan, as the Board may approve.
5. Appreciation Rights.
(a) The Board may also authorize the granting (i) to any Optionee, of Tandem
Appreciation Rights in respect of Option Rights granted hereunder, and (ii)
to any Participant, of Free-Standing Appreciation Rights. A Tandem
Appreciation Right will be a right of the Optionee, exercisable by
surrender of the related Option Right, to receive from the Company an
amount determined by the Board, which will be expressed as a percentage of
the Spread (not exceeding 100 percent) at the time of exercise. Tandem
Appreciation Rights may be granted at any time prior to the exercise or
termination of the related Option Rights; provided, however, that a Tandem
Appreciation Right awarded in relation to an Incentive Stock Option must be
granted concurrently with such Incentive Stock Option. A Free-Standing
Appreciation Right will be a right of the Participant to receive from the
Company an amount determined by the Board, which will be expressed as a
percentage of the Spread (not exceeding 100 percent) at the time of
exercise.
(b) Each grant of Appreciation Rights will be subject to all of the
requirements contained in the following provisions:
(i) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in cash, in Common
Shares or in any combination thereof and may either grant to the
Participant or retain in the Board the right to elect among those
alternatives.
8
(ii) Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum specified by the Board at
the Date of Grant.
(iii) Any grant may specify waiting periods before exercise and permissible
exercise dates or periods.
(iv) Any grant may specify that such Appreciation Right may be exercised
only in the event of, or earlier in the event of, the retirement,
death or disability of a Participant or a Change in Control.
(v) Any grant of Appreciation Rights may specify Management Objectives
that must be achieved as a condition of the exercise of such
Appreciation Rights.
(vi) To the extent permitted by law, any grant may provide for the payment
to the Participant of dividend equivalents thereon in cash or Common
Shares on a current, deferred or contingent basis.
(vii) Each grant of Appreciation Rights will be evidenced by an Evidence of
Award, which Evidence of Award will describe such Appreciation Rights,
identify the related Option Rights (if applicable), and contain such
other terms and provisions, consistent with this Plan, as the Board
may approve.
(c) Any grant of Tandem Appreciation Rights will provide that such Tandem
Appreciation Rights may be exercised only at a time when the related Option
Right is also exercisable and at a time when the Spread is positive, and by
surrender of the related Option Right for cancellation. Successive grants
of Tandem Appreciation Rights may be made to the same Participant
regardless of whether any Tandem Appreciation Rights previously granted to
the Participant remain unexercised.
(d) Regarding Free-Standing Appreciation Rights only:
(i) Each grant will specify in respect of each Free-Standing Appreciation
Right a Base Price, which may not be less than the Market Value per
Share on the Date of Grant;
(ii) Successive grants may be made to the same Participant regardless of
whether any Free-Standing Appreciation Rights previously granted to
the Participant remain unexercised; and
(iii) No Free-Standing Appreciation Right granted under this Plan may be
exercised more than 10 years from the Date of Grant.
9
6. Restricted Stock. The Board may also authorize the grant or sale of
Restricted Stock to Participants. Each such grant or sale will be subject to all
of the requirements contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to voting, dividend and
other ownership rights, but subject to the substantial risk of forfeiture
and restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional consideration or in
consideration of a payment by such Participant that is less than the Market
Value per Share at the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Stock covered by
such grant or sale that vests upon the passage of time will be subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the
Code for a period to be determined by the Board at the Date of Grant, or
may provide that the Restricted Stock will vest upon the achievement of
Management Objectives (as provided in Section 6(e) below); provided,
however, that if Restricted Stock vests based on the passage of time rather
than the achievement of Management Objectives, the period of time will be
no shorter than three years, except that the restrictions may be removed on
an annual, ratable basis during the three year period.
(d) Each such grant or sale will provide that during the period for which such
substantial risk of forfeiture is to continue, the transferability of the
Restricted Stock will be prohibited or restricted in the manner and to the
extent prescribed by the Board at the Date of Grant (which restrictions may
include, without limitation, rights of repurchase or first refusal in the
Company or provisions subjecting the Restricted Stock to a continuing
substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Stock may specify Management Objectives that, if
achieved, will result in termination or early termination of the
restrictions applicable to such Restricted Stock; provided, however, that
notwithstanding subparagraph (c) above, restrictions relating to Restricted
Stock that vests upon the achievement of Management Objectives may not
terminate sooner than one year from the Date of Grant. Each grant may
specify in respect of such Management Objectives a minimum acceptable level
of achievement and may set forth a formula for determining the number of
shares of Restricted Stock on which restrictions will terminate if
performance is at or above the minimum level, but falls short of maximum
achievement of the specified Management Objectives. The grant of Restricted
Stock will specify that, before the termination or early termination of
restrictions applicable to such Restricted Stock, the Board must determine
that the Management Objectives have been satisfied; provided, however, that
notwithstanding Section 6(c) above, the substantial risk of forfeiture
relating to Restricted Stock that vests upon the achievement of Management
Objections may not terminate sooner than one year from the Date of Grant.
(f) Notwithstanding anything to the contrary contained in this Plan, any grant
or sale of Restricted Stock may provide for the earlier lapse of the
10
substantial risk of forfeiture in the event of the retirement, death or
disability of a Participant or a Change in Control.
(g) Any such grant or sale of Restricted Stock may require that any or all
dividends or other distributions paid thereon during the period of such
restrictions be automatically deferred and reinvested in additional shares
of Restricted Stock, which may be subject to the same restrictions as the
underlying award.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of
Award and will contain such terms and provisions, consistent with this
Plan, as the Board may approve. Unless otherwise directed by the Board, all
certificates representing shares of Restricted Stock will be held in
custody by the Company until all restrictions thereon will have lapsed,
together with a stock power or powers executed by the Participant in whose
name such certificates are registered, endorsed in blank and covering such
Shares.
7. Restricted Stock Units. The Board may also authorize the granting or sale
of Restricted Stock Units to Participants. Each such grant or sale will be
subject to all of the requirements contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company
to deliver Common Shares or cash to the Participant in the future in
consideration of the performance of services, but subject to the
fulfillment of such conditions (which may include the achievement of
Management Objectives) during the Restriction Period as the Board may
specify. If a grant of Restricted Stock Units specifies that the
Restriction Period will terminate upon the achievement of Management
Objectives, then, notwithstanding anything to the contrary contained
in subparagraph (c) below, such Restriction Period may not terminate
sooner than one year from the Date of Grant. Each grant may specify in
respect of such Management Objectives a minimum acceptable level of
achievement and may set forth a formula for determining the number of
shares of Restricted Stock Units on which restrictions will terminate
if performance is at or above the minimum level, but falls short of
maximum achievement of the specified Management Objectives. The grant
of such Restricted Stock Units will specify that, before the
termination or early termination of restrictions applicable to such
Restricted Stock Units, the Board must determine that the Management
Objectives have been satisfied.
(b) Each such grant or sale may be made without additional consideration
or in consideration of a payment by such Participant that is less than
the Market Value per Share at the Date of Grant.
(c) If the Restriction Period lapses only by the passage of time rather
than the achievement of Management Objectives as provided in
subparagraph (a) above. Each such grant or sale will be subject to a
Restriction Period of not less than one year.
(d) Notwithstanding anything to the contrary contained in this Plan, any
grant or sale of Restricted Stock Units may provide for the earlier
lapse or other modification of the Restriction Period in the event of
the retirement, death or disability of a Participant or a Change in
Control.
11
(e) During the Restriction Period, the Participant will have no right to
transfer any rights under his or her award and will have no rights of
ownership in the Restricted Stock Units and will have no right to vote
them, but the Board may at the Date of Grant, authorize the payment of
dividend equivalents on such Restricted Stock Units on either a
current or deferred or contingent basis, either in cash or in
additional Common Shares.
(f) Each grant or sale will specify the time and manner of payment of the
Restricted Stock Units that have been earned. Any grant or sale may
specify that the amount payable with respect thereto may be paid by
the Company in cash, in Common Shares or in any combination thereof
and may either grant to the Participant or retain in the Board the
right to elect among those alternatives.
(g) Each grant or sale of Restricted Stock Units will be evidenced by an
Evidence of Award and will contain such terms and provisions,
consistent with this Plan, as the Board may approve.
8. Performance Shares and Performance Units. The Board may also authorize
the granting of Performance Shares and Performance Units that will become
payable to a Participant upon achievement of specified Management Objectives
during the Performance Period. Each such grant will be subject to all of the
requirements contained in the following provisions:
(a) Each grant will specify the number of Performance Shares or
Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors;
provided, however, that no such adjustment will be made in the case of
a Covered Employee where such action would result in the loss of the
otherwise available exemption of the award under Section 162(m) of the
Code.
(b) The Performance Period with respect to each Performance Share or
Performance Unit will be such period of time (not less than three
years) as will be determined by the Board at the time of grant, which
may be subject to earlier lapse or other modification in the event of
the retirement, death or disability of a Participant or a Change in
Control.
(c) Any grant of Performance Shares or Performance Units will specify
Management Objectives which, if achieved, will result in payment or
early payment of the award, and each grant may specify in respect of
such specified Management Objectives a level or levels of achievement
and will set forth a formula for determining the number of Performance
Shares or Performance Units that will be earned if performance is at
or above the minimum level or levels, but falls short of maximum
achievement of the specified Management Objectives. The grant of
Performance Shares or Performance Units will specify that, before the
Performance Shares or Performance Units will be earned and paid, the
Board must determine that the Management Objectives have been
satisfied.
(d) Each grant will specify the time and manner of payment of Performance
Shares or Performance Units that have been earned. Any grant may
specify that the amount payable with respect thereto may be paid by
the Company in cash, in Common Shares or in any combination thereof
12
and may either grant to the Participant or retain in the Board the
right to elect among those alternatives.
(e) Any grant of Performance Shares may specify that the amount payable
with respect thereto may not exceed a maximum specified by the Board
at the Date of Grant. Any grant of Performance Units may specify that
the amount payable or the number of Common Shares issued with respect
thereto may not exceed maximums specified by the Board at the Date of
Grant.
(f) The Board may at the Date of Grant of Performance Shares, provide for
the payment of dividend equivalents to the holder thereof on either a
current or deferred or contingent basis, either in cash or in
additional Common Shares.
(g) Each grant of Performance Shares or Performance Units will be
evidenced by an Evidence of Award and will contain such other terms
and provisions, consistent with this Plan, as the Board may approve.
9. Other Awards.
(a) The Board may, subject to limitations under applicable law, grant to
any Participant such other awards that may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based on,
or related to, Common Shares or factors that may influence the value
of such shares, including, without limitation, convertible or
exchangeable debt securities, other rights convertible or exchangeable
into Common Shares, purchase rights for Common Shares, awards with
value and payment contingent upon performance of the Company or
specified Subsidiaries, affiliates or other business units thereof or
any other factors designated by the Board, and awards valued by
reference to the book value of Common Shares or the value of
securities of, or the performance of specified Subsidiaries or
affiliates or other business units of the Company. The Board shall
determine the terms and conditions of such awards. Common Shares
delivered pursuant to an award in the nature of a purchase right
granted under this Section 9 shall be purchased for such
consideration, paid for at such time, by such methods, and in such
forms, including, without limitation, cash, Common Shares, other
awards, notes or other property, as the Board shall determine.
(b) Cash awards, as an element of or supplement to any other award granted
under this Plan, may also be granted pursuant to this Section 9 of
this Plan.
(c) The Board may grant Common Shares as a bonus, or may grant other
awards in lieu of obligations of the Company or a Subsidiary to pay
cash or deliver other property under this Plan or under other plans or
compensatory arrangements, subject to such terms as shall be
determined by the Board.
10. Administration of the Plan.
(a) This Plan will be administered by the Board, which may from time to
time delegate all or any part of its authority under this Plan to a
committee of the Board (or a subcommittee thereof) consisting of
non-employee Directors, as constituted from time to time. To the
13
extent of any such delegation, references in this Plan to the Board
will be deemed to be references to such committee or subcommittee.
(b) The interpretation and construction by the Board of any provision of
this Plan or of any agreement, notification or document evidencing the
grant of Option Rights, Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units or other
awards pursuant to Section 9 of this Plan and any determination by the
Board pursuant to any provision of this Plan or of any such agreement,
notification or document will be final and conclusive.
(c) The Board or, to the extent of any delegation as provided in Section
10(a), the committee, may delegate to one or more of its members or to
one or more officers of the Company, or to one or more agents or
advisors, such administrative duties or powers as it may deem
advisable, and the Board, the committee, or any person to whom duties
or powers have been delegated as aforesaid, may employ one or more
persons to render advice with respect to any responsibility the Board,
the committee or such person may have under the Plan. The Board or the
committee may, by resolution, authorize one or more officers of the
Company to do one or both of the following on the same basis as the
Board or the committee: (i) designate employees to be recipients of
awards under this Plan; (ii) determine the size of any such awards;
provided, however, that (A) the Board or the Committee shall not
delegate such responsibilities to any such officer for awards granted
to an employee who is an executive officer or any person subject to
Section 162(m) of the Code; (B) the resolution providing for such
authorization sets forth the total number of Common Shares such
officer(s) may grant; and (iii) the officer(s) shall report
periodically to the Board or the committee, as the case may be,
regarding the nature and scope of the awards granted pursuant to the
authority delegated.
11. Adjustments. The Board shall make or provide for such adjustments in
the numbers of Common Shares authorized under the Plan, subject to limits
contained in Section 3 of the Plan, and covered by outstanding Option Rights,
Appreciation Rights, Restricted Stock Units, Performance Shares and Performance
Units granted hereunder and, if applicable, in the number of Common Shares
covered by other awards granted pursuant to Section 9 hereof, in the Option
Price and Base Price, and in the kind of shares covered thereby, as the Board,
in its sole discretion may determine is equitably required to prevent dilution
or enlargement of the rights of Participants or Optionees that otherwise would
result from (a) any stock dividend, extraordinary dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, or (b) any Change in Control, merger, consolidation, spin-off,
split- off, spin-out, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of rights or warrants to purchase
securities, or (c) any other corporate transaction or event having an effect
similar to any of the foregoing; provided, however, that no further adjustment
shall be made pursuant to this Section 11 after the Effective Date in connection
with the 2007 Stock Split. Moreover, in the event of any such transaction or
event, the Board, in its discretion, may provide in substitution for any or all
outstanding awards under this Plan such alternative consideration (including
cash), if any, as it may determine to be equitable in the circumstances and may
require in connection therewith the surrender of all awards so replaced. The
Board shall also make or provide for such adjustments in the numbers of shares
specified in Section 3 of this Plan as the Board in its sole discretion,
exercised in good faith, may determine is appropriate to reflect any transaction
or event described in this Section 11; provided, however, that any such
14
adjustment to the number specified in Section 3(b) will be made only if and to
the extent that (i) such adjustment would not cause any option intended to
qualify as an Incentive Stock Option to fail so to qualify and (ii) such
adjustment would not result in negative tax consequences under Section 409A of
the Code. Without limiting the generality of the foregoing, in the event that
the Company issues warrants or other rights to acquire Common Shares on a pro
rata basis to all stockholders, the Board shall make such adjustments in the
number of Common Shares authorized under the Plan and in the limits contained
herein as it may deem to be equitable, including, without limitation,
proportionately increasing the number of authorized Common Shares or any such
limit.
12. Change in Control. For purposes of this Plan, except as may be
otherwise prescribed by the Board in an Evidence of Award made under this Plan,
a "Change in Control" shall be deemed to have occurred upon the occurrence of
any of the following events:
(a) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") is or becomes
the beneficial owner (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of the combined voting power of
the then-outstanding Voting Stock of the Company; provided, however,
that:
(i) for purposes of this Section 12(a), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition of
Voting Stock of the Company directly from the Company that is
approved by a majority of the Incumbent Directors, (B) any
acquisition of Voting Stock of the Company by the Company or any
Subsidiary, (C) any acquisition of Voting Stock of the Company by
the trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any Subsidiary, and (D) any acquisition of
Voting Stock of the Company by any Person pursuant to a Business
Transaction that complies with clauses (i), (ii) and (iii) of
Section 12(c) below;
(ii) a Change in Control will not be deemed to have occurred if a
Person is or becomes the beneficial owner of 50% or more of the
Voting Stock of the Company as a result of a reduction in the
number of shares of Voting Stock of the Company outstanding
pursuant to a transaction or series of transactions that is
approved by a majority of the Incumbent Directors unless and
until such Person thereafter becomes the beneficial owner of any
additional shares of Voting Stock of the Company representing 1%
or more of the then-outstanding Voting Stock of the Company,
other than as a result of a stock dividend, stock split or
similar transaction effected by the Company in which all holders
of Voting Stock are treated equally;
(iii) if at least a majority of the Incumbent Directors determine in
good faith that a Person has acquired beneficial ownership of 50%
or more of the Voting Stock of the Company inadvertently, and
such Person divests as promptly as practicable but no later than
the date, if any, set by the Incumbent Board a sufficient number
of shares so that such Person beneficially owns less than 50% of
the Voting Stock of the Company, then no Change in Control shall
15
have occurred as a result of such Person's acquisition;
(iv) the consummation of the Transaction shall not constitute a Change
in Control; or
(b) a majority of the Board ceases to be comprised of Incumbent Directors;
or
(c) the consummation of a reorganization, merger or consolidation, or sale
or other disposition of all or substantially all of the assets of the
Company or the acquisition of the stock or assets of another
corporation, or other transaction (each, a "Business Transaction"),
unless, in each case, immediately following such Business Transaction
(i) the Voting Stock of the Company outstanding immediately prior to
such Business Transaction continues to represent (either by remaining
outstanding or by being converted into Voting Stock of the surviving
entity or any parent thereof), more than 60% of the combined voting
power of the then outstanding shares of Voting Stock of the entity
resulting from such Business Transaction (including, without
limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries), (ii) no Person (other
than the Company, such entity resulting from such Business
Transaction, or any employee benefit plan (or related trust) sponsored
or maintained by the Company, any Subsidiary or such entity resulting
from such Business Transaction) beneficially owns, directly or
indirectly, 50% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such
Business Transaction, and (iii) at least a majority of the members of
the Board of Directors of the entity resulting from such Business
Transaction were Incumbent Directors at the time of the execution of
the initial agreement or of the action of the Board providing for such
Business Transaction; or
(d) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company, except pursuant to a Business
Transaction that complies with clauses (i), (ii) and (iii) of Section
12(c).
13. Non U.S. Participants. In order to facilitate the making of any grant
or combination of grants under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals or who are employed
by the Company or any Subsidiary outside of the United States of America or who
provide services to the Company under an agreement with a foreign nation or
agency, as the Board may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Board may approve
such supplements to or amendments, restatements or alternative versions of this
Plan (including, without limitation, sub-plans) as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of this Plan
as in effect for any other purpose, and the Secretary or other appropriate
officer of the Company may certify any such document as having been approved and
adopted in the same manner as this Plan. No such special terms, supplements,
amendments or restatements, however, will include any provisions that are
inconsistent with the terms of this Plan as then in effect unless this Plan
could have been amended to eliminate such inconsistency without further approval
by the stockholders of the Company.
16
14. Transferability.
(a) Except as otherwise determined by the Board, no Option Right,
Appreciation Right or other derivative security granted under the Plan
shall be transferable by the Participant except by will or the laws of
descent and distribution. Except as otherwise determined by the Board,
Option Rights and Appreciation Rights will be exercisable during the
Participant's lifetime only by him or her or, in the event of the
Participant's legal incapacity to do so, by his or her guardian or
legal representative acting on behalf of the Participant in a
fiduciary capacity under state law and/or court supervision.
(b) The Board may specify at the Date of Grant that part or all of the
Common Shares that are (i) to be issued or transferred by the Company
upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Restriction Period applicable to Restricted Stock
Units or upon payment under any grant of Performance Shares or
Performance Units or (ii) no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 6 of
this Plan, will be subject to further restrictions on transfer.
15. Withholding Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld,
which arrangements (in the discretion of the Board) may include relinquishment
of a portion of such benefit. If a Participant's benefit is to be received in
the form of Common Shares, and such Participant fails to make arrangements for
the payment of tax, the Company shall withhold such Common Shares having a value
equal to the amount required to be withheld. Notwithstanding the foregoing, when
a Participant is required to pay the Company an amount required to be withheld
under applicable income and employment tax laws, the Participant may elect to
satisfy the obligation, in whole or in part, by electing to have withheld, from
the shares required to be delivered to the Participant, Common Shares having a
value equal to the amount required to be withheld (except in the case of
Restricted Stock where an election under Section 83(b) of the Code has been
made), or by delivering to the Company other Common Shares held by such
Participant. The shares used for tax withholding will be valued at an amount
equal to the Market Value per Share of such Common Shares on the date the
benefit is to be included in Participant's income. In no event shall the Market
Value per Share of the Common Shares to be withheld and/or delivered pursuant to
this Section to satisfy applicable withholding taxes in connection with the
benefit exceed the minimum amount of taxes required to be withheld. Participants
shall also make such arrangements as the Company may require for the payment of
any withholding tax obligation that may arise in connection with the disposition
of Common Shares acquired upon the exercise of Option Rights.
16. Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants
made hereunder comply with the provisions of Section 409A of the Code.
This Plan and any grants made hereunder shall be administrated in a
manner consistent with this intent, and any provision that would cause
17
this Plan or any grant made hereunder to fail to satisfy Section 409A
of the Code shall have no force and effect until amended to comply
with Section 409A of the Code (which amendment may be retroactive to
the extent permitted by Section 409A of the Code and may be made by
the Company without the consent of Participants). Any reference in
this Plan to Section 409A of the Code will also include any proposed,
temporary or final regulations, or any other guidance, promulgated
with respect to such Section by the U.S. Department of the Treasury or
the Internal Revenue Service.
(b) In order to determine for purposes of Section 409A of the Code whether
a Participant is employed by a member of the Company's controlled
group of corporations under Section 414(b) of the Code (or by a member
of a group of trades or businesses under common control with the
Company under Section 414(c) of the Code) and, therefore, whether the
Common Shares that are or have been purchased by or awarded under this
Plan to the Participant are shares of "service recipient" stock within
the meaning of Section 409A of the Code:
(i) In applying Code Section 1563(a)(1), (2) and (3) for purposes of
determining the Company's controlled group under Section 414(b)
of the Code, the language "at least 50 percent" is to be used
instead of "at least 80 percent" each place it appears in Code
Section 1563(a)(1), (2) and (3), and
(ii) In applying Treasury Regulation Section 1.414(c)-2 for purposes
of determining trades or businesses under common control with the
Company for purposes of Section 414(c) of the Code, the language
"at least 50 percent" is to be used instead of "at least 80
percent" each place it appears in Treasury Regulation Section
1.414(c)-2.
17. Amendments.
(a) The Board may at any time and from time to time amend this Plan in
whole or in part; provided, however, that if an amendment to this Plan
(i) would materially increase the benefits accruing to participants
under this Plan, (ii) would materially increase the number of
securities which may be issued under this Plan, (iii) would materially
modify the requirements for participation in this Plan or (iv) must
otherwise be approved by the stockholders of the Company in order to
comply with applicable legal requirements or the requirements of the
principal national securities exchange upon which the Common Shares
are traded or quoted, then, such amendment will be subject to
stockholder approval and will not be effective unless and until such
approval has been obtained.
(b) The Board will not, without the further approval of the stockholders
of the Company, authorize the amendment of any outstanding Option
Right to reduce the Option Price. Furthermore, no Option Right will be
cancelled and replaced with awards having a lower Option Price without
further approval of the stockholders of the Company. This Section
17(b) is intended to prohibit the repricing of "underwater" Option
Rights and will not be construed to prohibit the adjustments provided
for in Section 11 of this Plan.
18
(c) If permitted by Section 409A of the Code, in case of termination of
employment by reason of death, disability or normal or early
retirement, or in the case of unforeseeable emergency or other special
circumstances, of a Participant who holds an Option Right or
Appreciation Right not immediately exercisable in full, or any shares
of Restricted Stock as to which the substantial risk of forfeiture or
the prohibition or restriction on transfer has not lapsed, or any
Restricted Stock Units as to which the Restriction Period has not been
completed, or any Performance Shares or Performance Units which have
not been fully earned, or any other awards made pursuant to Section 9
subject to any vesting schedule or transfer restriction, or who holds
Common Shares subject to any transfer restriction imposed pursuant to
Section 14(b) of this Plan, the Board may, in its sole discretion,
accelerate the time at which such Option Right, Appreciation Right or
other award may be exercised or the time at which such substantial
risk of forfeiture or prohibition or restriction on transfer will
lapse or the time when such Restriction Period will end or the time at
which such Performance Shares or Performance Units will be deemed to
have been fully earned or the time when such transfer restriction will
terminate or may waive any other limitation or requirement under any
such award.
(d) Subject to Section 17(b) hereof, the Board may amend the terms of any
award theretofore granted under this Plan prospectively or
retroactively, except in the case of a Covered Employee where such
action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code. In such case, the Board
will not make any modification of the Management Objectives or the
level or levels of achievement with respect to such Covered Employee.
Subject to Section 11 above, no such amendment shall impair the rights
of any Participant without his or her consent. The Board may, in its
discretion, terminate this Plan at any time. Termination of this Plan
will not affect the rights of Participants or their successors under
any awards outstanding hereunder and not exercised in full on the date
of termination.
18. Governing Law. The Plan and all grants and awards and actions taken
thereunder shall be governed by and construed in accordance with the internal
substantive laws of the State of Delaware.
19. Effective Date/Termination. This Plan will be effective as of the
Effective Date. No grant will be made under this Plan more than 10 years after
the Effective Date, but all grants made on or prior to such date will continue
in effect thereafter subject to the terms thereof and of this Plan.
20. Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional Common Shares
pursuant to this Plan. The Board may provide for the elimination of
fractions or for the settlement of fractions in cash.
(b) This Plan will not confer upon any Participant any right with respect
to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the
Company or any Subsidiary would otherwise have to terminate such
Participant's employment or other service at any time.
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(c) To the extent that any provision of this Plan would prevent any Option
Right that was intended to qualify as an Incentive Stock Option from
qualifying as such, that provision will be null and void with respect
to such Option Right. Such provision, however, will remain in effect
for other Option Rights and there will be no further effect on any
provision of this Plan.
(d) Any Evidence of Award may provide, in the event that the Participant
engages in any activity that is detrimental to the Company (as such
activity may be defined in any Evidence of Award): (i) for the
forfeiture of any award granted under the Plan, (ii) that the
Participant return to the Company any Common Shares that the
Participant has not disposed of that were offered pursuant to the
Plan, and/or (iii) that the Participant pay to the Company in cash the
difference between any amount actually paid by a Participant for any
Common Shares received under the Plan that the Participant has
disposed of and the Market Value per Share of the Common Shares on the
date the Participant acquired the Common Shares under the Plan.
(e) No award under this Plan may be exercised by the holder thereof if
such exercise, and the receipt of cash or stock thereunder, would be,
in the opinion of counsel selected by the Board, contrary to law or
the regulations of any duly constituted authority having jurisdiction
over this Plan.
(f) Absence on leave approved by a duly constituted officer of the Company
or any of its Subsidiaries shall not be considered interruption or
termination of service of any employee for any purposes of this Plan
or awards granted hereunder, except that no awards may be granted to
an employee while he or she is absent on leave.
(g) No Participant shall have any rights as a stockholder with respect to
any shares subject to awards granted to him or her under this Plan
prior to the date as of which he or she is actually recorded as the
holder of such shares upon the stock records of the Company.
(h) The Board may condition the grant of any award or combination of
awards authorized under this Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.
(i) Participants shall provide the Company with a written election form
setting forth the name and contact information of the person who will
have beneficial ownership rights upon the death of the Participant.
(j) If any provision of this Plan is or becomes invalid, illegal or
unenforceable in any jurisdiction, or would disqualify this Plan or
any award under any law deemed applicable by the Board, such provision
shall be construed or deemed amended or limited in scope to conform to
applicable laws or, in the discretion of the Board, it shall be
stricken and the remainder of this Plan shall remain in full force and
effect.
Approved by Stockholders - May __, 2007
Adopted by the Board - May __, 2007
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