|
1.
|
To
elect as directors the three persons named in the Company’s proxy
statement for the meeting, each to hold office for a term of three
years.
|
|
2.
|
To
approve an amendment of the Company’s 1996 Equity Incentive Plan
increasing the number of shares authorized for
issuance.
|
|
3.
|
To
ratify the selection of Caturano and Company, P.C. as the Company’s
independent registered public accounting firm for the fiscal year ending
September 30, 2010.
|
|
4.
|
To
transact such other business as may properly come before the
meeting.
|
|
Name
and Address
Of Beneficial Owner
|
Amount
Beneficially
Owned (1)
|
Percent
of Class
|
|
Mario
J. Gabelli/GGCP, Inc./GAMCO Investors, Inc.
One Corporate
Center
Rye, NY
10580-1435
|
701,527(2)
|
21.1%
|
|
Dr.
Marvin G. Schorr
330 Beacon Street
Boston, MA 02116
|
364,278
|
11.0%
|
|
Name
and Address
Of Beneficial Owner
|
Amount
Beneficially
Owned (1)
|
Percent
of Class
|
|
Bernard
F. Start
Water Ridge, Front Street,
Corbridge,
Northumberland, NE46
2JY,
United Kingdom
|
242,477
|
7.3%
|
|
Wells
Fargo & Company
Wachovia
Securities LLC (3)
420
Montgomery Street
San
Francisco, CA
|
222,448
|
6.7%
|
|
Paul
D. Sonkin/Hummingbird Management LLC/Hummingbird Capital, LLC
(4)
460 Park Avenue, 12th
Floor
New York, New York
10022
|
211,925
|
6.4%
|
|
Matthew
Boyle
Tech/Ops Sevcon,
Inc.
155 Northboro Road
Southborough, MA
01772
|
77,400(5)
|
2.3%
|
|
Paul
N. Farquhar
Tech/Ops Sevcon,
Inc.
155 Northboro Road
Southborough, MA
01772
|
27,000
|
(#)
|
|
All
current executive officers and
directors as a group (8
persons)
|
850,635(5)
|
25.3%
|
|
(#)
|
Less
than 1%
|
|
(1)
|
Unless
otherwise indicated, each owner has sole voting and investment power with
respect to the shares listed or shares that power with his
spouse.
|
|
(2)
|
As
reported on Schedule 13D/A filed with the Securities and Exchange
Commission (“SEC”) on July 27, 2009, each of Mr. Gabelli, GGCP, Inc. and
GAMCO Investors, Inc. is the beneficial owner of the shares shown, which
are held in investment advisory accounts of various subsidiaries of GGCP,
Inc. and GAMCO Investors, Inc. As reported in that Schedule 13D/A, GAMCO
Asset Management, Inc., a subsidiary of GAMCO Investors, Inc., has sole
voting and investment power with respect to 435,519 of such shares (13.1%
of the class) and Gabelli Funds, LLC, a subsidiary of GAMCO Investors,
Inc., has sole voting and investment power with respect to 200,006 of such
shares (6.0% of the class). Teton Advisors, Inc., which is controlled by
Mr. Gabelli and GGCP, Inc., has sole voting and investment power with
respect to 66,002 of such shares (2.0% of the class).
|
|
(3)
|
As
reported on Schedule 13G/A filed with the SEC on January 27, 2009, the
shares shown are held by Wachovia Securities LLC, an investment adviser
subsidiary of Wells Fargo & Company.
|
|
(4)
|
As
reported on Schedule 13D/A filed with the SEC on May 7, 2007, Mr. Sonkin
is the managing member and control person of Hummingbird Management, LLC
and of Hummingbird Capital, LLC, which are the investment manager and
general partner, respectively, of two investment funds that hold the
shares shown. Hummingbird Management, LLC and Hummingbird Capital, LLC
each disclaims beneficial ownership of such shares.
|
|
(5)
|
Includes the following shares subject to
stock options exercisable within sixty days: Mr. Boyle (26,000), all
current executive officers and directors as a group
(29,000).
|
|
Name
|
Term
Expires
|
Business
Experience
During
Past
Five
Years
and
Other Directorships
|
Has
Been
a
Director
of
the
Company
or
its
Predecessor,
Tech/Ops,
Inc.,
Since
|
No.
of
Common
Shares
of
the
Company
Beneficially
Owned
and
Percent
of
Class (†)
|
|
Matthew
Boyle (3)
Age
– 47
|
2011
|
President
and Chief Executive Officer of the Company since November 1997. Vice
President and Chief Operating Officer of the Company from November 1996 to
November 1997.
|
1997
|
77,400
(2.3%)(1)
|
|
*Maarten
D. Hemsley (4)(5)
Age
– 60
|
2010
|
Former
Chief Financial Officer and currently a director of Sterling Construction
Company, Inc., a NASDAQ listed company involved in civil construction in
Texas and Nevada. Senior fund manager at North Atlantic Value LLP, part of
the J. O. Hambro Capital Management Group, London, England, since 2001.
President of Bryanston Management Ltd., a specialized financial services
company, since 1993. Director of a number of UK privately-held
companies.
|
2003
|
13,000
(#)(2)
|
|
Paul
B. Rosenberg (4)(6)
Age
– 77
|
2012
|
Former
Treasurer of the Company.
|
1988
|
94,480
(2.8%)
|
|
*Dr.
Marvin G. Schorr (3)(5)(6)
Age
– 84
|
2010
|
Chairman
of the Company’s Board of Directors from January 1988 until January 2005.
Prior to that, Chairman of the Board of Directors and President of
Tech/Ops, Inc., the Company’s predecessor. Also a director emeritus of
Brooks Automation, Inc.
|
1951
|
364,278
(11.0%)
|
|
Name
|
Term
Expires
|
Business
Experience
During
Past
Five
Years
and
Other Directorships
|
Has
Been
a
Director
of
the
Company
or
its
Predecessor,
Tech/Ops,
Inc.,
Since
|
No.
of
Common
Shares
of
the Company
Beneficially
Owned
and
Percent
of
Class (†)
|
|
Bernard
F. Start
Age
– 71
|
2012
|
Vice-Chairman
of the Board since November 1997. President and Chief Executive Officer of
the Company from January 1988 to November 1997.
|
1988
|
242,477
(7.3%)
|
|
*David
R. A. Steadman (3)(4)(6)
Age
– 72
|
2010
|
Chairman
of the Company’s Board of Directors since January 2005. President of
Atlantic Management Associates, Inc., a management services firm, since
1988. Director of Aavid Thermal Technologies, Inc., a director of Sterling
Construction Company, Inc. and a director of several privately held
companies.
|
1997
|
22,000
(#)
|
|
Paul
O. Stump (4)(5)
Age
– 57
|
2011
|
President
and Chief Executive Officer of Telequip Corporation, a manufacturer of
coin dispensing equipment, from 1997 to 2007. Currently Vice President of
Engineering of Telequip Corporation.
|
2005
|
10,000
(#)
|
|
†
|
Unless
otherwise indicated, each person has sole voting and investment power with
respect to the shares listed or shares that power with his
spouse.
|
|
(#)
|
Less
than 1%
|
|
(1)
|
Includes
26,000 shares subject to stock options exercisable within sixty
days.
|
|
(2)
|
Includes
3,000 shares subject to stock options exercisable within sixty
days.
|
|
(3)
|
Member
of the Executive Committee.
|
|
(4)
|
Member
of the Audit Committee.
|
|
(5)
|
Member
of the Compensation Committee.
|
|
(6)
|
Member
of the Nominating and Governance Committee.
|
|
PROPOSAL
2:
|
APPROVAL
OF AN AMENDMENT OF THE 1996 EQUITY INCENTIVE PLAN INCREASING THE NUMBER OF
SHARES AUTHORIZED FOR ISSUANCE
|
|
Plan
Category
|
Number
of
securities
to
be
issued
upon
exercise
of
outstanding
options
warrants
and
rights
|
Weighted-
average
exercise
price
of
outstanding
options,
warrants
and rights
|
Number
of
securities
remaining
available
for
future
issuance
under
equity
compensation
plans
(excluding
securities
reflected
in
column
(a)) at
end
of year
|
|
(a)
|
(b)
|
(c)
|
|
|
Equity
compensation plans approved by security holders:
1996 Equity Incentive
Plan
1998 Directors Stock Option
Plan
|
58,500
5,000
|
$7.17
$5.40
|
54,500
-
|
|
Sub Total
|
63,500
|
$7.03
|
54,500
|
|
Equity
compensation plans not approved by security holders
|
-
|
-
|
-
|
|
Total
|
63,500
|
$7.03
|
54,500
|
|
(in
thousands)
|
||||||||
|
2009
|
2008
|
|||||||
|
Audit
fees
|
$ | 168 | $ | 173 | ||||
|
Audit-related
fees
|
5 | 6 | ||||||
|
Tax
fees
|
25 | 29 | ||||||
|
All
other fees
|
24 | 10 | ||||||
|
Total
|
$ | 222 | $ | 218 | ||||
|
a)
|
be
able to dedicate time and resources sufficient for the diligent
performance of the duties required of a member of the Board,
|
|
b)
|
not
hold positions or interests that conflict with their responsibilities to
the Company,
|
|
c)
|
comply
with any other minimum qualifications for either individual directors or
the Board as a whole mandated by applicable laws or
regulations.
|
|
Name
|
Fees
Earned or Paid in
Cash
($)
|
Stock
Awards
($)(1)(2)
|
Option
Awards
($)(1)(2)
|
Total($)
|
|
Maarten
D. Hemsley
|
20,125
|
7,507
|
1,382
|
29,014
|
|
Paul
B. Rosenberg(3)
|
20,125
|
7,507
|
-
|
27,632
|
|
Marvin
G. Schorr
|
20,125
|
7,507
|
-
|
27,632
|
|
Bernard
F. Start
|
17,250
|
7,507
|
-
|
24,757
|
|
David
R.A. Steadman
|
20,125
|
7,507
|
-
|
27,632
|
|
Paul
O. Stump
|
17,250
|
7,507
|
-
|
24,757
|
|
(1)
|
Represents
the compensation expense incurred by the Company relating to restricted
stock awards and stock options held by the director during fiscal 2009,
determined in accordance with FASB authoritative guidance in respect of
accounting for stock based compensation using
the methodology described in Note (1) E to the Company’s Financial
Statements included in the fiscal 2009 Form 10-K, which assumed that there
would be no forfeitures of restricted stock awards. For options, the
amount shown above assumes no forfeitures.
|
|
(2)
|
As
of September 30, 2009, the non-employee directors held restricted stock
and options as follows:
|
|
Restricted
Stock
|
Outstanding
Options
|
||
|
Name
|
#
Shares
|
#
Shares
|
#
Shares Vested
|
|
Maarten
D. Hemsley
|
2,000
|
5,000
|
3,000
|
|
Paul
B. Rosenberg
|
2,000
|
-
|
-
|
|
Marvin
G. Schorr
|
2,000
|
-
|
-
|
|
Bernard
F. Start
|
2,000
|
-
|
-
|
|
David
R.A. Steadman
|
2,000
|
-
|
-
|
|
Paul
O. Stump
|
2,000
|
-
|
-
|
|
(3)
|
Mr.
Rosenberg is a participant in the Company’s Directors Retirement Plan,
which was terminated in 1997. The change in value of his accumulated
benefit under the Plan in 2009 was
$2,341.
|
|
Name
and Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(2)
|
All
Other
Compensation
($)(1)
|
Total
($)
|
||||||||||||||||||
|
Matthew
Boyle
President
and Chief Executive Officer
|
2009
|
$ | 216,062 | $ | - | $ | 34,315 | $ | 9,800 | $ | 9,577 | $ | 269,754 | ||||||||||||
|
2008
|
$ | 290,172 | $ | - | $ | 33,525 | $ | 11,954 | $ | 12,434 | $ | 348,085 | |||||||||||||
|
Paul
N. Farquhar
Vice
President and Chief Financial Officer
|
2009
|
$ | 136,637 | $ | - | $ | 26,149 | $ | - | $ | 4,999 | $ | 167,785 | ||||||||||||
|
2008
|
$ | 183,017 | $ | - | $ | 23,899 | $ | - | $ | 6,519 | $ | 213,435 | |||||||||||||
|
(1)
|
Messrs.
Boyle and Farquhar are residents of the United Kingdom and receive their
cash compensation in British Pounds. The amounts shown in the table were
determined using the exchange rates (ranging from $1.37 to $1.65 per Pound during
fiscal 2009) in force on the respective payment dates. In April 2009, to
preserve cash and lower the costs of the business, the executive officers,
in line with the rest of the Company workforce, implemented a 10% salary
sacrifice. This sacrifice was still in place at the end of the fiscal year
although the Company restored salaries to previous levels in
December 2009. The following table sets out their cash compensation as
actually paid in British Pounds
(£):
|
|
Year
|
Salary
(£)(1)
|
Bonus
(£)(1)
|
All
Other
Compensation
(£)
|
||||||||||
|
Mr.
Boyle
|
2009
|
£ | 141,550 | £ | - | £ | 6,954 | ||||||
|
2008
|
£ | 147,450 | £ | - | £ | 6,879 | |||||||
|
Mr.
Farquhar
|
2009
|
£ | 89,505 | £ | - | £ | 3,625 | ||||||
|
2008
|
£ | 93,000 | £ | - | £ | 3,592 | |||||||
|
(2)
|
The
amounts shown in these columns do not reflect compensation actually
received by the executive officer. Instead, they represent the
compensation expense incurred by the Company relating to restricted stock
awards and stock options, respectively, held by the officer during fiscal
2009. These amounts are determined in accordance with FASB authoritative
guidance in respect of accounting for stock based compensation using the
assumptions described in Note (1) E to the Company’s financial statements
included in the fiscal 2009 Form 10-K, except that no forfeitures of
awards have been assumed.
|
|
|
Outstanding
Equity Awards at Fiscal 2009
Year-End
|
|
Option
Awards
|
Stock
Awards
|
|||||
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
that
Have
Not
Vested
(#)
|
Market
Value of
Shares
that
Have
Not Vested
($)(†)
|
|
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
Matthew
Boyle
|
10,000
7,000
8,000
|
-
3,000
(1)
8,000
(2)
|
$10.63
$9.60
$4.37
|
Nov
1, 2009
Nov
6, 2011
Apr
30, 2013
|
3,000
(3)
6,000
(4)
15,000
(5)
|
$9,840
$19,680
$49,200
|
|
Paul
N. Farquhar
Paul
N. Farquhar
|
12,000
(6)
10,000
(7)
|
$39,360
$32,800
|
||||
|
(†)
|
Based
on the closing sale price ($3.28) of the Common Stock on September 30,
2009, the last trading day of the fiscal year.
|
|
(1)
|
The
shares subject to this option vest at 1,000 shares per year, beginning on
November 6, 2009.
|
|
(2)
|
The
shares subject to this option vest at 2,000 shares per year, beginning on
April 30, 2010.
|
|
(3)
|
These
shares of restricted stock vest on the earlier of November 21, 2009, or
the third business day after the Company publicly announces its financial
results for fiscal 2009.
|
|
(4)
|
These
shares of restricted stock vest as to 3,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2009 and the earlier of December 5, 2010, or the third business
day after the Company publicly announces its financial results for fiscal
2010.
|
|
(5)
|
These
shares of restricted stock vest as to 3,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2009, 2010, 2011, 2012, and the earlier of January 26, 2014, or
the third business day after the Company publicly announces its financial
results for fiscal 2013.
|
|
(6)
|
These
shares of restricted stock vest as to 3,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2009, 2010, 2011, and the earlier of December 3, 2012, or the
third business day after the Company publicly announces its financial
results for fiscal 2012.
|
|
(7)
|
These
shares of restricted stock vest as to 2,000 shares per year on the third
business day after the Company publicly announces its financial results
for fiscal 2009, 2010, 2011, 2012, and the earlier of January 26, 2014, or
the third business day after the Company publicly announces its financial
results for fiscal 2013.
|
|
|
Pension
Benefits
|
|
|
TECH/OPS SEVCON,
INC.
Annual Meeting of Stockholders
January 26, 2010 5:00 PM
|
|
|
(a)
|
Amount. Subject
to adjustment under subsection (b), Awards may be made under the Plan
for up to 250,000 shares of Common Stock, together with all shares of
Common Stock available for issue under the 1987 Plan on January 31,
1996, and all shares of stock available for issuance under the Directors’
Plan as of January 27, 2004. If any Award (including any
grant under the 1987 Plan or the Directors’ Plan) expires or is terminated
unexercised or is forfeited or settled in a manner that results in fewer
shares outstanding than were awarded, the shares subject to such Award, to
the extent of such expiration, termination, forfeiture or decrease, shall
again be available for award under the Plan. Common Stock
issued through the assumption or substitution of outstanding grants from
an acquired company shall not reduce the shares available for Awards under
the Plan. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury
shares.
|
|
|
(b)
|
Adjustment. In
the event that the Committee determines that any stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, or
other transaction affects the Common Stock such that an adjustment is
required in order to preserve the benefits intended to be provided by the
Plan, then the Committee (subject in the case of Incentive Stock Options
to any limitation required under the Code) shall equitably adjust any or
all of (i) the number and kind of shares in respect of which Awards
may be made under the Plan, (ii) the number and kind of shares
subject to outstanding Awards, and (iii) the exercise price with
respect to any of the foregoing, and if considered appropriate, the
Committee may make provision for a cash payment with respect to an
outstanding Award, provided that the number of shares subject to any Award
shall always be a whole number.
|
|
|
(c)
|
Limit on Individual
Grants. The maximum number of shares of Common Stock
subject to all Awards that may be granted under this Plan to any
Participant in the aggregate in any calendar year shall not exceed 60,000
shares, subject to adjustment under
subsection (b).
|
|
|
(a)
|
Grant of
Options. Subject to the provisions of the Plan, the
Committee may grant options (“Options”) to purchase shares of Common Stock
(i) complying with the requirements of Section 422 of the Code
or any successor provision and any regulations thereunder (“Incentive
Stock Options”) and (ii) not intended to comply with such
requirements (“Nonstatutory Stock Options”). The Committee
shall determine the number of shares subject to each Option and the
exercise price therefor, which shall not be less than 100% of the Fair
Market Value of the Common Stock on the date of grant. No
Incentive Stock Option may be granted hereunder more than ten years after
the effective date of the Plan.
|
|
|
(b)
|
Terms and
Conditions. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Committee may
specify in the applicable grant or thereafter; provided that no Option
shall be exercisable after the expiration of ten years from the date the
Option is granted. The Committee may impose such conditions
with respect to the exercise of Options, including conditions relating to
applicable securities laws, as it considers necessary or
advisable.
|
|
|
(c)
|
Payment. No
shares shall be delivered pursuant to any exercise of an Option until
payment in full of the exercise price therefor is received by the
Company. Such payment may be made in whole or in part in cash
or through a so-called “cashless” or “broker-assisted”
exercise. To the extent permitted by the Committee at or after
the grant of the Option, such payment may also be made by delivery of a
note (subject to the limitations of Section 9(g)) or shares of Common
Stock owned by the optionee, including vested Restricted Stock, or by
retaining shares otherwise issuable pursuant to the Option, in each case
valued at their Fair Market Value on the date of delivery or retention, or
such other lawful consideration as the Committee may
determine.
|
|
|
(a)
|
Grant of
SARs. Subject to the provisions of the Plan, the
Committee may grant rights to receive any excess in value of shares of
Common Stock over the exercise price (“Stock Appreciation Rights” or
“SARs”) in tandem with an Option (at or after the award of the Option), or
alone and unrelated to an Option. SARs in tandem with an Option
shall terminate to the extent that the related Option is exercised, and
the related Option shall terminate to the extent that the tandem SARs are
exercised. The Committee shall determine at the time of grant
or thereafter whether SARs are settled in cash, Common Stock or other
securities of the Company, Awards or other
property.
|
|
|
(b)
|
Exercise
Price. The Committee shall fix the exercise price of
each SAR or specify the manner in which the price shall be
determined. An SAR granted in tandem with an Option shall have
an exercise price not less than the exercise price of the related
Option. An SAR granted alone and unrelated to an Option may not
have an exercise price less than 100% of the Fair Market Value of the
Common Stock on the date of the
grant.
|
|
|
(c)
|
Limited
SARs. An SAR related to an Option, which SAR can only be
exercised upon or during limited periods following a change in control of
the Company, may entitle the Participant to receive an amount based upon
the highest price paid or offered for Common Stock in any transaction
relating to the change in control or paid during a specified period
immediately preceding the occurrence of the change in control in any
transaction reported in the stock market in which the Common Stock is
normally traded.
|
|
|
(a)
|
Grant of Restricted
Stock. Subject to the provisions of the Plan, the
Committee may grant shares of Common Stock subject to forfeiture
(“Restricted Stock”) and determine the duration of the period (the
“Restricted Period”) during which, and the conditions under which, the
shares may be forfeited to the Company and the other terms and conditions
of such Awards. Shares of Restricted Stock may be issued for no
cash consideration or such minimum consideration as may be required by
applicable law.
|
|
|
(b)
|
Restrictions. Shares
of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered, except as permitted by the Committee, during the
Restricted Period. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may determine. Any
certificates issued in respect of shares of Restricted Stock shall be
registered in the name of the Participant and unless otherwise determined
by the Committee, deposited by the Participant, together with a stock
power endorsed in blank, with the Company. At the expiration of
the Restricted Period, the Company shall deliver such certificates to the
Participant or if the Participant has died, to the Participant’s
Designated Beneficiary.
|
|
|
(c)
|
Restricted Stock
Units. Subject to the provisions of the Plan, the
Committee may grant the right to receive in the future shares of Common
Stock subject to forfeiture (“Restricted Stock Units”) and determine the
duration of the Restricted Period during which, and the conditions under
which, the Award may be forfeited to the Company and the other terms and
conditions of such Awards. Restricted Stock Unit Awards shall
constitute an unfunded and unsecured obligation of the Company, and shall
be settled in shares of Common Stock or cash, as determined by the
Committee at the time of grant or thereafter. Such Awards shall
be made in the form of “units” with each unit representing the equivalent
of one share of Common Stock.
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(a)
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Reporting Person
Limitations. Notwithstanding any other provision of the
Plan, to the extent required to qualify for the exemption provided by Rule
16b-3 under the Exchange Act, Awards made to a Reporting Person shall not
be transferable by such person other than by will or the laws of descent
and distribution and are exercisable during such person’s lifetime only by
such person or by such person’s guardian or legal
representative. If then permitted by Rule 16b-3, such Awards
shall also be transferable pursuant to a qualified domestic relations
order as defined in the Code or Title I of the Employee Retirement Income
Security Act or the rules
thereunder.
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(b)
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Documentation. Each
Award under the Plan shall be evidenced by a writing delivered to the
Participant specifying the terms and conditions thereof and containing
such other terms and conditions not inconsistent with the provisions of
the Plan as the Committee considers necessary or advisable to achieve the
purposes of the Plan (including but not limited to the requirement that a
Participant satisfy Performance Goals) or to comply with applicable tax
and regulatory laws and accounting
principles.
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(c)
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Committee
Discretion. Each type of Award may be made alone, in
addition to or in relation to any other Award. The terms of
each type of Award need not be identical, and the Committee need not treat
Participants uniformly. Except as otherwise provided by the
Plan or a particular Award, any determination with respect to an Award may
be made by the Committee at the time of grant or at any time
thereafter.
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(d)
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Dividends and Cash
Awards. In the discretion of the Committee, any Award
under the Plan may provide the Participant with (i) dividends or
dividend equivalents payable currently or deferred with or without
interest, and (ii) cash payments in lieu of or in addition to an
Award.
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(e)
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Termination of Employment or
Service. The Committee shall determine the effect on an
Award of the disability, death, retirement or other termination of
employment or service of a Participant and the extent to which, and the
period during which, the Participant’s legal representative, guardian or
Designated Beneficiary may receive payment of an Award or exercise rights
thereunder. Unless the Committee provides otherwise in any
case, a Participant’s employment or other service shall have terminated
for purposes of this Plan at the time the entity by which the Participant
is employed or to which the Participant renders service ceases to be an
Affiliate of the Company.
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(f)
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Change in
Control. In order to preserve a Participant’s rights
under an Award in the event of a change in control of the Company, the
Committee in its discretion may, at the time an Award is made or at any
time thereafter, take one or more of the following
actions: (i) provide for the acceleration of any time
period relating to the exercise or payment of the Award, (ii) provide
for payment to the Participant of cash or other property with a Fair
Market Value equal to the amount that would have been received upon the
exercise or payment of the Award had the Award been exercised or paid upon
the change in control, (iii) adjust the terms of the Award in a
manner determined by the Committee to reflect the change in control,
(iv) cause the Award to be assumed, or new rights substituted
therefor, by another entity, or (v) make such other provision as the
Committee may consider equitable to Participants and in the best interests
of the Company.
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(g)
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Loans. The
Committee may authorize the making of loans or cash payments to
Participants in connection with the grant or exercise any Award under the
Plan, which loans may be secured by any security, including Common Stock,
underlying or related to such Award (provided that the loan shall not
exceed the Fair Market Value of the security subject to such Award), and
which may be forgiven upon such terms and conditions as the Committee may
establish at the time of such loan or at any time
thereafter. Notwithstanding the foregoing, no loans may be made
to any director or executive officer (or equivalent thereof) of the
Company which would be prohibited by Section 13(k) of the Exchange
Act.
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(h)
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Withholding
Taxes. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required
by law to be withheld in respect of Awards under the Plan no later than
the date of the event creating the tax liability. In the
Committee’s discretion, such tax obligations may be paid in whole or in
part in shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value on the date
of delivery. The Company and its Affiliates may, to the extent
permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the
Participant.
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(i)
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Foreign National
Awards. Notwithstanding anything to the contrary
contained in this Plan, Awards may be made to Participants who are foreign
nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Committee
considers necessary or advisable to achieve the purposes of the Plan or to
comply with applicable laws.
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(j)
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Amendment of
Award. The Committee may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the
same or a different type, changing the date of exercise or realization and
converting an Incentive Stock Option to a Nonstatutory Stock Option,
provided that the Participant’s consent to such action shall be required
unless the Committee determines that the action, taking into account any
related action, would not materially and adversely affect the
Participant.
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(k)
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Exchange
Programs. In addition to the authority granted to the
Committee in Section 9(j), the Committee may, without further
shareholder approval, engage in one or more exchange offers under which
Participants may elect to exchange or surrender their outstanding Awards
(including awards made under the Directors’ Plan) for other Awards or cash
(each, an “Exchange Program”). Each Exchange Program shall
provide that each eligible Participant must exchange or surrender Awards
with a fair value (as determined by the Committee using established
methods including but not limited to Black-Scholes) equal to or greater
than the fair value of the replacement Award or the present value of any
cash consideration, as the case may be. No Award granted on or
after January 27, 2004, shall be eligible for any Exchange
Program.
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(l)
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Code Section 162(m)
Provisions. If the Committee determines at the time
Restricted Stock or a Restricted Stock Unit is granted to a Participant
that such Participant is, or may be as of the end of the tax year for
which the Company would claim a tax deduction in connection with such
Award, a Covered Employee, then the Committee may provide that the
Participant’s right to receive cash, Shares, or other property pursuant to
such Award shall be subject to the satisfaction of Performance Goals
during a Performance Period. Prior to the payment of any Award
subject to this Section 9(l), the Committee shall certify in writing
that the Performance Goals applicable to such award were
met. The Committee shall have the power to impose such other
restrictions on Awards subject to this Section 9(l) as it may deem
necessary or appropriate to ensure that such Awards satisfy all
requirements for “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the
Code.
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(a)
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No Right To
Employment. No person shall have any claim or right to
be granted an Award. Neither the Plan nor any Award hereunder
shall be deemed to give any employee the right to continued employment or
service, or to limit the right of the Company to discharge any Participant
at any time.
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(b)
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No Rights As
Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the holder thereof. A
Participant to whom Common Stock is awarded shall be considered the holder
of the Stock at the time of the Award except as otherwise provided in the
applicable Award.
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(c)
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Effective
Date. Subject to the approval of the stockholders of the
Company, the Plan as herein amended and restated shall be effective on
January 27, 2004. Unless terminated earlier by the Board,
the Plan shall terminate such that no further Awards shall be made as of
January 27, 2014.
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(d)
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Amendment of
Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, subject to such stockholder approval
as the Board determines to be necessary or advisable to comply with any
tax or regulatory requirement.
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(e)
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Governing
Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of
Delaware.
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