BASIC PLAN DOCUMENT (“Basic Plan Document”)
Purpose. The purposes of the plan are:
to promote the long-term financial interests and growth of the Company by attracting and retaining select Employees, Board members, and other service providers with the training, experience, and ability to enable them to make a substantial contribution to the success of the business of the Company and its Affiliates;
to motivate Participants by means of growth-related incentives to achieve the Company’s long range goals; and
to allow each Participant to share in the potential increase in value of the Company following the date on which such Participant is granted an Award in accordance with the terms of the Plan and to assist each Participant with accumulating compensation that promotes a long-term commitment to the Company’s growth and success.
Definitions. Wherever used in the Plan, the terms set forth in Appendix A shall have the meanings set forth below (unless the Administrator determines otherwise based on the context of use).
Eligibility. The administrator may make Awards to any Eligible Persons; provided that deferral elections pursuant to Section 5.3 below shall not be allowed pursuant to an Award to anyone who is not a member of a select group of the management or highly compensated employees of the Company and its Affiliates (as determined in accordance with ERISA’s “top hat” rules).
Awards.
Award Agreements. Each Award shall be evidenced by an Award Agreement that sets forth its Grant Date and all other terms and conditions of the Award not set forth herein, that is signed on behalf of the Company (or delivered by an authorized agent through an electronic medium), and that is signed by the Eligible Person as an acceptance of the Award. Each Award Agreement, together with the Plan and the exhibits attached to this Award Agreement, constitutes the entire understanding of the Company and the Participant on the subjects covered thereby. By signing an Award Agreement, a Participant expressly warrants and acknowledges the following:
the Participant is not entering into the Award Agreement in reliance on any promises, representations or inducements other than those set forth in the Award Agreement;
the Plan is established voluntarily by the Company, the Plan is discretionary in nature and the Plan may be modified, amended, suspended, or terminated by the Company at any time in accordance with its terms;
the payments due under Awards are extraordinary items that do not constitute regular compensation for services rendered to the Company, and are accordingly not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, or end of service payments, bonuses, long-service awards, pension, retirement or welfare benefits, or similar payments
in consideration of the Award, no claim or entitlement to compensation or damages shall arise from its forfeiture resulting from termination of employment by the Company (for any reason whatsoever and whether or not in breach of local labor laws), and Participant irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, the Participant shall be deemed irrevocably to have waived Participant’s entitlement to pursue such claim.
Maximum Limit on Plan Payments. The maximum amount that the Company and its Afilliates shall be obligated to pay pursuant to all Awards under this Plan shall be the amount of the Plan Reserve, as determined pursuant to Part II of the Adoption Agreement. To the extent that Awards become payable on any date at an aggregate level that would exceed the Plan Reserve (taking into account all past and present Awards), all payment otherwise due on such date shall be reduced, pro rata by Administrator, so that such maximum limit is not exceeded.
Bookkeeping Accounts. Each Award shall be credited to and tracked through an internal bookkeeping account that the Company shall maintain as a liability account established on behalf of each Participant.
Vesting. Subject to Section 5.6 below (relating to the forfeiture of Awards), each Award shall vest only according to the terms and conditions set forth in the associated Award Agreement. A Participant’s vested interest under an Award shall be determined by the Administrator as soon as possible after any Settlement Date that occurs pursuant to the Award. Notwithstanding that an Award may have vested in whole or in part, the Award shall not be settled, and a Participant shall have no right to any payment with respect to an Award other than pursuant to ARTICLE 5 below.
Settlement of Awards.
Settlement Date. Each vested Award shall become payable upon the Settlement Date or Dates determined by the Administrator pursuant to the applicable Award Agreement (including any associated election forms); provided that the date of a Change in Control shall be the final Settlement DAte for all Awards, unless an Award Agreement expressly provides otherwise.
Settlement of Award. If a Participant has any vested interest (other than 0%) on an Award Agreement’s payment date, then the Participant shall become entitled to receive a payment from the Plan Reserve on the terms and conditions set forth in the Participant’s Award Agreement; provided that, under all circumstances, (i) the maximum payments due under this Plan and all Awards shall not exceed the amount of the Plan Reserve, and (ii) if the payment of Awards in any Plan Year would exceed the Plan Reserve, then all payments pursuant to such Awards shall be reduced proportionately, with any excess paid previously paid to any Participant in such Plan Year being subject to repayment to the Company within 30 days after notice thereof. Any payment pursuant to an Award shall be reduced by any required employment taxes and withholdings (as determined by the Administrator in its discretion) that are due with respect to the Award. No interest or earnings shall be paid on any distribution made after the Settlement Date.
Deferred Settlement Elections. If an Award specifically authorizes an Eligible Person to elect to defer the receipt of payments otherwise due under Section 5.2 above, then the Settlement Date or Dates for such Award shall be determined solely in accordance with any Deferral Election that the Participant both (i) makes on the form attached hereto to his or her Award Agreement, and (ii) files with the Administrator within the time frame specified in such form.
Payments after Death. In the event an amount becomes payable with respect to an Award made to a deceased Participant, the Administrator shall make payment to the beneficiary or beneficiaries (which may include individuals, trusts or other legal entities) designated by the Participant on the form attached to the Award Agreement. If the Participant fails to designate a beneficiary or fails to file a Beneficiary Designation Form with the Administrator prior to death, such amounts shall be made to the administrator or executor of the Participant’s estate. If a named beneficiary entitled to receive payments pursuant to the Beneficiary Designation Form dies at a time when additional payments still remain to be paid, then and in any such event, such remaining payments shall be paid to the other primary beneficiary or beneficiaries named by the Participant who shall then be living or in existence, if any, otherwise to the contingent beneficiary or beneficiaries named by the Participant who shall then be living or in existence, if any; otherwise to the estate of the Participant.
Forfeiture and Recoupment. Notwithstanding anything in the Plan or any Award Agreement to the contrary, but subject in all cases to applicable law, the Administrator may at any time provide that an Award or benefits related to an Award shall be forfeited and/or recouped (that is, returned to) the Company if the Participant, during Continuous Service or following termination of such service for any reason, engages in conduct that (a) constitutes Just Cause, (b) that breaches any non-solicitation, non-competition, confidentiality or other restrictive covenants, (c) that involves Competitive Activity at any time during Continuous Service by the Company or an Affiliate or during the two-year period following termination of Continuous Service, (d) that is determined by the Administrator to be detrimental to the business or reputation of the Company or any Affiliate, or (e) does not execute a new Annual Seasonal Sales Rep Agreement.
Administration of the Plan.
Duties and Powers of the Administrator. The Plan shall be administered by the Administrator; provided that the Board may act in place of the Administrator or any delegated party at any time and from time to time. In addition to action by meeting in accordance with Applicable Law, any action of the Administrator may be taken by a written instrument signed by a majority of the members of the Administrator. Subject to the provisions of the Plan, the Administrator shall have full and final authority, in its sole and absolute discretion, to take action with respect to the Plan including, without limitation, the authority to –
take any action that the Administrator is empowered to take pursuant to the terms of the Plan, including determination of the terms and conditions of Awards;
to establish, amend and rescind rules and regulations for the administration of the Plan;
to accelerate the vesting of any Award; provided that the Settlement Date for an Award shall not be accelerated unless the Administrator determines that such acceleration of the Settlement Date is not reasonably expected to cause the Participant to incur additional taxes under Code Section 409A; and
to construe and interpret the Plan and Award Agreements, the rules and regulations, and to make all other determinations deemed necessary or advisable for administering the Plan.
The decisions and interpretations of the Administrator with respect to any matter concerning the Plan or any Award shall be final, conclusive, and binding on all parties who have an interest in the Plan or such Award. Any such interpretations, rules, and administration shall be consistent with the basic purposes of the Plan. No person acting solely, or jointly with others, as the Administrator shall be liable while acting as such for any action or determination made in good faith with respect to the Plan or any Award. With respect to all actions or inactions relating to this Plan and all Awards, the members of the Board or Committee and anyone acting as or at the direction of the Administrator shall be entitled to indemnification and reimbursement in the manner and to the fullest extent provided in the Company’s articles of incorporation and/or bylaws and/or pursuant to Applicable Law. No individual member of the Administrator shall have any right to vote or decide upon any matter relating solely to himself or to any of his exclusive rights or benefits under the Plan (except that such member may sign unanimous written consent to resolutions adopted or other actions taken without a meeting).
Electronic Delivery and Language. The Administrator may decide to deliver any documents related to any Award or future Award by electronic means, or request Participant’s consent to participate in the Plan by electronic means.
Expenses; Professional Assistance. All expenses and liabilities incurred by the Administrator in connection with the administration of the Plan shall be borne by the Company. The Administrator may employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Administrator, the Company and the officers and directors of the Company shall be entitled to rely upon the advice, opinions, or valuations of any such persons.
Modification of Awards. Within the limitations of this Plan, the Administrator may modify an Award to accelerate its vesting, to accept the cancellation of outstanding Awards to the extent not previously settled, or to make any change that this Plan would permit for a new Award. Notwithstanding the foregoing, no modification of an outstanding Award may materially and adversely affect a Participant’s rights thereunder unless either (a) the Participant provides written consent to the modification, or (b) before a Change in Control, the Administrator determines in good faith that the modification is not materially adverse to the Participant.
Miscellaneous Provisions.
Assignment and Transfer. Awards shall not be transferable other than by will or the laws of intestate succession. No Award shall be subject to disposition or settlement by transfer, alienation, anticipation, pledge, encumbrance, assignment, or any other means whether such disposition be voluntary or involuntary or by operation of law, by judgment, levy, attachment, garnishment, or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition shall be null and void and of no effect.
No Right to Awards or Employment. No eligible Person, Participant or other person shall have any claim or right to be granted an Award. Under no circumstances shall the terms of the Plan constitute a contract of continuing employment or in any manner obligate the Company to continue or discontinue the Continuous Service of an Employee, Board member, other service provider, or Participant, or to change the policies of the Company regarding termination of Continuous Service.
Source of Payments; General Creditor Status. The obligations of the Company to make payments pursuant to this Plan shall solely constitute a liability of the Company to Participants (and shall not establish a liability of any Affiliate). Such payments shall be made from the general funds of the Company, and the Company shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such payments shall be made, and neither the Participant nor any other person shall have any interest in any particular asset of the Company by reason of its obligations hereunder. To the extent that any person vests in a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.
Withholding. The Company shall have the right to deduct from payment of an Award any taxes that the Company determines to be required by law to be withheld from the Participant with respect to such payment.
Compliance with Applicable Law. The Company may impose such restrictions on Awards and any right to cash payments underlying an Award as it may deem advisable, including without limitation restrictions under an Applicable Law. Notwithstanding any other Plan provision to the contrary, the Company shall not be obligated to make any payment under the Plan or any Award, or take any other action, unless such payment or action is in compliance with Applicable Law.
No Strict Construction. No rule of strict construction shall be applied against the Company, the Administrator, or any other person in the interpretation of any of the terms of the Plan, any Award, or any rule or procedure established by the Administrator.
Severability. Whenever possible, each provision in the Plan and in every Award Agreement shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of this Plan or any Award Agreement made thereunder shall be held to be prohibited by or invalid under Applicable Law, then (i) such provision shall be deemed amended to, and to have contained from the outset such language shall be necessary to, accomplish the objectives of the provision as originally written to the fullest extent permitted by law, and (ii) all other provisions of the Plan and every Award Agreement shall remain in full force and effect.
Governing Law. The Plan and the performance hereunder and all suits and special proceedings hereunder shall be governed by and construed in accordance with and under and pursuant to the laws of the State designated in Part II of the Adoption Agreement, without regard to conflicts of law principles thereof, except as superseded by applicable federal law.
Data Privacy. By executing an Award Agreement, each Participant thereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participant’s personal data as described in the associated Award Agreement by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan. Each such Participant shall thereby be further deemed to understand and agree: (i) that the Company and its Affiliates may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance or security number or other identification number, salary, nationality, job title(s), any shares of stock or directorships held in the Company or any Affiliate, details of all Awards or any other entitlement awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Personal Data”), and (ii) that Personal Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the United States, Participant’s country (if different than the United States), or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Participant’s country.
European Union. This paragraph shall apply to all Participants located in the European Union. Each such Participant understands and agrees: (i) that the Participant may request a list with the names and addresses of any potential recipients of Personal Data by contacting Participant’s local human resources representative; (ii) that the recipients of the Participant’s Personal Data may receive, possess, use, retain and transfer such Personal Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Personal Data as may be required to deposit payments made pursuant to any Award; (iii) that Personal Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan; (iv) that the Participant may, at any time, view Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, without cost, by contacting in writing Participant’s local human resources representative; and (v) that the Participant’s refusal or withdrawal of consent may affect Participant’s ability to participate in the Plan or to realize benefits from the Plan. For more information on the consequences of a Participant’s refusal to consent or withdrawal of consent, the Participant understands that Participant may contact Participant’s local human resources representative.
Amendment and Termination.
Amendment and Termination. The Plan and any Awards may be amended, altered and/or terminated at any time by the Board, provided that (except as otherwise provided in Section 9.2 below) any such amendment, alteration or termination of the Plan or any outstanding Award that materially adversely affect the rights of a Participant shall not be effective without the written consent of the Participant.
Unilateral Authority of Administrator to Modify Plan and Awards. Notwithstanding Section 9.1, the following provisions shall apply:
The Administrator shall have unilateral authority to amend the Plan and any Award (without Participant consent) to the extent necessary to comply with Applicable Law or changes to Applicable Law (including but in no way limited to Code Section 409A or related regulations or other guidance).
The Administrator shall have unilateral authority to equitably adjust the terms and conditions of Awards (including but not limited to a Participant’s percentage of the Plan Reserve and/or the Fair Market Value of the Company) in recognition of extraordinary or nonrecurring events affecting the Company, its Fair Market Value, or the financial statements of the Company, if the Administrator determines that any adjustments are appropriate in order to prevent unwarranted dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or necessary or appropriate to comply with applicable accounting principles.
The Administrator may unilaterally terminate Awards, without payment of consideration of any kind to the affected Participants, if the Plan Reserve has been entirely paid out to Participants in settlement of Awards.
Compliance with Code Section 409A.
The Company intends that this Plan and all Awards comply with, or be exempt from, Section 409A of the Code, and all rules, regulations and other similar guidance issued thereunder (“Code Section 409A”). Accordingly, this Plan and all Awards shall at all times be interpreted and construed in a manner to comply with Code Section 409A (including compliance with any applicable exemptions from Code Section 409A).
In no event shall any payment required to be made pursuant to ARTICLE 6 of the Plan that is considered deferred compensation within the meaning of Code Section 409A be made to the Participant as a result of his “termination of employment” unless he has incurred a separation from service as defined under Code Section 409A, and the term “termination of employment” (or words or phrases of similar meaning) shall be construed to mean a “separation of service” if and to the extent required under Code Section 409A.
In the event amendments are required to make this Plan compliant with Code Section 409A, the Administrator shall use its best efforts to provide the Participant with substantially the same benefits and payments he would have been entitled to pursuant to this Plan had Code Section 409A not applied, but in a manner that is compliant with Code Section 409A or any of its exemptions.
In no event shall any Plan payment that is considered deferred compensation within the meaning of Code Section 409A (and is not otherwise exempt from the provisions thereof) be accelerated in violation of Code Section 409A.
Each payment due on a Settlement Date under an Award shall be regarded as a separate payment for purposes of Code Section 409A.
In the event that the Company (or a successor thereto) has any stock that is publicly traded on an established securities market or otherwise, distributions that are subject to Code Section 409A to any Participant who is a “specified employee” (as defined under Code Section 409A) upon a separation from service (as defined under Code Section 409A) may only be made following the expiration of the six-month period after the date of separation from service (with such distributions to be made during the seventh month following separation of service), or, if earlier than the end of the six-month period, the date of death of the specified employee, or as otherwise permitted under Code Section 409A.
In the event that the Plan or any Award shall be deemed not to comply with Code Section 409A, then neither the Company, the Administrator nor its or their designees or agents shall be liable to any Participant or other person for actions, decisions or determinations made in good faith. Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including any taxes arising under Code Section 409A), and the Company shall not have any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes.
Successors. The Plan shall bind any successor of or to the Company, the Company’s assets or the Company’s businesses (whether direct or indirect, by purchase of such assets or businesses, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under the Plan if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by the Plan, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s obligations under the Plan, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The term “Company,” as used in the Plan, shall mean the Company as hereinbefore defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the Plan. The Plan shall bind the Participants, their executors, administrators, personal representatives and beneficiaries.
Claims by Participants. If a Participant believed the Company or the Administrator has denied providing the Participant with any benefit or right under this Plan or under any Award, then the Participant may file a written claim with the Administrator. Any claim must be delivered to the Administrator within sixty (60) days of the specific event giving rise to the claim. Untimely claims will not be processed and shall be deemed denied, in which event the Participant shall not be entitled to receive any payment or relief of any kind. The Administrator, or its designee, will notify the Participant of its decision in writing as soon as administratively practicable. Claims not responded to by the Administrator in writing within one hundred and twenty (120) days of the date the written claim is delivered to the Administrator shall be deemed denied. The Administrator’s decision, if made in good faith, shall be final, binding and conclusive on all persons. No lawsuit relating to this Plan may be filed before a written claim is filed with the Administrator and is denied or deemed denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred. For purposes of resolving any dispute that arises under the Plan or any Award Agreement, the Participant shall be deemed - by accepting an Award - to have submitted to and consented to the exclusive jurisdiction of the State whose governing law is designated in Part II of the Adoption Agreement, and agrees that such dispute will be handled only in the state and federal courts nearest to the Company’s headquarters in such State, and no other courts.
Right of Offset. Notwithstanding any other provision of the Plan to the contrary, the Company may (subject the any Code Section 409A considerations) at any time reduce the amount of any payment otherwise payable to or on behalf of a Participant by the amount of any obligation of the Participant to or on behalf of the Company that is or becomes due and payable, and, by entering into an Award Agreement, the Participant shall be deemed to have consented to such reduction.
Effective Date of the Plan. The Plan is effective on the Effective Date determined pursuant to Part II of the Adoption Agreement, and shall continue in effect until the termination of the Plan by the Board in accordance with ARTICLE 9 above. Awards outstanding as of the Plan termination date shall continue in accordance with their terms, unless otherwise provided in the Plan or an Award Agreement.
APPENDIX A (“Appendix A”)
Definitions. Wherever used in this Plan, the following terms shall have the meanings set forth below (unless the Administrator determines otherwise based on the context of use):
“Administrator” means the Board of Directors or, upon its delegation, a committee of the Board (the “Committee”) comprised of two or more members of the Board.
“Adoption Agreement” means the Company’s executed agreement that establishes its approval of the Plan, including the specific terms and conditions of this Plan.
“Affiliate” means any majority-owned subsidiary of the Company and any other business entity which is controlled by, under common control with, or controls the Company.
“Applicable Law” means any applicable laws, rules or regulations (or similar guidance), including but not limited to the the Code, ERISA, and the laws of the State designated in Part II of the Adoption Agreement.
“Award” means a grant pursuant to an Award Agreement, but only if it is made in accordance with the terms and conditions of the Plan.
“Award Agreement” means an agreement by which an Eligible Person receives an Award pursuant to Section 4 below.
“Board” means the Board of Directors of the Company.
“Change in Control” means and will be deemed to have occurred on the earliest of the following dates which occurs after the Effective Date, as determined by the Administrator, subject to any modifications that are expressly set forth in the Adoption Agreement:
The date any person or group of persons, together with any affiliates, but excluding employee benefit plans of the Company, is or becomes directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities; or
The date when individuals who at the beginning of any two (2)-year period during the term constitute the Board, plus new directors whose election or nomination is approved by a vote of at least two-thirds (2/3) of the directors still in office who were directors at the beginning of such two-year period (“Continuing Directors”), cease for any reason during such two-year period to constitute at least two-thirds (2/3) of the members of the Board; or
The effective date of a merger, share exchange or consolidation of the Company with any other corporation or entity regardless of which entity is the survivor, other than a merger, share exchange or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving or acquiring entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving or acquiring entity outstanding immediately after such merger or consolidation; or
The effective date of the sale or disposition by the Company of all or substantially all of the Company’s assets; or
The Company implements a plan for the winding up, liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of: (A) a sale of assets, merger, consolidation or other transaction effected exclusively for the purpose of changing the state of incorporation of the Company, or (B) the consummation of any transaction or series of integrated transactions immediately following which the owners of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions, or (C) any transfers or other acquisitions of Company securities by a tax-qualified retirement plan of the Company. The Administrator shall under all circumstances have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation (regardless of any provision within this Section A.h to the contrary).
“Code” means the Internal Revenue Code of 1986, as amended, and rules and regulations issued thereunder.
“Company” means the company identified in Part I of the Adoption Agreement, together with any successor to the Company’s interests.
“Competitive Activity” means (i) the Participant’s participation in, engagement by, possession of a financial or other interest in or filling a position directly or indirectly with (whether individually or as an employee, agent, partner, shareholder, consultant, or otherwise), any enterprise or business if such enterprise or business competes with the business of the Company in any state in which the Company conducts its business; (ii) the Participant’s solicitation of any other person to engage in any of the foregoing activities; (iii) the Participant’s solicitation of any employee of the Company to leave the employ of the Company, or to do business with any enterprise or business which competes with the business of the Company; (iv) the Participant’s solicitation of any customer, vendor or supplier of the Company; or (v) the Participant’s breach of any confidentiality obligations or restrictions to which the Participant is subject. The ownership of an interest constituting not more than two (2) percent of the outstanding debt or equity in a company whose securities are traded on a recognized stock exchange or traded on the over-the-counter market shall not be deemed financial participation in a competitor even though that company may be a competitor of the Company.
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Board member, or consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Board member, or consultant, will not terminate a Participant’s Continuous Service. Nor will such a termination result from a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate or their successors. To the extent permitted by law, the Administrator may determine whether Continuous Service will be considered interrupted in the case of any leave of absence approved by the Company, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.
“Eligible Person” shall mean an Employee, consultant, or independent contractor who is determined by the Administrator to be in a position to affect materially the continued growth and prosperity of the Company by reason of the individual’s duties, responsibilities, personal capabilities, performance, potential or any combination of such factors.
“Employee” shall mean an individual whom the Company or any Affiliate classifies as an employee for federal payroll tax purposes (whether or not such classification is correct).
“Fair Market Value” means the value of the Company, as determined by the Administrator in its sole and absolute discretion; provided that (i) the value of the Company that is determined by an independent appraiser, as well as the value that applies to an arm’s length Change in Control transaction, shall be conclusively presumed to equal the Company’s Fair Market Value and (ii) in the case of a Change in Control arising from the sale or disposition by the Company of substantially all, but not all, of the Company’s assets, the Company’s Fair Market Value shall be redetermined based on the value of the assets subject to the sale or disposition.
“Good Reason” means, subject to the conditions set forth in the next paragraph, that, without a Participant’s written agreement, the Company either:
reassigns the Participant’s primary place of employment to a location that increases the Participant’s one-way commute to work by at least 50 miles;
materially reduces the Participant’s total compensation[, other than as part of across-the-board salary reductions affecting all executives of similar status employed by the Company];
materially reduces the Participant’s duties or responsibilities; or
materially breaches one or more of its representations, warranties, or covenants under any other written agreement with the Participant.
An event that is or would constitute Good Reason shall cease to constitute Good Reason if: (1) the Participant does not provide the Company with both notice of the Participant’s intent to terminate employment for Good Reason, and a description of the event that the Participant believes to constitute Good Reason, within [30] days after the event occurs; (2) the Company reverses the action or cures the default that constitutes Good Reason within [90] days after the Participant provides the notice described above (the “Cure Period”); or (3) the Participant does not actually terminate employment within the [thirty (30)] day period following expiration of the Cure Period.
“Grant Date” means the date an Award is granted to a Participant.
“Just Cause” will exist if the Participant is terminated from Continuous Service for any of the following reasons: (i) the Participant’s commission of or plea of nolo contendere to any felony, or to a misdemeanor or other crime that is generally viewed within the United States as involving acts of dishonesty or moral turpitude or breach of fiduciary duty; (ii) the Participant’s willful failure to perform the Participant’s duties and responsibilities to the Company or intentional violation of a material Company policy; (iii) the Participant’s commission of any material act or acts of fraud, embezzlement, dishonesty, moral turpitude or other willful misconduct; (iv) the Participant’s unauthorized use or disclosure of any material proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of the Participant’s relationship with the Company; (v) the Participant’s willful and material breach of any of the Participant’s obligations under any written agreement or covenant with or published policies of the Company; (vi) the Participant’s gross misconduct or breach of any fiduciary duty; (vii) the Participant’s conduct causing the Company or any of its Affiliates substantial economic harm or disrepute; or (viii) any act of the Participant or knowing omission aiding or abetting a competitor, supplier or customer of the Company or any of its subsidiaries to the meaningful disadvantage or detriment of the Company and its subsidiaries. Furthermore, a Participant’s Continuous Service shall be deemed to have terminated for Just Cause within the meaning hereof if, at any time (whether before, on, or after termination of the Participant’s Continuous Service), facts or circumstances are discovered that would have justified a termination for Just Cause.
“Participant” means any Eligible Person who has received an Award that has not been settled in full, canceled or forfeited.
“Plan Reserve” shall have the meaning set forth in the Adoption Agreement.
“Plan” means the plan established by the Company through its execution of the Adoption Agreement that is associated with this Basic Plan Document. The formal name of the Plan shall be established by the name inserted in Part II of the Adoption Agreement.
“Settlement Date” means, with respect to each Participant, the first to occur of the events and/or dates specified in the Participant’s Award Agreement.
“Total Disability” means, for purposes of this Plan, that a Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company; provided, that the term “Total Disability” shall be interpreted in a manner consistent with the term “disability” under Code Section 409A if and to the extent required under Code Section 409A.