Other
Information:
●
Based
on the closing price on Nasdaq for our common stock on April 13,
2020 of $1.19 per share, the aggregate market value as of April 13,
2020 of the 2,000,000 shares requested for issuance under the
Restated Plan was $2,380,000.
●
In calendar years 2017, 2018 and 2019, we granted
awards under the 2010 Equity and Performance Incentive Plan
covering 533,380
shares, 390,905 shares, and 333,348 shares, respectively. The table below sets forth
the number of stock unit and stock option awards granted and the
weighted-average number of shares of common stock outstanding
during each year. There were no stock appreciation right awards or
restricted share awards during each year.
|
|
|
|
Stock
Unit Awards Granted
|
243,348
|
90,905
|
102,880
|
Stock
Options Grants
|
90,000
|
300,00
|
430,500
|
Weighted Average Common Stock
Outstanding
|
19,053,854
|
18,995,264
|
18,728,912
|
●
In
determining the number of shares to request for approval under the
Restated Plan, our Compensation Committee received advice from
management relative to recent share usage and other
criteria.
Summary of the Restated Plan
The
Restated Plan authorizes our Board to provide equity-based
compensation in the form of stock options, appreciation rights,
restricted stock, restricted stock units (“RSUs”),
performance shares, performance units, and other awards for the
purpose of providing our directors, officers, other employees and
consultants incentives and rewards for superior performance. The
following description of the Restated Plan is only a summary of its
principal terms and provisions and is qualified by reference to the
full text of the Restated Plan attached as Appendix C to this proxy
statement.
Shares Available. For a
summary of the shares available under the Restated Plan and a
description of the Restated Plan limits, see the subsection titled
“Plan Limits” in the section “Summary of Proposed
Amendments” above.
Eligibility. Executive
officers, certain key employees or consultants of ours or our
subsidiaries, our non-employee directors, and 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 our Board to receive
benefits under the Restated Plan. As of April 13, 2020, this
includes approximately one executive officer, 1,013 employees and
three non-employee directors. Any person who provides services to
us or a subsidiary that are substantially equivalent to those
typically provided by an employee may also be eligible to
participate in the Restated Plan.
Stock Options. We may
grant stock options that entitle the optionee to purchase shares of
common stock at a price not less than the market value per share at
the date of grant. The closing price of common stock on Nasdaq on
April 13, 2020, was $1.19 per share. The option price is payable in
cash, check or wire transfer at the time of exercise; by the
transfer to us of shares of common stock owned by the participant
having a value at the time of exercise equal to the option price;
by delivery of an irrevocable direction to a securities broker to
sell shares of common stock and to deliver all or part of the sale
proceeds to us in payment; by a combination of such payment
methods; or by such other method as may be approved by our Board.
To the extent permitted by law, any grant of a stock option may
provide for deferred payment of the option price from the proceeds
of a sale through a bank or broker of some or all of the shares of
common stock to which the exercise relates.
Stock
options will be evidenced by an award agreement containing such
terms and provisions, consistent with the Restated Plan, as our
Board may approve. No stock option may be exercisable more than 10
years from the date of grant. Each grant will specify the period of
continuous service with us or any subsidiary that is necessary
before the stock options become exercisable. No stock option may be
accompanied by a tandem award of dividend equivalents or provide
for dividends, dividend equivalents or other distributions to be
paid on the stock option. A grant of stock options may provide for
the earlier vesting of such stock options in the event of the
retirement, death or disability of the participant, or a change of
control. Successive grants may be made to the same participant
whether or not stock options previously granted remain unexercised.
Any grant of stock options may specify management objectives (as
described below) that must be achieved as a condition to exercising
such rights.
The
number of shares which may be issued under the Restated Plan
pursuant to the exercise of tax-qualified incentive stock options
(ISOs) may not exceed 1,934,600 (as equitably adjusted for the
extraordinary dividend paid on December 26, 2019).
SARs. A SAR is a right,
exercisable by the surrender of a related stock option (if granted
in tandem with stock options) or by itself (if granted as a
free-standing SAR), to receive from us an amount equal to 100%, or
such lesser percentage as the Board may determine, of the spread
between the base price (or option exercise price if a tandem SAR)
and the value of our shares of common stock on the date of
exercise. Any grant may specify that the amount payable on exercise
of a SAR may be paid by us in cash, in shares of common stock, or
in any combination of the two, and may either grant to the
participant or retain in our Board the right to elect among those
alternatives.
SARs
will be evidenced by an award agreement containing such terms and
provisions, consistent with the Restated Plan, as our Board may
approve. Any grant of a tandem SAR will provide that it may be
exercised only at a time when the related stock option is also
exercisable, at a time when the spread is positive, and by
surrender of the related stock option for cancellation. A grant of
SARs may provide for the earlier vesting of such SARs in the event
of the retirement, death or disability of the participant, or a
change of control. Successive grants of a tandem SAR may be made to
the same participant regardless of whether any tandem SARs
previously granted to the participant remain unexercised. Each
grant will specify in respect of each free-standing SAR a base
price that will be equal to or greater than the market value per
share on the date of grant. No free-standing SAR granted under the
Restated Plan may be exercised more than 10 years from the date of
grant. No SAR may be accompanied by a tandem award of dividend
equivalents or provide for dividends, dividend equivalents or other
distributions to be paid on the SAR.
Restricted Stock. A
grant of restricted stock involves the immediate transfer by us to
a participant of ownership of a specific number of shares of common
stock in consideration of the performance of services. The
participant is entitled immediately to voting, dividend and other
ownership rights in such shares.
Restricted stock
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. Each such grant or sale of restricted stock
will provide that during or after 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 our Board at the date of
grant. Our Board may provide for a shorter period during which the
forfeiture provisions are to apply in the event of the retirement,
death or disability of the grantee, or a change of
control.
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 shares. Any grant of restricted
stock may also specify, in respect of any applicable 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 or threshold level or levels, or is at or
above the target level or levels, but falls short of maximum
achievement of the specified management objectives.
Grants
of restricted stock will be evidenced by an award agreement
containing such terms and provisions, consistent with the Restated
Plan, as our Board may approve. Any grant or sale of restricted
stock will require that any or all dividends or other distributions
paid with respect to the restricted stock during the period of
restriction be automatically deferred and reinvested in additional
shares of restricted stock, which will be subject to the same
restrictions as the underlying award.
RSUs. A
grant of RSUs
constitutes an agreement by us to deliver shares of common stock or
cash to the participant in the future in consideration of the
performance of services, but subject to the fulfillment of such
conditions during the restriction period as our Board may specify.
During the applicable restriction period, the participant will have
no rights of ownership in the shares of common stock deliverable
upon payment of the RSUs and will have no right to vote the shares
of common stock. Our Board may, at the date of grant, authorize the
payment of dividend equivalents on RSUs on either a current,
deferred or contingent basis, either in cash or in additional
shares of common stock. However, dividends or other distributions
on shares of common stock underlying RSUs with restrictions that
lapse as a result of the achievement of management objectives or
other conditions will be subject to restrictions and risk of
forfeiture to the same extent as the respective RSUs.
Any
grant of RSUs may specify management objectives that, if achieved,
will result in termination or early termination of the restriction
period applicable to such shares. Any grant of RSUs may also
specify, in respect of any applicable management objectives, a
minimum acceptable level of achievement and may set forth a formula
for determining the number of RSUs for which the restriction period
will terminate if performance is at or above the minimum or
threshold level or levels, or is at or above the target level or
levels, but falls short of maximum achievement of the specified
management objectives. Additionally, our Board may provide for a
shorter restriction period in the event of the retirement, death or
disability of the grantee, or a change of control.
Performance Shares and
Performance Units. A performance share is the equivalent of
one common share and a performance unit is the equivalent of $1.00
or such other value as determined by our Board. A participant may
be granted any number of performance shares or performance units,
subject to the limitations set forth above. The participant will be
given one or more management objectives to meet within a specified
period (the “Performance Period”). The specified
Performance Period will be a period of time not less than one year,
except in the case of the retirement, death or disability of the
grantee, or a change of control, if our Board so
determines.
Each
grant of performance shares or performance units may specify, in
respect of the relevant management objectives, a minimum acceptable
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 or
threshold level or levels, or is at or above the target level or
levels, but falls short of maximum achievement of the specified
management objectives.
To the
extent earned, the performance shares or performance units will be
paid to the participant at the time and in the manner determined by
our Board. Our Board may, at the date of grant of performance
shares, provide for the payment of dividend equivalents to
participant either in cash or in additional shares of common stock,
subject in all cases to deferral on a contingent basis based on the
participant’s earning of the performance shares with respect
to which such dividend equivalents are paid.
Performance shares
and performance units will be evidenced by an award agreement
containing such terms and provisions, consistent with the Restated
Plan, as our Board may approve. 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.
Awards to Non-Employee
Directors. Our Board may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to
non-employee directors of stock options, SARs or other awards and
may also authorize the grant or sale of shares of common stock,
restricted stock or RSUs to non-employee directors. Each grant of
an award to a non-employee director will be upon such terms and
conditions as approved by our Board. Each such grant will not be
required to be subject to any minimum vesting period and will be
evidenced by an award agreement in such form as will be approved by
our Board. Each grant will specify in the case of stock options, an
option price per share, and in the case of a free-standing SAR, a
base price per share, each of which will not be less than the
market value per share on the date of grant. Each stock option and
free-standing SAR granted under the Plan to a non-employee director
will expire not more than 10 years from the date of grant and will
be subject to earlier termination as hereinafter provided. If a
non-employee director subsequently becomes an employee of our
company or a subsidiary while remaining a member of our Board, any
award held under this Plan by such individual at the time of such
commencement of employment will not be affected. Non-employee
directors may be awarded or may be permitted to elect to receive
all or any portion of their annual retainer, meeting fees or other
fees in shares of common stock, restricted stock, RSUs or other
awards under the Restated Plan in lieu of cash. Assuming our
stockholders approve the proposed amendments in the Restated Plan,
the amount of cash plus the grant date fair value of all awards
granted under the Plan to any outside director as compensation for
services during any twelve (12)-month period may not exceed
$500,000.
Other Awards. Our Board
may, subject to limitations under applicable law, grant to any
participant 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, shares of common stock or factors that may influence
the value of such shares, including, without limitation,
convertible or exchangeable debt securities; other rights
convertible or exchangeable into shares of common stock; purchase
rights for shares of common stock; awards with value and payment
contingent upon our performance or specified subsidiaries,
affiliates or other business units of ours or any other factors
designated by our Board; and awards valued by reference to the book
value of shares of common stock or the value of securities of, or
the performance of specified subsidiaries or affiliates or other
business units of ours.
Our
Board will determine the terms and conditions of the other awards.
Cash awards, as an element of or supplement to any other award
granted under the Restated Plan, may also be granted as another
award. Share-based other awards are not required to be subject to
any minimum vesting periods. Our Board may grant shares of common
stock as a bonus, or may grant other awards in lieu of our
obligation or a subsidiary’s obligation to pay cash or
deliver other property under the Restated Plan or under other plans
or compensatory arrangements, subject to such terms as will be
determined by our Board in a manner that complies with Section 409A
of the Code.
Management Objectives.
The
Restated Plan requires that the Board establish “Management
Objectives” for purposes of performance shares and
performance units, if and when used. When so determined by the
Board, stock options, SARs, restricted stock, RSUs, dividend
credits or other awards under the Restated Plan may also specify
management objectives. 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 the subsidiary,
division, department, region or function within the company or
subsidiary in which the participant is employed. The management
objectives may be made relative to the performance of one or more
other companies or subsidiaries, divisions, departments, regions or
functions within such other companies, and may be made relative to
an index or one or more of the performance objectives
themselves.
If our
Board determines that a change in the business, operations,
corporate structure or capital structure of our company, or the
manner in which we conduct our business, or other events or
circumstances render the management objectives unsuitable, our
Board may in its discretion modify such management objectives or
the related level or levels of achievement, in whole or in part, as
our Board deems appropriate and equitable.
Qualified Performance-Based
Compensation.
Under
the Restated Plan, provisions that would have enabled certain
awards to qualify for an exemption from a tax deduction limitation
under Section 162(m) of the Code if otherwise eligible, including
per person annual award limits and a limited menu of approved
performance goals, have been deleted in light of the repeal of the
“qualified performance-based compensation” exemption
under the Tax Cuts and Jobs Act, enacted on December 22,
2017.
Prior
to the elimination of these provisions, no participant could be
granted stock options or SARs, in the aggregate, for more than
1,000,000 shares of common stock during any calendar year; awards
of restricted stock, RSUs, performance shares or other stock-based
awards intended to qualify as “qualified performance-based
compensation” under Section 162(m), in the aggregate, for
more than 1,000,000 shares of common stock during any calendar
year; or awards of performance units or other awards payable in
cash intended to qualify as “qualified performance-based
compensation” under Section 162(m) having an aggregate
maximum value in excess of $5,000,000 (these limits do not reflect
equitable adjustments approved by the Board for the extraordinary
dividend paid on December 26, 2019).
Administration. The
Restated Plan will be administered by our Board, which may from
time to time delegates all or any part of its authority under the
Restated Plan to the Compensation Committee of our Board (or a
subcommittee thereof), as constituted from time to time. Our Board
or the Compensation Committee may authorize one or more of our
officers to designate employees (other than Section 16 officers) to
receive awards under the Restated Plan and determine the size of
any such awards. When we refer herein to actions taken or
determinations made by our, we also mean such actions taken and
decisions made by any committee, officer or officers authorized to
administer the Plan or to make awards.
Amendments. Our Board
may at any time and from time to time amend the Restated Plan in
whole or in part. However, if an amendment to the Restated Plan
would materially increase the benefits accruing to participants
under the Restated Plan, would materially increase the number of
securities which may be issued under the Restated Plan, would
materially modify the requirements for participation in the
Restated Plan, or must otherwise be approved by our stockholders in
order to comply with applicable law or the rules of Nasdaq (or our
applicable securities exchange), then such amendment will be
subject to stockholder approval and will not be effective unless
and until such approval has been obtained.
If
permitted by Section 409A of the Code, in case of termination of
the employment of a participant by reason of death, disability or
normal or early retirement, or in the case of unforeseeable
emergency or other special circumstances, our Board may accelerate
the vesting of any unvested awards that the participants holds at
the time of such termination. Our Board may also waive any other
limitation or requirement under any such award.
Our
Board may amend the terms of any awards granted under the Restated
Plan prospectively or retroactively. Except in connection with
certain corporate transactions described in the Restated Plan, no
amendment will impair the rights of any participant without his or
her consent.
Our
Board may, in its discretion, terminate the Restated Plan at any
time. Termination of the Restated Plan will not affect the rights
of participants or their successors under any outstanding awards
and not exercised in full on the date of termination.
No Repricing of Stock Options
or SARs. Except in connection with certain corporate
transactions described in the Restated Plan, the terms of
outstanding awards may not be amended to reduce the option price of
outstanding stock options or the base price of outstanding SARs, or
cancel outstanding underwater stock options or SARs in exchange for
cash, other awards or stock options or SARs with an option price or
base price, as applicable, that is less than the option price of
the original stock options or base price of the original SARs, as
applicable, without stockholder approval.
Tax Withholding. The Compensation Committee may condition any
payment relating to an award on the withholding of taxes and may
provide that a portion of any shares of common stock or other
property to be distributed will be withheld (or previously acquired
shares of common stock or other property be surrendered by the
participant) to satisfy withholding and other tax
obligations.
Transferability. Except
as otherwise determined by our Board, no stock option, SAR or other
derivative security granted under the Restated Plan will be
transferable by the participant except by will or the laws of
descent and distribution, and in no event will any such award
granted under the Restated Plan be transferred for value. Our Board
may provide at the date of grant additional restrictions on
transfer for certain shares of common stock earned under the
Restated Plan.
Effective Date and
Termination. The Restated Plan will be effective as of the
date the Restated Plan is approved by our stockholders and will
continue until terminated by the Board, in its discretion. However,
no ISOs may be granted under the Restated Plan after the tenth
anniversary of the adoption of the Restated Plan.
Federal Income Tax Consequences
The
following is a brief summary of some of the U.S. federal income tax
consequences of certain transactions under the Restated Plan based
on U.S. federal income tax laws in effect as of the date of this
Proxy Statement. This summary is not intended to be complete and
does not describe state, local or foreign tax
consequences.
Tax Consequences to Participants
Non-Qualified Stock
Options. In general: (1) no income will be recognized by an
optionee at the time a non-qualified stock option is granted; (2)
at the time of exercise of a non-qualified stock option, 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 the shares acquired
pursuant to the exercise of a non-qualified stock option,
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 Stock Options. 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 shares of common stock 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 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
shares of common stock 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.
SARs. 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 shares of common stock 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 Code (“Restrictions”). However, a recipient
who so elects under Section 83(b) of the 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.
RSUs. No income
generally will be recognized upon the award of RSUs. The recipient
of an RSU award generally will be subject to tax at ordinary income
rates on the fair market value of unrestricted shares of common
stock on the date that such shares are transferred to the
participant under the award (reduced by any amount paid by the
participant for such RSUs), 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 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 shares of common
stock received.
Tax Consequences to the Company or Subsidiary
To the
extent that a participant recognizes ordinary income in the
circumstances described above, we 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 Code and is not disallowed by
the $1 million limitation on certain executive compensation under
Section 162(m) of the Code.
Section
162(m) of the Code generally disallows a deduction for federal
income tax purposes to any publicly-traded corporation for any
remuneration in excess of $1 million paid in any taxable year to
its Chief Executive Officer (“CEO”) and each of the
three non-CEO most highly-compensated executive officers (other
than, prior to 2018, its chief financial officer
(“CFO”)) (the “Covered Employees”).
However, compensation which qualifies as
“performance-based” is excluded from the $1 million
limit if, among other requirements, the compensation is payable
only upon attainment of pre-established, objective performance
goals under a plan approved by the corporation’s
shareholders, although this exception is severely limited beginning
in 2018, as described below. The 2010 Equity and Performance
Incentive Plan included provision for certain long-term incentive
awards designed to meet the definition of performance-based
compensation under Section 162(m) which, if otherwise eligible,
could qualify for the performance-based exception to the $1 million
deduction limit. However, to maintain flexibility in compensating
executive officers in a manner designed to promote varying
corporate goals in the best interest of the Company, we did not
previously limit executive compensation to amounts deductible under
Section 162(m) if the Compensation Committee determined that doing
so is in the best interests of the Company.
The Tax
Cuts and Jobs Act, enacted on December 22, 2017, substantially
modified Section 162(m) and, among other things, eliminated the
performance-based exception to the $1 million deduction limit
effective as of January 1, 2018. As a result, beginning in 2018,
compensation paid to certain executive officers in excess of $1
million will generally be non-deductible whether or not it is
performance-based. In addition, beginning in 2018, Covered
Employees will include any individual who served as the CEO or CFO
at any time during the taxable year and the three other most highly
compensated officers (other than the CEO and CFO) for the taxable
year, and once an individual becomes a Covered Employee for any
taxable year beginning after December 31, 2016, that individual
will remain a Covered Employee for all future years, including
following any termination of employment.
The Tax
Cuts and Jobs Act includes a transition rule under which the
changes to Section 162(m) described above will not apply to
compensation payable pursuant to a written binding contract that
was in effect on November 2, 2017 and is not materially modified
after that date. To the extent applicable to our existing contracts
and awards, the Compensation Committee may avail itself of this
transition rule. However, because of uncertainties as to the
application and interpretation of the transition rule, no
assurances can be given at this time that our existing contracts
and awards, even if in place on November 2, 2017, will meet the
requirements of the transition rule. Moreover, the Compensation
Committee does not limit its actions with respect to executive
compensation to preserve deductibility under Section 162(m) if the
Compensation Committee determines that doing so is in the best
interests of the Company.
New Plan Benefits
No new
grants have been made requiring stockholder approval. With respect
to future grants under the Restated Plan, it is not possible to
determine specific amounts and types of awards that may be awarded
in the future under the Restated Plan, because the grant and actual
settlement of awards will be discretionary.
Aggregate Past Grants Under the Restated Plan
In
accordance with SEC rules, the following table sets forth summary
information with respect to the number of shares of common stock
subject to stock option awards made under the Restated Plan to the
Company’s named executive officers, all current executive
officers as a group, directors, associates of such executive
officers, directors and nominees, each other person who received or
is to receive 5% of such stock options and all employees (other
than executive officers) as a group as of April 13,
2020.
Individual or
Group
|
Number of Shares
Underlying Stock Option Awards
|
Richard
Bloom
|
360,837
|
President and
Chief Executive Officer
|
|
Joshua E.
Schechter
|
60,837
|
Chairperson
|
|
Bradly
Radoff
|
60,837
|
Director
|
|
Brian
Kelley
|
60,837
|
Director
|
|
All current
executive officers as a group
|
187,612
|
All current
directors who are not executive officers as a group
|
182,511
|
All nominees for
election as a director
|
-
|
Each associate of
any such director, executive officer or nominees
|
330,318
|
Each other person
who received or is to receive 5% of such awards
|
-
|
All employees,
including current officers who are not executive officers as a
group
|
574,433
|
|
|
Registration with the SEC
We
intend to file a Registration Statement on Form S-8 relating to the
issuance of the additional shares of common stock under the
Restated Plan with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended as soon as practicable
after approval of the Restated Plan by our
stockholders.
Securities
Authorized for Issuance Under Equity Compensation
Plans
Equity Compensation Plan Information
As of December 31, 2020
|
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))
|
Plan
Category
|
|
|
|
Equity Compensation
Plans approved by security holders (1)
|
1,657,940
|
$1.60
|
2,909,189
|
Equity Compensation
Plans not approved by security holders (2)
|
121,000
|
$1.17
|
707,267
|
Total
|
1,778,940
|
$1.57
|
3,616,456
|
(1)
This
is the 2010 Stock Plan. Stock options, restricted stock, RSUs or
stock appreciation rights may be awarded under the 2010 Stock
Plan.
(2)
This
is the Inducement Plan.
Vote Required
Approval of the
Restated Plan requires the affirmative vote of the holders of a
majority of the shares that are present in person or represented by
proxy at the Annual Meeting and entitled to vote on such matter
(meaning that of the shares represented at the Annual Meeting and
entitled to vote, a majority of them must be voted
“FOR” Proposal No. 6 for it to be
approved).
BOARD RECOMMENDATION
Our Board recommends a vote “FOR” the approval of the
Third Amended and Restated 2010 Equity and Performance Incentive
Plan.
Appendix A
SECTION 382
TAX BENEFITS PRESERVATION PLAN
by
and between
SUPPORT.COM,
INC.
and
COMPUTERSHARE
TRUST COMPANY, N.A.,
as
Rights Agent,
Dated
as of August 21, 2019
TABLE OF CONTENTS
Page
Section 1.
|
Definitions.
|
1
|
Section 2.
|
Appointment of Rights Agent
|
8
|
Section 3.
|
Issuance of Right Certificates.
|
9
|
Section 4.
|
Form of Right Certificates; Notice to Rights Agent as to Acquiring
Person.
|
11
|
Section 5.
|
Countersignature and Registration.
|
12
|
Section 6.
|
Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates.
|
12
|
Section 7.
|
Exercise of Rights; Purchase Price; Expiration Date of
Rights.
|
13
|
Section 8.
|
Cancellation and Destruction of Right Certificates.
|
15
|
Section 9.
|
Reservation and Availability of Shares of Preferred
Stock.
|
16
|
Section 10.
|
Securities Issuable Upon Exercise
|
17
|
Section 11.
|
Adjustments to Number and Kind of Securities or Other Property,
Number of Rights or Purchase Price.
|
17
|
Section 12.
|
Certification of Adjustments
|
25
|
Section 13.
|
Fractional Rights and Fractional Shares.
|
25
|
Section 14.
|
Rights of Action
|
26
|
Section 15.
|
Agreement of Right Holders
|
26
|
Section 16.
|
Right Certificate Holder Not Deemed a Stockholder
|
27
|
Section 17.
|
Concerning the Rights Agent.
|
27
|
Section 18.
|
Merger or Consolidation or Change of Name of Rights
Agent.
|
28
|
Section 19.
|
Duties of Rights Agent
|
29
|
Section 20.
|
Change of Rights Agent
|
31
|
Section 21.
|
Issuance of New Right Certificates
|
32
|
Section 22.
|
Redemption.
|
32
|
Section 23.
|
Exchange.
|
33
|
Section 24.
|
Notice of Proposed Actions.
|
34
|
Section 25.
|
Notices
|
35
|
Section 26.
|
Supplements and Amendments
|
36
|
Section 27.
|
Successors
|
37
|
Section 28.
|
Benefits of this Agreement
|
37
|
Section 29.
|
Governing Law
|
37
|
Section 30.
|
Counterparts
|
37
|
Section 31.
|
Descriptive Headings
|
37
|
Section 32.
|
Severability
|
37
|
Section 33.
|
Determination and Actions by the Board, etc
|
38
|
Section 34.
|
Force Majeure
|
38
|
Section 35.
|
Further Assurance
|
38
|
Exhibit A -
Amended
and Restated Certificate of Designation of Series B Junior
Participating Preferred Stock
Exhibit B -
Form
of Right Certificate
Exhibit C -
Form
of Summary of Rights
SECTION 382 TAX BENEFITS PRESERVATION
PLAN
SECTION
382 TAX
BENEFITS PRESERVATION PLAN (this “Agreement”),
dated August 21, 2019, between Support.com, Inc., a Delaware
corporation (the “Company”),
and Computershare Trust Company, N.A., a federally chartered trust
company, as rights agent (the “Rights
Agent”).
RECITALS:
WHEREAS,
the Company and certain of its
Subsidiaries have generated certain Tax Benefits (as hereinafter
defined) for United States federal income tax purposes, such Tax
Benefits may potentially provide valuable benefits to the Company,
the Company desires to avoid an “ownership change”
within the meaning of Section 382 (as hereinafter defined), and the Treasury
Regulations (as hereinafter defined) promulgated thereunder, and
thereby preserve its ability to utilize such Tax Benefits, and, in
furtherance of such objective, the Company desires to enter into
this Agreement; and
WHEREAS,
on August 21, 2019, the Board of
Directors of the Company (the “Board”)
authorized and declared a dividend of one right (a
“Right”)
for each share of the Common Stock (as hereinafter defined) of the
Company outstanding as of the Close of Business (as defined herein)
on September 3, 2019 (the “Record
Date”), each Right
representing the right to purchase, upon the terms and subject to
the conditions herein, one one-thousandth of a share of Preferred
Stock (as defined below) of the Company (each one one-thousandth of
a share, a “Unit”),
and (ii) further authorized the issuance, upon the terms and
subject to the conditions herein, of one Right with respect to each
share of Common Stock of the Company that shall become outstanding
between the Record Date and the earlier of the Distribution Date
and the Expiration Date (each as defined herein) (or thereafter in
accordance with Section 21
hereof).
NOW,
THEREFORE, in consideration of
the premises and the mutual agreements herein set forth and
intending to be legally bound hereby, the parties hereby agree as
follows:
For
purposes of this Agreement, the following terms shall have the
meanings indicated:
(a) “Acquiring
Person” means any Person who or
which, together with all Affiliates and Associates of such Person,
is or becomes the Beneficial Owner of 4.99% or more of the shares
of Common Stock of the Company then outstanding, as calculated
pursuant hereto, but shall not include:
(i) any
Exempt Person;
(ii) any
“direct public group” within the meaning of Treasury
Regulations Section 1.382-2T(j)(2)(ii);
(iii) any
Existing Holder unless and until such Existing Holder acquires
Beneficial Ownership of any additional shares of Common Stock of
the Company after the first public announcement by the Company of
the adoption of this Agreement (other than pursuant to a stock
split, reverse stock split, stock dividend, reclassification or
similar transaction effected by the Company) at a time when such
Existing Holder is still the Beneficial Owner of 4.99% or more of
shares of the Common Stock of the Company then outstanding, in
which case such Person shall be an Acquiring Person;
(iv) any
Person who as the result of an acquisition of shares of Common
Stock by the Company (or any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the
Company, or any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan) which, by
reducing the number of shares of Common Stock of the Company
outstanding, increases the proportionate number of shares of Common
Stock of the Company Beneficially Owned by such Person to 4.99% or
more of the shares of Common Stock of the Company then outstanding;
provided, however, that, if a Person shall become the Beneficial
Owner of 4.99% or more of the shares of Common Stock of the Company
then outstanding by reason of acquisition of shares by the Company
(or any Subsidiaryof the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any Person organized,
appointed or established by the Company for or pursuant to the
terms of any such plan) and shall, after the first public
announcement by the Company of such share acquisitions by the
Company (or any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, or any Person
organized, appointed or established by the Company for or pursuant
to the terms of any such plan), becomes the Beneficial Owner of any
additional shares (other than pursuant to a stock split, reverse
stock split, stock dividend, reclassification or similar
transaction effected by the Company) of Common Stock of the Company
and immediately thereafter is the Beneficial Owner of 4.99% or more
of the shares of Common Stock of the Company then outstanding, then
such Person shall be an Acquiring Person; or
(v) any Person
who or which, within ten (10) Business Days of being requested by
the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in excess
of 4.99% inadvertently or without knowledge of the terms of the
Rights and who or which, together with all Affiliates and
Associates, thereafter within ten (10) Business Days following such
certification reduces such Person’s, together with its
Affiliates’ and Associates’, Beneficial Ownership to
less than 4.99% of the shares of Common Stock then outstanding;
provided, however, that (x) if the Person requested to so certify
fails to do so within ten (10) Business Days or breaches or
violates such certification, then such Person shall become an
Acquiring Person immediately after such ten (10) Business Day
period or such breach or violation or (y) if the Person together
with its Affiliates and Associates fails to reduce Beneficial
Ownership to less than 4.99% within ten (10) Business Days
following such certification, then such Person shall become an
Acquiring Person immediately after such ten (10) Business Day
period;
provided, however,
that no Person shall be an Acquiring Person if the Board shall have
affirmatively determined, prior to or after the Distribution Date,
in light of the intent and purposes of this Agreement or other
circumstances facing the Company, that such Person shall not be
deemed an Acquiring Person, unless and until such Person shall
again become an Acquiring Person.
In
determining whether a Person owns 4.99% or more of the shares of
Common Stock of the Company then outstanding, for all purposes of
this Agreement, all of the Common Stock of the Company Beneficially
Owned by such Person shall be taken into account in the numerator
and, for purposes of the denominator, any calculation of the number
of shares of Common Stock outstanding at any particular time shall
be made pursuant to and in accordance with Section 382 and the
Treasury Regulations promulgated thereunder. Without limiting the
foregoing, any Person (other than a “direct public
group” within the meaning of Treasury Regulations Section
1.382-2T(j)(2)(ii)) shall be treated as the Beneficial Owner of
4.99% or more shares of the Common Stock of the Company then
outstanding if, in the determination of the Board, that Person
would be treated as a “5-percent stockholder” for
purposes of Section 382 (substituting “4.99” for
“5” each time “five” or “5” is
used in or for purposes of Section 382). Notwithstanding anything
to the contrary set forth herein, any shares of Common Stock of
which a Person or any Affiliate or Associate becomes the Beneficial
Owner pursuant to an equity compensation award granted to such
Person by the Company or as a result of an adjustment by the
Company to the number of shares of Common Stock represented by such
equity compensation award pursuant to the terms thereof shall,
solely for purposes of determining the number of shares of Common
Stock of which such Person or any Affiliate or Associate is the
Beneficial Owner at any time, not be included in (x) the
calculation of the number of shares of Common Stock outstanding or
(y) the particular percentage of the number of shares of Common
Stock of which such Person and/or any Affiliate or Associate of
such Person is the Beneficial Owner.
(b) “Adjustment
Shares” shall have the meaning set forth in Section
11(a)(ii).
(c) “Affiliate”
and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement, and to the extent not included
within the foregoing clause of this Section 1(c), shall also
include, with respect to any Person (other than an Exempt Person or
an Existing Holder), any other Person whose Common Stock would be
deemed constructively or otherwise owned by, or otherwise
aggregated with shares owned by, such first Person or owned by a
single “entity” pursuant to the provisions of Section
382; provided, however, that a Person will not be deemed to be the
Affiliate or Associate of another Person solely because either or
both Persons are or were directors of the Company.
(d) A Person shall be
deemed the “Beneficial Owner” of, and
to “Beneficially
Own,” any securities:
(i) which such
Person or any of such Person’s Affiliates or Associates (A)
directly or indirectly has the right to vote or dispose of, alone
or in concert with others, or (B) is deemed to beneficially own,
directly or indirectly, within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement, including, with respect to both
clause (A) and clause (B), pursuant to any agreement, arrangement
or understanding (whether or not in writing), but only if the
effect of such agreement, arrangement or understanding is to treat
such Persons as an “entity” under Section 1.382-3(a)(l)
of the Treasury Regulations;provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own
securities (including rights, options or warrants) which are
convertible or exchangeable into or exercisable for Common Stock
except to the extent the acquisition or transfer of such rights,
options or warrants would reasonably be expected to result in the
rights, options or warrants being treated as exercised on the date
of their acquisition or transfer under Section 382;
(ii) which
such Person or any of such Person’s Affiliates or Associates
owns, directly or indirectly, or has the right to acquire (whether
such right is exercisable immediately, or only after the passage of
time, compliance with regulatory requirements, the fulfillment of a
condition, or otherwise) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, warrants, options, or other
rights (including, without limitation, within the meaning of
Section 382) or otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, (A)
any shares of Common Stock by virtue of owning securities or other
interests (including rights, options or warrants) that are
convertible or exchangeable into, or exercisable for, such shares
of Common Stock, except to the extent that upon the issuance,
acquisition or transfer of such securities or other interests, such
securities or other interests would be treated as exercised under
Section 1.382-4(d) or other applicable sections of the Treasury
Regulations, (B) securities tendered pursuant to a tender offer or
exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange or (C) securities
issuable upon the exercise or exchange of Rights;
(iii) which
are owned, directly or indirectly, by any other Person, if such
Person or any of such Person’s Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in
writing) with such other Person or any of such other Person’s
Affiliates or Associates for the purpose of acquiring, holding,
voting or disposing of any securities of the Company, but only if
the effect of such agreement, arrangement or understanding is to
treat such Persons as an “entity” under Section
1.382-3(a)(l) of the Treasury Regulations; and
(iv) to the
extent not included within the foregoing provisions of this
Section, a Person shall be deemed the “Beneficial
Owner” of and shall be deemed to “beneficially
own” or have “beneficial ownership” of
securities, if such Person would be deemed to constructively own
such securities pursuant to Sections 1.382-2T(h) and 1.382-4(d) of
the Treasury Regulations, such Person owns such securities pursuant
to a “coordinated acquisition” treated as a single
“entity” as defined in Section 1.382-3(a)(l) of the
Treasury Regulations, or such securities are otherwise aggregated
with securities owned by such Person, pursuant to the provisions of
Section 382; provided, however, that (i) a Person will not be
deemed the Beneficial Owner of, or to Beneficially Own, any
security (A) if such Person has the right to vote such security
pursuant to an agreement, arrangement or understanding (whether or
not in writing) which (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
Section 14(a) of the Exchange Act by means of a solicitation
statement filed on Schedule 14A, and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial
ownership arises solely as a result of such Person’s status
as a “clearing agency,” as defined in Section 3(a)(23)
of the Exchange Act; (ii) nothing in this definition will cause a
Person engaged in business as an underwriter of securities to be
the Beneficial Owner of, or to Beneficially Own, any securities
acquired through such Person’s participation in good faith in
an underwriting syndicate until the expiration of forty (40)
calendar days after the date of such acquisition, or such later
date as the Board may determine in any specific case; (iii) subject
to Section 1(d)(iv), above, a Person
shall not be deemed the Beneficial Owner of, or to Beneficially
Own, any securities if (A) such securities would not be deemed
constructively or otherwise owned by, or otherwise aggregated with
shares owned by, such Person, and (B) such securities would not be
deemed constructively or otherwise owned by a single
“entity,” in each case, for purposes of Section 382;
and (iv) a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own any securities which such Person or any of such
Person’s Affiliates or Associates would otherwise be deemed
to Beneficially Own pursuant to this Section 1(d) solely as a
result of any merger or other acquisition agreement between the
Company and such Person (or one or more of such Person’s
Affiliates or Associates), or any tender, voting or support
agreement entered into by such Person (or one or more of such
Person’s Affiliates or Associates) in connection therewith,
if, prior to such Person becoming an Acquiring Person, the Board
has approved such merger or other acquisition agreement and any
such tender, voting or support agreement entered into in connection
therewith.
(e)
“Appropriate Officer” shall have the meaning set forth
in Section 19(b).
(f) “Board”
shall have the meaning set forth in the recitals.
(g) “Business
Day” shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to
close.
(h) “Close
of Business” on any given date shall mean 5:00 P.M.
New York City time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(i) “Code”
shall have the meaning set forth in the preamble.
(j) “Common
Stock.” when used with reference to the Company, shall
mean the common stock (presently $0.0001 par value per share) of
the Company. “Common
Stock,” when used with reference to any Person other
than the Company, shall mean shares of the capital stock with the
greatest voting power of such other Person or, if such other Person
is a subsidiary of another Person, the entity which ultimately
controls such first-mentioned Person. “Common Stock” when used
with reference to any Person not organized in corporate form shall
mean units of beneficial interest which (x) represent the right to
participate generally in the profits and losses of such Person
(including without limitation any flow-through tax benefits
resulting from an ownership interest in such Person) and (y) are
entitled to exercise the greatest voting power of such Person or,
in the case of a limited partnership, have the power to remove the
general partner or partners.
(k) “Company”
shall have the meaning set forth in the preamble.
(l) “Code”
shall mean the Internal Revenue Code of 1986, as
amended.
(m) “Current
Market Price” shall have the meaning set forth in
Section 11(d).
(n) “Current
Value” shall have the meaning set forth in Section
11(a)(iii).
(o) “Distribution
Date” shall have the meaning set forth in Section
3(a).
(p) “Equivalent
Preferred Securities” shall have the meaning set forth
in Section 11(b).
(q) “Exchange
Act” shall mean the Securities Exchange Act of 1934,
as amended,
(r) “Excess
Exchange Shares” shall have the meaning set forth in
Section 23.
(s) “Existing
Holder” shall mean any Person who, immediately prior
to the first public announcement of the adoption of this Agreement
by the Company, is the Beneficial Owner of 4.99% or more of the
Common Stock then outstanding, together with any Affiliates and
Associates of such Person.
(t) “Exempt
Person” shall mean (i) the Company or any Subsidiary
of the Company, in each case including, without limitation, the
officers and board of directors thereof acting solely in their
fiduciary capacity, (ii) any employee benefit plan of the Company
or any Subsidiary of the Company or any entity or trustee
organized, appointed, established or holding shares of Common Stock
of the Company for or pursuant to the terms of any such plan, or
for the purpose of funding other employee benefits for employees of
the Company or any Subsidiary of the Company, (iii) any Person who
the Board determines, in its sole discretion, prior to the time
such Person would otherwise be an Acquiring Person, should be
permitted to become the Beneficial Owner of up to a number of the
shares of Common Stock determined by the Board (the “Exempted
Number”) and be exempted from being an Acquiring Person,
unless and until such Person acquires Beneficial Ownership of
shares of Common Stock of the Company in excess of the Exempted
Number (other than pursuant to a stock split, reverse stock split,
stock dividend, reclassification or similar transaction effected by
the Company) in which case such Person shall be an Acquiring
Person; provided, however, that the Board may make such exemption
subject to such conditions, if any, which the Board may determine,
and (iv) any Person who is a transferee from the estate of an
Exempt Person and who receives Common Stock of the Company as a
bequest or inheritance from such Exempt Person, but only for so
long as such transferee continues to be the Beneficial Owner of
4.99% or more of the then outstanding shares of Common Stock of the
Company.
(u) “Expiration
Date” shall mean the earliest of (i) the date on which
all of the Rights are redeemed as provided in Section 22, (ii) the
date on which the Rights are exchanged as provided in Section 23,
(iii) the consummation of a reorganization transaction entered into
by the Company resulting in the imposition of stock transfer
restrictions that the Board, in its sole discretion, determines
will provide protection for the Company’s Tax Benefits
similar to that provided by this Agreement, (iv) the Close of
Business on the effective date of the repeal of Section 382
(but excluding the repeal or withdrawal of any Treasury Regulations
thereunder), or any other change, if the Board determines in its
sole discretion, that this Agreement is no longer necessary or
desirable for the preservation of Tax Benefits, (v) the date on
which the Board otherwise determines, in its sole discretion, that
this Agreement is no longer necessary to preserve the Tax Benefits,
and (vi) the beginning of a taxable year of the Company to which
the Board determines in its sole discretion, that no Tax Benefits
may be carried forward.
(v) “Final
Expiration Date” shall mean the earliest of (i) the
Close of Business on the day following the certification of the
voting results of the Company’s 2020 annual meeting of
stockholders, if at such stockholder meeting a proposal to approve
this Agreement has not been passed by the affirmative vote of the
majority of the votes cast at the 2020 annual meeting of
stockholders or any other meeting of stockholders of the Company
duly held prior to August 21, 2020, and (ii) August 21, 2022,
provided that neither (i) nor (ii) shall apply if a Distribution
Date has occurred in advance of the effectiveness of either (i) or
(ii).
(w) “NASDAQ”
shall mean the NASDAQ Stock Market or any of its listing
venues.
(x) “NYSE”
shall mean the New York Stock Exchange.
(y) “Person”
shall mean any individual, firm, corporation, partnership, limited
liability company, limited liability partnership, association,
trust, syndicate or other entity, or any group of persons making a
“coordinated acquisition” of shares of Common Stock or
otherwise treated as an entity within the meaning of Section
1.382-3(a)(l) of the Treasury Regulations or otherwise for purposes
of Section 382, or any successor provision or replacement
provision, and includes any successor (by merger or otherwise) of
such individual or entity.
(z) “Preferred
Stock” shall mean shares of Series B Junior
Participating Preferred Stock, par value $0.0001 per share, of the
Company having the voting powers, designations, preferences and
relative rights described in the Amended and Restated Certificate
of Designation, Preferences and Rights set forth in Exhibit A
hereto, and, to the extent that there are not a sufficient number
of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of preferred stock of the Company designated for such
purpose containing terms substantially similar to the terms of the
Series B Junior Participating Preferred Stock.
(aa) “Purchase
Price” shall have the meaning set forth in Section
7(b).
(bb) “Record
Date” shall have the meaning set forth in the
recitals.
(cc) “Redemption
Price” shall have the meaning set forth in Section
22(a).
(dd) “Right”
shall have the meaning set forth in the preamble.
(ee) “Rights
Agent” shall have the meaning set forth in the
preamble.
(ff) “Right
Certificate” shall have the meaning set forth in
Section 3(a).
(gg) “Section
11(a)(ii) Event” shall have the meaning set forth in
Section 11(a)(ii).
(hh) “Section
382” shall mean Section 382 of the Code and the
Treasury Regulations promulgated thereunder.
(ii) “Securities
Act” shall mean the Securities Act of 1933, as
amended.
(jj) “Share
Equivalents” shall have the meaning set forth in
Section 11(a)(iii).
(kk) “Stock
Acquisition Date” shall mean the first date of a
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed or amended pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person indicating that an Acquiring Person has become
such; provided that, if such Person is determined by the Board not
to be or have become an Acquiring Person, then no Stock Acquisition
Date shall be deemed to have occurred.
(ll) “Subsidiary”
of a Person shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting
power sufficient to elect or appoint a majority of the board of
directors or other persons performing similar functions are
beneficially owned, directly or indirectly, by such Person and any
corporation or other entity that is otherwise controlled by such
Person.
(mm) “Substitution
Period” shall have the meaning set forth in Section
11(a)(iii).
(nn) “Summary
of Rights” shall have the meaning set forth in Section
3(b).
(oo) “Tax
Benefits” shall mean the net operating loss
carryforwards, capital loss carryforwards, general business credit
carryforwards, alternative minimum tax credit carryforwards and
foreign tax credit carryforwards, as well as any loss or deduction
attributable to a “net unrealized built-in loss” within
the meaning of Section 382, and the Treasury Regulations
promulgated thereunder, of the Company or any direct or indirect
Subsidiary thereof.
(pp) “Trading
Day” shall have the meaning set forth in Section
11(d)(i).
(qq) “Treasury
Regulations” shall mean final and temporary (but not
proposed) regulations of the U.S. Department of the Treasury
promulgated under the Code, as such regulations may be amended from
time to time.
(rr) “Triggering
Event” shall mean any Section 11(a)(ii)
Event.
(ss) “Trust”
shall have the meaning set forth in Section 23(a).
(tt) “Trust
Agreement” shall have the meaning set forth in Section
23(a).
(uu) “Unit”
shall have the meaning set forth in the recitals.
Section
2. Appointment of
Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in
accordance with the express terms and conditions of this Agreement
(and no implied terms and conditions), and the Rights Agent hereby
accepts this appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable, upon
ten (10) days’ prior written notice the Rights Agent. In the
event the Company appoints one or more co-Rights Agents, the
respective duties of the Rights Agents and any co-Rights Agents
shall be as the Company shall determine and the Company shall
promptly notify the Rights Agent of such duties. The Rights Agent
shall have no duty to supervise, and in no event shall be liable
for, the acts or omissions of any co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the
Close of Business on the earlier to occur of (i) the tenth (10th)
calendar day after the Stock Acquisition Date or (ii) the tenth
(10th) calendar day (or such later time as determined by the Board
but in no event later than the time such Person becomes an
Acquiring Person) after the date of the commencement by any Person
of a tender or exchange offer, upon the successful consummation of
which such Person, together with its Affiliates and Associates,
would be an Acquiring Person (irrespective of whether any shares
are actually purchased pursuant to such offer), or in the case of
clause (ii) such later date specified by the Board which date shall
not be later than the date specified in clause (i) (the earliest of
such dates being referred to herein as the “Distribution Date”), (x)
the Rights will be evidenced by the certificates for the shares of
Common Stock of the Company registered in the names of the holders
of the shares of Common Stock of the Company (which certificates
for shares of Common Stock of the Company shall be deemed also to
be certificates for Rights) or, with respect to shares of Common
Stock of the Company not represented by certificates, the Rights
related thereto will be evidenced by the notation on the records of
the Company representing these shares, and, in each case, not by
separate certificates, (y) the registered holders of shares of
Common Stock of the Company shall also be the registered holders of
the associated Rights, and (z) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with
the transfer of the underlying shares of Common Stock of the
Company (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will, if
requested to do so by the Company and provided with all necessary
information and documents, at the expense of the Company, send, by
first-class, postage prepaid mail, to each record holder of shares
of Common Stock of the Company as of the Close of Business on the
Distribution Date, at the address of the holder shown on the
records of the Company, a certificate in substantially the form of
Exhibit B (the
“Right
Certificate”) evidencing the Rights underlying the
shares of Common Stock of the Company so held, provided, that all procedures
relating to actions to be taken or information to be provided with
respect to Rights recorded in uncertificated or book-entry form,
and all requirements with respect to the form of any Right
Certificate set forth in this Agreement, may be modified as
necessary or appropriate to reflect uncertificated or book-entry
ownership subject to the prior written consent of the Rights Agent.
As of and after the Distribution Date, the Rights will be evidenced
solely by the Right Certificates. The Company shall promptly notify
the Rights Agent in writing upon the occurrence of the Distribution
Date and, if notification is given orally, the Company shall
confirm the same in writing on or prior to the next succeeding
Business Day. Until such written notice is received by the Rights
Agent, the Rights Agent may presume conclusively for all purposes
that the Distribution Date has not occurred.
(b) As soon as
practicable following the Record Date, the Company will send a copy
of the Summary of the Terms of the Rights, substantially in the
form attached hereto as Exhibit C (the
“Summary of
Rights”), by postage prepaid mail, to each record
holder of the Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of
the Company.
(c) Until the
Distribution Date (or, if earlier, the Expiration Date or Final
Expiration Date), the surrender for transfer of any certificate for
shares of Common Stock of the Company shall also constitute the
surrender for transfer of the Rights associated with the shares of
Common Stock represented thereby and the transfer of shares of
Common Stock on the records of the Company shall also constitute
the transfer of the Rights associated with the shares.
(d) Certificates
issued for shares of Common Stock of the Company (including,
without limitation, certificates issued upon transfer or exchange
of shares of Common Stock of the Company) after the Record Date,
but prior to the earlier of the Distribution Date, the Expiration
Date or the Final Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following
legend:
“This
certificate also evidences and entitles the holder to certain
rights (the “Rights”) as set forth in
a Section 382 Tax Benefits Preservation Plan by and between
Support.com, Inc. (the “Company”) and Computershare
Trust Company, N.A., as Rights Agent (or any successor rights
agent), dated as of August 21, 2019, as from time to time amended,
extended or renewed (the “Plan”), the terms of
which are incorporated herein by reference and a copy of which is
on file at the principal executive office of the Company. Under
certain circumstances, as set forth in the Plan, such Rights will
be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder
of record of this certificate a copy of the Plan, without charge,
within ten Business Days (as defined in the Plan) after receipt of
a written request therefor. Under certain circumstances, as
provided in the Plan, Rights issued to or beneficially owned by
Acquiring Persons or their Associates or Affiliates (as such terms
are defined in the Plan) or any purported subsequent holder of such
Rights will become null and void. The Rights shall not be
exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to
such holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be
obtainable.”
In the
case of the initial transaction statement or subsequent period
statements with respect to shares of Common Stock of the Company
not represented by certificates (including, without limitation,
upon transfer or exchange of Common Stock) after the Record date,
but prior to the earlier of the Distribution Date or the Expiration
Date, registration of such shares in the Company’s share
register shall be deemed also to be evidence of such Rights, and
such statements will include a legend in substantially the
following form:
“The
registration in the share register of Support.com of the shares of
common stock to which this initial transaction or subsequent
periodic statement relates also evidences and entitles the
registered holder of such shares to certain rights (the
“Rights”) as set forth in
a Section 382 Tax Benefits Preservation Plan by and between
Support.com, Inc. and Computershare Trust Company, N.A., as Rights
Agent (or any successor rights agent), dated as of August 21, 2019, as from time to time
amended, extended or renewed (the “Plan”), the terms of
which are incorporated herein by reference and a copy of which is
on file at the principal executive office of the Company. Under
certain circumstances, as set forth in the Plan, such Rights will
be evidenced by separate certificates and will no longer be
evidenced by such registration. The Company will mail to the holder
of this statement a copy of the Plan, without charge, within ten
Business Days (as defined in the Plan) after receipt of a written
request therefor. Under certain circumstances, as provided in the
Plan, Rights issued to or beneficially owned by Acquiring Persons
or their Associates or Affiliates (as such terms are defined in the
Plan) or any purported subsequent holder of such Rights will become
null and void. The Rights shall not be exercisable, and shall be
void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable.”
The failure to print the foregoing legend on any
such certificate, initial transaction statement or subsequent
period statement representing shares of Common Stock of the Company
or any defect therein shall not affect in any manner whatsoever the
application or interpretation of the provisions of
Section
7(e) hereof.
Section 4. Form of Right Certificates; Notice to
Rights Agent as to Acquiring Person.
(a) The Right
Certificates (and the forms of election to purchase shares and
forms of assignment to be printed on the reverse thereof), when, as
and if issued, shall be substantially in the form set forth in
Exhibit B and may
have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate (which do not affect the rights, liabilities, duties or
responsibilities of the Rights Agent) and as are not inconsistent
with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any law, rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform
to usage. Subject to the terms and conditions hereof, the Right
Certificates evidencing the Rights, whenever issued, on their face
shall entitle the holders thereof to purchase, for each Right, one
Unit, at the Purchase Price, but the number and type of shares or
other property holders thereof shall be entitled to purchase and
the Purchase Price, shall be subject to adjustment as provided in
this Agreement.
(b) Notwithstanding
any other provision of this Agreement, any Right Certificate that
represents Rights that may be or may have been at any time on or
after the Distribution Date beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof (or any purported
transferee of such Rights) may have impressed on, printed on,
written on or otherwise affixed to it the following
legend:
“The beneficial owner of the Rights (the
“Rights”) represented by this Right Certificate may
be an Acquiring Person or an Affiliate or Associate (as such terms
are defined in the Section 382
Tax Benefits Preservation Plan by and between Support.com, Inc. and
Computershare Trust Company, N.A., as Rights Agent (or any
successor rights agent), dated as of August 21, 2019, as from time
to time amended, extended or renewed (the
“Plan”))
of an Acquiring Person or a subsequent holder of a Right
Certificate beneficially owned by such Persons (as defined in the
Plan). Accordingly, under certain circumstances as provided in the
Plan, this Right Certificate and the Rights represented hereby will
be null and void.”
The
provisions of this Agreement shall be operative whether or not the
foregoing legend is imprinted on any such Right Certificate. The
Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence of any Acquiring
Person.
Section 5. Countersignature and
Registration.
(a) The Right
Certificates shall be duly executed on behalf of the Company by the
Chief Executive Officer, Chief Financial Officer, General Counsel
or any Vice President of the Company, either manually or by
facsimile signature, and shall have affixed thereto the
Company’s seal or a facsimile thereof which shall be attested
by the Secretary, Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the
Rights Agent, manually or by in facsimile signature, and shall not
be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, the Right Certificates nevertheless may be
countersigned by the Rights Agent, issued and delivered with
thesame force and effect as though the person who signed the Right
Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign the
Right Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
(b) Following
the Distribution Date and receipt by the Rights Agent of written
notice to that effect and all other relevant information referred
to in Section 3(a),
the Rights Agent will keep or cause to be kept books for
registration and transfer of the Right Certificates issued
hereunder. The books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates, the date
of each of the Right Certificates, and the certificate numbers for
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to
the provisions of Section
4(b), Section
7(e) and Section
13(b), at any time after the Close of Business on the
Distribution Date and at or prior to the Close of Business on the
earlier of the Expiration Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be (a) transferred or
(b) split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase
a like number of Units (and/or other securities or property, as the
case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate to be
transferred, split up, combined or exchanged at the office of the
Rights Agent designated for this purpose, accompanied by a
signature guarantee by an “Eligible Guarantor
Institution” that is a member or participant in the
Securities Transfer Agents Medallion Program or other comparable
“signature guarantee program” (a “signature guarantee”) and
such other documentation as the Rights Agent may reasonably
request. The Right Certificates are transferable only on the
registry books of the Rights Agent. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate
until the registered holder thereof shall have (i) properly
completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Right
Certificate, (ii) provided a signature guarantee and such
additional evidence of theidentity of the Beneficial Owner (or
former Beneficial Owner) thereof and of the Rights evidenced
thereby and the Affiliates and Associates of such Beneficial Owner
(or former Beneficial Owner) as the Company or the Rights Agent
shall reasonably request, and (iii) paid a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates. Thereupon or as promptly as practicable
thereafter, the Company shall prepare, execute and deliver to the
Rights Agent, and the Rights Agent shall countersign (by manual or
facsimile signature) and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so
requested, registered insuch name or names as may be designated by
the surrendering registered holder. The Rights Agent shall forward
any such sum collected by it to the Company or to such Persons as
the Company shall specify by written notice. The Rights Agent shall
have no duty or obligation to take any action under this Section 6
unless and until the Rights Agent is reasonably satisfied that all
such taxes and/or charges have been paid.
(b) Subject to
Section 7(d),
Section 7Section
7(e) or as otherwise provided in this Agreement, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate and such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof, accompanied by a signature guarantee and
such other documentation as the Company or the Rights Agent may
reasonably request, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, if
requested by the Company, reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will execute and deliver to the Rights Agent
a new Right Certificate of like tenor for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated. Without limiting the foregoing, the Company
may require the owner of any lost, stolen or destroyed Right
Certificate, or his legal representative, to give the Company a
bond sufficient to indemnify the Company and the Rights Agent
against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such Right Certificate or
the issuance of any such new Right Certificate.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to
Section 7(d),
Section 7(e) or as
otherwise provided in this Agreement, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby in
whole at any time or in part from time to time after the
Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly
executed (with such signature duly guaranteed), to the Rights Agent
at the office of the Rights Agentdesignated for such purposes
together with payment of the Purchase Price (defined below), or
portion thereof, as applicable, with respect to each Unit or Units
(and/or other securities or property in lieu thereof) as to which
the Rights are exercised, subject to adjustment as hereinafter
provided, at or prior to the earlier of the Expiration Date and the
Final Expiration Date.
(b) The
purchase price shall initially be $3.00 for each Unit issuable
pursuant to the exercise of a Right. The purchase price and the
number of Units (and/or other securities or property, as the case
may be) to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Section 11. (The purchase
price, after giving effect to any adjustments, shall be referred to
as the “Purchase
Price.”) The Purchase Price shall be payable in lawful
money of the United States of America, in accordance with Section
7(c).
(c) Except as
provided in Section
7(d) and Section
7(e), upon receipt of a Right Certificate with the form of
election to purchase duly executed, accompanied by payment of the
Purchase Price, or the applicable portion thereof, for the Units
(and/or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable tax or governmental
charge, by cash, certified check or official bank check payable to
the order of the Company or the Rights Agent, the Rights Agent
shall thereupon promptly (i) (A) requisition from the Company or
any transfer agent for the Units, certificates for the number of
Units so elected to be purchased or, in the case of shares of Units
not represented by certificates, requisition from the Company or
any transfer agent therefor a notice setting forth such number of
Units to be purchased for which registration will be made in the
Company’s share register, and the Company will comply and
hereby authorizes and directs the transfer agent or shall cause the
transfer agent (if the Rights Agent is not also the transfer agent)
to comply with all such requests or (B) if the Company, in its sole
discretion, shall have elected to deposit the shares of Preferred
Stock underlying the Units issuable upon exercise of the Rights
hereunder into a depositary, requisition fromthe depositary agent
depositary receipts representing the number of Units as are to be
purchased (in which case certificates for the shares of Preferred
Stock underlying the Units represented by the receipts shall be
deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with
Section 13(b) and
(iii) promptly after receipt of the Units certificates or
depositary receipts, as the case may be, cause the same to be
delivered to or upon the order of the registered holder of the
Right Certificate, registered in such name or names as may be
designated by such holder,and, when appropriate, after receipt
promptly deliver the cash to or upon the order of the registered
holder of the Right Certificate. In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company
shall make all arrangements necessary so that those other
securities, cash and/or other property are available for
distribution by the Rights Agent, if and when necessary to comply
with this Agreement and the Rights Agent shall promptly take the
appropriate actions corresponding to the foregoing clauses (i)
through (iii), as applicable. In addition, in the case of an
exercise of the Rights by a holder pursuant to Section 11(a)(ii), the Rights
Agent shall return the Right Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating thereon
that the Rights represented by the Right Certificate no longer
include the rights provided by Section 11(a)(ii) and, if less
than all the Rights represented by such Right Certificate were so
exercised, the Rights Agent shall indicate on the Right Certificate
the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii). In case the
holder of any Right Certificate shall exercise (except pursuant to
Section 11(a)(ii))
less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered
holder of the Right Certificate or the holder’s duly
authorized assigns, subject to the provisions of Section
13(b).
(d) Notwithstanding
anything in this Agreement to the contrary, neither the Rights
Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the registered
holder shall have (i) properly completed and signed the certificate
contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for exercise and
(ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall
reasonably request.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the
first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person (or any
Affiliate or Associate thereof), (ii) a transferee of an Acquiring
Person (or of any Affiliate or Associate thereof) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any Affiliate or Associate
thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives those Rights pursuant
to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in the
Acquiring Person or to any Person with whom the Acquiring Person
has a continuing agreement, arrangement or understanding (whether
or not in writing) regarding the transferred Rights or (B) a
transfer which the Board has determined is part of an agreement,
arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of those Rights
shall have any rights whatsoever with respect to those Rights,
whether under any provision of this Agreement or otherwise. The
Company shall notify the Rights Agent when this Section 7(e) applies and shall
use its best efforts to ensure that the provisions of this
Section 7(e) and
Section 4(b) are
complied with, but neither the Company nor the Rights Agent shall
have any liability to any holder of Right Certificates or other
Person as a result of the Company’s failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
Section 8. Cancellation and Destruction of Right
Certificates.
All
Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to
the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any Right
Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy the cancelled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section
9. Reservation and Availability of Shares of Preferred
Stock.
(a) The
Company covenants and agrees that, from and after the Distribution
Date, it will cause to be reserved and kept available, out of and
to the extent of its authorized and unissued shares of Preferred
Stock not reserved for another purpose or shares of Preferred Stock
not reserved for another purpose held in its treasury, the number
of Units that, as provided in this Agreement, will be sufficient to
permit the exercise in full of all outstanding Rights;provided, however, that the Company shall
not be required to reserve and keep available Units sufficient to
permit the exercise in full of all outstanding Rights pursuant to
the adjustments set forth in Section 11(a)(ii) or
Section 11(a)(iii)
unless, and only to the extent that, the Rights become exercisable
pursuant to such adjustments.
(b) The
Company shall (i) use its best efforts to cause, from and after the
Distribution Date, the Rights and all Units (and/or following the
occurrence of a Triggering Event, shares of Common Stock of the
Company or other securities, as the case may be) issued or reserved
for issuance upon exercise thereof to be listed or admitted to
trading on the NYSE, NASDAQ or another national securities
exchange, and (ii) if then necessary to permit the offer and
issuance of such Units, shares of Common Stock of the Company
and/or other securities, as the case may be, register and qualify
such Units (or shares of Common Stock of the Company or other
securities, as the case may be) under the Securities Act and any
applicable state securities or “blue sky” laws (to the
extent exemptions therefrom are not available), cause the related
registration statement and qualifications to become effective as
soon as possible after filing and keep such registration statement
and qualifications effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier
of the expiration of the 60-day period referred to in Section 11(a)(ii), the
Expiration Date or the Final Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days,
the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to
become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. The Company
shall promptly notify the Rights Agent in writing whenever it makes
a public announcement pursuant to this Section 9(b) and give the
Rights Agent a copy of such announcement. Until such written notice
is received by the Rights Agent, the Rights Agent may presume
conclusively that no such suspension has occurred or such
suspension is still in effect, as the case may be. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall
not beexercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained or
the exercise thereof shall not otherwise be permitted under
applicable law or a registration statement under the Securities Act
(if required) shall not have been declared effective.
(c) The
Company covenants and agrees that it will take all such action as
may be necessary to insure that all Units (or shares of Common
Stock or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such Units (or
shares of Common Stock of the Company or other securities) subject
to payment of the Purchase Price (or the applicable portion
thereof) in respect thereof, be duly and validly authorized and
issued and fully paid and nonassessable Units (and/or shares of
Common Stock and other securities, as the case may be) in
accordance with applicable law.
(d) The
Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and
governmental charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Units (or
shares of Company Stock of the Company or other securities or
property, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any tax or charge
which may be payable in respect of any transfer or delivery of
Right Certificates to a Person otherthan, or the issuance or
delivery of certificates for Units (or shares of Common Stock of
the Company or other securities or property, as the case may be)
upon exercise of Rights in a name other than that of, the
registered holder of the Right Certificate, and the Company and the
Rights Agent shall not be required to issue or deliver a Right
Certificate or certificate for Units (and/or shares of Common Stock
of the Company or other securities or property, as the case may be)
to a Person other than the registered holder until any such tax or
charge shall have been paid (any such tax or charge being payable
by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s and the
Rights Agent’s satisfaction that no such tax or charge is
due.
Section 10. Securities Issuable Upon
Exercise. Each Person in whose name any certificate for
Units (or shares of Common Stock of the Company or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of the Units (or shares of Common Stock or other
securities, as the case may be) represented thereby on, and the
certificate shall be dated, the date upon which the Right
Certificate evidencing these Rights was duly surrendered and
payment of the Purchase Price, or the applicable portion thereof
(and any applicable taxes and governmental charges), was
made;provided,
however, that if
the date of such presentation and payment is a date upon which the
transfer books for the Units (or shares of Common Stock of the
Company or other securities, as the case may be) are closed, such
Person shall be deemed to have become the record holder of such
Units (or shares of Common Stock of the Company or other
securities) on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books for the Units
(or shares of Common Stock of the Company or other securities) are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate, as such, shall not be entitled to
any rights of a stockholder of the Company with respect to shares
for which the Right shall be exercisable, including without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustments to Number and Kind of
Securities or Other Property, Number of Rights or Purchase
Price.
The
number and kind of securities or other property subject to purchase
upon the exercise of each Right, the number of Rights outstanding
and the Purchase Price are subject to adjustment from time to time
as provided in this Section 11.
(a)
(i) In the event that the Company shall
at any time after the date of this Agreement (A) declare or pay any
dividend on the shares of Preferred Stock payable in shares of
Preferred Stock, (B) subdivide or split the outstanding shares of
Preferred Stock into a greater number of shares, (C) combine or
consolidate the outstanding shares of Preferred Stock into a
smaller number of shares or effect a reverse split of the
outstanding shares of Preferred Stock or (D) issue any shares of
its capital stock in a reclassification of the shares of Preferred
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then except as otherwise provided in this
Section 11(a) and
Section 7(e), the
Purchase Price in effect at the time of the record date for the
dividend or of the effective date of the subdivision, split,
combination, consolidation or reclassification, and the number of
Units and the number and kind of other securities, as the case may
be, issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number of Units and/or the number and kind of
other securities as the case may be, which, if the Right had been
exercised immediately prior to such date, whether or not such Right
was then exercisable, and at a time when the transfer books for the
Preferred Stock (or other capital stock, as the case maybe) of the
Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of the dividend,
subdivision, split, combination consolidation or reclassification.
If an event occurs which would require an adjustment under both
Section 11(a)(i)
and Section
11(a)(ii), the adjustment provided for in this Section 11(a) shall be in
addition to, and shall be made prior to, any adjustment required
pursuant to Section
11(ii).
(ii) In the
event any Person at any time becomes an Acquiring Person (this
event being referred to as a “Section 11(a)(ii)
Event”), then, subject to Section 22(a) and Section 23, and except as
otherwise provided in Section 7(e), each holder of a Right shall,
for a period of sixty days (or such longer period as may be
established by the Board) after the later of the occurrence of any
such event and the effective date of an appropriate registration
statement under the Securities Act pursuant to Section 9, have a
right to receive for each Right, upon exercise thereof in
accordance with the terms of this Agreement and payment of the
Purchase Price (or the applicable portion thereof) such number of
shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
then number of Units for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event
(whether or not such right was then exercisable), and (y) dividing
that product by 50% of the Current Market Price per share of Common
Stock of the Company on the date of such first occurrence (such
number of shares of Common Stock is called the “Adjustment Shares”);
provided,
however, that the
Purchase Price and the number of Adjustment Shares shall be further
adjusted as appropriate to reflect any stock split, reverse stock
split, stock dividend, reclassification or similar transaction
effected by the Company, or as provided in this Agreement to
reflect any other events, occurring after the date of such first
occurrence; and provided, further, that in connection
with any exercise effected pursuant to this Section 11(a)(ii), the
Board may (but shall not be required to) determine that a holder of
Rights shall not be entitled to receive shares of Common Stock of
the Company that would result in such holder, together with such
holder’s Affiliates, becoming the Beneficial Owner of 4.99%
or more of the total number of shares of Common Stock of the
Company then outstanding. If a holder would, but for the previous
clause, be entitled to receive a number of shares of Common Stock
of the Company (such shares, the “Excess Flip-In Shares”),
in lieu of receiving such Excess Flip-In Shares, such holder will
be entitled to receive an amount in (1) cash, (2) debt securities
of the Company, (3) other assets, or (4) any combination of the
foregoing, having an aggregate value equal to the Current Market
Price per share of Common Stock of the Company on the date of the
occurrence of a Section
11(a)(ii) Event multiplied by the number of Excess Flip-In
Shares that would otherwise have been issuable to such
holder.
(ii) In the
event that the number of shares of Common Stock of the Company
which are authorized by the Company’s Restated Certificate of
Incorporation but not outstanding and which are not reserved for
issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights for shares
of Common Stock of the Company in accordance with Section 11(a)(ii) and the
Rights shall become so exercisable, to the extent permitted by
applicable laws, each Right shall thereafter represent the right to
receive, upon exercise thereof at the Purchase Price, (x) a number
of shares of Common Stock of the Company (up to the maximum number
of shares of Common Stock of the Company which may be permissibly
issued), and (y) a number Units so that, when added together, the
numbers in clauses (x) and (y) equal the number of Adjustment
Shares. In the event the number of shares of Common Stock and
Preferred Stock which are authorized by the Company’s
Restated Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights is insufficient to permit the exercise in full of the Rights
in accordance with the prior sentence and the Rights shall become
so exercisable, to the extent permitted by applicable law, the
Company shall: (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the “Current Value”) and that
value shall be conclusive for all purposes; and (B) with respect to
each Right, upon exercise of such Right, issue shares of Common
Stock of the Company and Units to the extent available for the
exercise in full of such Right and, to the extent shares of Common
Stock or Units are not so available, make adequate provision to
substitute for the Adjustment Shares not received upon exercise of
such Right: (1)other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock
which, by virtue of having dividend, voting and liquidation rights
substantially comparable to the shares of Common Stock of the
Company, are deemed in good faith by the Board to have
substantially the same value as one share of Common Stock of the
Company (such shares are herein called “Share Equivalents”) and
whose determination shall be conclusive for all purposes); (2) debt
securities of the Company; (3) other assets; (4) cash; or (5) any
combination of the foregoing as determined by the Board, having a
value which, when added to the value of the number of the shares of
Common Stock of the Company and Units actually issued upon exercise
of such Right, shall have an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board
based upon the advice of a nationally recognized independent
investment banking firm selected by the Board;provided, however, if the Company shall
not have made adequate provision to deliver shares of Common Stock,
Units and Share Equivalents pursuant to Section 11(a)(ii), the prior
sentence of this paragraph and clause (B) above within 50 days
following the Stock Acquisition Date, then, to the extent permitted
by applicable law, the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available), Units or Share Equivalents and then, if necessary,
cash, debt securities, or other assets (in that order) which
shares, units, cash, debt securities and/or other assets have an
aggregate value equal to the excess of the Current Value over the
Purchase Price, and provided, further, that the Board may
(but shall not be required to) determine that a holder of Rights
shall not be entitled to receive equity securities under this
Section 11(a)(iii)
to the extent the Company determines the receipt thereof could
limit the Company’s ability to utilize the Tax Benefits. If
the Board shall determine in good faith that it is likely that
sufficient additional shares of Common Stock, Units or Share
Equivalents could be authorized for issuance upon exercise in full
of the Rights, the 50 day period set forth above may be extended to
the extent necessary, but not more than 120 days after the Stock
Acquisition Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares or Shares
Equivalents (such 50 day period, as it may be extended, is called
the “Substitution
Period”), To the extent that the Company determines
that some action need be taken pursuant to the foregoing provisions
of this Section
11(a)(iii), the Company (x) shall provide, subject to
Section 7(e), that
this action shall apply uniformly to all outstanding and
exercisable Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to the
foregoing provisions of this Section 11(a)(iii) and, if
necessary, to determine the value thereof In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement (with a prompt written
notice thereof to the Rights Agent) at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the value
of each Unit, each share of Common Stock of the Company and the per
share or unit value of any Share Equivalent shall be deemed to
equal the Current Market Price of a share of Common Stock of the
Company thereof as of the Stock Acquisition
Date.
(b) In case
the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of
shares of Preferred Stock entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after this
record date) shares of Preferred Stock and/or securities having the
same rights, privileges and preferences as the Preferred Stock
(“Equivalent
Preferred Securities”) or securities convertible into
Preferred Stock or Equivalent Preferred Securities at a price per
share of Preferred Stock or per unit of Equivalent Preferred
Securities (or having a conversion price per share or unit, if a
security convertible into Preferred Stock or Equivalent Preferred
Securities) less than the Current Market Price per share of
Preferred Stock on the record date, the Purchase Price to be in
effect after the record date shall be determined by multiplying the
Purchase Price in effect immediately prior to the record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or units of
Equivalent Preferred Securities (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at that Current Market Price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of additional shares of
Preferred Stock and/or units of Equivalent Preferred Securities to
be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible).
In case the subscription price may be paid by delivery of
consideration part or all of which may be in a form other than
cash, the value of the non-cash consideration shall be as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent. Shares of
Preferred Stock and units of Equivalent Preferred Securities owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. This
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if the record date had
not been fixed.
(c) In case
the Company shall fix a record date for a distribution to all
holders of shares of Preferred Stock (including any such
distribution made in connection with a consolidation, merger or
share exchange in which the Company is the continuing corporation)
of evidences of indebtedness, cash (other than a regular periodic
cash dividend), assets (other than a dividend payable in shares of
Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to the record date
by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on the record date, less the
fair market value (as determinedin good faith by the Board, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share
of Preferred Stock;provided, however, that in no event shall
the consideration to be paid upon exercise of one Right be less
than the aggregate par value of the shares of capital stock of the
Company issuable upon the exercise of one Right. These adjustments
shall be made successively whenever such a record date is fixed;
and in the event that the distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) For the
purpose of any computation hereunder, other than computations made
pursuant to Section 11(a)(iii), and subject to Section 11(d)(ii),
the “Current Market
Price” per share of stock or unit of other securities
on any date shall be deemed to be the average of the daily closing
prices per share of such stock or unit of other securities for the
30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date;provided, however, that in the event that
the Current Market Price per share of any stock or unit of other
securities is determined during a period following the announcement
by the issuer of that stock or other security of (i) any dividend
or distribution on such stock or other securities(other than a
regular quarterly cash dividend and other than the Rights), or (ii)
any subdivision, split, combination or reclassification of that
stock or other securities, and prior to the expiration of the
requisite 30 Trading Day period, the ex-dividend date for the
dividend or distribution, or the record date for the subdivision,
combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on that day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to shares of
stock or units of securities listed or admitted to trading on the
NYSE or NASDAQ or, if the shares of stock or units of any other
securities are not listed or admitted to trading on the NYSE or
NASDAQ, as reported in the principal consolidated transaction
reporting system with respect to shares of stock or units of other
securities listed on the principal national securities exchange on
which the shares of stock or units of other securities are listed
or admitted to trading or,if the shares of stock or units of other
security are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the OTC Bulletin Board or
any other system then in use, or, if on any such date the shares of
such stock or units of such other security are not quoted by any
such organization, the average of the closing bid and asked prices
as furnished bya professional market maker making a market in such
stock or other securities selected by the Board; provided, that if
such security is not listed or quoted on the NYSE or NASDAQ and the
principal market for such securities is a non-U.S. securities
exchange, then the closing price foreach day shall be determined by
using the customary convention for determining the closing price of
a security on such exchange as determined by the Board (in which
event the exchange rate of the relevant currency into U.S. dollars
for each Trading Day (as defined below) shall be determined by the
Board). The term “Trading Day” shall mean a
day on which the principal national securities exchange on which
the shares of such stock or units of other securities are listed or
admitted to trading is open for the transaction of business or, if
the shares of such stock or other units of such security are not
listed or admitted to trading on any national securities exchange,
a Business Day; provided, that if such security is not listed or
quoted on the NYSE or NASDAQ and the principal market for such
security is a non-U.S. securities exchange, then
“Trading
Day” shall mean a day on which such non-U.S.
securities exchange is open for the transaction of business.
Subject to Section
11(d)(ii) with respect to Units, if such stock or unit of
other securities is not publicly held or not so listed, traded or
quoted, “Current
Market Price” per share or other unit of such
securities shall mean the fair value per share of stock or other
unit of such securities as determined in good faith by the Board
whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(i) For the
purpose of any computation hereunder, the “Current Market Price” per
Unit shall be determined in the same manner as set forth above in
paragraph (i) of this Section 11(d) (other than the
last sentence thereof). If the Current Market Price per Unit cannot
be determined in the manner provided above because the Units are
not publicly held, listed or traded or quoted in a manner described
in paragraph (i) of this Section 11(d), the
“Current Market Price” per Unit shall be conclusively
deemed to be an amount equal to the Current Market Price per share
of the Common Stock of the Company. If neither the shares of Common
Stock of the Company nor the Units are listed or traded or quoted
as described in Section
11(d)(i), “Current Market Price” per share
thereof shall mean the fair value per share of Common Stock of the
Company as determined in good faith by the Board, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(e) Anything
herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the
Purchase Price; provided, however, that any adjustments which by
reason of this Section
11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest
cent or to the nearest thousandth of a Unit or share of Common
Stock or any other security, as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required
by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which mandates such
adjustment, or (ii) the Final Expiration Date.
(f) If as a
result of an adjustment made pursuant to Section 11(a)(ii), the
holder of any Right thereafter exercised shall become entitled to
receive any securities other than Units, thereafter the number of
the other securities so receivable upon exercise of any Right and
the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of
Preferred Stock and/or Units contained in Section 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (l) and (m), and the provisions of
Section 7, 9, 10 and Section 13 with respect to the shares of
Preferred Stock and/or Units shall apply on like terms to any such
other shares.
(g) All Rights
originally issued by the Company subsequent to any adjustment made
to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units
(and/or other securities) purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the
Company shall have exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Units (calculated to the nearest
one-thousandth) equal to the quotient obtained by (i) multiplying
(x) the number of Units covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The
Company may elect on or after the date of any adjustment of the
Purchase Price or any adjustment to the number of Units for which a
Right may be exercised, to adjust the number of Rights, in lieu of
any adjustment in the number of Units purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of Units
for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated
to the nearest one thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement
(with prompt written notice thereof to the Rights Agent) of its
election to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any date thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to the registered
holders of Right Certificates on the record date Right Certificates
evidencing, subject to Section 13, the additional Rights to which
the holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such
registered holders in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in
the names of the registered holders of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of
any adjustment or change in the Purchase Price or the number of
Units issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per Unit and the number of Units which
were expressed in the initial Right Certificates issued
hereunder.
(k) Before
taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, attributable to
the Units, shares of Common Stock or other securities issuable upon
exercise of the Rights, the Company shall use best efforts to take
any corporate action, which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable Units, shares of Common Stock or other
securities at such adjusted Purchase Price.
(l) In any
case in which this Section 11 shall require that an adjustment in
the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt
written notice thereof to the Rights Agent) until the occurrence of
such event the issuance to the holder of any Right exercised after
such record date the Units and/or other securities of the Company,
if any, issuable upon such exercise over and above the Units and/or
other securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive the additional Units and/or
other securities upon the occurrence of the event requiring such
adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section
11, as and to the extent that in its good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock or Common Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock or Common
Stock at less than the Current Market Price, (iii) issuance wholly
for cash or shares of Common Stock, Preferred Stock or securities
which by their terms are convertible into or exchangeable for
shares of Preferred Stock or Common Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common
Stock or Preferred Stock, shall not be taxable to such
stockholders.
(n) The
Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 22, Section 23 or Section
26, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits
intended to be afforded by the Rights.
(o) Anything
in this Agreement to the contrary notwithstanding, in the event
that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any
dividend on the shares of Common Stock of the Company payable in
shares of Common Stock of the Company or (ii) effect a subdivision
or split the outstanding shares of Common Stock of the Company into
a greater number of shares of Common Stock of the Company or (iii)
combine or consolidate the outstanding shares of Common Stock of
the Company into a small number of shares or effect a reverse split
of the outstanding shares of Common Stock of the Company, then in
any such case, each share of Common Stock outstanding following
payment of such dividend, such subdivision, split, combination,
consolidation or issuance shall continue to have one Right (as
adjusted as otherwise provided herein) associated therewith and the
Purchase Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the Purchase
Price immediately prior to such event by a fraction, the numerator
of which shall be the total number of shares of Common Stock of the
Company outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of
shares of Common Stock of the Company outstanding immediately
following the occurrence of such event. The adjustment provided for
in the preceding sentence shall be made successively whenever such
a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certification of Adjustments.
Whenever an adjustment is made as provided in Section 11, the
Company shall (a) promptly prepare a certificate setting forth the
adjustment and a reasonably detailed statement of facts and
computations accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the shares of
Common Stock and Preferred Stock a copy of the certificate, and (c)
if a Distribution Date has occurred, mail or cause the Rights Agent
to mail a brief summary thereof to each registered holder of a
Right Certificate (or, if prior to the Distribution Date, to each
holder of record of shares of Common Stock) in accordance with
Section 25. Notwithstanding the foregoing sentence, the failure of
the Company to prepare such certificate or statement or make such
filings or mailings shall not affect the validity of, or the force
or effect of, the requirement for such adjustment. The Rights Agent
shall be fully protected in relying on such certificate, shall have
no duty or liability with respect to any adjustment therein
contained, and shall not be deemed to have knowledge of any
adjustment or events related thereto unless and until it shall have
received such certificate. Subject to the preceding sentence, any
adjustment to be made pursuant to Section 11 shall be effective as
of the date of the event giving rise to the
adjustment.
Section 13. Fractional Rights and Fractional
Shares.
(a) The
Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights.
Units may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that the
agreement shall provide that the holders of the depositary receipts
shall have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Units represented by the
depositary receipts. In lieu of such fractional Rights, the Company
shall pay to the holders of record of the Right Certificates with
regard to which the fractional Rights would otherwise be issuable
an amount in cash equal to the same fraction of the then Current
Market Value of a whole Right.
(b) The
Company shall not be required to issue fractions of Units or other
securities upon exercise of the Rights or to distribute
certificates which evidence fractional Units or other securities.
In lieu of issuing fractions of Units or other securities, the
Company shall pay to the registered holders of Right Certificates
at the time the Right Certificates are exercised as herein provided
an amount in cash equal to the same fraction of the then Current
Market Value of a Unit or other securities, as the case may
be.
(c) The holder
of a Right by the acceptance of a Right expressly waives his right
to receive any fractional Right or fractional Unit or other
fractional securities (other than the fractional shares of
Preferred Stock represented by Units) upon exercise of a
Right.
(d) Whenever a
payment for fractional Rights or fractional shares is to be made by
the Rights Agent under this Agreement, the Company shall (i)
promptly prepare and deliver to the Rights Agent a certificate
setting forth in reasonable detail the facts related to such
payments and the prices and formulas utilized in calculating such
payments; and (ii) provide sufficient funds to the Rights Agent in
the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate
and has no duty with respect to, and will not be deemed to have
knowledge of, any payment for fractional Rights or fractional
shares under any Section of this Agreement relating to the payment
of fractional Rights or fractional shares unless and until the
Rights Agent has received such a certificate and sufficient
monies.
Section 14. Rights of Action. All rights of
action in respect of this Agreement, except those rights of action
vested in the Rights Agent pursuant to Section 17 and Section 19,
are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of
record of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, the shares of
Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, any shares of Common Stock), may, in its own
behalf and for its own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company or any
other Person to enforce, or otherwise act inrespect of, its right
to exercise the Rights evidenced by the Right Certificate in the
manner provided in the Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any breach
of this Agreement and, accordingly, that they will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations
of any Person subject to this Agreement.
Section 15. Agreement of Right
Holders. Every holder of a Right by accepting the same
consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to
the Distribution Date, the Rights will not be evidenced by a Right
Certificate and will be transferable only in connection with the
transfer of Common Stock of the Company;
(b) from and
after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates contained
therein properly completed and duly executed;
(c) subject to
Section 6 and Section 7(e), the Company and the Rights Agent may
deem and treat the Person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Stock
certificate or, with respect to shares of Common Stock not
represented by a certificate the associated notation on the
Company’s share register) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the
associated Common Stock certificate, if any, made by anyone other
than the Company or the Rights Agent or the transfer agent of the
shares of Common Stock) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company,
its directors, officers, employees and agents nor the Rights Agent
shall have any liability to any holder of a Right or other Person
as a result of its inability to perform any ofits obligations under
this Agreement by reason of any preliminary or permanent injunction
or other order, decree, judgment or ruling (whether interlocutory
or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
by reason of any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, regulatory or
administrative agency or commission, prohibiting or otherwise
restraining performance of such obligation.
Section 16. Right Certificate Holder Not Deemed a
Stockholder. No holder of a Right, as such, shall be
entitled to vote, receive dividends in respect of or be deemed for
any purpose to be the holder of shares of Common Stock, Preferred
Stock, Units or any other securities of the Company which may at
any time be issuable upon the exercise of the Rights, nor shall
anything contained herein or in any Right Certificate be construed
to confer upon the holder of any Right Certificate, as such, any
ofthe rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions hereof.
Section 17. Concerning the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, reimbursement of its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the preparation, delivery, amendment, administration
and execution of this Agreement and the exercise and performance of
its duties hereunder.
(b) The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, damage, liability, demand, judgment, fine,
penalty, claim, settlement, cost or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the
Rights Agent as each must be determined by final non-appealable
judgment of a court of competent jurisdiction, for any action
taken, suffered or omitted by the Rights Agent in connection with
the acceptance of, administration of and performance of its duties
under this Agreement, including reasonable attorneys’ fees
and expenses and the costs and expenses of defending against any
claim of liability in the premises.
(c) The Rights
Agent shall be authorized and protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by in connection with its administration and performance of
this Agreement in reliance upon any Right Certificate, certificate
for shares of Common or Preferred Stock, Units or other securities
of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document
reasonably believed by it to be genuine and to be signed, executed
and, where expressly required hereunder, guaranteed, verified or
acknowledged, by the proper person or persons, or otherwise upon
the advice of counsel as set forth herein. The Rights Agent shall
not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent
shall be fully protected and shall incur no liability for failing
to take any action in connection therewith, unless and until it has
received such notice.
The
provisions of this Section 17 and Section 19 shall survive the
termination or expiration of this Agreement, the exercise or
expiration of the Rights and the resignation, replacement or
removal of the Rights Agent. The costs and expenses incurred in
enforcing this right of indemnification shall be paid by the
Company. Anything to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits, even if the Rights
Agent has been advised of the likelihood of such loss or damage.
Any liability of the Rights Agent under this Agreement (other than
by reason of gross negligence, bad faith or willful misconduct, in
each case as determined by a non-appealable judgment of a court of
competent jurisdiction) will be limited to the amount of fees paid
by the Company to the Rights Agent during the twelve (12) months
immediately preceding the event for which recovery from the Rights
Agent is being sought.
Section 18. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any Person
into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any Person
succeeding to the stockholder services business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 20. In case
at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at
any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver such Right Certificates so
countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or
in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in
this Agreement.
Section 19. Duties of Rights Agent. The
Rights Agent undertakes to perform only the duties and obligations
expressly imposed by this Agreement (and no implied duties and
obligations) upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights
Agent may consult with legal counsel (who may be legal counsel for
the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of,
any action taken, suffered or omitted by it, subject to Section
17(b) and in accordance with such advice or opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring
Person and the determination of Current Market Price) be proved or
established by the Company prior to taking, suffering or omitting
to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the Chief
Executive Officer, the Chief Financial Officer, the General
Counsel, any Vice President of the Company, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company (each, an “Appropriate Officer”) and
delivered to the Rights Agent; and such certificate shall be
complete and full authorization and protection to the Rights Agent,
and, subject to Section 17(b) the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or
omitted by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights
Agent shall be liable hereunder only for its own gross negligence,
bad faith or willful misconduct, as each is determined by a final
non-appealable judgment by a court of competent
jurisdiction.
(d) The Rights
Agent shall not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the Right
Certificates (including in the case of uncertificated shares, by
notation in the Company’s share register reflecting
ownership), except as to the fact that it has countersigned the
Rights Certificates, or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights
Agent shall not have any liability for nor be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by
the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereon); nor shall
it be liable nor responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be liable or responsible for any
adjustment required under the provisions of Section 11 or
responsible for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a certificate
describing any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or
Common Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred Stock (or
other securities, as the case may be) will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights
Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from an
Appropriate Officer, and to apply to such officers for advice or
instructions in connection with its duties, and such advice or
instructions shall be full authorization and protection to the
Rights Agent and, subject to 17(b), the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or
omitted to be taken by it in accordance with the advice or
instructions of any such officer.
(h) The Rights
Agent and any stockholder, Affiliate, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and
freely as though it were not the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent and such Persons
from acting in any other capacity for the Company or for any other
Person.
(i) If, with
respect to any Right Certificate surrendered to the Rights Agent
for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 of such
certificate, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first
consulting with the Company and the Rights Agent shall not be
liable for its failure to act or any delay in acting in compliance
with this clause (i).
(j) No
provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other
than internal costs incurred by the Rights Agent in providing
services to the Company in the ordinary course of its business as
Rights Agent and for which the Rights Agent shall be compensated by
the Company pursuant to Section 17(a)) or in the exercise of its
rights or powers if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) The Rights
Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be
liable, answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the
Company, any holder of Rights or any other Person resulting from
any such act, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and
continued employment thereof, as each is determined by a final,
non-appealable court judgment of a court of competent
jurisdiction.
(l) The Rights
Agent shall not have any duty or responsibility in the case of the
receipt of any written demand from any holder of Rights with
respect to any action or default by the Company, including, without
limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings
at law or otherwise or to make any demand upon the
Company.
(m) The Rights
Agent shall not be liable or responsible for any failure of the
Company to comply with any of its obligations relating to any
registration statement filed with the Securities and Exchange
Commission or this Agreement, including without limitation
obligations under applicable regulation or law.
(n) The Rights
Agent shall not assume any obligations or relationship of agency or
trust with any of the owners or holders of the Rights.
(o) The Rights
Agent may rely on, and be fully authorized and protected in acting
or failing to act in reliance upon, (a) any guaranty of signature
by an “Eligible Guarantor Institution” that is a member
or participant in the Securities Transfer Agents Medallion Program
or other comparable “signature guarantee program” or
insurance program in addition to, or in substitution for, the
foregoing; or (b) any law, act, regulation or any interpretation of
the same even though such law, act, or regulation may thereafter
have been altered, changed, amended or repealed.
Section 20. Change of Rights Agent. The
Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days’
notice in writing mailed to the Company and, to the extent the
Right Agent is not the transfer agent of the shares of Common
Stock, to each such transfer agent by registered or certified mail.
The Company shall notify the registered holders of any such change
in Rights Agent. The Company may remove the Rights Agent or any
successor Rights Agent (with or without cause) upon 30 days’
notice in writing, mailed to the Rights Agent or any successor
Rights Agent, as the case may be, and to each transfer agent of the
shares of Common Stock by registered or certified mail, and to the
registered holders of the Right Certificates by mail. In the event
a transfer agency relationship in effect between the Company and
the Rights Agent terminates, the Rights Agent will be deemed to
have resigned automatically and be discharged from its duties under
this Agreement as of the effective date of such termination, and
the Company shall be responsible for sending any required notice to
holders. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
registered holder of a Right Certificate (who shall, with such
notice, submit such holder’s Right Certificate for inspection
by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a) a
Person organized and doing business under the laws of the United
States or any state of the United States so long as such Person is
in good standing, is authorized to do business in such state, is
authorized under such laws to exercise stockholder services powers,
is subject to supervision or examination by federal or state
authority and has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a Person described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and shall execute and deliver, if applicable, any
further assurance, conveyance, act or deed necessary for that
purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common
Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates, if any. Failure to give any
notice provided for in this Section 20, however, or any defect
therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 21. Issuance of New Right
Certificates. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares of
stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock of the Company following the Distribution
Date and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the
exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board, issue
Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i)
no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right
Certificate would be issued, and (ii) no such Right Certificate
shall be issued, if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance
thereof.
Section 22. Redemption.
(a) The Board
may, at its option, at any time prior to the earlier of (x) the
Close of Business on the tenth (10th) calendar day after the Stock
Acquisition Date (or, if the tenth (10th) calendar day following
the Stock Acquisition Date occurs before the Record Date, the Close
of Business on the Record Date) or (y) the Close of Business on the
Final Expiration Date, direct the Company to, and if directed, the
Company shall, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.001 per Right (the
total amount paid to any holder of Rights to be rounded up to the
nearest $0.01),as such amount may be appropriately adjusted to
reflect any stock split, reverse stock split, stock dividend,
reclassification or similar transaction effected by the Company
occurring after the date (such redemption price being hereinafter
referred to as the “Redemption Price”).
(b) Immediately
upon the action of the Board directing the Company to make the
redemption of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive
the Redemption Price for each Right so held. Promptly after the
action of the Board directing the Company to make such redemption
of the Rights, the Company shall give notice of such redemption to
the Rights Agent and each such holder of the then outstanding
Rights by mailing such notice to the Rights Agent and to each such
holders at such holder’s last address as it appears upon the
registry books of the Rights Agent, or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made, unless such
notice is mailed together with such payment.
In the
case of a redemption permitted under Section 22(a), the Company
may, at its option, discharge all of its obligations with respect
to the Rights by (i) issuing a press release announcing the manner
of redemption of the Rights (with prompt written notice thereof to
the Rights Agent) and (ii) mailing payment of the Redemption Price
to each registered holder of the Rights at each such holder’s
last address as it appears on the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of
the transfer agent of the Common Stock, and upon such action, all
outstanding Right Certificates shall be null and void without any
further action by the Company.
Section 23. Exchange.
(a) The Board
may, at its option, at any time after the later of the Stock
Acquisition Date or the Distribution Date, exchange all or part of
the then-outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the
provisions of Section 11(a)(ii)) for Common Stock of the Company at
an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, reverse stock
split, stock dividend, reclassification or similar transaction
effected by the Company occurring after the Record Date (such
exchange ratio being hereinafter referred to as the “Exchange
Ratio”); provided, however, that in connection with any
exchange effected pursuant to this Section 23, the Board may (but
shall not be required to) determine that a holder of Rights shall
not be entitled to receive shares of Common Stock that would result
in such holder, together with such holder’s Affiliates,
becoming the Beneficial Owner of 4.99% or more of the shares of
Common Stock then outstanding. If a holder would, but for the
proviso set forth in the previous sentence, be entitled to receive
a number of shares under this Section 23 that would otherwise
result in such holder, together with such holder’s
Affiliates, becoming the Beneficial Owner of 4.99% or more of the
shares of Common Stock then outstanding (such shares, the
“Excess Exchange Shares”), in lieu of receiving such
Excess Exchange Shares, such holder will be entitled to receive an
amount in (1) cash, (2) debt securities of the Company, (3) other
assets, or (4) any combination of the foregoing, having an
aggregate value equal to the Current Market Price per share of the
Common Stock on the date of the Stock Acquisition Date or
Distribution Date, as applicable, multiplied by the number of
Excess Exchange Shares that would otherwise have been issuable to
such holder. Any such exchange will be effective immediately upon
the action of the Board ordering the same, unless such action of
the Board expressly provides that such exchange will be effective
at a subsequent time or upon the occurrence or nonoccurrence of one
or more specified events (in which case such exchange will be
effective in accordance with the provisions of such action of the
Board). Without limiting the foregoing, prior to effecting an
exchange pursuant to this Section 23, the Board may enter into a
Trust Agreement in such form and with such terms as the Board shall
then approve (the “Trust Agreement”). If the Board so
directs, the Company shall enter into the Trust Agreement and shall
issue to the trust created by such agreement (the
“Trust”) all of the Common Stock issuable pursuant to
the exchange (or any portion thereof that has not theretofore been
issued in connection with the exchange). From and after the time at
which such shares are issued to the Trust, all stockholders then
entitled to receive shares pursuant to the exchange shall be
entitled to receive such shares (and any dividends or distributions
made thereon after the date on which such shares are deposited in
the Trust) only from the Trust and solely upon compliance with the
relevant terms and provisions of the Trust Agreement. Any shares of
Common Stock issued at the direction of the Board in connection
herewith shall be validly issued, fully paid and nonassessable
Common Stock, and the Company shall be deemed to have received as
consideration for such issuance a benefit having a value that is at
least equal to the aggregate par value of the shares so
issued.
(b) Immediately
upon the action of the Board authorizing the exchange of any Rights
pursuant to Section 23(a) and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of the holders of such
Rights shall be to receive that number of shares of Common Stock
(or Units, as applicable) equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange (with prompt
written notice tothe Rights Agent); provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each notice of exchange will state the method by which the
exchange of shares of Common Stock (or Units, as applicable) for
Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other
than Rights which have become null and void pursuant to the
provisions of Section 7(e)) held by each holder of
Rights.
(c) In any
exchange pursuant to this Section 23, the Company, at its option,
may, and to the extent there are an insufficient number of
authorized shares of Common Stock not reserved for any other
purpose to exchange all of the outstanding Rights shall, substitute
Units or Share Equivalents for some or all of the shares of Common
Stock exchangeable for Rights, at the initial rate of one Unit or
Share Equivalent for each share of Common Stock.
(d) The Board
shall not authorize any exchange transaction referred to in Section
23(a) unless at the time such exchange is authorized there shall be
sufficient shares of Common Stock (and/or Units or Unit
Equivalents) issued but not outstanding, or authorized but
unissued, to permit the exchange of Rights as contemplated in
accordance with this Section 23.
Section 24. Notice of Proposed
Actions.
(a) In case
the Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend to the holders of record of its shares of
Preferred Stock payable in stock of any class or to make any other
distribution to the holders of record of its shares of Preferred
Stock (other than a regular periodic cash dividend out of earnings
or retained earnings of the Company), (ii) to offer to the holders
of record of its shares of Preferred Stock options, warrants, or
other rights to subscribe for or to purchase shares of Preferred
Stock (including any security convertible into or exchangeable for
shares of Preferred Stock) or shares of stock of any class or any
other securities, options, warrants, convertible or exchangeable
securities or other rights, (iii) to effect any reclassification of
its shares of Preferred Stock or any recapitalization or
reorganization of the Company, (iv) to effect any consolidation,
combination or merger with or into, or any share exchange with, or
to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets, earning power or
cash flow of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case,
the Company shall give to the Rights Agent and, to the extent
feasible, each registered holder of a Right Certificate in
accordance with Section 25, a written notice of such proposed
action, which shall specify the record date for the purposes of
such dividend or distribution, or the date on which such
reclassification, recapitalization, reorganization, consolidation,
combination, merger, share exchange, sale or transfer of assets,
liquidation, dissolution, or winding up is to take place and the
record date for determining participation therein by the holders of
record of shares of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of record of the shares of
Preferred Stock for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein by the
holders of record of the shares of Preferred Stock, whichever shall
be the earlier. The failure to give notice required by this Section
24 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such
action.
(b) In case a
Section 11(a)(ii) Event is proposed, then, in any such case, the
Company shall, as soon as practicable thereafter, give to the
Rights Agent and to each registered holder of Rights, to the extent
feasible, in accordance with Section 25, notice of the occurrence
of such event or proposal of such transaction which notice shall
specify the proposed event and the consequences of the event to
holders of Rights under Section 11(a)(ii), upon consummating such
transaction, shall similarly give notice thereof to each holder of
Rights.
Section 25. Notices.
Notices or demands authorized by this Agreement to be given or made
by the Rights Agent or by the registered holder of any Right
Certificate or Right to or on behalf of the Company shall be
sufficiently given or made if in writing and when sent by first-
class mail, postage prepaid, addressed or by nationally recognized
overnight courier (until another address is filed in writing with
the Rights Agent) as follows:
Support.com,
Inc.
900
Chesapeake Drive, 2nd Floor
Redwood
City, CA 94063
Attention: General
Counsel
Fax:
(650) 556-1194
with a
copy (which will not constitute notice) to:
Pillsbury Winthrop
Shaw Pittman LLP
2550
Hanover Street
Palo
Alto, CA 94304-1115
Attention: James J.
Masetti, Esq.
Fax:
(650) 233-4545
Subject
to the provisions of Section 20, any notice or demand authorized by
this Agreement to be given or made by the Company or by the
registered holder of any Right Certificate or Right to or on the
Rights Agent shall be sufficiently given or made if in writing and
when sent by first-class mail, postage prepaid, addressed or a
nationally recognized courier service (until another address is
filed in writing with the Company) as follows:
Computershare Trust
Company, N.A.
8742
Lucent Blvd., Suite 225
Highlands Ranch, CO
80129
Attention: Client
Services
with a
copy (which shall not constitute notice) to:
Computershare Trust
Company, N.A.
250
Royall Street
Canton,
MA 02021
Attention: General
Counsel
Notices
or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the registered holder of any Right
Certificate or Right shall be sufficiently given or made if in
writing and when sent by mail, postage prepaid, addressed to such
holder at the address of such holder as it appears upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent.
Section 26. Supplements and
Amendments. Subject to extension by the Board by amendments,
prior to the Close of Business on the tenth (10th) calendar day
after the Stock Acquisition Date, the Company may in its sole and
absolute discretion and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement
(including without limitation amendments that increase or decrease
the Purchase Price or Redemption Price or accelerate or extend the
Final Expiration Date or the period in which Rights may be
redeemed), without the approval of any holders of the Rights or
shares of Common Stock. From and after the Close of Business on the
tenth (10th) calendar day after the Stock Acquisition Date, the
Company may and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to
change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable which shall not
adversely affect the interests of the holders of Right Certificates
(other than any interest an Acquiring Person or an Affiliate or
Associate of an Acquiring Person has other than as a holder of
Rights). Upon the delivery of a certificate from an Appropriate
Officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment. Prior to
the Stock Acquisition Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of
shares of Common Stock. Notwithstanding anything contained herein
to the contrary, the Rights Agent may, but shall not be obligated
to, enter into any supplement or amendment that affects the Rights
Agent’s own rights, duties, obligations or immunities under
this Agreement. In addition, notwithstanding anything to the
contrary in this Agreement, no supplement or amendment to this
Agreement shall be made that extends the Expiration Date. No
supplement or amendment to this Agreement shall be effective unless
duly executed by the Rights Agent.
Section 27. Successors. All of the
covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 28. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
shares of Common Stock) any legal or equitable right, remedy or
claim under this Agreement but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the shares of Common Stock).
Section 29. Governing Law. This Agreement
and each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the
laws of such state applicable to contracts to be made and performed
entirely within such state.
Section 30. Counterparts. This Agreement
may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the
same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile or electronic mail shall be as
effective as delivery of a manually executed counterpart of this
Agreement.
Section 31. Descriptive
Headings. Descriptive headings of the several sections of
this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the
provisions.
Section 32. Severability. If any term,
provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in
this Agreement to the contrary, if any such excluded term,
provision, covenant or restriction shall materially and adversely
affect the rights, immunities, duties or obligations of the Rights
Agent, the Rights Agent shall be entitled to resign immediately
upon written notice to the Company pursuant to the requirements of
Section 25 of this Agreement; and provided, further, that
notwithstanding anything inthis Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court
or authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in
Section 22 hereof shall be reinstated and shall not expire until
the Close of Business on the tenth (10th) Business Day following
the date of such determination by the Board.
Section 33. Determination and Actions by the
Board, etc. Except with respect to the rights, immunities,
duties or obligations of the Rights Agent hereunder, the Board
shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically
granted to the Board, or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret
theprovisions of this Agreement, and (ii) make all determinations
or judgments deemed necessary or advisable for the administration
of this Agreement (including without limitation a determination to
redeem or not redeem the Rights or to amend this Agreement)or
otherwise contemplated by this Agreement. All such actions,
calculations, interpretations, judgments and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the
holders of the Right Certificates. The Rights Agent is entitled
always to assume the Board acted in good faith and shall be fully
protected and incur no liability in reliance thereon.
Section 34. Force Majeure. Notwithstanding
anything to the contrary contained herein, the Rights Agent shall
not be liable for any delays or failures in performance resulting
from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of
computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest.
Section 35. Further Assurance. The Company
shall perform, acknowledge and deliver or cause to be performed,
acknowledged and delivered all such further and other acts,
documents, instruments and assurances as may be reasonably required
by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
[signature page follows]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above
written.
|
SUPPORT.COM,
INC.
By:
/s/ Richard
Bloom
Name:
Richard Bloom
Title:
President and Chief Executive Officer
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COMPUTERSHARE
TRUST COMPANY, N.A., AS RIGHTS AGENT
By:
_______________
Name:
Title:
|
[Signature
Page to Section 382 Tax Benefits Preservation Plan]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above
written.
|
SUPPORT.COM,
INC.
By:
________________
Name:
Richard Bloom
Title:
President and Chief Executive Officer
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COMPUTERSHARE
TRUST COMPANY, N.A., AS RIGHTS AGENT
By:
/s/ Patrick
Hayes
Name:
Patrick Hayes
Title:
Vice President & Manager
|
[Signature
Page to Section 382 Tax Benefits Preservation Plan]
EXHIBIT A
AMENDED
AND RESTATED
CERTIFICATE
OF DESIGNATION
OF
SERIES
B JUNIOR PARTICIPATING PREFERRED STOCK
OF
SUPPORT.COM,
INC.
(Pursuant to Section 151 of the Delaware General Corporation
Law)
_______________________________________
The undersigned, Richard Bloom, the President and
Chief Executive Officer of Support.com, Inc. (the
“Corporation”),
a corporation organized and existing under the General Corporation
Law of the State of the Delaware, as amended (the
“DGCL”), does hereby certify:
That pursuant to the authority granted by
Article IV of the Restated Certificate
of Incorporation of the Corporation, as amended (the
“Restated Certificate
of Incorporation”), and
in accordance with Section 151
of the DGCL, the Board of Directors of the Corporation (hereinafter
being referred to as the “Board of
Directors” or the
“Board”),
at a meeting duly called and held on April 20, 2016, adopted
resolutions authorizing the creation and issuance of a series of
preferred stock designated as the “Series B Junior
Participating Preferred Stock,” none of which shares have
been issued;
That the Certificate of Designation for the Series
B Junior Participating Preferred Stock (the
“Certificate of
Designation”) was filed
with the Secretary of State for the State of Delaware and became
effective on April 21, 2016.
That
pursuant to the authority granted by the Restated Certificate of
Incorporation, and in accordance with Section 151 of the DGCL, the
Board of Directors, at a meeting duly called and held on August 21,
2019, adopted the following resolutions amending and restating the
Certificate of Designation:
RESOLVED,
that pursuant to the authority granted to and vested in the Board
of Directors in accordance with the provisions of the Restated
Certificate of Incorporation, the Certificate of Designation for
the Series B Junior Participating Preferred Stock shall be amended
and restated in its entirely, and the designation and number of
shares constituting such series, and the rights, powers,
preferences, privileges and restrictions relating to such series,
in addition to any set forth in the Restated Certificate of
Incorporation, shall be as follows:
1. Designation
and Amount. The shares of such
series shall be designated as “Series B Junior
Participating Preferred Stock” (the
“Series
B Preferred Stock”) and
the number of shares constituting the Series B Preferred Stock
shall be 150,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors prior to
issuance; provided, that no decrease shall reduce the number of
shares of the Series B Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into the Series B
Preferred Stock; provided, further, that if more than a total of
150,000 shares of Series B Preferred Stock shall be issuable upon
the exercise of Rights (the “Rights”) issued pursuant
to the Tax Benefits Preservation Plan, dated as of August 21, 2019,
by and between the Corporation and Computershare Trust Company,
N.A., as Rights Agent, the Board of Directors of the Corporation,
pursuant to Section 151(g)
of the DGCL, shall direct by resolution or resolutions that a
certificate be properly executed, acknowledged, filed and recorded,
in accordance with the provisions of Section 103 of the DGCL, providing for the total number of
shares of Series B Preferred Stock authorized to be issued to be
increased (to the extent that the Certificate of Incorporation then
permits) to the largest number of whole shares (rounded up to the
nearest whole number) issuable upon exercise of such
Rights.
2. Dividends
and Distributions.
(a) Subject to the rights of the holders of any shares
of any series of Preferred Stock of the Corporation (the
“Preferred
Stock”) (or any similar
stock) ranking prior and superior to the shares of Series B
Preferred Stock with respect to dividends, the holders of shares of
the Series B Preferred Stock, in preference to the holders of
common stock, par value $0.0001 per share, of the Corporation (the
“Common Stock”) and of any other stock of the
Corporation ranking junior to the Series B Preferred Stock, shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds of the Corporation legally available for the
payment of dividends, quarterly dividends payable in cash on the
last day of each fiscal quarter of the Corporation in each year, or
such other dates as the Board of Directors shall approve (each such
date being referred to herein as a “Quarterly Dividend
Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of the Series B
Preferred Stock (the “Issue
Date”), in an amount per
share (rounded to the nearest cent) equal to the greater of
(i) $1.00 or (ii) subject to the
provision for adjustment hereinafter set forth, 1000 times the
aggregate per share amount of all cash dividends, and
1000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of the Common
Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any
time after the Issue Date (A)
declare and pay any dividend on the Common Stock payable in shares
of Common Stock, or (B) effect
a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under clause (ii) of the
preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on the
Series B Preferred Stock payable in shares of Series B Preferred
Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Series B Preferred Stock (by reclassification
or otherwise than by payment of a dividend in shares of Series B
Preferred Stock) into a greater or lesser number of shares of
Series B Preferred Stock, then in each such case the amount to
which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (ii) of the first
sentence of this Section
2(a)
shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of
shares of Series B Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the
number of shares of Series B Preferred Stock outstanding
immediately after such event.
(b) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (a) of this
Section
2 immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); and the Corporation
shall pay such dividend or distribution on the Series B Preferred
Stock before the dividend or distribution declared on the Common
Stock is paid or set apart; provided
that, in the event no dividend or
distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series B Preferred Stock shall nevertheless be
payable, when, as and if declared, on such subsequent Quarterly
Dividend Payment Date.
(c) Dividends
shall begin to accrue and be cumulative, whether or not declared,
on outstanding shares of Series B Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to
the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Preferred
Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series B
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment
thereof.
3. Voting
Rights. The holders of shares
of Series B Preferred Stock shall have the following voting
rights:
(a) Subject
to the provision for adjustment hereinafter set forth and except as
otherwise provided in the Restated Certificate of Incorporation or
required by law, each share of Series B Preferred Stock shall
entitle the holder thereof to 1000 votes on all matters upon which the holders
of the Common Stock of the Corporation are entitled to vote. In the
event the Corporation shall at any time after the Issue Date
(i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or (ii) effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event. In the event the Corporation shall at any time
declare or pay any dividend on the Series B Preferred Stock payable
in shares of Series B Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series B
Preferred Stock (by reclassification or otherwise than by payment
of a dividend in shares of Series B Preferred Stock) into a greater
or lesser number of shares of Series B Preferred Stock, then in
each such case the number of votes per share to which holders of
shares of Series B Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Series
B Preferred Stock that were outstanding immediately prior to such
event and the denominator of which is the number of shares of
Series B Preferred Stock outstanding immediately after such
event.
(b) Except
as otherwise provided herein, in the Restated Certificate of
Incorporation or in any other Certificate of Designations creating
a series of Preferred Stock or any similar stock, and except as
otherwise required by law, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(c)
(i) If at any time dividends on any Series B Preferred
Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the holders of the Series B Preferred Stock,
voting as a separate series from all other series of Preferred
Stock and classes of capital stock, shall be entitled to elect two
members of the Board in addition to any Directors elected by any
other series, class or classes of securities and the authorized
number of Directors will automatically be increased by two.
Promptly thereafter, the Board of the Corporation shall, as soon as
may be practicable, call a special meeting of holders of Series B
Preferred Stock for the purpose of electing such members of the
Board. Such special meeting shall in any event be held within 45
days of the occurrence of such arrearage.
(ii) During
any period when the holders of Series B Preferred Stock, voting as
a separate series, shall be entitled and shall have exercised their
right to elect two Directors, then, and during such time as such
right continues, (a) the then
authorized number of Directors shall be increased by two, and the
holders of Series B Preferred Stock, voting as a separate series,
shall be entitled to elect the additional Directors so provided
for, and (b) each such
additional Director shall serve until the next annual meeting of
stockholders for the election of Directors, or until his successor
shall be elected and shall qualify, or until his right to hold such
office terminates pursuant to the provisions of this
Section
3(c).
(iii) A
Director elected pursuant to the terms hereof may be removed with
or without cause by the holders of Series B Preferred Stock
entitled to vote in an election of such Director.
(iv) If,
during any interval between annual meetings of stockholders for the
election of Directors and while the holders of Series B Preferred
Stock shall be entitled to elect two Directors, there is no such
Director in office by reason of resignation, death or removal,
then, promptly thereafter, the Board shall call a special meeting
of the holders of Series B Preferred Stock for the purpose of
filling such vacancy and such vacancy shall be filled at such
special meeting. Such special meeting shall in any event be held
within 45 days of the occurrence of such vacancy.
(v) At such time as the arrearage is fully cured, and
all dividends accumulated and unpaid on any shares of Series B
Preferred Stock outstanding are paid, and, in addition thereto, at
least one regular dividend has been paid subsequent to curing such
arrearage, the term of office of any Director elected pursuant to
this Section
3(c), or his successor, shall
automatically terminate, and the authorized number of Directors
shall automatically decrease by two, the rights of the holders of
the shares of the Series B Preferred Stock to vote as provided in
this Section 3(c)
shall cease, subject to renewal from
time to time upon the same terms and conditions, and the holders of
shares of the Series B Preferred Stock shall have only the limited
voting rights elsewhere herein set forth.
(d) Except
as set forth herein, or as otherwise provided by law, holders of
Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.
4. Certain
Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided
in Section 2
hereof are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Preferred Stock outstanding
shall have been paid in full, the Corporation shall
not:
(i) declare
or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare
or pay dividends, or make any other distributions, on any shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred
Stock, except dividends paid ratably on the Series B Preferred
Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders
of all such shares are then entitled;
(iii) redeem
or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock,
provided
that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series B Preferred Stock or
rights, warrants or options to acquire such junior stock;
or
(iv) redeem
or purchase or otherwise acquire for consideration any shares of
Series B Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (a) of
this Section
4, purchase or otherwise
acquire such shares at such time and in such
manner.
5. Reacquired
Shares. Any shares of Series B
Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued, without designation as to series until
such shares are once more designated as part of a particular series
of Preferred Stock by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance
set forth herein, in the Restated Certificate of Incorporation, or
in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by
law.
6. Liquidation,
Dissolution or Winding Up.
(a) Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made
(i) to the holders of the
Common Stock or of shares of any other stock of the Corporation
ranking junior, either as to dividends or upon liquidation,
dissolution or winding up, to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock
shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount
per share, subject to the provision for adjustment hereinafter set
forth, equal to 1000
times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (ii) to the holders of shares of
stock ranking on a parity either as to dividends or upon
liquidation, dissolution or winding up with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred
Stock and all such parity stock in proportion to the total amounts
to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event, however, that
there are not sufficient assets available to permit payment in full
of the Series B Preferred Stock liquidation preference and the
liquidation preferences of all other classes and series of stock of
the Corporation, if any, that rank on a parity with the Series B
Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of
the Series B Preferred Stock and the holders of such parity shares
in the proportion to their respective liquidation preferences. In
the event the Corporation shall at any time after the Issue
Date (A) declare or
pay any dividend on the Common Stock payable in shares of Common
Stock, or (B) effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under the
proviso in clause (i) of this Section 6(a) shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on the
Series B Preferred Stock payable in shares of Series B Preferred
Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Series B Preferred Stock (by reclassification
or otherwise than by payment of a dividend in shares of Series B
Preferred Stock) into a greater or lesser number of shares of
Series B Preferred Stock, then in each such case the aggregate
amount to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under the proviso in
clause (1) of
paragraph (A) of
this Section 6
shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the denominator of
which is the number of shares of Series B Preferred Stock
outstanding immediately after such event.
(b) Neither the merger, consolidation or
other business combination of the Corporation into or with another
entity nor the merger, consolidation or other business combination
of any other entity into or with the Corporation (nor the sale,
lease, exchange or conveyance of all or substantially all of the
property, assets or business of the Corporation) shall be deemed to
be a liquidation, dissolution or winding up of the Corporation
within the meaning of this Section 6.
7. Consolidation Merger,
etc. Notwithstanding anything
to the contrary contained herein, in case the Corporation shall
enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are converted into,
exchanged for or changed into other stock or securities, cash
and/or any other property (payable in kind), then in any such case
each share of Series B Preferred Stock shall at the same time be
similarly converted into, exchanged for or changed into an amount
per share (subject to the provision for adjustment hereinafter set
forth) equal to 1000 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is converted or exchanged. In the
event the Corporation shall at any time after the Issue Date
(i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or (ii) effect a
subdivision or combination or consolidation (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
of the outstanding shares of Common Stock into a greater or lesser
number of shares of Common Stock, then in each such case the amount
set forth in the preceding sentence with respect to the conversion,
exchange or change of shares of Series B Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event. In the event the Corporation shall at any time
declare or pay any dividend on the Series B Preferred Stock payable
in shares of Series B Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series B
Preferred Stock (by reclassification or otherwise than by payment
of a dividend in shares of Series B Preferred Stock) into a greater
or lesser number of shares of Series B Preferred Stock, then in
each such case the amount set forth in the first sentence of
this Section 7
with respect to the exchange or change
of shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the denominator of
which is the number of shares of Series B Preferred Stock
outstanding immediately after such event.
8. No
Redemption. The shares of
Series B Preferred Stock shall not be redeemable from any
holder.
9. Rank.
The Series B Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, junior
to all series of any other class of the Preferred Stock issued
either before or after
the issuance of the Series B Preferred Stock, unless the terms of
any such series shall provide otherwise, and shall rank senior to
the Common Stock.
10. Amendment.
At such time as any shares of Series B Preferred Stock are
outstanding, if any proposed amendment to the Restated Certificate
of Incorporation (including this Certificate of Designation) would
materially alter, change or repeal any of the preferences, powers
or special rights given to the Series B Preferred Stock so as to
affect the Series B Preferred Stock adversely, then the holders of
the Series B Preferred Stock shall be entitled to vote separately
as a class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series B Preferred
Stock, voting separately as a single class, shall be necessary for
the adoption thereof, in addition to such other vote as may be
required by the DGCL.
11. Fractional
Shares. Series B Preferred
Stock may be issued in fractions of a share that shall entitle the
holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
IN WITNESS WHEREOF, the undersigned have signed
and attested this Amended and Restated Certificate of Designation
on the 21st
day of August,
2019.
SUPPORT.COM,
INC.
By: ________________________
Name:
Richard Bloom
Title:
President and Chief Executive Officer
Attest:
___________________________________
Olivia Mirzoyev, Secretary
EXHIBIT B
Form
of Right Certificate
Certificate No.
R-____ ____________
Rights
NOT EXERCISABLE AFTER August 21, 2022, SUBJECT TO
EARLIER REDEMPTION OR EXPIRATION PURSUANT TO THE SECTION
382 TAX BENEFITS PRESERVATION PLAN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE SECTION
382 TAX BENEFITS PRESERVATION PLAN.
THE RIGHTS EVIDENCED BY THIS CERTIFICATE SHALL NOT BE EXERCISABLE,
AND SHALL BE VOID SO LONG AS HELD BY A HOLDER IN ANY JURISDICTION
WHERE THE REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH HOLDER,
OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION
SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. THE BENEFICIAL OWNER
OF THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE MAY BE AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE (AS DEFINED IN THE
SECTION 382 TAX BENEFITS
PRESERVATION PLAN) OF AN ACQUIRING PERSON OR A SUBSEQUENT HOLDER OF
A RIGHT CERTIFICATE BENEFICIALLY OWNED BY SUCH PERSONS.
ACCORDINGLY, UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
SECTION 382 TAX BENEFITS
PRESERVATION PLAN, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY WILL BE NULL AND VOID.
RIGHT
CERTIFICATE
SUPPORT.COM,
INC.
This certifies
that ,
or registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the
Section 382 Tax Benefits
Preservation Plan, dated as of August 21, 2019, as amended,
restated, renewed or extended from time to time (the
“Plan”)
between Support.com, a Delaware corporation
(“Company”),
and Computershare Trust Company N.A., a federally chartered trust
company, as Rights Agent (“Rights
Agent”), to purchase from
the Company at any time after the Distribution Date (as such term
is defined in the Plan) and prior to 5:00 P.M., New York City time, on August 21, 2022,
at the office or offices of the Rights Agent, or its successors as
Rights Agent, designated for such purpose, one one-thousandth of a
fully paid, nonassessable share of Series B Junior Participating
Preferred Stock, par value $0.0001 per share, of the Company (a
“Unit”),
at a purchase price of $3.00, as the same may from time to time be
adjusted in accordance with the Plan (“Purchase
Price”), upon
presentation and surrender of this Right Certificate with the Form
of Election to Purchase and included Certificate duly completed and
executed. The number of Rights evidenced by this Right Certificate
(and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of ___________, 20___, based
on the Units as constituted at such date.
As
provided in the Plan, the Purchase Price and the number of Units
which may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment
upon the happening of certain events and, upon the happening of
certain events, shares of Common Stock or other securities other
than Units, or other property, may be acquired upon exercise of the
Rights evidenced by this Right Certificate, as provided by the
Plan.
As more fully set forth in the Plan, from and
after the first occurrence of a Section
11(a)(ii) Event (as such term
is defined in the Plan), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person (as such terms are defined in the
Plan), (ii) a transferee of such Acquiring Person (or of any such
Associate or Affiliate), or (iii) under certain circumstances
specified in the Plan, a transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such, such
Rights shall become null and void without any further action, and
no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section
11(a)(ii) Event, whether under
the Plan or otherwise.
This
Right Certificate is subject to all of the terms, provisions and
conditions of the Plan, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to
which Plan reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities
of the Rights Agent, the Company and the registered holders of the
Right Certificates. Copies of the Plan are on file at the principal
executive office of the Company and will be mailed to stockholders
upon written request to the Rights Agent.
This
Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the registered holder to purchase a like aggregate number
of Units as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled the holder to
purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive, upon surrender hereof, the
Right Certificate indicating the remaining Rights represented
thereby or another Right Certificate or Right Certificates for the
number of Rights not exercised.
Subject to the provisions of the Plan, the Rights
evidenced by this Certificate may be (x) redeemed by the Company at its option at a
redemption price of $0.001 per Right at any time prior to the
earlier of the Close of Business on (i) the tenth (10th) calendar day after the Stock
Acquisition Date, and (ii) the Final Expiration Date, or under
certain other conditions as specified in the Plan, and
(y) exchanged, after any Person
becomes an Acquiring Person (as such terms are defined in the
Plan), at the option of the Board of Directors of the Company, for
one share of Common Stock of the Company as set forth in the
Plan.
No
fractional Units, shares of Common Stock of the Company or other
securities (other than fractions of a share of Preferred Stock
represented by Units) shall be required to be issued upon the
exercise of any Right or Rights evidenced hereby, and in lieu
thereof, as provided in the Plan, a holder otherwise entitled to
fractions of shares of Common Stock, Units or other securities
(other than fractions of a share of Preferred Stock represented by
Units) may receive an amount in cash equal to the same fraction of
the then current value of a share of Common Stock or such other
securities.
No
holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Units,
shares of Preferred Stock, shares of Common Stock or of any other
securities of the Company which may at any time be issuable upon
the exercise hereof, nor shall anything contained in the Plan or
herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote
for the election of directors, or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent
to any corporate action or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Plan) or
to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Plan.
This
Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights
Agent.
[remainder of page intentionally left blank]
WITNESS
the facsimile signature of the proper officers of the Company and
its corporate seal, dated as of ____________ ___,
______.
|
SUPPORT.COM,
INC.
By:
Name:
Title:
By:
Name:
Title:
|
|
|
|
|
|
Countersigned:
|
|
|
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COMPUTERSHARE
TRUST COMPANY, N.A., AS RIGHTS AGENT
By:
Name:
Title:
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Form
of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To
be executed by the registered holder if such
holder
desires to transfer the Right Certificate.)
FOR
VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto
(Please
print name and address of transferee)
Rights
evidenced by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and
appoint _______________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ,
20___
|
_________________________________
Signature
(Signature must conform in all respects to the name of holder as
written upon the face of this Right Certificate, without alteration
or enlargement or any change whatsoever.)
|
Signature
Guaranteed:*
* Signature must be guaranteed by an
“Eligible Guarantor
Institution” pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as
amended.
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate
[ ]
are
[ ]
are not
being
exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Plan);
after
due inquiry and to the best knowledge of the undersigned, the
undersigned
[
] did
[ ]
did not
acquire
the Rights evidenced by this Right Certificate from any Person who
is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ,
20___
Signature:
(Signature must conform in all respects to the name
of holder as written upon the face of this Right
Certificate, without alteration or enlargement or any
change
whatsoever.)
Signature
Guaranteed:*
* Signature must be guaranteed by an
“Eligible Guarantor
Institution” pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as
amended.
FORM
OF ELECTION TO PURCHASE
(To
be executed if registered holder desires to Exercise the Right
Certificate.)
To:
SUPPORT.COM, INC.
The undersigned hereby irrevocably elects to
exercise Rights
represented by this Right Certificate to purchase the number of one
one-thousandths of a share of Preferred Stock, shares of Common
Stock or other securities issuable upon the exercise of such Rights
and requests that certificates representing such share(s) or other
securities be issued in the name of:
Please
insert social security or other identifying number
________________________________
(Please
print name and address)
If
such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the remaining such
Rights shall be registered in the name of and delivered
to:
Please
insert social security or other identifying number
________________________________
(Please
print name and address)
Dated: ,
20___
|
_____________________________
Signature
(Signature must conform in all respects to the name of holder as
written upon the face of the Right Certificate, without alteration
or enlargement or any change whatsoever.)
|
Signature
Guaranteed:*
* Signature must be guaranteed by an
“Eligible Guarantor
Institution” pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as
amended.
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate
[ ]
are
[ ]
are not
being
exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Plan);
(2) after
due inquiry and to the best knowledge of the undersigned, the
undersigned
[ ]
did
[ ]
did not
acquire
the Rights evidenced by this Right Certificate from any Person who
is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ,
20___
Signature:
(Signature must conform in all respects to the name of holder as
written upon the face of this Right Certificate, without alteration
or enlargement or any change whatsoever.)
Signature
Guaranteed:*
* Signature must be guaranteed by an
“Eligible Guarantor
Institution” pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as
amended.
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES AS SET FORTH IN THE
SECTION 382 TAX BENEFITS
PRESERVATION PLAN, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE SECTION
382 TAX BENEFITS PRESERVATION PLAN)
MAY BECOME NULL AND VOID.
SUPPORT.COM, INC.
SUMMARY OF THE TERMS OF THE RIGHTS
TO PURCHASE UNITS OF PREFERRED STOCK
On August 21, 2019, the Board of Directors (the
“Board”)
of Support.com, Inc., a Delaware corporation (the
“Company”),
declared a dividend distribution of one purchase right (a
“Right”)
for each outstanding share of Common Stock, par value $0.0001 per
share (“Common
Stock”), of the Company,
payable to stockholders of record on September 3, 2019, and
issuable as of that date. Except in the circumstances described
below, each Right, when it becomes exercisable, entitles the
registered holder to purchase from the Company one one-thousandth
of a share of Series B Junior Participating Preferred Stock,
$0.0001 par value, of the Company (“Preferred
Stock” and each one
one-thousandth of a share of Preferred Stock, a
“Unit”)
at a price of $3.00 per Unit (the “Purchase
Price”). The rights of a
holder of a Unit are substantially equivalent to the rights of a
holder of a share of Common Stock. The description and terms of the
Rights are set forth in a Section 382 Tax Benefits Preservation Plan (the
“Plan”)
between the Company and Computershare Trust Company, N.A., a
federally chartered trust company, as rights agent (the
“Rights
Agent”).
The Company has generated substantial operating
losses (“NOLs”) in previous years which, under the
Internal Revenue Code of 1986 (the “Code”),
the Company may in certain circumstances use to offset current and
future earnings and thus reduce its future federal income tax
liability (subject to certain requirements and restrictions).
However, if the Company experiences an “Ownership
Change,” as defined in Section 382 of the Code and the treasury regulations
promulgated thereunder (“Section
382”), its ability to use
these NOLs could be substantially limited or lost altogether. In
order to seek to avoid an “Ownership Change” and
protect stockholder value, the Board of Directors adopted the
Plan.
As
discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
The Rights will be evidenced by Common Stock
certificates, and Rights relating to shares of Common Stock not
represented by certificates will be represented by notation on the
records of the Company, until the close of business on the earlier
to occur of (i) the tenth
(10th) calendar day after the day on which a public announcement or
filing that a person or group of affiliated or associated persons
has become an “Acquiring Person,” which is defined as a
person who, at any time after the date of the Plan, has acquired,
or obtained the right to acquire, beneficial ownership of 4.99% or
more of the Common Stock of the Company then outstanding, subject
to certain exceptions as described below, or (ii) the tenth (10th)
calendar day (or a later date determined by the Board of Directors
of the Company) after the commencement of a tender or exchange
offer the consummation of which would result in a person becoming
an Acquiring Person (the earlier of these dates is called the
“Distribution
Date”).
As soon as practicable following a Distribution
Date, the Rights Agent will, if requested to do so by the Company,
mail separate certificates evidencing the Rights
(“Right
Certificates”) to holders
of record of shares of the Common Stock as of the close of business
on the Distribution Date, and those separate certificates alone
will evidence the Rights from and after the Distribution
Date.
Each of the following persons will not be deemed
to be an Acquiring Person, even if they have acquired, or obtained
the right to acquire, beneficial ownership of 4.99% or more of the
shares of Common Stock of the Company then outstanding:
(i) the Company, (ii) any Subsidiary
of the Company, (iii) any employee benefit plan or employee stock
plan of the Company or any Subsidiary of the Company, or any person
organized, appointed, established or holding shares of Common Stock
of the Company for or pursuant to the terms of any such plan; (iv)
any “direct public group” within the meaning of
Treasury Regulations Section 1.382-2T(j)(2)(ii); (v) any person who the Board determines prior to
the time the person would otherwise be an Acquiring Person, should
be exempted from being an Acquiring Person; (vi) any person who
would otherwise be an Acquiring Person upon the first public
announcement by the Company of the adoption of the Plan, unless and
until such person, or any Affiliate of such person, acquires
beneficial ownership of any additional shares of Common Stock after
the first public announcement by the Company of the adoption of the
Plan; (vii) any person who as the result of an acquisition of
shares of Common Stock by the Company (or any Subsidiary of the
Company, any employee benefit plan or employee stock plan of the
Company or any Subsidiary of the Company, or any person organized,
appointed, established or holding shares of Common Stock of the
Company for or pursuant to the terms of any such plan) which, by
reducing the number of shares of Common Stock outstanding,
increases the proportionate number of shares of Common Stock
beneficially owned by the person to 4.99% or more of the shares of
Common Stock then outstanding, unless and until such person, or any
Affiliate of such person, following the first public announcement
by the Company of such share acquisition, acquires beneficial
ownership of any additional shares of Common Stock (other than
pursuant to a stock split, reverse stock split, stock dividend,
reclassification or similar transaction effected by the Company);
or (viii) any person who or which, within ten (10) business days of
being requested by the Company to advise it regarding the same,
certifies to the Company that such person acquired shares of Common
Stock in excess of 4.99% inadvertently or without knowledge of the
terms of the Rights and who or which, together with all Affiliates
and Associates, thereafter within ten (10) business days following
such certification reduces such person’s (together with its
Affiliates’ and Associates’) beneficial ownership to
less than 4.99% of the shares of Common Stock then outstanding;
provided, however, that (x) if
the person requested to so certify fails to do so within ten (10)
business days or breaches or violates such certification, then such
person shall become an Acquiring Person immediately after such ten
(10) business day period or such breach or violation or
(y) if the person together with its
Affiliates and Associates fails to reduce beneficial ownership to
less than 4.99% within ten (10) business days following such
certification, then such person shall become an Acquiring Person
immediately after such ten (10) business day period. In addition,
no person shall be an Acquiring Person if the Board shall have
affirmatively determined in light of the intent and purposes of the
Plan or other circumstances facing the Company, that such person
should not be deemed an Acquiring Person. A person (other than any
“direct public group” within the meaning of Treasury
Regulations Section 1.382-2T(j)(2)(ii)) will be treated as the
beneficial owner of 4.99% or more shares of the Common Stock if, in
the determination of the Board, that person would be treated as a
“5-percent stockholder” for purposes of Section
382 (substituting “4.99”
for “5” each time “five” or “5”
is used in or for purposes of Section 382).
The Rights are not exercisable until after the
Distribution Date. The Rights will expire upon the earliest
of (i) the date on which all of
the Rights are redeemed as described below, (ii) the date on which
the Rights are exchanged as described below, (iii) the consummation
of a reorganization transaction entered into by the Company
resulting in the imposition of stock transfer restrictions that the
Board determines, in its sole discretion, will provide protection
for the Company’s tax attributes similar to that provided by
the Plan, (iv) the close of business on the effective date of the
repeal of Section 382, or any
other change, if the Board determines, in its sole discretion, that
the Plan is no longer necessary or desirable for the preservation
of the Company’s tax attributes, (v) the date on which the Board otherwise
determines, in its sole discretion, that the Plan is no longer
necessary to preserve the Company’s tax attributes, (vi) the
beginning of a taxable year of the Company to which the Board
determines, in its sole discretion, that none of the
Company’s tax attributes may be carried forward, (vii) the
Close of Business on the day following the certification of the
voting results of the Company’s 2020 annual meeting of
stockholders, if at such stockholder meeting a proposal to approve
the Agreement has not been passed by the affirmative vote of the
majority of the votes cast at the 2020 annual meeting of
stockholders or any other meeting of stockholders of the Company
duly held prior to August 21, 2020, and (viii) August 21,
2022.
The Purchase Price, and the number of Units,
shares of Common Stock or other securities or property issuable
upon exercise of the Rights, are subject to adjustment from time to
time to prevent dilution: (i)
in the event of a stock dividend on, or a subdivision, combination
or reclassification of, the Preferred Stock; (ii) upon the grant to
holders of Preferred Stock of certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock; or (iii) upon
the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding dividends payable in Preferred
Stock) or of subscription rights or warrants (other than those
referred to above). The Purchase Price is also subject to
adjustment from time to time in the event of a Common Stock
dividend on, or a subdivision or combination of, the shares of
Common Stock.
In
the event any Person becomes an Acquiring Person, then each holder
of record of a Right, other than the Acquiring Person, will
thereafter have the right to receive, upon payment of the Purchase
Price, that number of shares of Common Stock having a value at the
time the person becomes an Acquiring Person equal to twice the
Purchase Price. Any Rights that are or were at any time, on or
after the Distribution Date, beneficially owned by an Acquiring
Person will become null and void. After such an event, to the
extent that insufficient shares of Common Stock are available for
the exercise in full of the Rights, holders of Rights will receive
upon exercise a number of shares of Common Stock to the extent
available and then Units or other securities of the Company,
assets, or cash, in proportions determined by the Company, so that
the aggregate value received is equal to twice the Purchase
Price.
No
fractional shares of Common Stock or Units will be required to be
issued upon exercise of the Rights and, in lieu thereof, a payment
in cash equal to the fraction of the then current value of a share
of Common Stock may be made.
At
any time after a person becomes an Acquiring Person, the Board may
exchange all or part of the outstanding Rights (other than those
held by an Acquiring Person) for shares of Common Stock at an
exchange rate of one share of Common Stock (and, in certain
circumstances, a Unit) for each Right. The Company will promptly
give public notice of any exchange (although failure to give notice
will not affect the validity of the exchange).
At
any time until the close of business on the tenth (10th) calendar
day after the day a public announcement or filing is made
indicating that a person has become an Acquiring Person (and prior
to the giving of notice of the exchange or redemption, as
applicable to the holders of the Rights), or thereafter under
certain circumstances, the Company may redeem the Rights in whole,
but not in part, at a price of $0.001 per Right.
Immediately
upon the action of the Board authorizing exchange or redemption of
the Rights, the right to exercise the Rights will terminate, and
the only right of the holders of Rights will be to receive (if
applicable) the shares of Common Stock of the Company (or Units)
issuable in connection with the exchange or the Redemption Price
without any interest thereon.
Until
the close of business on the tenth (10th) calendar day after the
day a public announcement or a filing is made indicating that a
person has become an Acquiring Person, or thereafter under certain
circumstances, the Company may amend the Rights in any manner. The
Company may also amend the Plan after the close of business on the
tenth (10th) calendar day after the day a public announcement or
filing is made indicating that a person has become an Acquiring
Person, to cure ambiguities, to correct defective or inconsistent
provisions or to otherwise change or supplement the Plan in any
manner that does not adversely affect the interests of holders of
the Rights.
Until
a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including the right to vote or to
receive dividends.
The
issuance of the Rights should not be taxable to the Company or to
stockholders under presently existing federal income tax law.
However, if the Rights become exercisable or are redeemed,
stockholders may recognize taxable income, depending on the
circumstances then existing.
A copy of the Plan has been filed with the
Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8-K filed on
August 22, 2019. In addition, a copy of the Plan is available free
of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by
reference to the Plan, which is incorporated in this summary
description by reference.
Appendix B
SUPPORT.COM
AMENDED
AND RESTATED
2011 EMPLOYEE STOCK PURCHASE PLAN
Support.com
Amended and Restated 2011 Employee Stock Purchase Plan
1)
Establishment, Purpose
And Term Of Plan
.
a) Establishment. The Support.com
Amended and Restated 2011 Employee Stock Purchase Plan (the
“Plan”) amends
and restates the 2011 Employee Stock Purchase Plan effective upon
stockholder approval on [June 5, 2020] (the “Restatement Effective
Date”).
b) Purpose. The purpose of
the Plan is to advance the interests of the Company and its
stockholders by providing an incentive to attract, retain and
reward Eligible Employees of the Participating Company Group and by
motivating such persons to contribute to the growth and
profitability of the Participating Company Group. The Plan provides
such Eligible Employees with an opportunity to acquire a
proprietary interest in the Company through the purchase of Stock.
The Company intends that the Plan qualify as an “employee
stock purchase plan” under Section 423 of the Code (including
any amendments of such section), and the Plan shall be so
construed.
c) Term of Plan. The Committee
may, in its discretion, terminate the Plan at any
time.
2)
Definitions And
Construction
.
a) Definitions. Any term not
expressly defined in the Plan but defined for purposes of Section
423 of the Code shall have the same definition herein. Whenever
used herein, the following terms shall have their respective
meanings set forth below:
i. “Board”
means the Board of Directors of the Company.
ii. “Change
in Control” means the
occurrence of any one or a combination of the
following:
(1) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the total
Fair Market Value or total combined voting power of the
Company’s then-outstanding securities entitled to vote
generally in the election of Directors; provided, however, that a
Change in Control shall not be deemed to have occurred if such
degree of beneficial ownership results from any of the following:
(A) an acquisition by any person who is the beneficial owner of
more than fifty percent (50%) of such voting power, (B) any
acquisition directly from the Company, including, without
limitation, pursuant to or in connection with a public offering of
securities, (C) any acquisition by the Company, (D) any acquisition
by a trustee or other fiduciary under an employee benefit plan of a
Participating Company or (E) any acquisition by an entity owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the voting
securities of the Company; or
(2) an
Ownership Change Event or series of related Ownership Change Events
(collectively, a “Transaction”)
in which the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction direct
or indirect beneficial ownership of more than fifty percent (50%)
of the total combined voting power of the outstanding securities
entitled to vote generally in the election of Directors or, in the
case of an Ownership Change Event described in Section 2.1(o)(iii),
the entity to which the assets of the Company were transferred (the
“Transferee”),
as the case may be; or
(3) approval
by the stockholders of a plan of complete liquidation or
dissolution of the Company; provided, however, that a Change in
Control shall be deemed not to include a transaction described in
subsections (i) or (ii) of this Section 2.1(b) in which a
majority of the members of the board of directors of the
continuing, surviving or successor entity, or parent thereof,
immediately after such transaction is comprised of Incumbent
Directors.
For
purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or
other business entities which own the Company or the Transferee, as
the case may be, either directly or through one or more subsidiary
corporations or other business entities. The Committee shall
determine whether multiple acquisitions of the voting securities of
the Company and/or multiple Ownership Change Events are related and
to be treated in the aggregate as a single Change in Control, and
its determination shall be final, binding and
conclusive.
iii. “Code”
means the Internal Revenue Code of 1986, as amended, and any
applicable regulations promulgated thereunder.
iv. “Committee”
means the Compensation Committee and such other committee or
subcommittee of the Board, if any, duly appointed to administer the
Plan and having such powers in each instance as shall be specified
by the Board. If, at any time, there is no committee of the Board
then authorized or properly constituted to administer the Plan, the
Board shall exercise all of the powers of the Committee granted
herein, and, in any event, the Board may in its discretion exercise
any or all of such powers.
v. “Company”
means Support.com, a Delaware corporation, or any successor
corporation thereto.
vi. “Compensation”
means, with respect to any Offering Period, base wages or salary,
overtime, bonuses, commissions, shift differentials, payments for
paid time off, payments in lieu of notice, and compensation
deferred under any program or plan, including, without limitation,
pursuant to Section 401(k) or Section 125 of the Code. Compensation
shall be limited to amounts actually payable in cash or deferred
during the Offering Period. Compensation shall not include moving
allowances, payments pursuant to a severance agreement, termination
pay, relocation payments, sign-on bonuses, any amounts directly or
indirectly paid pursuant to the Plan or any other stock purchase,
stock option or other stock-based compensation plan, or any other
compensation not included above.
vii. “Eligible
Employee” means an
Employee who meets the requirements set forth in Section 5 for
eligibility to participate in the Plan.
viii. “Employee”
means a person treated as an employee of a Participating Company
for purposes of Section 423 of the Code. A Participant shall be
deemed to have ceased to be an Employee either upon an actual
termination of employment or upon the corporation employing the
Participant ceasing to be a Participating Company. For purposes of
the Plan, an individual shall not be deemed to have ceased to be an
Employee while on any military leave, sick leave, or other bona
fide leave of absence approved by the Company of ninety (90) days
or less. If an individual’s leave of absence exceeds ninety
(90) days, the individual shall be deemed to have ceased to be an
Employee on the ninety-first (91st) day of such leave unless the
individual’s right to reemployment with the Participating
Company Group is guaranteed either by statute or by
contract.
ix. “Fair
Market Value” means, as
of any date:
(1) Except
as otherwise determined by the Committee, if, on such date, the
Stock is listed or quoted on a national or regional securities
exchange or quotation system, the closing price of a share of Stock
as quoted on the national or regional securities exchange or
quotation system constituting the primary market for the Stock, as
reported in The Wall Street Journal
or such other source as the Company
deems reliable. If the relevant date does not fall on a day on
which the Stock has traded on such securities exchange or quotation
system, the date on which the Fair Market Value is established
shall be the last day on which the Stock was so traded or quoted
prior to the relevant date, or such other appropriate day as
determined by the Committee, in its discretion.
(2) If,
on the relevant date, the Stock is not then listed on a national or
regional securities exchange or quotation system, the Fair Market
Value of a share of Stock shall be as determined in good faith by
the Committee.
x. “Non-United
States Offering” means a
separate Offering covering Eligible Employees of one or more
Participating Companies whose Eligible Employees are subject to a
prohibition under applicable law on payroll deductions or other
local law requirement, as described in Section
11.1(b).
xi. “Offering”
means an offering of Stock pursuant to the Plan, as provided in
Section 6.
xii. “Offering
Date” means, for any
Offering Period, the first day of such Offering
Period.
xiii. “Offering
Period” means a period,
established by the Committee in accordance with Section 6, during
which an Offering is outstanding.
xiv. “Officer”
means any person designated by the Board as an officer of the
Company.
xv. “Ownership
Change Event” means the
occurrence of any of the following with respect to the Company:
(i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company
of securities of the Company representing more than fifty percent
(50%) of the total combined voting power of the Company’s
then outstanding securities entitled to vote generally in the
election of Directors; (ii) a merger or consolidation in which the
Company is a party; or (iii) the sale, exchange, or transfer of all
or substantially all of the assets of the Company (other than a
sale, exchange or transfer to one or more subsidiaries of the
Company).
xvi. “Parent
Corporation” means any
present or future “parent corporation” of the Company,
as defined in Section 424(e) of the Code.
xvii. “Participant”
means an Eligible Employee who has become a participant in an
Offering Period in accordance with Section 7 and remains a
participant in accordance with the Plan.
xviii. “Participating
Company” means the
Company and any Parent Corporation or Subsidiary Corporation
designated by the Committee as a corporation the Employees of which
may, if Eligible Employees, participate in the Plan. The Committee
shall have the discretion to determine from time to time which
Parent Corporations or Subsidiary Corporations shall be
Participating Companies.
xix. “Participating
Company Group” means, at
any point in time, the Company and all other corporations
collectively which are then Participating
Companies.
xx. “Purchase
Date” means, for any
Offering Period, the last day of such Offering Period, or, if so
determined by the Committee, the last day of each Purchase Period
occurring within such Offering Period.
xxi. “Purchase
Period” means a period,
established by the Committee in accordance with Section 6, included
within an Offering Period and on the final date of which
outstanding Purchase Rights are exercised.
xxii. “Purchase
Price” means the price at
which a share of Stock may be purchased under the Plan, as
determined in accordance with Section 9.
xxiii. “Purchase
Right” means an option
granted to a Participant pursuant to the Plan to purchase such
shares of Stock as provided in Section 8, which the Participant may
or may not exercise during the Offering Period in which such option
is outstanding. Such option arises from the right of a Participant
to withdraw any payroll deductions or other funds accumulated on
behalf of the Participant and not previously applied to the
purchase of Stock under the Plan, and to terminate participation in
the Plan at any time during an Offering Period.
xxiv. “Securities
Act” means the Securities
Act of 1933, as amended.
xxv. “Stock”
means the common stock of the Company, as adjusted from time to
time in accordance with Section 4.2.
xxvi. “Subscription
Agreement” means a
written or electronic agreement, in such form as is specified by
the Company, stating an Employee’s election to participate in
the Plan and authorizing payroll deductions under the Plan from the
Employee’s Compensation or other method of payment authorized
by the Committee pursuant to Section 11.1(b).
xxvii. “Subscription
Date” means the last
business day prior to the Offering Date of an Offering Period or
such earlier date as the Company shall
establish.
xxviii. “Subsidiary
Corporation” means any
present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the
Code.
b) Construction. Captions and
titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan.
Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.
a) Administration by the
Committee. The Plan shall be
administered by the Committee. All questions of interpretation of
the Plan, of any form of agreement or other document employed by
the Company in the administration of the Plan, or of any Purchase
Right shall be determined by the Committee, and such determinations
shall be final, binding and conclusive upon all persons having an
interest in the Plan or the Purchase Right, unless fraudulent or
made in bad faith. Subject to the provisions of the Plan, the
Committee shall determine all of the relevant terms and conditions
of Purchase Rights; provided, however, that all Participants
granted Purchase Rights pursuant to an Offering shall have the same
rights and privileges within the meaning of Section 423(b)(5) of
the Code. Any and all actions, decisions and determinations taken
or made by the Committee in the exercise of its discretion pursuant
to the Plan or any agreement thereunder (other than determining
questions of interpretation pursuant to the second sentence of this
Section 3.1) shall be final, binding and conclusive upon all
persons having an interest therein. All expenses reasonably
incurred by the Company in the administration of the Plan shall be
paid by the Company.
b) Authority of
Officers. Any Officer shall
have the authority to act on behalf of the Company with respect to
any matter, right, obligation, determination or election that is
the responsibility of or that is allocated to the Company herein,
provided that the Officer has actual authority with respect to such
matter, right, obligation, determination or election.
c) Power to Adopt Sub-Plans or
Varying Terms with Respect to Non-U.S. Employees. The Committee
shall have the power, in its discretion, to adopt one or more
sub-plans of the Plan and initiate separate Offerings through such
sub-plans or otherwise (which need not qualify under Section 423 of
the Code) as the Committee deems necessary or desirable to comply
with the laws or regulations, tax policy, accounting principles or
custom of foreign jurisdictions applicable to employees of a
subsidiary business entity of the Company without affecting the
qualification of the remainder of the Plan under Section 423 of the
Code. Any of the provisions of any such sub-plan or Offerings may
supersede the provisions of this Plan, other than Section 4. Except
as superseded by the provisions of such sub-plan or Offering, the
provisions of this Plan shall govern such sub-plan or Offering. In
order to comply with the laws of a foreign jurisdiction, the
Committee shall also have the power, in its discretion, to grant
Purchase Rights in an Offering to citizens or residents of a
non-U.S. jurisdiction (without regard to whether they are also
citizens of the United States or resident aliens) that provide
terms which are less favorable or differ than the terms of Purchase
Rights granted to Employees resident in the United States, subject
to compliance with Section 423 of the Code.
d) Power
to Establish Separate Offerings with Varying
Terms. The Committee
shall have the power, in its discretion, to establish separate,
simultaneous or overlapping Offerings having different terms and
conditions and to designate the Participating Company or Companies
that may participate in a particular Offering, provided that each
Offering shall individually comply with the terms of the Plan and
the requirements of Section 423(b)(5) of the Code that all
Participants granted Purchase Rights pursuant to such Offering
shall have the same rights and privileges within the meaning of
such section.
e) Policies and Procedures
Established by the Company. Without regard to
whether any Participant’s Purchase Right may be considered
adversely affected, the Company may, from time to time, consistent
with the Plan and the requirements of Section 423 of the Code,
establish, change or terminate such rules, guidelines, policies,
procedures, limitations, or adjustments as deemed advisable by the
Company, in its discretion, for the proper administration of the
Plan, including, without limitation, (a) a minimum payroll
deduction amount required for participation in an Offering,
(b) a limitation on the frequency or number of changes
permitted in the rate of payroll deduction during an Offering,
(c) an exchange ratio applicable to amounts withheld or paid
in a currency other than United States dollars, (d) a payroll
deduction greater than or less than the amount designated by a
Participant in order to adjust for the Company’s delay or
mistake in processing a Subscription Agreement or in otherwise
effecting a Participant’s election under the Plan or as
advisable to comply with the requirements of Section 423 of the
Code, (e) determination of the date and manner by which the
Fair Market Value of a share of Stock is determined for purposes of
administration of the Plan, and (f) prescribe rules, forms and
administrative procedures designed to mandate a minimum holding
period for shares of Stock acquired under the Plan or to facilitate
a “quick sale” and/or 10b5-1 program by Participants in
accordance with applicable securities laws. All such actions by the
Company shall be taken consistent with the requirements under
Section 423(b)(5) of the Code that all Participants granted
Purchase Rights pursuant to an Offering shall have the same rights
and privileges within the meaning of such section, except as
otherwise permitted by Section 3.3 and the regulations under
Section 423 of the Code.
f)
Indemnification. In addition to
such other rights of indemnification as they may have as members of
the Board or the Committee or as officers or employees of the
Participating Company Group, to the extent permitted by applicable
law, members of the Board or the Committee and any officers or
employees of the Participating Company Group to whom authority to
act for the Board, the Committee or the Company is delegated shall
be indemnified by the Company against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred
in connection with the defense of any action, suit or proceeding,
or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act
under or in connection with the Plan, or any right granted
hereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of
a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the
institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own
expense to handle and defend the same.
a) Maximum Number of Shares
Issuable. Subject to
adjustment as provided in Section 4.2, the maximum aggregate number
of shares of Stock that may be issued under the Plan shall be one
million(1,000,000) shares, plus the increase in the number of
shares available for issuance under the Plan resulting from the
equitable adjustment for the extraordinary dividend paid on
December 26, 2019 (50,275), plus an additional one million
(1,000,000) shares subject to and effective upon stockholder
approval of this amendment and restatement, and shall consist of
authorized but unissued or reacquired shares of Stock, or any
combination thereof. If an outstanding Purchase Right for any
reason expires or is terminated or canceled, the shares of Stock
allocable to the unexercised portion of that Purchase Right shall
again be available for issuance under the Plan.
b) Adjustments
for Changes in Capital Structure. Subject to any
required action by the stockholders of the Company and the
requirements of Section 424 of the Code to the extent applicable,
in the event of any change in the Stock effected without receipt of
consideration by the Company, whether through merger,
consolidation, reorganization, reincorporation, recapitalization,
reclassification, stock dividend, stock split, reverse stock split,
split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company,
or in the event of payment of a dividend or distribution to the
stockholders of the Company in a form other than Stock (excepting
regular, periodic cash dividends) that has a material effect on the
Fair Market Value of shares of Stock, appropriate and proportionate
adjustments shall be made in the number and kind of shares subject
to the Plan, the limit on the shares which may be purchased by any
Participant during an Offering (as described in Section 8) and each
Purchase Right, and in the Purchase Price in order to prevent
dilution or enlargement of Participants’ rights under the
Plan. For purposes of the foregoing, conversion of any convertible
securities of the Company shall not be treated as “effected
without receipt of consideration by the Company.” If a
majority of the shares which are of the same class as the shares
that are subject to outstanding Purchase Rights are exchanged for,
converted into, or otherwise become (whether or not pursuant to an
Ownership Change Event) shares of another corporation (the
“New
Shares”), the Committee may unilaterally amend the
outstanding Purchase Rights to provide that such Purchase Rights
are for New Shares. In the event of any such amendment, the number
of shares subject to, and the exercise price per share of, the
outstanding Purchase Rights shall be adjusted in a fair and
equitable manner as determined by the Committee, in its discretion.
Any fractional share resulting from an adjustment pursuant to this
Section shall be rounded down to the nearest whole number, and in
no event may the Purchase Price be decreased to an amount less than
the par value, if any, of the stock subject to the Purchase Right.
The adjustments determined by the Committee pursuant to this
Section 4.2 shall be final, binding and conclusive.
a) Employees Eligible to
Participate. Each Employee of
a Participating Company is eligible to participate in the Plan and
shall be deemed an Eligible Employee, except the
following:
i. Any
Employee who is customarily employed by the Participating Company
Group for twenty (20) hours or less per week; or
ii. Any
Employee who is customarily employed by the Participating Company
Group for not more than five (5) months in any calendar
year.
The
Committee may include Employees described above in the category of
Eligible Employees to the extent required under local law, subject
to compliance with Section 423 of the Code to the extent
applicable.
b) Exclusion of Certain
Stockholders. Notwithstanding
any provision of the Plan to the contrary, no Employee shall be
treated as an Eligible Employee and granted a Purchase Right under
the Plan if, immediately after such grant, the Employee would own,
or hold options to purchase, stock of the Company or of any Parent
Corporation or Subsidiary Corporation possessing five percent (5%)
or more of the total combined voting power or value of all classes
of stock of such corporation, as determined in accordance with
Section 423(b)(3) of the Code. For purposes of this Section 5.2,
the attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of such Employee.
c) Determination by
Company. The Company shall
determine in good faith and in the exercise of its discretion
whether an individual has become or has ceased to be an Employee or
an Eligible Employee and the effective date of such
individual’s attainment or termination of such status, as the
case may be. For purposes of an individual’s participation in
or other rights, if any, under the Plan as of the time of the
Company’s determination of whether or not the individual is
an Employee, all such determinations by the Company shall be final,
binding and conclusive as to such rights, if any, notwithstanding
that the Company or any court of law or governmental agency
subsequently makes a contrary determination as to such
individual’s status as an Employee.
The
Plan shall be implemented by sequential Offerings of approximately
six (6) months duration or such other duration as the
Committee shall determine. Offering Periods shall commence on the
fifteenth day of May and November of each year and end on the
fourteenth day of the next May and November, respectively,
occurring thereafter. Notwithstanding the foregoing, the Committee
may establish additional or alternative concurrent, sequential or
overlapping Offering Periods, a different duration for one or more
Offering Periods or different commencing or ending dates for such
Offering Periods; provided, however, that no Offering Period may
have a duration exceeding twenty-seven (27) months. If the
Committee shall so determine in its discretion, each Offering
Period may consist of two (2) or more consecutive Purchase
Periods having such duration as the Committee shall specify, and
the last day of each such Purchase Period shall be a Purchase Date.
If the first or last day of an Offering Period or a Purchase Period
is not a day on which the principal stock exchange or quotation
system on which the Stock is then listed is open for trading, the
Company shall specify the trading day that will be deemed the first
or last day, as the case may be, of the Offering Period or Purchase
Period.
7)
Participation In The
Plan
.
a) Initial
Participation.
i. Generally.
An Eligible Employee may become a Participant in an Offering Period
by delivering a properly completed written or electronic
Subscription Agreement to the Company office or representative
designated by the Company (including a third-party administrator
designated by the Company) not later than the close of business on
the Subscription Date established by the Company for that Offering
Period. An Eligible Employee who does not deliver a properly
completed Subscription Agreement in the manner permitted or
required on or before the Subscription Date for an Offering Period
shall not participate in the Plan for that Offering Period or for
any subsequent Offering Period unless the Eligible Employee
subsequently delivers a properly completed Subscription Agreement
to the appropriate Company office or representative on or before
the Subscription Date for such subsequent Offering Period. An
Employee who becomes an Eligible Employee after the Offering Date
of an Offering Period shall not be eligible to participate in that
Offering Period but may participate in any subsequent Offering
Period provided the Employee is still an Eligible Employee as of
the Offering Date of such subsequent Offering
Period.
b) Continued
Participation.
i. Generally.
A Participant shall automatically participate in the next Offering
Period commencing immediately after the final Purchase Date of each
Offering Period in which the Participant participates provided that
the Participant remains an Eligible Employee on the Offering Date
of the new Offering Period and has not either (a) withdrawn
from the Plan pursuant to Section 12.1, or (b) terminated
employment or otherwise ceased to be an Eligible Employee as
provided in Section 13. A Participant who may automatically
participate in a subsequent Offering Period, as provided in this
Section, is not required to deliver any additional Subscription
Agreement for the subsequent Offering Period in order to continue
participation in the Plan. However, a Participant may deliver a new
Subscription Agreement for a subsequent Offering Period in
accordance with the procedures set forth in Section 7.1(a) if the
Participant desires to change any of the elections contained in the
Participant’s then effective Subscription
Agreement.
a) Grant of Purchase
Right. On the Offering
Date of each Offering Period, each Participant in such Offering
Period shall automatically be granted a Purchase Right consisting
of an option to purchase the lesser of (a) that number of
whole shares of Stock determined by applying the dollar limit in
Section 8.2 (as provided below) or (b) the share limit in
Section 8.3 (as provided below). The Committee may, in its
discretion and prior to the Offering Date of any Offering Period,
(i) change the method of, or any of the foregoing factors in,
determining the number of shares of Stock subject to Purchase
Rights to be granted on such Offering Date, or (ii) specify a
maximum aggregate number of shares that may be purchased by all
Participants in an Offering or on any Purchase Date within an
Offering Period. No Purchase Right shall be granted on an Offering
Date to any person who is not, on such Offering Date, an Eligible
Employee.
b) Calendar
Year Purchase Limitation. Notwithstanding
any provision of the Plan to the contrary, no Participant shall be
granted a Purchase Right which permits his or her right to purchase
shares of Stock under the Plan to accrue at a rate which, when
aggregated with such Participant’s rights to purchase shares
under all other employee stock purchase plans of a Participating
Company intended to meet the requirements of Section 423 of the
Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market
Value (or such other limit, if any, as may be imposed by the Code)
for each calendar year in which such Purchase Right is outstanding
at any time. For purposes of the preceding sentence, the Fair
Market Value of shares purchased during a given Offering Period
shall be determined as of the Offering Date for such Offering
Period. The limitation described in this Section shall be applied
in conformance with Section 423(b)(8) of the Code and the
regulations thereunder.
c) Share
Limitation. Notwithstanding
any provision of the Plan to the contrary, no Participant shall
purchase more than ten thousand (10,000) shares of Stock during an
Offering Period. This limitation may be adjusted by the Committee
prior to the start of an Offering Period.
The
Purchase Price at which each share of Stock may be acquired in an
Offering Period upon the exercise of all or any portion of a
Purchase Right shall be established by the Committee; provided,
however, that the Purchase Price on each Purchase Date shall not be
less than eighty-five percent (85%) of the lesser of (a) the
Fair Market Value of a share of Stock on the Offering Date of the
Offering Period or (b) the Fair Market Value of a share of
Stock on the Purchase Date.
10)
Accumulation Of
Purchase Price Through Payroll Deduction
.
Except
as provided in Section 11.1(b) with respect to a Non-United States
Offering, shares of Stock acquired pursuant to the exercise of all
or any portion of a Purchase Right may be paid for only by means of
payroll deductions from the Participant’s Compensation
accumulated during the Offering Period for which such Purchase
Right was granted, subject to the following:
a) Amount of Payroll
Deductions. Except as
otherwise provided herein, the amount to be deducted under the Plan
from a Participant’s Compensation on each pay day during an
Offering Period shall be determined by the Participant’s
Subscription Agreement. The Subscription Agreement shall set forth
the percentage of the Participant’s Compensation to be
deducted on each pay day during an Offering Period in whole
percentages of not less than one percent (1%) (except as a result
of an election pursuant to Section 10.3 to stop payroll deductions
effective following the first pay day during an Offering) or more
than fifteen (15%) percent. The Committee may change the foregoing
limits on payroll deductions (but shall not exceed fifteen (15)
percent) effective as of any Offering Date.
b) Commencement of Payroll
Deductions. Payroll
deductions shall commence on the first pay day following the
Offering Date and shall continue to the end of the Offering Period
unless sooner altered or terminated as provided
herein.
c) Election to Decrease or Stop
Payroll Deductions. During an
Offering Period, a Participant may elect to decrease the rate of or
to stop deductions from his or her Compensation by delivering to
the Company office or representative designated by the Company
(including a third-party administrator designated by the Company)
an amended Subscription Agreement authorizing such change on or
before the “Change Notice
Date.” The “Change Notice
Date” shall be a date prior to the beginning of the
first pay period for which such election is to be effective as
established by the Company from time to time and announced to the
Participants. A Participant who elects, effective following the
first pay day of an Offering Period, to decrease the rate of his or
her payroll deductions to zero percent (0%) shall nevertheless
remain a Participant in such Offering Period unless the Participant
withdraws from the Plan as provided in Section 12.1.
d) Administrative
Suspension of Payroll Deductions. The Company may,
in its discretion, suspend a Participant’s payroll deductions
under the Plan as the Company deems advisable to avoid accumulating
payroll deductions in excess of the amount that could reasonably be
anticipated to purchase the maximum number of shares of Stock
permitted
i. under
the Participant’s Purchase Right, or (b) during a
calendar year under the limit set forth in Section 8.1. Unless the
Participant has either withdrawn from the Plan as provided in
Section 12.1 or has ceased to be an Eligible Employee, suspended
payroll deductions shall be resumed at the rate specified in the
Participant’s then effective Subscription Agreement
either
(1) at
the beginning of the next Offering Period if the reason for
suspension was clause (a) in the preceding sentence, or (ii)
at the beginning of the next Offering Period having a first
Purchase Date that falls within the subsequent calendar year if the
reason for suspension was clause (b) in the preceding
sentence.
e) Participant
Accounts. Individual
bookkeeping accounts shall be maintained for each Participant. All
payroll deductions from a Participant’s Compensation (and
other amounts received from the Participant in a non-United States
Participant pursuant to Section 11.1(b)) shall be credited to such
Participant’s Plan account and shall be deposited with the
general funds of the Company. All such amounts received or held by
the Company may be used by the Company for any corporate
purpose.
f) No Interest
Paid. Interest shall
not be paid on sums deducted from a Participant’s
Compensation pursuant to the Plan or otherwise credited to the
Participant’s Plan account.
a) Exercise of Purchase
Right.
i. Generally.
Except as provided in Section 11.1(b), on each Purchase Date of an
Offering Period, each Participant who has not withdrawn from the
Plan and whose participation in the Offering has not otherwise
terminated before such Purchase Date shall automatically acquire
pursuant to the exercise of the Participant’s Purchase Right
the number of whole shares of Stock determined by dividing
(a) the total amount of the Participant’s payroll
deductions accumulated in the Participant’s Plan account
during the Offering Period and not previously applied toward the
purchase of Stock by (b) the Purchase Price. However, in no
event shall the number of shares purchased by the Participant
during an Offering Period exceed the number of shares subject to
the Participant’s Purchase Right. No shares of Stock shall be
purchased on a Purchase Date on behalf of a Participant whose
participation in the Offering or the Plan has terminated before
such Purchase Date.
ii. Purchase
by Non-United States Participants for Whom Payroll Deductions Are
Prohibited by Applicable Law.
Notwithstanding Section 11.1(a), and without limiting the
Committee’s powers under Section 3.3, where payroll
deductions on behalf of Participants who are citizens or residents
of countries other than the United States (without regard to
whether they are also citizens of the United States or resident
aliens) are prohibited by applicable law, the Committee may
establish a separate Offering (a “Non-United
States Offering”)
covering all Eligible Employees of one or more Participating
Companies subject to such prohibition on payroll deductions. The
Non-United States Offering shall provide another method for payment
of the Purchase Price with such terms and conditions as shall be
administratively convenient and comply with applicable law. On each
Purchase Date of the Offering Period applicable to a Non-United
States Offering, each Participant who has not withdrawn from the
Plan and whose participation in such Offering Period has not
otherwise terminated before such Purchase Date shall automatically
acquire pursuant to the exercise of the Participant’s
Purchase Right a number of whole shares of Stock determined in
accordance with Section 11.1(a) to the extent of the total amount
of the Participant’s Plan account balance accumulated during
the Offering Period in accordance with the method established by
the Committee and not previously applied toward the purchase of
Stock. However, in no event shall the number of shares purchased by
a Participant during such Offering Period exceed the number of
shares subject to the Participant’s Purchase Right. The
Company shall refund to a Participant in a Non-United States
Offering in accordance with Section 11.4 any excess Purchase Price
payment received from such Participant.
b) Pro
Rata Allocation of Shares. If the number of
shares of Stock which might be purchased by all Participants on a
Purchase Date exceeds the number of shares of Stock available in
the Plan as provided in Section 4.1 or the maximum aggregate number
of shares of Stock that may be purchased on such Purchase Date
pursuant to a limit established by the Committee pursuant to
Section 8.1, the Company shall make a pro rata allocation of the
shares available in as uniform a manner as practicable and as the
Company determines to be equitable. Any fractional share resulting
from such pro rata allocation to any Participant shall be
disregarded.
c) Transfer of
Shares. Subject to any
governing rules or regulations, as soon as practicable after each
Purchase Date, the Company shall issue or cause to be issued to or
for the benefit of each Participant the shares of Stock acquired by
the Participant on such Purchase Date by means of one or more of
the following: (a) by delivering to the Participant evidence
of book entry shares of Stock credited to the account of the
Participant, (b) by depositing such shares of Stock for the
benefit of the Participant with any broker with which the
Participant has an account relationship, or (c) by delivering
such shares of Stock to the Participant in certificate form.
Notwithstanding the foregoing, the Committee may permit or require
that the shares be deposited in the name of the Participant with a
broker designated by the Company to maintain accounts on behalf of
Participants who have purchased shares under the Plan, and may
require that the shares of Stock be retained with such designated
broker for a specified period of time. Unless otherwise provided by
the Committee, shares acquired by a Participant pursuant to the
exercise of a Purchase Right under the Plan must be held by the
Participant until three months after the date of exercise of such
Purchase Right.
d) Return of Plan Account
Balance. Any cash balance
remaining in a Participant’s Plan account following any
Purchase Date shall be refunded to the Participant as soon as
practicable after such Purchase Date. However, if the cash balance
to be returned to a Participant pursuant to the preceding sentence
is less than the amount that would have been necessary to purchase
an additional whole share of Stock on such Purchase Date, the
Company may retain the cash balance in the Participant’s Plan
account to be applied toward the purchase of shares of Stock in the
subsequent Purchase Period or Offering Period.
e) Tax
Withholding. At the time a
Participant’s Purchase Right is exercised, in whole or in
part, or at the time a Participant disposes of some or all of the
shares of Stock he or she acquires under the Plan, the Participant
shall make adequate provision for the federal, state, local and
foreign taxes (including social insurance), if any, required to be
withheld by any Participating Company upon exercise of the Purchase
Right or upon such disposition of shares, respectively. A
Participating Company may, but shall not be obligated to, withhold
from the Participant’s compensation the amount necessary to
meet such withholding obligations.
f) Expiration of Purchase
Right. Any portion of a
Participant’s Purchase Right remaining unexercised after the
end of the Offering Period to which the Purchase Right relates
shall expire immediately upon the end of the Offering
Period.
g) Provision of Reports and
Stockholder Information to Participants. Each Participant
who has exercised all or part of his or her Purchase Right shall
receive, as soon as practicable after the Purchase Date, a report
of such Participant’s Plan account setting forth the total
amount credited to his or her Plan account prior to such exercise,
the number of shares of Stock purchased, the Purchase Price for
such shares, the date of purchase and the cash balance, if any,
remaining immediately after such purchase that is to be refunded or
retained in the Participant’s Plan account pursuant to
Section 11.4. The report required by this Section may be delivered
in such form and by such means, including by electronic
transmission, as the Company may determine. In addition, each
Participant shall be provided information concerning the Company
equivalent to that information provided generally to the
Company’s common stockholders.
a) Voluntary Withdrawal from the
Plan. A Participant may
withdraw from the Plan by signing and delivering to the Company
office or representative designated by the Company (including a
third-party administrator designated by the Company) a written or
electronic notice of withdrawal on a form provided by the Company
for this purpose. Such withdrawal may be elected at any time prior
to the end of an Offering Period; provided, however, that if a
Participant withdraws from the Plan after a Purchase Date, the
withdrawal shall not affect shares of Stock acquired by the
Participant on such Purchase Date. A Participant who voluntarily
withdraws from the Plan is prohibited from resuming participation
in the Plan in the same Offering from which he or she withdrew but
may participate in any subsequent Offering by again satisfying the
requirements of Sections 5 and 7.1. The Company may impose, from
time to time, a requirement that the notice of withdrawal from the
Plan be on file with the Company office or representative
designated by the Company for a reasonable period prior to the
effectiveness of the Participant’s withdrawal.
b) Return
of Plan Account Balance. Upon a
Participant’s voluntary withdrawal from the Plan pursuant to
Section 12.1, the Participant’s accumulated Plan account
balance which has not been applied toward the purchase of shares of
Stock shall be refunded to the Participant as soon as practicable
after the withdrawal, without the payment of any interest, and the
Participant’s interest in the Plan and the Offering shall
terminate. Such amounts to be refunded in accordance with this
Section may not be applied to any other Offering under the
Plan.
13)
Termination Of
Employment Or Eligibility
.
Upon a
Participant’s ceasing, prior to a Purchase Date, to be an
Employee of the Participating Company Group for any reason,
including retirement, disability or death, or upon the failure of a
Participant to remain an Eligible Employee, the Participant’s
participation in the Plan shall terminate immediately. In such
event, the Participant’s Plan account balance which has not
been applied toward the purchase of shares of Stock shall, as soon
as practicable, be returned to the Participant or, in the case of
the Participant’s death, to the Participant’s
beneficiary designated in accordance with Section 20, if any, or
legal representative, and all of the Participant’s rights
under the Plan shall terminate. Interest shall not be paid on sums
returned pursuant to this Section 13. A Participant whose
participation has been so terminated may again become eligible to
participate in the Plan by satisfying the requirements of Sections
5 and 7.1.
14)
Effect Of Change In
Control On Purchase Rights
.
In the
event of a Change in Control, the surviving, continuing, successor,
or purchasing corporation or parent thereof, as the case may be
(the “Acquiring
Corporation”), may, without the consent of any
Participant, assume or continue the Company’s rights and
obligations under outstanding Purchase Rights or substitute
substantially equivalent purchase rights for the Acquiring
Corporation’s stock. If the Acquiring Corporation elects not
to assume, continue or substitute for the outstanding Purchase
Rights, the Purchase Date of the then current Offering Period shall
be accelerated to a date before the date of the Change in Control
specified by the Committee, but the number of shares of Stock
subject to outstanding Purchase Rights shall not be adjusted. All
Purchase Rights which are neither assumed or continued by the
Acquiring Corporation in connection with the Change in Control nor
exercised as of the date of the Change in Control shall terminate
and cease to be outstanding effective as of the date of the Change
in Control.
15)
Nontransferability Of
Purchase Rights
.
Neither
payroll deductions or other amounts credited to a
Participant’s Plan account nor a Participant’s Purchase
Right may be assigned, transferred, pledged or otherwise disposed
of in any manner other than as provided by the Plan or by will or
the laws of descent and distribution. (A beneficiary designation
pursuant to Section 20 shall not be treated as a disposition for
this purpose.) Any such attempted assignment, transfer, pledge or
other disposition shall be without effect, except that the Company
may treat such act as an election to withdraw from the Plan as
provided in Section 12.1. A Purchase Right shall be exercisable
during the lifetime of the Participant only by the
Participant.
16)
Compliance With
Securities Law
.
The
issuance of shares under the Plan shall be subject to compliance
with all applicable requirements of federal, state and foreign law
with respect to such securities. A Purchase Right may not be
exercised if the issuance of shares upon such exercise would
constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of
any securities exchange or market system upon which the Stock may
then be listed. In addition, no Purchase Right may be exercised
unless (a) a registration statement under the Securities Act
shall at the time of exercise of the Purchase Right be in effect
with respect to the shares issuable upon exercise of the Purchase
Right, or (b) in the opinion of legal counsel to the Company,
the shares issuable upon exercise of the Purchase Right may be
issued in accordance with the terms of an applicable exemption from
the registration requirements of the Securities Act. The inability
of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s
legal counsel to be necessary to the lawful issuance and sale of
any shares under the Plan shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as
to which such requisite authority shall not have been obtained. As
a condition to the exercise of a Purchase Right, the Company may
require the Participant to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any
applicable law or regulation, and to make any representation or
warranty with respect thereto as may be requested by the
Company.
17)
Rights As A Stockholder And Employee.
A
Participant shall have no rights as a stockholder by virtue of the
Participant’s participation in the Plan until the date of the
issuance of the shares of Stock purchased pursuant to the exercise
of the Participant’s Purchase Right (as evidenced by the
appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be
made for dividends, distributions or other rights for which the
record date is prior to the date such shares are issued, except as
provided in Section 4.2. Nothing herein shall confer upon a
Participant any right to continue in the employ of the
Participating Company Group or interfere in any way with any right
of the Participating Company Group to terminate the
Participant’s employment at any time.
18)
Notification Of
Disposition Of Shares.
The
Company may require the Participant to give the Company prompt
notice of any disposition of shares of Stock acquired by exercise
of a Purchase Right. The Company may require that until such time
as a Participant disposes of shares of Stock acquired upon exercise
of a Purchase Right, the Participant shall hold all such shares in
the Participant’s name until the later of two years after the
date of grant of such Purchase Right or one year after the date of
exercise of such Purchase Right. The Company may direct that the
certificates evidencing shares of Stock acquired by exercise of a
Purchase Right refer to such requirement to give prompt notice of
disposition.
The
Company may at any time place legends or other identifying symbols
referencing any applicable federal, state or foreign securities law
restrictions or any provision convenient in the administration of
the Plan on some or all of the certificates representing shares of
Stock issued under the Plan. The Participant shall, at the request
of the Company, promptly present to the Company any and all
certificates representing shares acquired pursuant to a Purchase
Right in the possession of the Participant in order to carry out
the provisions of this Section. Unless otherwise specified by the
Company, legends placed on such certificates may include but shall
not be limited to the following:
“THE
SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION
TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN
EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND MAY BE SUBJECT TO
TRANSFER RESTRICTIONS IMPOSED PURSUANT TO THE TERMS THEREOF. THE
TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE
CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE
REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL
SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S
NAME (AND NOT IN THE NAME OF ANY NOMINEE).”
20)
Designation Of
Beneficiary.
a) Designation
Procedure. Subject to local
laws and procedures, and if permitted by the Committee, a
Participant may file a written designation of a beneficiary who is
to receive (a) shares and cash, if any, from the
Participant’s Plan account if the Participant dies subsequent
to a Purchase Date but prior to delivery to the Participant of such
shares and cash, or (b) cash, if any, from the
Participant’s Plan account if the Participant dies prior to
the exercise of the Participant’s Purchase Right. If a
married Participant designates a beneficiary other than the
Participant’s spouse, the effectiveness of such designation
may be subject to the consent of the Participant’s spouse. A
Participant may change his or her beneficiary designation at any
time by written notice to the Company.
b) Absence of Beneficiary
Designation. If a Participant
dies without an effective designation pursuant to Section 20.1 of a
beneficiary who is living at the time of the Participant’s
death, the Company shall deliver any shares or cash credited to the
Participant’s Plan account to the Participant’s legal
representative or as otherwise required by applicable
law.
All
notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the
receipt thereof.
22)
Amendment Or
Termination Of The Plan
.
The
Committee may at any time amend, suspend or terminate the Plan,
except that (a) no such amendment, suspension or termination
shall affect Purchase Rights previously granted under the Plan
unless expressly provided by the Committee, and (b) no such
amendment, suspension or termination may adversely affect a
Purchase Right previously granted under the Plan without the
consent of the Participant, except to the extent permitted by the
Plan or as may be necessary or advisable to qualify the Plan as an
employee stock purchase plan pursuant to Section 423 of the Code or
to comply with any applicable law, regulation or rule. In addition,
an amendment to the Plan must be approved by the stockholders of
the Company within twelve (12) months of the adoption of such
amendment if such amendment would authorize the sale of more shares
than are then authorized for issuance under the Plan or would
change the definition of the corporations that may be designated by
the Committee as Participating Companies.
Notwithstanding the
foregoing, in the event that the Committee determines that
continuation of the Plan or an Offering would result in unfavorable
financial accounting consequences to the Company, the Committee
may, in its discretion and without the consent of any Participant,
including with respect to an Offering Period then in progress:
(i) terminate the Plan or any Offering Period, (ii) accelerate
the Purchase Date of any Offering Period, (iii) reduce the discount
or the method of determining the Purchase Price in any Offering
Period (e.g., by determining the Purchase Price solely on the basis
of the Fair Market Value on the Purchase Date), (iv) reduce the
maximum number of shares of Stock that may be purchased in any
Offering Period, or (v) take any combination of the foregoing
actions.
APPENDIX A
Participating Companies/Offerings
Offering
A – United States
Support.com,
Inc.
Offering
B- Outside the United States
SDC
Services Canada Inc.
Support.com India
Pvt Ltd.
TABLE
OF CONTENTS
Page
1
|
Establishment, Purpose And Term Of Plan
|
1
|
|
1.1
|
Establishment
|
1
|
|
1.2
|
Purpose
|
1
|
|
1.3
|
Term of Plan
|
1
|
2
|
Definitions And Construction
|
1
|
|
2.1
|
Definitions
|
1
|
|
2.2
|
Construction
|
5
|
3
|
Administration
|
5
|
|
3.1
|
Administration by the Committee
|
5
|
|
3.2
|
Authority of Officers
|
5
|
|
3.3
|
Power to Adopt Sub-Plans or Varying Terms with Respect to Non-U.S.
Employees
|
5
|
|
3.4
|
Power to Establish Separate Offerings with Varying
Terms
|
6
|
|
3.5
|
Policies and Procedures Established by the Company
|
6
|
|
3.6
|
Indemnification
|
6
|
4
|
Shares Subject To Plan
|
7
|
|
4.1
|
Maximum Number of Shares Issuable
|
7
|
|
4.2
|
Adjustments for Changes in Capital Structure
|
7
|
5
|
Eligibility
|
|
8
|
|
5.1
|
Employees Eligible to Participate
|
8
|
|
5.2
|
Exclusion of Certain Stockholders
|
8
|
|
5.3
|
Determination by Company
|
8
|
6
|
Offerings
|
|
8
|
7
|
Participation In The Plan
|
9
|
|
7.1
|
Initial Participation
|
9
|
|
7.2
|
Continued Participation
|
9
|
8
|
Right To Purchase Shares
|
9
|
|
8.1
|
Grant of Purchase Right
|
9
|
|
8.2
|
Calendar Year Purchase Limitation
|
10
|
|
8.3
|
Share Limitation
|
10
|
9
|
Purchase Price
|
10
|
10
|
Accumulation Of Purchase Price Through Payroll
Deduction
|
10
|
|
10.1
|
Amount of Payroll Deductions
|
10
|
|
10.2
|
Commencement of Payroll Deductions
|
11
|
|
10.3
|
Election to Decrease or Stop Payroll Deductions
|
11
|
|
10.4
|
Administrative Suspension of Payroll Deductions
|
11
|
|
10.5
|
Participant Accounts
|
11
|
|
10.6
|
No Interest Paid
|
11
|
11
|
Purchase Of Shares
|
12
|
|
11.1
|
Exercise of Purchase Right
|
12
|
|
11.2
|
Pro Rata Allocation of Shares
|
12
|
|
11.3
|
Transfer of Shares
|
13
|
|
11.4
|
Return of Plan Account Balance
|
13
|
|
11.5
|
Tax Withholding
|
13
|
|
11.6
|
Expiration of Purchase Right
|
13
|
|
11.7
|
Provision of Reports and Stockholder Information to
Participants
|
13
|
12
|
Withdrawal From Plan
|
14
|
|
12.1
|
Voluntary Withdrawal from the Plan
|
14
|
|
12.2
|
Return of Plan Account Balance
|
14
|
13
|
Termination Of Employment Or Eligibility
|
14
|
14
|
Effect Of Change In Control On Purchase Rights
|
14
|
15
|
Nontransferability Of Purchase Rights
|
15
|
16
|
Compliance With Securities Law
|
15
|
17
|
Rights As A Stockholder And Employee
|
15
|
18
|
Notification Of Disposition Of Shares
|
16
|
19
|
Legends
|
|
16
|
20
|
Designation Of Beneficiary
|
16
|
|
20.1
|
Designation Procedure
|
16
|
|
20.2
|
Absence of Beneficiary Designation
|
17
|
21
|
Notices
|
|
17
|
22
|
Amendment Or Termination Of The Plan
|
17
|
Appendix C
SUPPORT.COM, INC.
Third Amended and Restated 2010 Equity and Performance Incentive
Plan
1. Purpose. The purpose of the Third
Amended and Restated 2010 Equity and Performance Incentive Plan is
to attract and retain directors, officers, other employees and
consultants of support.com, Inc., a Delaware corporation, and its
Subsidiaries and to provide to such persons incentives and rewards
for superior performance. The Plan amends and restates the Second
Amended and Restated 2010 Equity and Performance Incentive Plan
effective upon stockholder approval on the Restatement Effective
Date.
2. Definitions. As used in this
Plan,
a) “Appreciation
Right” means a right granted pursuant to Section 5 or Section
9 of this Plan, and will include both Tandem Appreciation Rights
and Free-Standing 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 and 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 14 of this Plan, such committee (or
subcommittee).
d) “Change
of Control” shall mean the occurrence of either of the
following events:
i. A
change in the composition of the Board, as a result of which fewer
than one-half of the incumbent directors are directors who
either:
(1) Had
been directors of the Company twenty-four (24) months prior to
such change; or
(2) Were
elected, or nominated for election, to the Directors with the
affirmative votes of at least a majority of the directors who had
been directors of the Company twenty-four (24) months prior to
such change and who were still in office at the time of the
election or nomination; or
ii. Any
“person” (as such term is used in sections 13(d) and
14(d) of the Exchange Act) who, by the acquisition or aggregation
of securities, is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s
then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at
elections of directors (the “Base Capital Stock”);
except that any change in the relative beneficial ownership of the
Company’s securities by any person resulting solely from a
reduction in the aggregate number of outstanding shares of Base
Capital Stock, and any decrease thereafter in such person’s
ownership of securities, shall be disregarded until such person
increases in any manner, directly or indirectly, such
person’s beneficial ownership of any securities of the
Company. For purposes of this Subsection (ii), the term
“person” shall not include an employee benefit plan
maintained by the Company.
e) “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
f) “Common
Stock” means the Common Stock, par value $0.0001 per share,
of the Company or any security into which such Common Stock may be
changed by reason of any transaction or event of the type referred
to in Section 12 of this Plan.
g) “Company”
means support.com Inc., a Delaware corporation, and its
successors.
h) “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 10 of
this Plan, or a grant or sale of Restricted Stock, Restricted Stock
Units, or other awards contemplated by Section 10 of this Plan,
will become effective (which date will not be earlier than the date
on which the Board takes action with respect thereto).
i) “Director”
means a member of the Board of Directors of the
Company.
j) “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,
unless otherwise determined by the Board, need not be signed by a
representative of the Company or a Participant.
k) “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.
l) “Free-Standing
Appreciation Right” means an Appreciation Right granted
pursuant to Section 5 or Section 9 of this Plan that is not granted
in tandem with an Option Right.
m) “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.
n) “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
or other awards pursuant to this Plan. Management Objectives may be
described, without limitation, in terms of Company-wide objectives
or objectives that are related to the performance of the individual
Participant or of the Subsidiary, division, department, region or
function within the Company or Subsidiary in which the Participant
is employed. The Management Objectives may be made relative to the
performance of one or more other companies or subsidiaries,
divisions, departments, regions or functions within such other
companies, and may be made relative to an index or one or more of
the performance objectives themselves.
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 level or levels of achievement, in whole or in part, as
the Board deems appropriate and equitable
o) “Market
Value per Share” means as of any particular date the closing
sale price of a share of Common Stock during regular trading as
reported on The NASDAQ Stock Market or, if not listed on such
exchange, on any other national securities exchange on which the
Common Stock is listed; for the avoidance of doubt, this excludes
pricing from “after-hours” trading, or any similar
period of outside of regular stock market hours when the full stock
market is open. If the Common Stock is not traded as of any given
date, the Market Value per Share means the closing price for a
share of Common Stock on the principal exchange on which the Common
Stock is traded for the immediately preceding date on which the
Common Stock is traded. If there is no regular public trading
market for the Common Stock, the Market Value per Share shall be
the fair market value of a share of Common Stock as determined in
good faith by the Board. The Board is authorized to adopt another
fair market value pricing method, provided such method is stated in
the Evidence of Award, and is in compliance with the fair market
value pricing rules set forth in Section 409A of the
Code.
p) “Non-Employee
Director” means a person who is a “Non-Employee
Director” of the Company within the meaning of Rule 16b-3 of
the Securities and Exchange Commission promulgated under the
Exchange Act.
q) “Optionee”
means the optionee named in an Evidence of Award evidencing an
outstanding Option Right.
r) “Option
Price” means the purchase price payable on exercise of an
Option Right.
s) “Option
Right” means the right to purchase Common Stock upon exercise
of an option granted pursuant to Section 4 or Section 9 of this
Plan.
t) “Participant”
means a person who is selected by the Board to receive benefits
under this Plan and who is at the time an officer, other key
employee or a consultant of the Company or any one or more of its
Subsidiaries, or who has agreed to commence serving in any of such
capacities within 90 days of the Date of Grant, and will also
include each non-employee Director who receives Common Stock or an
award of Option Rights, Appreciation Rights, Restricted Stock,
Restricted Stock Units or other awards under this Plan. The term
“Participant” shall also include any person who
provides services to the Company or a Subsidiary that are
substantially equivalent to those typically provided by an
employee.
u) “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.
v) “Performance
Share” means a bookkeeping entry that records the equivalent
of one Common Share awarded pursuant to Section 8 of this
Plan.
w) “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.
x) “Plan”
means this Support.com, Inc. Third Amended and Restated 2010 Equity
and Performance Incentive Plan, as may be amended from time to
time.
y) “Restatement
Effective Date” means [June 5, 2020].
z) “Restricted
Stock” means Common Stock granted or sold pursuant to Section
6 or Section 9 of this Plan as to which neither the substantial
risk of forfeiture nor the prohibition on transfers has
expired.
aa) “Restriction
Period” means the period of time during which Restricted
Stock Units are subject to restrictions, as provided in Section 7
or Section 9 of this Plan.
bb) “Restricted
Stock Unit” means an award made pursuant to Section 7 or
Section 9 of this Plan of the right to receive Common Stock or cash
at the end of a specified period.
cc) “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.
dd) “Subsidiary”
means a corporation, company or other entity (i) more than 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 more than 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, more than 50
percent of the total combined voting power represented by all
classes of stock issued by such corporation.
ee) “Tandem
Appreciation Right” means an Appreciation Right granted
pursuant to Section 5 or Section 9 of this Plan that is granted in
tandem with an Option Right.
3.
Shares
Available Under the Plan.
a) Maximum
Shares Available Under Plan.
i. Subject
to adjustment as provided in Section 12 of this Plan, the number of
shares of Common Stock that may be issued or transferred (A) upon
the exercise of Option Rights or Appreciation Rights, (B) in
payment of Restricted Stock and released from substantial risks of
forfeiture thereof, (C) in payment of Restricted Stock Units, (D)
in payment of Performance Shares or Performance Units that have
been earned, (E) as awards to Non-Employee Directors, (F) as awards
contemplated by Section 10 of this Plan, or (G) in payment of
dividend equivalents paid with respect to awards made under the
Plan, will not exceed in the aggregate eight million two hundred
fifty thousand (8,250,000) shares of Common Stock plus the number
of shares relating to prior awards under the 2000 Omnibus Equity
Incentive Plan that expire or are forfeited or cancelled after May
19, 2010, plus the increase in the number of shares available for
grant resulting from the equitable adjustment for the extraordinary
dividend paid on December 26, 2019 (1,655,553 shares), plus an
additional two million (2,000,000) shares subject to and effective
upon stockholder approval of this amendment and restatement on the
Restatement Effective Date. Each share of Common Stock issued
pursuant to an award of Option Rights or Appreciation Rights shall
reduce the aggregate Plan limit by one share. Commencing June 1,
2013, each share of Common Stock issued pursuant to an award other
than Option Rights or Appreciation Rights shall reduce the
aggregate Plan limit by 1.6 shares (and if
such shares are credited back to the aggregate plan limit pursuant
to Section 3(a)(ii) below, shall be credited based on the same
ratio). For the avoidance of doubt, such amounts do not include
shares used in payment of the exercise price or shares used to
satisfy tax withholding. Such Common Stock may be shares of
original issuance or treasury shares or a combination of the
foregoing.
ii. Shares
of Common Stock 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 and, therefore, the total number of
shares of Common Stock available under the Plan as of a given date
shall not be reduced by any Common Stock relating to prior awards
that have expired or have been forfeited or cancelled, and upon
payment in cash of the benefit provided by any award granted under
the Plan, any shares of Common Stock that are covered by that award
will be available for issue or transfer hereunder. Notwithstanding
anything to the contrary contained herein: (A) if shares of Common
Stock are tendered or otherwise used in payment of the Option Price
of an Option Right, the total number of shares of Common Stock
covered by the Option Right being exercised shall count against the
aggregate plan limit described above; (B) shares of Common Stock
withheld by the Company to satisfy the tax withholding obligation
shall count against the aggregate plan limit described above; and
(C) the number of shares of Common Stock covered by an Appreciation
Right, to the extent that it is exercised and settled in Common
Stock, and whether or not the shares of Common Stock are actually
issued to the Participant upon exercise of the Appreciation Right,
shall be considered issued or transferred pursuant to the Plan. In
the event that the Company repurchases Common Stock with Option
Right proceeds, those shares of Common Stock will not be added to
the aggregate plan limit described above. If, under this Plan, a
Participant has elected to give up the right to receive
compensation in exchange for Common Stock based on fair market
value, such shares of Common Stock will not count against the
aggregate plan limit described above.
b) Incentive
Stock Option Limit. Notwithstanding anything in this Section
3, or elsewhere in this Plan, to the contrary, and subject to
adjustment as provided in Section 12 of this Plan, the aggregate
number of shares of Common Stock actually issued or transferred by
the Company upon the exercise of Incentive Stock Options will not
exceed 1,934,600 shares of Common Stock (as equitably adjusted for
the extraordinary dividend paid on December 26, 2019).
c) Limit on Non-Employee Director
Compensation. The amount of cash plus the grant date fair
value of all awards (as determined in accordance with Financial
Accounting Standards Board Accounting Standards Codification Topic
718, or any successor thereto) granted under the Plan to any
Non-Employee Director as compensation for services as a
Non-Employee Director during any twelve (12)-month period may not
exceed $500,000.
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 Stock. Each such grant may utilize any or all of the
authorizations, and will be subject to all of the requirements
contained in the following provisions:
a) Each grant will
specify the number of shares of Common Stock 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 Stock owned by the Optionee (or other
consideration authorized pursuant to Section 4(d)) having a value
at the time of exercise equal to the total Option Price, (iii) by
delivery (through a process approved by the Board) of an
irrevocable direction to a securities broker to sell Common Stock
and to deliver all or part of the sale proceeds to the Company in
payment; (iv) by a combination of such methods of payment, or (v)
by such other methods as may be approved by the Board.
d) 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.
e) Successive grants
may be made to the same Participant whether or not any Option
Rights previously granted to such Participant remain
unexercised.
f) 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 of Control.
g) Any grant of Option
Rights may specify Management Objectives that must be achieved as a
condition to the exercise of such rights.
h) 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.
i) No grant of Option
Rights may be accompanied by a tandem award of dividend equivalents
or provide for dividends, dividend equivalents or other
distributions to be paid on such Option Rights.
j) 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.
k) No Option Right
will be exercisable more than ten (10) years from the Date of
Grant.
l) The Board reserves
the discretion at or after the Date of Grant to provide for (i) the
availability of a loan at exercise and (ii) the right to tender in
satisfaction of the Option Price nonforfeitable, unrestricted
shares of Common Stock, which are already owned by the Optionee and
have a value at the time of exercise that is equal to the Option
Price.
m) Each grant of
Option Rights will be evidenced by an Evidence of Award. Each
Evidence of Award shall be subject to the Plan and shall contain
such terms and provisions as the Board may approve.
5.
Appreciation
Rights.
a) The Board may, from
time to time and upon such terms and conditions as it may
determine, 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 may utilize any or all of the authorizations,
and 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
Stock or in any combination thereof and may either grant to the
Participant or retain in the Board the right to elect among those
alternatives.
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 of
Control.
v. No
grant of Appreciation Rights may be accompanied by a tandem award
of dividend equivalents or provide for dividends, dividend
equivalents or other distributions to be paid on such Appreciation
Rights.
vi. Any
grant of Appreciation Rights may specify Management Objectives that
must be achieved as a condition of the exercise of such
Appreciation Rights.
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 will be equal to or greater than the
Market Value per Share on the Date of Grant;
ii. Successive
grants of Free-Standing Appreciation Rights 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.
6. Restricted Stock. The Board may, from
time to time and upon such terms and conditions as it may
determine, also authorize the grant or sale of Restricted Stock to
Participants. Each such grant or sale may utilize any or all of the
authorizations, and 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 Stock 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 upon achievement of Management Objectives
referred to in subparagraph (e) below.
d) Each such grant or
sale will provide that during or after 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 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 or threshold level or levels, or is at or above the target
level or levels, but falls short of maximum achievement of the
specified Management Objectives.
f) Notwithstanding
anything to the contrary contained in this Plan, any grant or sale
of Restricted Stock may provide for the earlier termination of
restrictions on such Restricted Stock in the event of the
retirement, death or disability of a Participant, or a Change of
Control.
g) Any such grant or
sale of Restricted Stock shall require that 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 shall be subject to the same restrictions
and risk of forfeiture 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,
(i) 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, or (ii) all shares of
Restricted Stock will be held at the Company’s transfer agent
in book entry form with appropriate restrictions relating to the
transfer of such shares of Restricted Stock.
7. Restricted Stock Units. The Board may,
from time to time and upon such terms and conditions as it may
determine, also authorize the granting or sale of Restricted Stock
Units to Participants. Each such grant or sale may utilize any or
all of the authorizations, and 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
Stock 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.
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 Restricted Stock Units on which
restrictions will terminate if performance is at or above the
minimum or threshold level or levels, or is at or above the target
level or levels, but falls short of maximum achievement of the
specified Management Objectives.
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) Notwithstanding
anything to the contrary contained in this Plan, any grant or sale
of Restricted Stock Units may provide for the earlier lapse or
modification of the Restriction Period in the event of the
retirement, death or disability of a Participant, or a Change of
Control.
d) 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 shares of Common Stock covered by such Restricted
Stock Units and will have no right to vote them, but the Board may
authorize the payment of dividend equivalents on a deferred basis,
either in cash or in additional shares of Common Stock; provided,
however, that any such dividend equivalents with respect to the
number of shares of Common Stock covered by Restricted Stock Units
shall be subject to the same conditions and restrictions (including
without limitation any forfeiture conditions) as the Restricted
Stock Units with respect to which such dividend equivalents attach.
The value of dividend equivalents payable or distributable with
respect to any unvested Restricted Stock Units that do not vest
shall be forfeited.
e) Each grant or sale
of Restricted Stock Units will specify the time and manner of
settlement of the Restricted Stock Units that have been earned.
Settlement of vested Restricted Stock Units may be made in the form
of (i) cash, (ii) shares of Common Stock or (iii) any combination
of both, as determined by the Board. . Restricted Stock Units may
be settled when all vesting conditions applicable to the Restricted
Stock Units have been satisfied or have lapsed, or settlement may
be deferred to any later date, subject to compliance with Section
409A of the Code and the terms of the Evidence of
Award.
f) 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, from time to time and upon such terms
and conditions as it may determine, 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 may
utilize any or all of the authorizations, and 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.
b) The Performance
Period with respect to each Performance Share or Performance Unit
will be such period of time (not less than one year), commencing with the Date of
Grant 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 of 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
Management Objectives a minimum acceptable level of achievement and
may 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 or threshold level or levels, or is at or
above the target 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 certify 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 Stock or in any combination thereof 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 or Performance Units may specify that the amount
payable or the number of shares of Common Stock issued with respect
thereto may not exceed maximums specified by the Board at the Date
of Grant.
f) The Board may
provide for the payment of dividend equivalents to the holder of
Performance Shares either in cash or in additional shares of Common
Stock subject in all cases to payment on a contingent basis based
on the Participant’s earning of the Performance Shares with
respect to which such dividend equivalents attach.
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. Awards to Non-Employee Directors. The
Board may, from time to time and upon such terms and conditions as
it may determine, authorize the granting to Non-Employee Directors
of Option Rights, Appreciation Rights or other awards contemplated
by Section 10 of this Plan and may also authorize the grant or sale
of Common Stock, Restricted Stock or Restricted Stock Units to
Non-Employee Directors. Each grant of an award to a Non-Employee
Director will be upon such terms and conditions as approved by the
Board, will not be required to be subject to any minimum vesting
period, and will be evidenced by an Evidence of Award in such form
as will be approved by the Board. Each grant will specify in the
case of an Option Right, an Option Price per share, and in the case
of a Free-Standing Appreciation Right, a Base Price per share,
which will not be less than the Market Value per Share on the Date
of Grant. Each Option Right and Free-Standing Appreciation Right
granted under the Plan to a Non-Employee Director will expire not
more than 10 years from the Date of Grant and will be subject to
earlier termination as hereinafter provided. If a Non-Employee
Director subsequently becomes an employee of the Company or a
Subsidiary while remaining a member of the Board, any award held
under this Plan by such individual at the time of such commencement
of employment will not be affected thereby. Non-Employee Directors,
pursuant to this Section 9, may be awarded, or may be permitted to
elect to receive, pursuant to procedures established by the Board,
all or any portion of their annual retainer, meeting fees or other
fees in Common Stock, Restricted Stock, Restricted Stock Units or
other awards under the Plan in lieu of cash. Notwithstanding any
provision of this Section 9 to the contrary, the provisions of this
Section 9 are subject in all respects to the limitations of Section
3(c).
10.
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, shares of Common Stock 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 Stock, purchase rights for
Common Stock, 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 shares
of Common Stock 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. Shares of Common Stock delivered pursuant to an award
in the nature of a purchase right granted under this Section 10
shall be purchased for such consideration, paid for at such time,
by such methods, and in such forms, including, without limitation,
cash, shares of Common Stock, 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 10 of this
Plan.
c) The Board may grant
Common Stock 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 in a manner that complies with Section 409A of the
Code.
d) Share-based awards
pursuant to this Section 10 are not required to be subject to any
minimum vesting period.
11.
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, and in no event shall any such award
granted under this Plan be transferred for value. 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 shares of
Common Stock 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.
12.
Adjustments. The Board shall make or
provide for such adjustments (including acceleration) in the
numbers of shares of Common Stock covered by outstanding Option
Rights, Appreciation Rights, Restricted Stock Units, Performance
Shares and Performance Units granted hereunder and, if applicable,
in the number of shares of Common Stock covered by other awards
granted pursuant to Section 10 hereof, in the Option Price and Base
Price provided in outstanding Appreciation Rights, and in the kind
of shares covered thereby, as the Board, in its sole discretion,
exercised in good faith, 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,
stock split, combination of shares, recapitalization or other
change in the capital structure of the Company, (b) any 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. Moreover, in the event
of any such transaction or event or in the event of a Change of
Control, 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, in good faith, may
determine to be equitable in the circumstances and may require in
connection therewith the surrender of all awards so replaced in a
manner that complies with Section 409A of the Code. In addition,
for each Option Right or Appreciation Right with an Option Price or
Base Price greater than the consideration offered in connection
with any such transaction or event or Change of Control, the Board
may in its sole discretion elect to cancel such Option Right or
Appreciation Right without any payment to the person holding such
Option Right or Appreciation Right. The Board shall also make or
provide for such adjustments in the numbers of shares of Common
Stock 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 12;
provided,
however, that any
adjustment or acceleration to an Option Right intended to qualify
as an Incentive Stock Option, which will fail to so qualify as such
after the adjustment or acceleration, will be a non-qualified
Option Right.
13.
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 the Compensation
Committee of the Board (or a subcommittee thereof), as constituted
from time to time. To the extent of any such delegation, references
in this Plan to the Board will be deemed to be references to such
committee or subcommittee. A majority of the committee (or
subcommittee) will constitute a quorum, and the action of the
members of the committee (or subcommittee) present at any meeting
at which a quorum is present, or acts unanimously approved in
writing, will be the acts of the 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 10 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.
No member of the Board will be liable for any such action or
determination made in good faith.
c) The Board or, to
the extent of any delegation as provided in Section 13(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
officer, Director, or more than 10% beneficial owner of any class
of the Company’s equity securities that is registered
pursuant to Section 12 of the Exchange Act, as determined by the
Board in accordance with Section 16 of the Exchange Act; (B) the
resolution providing for such authorization sets forth the total
number of shares of Common Stock 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.
14.
Cancellation Provisions. Any Evidence of
Award may provide for the cancellation, modification or termination
of an award upon such terms and conditions as may be determined
from time to time by the Board.
15.
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.
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, 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. Without limiting the foregoing, the Board may also
permit or require a Participant to satisfy all or part of the
withholding obligation by having the Company withhold all or a
portion of any shares of Common Stock that otherwise would be
issued to the Participant or by surrendering all or a portion of
any shares of Common Stock that the Participant previously
acquired. The shares used for tax withholding will be valued at an
amount equal to the Market Value per Share of such Common Stock 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
Stock to be withheld and delivered pursuant to this Section 16 to
satisfy applicable withholding taxes in connection with the benefit
exceed the maximum 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 shares of Common Stock
acquired upon the exercise of Option Rights.
17.
Amendments,
Etc.
a) The Board may at
any time and from time to time amend the Plan in whole or in part;
provided,
however, that if an
amendment to the Plan (i) would materially increase the benefits
accruing to Participants under the Plan, (ii) would materially
increase the number of securities which may be issued under the
Plan, (iii) would materially modify the requirements for
participation in the Plan or (iv) must otherwise be approved by the
stockholders of the Company in order to comply with applicable law
or the rules of The NASDAQ Stock Market or, if the Common Stock is
not traded on The NASDAQ Stock Market, the principal national
securities exchange upon which the Common Stock is 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) Except
in connection with a corporate transaction or event described in
Section 12 of this Plan, the terms of outstanding awards may not be
amended to reduce the Option Price of outstanding Option Rights or
the Base Price of outstanding Appreciation Rights, or cancel
outstanding Option Rights or Appreciation Rights that are
underwater in exchange for cash, other awards or Option Rights or
Appreciation Rights with an Option Price or Base Price, as
applicable, that is less than the Option Price of the original
Option Rights or Base Price of the original Appreciation Rights, as
applicable, without stockholder approval.
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 10 subject to any vesting schedule or transfer
restriction, or who holds Common Stock subject to any transfer
restriction imposed pursuant to Section 11(b) of this Plan, or in
the case of a Change of Control, 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.
Subject to Section 12 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.
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, so that the income inclusion provisions of Section 409A(a)(1)
of the Code do not apply to the Participants. This Plan and any
grants made hereunder shall be administered in a manner consistent
with this intent. Any reference in this Plan to Section 409A of the
Code will also include any regulations or any other formal guidance
promulgated with respect to such Section by the U.S. Department of
the Treasury or the Internal Revenue Service.
(b) Neither
a Participant nor any of a Participant’s creditors or
beneficiaries shall have the right to subject any deferred
compensation (within the meaning of Section 409A of the Code)
payable under this Plan and grants hereunder to any anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment. Except as permitted under Section 409A
of the Code, any deferred compensation (within the meaning of
Section 409A of the Code) payable to a Participant or for a
Participant’s benefit under this Plan and grants hereunder
may not be reduced by, or offset against, any amount owing by a
Participant to the Company or any of its affiliates.
(c) If,
at the time of a Participant’s separation from service
(within the meaning of Section 409A of the Code), (i) the
Participant shall be a specified employee (within the meaning of
Section 409A of the Code and using the identification methodology
selected by the Company from time to time) and (ii) the Company
shall make a good faith determination that an amount payable
hereunder constitutes deferred compensation (within the meaning of
Section 409A of the Code) the payment of which is required to be
delayed pursuant to the six-month delay rule set forth in Section
409A of the Code in order to avoid taxes or penalties under Section
409A of the Code, then the Company shall not pay such amount on the
otherwise scheduled payment date but shall instead pay it, without
interest, on the tenth business day of the seventh month after such
separation of service.
(d)
Notwithstanding any provision of this Plan and grants hereunder to
the contrary, in light of the uncertainty with respect to the
proper application of Section 409A of the Code, the Company
reserves the right to make amendments to this Plan and grants
hereunder as the Company deems necessary or desirable to avoid the
imposition of taxes or penalties under Section 409A of the Code. In
any case, a Participant shall be solely responsible and liable for
the satisfaction of all taxes and penalties that may be imposed on
a Participant or for a Participant’s account in connection
with this Plan and grants hereunder (including any taxes and
penalties under Section 409A of the Code), and neither the Company
nor any of its affiliates shall have any obligation to indemnify or
otherwise hold a Participant harmless from any or all of such taxes
or penalties.
19.
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.
20.
Effective Date/Termination. This Plan
will be effective as of the Restatement Effective Date. No grants
of Incentive Stock Options will be made under this Plan after the
tenth anniversary of the Restatement 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.
21.
Miscellaneous.
a) The Company will
not be required to issue any fractional shares of Common Stock
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.
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) 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.
e) Absence or 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.
f) 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.
g) 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.
h) If any provision of
the Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify the 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 the Plan shall remain in full force
and effect.