PROPOSAL No. FOUR
APPROVAL OF THE ACCURIDE CORPORATION SECOND
AMENDED AND RESTATED 2010 INCENTIVE AWARD PLAN
Our compensation program has historically consisted of a fixed base salary, an annual performance-based cash incentive program and a
long-term equity incentive program. As a result, our senior executive management team members have historically had a substantial portion of their potential compensation tied to performance- and
incentive-based programs based on the financial performance of the Company. This mix of compensation is intended to ensure that total compensation reflects our overall success or failure and to
motivate executive officers to meet appropriate performance measures. Total compensation is allocated between cash and equity compensation based on competitive market practice and our desire to
balance short-term financial and operating performance achievements with long-term value creation.
In
addition to requesting approval of our Amended and Restated Incentive Compensation Plan as discussed under Proposal No. Three above, through which we provide annual performance-based
cash incentives, we are also requesting that our stockholders vote in favor of approving the Accuride Corporation Second Amended and Restated 2010 Incentive Award Plan (the "2014 IAP") in order to
allow us to continue providing equity compensation to employees and members of our Board of Directors as a competitive compensation practice and to align the interests of our employees and Board
members with our stockholders.
A
summary of the 2014 IAP appears below. This summary is qualified in its entirety by the text of the 2014 IAP, which is included as Appendix B to this proxy statement.
The
amendments to the 2010 Incentive Award Plan reflected in the 2014 IAP would affect the following material changes:
-
-
Increase the number of shares of our common stock that may be granted under the Incentive Award Plan by 1,700,000 shares;
-
-
Adjusting the per participant limit on the number of awards that may be granted under the terms of the Incentive Award
Plan for Section 162(m) purposes to 1,000,000 shares and $2,500,000 for cash awards for any calendar year; and
-
-
extend the term of the Incentive Award Plan until 2024.
Background for Request to Increase the Share Reserve
In determining to recommend the adoption of the 2014 IAP and increase the shares by 1,700,000 over the share reserve currently
available under the existing Incentive Award Plan, our Board and the Compensation Committee considered the following factors:
-
-
As of March 13, 2014, approximately 1,177,737 shares remain available for awards under the existing plan. Based on
historical usage and expected practices, and noting that future circumstances may require us to make changes to our expected practices, we estimate that this number of shares would allow us to make
equity grants for approximately up to one additional year, unless we increase the share reserve.
-
-
The additional 1,700,000 shares being added to the 2014 IAP would be dilutive to other stockholders by an additional 3%,
based on outstanding shares as of February 28, 2013.
-
-
Based on historical usage, we estimate that the 1,700,000 additional shares, in addition to the available share pool of
approximately 1,177,737 shares as of March 13, 2014 (for a total available pool of approximately 2,877,737 shares if the 2014 IAP is approved), would be sufficient for two to three additional
years of Awards, assuming we continue to grant Awards consistent with our
27
Summary of the 2014 IAP
A summary of the principal provisions of the 2014 IAP is set forth below. The summary is qualified by reference to the full text of the
2014 IAP, which is attached as Appendix B to this Proxy Statement.
The
2014 IAP was approved by our Board and by the compensation committee on March 13, 2014, subject to approval by our stockholders. The 2014 IAP provides for the grant of options
(both nonqualified and incentive stock options), stock appreciation rights ("SARs"), restricted stock, restricted stock units, performance awards, dividend equivalents, and stock payments
(collectively, "Awards").
Shares Subject to the 2014 IAP
Under the 2014 IAP, the total number of shares of our common stock that have been reserved for, issued or may be issued or transferred
pursuant to Awards is 5,200,000 in total, which is an increase of 1,700,000 shares over the current reserve under the 2010 Incentive Award Plan.
The
2014 IAP provides for specific limits on the number of shares that may be subject to different types of Awards:
-
-
No more than 1,000,000 shares of our common stock may be granted in any calendar year to any one person.
-
-
In any one calendar year no person may receive cash based Awards with a value exceeding $2,500,000.
The
shares of our common stock available under the 2014 IAP may be either previously authorized and unissued shares or treasury shares. The 2014 IAP provides for appropriate adjustments
in the number and kind of shares subject to the 2014 IAP and to outstanding Awards thereunder in the event of a corporate event or transaction, including any stock dividend, stock split, combination
or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of our assets to stockholders, or any other change affecting the shares or the share price of our
stock.
If
any shares subject to an Award under the 2014 IAP terminate, expire, are settled in cash in lieu of shares or lapse for any reason without the delivery of shares, then the shares
subject to such Award under the 2014 IAP shall be available again for grant under the plan. In addition, shares repurchased by the Company at the same price paid by the Participant so that such shares
are returned to the Company will be available for future grants under the 2014 IAP. To the extent permitted by applicable law or any exchange rule, shares issued in assumption of, or in substitution
for, any outstanding awards or an entity acquired by the Company or any of its subsidiaries will not be counted against the shares available for grant under the 2014 IAP. Shares tendered or withheld
to satisfy the exercise price of an option granted under the 2014 IAP and any shares tendered or withheld to satisfy any tax withholding obligation with respect to Awards granted under the 2014 IAP
will again be available for grant under the 2014 IAP.
On
March 18, 2014, the closing price of a share of our common stock on the NYSE was $4.49.
Administration
The 2014 IAP is generally administered by our Compensation Committee or any subcommittee thereof; provided that a subcommittee of our
Board may also function as the Compensation Committee (the "Administrator").
28
The
Administrator is authorized to determine the individuals who will receive Awards (the "Participants"), the terms and conditions of such Awards, the types of Awards to be granted, the
number of shares to be subject to each Award, the price of the Awards granted, any performance criteria, any reload provisions, payment terms, payment method and the expiration date applicable to each
Award. The Administrator is also authorized to establish, adopt or revise rules relating to the administration of the LTIP. The Administrator may delegate its authority to grant or amend Awards or
take other administrative actions with respect to participants other than senior executive officers subject to Section 16 of the Exchange Act, employees covered by Section 162(m) or the
officers to whom the authority to grant or amend Awards has been delegated.
Amendment and Termination
The Committee, subject to approval of the Board, may terminate, amend, or modify the Plan at any time;
provided, however
, that stockholder
approval will be obtained for any amendment to the extent necessary and desirable to comply with any applicable law,
regulation or stock exchange rule, to increase the number of shares available under the Plan, to permit the Committee to grant options with a price below fair market value on the date of grant, or to
extend the exercise period for an option beyond ten years from the date of grant. In addition, absent stockholder approval, no option or SAR may be amended to reduce the per share exercise price of
the shares subject to such option or SAR below the per share exercise price as of the date the option or SAR was granted and, except to the extent permitted by the Plan in connection with certain
changes in capital structure, no option or SAR may be granted in exchange for, or in connection with, the cancellation or surrender of an option or SAR having a higher per share exercise price.
In
no event may an Award be granted pursuant to the Plan on or after the tenth anniversary of the date the stockholders approve the Plan.
Eligibility
Awards under the Plan may be granted to individuals who are our employees or employees of our subsidiaries, our non-employee directors
and our consultants and advisors. However, options which are intended to qualify as ISOs may only be granted to employees.
As
of February 28, 2014, there were 2,166 employees and 7 non-employee directors who are eligible to receive Awards under the Plan.
Awards.
The following will briefly describe the principal features of the various Awards that may be granted under the Plan.
Options
Options provide for the right to purchase our common stock at a specified price, and usually will become exercisable in the discretion of the
Committee in one or more installments after the grant date. The option exercise price may be paid in:
-
-
cash,
-
-
check,
-
-
shares of our common stock which have been held by the option holder for at least 6 months,
-
-
broker assisted cash-less exercise, or
-
-
such other methods as the Committee may approve from time to time.
The
Committee may at any time substitute SARs for options granted under the Plan. Options may take two forms, nonstatutory options (NSOs) and incentive stock options (ISOs). NSOs may be
granted
29
for
any term specified by the Committee, but shall not exceed ten years. ISOs will be deigned to comply with the provision of the Code and will be subject to certain restrictions contained in the Code
in order to qualify as ISOs. Among such restrictions ISOs must:
-
-
have an exercise price not less than the fair market value of our common stock on the date of grant, or if granted to
certain individuals who own or are deemed to own at least 10% of the total combined voting power of all of our classes of stock ("10% shareholders"), then such exercise price may not be less than 110%
of the fair market value of our common stock on the date of grant,
-
-
be granted only to our employees and employees of our subsidiary corporations,
-
-
expire with a specified time following the option holders termination of employment,
-
-
exercised within ten years after the date of grant, or with respect to 10% shareholders, no more than five years after the
date of grant, and
-
-
not be exercisable for the first time for shares of our common stock with an aggregate fair market value in excess of
$100,000, determined based on the exercise price.
No
ISO may be granted under the Plan after ten years from the date the Plan is approved by our stockholders.
Restricted Stock
A restricted stock award is the grant of shares of our common stock at a price determined by the Committee (which price may be zero)
that is nontransferable and unless otherwise determined by the Committee at the time of award, may be forfeited upon termination of employment or service during a restricted period. The Committee
shall also determine in the Award agreement whether the Participant will be entitled to vote the shares of restricted stock and or receive dividends on such shares. Restricted stock granted to
employees and consultants will vest according to the terms of each individual Award agreement, as determined by the Committee. In addition, the vesting of restricted stock may be accelerated in the
event of a change in control, death or disability.
Stock Appreciation Rights
SARs provide for the payment to the holder based upon increases in the price of our common stock over a set base price. SARs
may be granted in connection with stock options or other Awards or separately. The term of each SAR is set by the Committee, but shall not exceed 10 years from the date of grant. Payment for
SARs may be made in cash, our common stock or any combination of the two.
Restricted Stock Units
Restricted stock units represent the right to receive shares of our common stock at a specified date in the future, subject to
forfeiture of such right. If the restricted stock unit has not been forfeited, then on the date specified in the Award agreement we shall deliver to the holder of the restricted stock unit,
unrestricted shares of our common stock which will be freely transferable. The Committee will specify the vesting requirements in each Award agreement. The vesting of restricted stock units may be
accelerated in the event of a change in control, death or disability.
Dividend Equivalents
Dividend equivalents represent the value of the dividends per share we pay, calculated with reference to the number of shares
covered by an Award (other than a dividend equivalent award) held by the Participant. These may be paid in cash or stock. Dividend Equivalents paid in cash do not count against the share and award
limits under the Plan.
Performance Awards
Performance awards are denominated in cash or shares of our common stock and are linked to satisfaction of performance criteria
established by the Committee. If
the Committee determines that the Award is intended to meet the requirements of "qualified performance based
30
compensation"
and therefore be deductible under Section 162(m) of the Code, then the performance criteria which the Award will be based shall be with reference to any one or more of the
following:
-
-
net earnings (either before or after interest, taxes, depreciation and amortization),
-
-
economic value-added (as determined by the Committee),
-
-
gross or net sales or revenue,
-
-
net income (either before or after taxes),
-
-
adjusted net income,
-
-
operating earnings,
-
-
cash flow (including, but not limited to, operating cash flow and free cash flow),
-
-
return on capital,
-
-
return on assets,
-
-
return on stockholders' equity,
-
-
total stockholder return,
-
-
return on sales,
-
-
gross or net profit or operating margin,
-
-
costs,
-
-
funds from operations,
-
-
expenses,
-
-
productivity,
-
-
return on net assets,
-
-
operating efficiency,
-
-
customer satisfaction,
-
-
working capital,
-
-
earnings per share,
-
-
adjusted earnings per share,
-
-
implementation or completion of critical projects,
-
-
cash flow return on capital,
-
-
price per share of common stock, and
-
-
market share
any
of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.
Stock Payments
Payments to Participants of bonuses or other compensation may be made under the Plan in the form our common stock.
Deferred Stock
Deferred stock typically is awarded without payment of consideration and is subject to vesting conditions, including satisfaction of
performance criteria. Like restricted stock, deferred stock may not be sold, or otherwise transferred until the vesting conditions are removed or
31
expire.
Unlike restricted stock, deferred stock is not actually issued until the deferred stock award has vested. Recipients of deferred stock also will have no voting or dividend rights prior to the
time when the vesting conditions are met and the deferred stock is delivered.
Changes in Control
In connection with a change in control, unless, all options, restricted stock and SARs are assumed or converted in the transaction, the
Committee may cause each such Award to become fully vested and exercisable and all forfeiture restrictions on such Awards shall lapse. In addition, all restricted stock units, deferred stock and
performance stock may become deliverable.
Adjustments upon Certain Events
In the event of a stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization or
other distribution (other than normal cash dividends) of company assets to stockholders, or other similar changes affecting the shares or share price of company stock, the Committee shall make
equitable adjustments to reflect changes with respect to (i) the terms and conditions of any outstanding Awards (ii) the number and kind of shares subject to an Award, (iii) the
aggregate number and kind of shares that may be issued under the Plan,
and (iv) the grant or exercise price per share for any outstanding Awards. In addition, upon such events the Committee may provide for (i) the termination of any Awards in exchange for
cash equal to the amount the holder would otherwise be entitled if they had exercised the Award, (ii) the full vesting, exercisability or payment of any Award, (iii) the assumption of
such Award by any successor, (iv) the replacement of such Award with other rights or property, (v) the adjustment of the number and type of shares and/or the terms and conditions of the
Awards which may be granted in the future, or (vi) that Awards cannot vest, be exercised or become payable after such event.
Awards Not Transferable
Generally the Awards may not be pledged, assigned or otherwise transferred other than by will or by laws of descent and distribution.
The Committee may allow Awards other than ISOs to be transferred for estate or tax planning purposes to members of the holder's family, charitable institutions or trusts for the benefit of family
members.
Miscellaneous
As a condition to the issuance or delivery of stock or payment of other compensation pursuant to the exercise or lapse of restrictions
on any Award, the Company requires Participants to discharge all applicable withholding tax obligations. Shares held by or to be issued to a Participant may also be used to discharge tax withholding
obligations, subject to the discretion of the Committee to disapprove of such use.
The
Plan will expire and no further Awards may be granted after the tenth anniversary.
Federal Income Tax Consequences
The tax consequences of the Plan under current federal law are summarized in the following discussion. This discussion is limited to
the general tax principles applicable to the Plan, and is intended for general information only. State and local income taxes are not discussed. Tax laws are complex and subject to change and may vary
depending on individual circumstances and from locality to locality. The tax information summarized is not tax advice.
32
Nonqualified Stock Options.
For federal income tax purposes, an optionee generally will not recognize taxable income at the time a
non-qualified
stock option is granted under the Plan. The optionee will recognize ordinary income, and the Company generally will be entitled to a deduction, upon the exercise of a non-qualified stock option. The
amount of income recognized (and the amount generally deductible by the Company) generally will be equal to the excess, if any, of the fair market value of the shares at the time of exercise over the
aggregate exercise price paid for the shares, regardless of whether the exercise price is paid in cash or in shares or other property. An optionee's basis for the stock for purposes of determining his
or her gain or loss upon a subsequent disposition of the shares generally will be the fair market value of the stock on the date of exercise of the non-qualified stock option, and any subsequent gain
or loss will generally be taxable as capital gain or loss.
Incentive Stock Options.
An optionee generally will not recognize taxable income either at the time an incentive stock option is
granted or when it
is exercised. However, the amount by which the fair market value of the shares at the time of exercise exceeds the exercise price will be an "item of tax preference" to the optionee for purposes of
alternative minimum tax. Generally, upon the sale or other taxable disposition of the shares acquired upon exercise of an incentive stock option, the optionee will recognize taxable income. If shares
acquired upon the exercise of an incentive stock option are held for the longer of two years from the date of grant or one year from the date of exercise, the gain or loss (in an amount equal to the
difference between the fair market value on the date of sale and the exercise price) upon disposition will be treated as a long-term capital gain or loss, and the company will not be entitled to any
deduction. If this holding period is not met and the stock is sold for a gain, then the difference between the option price and the fair market value of the stock on the date of exercise will be taxed
as ordinary income and any gain over that will be eligible for long or short term capital gain treatment. If the holding period is not met and the shares are disposed of for less than the fair market
value on the date of exercise, then the amount of ordinary income is limited to the excess, if any, of the amount realized over the exercise price paid. The Company generally will be entitled to a
deduction in the amount of any ordinary income recognized by the optionee.
Stock Appreciation Rights.
No taxable income is generally recognized upon the receipt of an SAR. Upon exercise of an SAR, the cash or
the fair market
value of the shares received generally will be taxable as ordinary income in the year of such exercise. The Company generally will be entitled to a compensation deduction for the same amount which the
recipient recognizes as ordinary income.
Restricted Stock.
A Participant to whom restricted stock is issued generally will not recognize taxable income upon such issuance and
the Company
generally will not then be entitled to a deduction, unless an election is made by the Participant under Section 83(b) of the Code. However, when restrictions on shares of restricted stock
lapse, such that the shares are no longer subject to a substantial risk of forfeiture, the Participant generally will recognize ordinary income and the Company generally will be entitled to a
deduction for an amount equal to the excess of the fair market value of the shares on the date such restrictions lapse over the purchase price thereof. If an election is made under
Section 83(b) of the Code, then the Participant generally will recognize ordinary income on the date of issuance equal to the excess, if any, of the fair market value of the shares on that date
over the purchase price therefor and the Company will be entitled to a deduction for the same amount.
Restricted Stock Unit.
A Participant will generally not recognize taxable income upon the grant of a restricted stock unit. However,
when the shares
are delivered to the Participant, then the value of such shares at that time will be taxable to the Participant as ordinary income. Generally the Company will be entitled to a deduction for an amount
equal to the amount of ordinary income recognized by the Participant.
Performance Awards.
A Participant who has been granted a performance award (either performance unit or stock) generally will not
recognize taxable
income at the time of grant, and the
33
company
will not be entitled to a deduction at that time. When an award is paid, whether in cash or shares, the Participant generally will recognize ordinary income, and the Company will be entitled
to a corresponding deduction.
Section 162(m) Limitation.
In general, under Section 162(m), income tax deductions of publicly-held corporations may be
limited to the
extent total compensation (including base salary, annual bonus, stock option exercises and non-qualified benefits paid) for certain executive officers exceeds $1,000,000 (less the amount of any
"excess parachute payments" as defined in Section 280G of the Code) in any one year. However, under Section 162(m), the deduction limit does not apply to certain "performance-based
compensation" established by an independent compensation committee which is adequately disclosed to, and approved by, stockholders. In particular, stock options and SARs will satisfy the
"performance-based compensation" exception if the awards are made by a qualifying compensation committee, the Plan sets the maximum number of shares that can be granted to any person within a
specified period and the compensation is based solely on an increase in the stock price after the grant date (i.e., the option exercise price is equal to or greater than the fair market value
of the stock subject to the award on the grant date). Restricted stock, restricted stock units and performance unit/share Awards granted under the Plan may qualify as "qualified performance-based
compensation" for purposes of Section 162(m) if such awards are granted or vest upon pre-established objective performance measures based on the performance goals described above under the
section entitled "Performance Awards".
We
have attempted to structure the Plan in such a manner that the Committee can determine the terms and conditions of Awards granted thereunder in order to determine whether the
remuneration attributable to such Awards will be subject to the $1,000,000 limitation. We have not, however, requested a ruling from the IRS or an opinion of counsel regarding this issue. This
discussion will neither bind the IRS nor preclude the IRS from taking a contrary position with respect to the Plan.
Plan Benefits
The number of Awards that an individual Participant may receive under the Plan is in the discretion of the Committee and therefore
cannot be determined in advance. However, for sake of illustration, the following table sets forth the grants that were made to our named executive officers (other than Mr. Byrnes who is no
longer employed), other executives, non-employee directors and non-executive officers as a group in 2013:
|
|
|
|
|
|
|
|
Name or Position
|
|
Options(#)
|
|
Restricted Stock Units(#)
|
|
Richard F. Dauch
|
|
|
|
|
|
222,750
|
(1)
|
Gregory A. Risch
|
|
|
|
|
|
36,000
|
(1)
|
David G. Adams
|
|
|
|
|
|
42,750
|
(1)
|
Scott D. Hazlett
|
|
|
|
|
|
51,004
|
(1)
|
Executive Group
|
|
|
|
|
|
504,006
|
(1)
|
Non-Executive Director Group
|
|
|
|
|
|
117,580
|
(2)
|
Non-Executive Officer Employee Group
|
|
|
|
|
|
452,948
|
(1)
|
-
(1)
-
Amount
listed includes and equal split of time-vesting restricted stock units (RSUs) and performance-vesting restricted stock units (or PSUs). Subject to
continued service, the RSUs vest in a back-end loaded fashion with twenty percent (20%) vesting in each of the first three years after the grant date and the final forty percent (40%) vesting in the
fourth year after the grant date. Subject to continued service, the PSUs will vest in 2016, if at all, depending on the attainment of a return on assets target covering fiscal years 2013 through 2015.
PSUs listed are at the Target performance level.
34
-
(2)
-
Includes
88,854 RSUs granted as annual non-employee director awards, which vest in the year after the grant date subject to continued service, and 28,726
RSUs granted as initial awards to new non-employee directors that joined our Board in 2013, which vest in the fourth year after the grant date subject to continued service.
The following table provides certain information as of December 31, 2013 about our common stock that may be issued upon under
our existing equity compensation plans:
|
|
|
|
|
|
|
|
|
|
|
Plan category
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants, and rights
|
|
Number of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected in
column (a))
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Equity compensation plans approved by security holders
|
|
|
1,448,515
|
|
$
|
6.87
|
|
|
1,836,247
|
|
Equity compensation plans not approved by security holders
|
|
|
7,246
|
|
$
|
13.00
|
|
|
|
|
Board Recommendation and Vote Required for Approval
:
Approval
of the Accuride Corporation Second Amended and Restated 2010 Incentive Award Plan requires the affirmative vote of the majority of the shares present
in person or represented by proxy and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE APPROVAL OF THE ACCURIDE CORPORATION SECOND AMENDED AND RESTATED 2010 INCENTIVE
AWARD PLAN.
35
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee is comprised of three members, Robin J. Adams (Chairman), Lewis M. Kling, and John W. Risner, each of whom is
"independent," as defined in the rules and regulations of the New York Stock Exchange ("NYSE"). Upon the recommendation of the Audit Committee and in compliance with regulations of the NYSE, the Board
has adopted an Audit Committee Charter setting forth the requirements for the composition of the Audit Committee, the qualifications of its members, the frequency of meetings and the responsibilities
of the Audit Committee.
The
following is the report of the Audit Committee with respect to the Company's audited financial statements for the fiscal year ended December 31, 2013, which include the
consolidated balance sheets of Accuride Corporation and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, stockholders' equity (deficiency),
and cash flows for the three year period ended December 31, 2013, and the notes thereto. The information contained in this report shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the 1934 Securities
Exchange Act, as amended, except to the extent that the Company specifically incorporates it by reference in such filing.
Review with Management
The Audit Committee oversees the Company's financial reporting process on behalf of the Board. Management has the primary
responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the
Company's audited financial statements with management, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments,
and the clarity of disclosures in the financial statements.
Review and Discussion with Independent Registered Public Accounting Firm
The Audit Committee has discussed with Deloitte & Touche LLP, the Company's independent registered public accounting
firm, the matters required to be discussed by Statement on Auditing Standards No. 61, "Communication With Audit Committees," as amended, which includes, among other items, matters related to
the conduct of the audit of the Company's financial statements.
The
Audit Committee reviewed with the Company's independent registered public accounting firm, who is responsible for expressing an opinion on the conformity of audited financial
statements with generally accepted accounting principles in the United States of America, its judgments as to the quality, not just the acceptability, of the Company's accounting principles and such
other matters as are required to be discussed with the Audit Committee by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380),
as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has discussed with Deloitte & Touche LLP matters relating to its
independence and has received the written disclosures and the letter required by the applicable standards of the Public Company Accounting Oversight Board, and has considered the compatibility of
non-audit services with the auditors' independence.
The
Audit Committee discussed with Deloitte & Touche LLP the overall scope and plans for their audits. The Audit Committee met with Deloitte & Touche LLP,
with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal controls in connection with their audit procedures, and the overall
quality of the Company's financial reporting.
66
Conclusion
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved,
that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2013 for filing with the Securities and Exchange Commission. The Audit
Committee and the Board have also recommended, subject to stockholder ratification described in Proposal No. Two, the appointment of
Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2014.
By
the Members of the Audit Committee
Robin J. Adams, Chairman
Lewis M. Kling
John W. Risner
67
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of Proxy to vote the shares they represent as the Board may recommend.
It
is important that your stock be represented at the meeting, regardless of the number of shares that you hold. You are, therefore, urged to mark, sign, date, and return the
accompanying Proxy as promptly as possible in the postage-paid envelope enclosed for that purpose.
Any person who was a beneficial owner of common stock on the record date for the 2014 Annual Meeting may obtain a copy of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission without charge (except for exhibits to such annual report which will be furnished
upon payment of the Company's reasonable expenses in furnishing such exhibits). The request for such materials should identify the person
making the request as a stockholder of the Company as of the record date and should be directed to Investor Relations, Accuride Corporation, 7140 Office Circle, Evansville, IN
47715.
|
|
|
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
Stephen A. Martin
Corporate Secretary
|
Dated:
March 20, 2014
68
Appendix A
AMENDED AND RESTATED
ACCURIDE CORPORATION
INCENTIVE COMPENSATION PLAN
I. ESTABLISHMENT AND PURPOSE
Accuride Corporation (the "
Company
") hereby establishes the Amended and Restated Accuride Corporation Incentive
Compensation Plan (as amended from time to time, the "
Plan
"). The purpose of the Plan is to (i) attract and retain highly qualified individuals;
(ii) obtain from each eligible Plan participant the best possible performance; (iii) establish one or more performance goals based on objective criteria; (iv) further underscore
the importance of achieving business objectives for the short and long term; and (v) include in each eligible Plan participant's compensation package an annual incentive component which is tied
directly to the achievement of those objectives.
To
the extent applicable, the Plan is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended and the
regulations issued thereunder (the "
Code
").
II. EFFECTIVE DATE; TERM
The Plan will be effective for performance periods occurring after the Plan is approved by the Company's shareholders under Section X. Once effective, the
Plan shall remain in effect until such time as it shall be terminated by the Committee (as defined below). The Committee may terminate the Plan at any time; provided, however that except in the event
of a Change in Control (as defined below), the Committee may not terminate the Plan during any performance period without payment of a pro rata portion of any bonus based on the period of time elapsed
during the performance period and a determination of the Committee as to satisfaction of pro rata Performance Goals for such period. For this purpose, "
Change in
Control
" shall have the meaning set forth in the Company's Amended and Restated Incentive Award Plan, as amended from time to time and any replacement plan thereof.
III. ADMINISTRATION
The Plan shall be administered by the Compensation and Human Resources Committee of the Board of Directors of the Company or a subcommittee thereof (the
"
Committee
"); which Committee shall consist solely of two or more members who shall qualify as "outside directors" under Section 162(m) of the
Code.
The
Committee shall have full power to construe and interpret the Plan, establish and amend rules and regulations for its administration, and perform all other acts relating to the Plan,
including the delegation of administrative responsibilities, that it believes reasonable and proper and in conformity with the purposes of the Plan.
Any
decision made, or action taken, by the Committee arising out of or in connection with the interpretation and/or administration of the Plan shall be final, conclusive and binding on
all persons affected thereby.
IV. ELIGIBILITY AND PARTICIPATION
Eligibility to participate in the Plan is limited to certain salaried employees of the Company as determined and selected by the Committee (each a
"
Participant
"), but including all individuals who are "covered employees" within the meaning of Code Section 162(m) and the regulations and
published guidance thereunder ("
Covered Employees
").
A-1
V. BUSINESS CRITERIA
A Participant may receive a bonus payment under the Plan based upon the attainment of performance objectives which are established by the Committee and relate to
one or more of the following corporate business criteria with respect to the Company, any of its subsidiaries or a designated business unit (the "
Performance
Goals
"): (i) earnings (either net or gross and either before or after interest, taxes, depreciation and amortization), (ii) economic value-added (as determined by
the Committee), (iii) sales or revenue, (iv) net income (either before or after taxes), (v) cash flow (including, but not limited to, operating cash flow and free cash flow),
(vi) return on capital, (vii) return on invested capital, (viii) return on stockholders' equity, (ix) return on assets, (x) stockholder return, (xi) return on
sales, (xii) gross or net profit margin, (xiii) productivity, (xiv) expense, (xv) operating margin, (xvi) operating efficiency, (xvii) customer satisfaction,
(xviii) working capital, (xix) earnings per share, (xx) price per share of common stock, (xxi) market share, (xxii) profits, (xxiii) disposition or
acquisition of assets, (xxiv) cost savings, (xxv) regulatory body approval for commercialization of new products, (xxvi) settlement of disputes, (xxvii) funds from
operations, (xxviii) plant closings or start-ups, (xxix) sales penetration or new business awards, (xxx) adjusted net income; (xxxi) operating earnings;
(xxxii) costs; (xxxiii) adjusted earnings per share; (xxxiv) return on net assets; and (xxxv) implementation or completion of specified projects, any of which may be
measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group market performance indicators or indices.
The
Committee may, in its discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments may include,
but are not limited to, one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for
restructuring or productivity initiatives; (iv) other non-operating items ; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity
acquired by the Company during the performance period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do
not qualify as a segment of a business under applicable accounting principles; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the
performance period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate
transactions, events or developments; (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company's core, on-going business
activities; (xiv) commercial vehicle industry build rates; (xv) items related to acquired in-process research and development; (xvi) items relating to changes in tax laws;
(xvii) items relating to major licensing or partnership arrangements; (xviii) items
relating to asset impairment charges; (xix) items relating to gains or losses for litigation, arbitration and contractual settlements, (xx) items relating to any other unusual or
nonrecurring events or changes in applicable laws, accounting principles or business conditions or (xxi) items related to labor negotiations, organizing activity and work stoppages. All such
determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.
VI. BONUS DETERMINATIONS
Any bonuses paid to Participants under the Plan shall be based upon objectively determinable bonus formulas that tie such bonuses to one or more performance
objectives relating to the Performance Goals. Bonus formulas may be set for performance periods of one, two or three fiscal years of the Company. A performance period may be concurrent or consecutive.
Participant need not be employed on the first day of a performance period, but must be employed in an eligible position for at least three months of a performance period in order to be eligible to
participate in the Plan for that performance period. If a Participant becomes eligible to participate in the Plan during a performance
A-2
period,
the Committee shall determine if such Participant shall be eligible to participate in an award for such performance period and whether or not such award may be prorated for such period.
Bonus
formulas for Participants shall be adopted for each performance period by the Committee no later than the latest time permitted by Section 162(m) of the Code (generally, for
performance periods of one year or more, no later than 90 days after the commencement of the performance period) and while the performance relating to the Performance Goal(s) remain
substantially uncertain within the meaning of Section 162(m) of the Code.
Although
the Committee may in its sole discretion reduce a bonus payable to a Participant pursuant to the applicable bonus formula, the Committee shall have no discretion to increase the
amount of a Covered Employee's bonus as determined under the applicable bonus formula.
The
maximum bonus payable to a Participant under the Plan shall not exceed 400% of such Participant's base salary with respect to any performance period.
The
payment of a bonus to a Participant with respect to a performance period shall be conditioned upon the Participant's employment by the Company on the last day of the performance
period; provided, however, that the Committee may make exceptions to this requirement, in its sole discretion, in the case of a Participant's death, disability or termination without cause or Change
in Control; and, provided further, that any such bonus payments will only be made to the extent that the performance objectives are attained, as provided herein.
No
bonuses shall be paid to Participants unless and until the Committee makes a certification in writing with respect to the attainment of the performance objectives as required by
Section 162(m) of the Code.
VII. ADDITIONAL CONDITIONS
For each performance period the Company will prepare proposed "Eligibility, Target Opportunity and Administrative Guidelines" (the
"
Guidelines
") that set forth eligibility and other administrative details regarding awards for such performance period. The Committee shall approve the
Guidelines along with the applicable Performance Goals within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.
Once
a bonus formula is established under Section VI based on one or more of the Performance Goals, the Committee may with the consent of the Participant establish (and once
established, rescind, waive or amend) additional conditions and terms of payment of awards (including but not limited to the achievement of other financial, strategic or individual goals, which may be
objective or subjective) as it deems desirable in carrying out the purposes of the Plan and may take into account such other factors as it deems appropriate in administering any aspect of the Plan.
However, the Committee shall have no authority to increase the amount of a targeted award granted to any Covered Employee or to pay an award under the Plan if the Performance Goal has not been
satisfied after taking into consideration any adjustments provided in Section V above, if applicable.
The
payment of an award to a Participant with respect to a performance period shall be conditioned upon the Participant's employment by the Company on the last day of the performance
period;
provided, however
, that in the discretion of the Committee, awards may be paid to Participants who have become disabled or whose employment has
terminated without cause prior to the end of the applicable performance period, or to the designee or estate of a Participant who died during such period.
A-3
VIII. PAYMENT OF AWARDS
All awards shall be paid in (i) cash or (ii) the equivalent value of common stock of the Company ("
Common
Stock
") based on the fair market value of the Common Stock on the date the bonus is awarded, as determined by the Committee. The Committee may impose vesting and other similar
conditions upon any payment of awards made in Common Stock; provided that any vesting terms shall not be longer than four years following the date of payment in Common Stock. For this purpose fair
market value shall have the meaning set forth in the Company's Amended and Restated Incentive Award Plan.
No
awards shall be paid unless and until the Committee certifies, in writing, that the amounts payable with respect to each award do not exceed the limitations set forth in
Section VI and that the amount payable to each Participant does not exceed the amount of the maximum award granted. Awards shall be paid as soon as practicable following the end of the
performance period, but in no event shall payment be made later than two and one half months following the end of the performance period. If a Participant voluntarily terminates employment or is
involuntarily terminated for any reason (except for those reasons described above) after the end of the performance period but before distribution of the award, he or she shall forfeit any rights to
an award for such performance period, unless such forfeiture is prohibited by applicable state, provincial or other prevailing law, or is otherwise approved by the Committee.
IX. SPECIAL AWARDS AND OTHER PLANS
Nothing contained in the Plan shall prohibit the Company from granting awards or authorizing other compensation to any person under any other plan or authority or
limit the authority of the Company to establish other special awards or incentive compensation plans providing for the payment of incentive compensation to employees (including those employees who are
eligible to participate in the Plan).
X. STOCKHOLDER APPROVAL
No awards shall be paid under the Plan unless and until the Company's stockholders shall have approved the Plan and the Performance Goals as required by
Section 162(m) of the Code.
XI. AMENDMENT OF THE PLAN
The Compensation Committee shall have the right to amend the Plan from time to time or to repeal it entirely or to direct the discontinuance of awards either
temporarily or permanently;
provided, however
, that no amendment of the Plan that changes the maximum award payable to any Participant as set forth in
Section VI, or materially amends the definition of Performance Goals under Section V, shall be effective before approval by the affirmative vote of a majority of shares voting at a
meeting of the shareholders of the Company.
XII. RIGHTS OF PLAN PARTICIPANTS
Neither the Plan, nor the adoption or operation of the Plan, nor any documents describing or referring to the Plan (or any part hereof) shall confer upon any
Participant any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge any
Participant at any time for any reason whatsoever, with or without cause.
No
individual to whom an award has been made or any other party shall have any interest in the cash or any other asset of the Company prior to such amount being paid.
A-4
No
right or interest of any Participant shall be assignable or transferable, or subject to any claims of any creditor or subject to any lien.
XIII. MISCELLANEOUS
The Company shall deduct all federal, state and local taxes required by law or Company policy from any award paid hereunder.
In
no event shall the Company be obligated to pay to any Participant an award for any period by reason of the Company's payment of an award to such Participant in any other period, or by
reason of the Company's payment of an award to any other Participant or Participants in such period or in any
other period. Nothing contained in this Plan shall confer upon any person any claim or right to any payments hereunder. Such payments shall be made at the sole discretion of the Committee.
The
Plan shall be unfunded. Amounts payable under the Plan are not and will not be transferred into a trust or otherwise set aside. The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure the payment of any award under the Plan. Any accounts under the Plan are for bookkeeping purposes only and do not
represent a claim against the specific assets of the Company.
It
is the intent of the Company that the Plan and awards made hereunder shall satisfy and shall be interpreted in a manner that satisfies any applicable requirements as performance-based
compensation within the meaning of Section 162(m) of the Code. Any provision, application or interpretation of the Plan that is inconsistent with this intent to satisfy the standards in
Section 162(m) of the Code shall be disregarded.
Any
provision of the Plan that is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of
the Plan.
The
Plan and the rights and obligations of the parties to the Plan shall be governed by, and construed and interpreted in accordance with, the law of the State of Delaware (without
regard to principles of conflicts of law).
XIV. SECTION 409A COMPLIANCE
Payments under this Plan are intended to be exempt from the provisions of Code Section 409A; provided however, that if any amounts under this Plan are
subject to Code Section 409A, then the Plan shall be administered in compliance with Code Section 409A and shall be interpreted, to the extent possible, to comply with Code
Section 409A. The Plan shall not be adjusted, amended or suspended in a way that results in a violation of Code Section 409A or any other provisions of applicable law. Any such
adjustment, amendment or suspension shall be null and void. To the extent subject to Code Section 409A, then payments made by the Company will payable at a specified time or pursuant to a fixed
schedule within the meaning of Treas. Reg. §1.409A-3(i)(1)(iv). Notwithstanding any other provision of this Plan to the contrary, neither the time nor the schedule of any payment under
this Plan may be accelerated or subject to a further deferral except as provided in Treas. Reg. §1.409A-3(j)(4). Payment under this Plan may be delayed only in accordance with the
regulations issued pursuant to Code Section 409A
Adopted
by Accuride Corporation on February 25, 2014.
A-5
Appendix B
ACCURIDE CORPORATION
SECOND AMENDED AND RESTATED 2010 INCENTIVE AWARD PLAN
(March 13, 2014)
ARTICLE 1.
PURPOSE
The purpose of the Accuride Corporation Second Amended and Restated 2010 Incentive Award Plan (as it may be amended and restated from
time to time, the "
Plan
") is to promote the success and enhance the value of Accuride Corporation (the
"
Company
") by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing
such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility
to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct
of the Company's operation is largely dependent.
ARTICLE 2.
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates
otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 "
Administrator
" shall mean the entity that conducts the general administration of the Plan as provided in
Article 13. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 13.6, or as to which the Board has assumed,
the term "Administrator" shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.
2.2 "
Affiliate
" shall mean (a) any Subsidiary; and (b) any domestic eligible entity that is disregarded, under
Treasury Regulation Section 301.7701-3, as an entity separate from either (i) the Company or (ii) any Subsidiary.
2.3 "
Applicable Law
" shall mean any applicable law, including without limitation: (i) provisions of the Code, the
Securities Act, the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state,
local or foreign; and (iii) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
2.4 "
Applicable Accounting Standards
" shall mean Generally Accepted Accounting Principles in the United States, International
Financial Reporting Standards or such other accounting principles or standards as may apply to the Company's financial statements under United States federal securities laws from time to time.
2.5 "
Award
" shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a Dividend
Equivalents award, a Deferred Stock award, a Stock Payment award or a Stock Appreciation Right, which may be awarded or granted under the Plan (collectively,
"
Awards
").
2.6 "
Award Agreement
" shall mean any written notice, agreement, terms and conditions, contract or other instrument or
document evidencing an Award, including through electronic medium, which
B-1
shall
contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.
2.7 "
Award Limit
" shall mean with respect to Awards that shall be payable in Shares or in cash, as the case may be, the
respective limit set forth in Section 3.3.
2.8 "
Board
" shall mean the Board of Directors of the Company.
2.9 "
Change in Control
" shall mean and includes each of the following:
(a) A
transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and
Exchange Commission) whereby any "person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its
subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a "person" that, prior to such transaction, directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing
more than 35% of the total combined voting power of the Company's securities outstanding immediately after such acquisition; or
(b) During
any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a
Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.9(a) or Section 2.9(c)) whose election by the
Board or nomination for election by the Company's stockholders was approved by a vote of a majority of the Directors then still in office who either were directors at the beginning of the two-year
period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
(c) The
consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or
business combination or (y) a sale or other disposition of all or substantially all of the Company's assets in any single transaction or series of related transactions or (z) the
acquisition of assets or stock of another entity, in each case other than a transaction:
(i) Which
results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially
all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the "
Successor Entity
")) directly or
indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, and
(ii) After
which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity;
provided, however,
that no person or group shall be treated
for purposes of this Section 2.9(c)(ii) as beneficially owning 50% or more of
combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or
(d) The
Company's stockholders approve a liquidation or dissolution of the Company.
Notwithstanding
the foregoing, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for the deferral of compensation and is subject to
Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such
B-2
Award
(or portion thereof) must also constitute a "change in control event," as defined in Treasury Regulation §1.409A-3(i)(5) to the extent required by Section 409A.
2.10 "
Code
" shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and
official guidance promulgated thereunder.
2.11 "
Committee
" shall mean the Compensation and Human Resources Committee of the Board, or another committee or subcommittee
of the Board, appointed as provided in Section 12.1.
2.12 "
Common Stock
" shall mean the common stock of the Company, par value $0.01 per share.
2.13 "
Company
" shall mean Accuride Corporation, a Delaware corporation.
2.14 "
Consultant
" shall mean any consultant or adviser engaged to provide services to the Company or any Affiliate that
qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.
2.15 "
Covered Employee
" shall mean any Employee who is, or could be, a "covered employee" within the meaning of
Section 162(m) of the Code.
2.16 "
Deferred Stock
" shall mean a right to receive Shares awarded under Section 9.4.
2.17 "
Director
" shall mean a member of the Board, as constituted from time to time.
2.18 "
Dividend Equivalent
" shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on
Shares, awarded under Section 10.2.
2.19 "
DRO
" shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security
Act of 1974, as amended from time to time, or the rules thereunder.
2.20 "
Effective Date
" shall mean the date the Plan is approved by the Board, subject to approval of the Plan by the Company's
stockholders.
2.21 "
Eligible Individual
" shall mean any person who is an Employee, a Consultant or a Non-Employee Director, as determined
by the Committee.
2.22 "
Employee
" shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code
and the Treasury Regulations thereunder) of the Company or of any Affiliate.
2.23 "
Equity Restructuring
" shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock
dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other securities of the Company) or the
share price of Common Stock (or other securities) and causes a change in the per-share value of the Common Stock underlying outstanding Awards.
2.24 "
Exchange Act
" shall mean the Securities Exchange Act of 1934, as amended from time to time.
2.25 "
Fair Market Value
" shall mean, as of any given date, the value of a Share determined as follows:
(a) If
the Common Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global
Select Market), (ii) national market system or (iii) automated quotation system on which the Shares are listed, quoted or traded, its Fair Market Value shall be the closing sales price
for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding
date for which such quotation
B-3
exists,
as reported in
The Wall Street Journal
or such other source as the Administrator deems reliable;
(b) If
the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted
by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such
date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in
The Wall Street Journal
or such other source as the Administrator deems reliable; or
(c) If
the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized
securities dealer, its Fair Market Value shall be established by the Administrator in good faith.
2.26 "
Greater Than 10% Stockholder"
shall mean an individual then owning (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate corporation (as defined in Section 424(f) of the Code) or parent corporation
thereof (as defined in Section 424(e) of the Code).
2.27 "
Holder
" shall mean a person who has been granted an Award.
2.28 "
Incentive Stock Option
" shall mean an Option that is intended to qualify as an incentive stock option and conforms to
the applicable provisions of Section 422 of the Code.
2.29 "
Non-Employee Director
" shall mean a Director of the Company who is not an Employee.
2.30 "
Non-Qualified Stock Option
" shall mean an Option that is not an Incentive Stock Option.
2.31 "
Option
" shall mean a right to purchase Shares at a specified exercise price, granted under Article 6. An Option
shall be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided
,
however
, that
Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.
2.32 "
Parent
" shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities
ending with the Company if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests representing at least fifty percent (50%) of the
total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.33 "
Performance Award
" shall mean a cash bonus award, stock bonus award, performance award or incentive award that is paid
in cash, Shares or a combination of both, awarded under Section 10.1.
2.34 "
Performance-Based Compensation
" shall mean any compensation that is intended to qualify as "performance-based
compensation" as described in Section 162(m)(4)(C) of the Code.
2.35 "
Performance Criteria
" shall mean the criteria (and adjustments) that the Committee selects for an Award for purposes of
establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:
(a) The
Performance Criteria that shall be used to establish Performance Goals are limited to the following: (i) net earnings (either before or after one or more of
the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization); (ii) gross or net sales or revenue; (iii) net income (either before or after
taxes); (iv) adjusted net income; (v) operating earnings; (vi) cash flow (including, but not limited to, operating cash flow and free cash flow); (vii) return on assets;
(viii) return on capital; (ix) return on stockholders' equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin;
(xiii) costs; (xiv) funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings per share; (xviii) adjusted earnings per share;
B-4
(xix) price
per share of Common Stock; (xx) return on net assets; (xxi) implementation or completion of critical projects; (xxii) market share; (xxiii) economic
value-added (as determined by the Committee) (xxiv) productivity; (xxv) operating efficiency; (xxvi) cash flow return on capital; and (xxvii) customer satisfaction, any of
which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.
(b) The
Administrator, in its sole discretion, may provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such
adjustments may include one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for
restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity
acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do
not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the
Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate
transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company's core, on-going business
activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership
arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xix) items
relating to any other unusual or nonrecurring events or changes in Applicable Laws, accounting principles or business conditions. For all Awards intended to qualify as Performance-Based Compensation,
such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.
2.36 "
Performance Goals
" shall mean, for a Performance Period, one or more goals established in writing by the Administrator
for the Performance Period based upon one or more Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms
of overall Company performance or the performance of a division, business unit, or an individual. The achievement of each Performance Goal shall be determined, to the extent applicable, with reference
to Applicable Accounting Standards.
2.37 "
Performance Period
" shall mean one or more periods of time, which may be of varying and overlapping durations, as the
Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder's right to, and the payment of, a Performance Award.
2.38 "
Permitted Transferee
" shall mean, with respect to a Holder, any "family member" of the Holder, as defined under the
instructions to use of the Form S-8 Registration Statement under the Securities Act, after taking into account any state, federal, local or foreign tax and securities laws applicable to
transferable Awards.
2.39 "
Plan
" shall mean this Accuride Corporation Second Amended and Restated 2010 Incentive Award Plan, as it may be amended
or restated from time to time.
2.40 "
Program
" shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions
intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.
B-5
2.41 "
Restricted Stock
" shall mean Common Stock awarded under Article 8 that is subject to certain restrictions and
may be subject to risk of forfeiture or repurchase.
2.42 "
Restricted Stock Units
" shall mean the right to receive Shares awarded under Article 9.
2.43 "
Securities Act
" shall mean the Securities Act of 1933, as amended.
2.44 "
Shares
" shall mean shares of Common Stock.
2.45 "
Stock Appreciation Right
" shall mean a stock appreciation right granted under Article 10.
2.46 "
Stock Appreciation Right Term
" shall have the meaning set forth in Section 11.4.
2.47 "
Stock Payment
" shall mean (a) a payment in the form of Shares, or (b) an option or other right to
purchase Shares, as part of a bonus, deferred compensation or other arrangement, awarded under Section 10.3.
2.48 "
Subsidiary
" shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of
entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing
at least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.49 "
Substitute Award
" shall mean an Award granted under the Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock;
provided
,
however
, that in no event shall the term "Substitute Award" be construed to refer to an award
made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.
2.50 "
Termination of Service
" shall mean,
(a) As
to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or an Affiliate is terminated for any reason, with or without cause,
including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the
Company or any Affiliate.
(b) As
to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination
by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.
(c) As
to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Affiliate is terminated for any reason, including, without
limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the
Company or any Affiliate.
The
Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, the question of
whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service;
provided
,
however
, that, with respect to Incentive Stock Options, unless the Administrator otherwise
provides in the terms of the Program, the Award Agreement or otherwise, or as otherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor
or other change in the employee-employer
B-6
relationship
shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of
Section 422(a)(2) of the Code and the then-applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder's employee-employer relationship or consultancy
relations shall be deemed to be terminated in the event that the Affiliate employing or contracting with such Holder ceases to remain an Affiliate following any merger, sale of stock or other
corporate transaction or event (including, without limitation, a spin-off)..
ARTICLE 3.
SHARES SUBJECT TO THE PLAN
3.1
Number of Shares.
(a) Subject
to Sections 3.1(b) and 14.2, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan is 5,200,000.
(b) Notwithstanding
Section 3.1(a): (i) the Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of tandem or Substitute Awards), and make adjustments if the number of Shares actually delivered differs from the number of Shares previously counted in connection with an Award;
(ii) Shares that are potentially deliverable under any Award that expires or is canceled, forfeited, settled in cash or otherwise terminated without a delivery of such Shares to the Holder will
not be counted as delivered under the Plan; (iii) shares of Stock that have been issued in connection with any Award (
e.g.
, Restricted Stock)
that is canceled, forfeited, or settled in cash such that those shares are returned to the Company shall again be available for Awards; and (iv) Shares withheld in payment of the exercise price
or taxes relating to any Award and Shares equal to the number surrendered in payment of any exercise price or taxes relating to any Award shall be deemed to constitute shares not delivered to the
Holder and shall be deemed to be available for Awards under the Plan;
provided, however,
that, no shares shall become available pursuant to this
Section 3.1(b) to the extent that (x) the transaction resulting in the return of shares occurs more than ten years after the date of the most recent shareholder approval of the Plan, or
(y) such return of shares would constitute a "material revision" of the Plan subject to stockholder approval under then-applicable rules of the New York Stock Exchange (or any other applicable
exchange or quotation system). In addition, in the case of any Award granted in substitution for an award of a company or business acquired by the Company or an Affiliate, Shares issued or issuable in
connection with such substitute Award shall not be counted against the number of shares reserved
under the Plan, but shall be available under the Plan by virtue of the Company's assumption of the plan or arrangement of the acquired company or business. This Section 3.1 shall apply to the
share limit imposed to conform to the regulations promulgated under the Code with respect to Incentive Stock Options only to the extent consistent with applicable regulations relating to Incentive
Stock Options under the Code. Because shares will count against the number reserved in Section 3.1 upon delivery, the Committee may, subject to the share counting rules under this
Section 3.1, determine that Awards may be outstanding that relate to a greater number of shares than the aggregate remaining available under the Plan, so long as Awards will not result in
delivery and vesting of shares in excess of the number then available under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted
against the shares available for issuance under the Plan.
(c) Substitute
Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate or
with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares
B-7
available
for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and
shall not reduce the Shares authorized for grant under the Plan;
provided
that Awards using such available Shares shall not be made after the date
awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing
services to the Company or its Subsidiaries immediately prior to such acquisition or combination.
3.2
Stock Distributed.
Any Shares distributed pursuant to an Award may consist, in whole or in part, of
authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.
3.3
Limitation on Number of Shares Subject to Awards.
Notwithstanding any provision in the Plan to the contrary,
and subject to Section 14.2, the maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any calendar year shall be 1,000,000 and the
maximum aggregate amount of cash that may be paid during any calendar year with respect to one or more Awards payable in cash shall be $2,500,000.
ARTICLE 4.
GRANTING OF AWARDS
4.1
Participation.
The Administrator may, from time to time, select from among all Eligible Individuals, those
to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. No Eligible Individual shall have any
right to be granted an Award pursuant to the Plan.
4.2
Award Agreement.
Each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions
and limitations for such Award, which may include the term of the Award, the provisions applicable in the event of the Holder's Termination of Service, and the Company's authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind an Award. Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain such terms and conditions as may
be necessary to meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to
meet the applicable provisions of Section 422 of the Code.
4.3
Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan, the
Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive
rule. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
4.4
At-Will Employment; Voluntary Participation.
Nothing in the Plan or in any Program or Award Agreement
hereunder shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Affiliate, or shall interfere with or restrict in any way the
rights of the Company and any Affiliate, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice,
or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the
B-8
Company
or any Affiliate. Participation by each Holder in the Plan shall be voluntary and nothing in the Plan shall be construed as mandating that any Eligible Individual shall participate in the
Plan.
4.5
Foreign Holders.
Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws
in countries other than the United States in which the Company and its Subsidiaries operate or have Employees, Non-Employee Directors or Consultants, or in order to comply with the requirements of any
foreign securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Subsidiaries shall be covered by the Plan;
(b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible
Individuals outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices);
provided
,
however
, that no such subplans and/or modifications shall increase the share limitations
contained in Sections 3.1 and 3.3; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental
regulatory exemptions or approvals or listing requirements of any such foreign securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards
shall be granted, that would violate Applicable Law. For purposes of the Plan, all reference to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes
of any applicable jurisdiction other than the United States or a political subdivision thereof.
4.6
Stand-Alone and Tandem Awards.
Awards granted pursuant to the Plan may, in the sole discretion of the
Administrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other Awards.
ARTICLE 5.
PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS
PERFORMANCE-BASED COMPENSATION.
5.1
Purpose.
The Committee, in its sole discretion, may determine at the time an Award is granted or at any time
thereafter whether such Award is intended to qualify as Performance-Based Compensation. If the Committee, in its sole discretion, decides to grant such an Award to an Eligible Individual that is
intended to qualify as Performance-Based Compensation (other than an Option or Stock Appreciation
Right), then the provisions of this Article 5 shall control over any contrary provision contained in the Plan. The Committee, in its sole discretion, may grant Awards to other Eligible
Individuals that are based on Performance Criteria or Performance Goals or any such other criteria and goals as the Committee shall establish, but that do not satisfy the requirements of this
Article 5 and that are not intended to qualify as Performance-Based Compensation. Unless otherwise specified by the Committee at the time of grant, the Performance Criteria with respect to an
Award intended to be Performance-Based Compensation payable to a Covered Employee shall be determined on the basis of Applicable Accounting Standards.
5.2
Applicability.
The grant of an Award to an Eligible Individual for a particular Performance Period shall not
require the grant of an Award to such Eligible Individual in any subsequent Performance Period and the grant of an Award to any one Eligible Individual shall not require the grant of an Award to any
other Eligible Individual in such period or in any other period.
5.3
Types of Awards.
Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to
an Eligible Individual intended to qualify as Performance-Based Compensation, including, without limitation, Restricted Stock the restrictions with respect to which lapse upon the
B-9
attainment
of specified Performance Goals, Restricted Stock Units that vest and become payable upon the attainment of specified Performance Goals and any Performance Awards described in
Article 9 that vest or become exercisable or payable upon the attainment of one or more specified Performance Goals.
5.4
Procedures with Respect to Performance-Based Awards.
To the extent necessary to comply with the requirements
of Section 162(m)(4)(C) of the Code, with respect to any Award granted to one or more Eligible Individuals which is intended to qualify as Performance-Based Compensation, no later than
90 days following the commencement of any Performance Period or any designated fiscal period or period of service (or such earlier time as may be required under Section 162(m) of the
Code), the Committee shall, in writing, (a) designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the
Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Criteria, and (d) specify the relationship between
Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing whether and the extent to which the applicable Performance Goals have been achieved for such Performance Period. In determining the amount
earned under such Awards, the Committee shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors
that the Committee may deem relevant, including the assessment of individual or corporate performance for the Performance Period.
5.5
Payment of Performance-Based Awards.
Unless otherwise provided in the applicable Program or Award Agreement
and only to the extent otherwise permitted by Section 162(m) of the Code, as to an Award that is intended to qualify as Performance-Based Compensation, the Holder must be employed by the
Company or an Affiliate throughout the Performance Period. Unless otherwise provided in the applicable Performance Goals, Program or Award Agreement, a Holder shall be eligible to receive payment
pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such period are achieved.
5.6
Additional Limitations.
Notwithstanding any other provision of the Plan and except as otherwise determined
by the Administrator, any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in
Section 162(m) of the Code or any regulations or rulings issued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable Program and
Award Agreement shall be deemed amended to the extent necessary to conform to such requirements.
ARTICLE 6.
GRANTING OF OPTIONS
6.1
Granting of Options to Eligible Individuals.
The Administrator is authorized to grant Options to Eligible
Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not be inconsistent with the Plan.
6.2
Qualification of Incentive Stock Options.
No Incentive Stock Option shall be granted to any person who is
not an Employee of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) of the Company. No person who qualifies as a Greater Than 10% Stockholder may be granted
an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under the Plan may be modified
by the Administrator, with the consent of the Holder, to disqualify such Option from treatment as an "incentive stock option" under Section 422 of the Code. To the extent that the
B-10
aggregate
Fair Market Value of stock with respect to which "incentive stock options" (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any Affiliate or parent corporation thereof (each as defined in
Section 424(e) and 424(f) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code. The
rule set forth in the immediately preceding sentence shall be applied by taking Options and other "incentive stock options" into account in the order in which they were granted and the Fair Market
Value of stock shall be determined as of the time the respective options were granted.
6.3
Option Exercise Price.
The exercise price per Share subject to each Option shall be set by the
Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or
renewed for purposes of Section 424(h) of the Code). In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of the
Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).
6.4
Option Term.
The term of each Option (the "
Option Term
")
shall be set by the Administrator in its sole discretion;
provided
,
however
, that the Option Term shall
not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. The
Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Options, which time period may
not extend beyond the last day of the Option Term. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the
Administrator may extend the Option Term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the
Holder, and may amend, subject to Section 14.1, any other term or condition of such Option relating to such a Termination of Service.
6.5
Option Vesting.
(a) The
period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine
that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance
Criteria, or any other criteria selected by the Administrator, and, except as limited by the Plan, at any time after the grant of an Option, the Administrator, in its sole discretion and subject to
whatever terms and conditions it selects, may accelerate the period during which an Option vests.
(b) No
portion of an Option which is unexercisable at a Holder's Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the
Administrator either in the applicable Program, in the Award Agreement or by action of the Administrator following the grant of the Option, and the portion of an Option that is unexercisable at a
Holder's Termination of Service shall automatically expire upon such Termination of Service.
6.6
Substitute Awards.
Notwithstanding the foregoing provisions of this Article 6 to the contrary, in the
case of an Option that is a Substitute Award, the price per share of the Shares subject to such Option may be less than the Fair Market Value per share on the date of grant;
provided
that the excess of:
(a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the Shares subject to the
Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction
giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by
the Company, over (y) the aggregate exercise price of such shares.
B-11
6.7
Substitution of Stock Appreciation Rights.
The Administrator may provide in the applicable Program or the
Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to or
upon exercise of such Option;
provided,
that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such
substituted Option would have been exercisable, and shall also have the same exercise price and remaining term as the substituted Option.
ARTICLE 7.
EXERCISE OF OPTIONS
7.1
Partial Exercise.
An exercisable Option may be exercised in whole or in part. However, an Option shall not
be exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.
7.2
Manner of Exercise.
All or a portion of an exercisable Option shall be deemed exercised upon delivery of all
of the following to the Secretary of the Company, the Administrator of the Company or such other person or entity designated by the Administrator, or his, her or its office, as applicable:
(a) A
written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;
(b) Such
representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of
Applicable Law. The Administrator, in its sole discretion, may also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents and registrars;
(c) In
the event that the Option shall be exercised pursuant to Section 12.3 by any person or persons other than the Holder, appropriate proof of the right of such
person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and
(d) Full
payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the Shares with respect to which the Option, or portion
thereof, is exercised, in a manner permitted by Section 12.1 and 12.2.
7.3
Notification Regarding Disposition.
The Holder shall give the Company prompt written or electronic notice of
any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or
renewed for purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one year after the transfer of such Shares to such Holder.
ARTICLE 8.
AWARD OF RESTRICTED STOCK
8.1
Award of Restricted Stock.
(a) The
Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to
each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.
B-12
(b) The
Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock;
provided
,
however
, that if a purchase price is charged,
such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless
otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.
8.2
Rights as Stockholders.
Subject to Section 8.4, upon issuance of Restricted Stock, the Holder shall
have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in the applicable Program or in each individual Award
Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares;
provided
,
however
, that, in the
sole discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject to the
restrictions set forth in Section 8.3. In addition, with respect to a share of Restricted Stock with performance-based vesting, dividends which are paid prior to vesting shall only be paid out
to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the share of Restricted Stock vests.
8.3
Restrictions.
All shares of Restricted Stock (including any shares received by Holders thereof with respect
to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of the applicable Program or in each individual Award Agreement,
be subject to such restrictions and vesting requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and
transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including,
without limitation, criteria based on the Holder's duration of employment, directorship or consultancy with the Company, the Performance Criteria, Company performance, individual performance or other
criteria selected by the Administrator. By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the
vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the applicable Program or Award Agreement. Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire.
8.4
Repurchase or Forfeiture of Restricted Stock.
Except as otherwise determined by the Administrator at the
time of the grant of the Award or thereafter, if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder's rights
in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration. If a price was paid by the
Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock
then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stock or such other amount as may be specified in the applicable Program or Award
Agreement. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide that
upon certain events, including a Change in Control, the Holder's death, retirement or disability or any other specified Termination of Service or any other event, the Holder's rights in unvested
Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable, the Company shall not have a right of repurchase.
8.5
Certificates for Restricted Stock.
Restricted Stock granted pursuant to the Plan may be evidenced in such
manner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock shall include an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock. The Company, in its sole discretion, may (a) retain physical possession of any stock certificate evidencing shares of Restricted Stock until the
restrictions thereon shall have lapsed and/or (b) require that the stock certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent (which may but need
not be the Company) until
B-13
the
restrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to such Restricted Stock.
8.6
Section 83(b) Election.
If a Holder makes an election under Section 83(b) of the Code to be
taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under
Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof
of the timely filing thereof with the Internal Revenue Service.
ARTICLE 9.
AWARD OF RESTRICTED STOCK UNITS
9.1
Grant of Restricted Stock Units.
The Administrator is authorized to grant Awards of Restricted Stock Units
to any Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator.
9.2
Term.
Except as otherwise provided herein, the term of a Restricted Stock Unit award shall be set by the
Administrator in its sole discretion.
9.3
Purchase Price.
The Administrator shall specify the purchase price, if any, to be paid by the Holder to the
Company with respect to any Restricted Stock Unit award;
provided
,
however
, that value of the
consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law. Service to the Company may be sufficient consideration if permitted by Applicable Law.
9.4
Vesting of Restricted Stock Units.
At the time of grant, the Administrator shall specify the date or dates
on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon
the Holder's duration of service to the Company or any Subsidiary, one or more Performance Criteria, Company performance, individual performance or other specific criteria, in each case on a specified
date or dates or over any period or periods, as determined by the Administrator.
9.5
Maturity and Payment.
At the time of grant, the Administrator shall specify the maturity date applicable to
each grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award
Agreement);
provided
that, except as otherwise determined by the Administrator, set forth in any applicable Award Agreement, and subject to compliance
with Section 409A of the Code, in no event shall the maturity date relating to each Restricted Stock Unit occur following the later of (a) the 15
th
day of the third
month following the end of calendar year in which the applicable portion of the Restricted Stock Unit vests; or (b) the 15
th
day of the third month following the end of the
Company's fiscal year in which the applicable portion of the Restricted Stock Unit vests. On the maturity date, the Company shall, subject to Section 12.4(e), transfer to the Holder one
unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the sole discretion of the Administrator, an amount in
cash equal to the Fair Market Value of such Shares on the maturity date or a combination of cash and Common Stock as determined by the Administrator.
9.6
Payment upon Termination of Service.
An Award of Restricted Stock Units shall only be payable while the
Holder is an Employee, a Consultant or a member of the Board, as applicable;
provided
,
however
, that the
Administrator, in its sole discretion, may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid subsequent to a Termination of Service in certain events,
including a Change in Control, the Holder's death, retirement or disability or any other specified Termination of Service.
B-14
9.7
No Rights as a Stockholder.
Unless otherwise determined by the Administrator, a Holder of Restricted Stock
Units shall possess no incidents of ownership with respect to the Shares represented by such Restricted Stock Units, unless and until such Shares are transferred to the Holder pursuant to the terms of
this Plan and the Award Agreement.
ARTICLE 10.
AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED STOCK
10.1
Performance Awards.
(a) The
Administrator is authorized to grant Performance Awards to any Eligible Individual and to determine whether such Performance Awards shall be Performance-Based
Compensation. The value of Performance Awards may be linked to any one or more of the Performance Criteria or other specific criteria determined by the Administrator, in each case on a specified date
or dates or over any period or periods and in such amounts as may be determined by the Administrator. Performance Awards may be paid in cash, Shares, or a combination of cash and Shares, as determined
by the Administrator.
(b) Without
limiting Section 10.1(a), the Administrator may grant Performance Awards to any Eligible Individual in the form of a cash bonus payable upon the
attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Administrator, in each case on a specified date or dates or over any period or
periods determined by the Administrator. Any such bonuses paid to a Holder which are intended to be Performance-Based Compensation shall be based upon objectively determinable bonus formulas
established in accordance with the provisions of Article 5.
10.2
Dividend Equivalents.
(a) Dividend
Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as of dividend payment dates with respect to
dividends with record dates that occur during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by the
Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such restrictions and limitations as may be determined by the
Administrator. In addition, Dividend Equivalents with respect to an Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out to
the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests.
(b) Notwithstanding
the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.
10.3
Stock Payments.
The Administrator is authorized to make Stock Payments to any Eligible Individual. The
number or value of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or more Performance Criteria or any other specific criteria, including service to the
Company or any Affiliate, determined by the Administrator. Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall not
be issued until those conditions have been satisfied. Unless otherwise provided by the Administrator, a Holder of a Stock Payment shall have no rights as a Company stockholder with respect to such
Stock Payment until such time as the Stock Payment has vested and the Shares underlying the Award have been issued to the Holder. Stock Payments may, but are not required to be made in lieu of base
salary, bonus, fees or other cash compensation otherwise payable to such Eligible Individual.
B-15
10.4
Deferred Stock.
The Administrator is authorized to grant Deferred Stock to any Eligible Individual. The
number of shares of Deferred Stock shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service
to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator. Shares underlying a Deferred
Stock award which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall be issued on the vesting date(s) or date(s) that those conditions and criteria have
been satisfied, as applicable. Unless otherwise provided by the Administrator, a Holder of Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such
time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.
10.5
Term.
The term of a Performance Award, Dividend Equivalent award, Deferred Stock award, and/or Stock
Payment award shall be established by the Administrator in its sole discretion.
10.6
Purchase Price.
The Administrator may establish the purchase price of a Performance Award, Shares
distributed as a Stock Payment award or shares distributed pursuant to a Restricted Stock Unit award;
provided
,
however
, that value of the consideration
shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.
10.7
Termination of Service.
A Performance Award, Dividend Equivalent award, Deferred Stock award, and/or Stock
Payment award is distributable only while the Holder is an Employee, Director or Consultant, as applicable. The Administrator, however, in its sole discretion may provide that the Performance Award,
Dividend Equivalent award, Deferred Stock award, and/or Stock Payment award may be distributed subsequent to a Termination of Service in certain events, including a Change in Control, the Holder's
death, retirement or disability or any other specified Termination of Service.
ARTICLE 11.
AWARD OF STOCK APPRECIATION RIGHTS
11.1
Grant of Stock Appreciation Rights.
(a) The
Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it
may determine, which shall not be inconsistent with the Plan.
(b) A
Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a
specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by
subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to
which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. Except as described in (c) below, the exercise price per Share subject to
each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.
(c) Notwithstanding
the foregoing provisions of Section 10.1(b) to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the price per
share of the Shares subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share on the date of grant;
provided
that the excess of: (i) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the Shares subject to the Substitute Award, over (ii) the aggregate exercise
price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market
B-16
value
to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise
price of such shares.
11.2
Stock Appreciation Right Vesting.
(a) The
period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be set by the Administrator and the
Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company
or any Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator. Except as limited by the Plan, at any time after grant of a Stock Appreciation Right, the
Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, may accelerate the period during which a Stock Appreciation Right vests.
(b) No
portion of a Stock Appreciation Right which is unexercisable at a Holder's Termination of Service shall thereafter become exercisable, except as may be otherwise
provided by the Administrator in the applicable Program, the Award Agreement evidencing the grant of a Stock Appreciation Right, or by action of the Administrator following the grant of the Stock
Appreciation Right.
11.3
Manner of Exercise.
All or a portion of an exercisable Stock Appreciation Right shall be deemed exercised
upon delivery of all of the following to the Secretary of the Company, the stock administrator of the Company, or such other person or entity designated by the Administrator, or his, her or its
office, as applicable:
(a) A
written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is
exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right;
(b) Such
representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all Applicable Law. The
Administrator, in its sole discretion, may also take whatever additional actions it deems appropriate to effect such compliance, including, without
limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars; and
(c) In
the event that the Stock Appreciation Right shall be exercised pursuant to this Section 11.3 by any person or persons other than the Holder, appropriate proof
of the right of such person or persons to exercise the Stock Appreciation Right, as determined in the sole discretion of the Administrator.
11.4
Stock Appreciation Right Term.
The term of each Stock Appreciation Right (the "Stock Appreciation Right
Term") shall be set by the Administrator in its sole discretion;
provided
,
however
, that the Stock
Appreciation Right Term shall not be more than ten (10) years from the date the Stock Appreciation Right is granted. The Administrator shall determine the time period, including the time period
following a Termination of Service, during which the Holder has the right to exercise the vested Stock Appreciation Rights, which time period may not extend beyond the last day of the Stock
Appreciation Right Term. Except as limited by the requirements of Section 409A of the Code and regulations and rulings thereunder, or the first sentence of this Section 11.4, the
Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, and may extend the time period during which vested Stock Appreciation Rights may be exercised,
in connection with any Termination of Service of the Holder, and may amend, subject to Section 14.1, any other term or condition of such Stock Appreciation Right relating to such a Termination
of Service.
B-17
11.5
Payment.
Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this
Article 11 shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.
ARTICLE 12.
ADDITIONAL TERMS OF AWARDS
12.1
Payment.
The Administrator shall determine the methods by which payments by any Holder with respect to any
Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares
issuable pursuant to the exercise of the Award) or Shares held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a
Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker
acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale
to the Company in satisfaction of the aggregate payments required;
provided,
that payment of such proceeds is then made to the Company upon settlement
of such sale, or (d) other form of legal consideration acceptable to the Administrator in its sole discretion. The Administrator shall also determine the methods by which Shares shall be
delivered or deemed to be delivered to Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an "executive officer" of the Company within the meaning
of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with
a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
12.2
Tax Withholding.
The Company or any Affiliate shall have the authority and the right to deduct or withhold,
or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder's FICA or employment tax or other social security
contribution obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan. The Administrator, in its sole discretion and in
satisfaction of the foregoing requirement, may withhold, or allow a Holder to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). The number
of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The
Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless
Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.
12.3
Transferability of Awards
.
(a) Except
as otherwise provided in Sections 12.3(b) and 12.3(c):
(i) No
Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the
consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares
have lapsed;
B-18
(ii) No
Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or the Holder's successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the
extent that such disposition is permitted by Section 12.3(a)(i); and
(iii) During
the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to such Holder under the Plan, unless it has been disposed of
pursuant to a DRO; after the
death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by the
Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then-Applicable Laws of descent and distribution.
(b) Notwithstanding
Section 12.3(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an Award other than an Incentive Stock
Option to any one or more Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the
Permitted Transferee other than by will or the laws of descent and distribution or pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the
terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute
any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any
requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer.
(c) Notwithstanding
Section 12.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to
receive any distribution with respect to any Award upon the Holder's death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to
all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a
community property state, a designation of a person other than the Holder's spouse or domestic partner, as applicable, as the Holder's beneficiary with respect to more than 50% of the Holder's
interest in the Award shall not be effective without the prior written or electronic consent of the Holder's spouse or domestic partner. If no beneficiary has been designated or survives the Holder,
payment shall be made to the person entitled thereto pursuant to the Holder's will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or
revoked by a Holder at any time;
provided
that the change or revocation is filed with the Administrator prior to the Holder's death.
12.4
Conditions to Issuance of Shares
.
(a) Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares
pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such Shares is in compliance with Applicable Laws and
the Shares are covered by an effective registration statement or applicable exemption from registration. In
B-19
addition
to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements, and representations as the Board or the
Committee, in its sole discretion, deems advisable in order to comply with Applicable Law.
(b) All
share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other
restrictions as the Administrator deems necessary or advisable to comply with Applicable Law. The Administrator may place legends on any share certificate or book entry to reference restrictions
applicable to the Shares.
(c) The
Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of
any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.
(d) No
fractional Shares shall be issued and the Administrator, in its sole discretion, shall determine whether cash shall be given in lieu of fractional Shares or whether
such fractional Shares shall be eliminated by rounding down.
(e) Notwithstanding
any other provision of the Plan, unless otherwise determined by the Administrator or required by Applicable Law, the Company shall not deliver to any
Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan
administrator).
12.5
Forfeiture and Claw Back Provisions.
Pursuant to its general authority to determine the terms and
conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree by separate written or electronic
instrument, that:
(a) (i)
Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or
resale of any Shares underlying the Award, shall be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited,
if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a
specified time period, engages in any activity in competition with the
Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for "cause" (as
such term is defined in the sole discretion of the Administrator, or as set forth in a written agreement relating to such Award between the Company and the Holder); and
(b) All
Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of any Award or upon
the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy
adopted to comply with the requirements of Applicable Law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated
thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.
12.6
Prohibition on Repricing.
Subject to Section 14.2, the Administrator shall not, without the approval
of the stockholders of the Company, (i) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its price per share, or (ii) cancel any Option or Stock
Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Subject to
Section 14.2,
B-20
the
Administrator shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding Award to increase the price per share or to cancel and replace an Award
with the grant of an Award having a price per share that is greater than or equal to the price per share of the original Award.
ARTICLE 13.
ADMINISTRATION
13.1
Administrator.
The Compensation and Human Resources Committee (or another committee or a subcommittee of
the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein). To the extent necessary to comply with Rule 16b-3 of the
Exchange Act, and with respect to Awards that are intended to be Performance-Based Compensation, including Options and Stock Appreciation Rights, then the Committee (or another
committee or subcommittee of the Board assuming the functions of the Committee under the Plan) shall take all action with respect to such Awards, and the individuals taking such action shall consist
solely of two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as both a "non-employee director" as defined by
Rule 16b-3 of the Exchange Act or any successor rule and an "outside director" for purposes of Section 162(m) of the Code. Additionally, to the extent required by Applicable Law, each of
the individuals constituting the Committee (or another committee or subcommittee of the Board assuming the functions of the Committee under the Plan) shall be an "independent director" under the rules
of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid and
effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 13.1 or
otherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in the Committee may only be filled by the Board. Notwithstanding the
foregoing, (a) unless specifically delegated to the Committee by the Board, the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan
with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms "Administrator" and "Committee" as used in the Plan shall be deemed to refer to the Board and
(b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 13.6.
13.2
Duties and Powers of Committee.
It shall be the duty of the Committee to conduct the general administration
of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan, the Program and the Award Agreement, and to adopt such rules for the administration,
interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Program or Award Agreement provided that the rights or
obligations of the Holder of the Award that is the subject of any such Program or Award Agreement are not affected adversely by such amendment, unless the consent of the Holder is obtained or such
amendment is otherwise permitted under Section 12.5 or Section 14.10. Any such grant or award under the Plan need not be the same with respect to each Holder. Any such interpretations
and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. In its sole discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or
Section 162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded
are required to be determined in the sole discretion of the Committee.
B-21
13.3
Action by the Committee.
Unless otherwise established by the Board or in any charter of the Committee, a
majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the
Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each
member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the
Company's independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
13.4
Authority of Administrator.
Subject to the Company's Bylaws, the Committee's Charter and any specific
designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:
(a) Designate
Eligible Individuals to receive Awards;
(b) Determine
the type or types of Awards to be granted to each Eligible Individual;
(c) Determine
the number of Awards to be granted and the number of Shares to which an Award will relate;
(d) Determine
the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, purchase price, any
Performance Criteria, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award,
and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole
discretion determines;
(e) Determine
whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other
Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe
the form of each Award Agreement, which need not be identical for each Holder;
(g) Decide
all other matters that must be determined in connection with an Award;
(h) Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
(i) Interpret
the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement;
(j) Make
all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and
(k) Accelerate
wholly or partially the vesting or lapse of restriction of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and
conditions it selects and Section 14.2.
13.5
Decisions Binding.
The Administrator's interpretation of the Plan, any Awards granted pursuant to the Plan,
any Program, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.
13.6
Delegation of Authority.
To the extent permitted by Applicable Law, the Board or Committee may from time to
time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this
Article 13;
provided
,
however
, that in no event shall an officer of
B-22
the
Company be delegated the authority to grant awards to, or amend awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act,
(b) Covered Employees, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder;
provided
further
, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Section 162(m) of the Code Applicable Law. Any
delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so
delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 13.6 shall serve in such capacity at the pleasure of the Board and the Committee.
ARTICLE 14.
MISCELLANEOUS PROVISIONS
14.1
Amendment, Suspension or Termination of the Plan.
Except as otherwise provided in this Section 14.1,
the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company's
stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 14.2, (a) increase
the limits imposed in Section 3.1 on the maximum number of Shares which may be issued under the Plan, or (b) reduce the price per share of any outstanding Option or Stock Appreciation
Right granted under the Plan or take action prohibited under Section 12.6, or (c) cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or
Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Except as provided in Section 12.5 and Section 14.10, no amendment, suspension or
termination of the Plan shall, without the consent of the Holder, impair any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so
provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and notwithstanding anything herein to the contrary, in no event may any Award be
granted under the Plan after the tenth (10
th
) anniversary of the Effective Date.
14.2
Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate
Events
.
(a) In
the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the Shares of the Company's stock or the share price of the Company's stock, other than an Equity Restructuring, the Administrator may
make equitable adjustments, if any to reflect such change with respect to (i) the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Sections 3.1 and 3.3 on the maximum number and kind of Shares which may be issued under the Plan and adjustments of the Award Limit); (ii) the number
and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable
performance targets or criteria with respect thereto); and (iv) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as
Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code.
B-23
(b) In
the event of any transaction or event described in Section 14.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate
of the Company, or the financial statements of the Company or any Affiliate, or of changes in Applicable Law or accounting principles, the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder's request, is
hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws,
regulations or principles:
(i) To
provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the
exercise of such Award or realization of the Holder's rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 14.2 the
Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder's rights, then such Award may be terminated by the Company
without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that
could have been attained upon the exercise of such Award or realization of the Holder's rights had such Award been currently exercisable or payable or fully vested;
(ii) To
provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;
(iii) To
make adjustments in the number and type of Shares of the Company's stock (or other securities or property) subject to outstanding Awards, and in the number and kind
of outstanding Restricted
Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future;
(iv) To
provide that such Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby, notwithstanding anything to the contrary in the
Plan or the applicable Program or Award Agreement; and
(v) To
provide that the Award cannot vest, be exercised or become payable after such event.
(c) In
connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 14.2(a) and 14.2(b):
(i) The
number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or
(ii) The
Administrator shall make such equitable adjustments, if any, as the Administrator, in its sole discretion may deem appropriate to reflect such Equity Restructuring
with respect to the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3 on the maximum
number and kind of Shares which may be issued under the Plan and adjustments of the Award Limit). The adjustments provided under this Section 14.2(c) shall be nondiscretionary and shall be
final and binding on the affected Holder and the Company.
B-24
(d) Notwithstanding
any other provision of the Plan, in the event of a Change in Control, each outstanding Award shall continue in effect or be assumed or an equivalent
Award substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event an Award continues in effect or is assumed or an equivalent Award substituted, and a
Holder incurs a Termination of Service upon or within twelve (12) months following the Change in Control, then such Holder shall be fully vested in such continued, assumed or substituted Award.
(e) In
the event that the successor corporation in a Change in Control refuses to assume or substitute for the Award, the Administrator may cause any or all of such Awards
to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all
of such Awards to lapse. If an Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that the Award shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and the Award shall terminate upon the expiration of such
period.
(f) For
the purposes of this Section 14.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by
holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares);
provided
,
however
, that if such consideration received in the
Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Award, for each Share subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per-share
consideration received by holders of Common Stock in the Change in Control.
(g) The
Administrator, in its sole discretion, may include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in
the best interests of the Company that are not inconsistent with the provisions of the Plan.
(h) With
respect to Awards which are granted to Covered Employees and are intended to qualify as Performance-Based Compensation, no adjustment or action described in this
Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based
Compensation, unless the Administrator determines that the Award should not so qualify. No adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that
the Award is not to comply with such exemptive conditions.
(i) The
existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or
the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of
the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part
B-25
of
its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
(j) No
action shall be taken under this Section 14.2 which shall cause an Award to fail to be exempt from or comply with Section 409A of the Code or the
Treasury Regulations thereunder.
(k) In
the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash
dividends) of Company assets to stockholders, or any other change affecting the Shares or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative
convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.
14.3
Approval of Plan by Stockholders.
The Plan shall be submitted for the approval of the Company's
stockholders within twelve (12) months after the date of the Board's initial adoption of the Plan. Awards may be granted or awarded prior to such stockholder approval; provided that such Awards
shall not be exercisable, shall not vest and the restrictions thereon shall not lapse and no Shares shall be issued pursuant thereto prior to the time when the Plan is approved by the stockholders;
and provided, further, that if such approval has not been obtained at the end of said twelve (12) month period, all Awards previously granted or awarded under the Plan shall thereupon be
canceled and become null and void. The Plan is an amendment and restatement of the Accuride Corporation Amended and Restated 2010 Incentive Award Plan, which will continue in effect of stockholders of
the Company do not approve this Plan, and awards may still be granted under such plan in accordance with its terms and the limitations set forth therein,
14.4
No Stockholders Rights.
Except as otherwise provided herein, a Holder shall have none of the rights of a
stockholder with respect to shares of Common Stock covered by any Award until the Holder becomes the record owner of such shares of Common Stock.
14.5
Paperless Administration.
In the event that the Company establishes, for itself or using the services of a
third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation,
granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.
14.6
Effect of Plan upon Other Compensation Plans.
The adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company or any Affiliate. Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate: (a) to establish any other
forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise than under the
Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.
14.7
Compliance with Laws.
The Plan, the granting and vesting of Awards under the Plan and the issuance and
delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including but not limited to state, federal
and foreign securities law and margin requirements), , and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the
Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with Applicable Law. To the extent permitted by Applicable Law,
the
B-26
Plan
and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to Applicable Law.
14.8
Titles and Headings, References to Sections of the Code or Exchange Act.
The titles and headings of the
Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the
Code or the Exchange Act shall include any amendment or successor thereto.
14.9
Governing Law.
The Plan and any agreements hereunder shall be administered, interpreted and enforced under
the internal laws of the State of Delaware without regard to conflicts of laws thereof or any other jurisdiction.
14.10
Section 409A.
To the extent that the Administrator determines that any Award granted under the Plan
is subject to Section 409A of the Code, the Program pursuant to which such Award is granted and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by
Section 409A of the Code. To the extent applicable, the Plan, the Program and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator
determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the
Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code
and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of
Treasury guidance and thereby avoid the application of any penalty taxes under such Section.
14.11
No Rights to Awards.
No Eligible Individual or other person shall have any claim to be granted any Award
pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly.
14.12
Unfunded Status of Awards.
The Plan is intended to be an "unfunded" plan for incentive compensation. With
respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Program or Award Agreement shall give the Holder any rights that are greater than those of a
general creditor of the Company or any Affiliate.
14.13
Indemnification.
To the extent allowable pursuant to Applicable Law, each member of the Committee or of
the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against
and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her;
provided
he or she
gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.
14.14
Relationship to other Benefits.
No payment pursuant to the Plan shall be taken into account in determining
any benefits under any pension, retirement, savings, profit sharing, group
B-27
insurance,
welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
14.15
Expenses.
The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.
*
* * * *
I
hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Accuride Corporation on March 13, 2014.
*
* * * *
I
hereby certify that the foregoing Plan was approved by the stockholders of Accuride Corporation
on , 20 .
Executed
on this 14
th
day of March, 2014.
|
|
|
|
|
/s/ STEPHEN A. MARTIN
Corporate Secretary
|
B-28
|
ANNUAL MEETING
OF STOCKHOLDERS OF ACCURIDE CORPORATION April 24, 2014 NOTICE OF INTERNET
AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and
proxy card are available in the Investors section of our website at
www.accuridecorp.com Please sign, date and mail your proxy card in the
envelope provided as soon as possible. GO GREEN e-Consent makes it easy to go
paperless. With e-Consent, you can quickly access your proxy material,
statements and other eligible documents online, while reducing costs, clutter
and paper waste. Enroll today via www.amstock.com to enjoy online access.
Signature of Stockholder: Date: Signature of Stockholder: Date: Note: Please
sign exactly as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person. To change the address on your account,
please check the box to the right and indicate your new address in the
address space above. Please note that changes to the registered name(s) on
the account may not be submitted via this method. 1. Election of Directors: O
Robin J. Adams O Keith E. Busse O Richard F. Dauch O Robert E. Davis O Lewis
M. Kling O John W. Risner O James R. Rulseh 2. Proposal to ratify the
appointment of Deloitte & Touche LLP as the independent registered public
accounting firm of the Company for the 2014 fiscal year. 3. Proposal to
approve the Amended and Restated Incentive Compensation Plan. 4. Proposal to
approve the Second Amended and Restated 2010 Incentive Award Plan. 5.
Advisory vote on executive compensation. And upon such other matters that may
properly come before the meeting and any adjournment(s) thereof. FOR AGAINST
ABSTAIN FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT
(See instructions below) INSTRUCTIONS: To withhold authority to vote for any
individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to
each nominee you wish to withhold, as shown here: DIRECTOR NOMINEES: THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
DIRECTORS AND "FOR" PROPOSALS 2, 3, 4 AND 5. PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR
BLACK INK AS SHOWN HERE x Please detach along perforated line and mail in the
envelope provided. --------------- ---------------- 20730303030000000000 7
042414
|
|
0
--------------- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . ---------------- 14475 THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ACCURIDE CORPORATION
2014 ANNUAL MEETING OF STOCKHOLDERS The undersigned stockholder of Accuride
Corporation, a Delaware corporation, hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders and Proxy Statement, and hereby
appoints Richard F. Dauch and Gregory A. Risch, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 2014 Annual
Meeting of Stockholders of Accuride Corporation to be held on April 24, 2014,
at 7:00 a.m. Central Time at Victoria National Golf Club, located at 2000
Victoria National Boulevard, Newburgh, Indiana 47630, and at any adjournments
thereof, and to vote all shares of common stock, which the undersigned would
be entitled to vote if then and there personally present on the matters set
forth below: THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS
INDICATED, WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS NAMED
HEREIN, "FOR" PROPOSALS 2, 3, 4 AND 5, AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING, EITHER OF
SUCH ATTORNEYS OR SUBSTITUTES SHALL HAVE AND MAY EXERCISE ALL OF THE POWERS
OF SAID ATTORNEYS-IN-FACT HEREUNDER. (Continued, and to be marked, dated and
signed, on the other side.)
|
QuickLinks
Brokers cannot vote for Proposals 1, 3, 4 and 5 without your instructions.
GENERAL
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
PROPOSAL No. ONE ELECTION OF DIRECTORS
COMPENSATION OF NON-EMPLOYEE DIRECTORS
PROPOSAL No. TWO
ADVISORY VOTE ON APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY
PROPOSAL No. THREE APPROVAL OF THE AMENDED AND RESTATED ACCURIDE CORPORATION INCENTIVE COMPENSATION PLAN
PROPOSAL No. FOUR APPROVAL OF THE ACCURIDE CORPORATION SECOND AMENDED AND RESTATED 2010 INCENTIVE AWARD PLAN
PROPOSAL No. FIVE APPROVAL OF THE ADVISORY RESOLUTION ON THE COMPANY'S EXECUTIVE COMPENSATION
OTHER INFORMATION
EXECUTIVE OFFICERS
EXECUTIVE OFFICER COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Compensation Discussion and Analysis
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
COMPENSATION OF NAMED EXECUTIVE OFFICERS SUMMARY COMPENSATION TABLE2013
GRANTS OF PLAN-BASED AWARDS2013
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE2013
OPTIONS EXERCISED & STOCK VESTED DURING FISCAL 2013
NON-QUALIFIED DEFERRED COMPENSATION TABLE
PENSION BENEFITS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OTHER MATTERS
AMENDED AND RESTATED ACCURIDE CORPORATION INCENTIVE COMPENSATION PLAN
ACCURIDE CORPORATION SECOND AMENDED AND RESTATED 2010 INCENTIVE AWARD PLAN (March 13, 2014)
ARTICLE 1. PURPOSE
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
ARTICLE 3. SHARES SUBJECT TO THE PLAN
ARTICLE 4. GRANTING OF AWARDS
ARTICLE 5. PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION.
ARTICLE 6. GRANTING OF OPTIONS
ARTICLE 7. EXERCISE OF OPTIONS
ARTICLE 8. AWARD OF RESTRICTED STOCK
ARTICLE 9. AWARD OF RESTRICTED STOCK UNITS
ARTICLE 10. AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED STOCK
ARTICLE 11. AWARD OF STOCK APPRECIATION RIGHTS
ARTICLE 12. ADDITIONAL TERMS OF AWARDS
ARTICLE 13. ADMINISTRATION
ARTICLE 14. MISCELLANEOUS PROVISIONS