Performance Units
The Compensation Committee may grant participants awards of performance units. The period of time over which performance targets are measured will be of such duration as the Compensation Committee shall determine in an award agreement. Upon satisfaction of the applicable performance targets during the performance period, the participant will be entitled to receive either shares, cash, or a combination of shares and cash as determined by the Compensation Committee and provided in the applicable award agreement.
Cash-Based Awards
Cash-based awards entitle the participant to payment in amounts of cash determined by the Compensation Committee based upon the achievement of specified performance targets during a specified performance period, which typically will be one year unless otherwise determined by the Compensation Committee. Each cash-based award will have its value determined by the Compensation Committee.
Other Stock-Based Awards
The Compensation Committee may also grant other awards that are valued in whole or in part by reference to, or are otherwise based on and/or payable in, shares of common stock of the Company. Other stock-based awards are a catch-all category to provide for awards of stock-based compensation that do not fit within the scope of the other specifically described types of awards. Payments with respect to other stock-based awards may be made in cash, shares, or a combination of cash and shares as determined by the Compensation Committee. The Compensation Committee has the discretion to determine the terms and conditions of these other stock-based awards.
Dividends and Dividend Equivalents
Awards other than options and SARs may provide for the payment of dividends or dividend equivalents, which payments may be credited to an account or deemed reinvested in additional shares. Any dividends or dividend equivalents paid with respect to an award subject to vesting conditions will be subject to the same vesting conditions as the underlying awards.
Termination of Service. The award agreement will specify the impact on the award of a participant’s termination of employment or service. If a participant ceases to be an employee or director of the Company or its affiliates, the Compensation Committee may provide for special vesting and payment conditions upon such termination in the applicable award agreement.
Transferability. In general, awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order under the Employee Retirement Income Security Act of 1974, as amended. Except as otherwise provided in the 2020 Plan, all rights with respect to an award granted to a participant shall be available during his or her lifetime only to such participant. Notwithstanding the foregoing, a participant, at any time prior to his death, may assign all or any portion of an NSO or SAR to: (i) his or her spouse or lineal descendant; (ii) the trustee of a trust for the primary benefit of his or her spouse or lineal descendant; or (iii) a tax-exempt organization as described in Section 501(c)(3) of the Code.
Notwithstanding the foregoing, non-employee directors may assign all or any portion of any award granted to them to assignees described above. In the event of an assignment, the spouse, lineal descendant, trustee or tax-exempt organization shall be entitled to all of the rights of the participant with respect to the assigned portion of such award, and such portion of the award shall continue to be subject to all of the terms, conditions and restrictions applicable to the award as set forth in the 2020 Plan and in the related award agreement, immediately prior to the effective date of the assignment. Any such assignment shall be permitted only if (i) the participant does not receive any consideration therefore, and (ii) the assignment is expressly approved by the Compensation Committee or its delegate. Further notwithstanding the foregoing, no ISO may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or the laws of descent or distribution.
Duration, Adjustments, Modifications, Terminations. The 2020 Plan will remain in effect until all shares of the Company subject to the 2020 Plan are distributed, or the 2020 Plan is terminated as described below.
If any change is made to the Company common stock subject to the 2020 Plan, or subject to any award agreement under the 2020 Plan, without the receipt of consideration by the Company, such as through a stock split, stock dividend, extraordinary distribution, recapitalization, combination of shares, exchange of shares or other similar transaction, appropriate adjustments will be made in the number, class and price of shares subject to each outstanding award and the numerical share limits contained in the 2020 Plan.
Subject to applicable law, the 2020 Plan also gives the Board and Compensation Committee the right to terminate, suspend or amend the 2020 Plan. No termination, suspension or amendment of the 2020 Plan shall materially adversely affect any right acquired by any participant under an award granted before the date of such termination, suspension or amendment, unless such participant shall consent.
Forfeiture. The Compensation Committee may specify in an award agreement that the participant’s rights, payments, and benefits with respect to an award shall be subject to reduction, cancellation, forfeiture, clawback or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance conditions of an award. Such events may include, but shall not be limited to, termination of service for cause or any act by a participant, whether before or after termination of service, that would constitute cause for termination of service.
If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and if the participant knowingly or through gross negligence engaged in the misconduct, or knowingly or through gross negligence failed to prevent the misconduct, or if the participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the participant shall reimburse the Company the amount of any payment in settlement of an award