Payment of Filing Fee (Check the appropriate box):
|
||
þ
|
No fee required.
|
|
¨
|
Fee Computed on table below per Exchange Act Rules 14a-6 (i)(1) and 0-11.
|
|
(1)
|
Title of each class of securities to which transaction applies:
|
|
_________________________________________________________________________________________________ | ||
(2)
|
Aggregate number of securities to which transaction applies:
|
|
_________________________________________________________________________________________________ | ||
(3)
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
|
|
_________________________________________________________________________________________________ | ||
(4)
|
Proposed maximum aggregate value of transaction:
|
|
_________________________________________________________________________________________________ | ||
(5)
|
Total fee paid:
|
|
_________________________________________________________________________________________________ | ||
¨
|
Fee paid previously with preliminary materials.
|
|
¨
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
|
|
(1)
|
Amount Previously Paid: ______________________________________________________________________________
|
|
(2)
|
Form, Schedule or Registration Statement No.: ______________________________________________________________
|
|
(3)
|
Filing Party: ________________________________________________________________________________________
|
|
(4)
|
Date Filed: _________________________________________________________________________________________
|
Sincerely yours,
|
|
/s/ Rene Robichaud
|
|
Rene Robichaud
|
|
President and Chief Executive Officer |
1.
|
To vote on the election of the Company's seven nominees for director to hold office for terms expiring at the 2013 Annual Meeting of the Stockholders of Layne Christensen and until their successors are duly elected and qualified or until their earlier death, retirement, resignation or removal;
|
2.
|
To conduct an advisory vote on executive compensation;
|
3.
|
To consider and act upon a proposal to amend the Company's 2006 Equity Incentive Plan, as amended and restated (the "2006 Equity Plan") to increase the number of shares available for issuance under the 2006 Equity Plan and approve additional 162(m) performance goals;
|
4.
|
To consider and act upon ratification of the selection of the accounting firm of Deloitte & Touche LLP as the independent auditors of Layne Christensen Company for the fiscal year ending January 31, 2013; and
|
5.
|
To transact such other business as may properly come before the meeting and any adjournment or adjournments thereof.
|
By Order of the Board of Directors.
|
|
Steven F. Crooke
|
|
Senior Vice President—General Counsel and Secretary
|
Name
|
Age
|
Present Position with the Company
|
Director Since
|
|||
Nominees
|
David A.B. Brown
|
68
|
Director, Chairman of the Board
|
2003
|
||
J. Samuel Butler
|
66
|
Director
|
2003
|
|||
Anthony B. Helfet
|
68
|
Director
|
2003
|
|||
Nelson Obus
|
65
|
Director
|
2004
|
|||
Jeffrey J. Reynolds
|
45
|
Director, Executive Vice President
|
2005
|
|||
and Chief Operating Officer
|
||||||
Robert R. Gilmore
|
60
|
Director
|
2009
|
|||
Rene J. Robichaud
|
53
|
Director, President and
|
2009
|
|||
Chief Executive Officer
|
Name |
Fees Earned or
Paid in Cash(1)
($)
|
Stock Awards(2)
($)
|
Option
Awards(3)
($)
|
Total
($)
|
||||||||||||
David A.B. Brown
|
$ | 98,000 | $ | 75,000 | — | $ | 173,000 | |||||||||
J. Samuel Butler
|
$ | 84,532 | $ | 50,000 | — | $ | 134,532 | |||||||||
Anthony B. Helfet
|
$ | 92,278 | $ | 50,000 | — | $ | 142,278 | |||||||||
Nelson Obus
|
$ | 81,458 | $ | 50,000 | — | $ | 131,458 | |||||||||
Robert R. Gilmore
|
$ | 94,097 | $ | 50,000 | — | $ | 144,097 |
(1)
|
Includes amounts deferred under the Company's Deferred Compensation Plan for Directors for the accounts of Messrs. Obus and Gilmore in the amounts of $52,458 and $25,000, respectively.
|
(2)
|
As of January 31, 2012, the Company had aggregate outstanding unvested restricted stock awards to non-employee directors in the amounts of 2,265, 1,510, 1,510, 1,510 and 1,510 shares held by Messrs. Brown, Butler, Helfet, Obus and Gilmore, respectively. The amount reported in this column is equal to the grant date fair value computed in accordance with Accounting Standards Codification ("ASC") Topic 718 for each stock award.
|
(3)
|
As of January 31, 2012, the Company had aggregate outstanding option awards to non-employee directors in the amounts of 13,000, 13,030, 9,000, 10,007 and 7,736 options held by Messrs. Brown, Butler, Helfet, Obus and Gilmore, respectively. The amount reported in this column is equal to the grant date fair value computed in accordance with ASC Topic 718 for each stock award.
|
●
|
a general understanding of management, marketing, accounting, finance and other elements relevant to the Company's success in today's business environment;
|
●
|
an understanding of the principal operational, financial and other plans, strategies and objectives of the Company;
|
●
|
an understanding of the results of operations and the financial condition of the Company and its significant business segments for recent periods;
|
●
|
an understanding of the relative standing of the Company's significant business segments vis-à-vis competitors;
|
●
|
the educational and professional background of the prospective candidate;
|
●
|
the prospective nominee's standards of personal and professional integrity;
|
●
|
the demonstrated ability and judgment necessary to work effectively with other members of the Board to serve the long-term interests of the stockholders;
|
●
|
the extent of the prospective nominee's business or public experience that is relevant and beneficial to the Board and the Company;
|
●
|
the prospective nominee's willingness and ability to make a sufficient time commitment to the affairs of the Company in order to effectively perform the duties of a director, including regular attendance at Board and committee meetings;
|
●
|
the prospective nominee's commitment to the long-term growth and profitability of the Company; and
|
●
|
the prospective nominee's ability to qualify as an independent director as defined in the Nasdaq listing standards.
|
●
|
the objectives of our compensation program;
|
●
|
the role others play in designing and implementing our compensation program, including compensation consultants, peer groups and our Chief Executive Officer;
|
●
|
the components of compensation for our Executives, including the determination of base salaries, annual bonuses under our annual incentive compensation plan and equity grants under our long-term equity incentive plan; and
|
●
|
the manner in which the Company addresses Internal Revenue Code limits on deductibility of compensation.
|
●
|
to attract and retain top-quality executives;
|
●
|
to tie annual and long-term equity incentives to achievement of measurable corporate, business unit and individual performance objectives; and
|
●
|
to align the Executives' incentives with stockholder value creation.
|
Calgon Carbon Corporation
|
Team Inc.
|
Granite Construction Incorporated
|
Tetra Tech Inc.
|
Aegion Corporation
|
Watts Water Technologies, Inc.
|
MasTec, Inc.
|
Helmerich & Payne Inc.
|
Michael Baker Corporation
|
Patterson-UTI Energy Inc.
|
MYR Group, Inc.
|
Unit Corp.
|
Primoris Services Corporation
|
Wilbros Group Inc.
|
Sterling Construction Co. Inc.
|
Aqua America Inc.
|
Martin Marietta Materials, Inc.
|
California Water Service Group
|
Amcol International Corp.
|
Compass Minerals International, Inc.
|
● |
37,500 shares of restricted common stock, 20% of which will vest on each of the next five anniversaries of the date of grant;
|
● |
18,750 shares of restricted common stock that will vest only if the closing market price of the Company's common stock is more than $34.31 for 21 consecutive trading days during the period from July 29, 2013 to July 29, 2016;
|
● |
18,750 shares of restricted common stock that will vest only if the closing market price of the Company's common stock is more than $39.31 for 21 consecutive trading days during the period from July 29, 2013 to July 29, 2016; and
|
● |
37,500 shares of restricted common stock that will vest based on the Company's total stockholder return ("TSR", calculated in a manner consistent with Item 201(e) of Regulations S-K) for the five-year period ending July 29, 2016 when compared to the TSR for the same period of a peer group selected by the Compensation Committee in its sole discretion, but consistent with the Company's past practices of determining the Company's peer group companies for compensation purposes. If the Company's TSR for the five-year period is equal to or greater than the 90th percentile of the TSR for the peer group for the same period, all 37,500 shares will vest. If the Company's TSR for the five-year period is equal to or less than the 50th percentile of the TSR for the peer group for the same period, then none of such restricted shares will vest. If the Company's TSR for the five-year period is between the 50th percentile and the 90th percentile of the TSR for the peer group for the same period, then the number of shares that will vest will be determined based on the vesting table attached to the Offer Letter. For example, under the vesting table, if the Company's TSR for the five-year period is equal to the 75th percentile of the TSR for the peer group for the same period, then 11,719 of such restricted shares will vest.
|
Executive
|
Fiscal 2011
|
Fiscal 2012
|
Andrew B. Schmitt, President (until September 6, 2011) and Chief Executive Officer (through January 31, 2012)
|
$620,000
|
$620,000
|
Rene J. Robichaud, President (from September 6, 2011)
|
N/A
|
$558,000
|
Jerry W. Fanska, Senior Vice President—Finance
|
$365,000
|
$375,000
|
Jeffrey J. Reynolds, Executive Vice President and Chief Operating Officer
|
$350,000
|
$375,000
|
Steven F. Crooke, Senior Vice President—General Counsel
|
$310,000
|
$345,000
|
Executive
|
Total Bonus Award
|
Andrew B. Schmitt
|
$303,426
|
Rene J. Robichaud
|
$178,936
|
Jerry W. Fanska
|
$137,643
|
Jeffrey J. Reynolds
|
$137,643
|
Steven F. Crooke
|
$126,632
|
Name of Executive
|
Option Long-Term Incentive Amount
|
Andrew B. Schmitt
|
$440,000
|
Jerry W. Fanska
|
$226,000
|
Jeffrey J. Reynolds
|
$219,500
|
Steven F. Crooke
|
$178,000
|
Name of Executive
|
Restricted Stock Incentive Amount
|
Andrew B. Schmitt
|
$440,000
|
Jerry W. Fanska
|
$226,000
|
Jeffrey J. Reynolds
|
$219,500
|
Steven F. Crooke
|
$178,000
|
Change in
|
||||||||||||||||||||||||||||||||||
Pension
|
||||||||||||||||||||||||||||||||||
Non-Equity
|
Value and
|
|||||||||||||||||||||||||||||||||
Incentive
|
Nonqualified
|
|||||||||||||||||||||||||||||||||
Plan
|
Compen-
|
All Other
|
||||||||||||||||||||||||||||||||
Stock
|
Option
|
Compen-
|
sation
|
Compen-
|
||||||||||||||||||||||||||||||
Fiscal
|
Salary(2)
|
Bonus(3)
|
Awards(4)
|
Awards(4)
|
sation(5)
|
Earnings
|
sation(6)(7)
|
Total | ||||||||||||||||||||||||||
Name and Principal Position
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($) | |||||||||||||||||||||||||
Andrew B. Schmitt
|
2012
|
$ | 620,000 | $ | 303,426 | $ | 220,000 | $ | 440,000 | — | $ | 1,889,040 | $ | 19,350 | $ | 3,491,816 | ||||||||||||||||||
President (January 2011-August 2011),
|
2011
|
620,000 | — | 74,800 | 374,000 | $ | 992,000 | 675,207 | 19,344 | 2,755,350 | ||||||||||||||||||||||||
Chief Executive Officer and Director
|
2010
|
620,000 | $ | 363,362 | — | 879,761 | — | 889,130 | 17,639 | 2,769,892 | ||||||||||||||||||||||||
Rene J. Robichaud (1)
|
2012
|
$ | 270,415 | $ | 178,936 | $ | 2,511,990 | $ | 300,000 | — | — | $ | 129,152 | $ | 3,390,493 | |||||||||||||||||||
President (since September 2011),
|
||||||||||||||||||||||||||||||||||
and Director
|
||||||||||||||||||||||||||||||||||
Jerry W. Fanska
|
2012
|
$ | 374,769 | $ | 137,643 | $ | 113,000 | $ | 226,000 | — | — | $ | 22,042 | $ | 873,454 | |||||||||||||||||||
Senior Vice President—
|
2011
|
365,000 | — | 37,400 | 186,992 | $ | 438,000 | — | 21,686 | 1,049,077 | ||||||||||||||||||||||||
Finance and Treasurer
|
2010
|
365,000 | $ | 176,465 | — | 439,880 | — | — | 15,835 | 997,180 | ||||||||||||||||||||||||
Jeffrey J. Reynolds
|
2012
|
$ | 374,423 | $ | 137,643 | $ | 109,750 | $ | 219,500 | — | — | $ | 23,833 | $ | 865,149 | |||||||||||||||||||
Executive Vice President, Chief
|
2011
|
350,000 | — | 34,849 | 174,257 | $ | 420,000 | — | 15,613 | 994,718 | ||||||||||||||||||||||||
Operating Officer and Director
|
2010
|
319,826 | $ | 140,505 | — | 409,881 | — | — | 16,168 | 886,380 | ||||||||||||||||||||||||
Steven F. Crooke
|
2012
|
$ | 344,192 | $ | 126,632 | $ | 89,000 | $ | 178,000 | — | — | $ | 18,786 | $ | 756,610 | |||||||||||||||||||
Senior Vice President—
|
2011
|
310,000 | — | 27,623 | 138,132 | $ | 372,000 | — | 18,373 | 866,129 | ||||||||||||||||||||||||
General Counsel and Secretary
|
2010
|
310,000 | $ | 149,874 | — | 324,908 | — | — | 16,373 | 801,155 |
(1)
|
All amounts reported for Mr. Robichaud reflect the portion of the year that he was employed by the Company. Mr. Robichaud's employment commenced on July 29, 2011. Furthermore, $2,211,989 of the amount reported under the Stock Awards column represents the grant date fair value of Mr. Robichaud's inducement grant of restricted stock received upon the commencement of his employment with the Company, as described in detail in the Compensation Discussion and Analysis section of this Proxy Statement under the heading "—Offer Letter for Mr. Robichaud," beginning on page 12, and $300,000 reflects the pro-rated portion of his annual award of restricted stock, which was received by all other Named Executive Officers on February 1, 2011. The amount reported under the Option Awards column also reflects the pro-rated portion of his annual award of options, which was received by all other Named Executive Officers on February 1, 2011.
|
(2)
|
Reflects salary earned for the fiscal years ended January 31, 2012, 2011 and 2010, respectively. The salary amounts in 2012 for Messrs. Schmitt, Fanska, Reynolds and Crooke include amounts deferred under the Company's Deferred Compensation Plan of $13,846, $5,000, $37,441 and $5,000, respectively. The salary amounts in 2011 for Messrs. Schmitt, Fanska, Reynolds and Crooke include amounts deferred under the Company's Deferred Compensation Plan of $12,231, $5,000, $34,999 and $5,000, respectively. The salary amounts in 2010 for Messrs. Schmitt, Fanska, Reynolds and Crooke include amounts deferred under the Company's Deferred Compensation Plan of $5,538, $84,616, $30,774 and $5,000, respectively. All amounts deferred are also reflected in the Nonqualified Deferred Compensation table appearing on page 26 in this Proxy Statement.
|
(3)
|
The incentive compensation paid with respect to fiscal 2012 is reported in the "Bonus" column rather than the "Non-Equity Incentive Plan Compensation" column since the Named Executive Officers did not meet the target performance goals set under the Executive Incentive Compensation Plan due to the non-cash write-off of goodwill and other intangible assets, the additional compensation cost associated with the transition of the Chief Executive Officer position and the FCPA accrual, all as more fully described in the Compensation Discussion and Analysis section of this Proxy Statement. As a result, the incentive awards for fiscal 2012 were discretionary bonuses. The incentive amounts in 2012 for Mr. Reynolds includes the amount deferred under the Company's Deferred Compensation Plan of $68,822. All amounts deferred are also reflected in the Nonqualified Deferred Compensation table appearing on page 26 in this Proxy Statement.
|
(4)
|
Amounts reported in the Stock Awards and Option Awards columns represent the aggregate grant date fair value of such awards, computed in accordance with ASC Topic 718. Pursuant to Securities and Exchange Commission rules, the amounts shown for the fiscal 2012 and fiscal 2011 Stock Awards report the value at the grant date based upon the probable outcome of the performance conditions that affect the vesting of such awards. These amounts do not include an estimate of forfeitures related to any time-based vesting conditions, and assume that the named executive officer will perform the requisite service to vest in the award. For assumptions used in determining these values, refer to Note 15 of the Company's financial statements in the Company's Annual Report on Form 10-K for the year ended January 31, 2012, as filed with the Securities and Exchange Commission. For additional information regarding stock awards for the named executive officers, refer to the "Grants of Plan-Based Awards in Last Fiscal Year" and "Outstanding Equity Awards at Fiscal Year End" tables included in this Proxy Statement beginning on page 25.
|
(5)
|
Reflects incentive plan compensation earned for the fiscal year ended January 31, 2011. The incentive amounts in 2011 for Messrs. Fanska and Reynolds include amounts deferred under the Company's Deferred Compensation Plan of $109,500 and $210,000, respectively. All amounts deferred are also reflected in the Nonqualified Deferred Compensation table appearing on page 26 in this Proxy Statement.
|
(6)
|
Excludes perquisites and other benefits, unless the aggregate amount of such compensation exceeds $10,000.
|
(7)
|
All Other Compensation for the fiscal year ended January 31, 2012, includes Layne Christensen contributions in the amounts of $9,847, $5,794, $9,830, $9,869 and $9,908 which accrued during such fiscal year for the accounts of Messrs. Schmitt, Robichaud, Fanska, Reynolds and Crooke, respectively, under the Company's Capital Accumulation Plan; the cost of term life insurance paid by the Company for the benefit of Messrs. Schmitt, Robichaud, Fanska, Reynolds and Crooke in the amounts of $2,322, $1,226, $5,531, $1,350 and $1,878, respectively; Company matching contributions to the accounts of Messrs. Schmitt, Robichaud, Fanska, Reynolds and Crooke under the Company's Deferred Compensation Plan in the amounts of $3,846, $5,385, $5,000, $5,192 and $5,000, respectively; and Company matching contributions to the health savings accounts of Messrs. Schmitt, Robichaud, Fanska and Crooke in the amounts of $3,335, $2,250, $1,681 and $2,000, respectively. Also includes $20,039 of compensation for Mr. Robichaud related to the costs of housing and travel incurred by the Company in connection with his relocation to the Kansas City area, and $7,422 of compensation for Mr. Reynolds related to a monthly auto allowance paid by the Company on his behalf. Also includes $94,458 in compensation for Mr. Robichaud that was earned for his service as a director of the Company prior to the commencement of his employment with the Company on July 29, 2011. Mr. Robichaud earned $44,458 in director's fees, all of which were deferred under the Company's Deferred Compensation Plan for Directors, and $50,000 in restricted stock, which vested on February 1, 2012. The value of such restricted stock award is equal to the grant date fair value computed in accordance with ASC Topic 718.
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards (1)
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
All Other Stock Awards: Number of Shares of Stock or
|
All Other Option Awards: Number of Securities Underlying
|
Exercise
or Base
Price of Option
|
Grant
Date Fair Value of Stock and Option
|
||||||||||||||||||||||||||||
Name
|
Grant
Date
|
Threshold ($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
Units
(#)
|
Options
(#)
|
Awards
($/Sh)
|
Awards (2)
($)
|
||||||||||||||||||||||
Andrew B. Schmitt
|
02/01/11
02/01/11(3)
|
$248,000 | $496,000 | $992,000 | 6,646 | 13,293 | 19,939 |
|
23,070 | $33.10 |
$
$
|
440,000
220,000
|
|||||||||||||||||||||
Rene J. Robichaud
|
02/01/11
07/29/11
07/29/11(3)
07/29/11(4)
07/29/11(5)
07/29/11(6)
07/29/11(7)
|
$139,300 | $279,000 | $558,000 |
5,117
469
|
10,235
18,750
18,750
9,375
|
15,362
37,500
|
37,500
|
17,893
|
$29.31
|
$
$
$
$
$
$
|
300,000
300,000 1,099,125
549,563
549,563
13,739
|
|||||||||||||||||||||
Jerry W. Fanska
|
02/01/11
02/01/11(3)
|
$112,500 | $225,000 | $450,000 |
3,413
|
6,827
|
10,240
|
11,849 | $33.10 |
$
$
|
226,000
113,000
|
||||||||||||||||||||||
Jeffrey J. Reynolds
|
02/01/11
02/01/11(3)
|
$112,500 | $225,000 | $450,000 |
3,315
|
6,631
|
9,946
|
11,509 | $33.10 |
$
$
|
219,500
109,750
|
||||||||||||||||||||||
Steven F. Crooke
|
02/01/11
02/01/11(3)
|
$103,500 | $207,000 | $414,000 |
2,688
|
5,377
|
8,065
|
9,333 | $33.10 |
$
$
|
178,000
89,000
|
(1)
|
The amounts reported under the Threshold, Target and Maximum columns in this table are the possible incentive compensation awards calculated in accordance with the provisions set forth in the Executive Incentive Compensation Plan. The Threshold column reports the awards that would have been paid if 80% of the performance targets were met. If less than 80% of a performance target is met, no incentive award is paid with respect to that target. The Target column reports the awards that would have been paid if 100% of the performance targets were met and the Maximum column reports the maximum awards available under the plan regardless of the amount by which the performance targets are exceeded. The amounts reported for Mr. Robichaud reflect pro-ration based on the number of days during the year that he was employed by the Company. For fiscal 2012, the minimum performance threshold set by the Board was not met. As discussed in detail in the Compensation Discussion and Analysis beginning on page 10 of this Proxy Statement, the Named Executive Officers did receive discretionary bonuses for their performance in Fiscal 2012.
|
(2)
|
Amounts reported in the Grant Date Fair Value of Stock and Option Awards column represent the aggregate grant date fair value of such awards, computed in accordance with ASC Topic 718. Pursuant to Securities and Exchange Commission rules, the amounts shown for the Stock Awards report the value at the grant date based upon the probable outcome of the performance conditions that affect the vesting of such awards. The amounts shown for the Option Awards do not include an estimate of forfeitures related to time-based vesting conditions, and assume that the named executive officer will perform the requisite service to vest in the award. For assumptions used in determining these values, refer to Note 15 of the Company's financial statements in the Company's Annual Report on Form 10-K for the year ended January 31, 2012, as filed with the Securities and Exchange Commission. For additional information regarding stock awards for the named executive officers, refer to the "Summary Compensation" and "Outstanding Equity Awards at Fiscal Year End" tables included in this Proxy Statement on pages 21 and 25, respectively.
|
(3)
|
The grant of shares of restricted stock reported under the Threshold, Target and Maximum columns for this award will vest, if at all, in various percentages only if the Company achieves a corporate RONA threshold based on average RONA over the entire three-year period beginning on February 1, 2011, and ending on January 31, 2014, within a range between 7.5 and 12.5%. See the discussion in the Compensation Discussion and Analysis under the heading "Compensation Components—Performance-Contingent Restricted Shares" on page 17 of this Proxy Statement for a complete explanation of the vesting of the shares of restricted stock reported in this table. The Threshold column reports the number of shares that will vest if a 7.5% average RONA is achieved during the vesting period, the Target column reports the number of shares that will vest if a 10% average RONA is achieved during the vesting period and the Maximum column reports the number of shares that will vest if a 12.5% average RONA is achieved during the vesting period.
|
(4)
|
7,500 shares of restricted common stock will vest on each of the first five anniversaries of the date of grant.
|
(5)
|
Shares will vest only if the closing market price of the Company's common stock is more than $34.31 for 21 consecutive trading days during the period from July 29, 2013 to July 29, 2016.
|
(6)
|
Shares will vest only if the closing market price of the Company's common stock is more than $39.31 for 21 consecutive trading days during the period from July 29, 2013 to July 29, 2016.
|
(7)
|
The grant of shares of restricted stock reported under the Threshold, Target and Maximum columns in this table will vest, if at all, in various percentages only if the Company achieves a total stockholder return ("TSR", calculated in a manner consistent with Item 201(e) of Regulations S-K) for the five-year period ending July 29, 2016, within a range between the 50th and 90th percentiles of the TSR for the same period of a peer group selected by the Compensation Committee in its sole discretion, but consistent with the Company's past practices of determining the Company's peer group companies for compensation purposes. See the discussion in the Compensation Discussion and Analysis under the heading "—Offer Letter for Mr. Robichaud" on page 12 of this Proxy Statement for a complete explanation of the vesting of the shares of restricted stock reported for this award. The Threshold column reports the number of shares that will vest if the Company's TSR for the five year period is equal to the 51st percentile of the TSR for the peer group and the Maximum column reports the number of shares that will vest if the Company's TSR for the five year period is equal to or greater than the 90th percentile of the TSR for the peer group. No specific target within this range was set by the Board; the Target column reports the number of shares that will vest if the Company's TSR for the five year period is equal to the 70th percentile of the TSR for the peer group, which is the mid-point between the Threshold and Maximum percentiles.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#) Unexercisable
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number
of Shares
or Units
of Stock
that Have
Not
Vested (#)
|
Market
Value of
Shares or
Units of
Stock that
Have Not
Vested ($)(7)
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested (#)
|
Equity
Incentive
Plan Awards: Market
Value or
Payout Value
of Unearned Shares, Units
or Other
Rights that
Have Not
Vested ($) (7)
|
||||||||||
Andrew B. Schmitt
|
15,000 (1)
70,000 (1)
35,000 (1)
26,607 (1)
38,408 (2)
20,716 (3)
7,733
—
|
—
—
—
—
19,204 (2)
10,358 (3)
15,468 (4)
23,070 (5)
|
—
—
—
—
—
—
—
—
|
$16.65
$29.29
$42.26
$35.71
$15.78
$21.99
$27.79
$33.10
|
06/28/2014
06/08/2016
06/07/2017
02/05/2018
02/01/2019
06/03/2019
02/19/2020
02/02/2021
|
26,751
|
$
|
621,693
|
|||||||||||
Rene J. Robichaud
|
3,000 (1)
|
—
17,893 (6)
|
—
—
|
$24.01
$29.31
|
01/01/2019
07/29/2021
|
39,010
|
$906,592
|
85,235
|
$ |
1,980,861
|
|||||||||
Jerry W. Fanska
|
35,000 (1)
17,500 (1)
13,303 (1)
19,204 (2)
10,358 (3)
3,866
—
|
—
—
—
9,602 (2)
5,179 (3)
7,734 (4)
11,849 (5)
|
—
—
—
—
—
—
—
|
$27.87
$42.26
$35.71
$15.78
$21.99
$27.79
$33.10
|
01/20/2016
06/07/2017
02/05/2018
02/01/2019
06/03/2019
02/19/2020
02/01/2021
|
13,556
|
$ |
315,041
|
|||||||||||
Jeffrey J. Reynolds
|
57,500 (1)
17,895 (2)
9,652 (3)
3,603
—
|
—
8,947 (2)
4,825 (3)
7,207 (4)
11,509 (5)
|
—
—
—
—
—
|
$23.05
$15.78
$21.99
$27.79
$33.10
|
09/28/2015
02/01/2019
06/03/2019
02/19/2020
02/01/2021
|
|
|
12,901
|
$ |
299,819
|
|||||||||
Steven F. Crooke
|
17,500 (1)
13,125 (1)
9,826 (1)
14,185 (2)
7,651 (3)
2,856
—
|
—
—
—
7,092 (2)
3,825 (3)
5,713 (4)
9,333 (5)
|
—
—
—
—
—
—
—
|
$27.87
$42.26
$35.71
$15.78
$21.99
$27.79
$33.10
|
01/20/2016
06/07/2017
02/05/2018
02/01/2019
06/03/2019
02/19/2020
02/01/2021
|
|
|
10,347
|
$ |
240,464
|
(1)
|
The options are fully vested and exercisable.
|
(2)
|
The options vest in three equal annual installments on February 1 of each year. If they have not yet been exercised, the options in the grant were 2/3 vested and 1/3 unvested on January 31, 2012.
|
(3)
|
The options vest in three equal annual installments on June 3 of each year. If they have not yet been exercised, the options in the grant were 2/3 vested and 1/3 unvested on January 31, 2012.
|
(4)
|
The options vest in three equal annual installments on February 19 of each year. If they have not yet been exercised, the options in the grant were 1/3 vested and 2/3 unvested on January 31, 2012.
|
(5)
|
The options vest in three equal annual installments on February 1 of each year. All of the options in the grant were unvested on January 31, 2012.
|
(6)
|
The options vest in three equal annual installments on July 29 of each year. All of the options in the grant were unvested on January 31, 2012.
|
(7)
|
The market value of the shares of restricted stock, either earned or unearned, that have not vested was calculated by multiplying $23.24, which was the closing market price of the Company's common stock on January 31, 2012, by the number of unvested shares.
|
Option Awards
|
Stock Awards
|
||||||||||||||||
Name
|
Number of Shares
Acquired on Exercise (#)
|
Value Realized
on Exercise ($)
|
Number of Shares Acquired
on Vesting (#)
|
Value Realized on
Vesting ($)(1)
|
|||||||||||||
Andrew B. Schmitt
|
— | — | 3,750 | $ | 102,975 | ||||||||||||
Rene J. Robichaud
|
— | — | 1,572 | $ | 49,644 | ||||||||||||
Jerry W. Fanska
|
— | — | 1,875 | $ | 51,488 | ||||||||||||
Jeffrey J. Reynolds
|
— | — | — | — | |||||||||||||
Steven F. Crooke
|
— | — | 1,875 | $ | 51,488 |
(1)
|
The value realized upon vesting for all shares, except those held by Mr. Robichaud, was calculated using the closing price of the Company's common stock on the day prior to the date the shares vested ($27.46) multiplied by the number of shares vested. All shares reported in this column, except those held by Mr. Robichaud, vested on June 7, 2011. The shares held by Mr. Robichaud vested on February 1, 2011, and the value realized upon the vesting of such shares was calculated using the closing price of the Company's common stock on the day prior to the date the shares vested ($31.58) multiplied by the number of shares vested.
|
Name
|
Plan Name
|
Number of Years
Credited Service (#)
|
Present Value of
Accumulated Benefit( $)
|
Payments During
Last Fiscal Year ($)
|
||||
Andrew B. Schmitt
|
Supplemental Executive Retirement Plan
|
18
|
$5,557,905
|
$0
|
Name
|
Executive
Contributions in Last
Fiscal Year(1) ($)
|
Registrant
Contributions in Last
Fiscal Year(2) ($)
|
Aggregate Earnings
(Losses) in
Last Fiscal Year(3) ($)
|
Aggregate
Withdrawals/
Distributions ($)
|
Aggregate Balance
at Last Fiscal Year
End(4) ($)
|
|||||||||||||
Andrew B. Schmitt
|
$ |
13,846
|
$ |
3,846
|
$ |
9
|
—
|
$ |
112,000
|
|||||||||
Rene J. Robichaud
|
5,385
|
5,385
|
575
|
—
|
11,345
|
|||||||||||||
Jerry W. Fanska
|
114,500
|
5,000
|
18,533
|
—
|
912,260
|
|||||||||||||
Jeffrey J. Reynolds
|
247,441
|
5,192
|
35,747
|
—
|
1,212,598
|
|||||||||||||
Steven F. Crooke
|
5,000
|
5,000
|
7,138
|
—
|
148,417
|
(1)
|
The salary deferrals reported in this column are included in the salary of each Named Executive Officer for fiscal 2012 as indicated in footnote (2) to the Summary Compensation Table. However, the incentive compensation deferrals reported in this column are included in the incentive compensation of each Named Executive Officer for fiscal 2011 as indicated in footnote (5) to the Summary Compensation Table, since, due to the timing of the payments, they are not credited to the account of the executive until the succeeding fiscal year.
|
(2)
|
The amounts reported in this column are included in the All Other Compensation column for each executive as indicated in footnote (7) to the Summary Compensation Table.
|
(3)
|
The earnings reported in this column are not included in the Summary Compensation Table as they are not above-market or preferential.
|
(4)
|
Includes amounts reported as salary in the Summary Compensation Table for fiscal 2012 of $13,846, $5,385, $5,000, $37,441 and $5,000 for Messrs. Schmitt, Robichaud, Fanska, Reynolds and Crooke, respectively; amounts reported as salary in the Summary Compensation Table for fiscal 2011 of $12,231, $5,000, $34,999 and $5,000 for Messrs. Schmitt, Fanska, Reynolds and Crooke, respectively; and amounts reported as salary in the Summary Compensation Table for fiscal 2010 of $5,538, $84,616, $30,774 and $5,000 for Messrs. Schmitt, Fanska, Reynolds and Crooke, respectively. Also includes an amount reported as a bonus in the Summary Compensation Table for fiscal 2012 of $68,822 for Mr. Reynolds; amounts reported as incentive compensation in the Summary Compensation Table for fiscal 2011 of $109,500 for Mr. Fanska and $210,000 for Mr. Reynolds; and amounts reported as a bonus in the Summary Compensation Table for fiscal 2010 of $44,116 for Mr. Fanska and $70,253 for Mr. Reynolds.
|
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
|
1,060,654 | (1) | $ | 26.27 | 846,691 | (2) | ||||||
Equity Compensation Plans Not Approved by Security Holders(3)
|
N/A | N/A | N/A | |||||||||
Total
|
1,060,654 | (4) | 846,691 |
(1)
|
Shares issuable pursuant to outstanding options under the 2006 Equity Plan and the 2002 Option Plan.
|
(2)
|
All shares listed are issuable pursuant to future awards under the 2006 Equity Plan. No shares remain available for issuance under the 2002 Option Plan.
|
(3)
|
The Company does not have any equity compensation plans that have not been approved by security holders.
|
(4)
|
As of January 31, 2012, a total of 72,557 shares of Company common stock were issuable upon the exercise of outstanding options under the Company's expired 1996 Stock Option Plan. The weighted-average exercise price of those options is $23.99 per share. No additional options may be granted under the 1996 Stock Option Plan.
|
●
|
If before a change of control, the Company terminates the Executive's employment without "cause" or if the Company constructively terminates the Executive's employment (i.e., the Executive leaves for "good reason"), the Executive is entitled to receive severance benefits that include (i) 24 months of continued base salary, (ii) continued vesting of equity-based awards and a continued right to exercise outstanding stock options during this 24-month severance period, (iii) for any performance-based equity award that is exercisable, payable or becomes vested only if the applicable performance-based criteria is satisfied, such performance-based award will become exercisable, payable or become vested at the time of and only if the underlying performance criteria is satisfied, (iv) for any performance-based stock options that become exercisable after the end of the 24-month severance period, such stock options will remain exercisable until the earlier of the original expiration date of the option or 90 days after the end of the 24 month severance period, (v) continued participation in the Company's welfare benefit plans (or comparable arrangements) throughout the 24 month severance period, and (vi) payment of any applicable COBRA premiums.
|
Name
|
Base Salary |
Unvested Equity
Compensation(1)
|
Benefits(2)
|
Total
|
||||||||||||
Rene J. Robichaud
|
$ | 1,116,000 | $ | 118,931 | $ | 42,346 | $ | 1,277,276 | ||||||||
Jerry W. Fanska
|
750,000 | 188,711 | 40,684 | 979,395 | ||||||||||||
Jeffrey J. Reynolds
|
750,000 | 178,980 | 46,473 | 975,453 | ||||||||||||
Steven F. Crooke
|
690,000 | 143,278 | 48,784 | 882,061 |
(1)
|
Represents value of unvested awards at January 31, 2012 that would become vested in the 24-month period following January 31, 2012, including any awards for which the applicable vesting date falls on February 1, 2014. Stock options are valued based on the positive difference, if any, between the closing stock price of the Company's common stock on January 31, 2012 and the exercise price for such options. With respect to performance vesting restricted stock granted on February 19, 2010, the Company has determined that there is a 20% likelihood that the Company will achieve the performance conditions associated with such shares. With respect to performance vesting restricted stock granted on February 1, 2011, the Company has determined that there is a 50% likelihood that the Company will achieve the performance conditions associated with such shares. Accordingly, shares of performance vesting restricted stock have been assigned a value that is 20% and 50% of the value of the closing stock price of the Company's common stock on January 31, 2012 for the 2010 and 2011 grants of performance-vesting restricted stock, respectively.
|
(2)
|
Assumes the executive earns the maximum Company match with respect to his health savings account for each year during the 24-month period.
|
●
|
If the Executive's employment is terminated due to death, the Executive's estate or his beneficiaries will be entitled to receive (i) immediate acceleration of the vesting of the Executive's service-based equity awards and the right to exercise the service-based stock options until the earlier of the original expiration date of the options or 12 months after the Executive's date of death, (ii) for any performance-based equity award that is exercisable, payable or becomes vested only if the applicable performance-based criteria is satisfied, such performance-based award will become exercisable, payable or become vested at the time of and only if the underlying performance criteria is satisfied, and (iii) for any performance-based stock option that becomes exercisable due to the satisfaction of the underlying performance criteria, the continued right to exercise the option until the earlier of the option's original expiration date or 12 months after the Executive's date of death.
|
Name
|
Unvested Equity Compensation(1)
|
|||
Rene J. Robichaud
|
$ | 118,931 | ||
Jerry W. Fanska
|
188,711 | |||
Jeffrey J. Reynolds
|
178,980 | |||
Steven F. Crooke
|
143,278 |
(1)
|
Represents value of unvested awards at January 31, 2012 that would become vested upon death. Stock options are valued based on the positive difference, if any, between the closing stock price of the Company's common stock on January 31, 2012 and the exercise price for such options. With respect to performance vesting restricted stock granted on February 19, 2010, the Company has determined that there is a 20% likelihood that the Company will achieve the performance conditions associated with such shares. With respect to performance vesting restricted stock granted on February 1, 2011, the Company has determined that there is a 50% likelihood that the Company will achieve the performance conditions associated with such shares. Accordingly, shares of performance vesting restricted stock have been assigned a value that is 20% and 50% of the value of the closing stock price of the Company's common stock on January 31, 2012 for the 2010 and 2011 grants of performance-vesting restricted stock, respectively.
|
·
|
If the Executive's employment is terminated due to disability, the Executive will be entitled to (i) payment of a lump sum disability benefit equal to 12 months base salary, (ii) immediate acceleration of the vesting of his service-based equity awards and a continuation of his right to exercise any service-based stock options for a period of 12 months after the termination, (iii) for any performance-based equity award that is exercisable, payable or becomes vested only if the applicable performance-based criteria is satisfied, such performance-based award will become exercisable, payable or become vested at the time of and only if the underlying performance criteria is satisfied, and (iv) for any performance-based stock options that have become exercisable due to the satisfaction of the underlying performance criteria, the continued right to exercise the options until the earlier of the option's original expiration date or 12 months after the Executive's termination due to disability.
|
Name
|
Base Salary
|
Unvested Equity
Compensation(1)
|
Total
|
||||||||||
Rene J. Robichaud
|
$ | 558,000 | $ | 118,931 | $ | 676,931 | |||||||
Jerry W. Fanska
|
375,000 | 188,711 | 563,711 | ||||||||||
Jeffrey J. Reynolds
|
375,000 | 178,980 | 553,980 | ||||||||||
Steven F. Crooke
|
345,000 | 143,278 | 488,278 |
(1)
|
Represents value of unvested awards at January 31, 2012 that would become vested upon a disability. Stock options are valued based on the positive difference if any between the closing stock price of the Company's common stock on January 31, 2012 and the exercise price for such options. With respect to performance vesting restricted stock granted on February 19, 2010, the Company has determined that there is a 20% likelihood that the Company will achieve the performance conditions associated with such shares. With respect to performance vesting restricted stock granted on February 1, 2011, the Company has determined that there is a 50% likelihood that the Company will achieve the performance conditions associated with such shares. Accordingly, shares of performance vesting restricted stock have been assigned a value that is 20% and 50% of the value of the closing stock price of the Company's common stock on January 31, 2012 for the 2010 and 2011 grants of performance-vesting restricted stock, respectively.
|
●
|
Upon a change of control of the Company, all of the Executive's equity awards will become immediately vested on the effective date of the change of control. Following a change of control of the Company and for a three-year period following the change of control, the successor Company is obligated to both (i) continue to employ the Executive in a substantially similar position (at an equal or greater base salary as before the change of control) and (ii) provide the Executive with certain welfare benefits and bonus compensation opportunities similar to those of other similarly situated employees.
|
Name
|
Base Salary and
Bonus(1)
|
Unvested Equity
Compensation(2)
|
Benefits(3)
|
280G Excise
Tax Gross-up(4)
|
Total
|
|||||||||||||||
Rene J. Robichaud
|
$ | 2,948,208 | $ | 2,852,361 | $ | 69,518 | -- | $ | 5,864,088 | |||||||||||
Jerry W. Fanska
|
1,006,126 | 393,146 | 67,026 | -- | 1,460,298 | |||||||||||||||
Jeffrey J. Reynolds
|
1,006,126 | 372,604 | 75,710 | $ | 514,489 | 1,962,928 | ||||||||||||||
Steven F. Crooke
|
925,636 | 298,161 | 79,175 | -- | 1,296,971 |
(1)
|
For Messrs. Crooke, Fanska and Reynolds, this amount represents the present value of three times the base salary of the Executive on January 31, 2012, paid out in bi-weekly installments over a three-year period using a discount rate of 7.5%. For Mr. Robichaud, this amount represents the present value of three times his base salary as of January 31, 2012 and three times his annual incentive bonus amount (assuming performance goal achievement at the target level) that would have been paid under the Company's annual incentive bonus plan using a discount rate of 7.5%. Mr. Robichaud is currently eligible to receive an incentive bonus equal to 100% of his base salary if performance at target is achieved.
|
(2)
|
Represents value of unvested awards at January 31, 2012 that would become vested upon a change of control, regardless of whether the Executive's employment is terminated, including all awards subject to performance conditions. Stock options are valued based on the positive difference, if any, between the closing price of the Company's common stock on January 31, 2012 and the exercise price for such options.
|
(3)
|
Assumes the Executive earns the maximum Company match with respect to his health savings account for each year during the three-year period.
|
(4)
|
Assumes the Executive's marginal tax rates are 35% federal, 6% state and 1.45% FICA.
|
Amount and | |||||||||
Nature of
|
Percentage of | ||||||||
Beneficial
|
Shares | ||||||||
Name
|
Ownership (1)
|
Outstanding (1) | |||||||
Tradewinds Global Investors, LLC (2)
|
3,214,532 | 16.2 | % | ||||||
Dimensional Fund Advisors LP (3)
|
1,442,129 | 7.3 | % | ||||||
Invesco Ltd. (4)
|
1,164,534 | 5.9 | % | ||||||
BlackRock, Inc. (5)
|
1,111,493 | 5.6 | % | ||||||
Jeffrey J. Reynolds
|
567,840 | (6) | 2.8 | % | |||||
Andrew B. Schmitt
|
406,042 | (6) | 2.0 | % | |||||
Rene J. Robichaud
|
201,836 | (6) | 1.0 | % | |||||
Jerry W. Fanska
|
143,592 | (6) | * | ||||||
Steven F. Crooke
|
100,226 | (6) | * | ||||||
Nelson Obus
|
20,854 | (7) | * | ||||||
David A.B. Brown
|
24,297 | (8) | * | ||||||
J. Samuel Butler
|
18,424 | (8) | * | ||||||
Anthony B. Helfet
|
14,537 | (8) | * | ||||||
Robert R. Gilmore
|
12,409 | (8) | * | ||||||
All directors and executive officers as a group (17 persons)
|
1,607,205 | (9) | 7.8 | % |
(1)
|
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power and/or investment power with respect to those securities and includes shares of common stock issuable pursuant to the exercise of stock options exercisable within 60 days of March 31, 2012. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Percentage ownership calculations are based on 19,845,876 shares of common stock outstanding plus 661,086 options exercisable within 60 days of March 31, 2012, where said options are considered deemed shares attributed to a given beneficial owner.
|
(2)
|
The ownership reported is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2012, by Tradewinds Global Investors, LLC ("Tradewinds") with a principal business address of 2049 Century Park East, 20th Floor, Los Angeles, California 90067. The securities reported in the Schedule 13G/A filed by Tradewinds are beneficially owned by clients of Tradewinds, which may include investment companies registered under the Investment Company Act and/or employee benefit plans, pension funds, endowment funds or other institutional clients.
|
(3)
|
The ownership reported is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2012 by Dimensional Fund Advisors LP, with a principal business address of Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas, 78746. Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate account (such investment companies, trusts and accounts, collectively referred to as the "Funds"). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. However, all securities reported in the Schedule 13G/A are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. To the knowledge of Dimensional, the interest of any one such Fund does not exceed 5% of the class of securities.
|
(4)
|
The ownership reported is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 8, 2012, by Invesco Ltd. on behalf of itself and its subsidiaries, Invesco PowerShares Capital Management LLC and Invesco National Trust Company. Invesco PowerShares Capital Management is a subsidiary of Invesco Ltd. and it advises the Invesco PowerShares Water Resources Portfolio Fund which owns 5.5% of the Company's common stock. However, no one individual has greater than 5% economic ownership. The shareholders of the fund have the right to receive or the power to direct the receipt of dividends and proceeds from the sale of the Company's common stock. The principal business address of these entities is 1555 Peachtree Street NE, Atlanta, Georgia 30309.
|
(5)
|
The ownership reported is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 13, 2012, by BlackRock, Inc., with a principal business address of 40 East 52nd Street, New York, New York 10022.
|
(6)
|
Includes options for the purchase of 248,092 shares, 3,000 shares, 116,649 shares, 105,035 shares and 78,201 shares of the Company's common stock exercisable within 60 days of March 31, 2012, granted to Messrs. Schmitt, Robichaud, Fanska, Reynolds and Crooke, respectively. Also includes 2,055 shares of restricted stock granted to Mr. Schmitt on February 1, 2012, as a non-employee director of the Company that will vest on February 1, 2013. Also includes 13,458, 6,729, 6,270 and 4,970 shares of restricted stock of the Company held by Messrs. Schmitt, Fanska, Reynolds and Crooke, respectively, which vest, if at all, at the end of a three-year period ending February 19, 2013, in various percentages based on the level of certain performance targets achieved by the Company during that period. Also includes 13,293, 10,235, 6,827, 6,631 and 5,377 shares of restricted stock of the Company held by Messrs. Schmitt, Robichaud, Fanska, Reynolds and Crooke, respectively, all of which vest, if at all, at the end of a three-year period ending February 1, 2014, in various percentages based on the level of certain performance targets achieved by the Company during that period. Also includes 24,671, 9,529, 9,529 and 7,820 shares of restricted stock of the Company held by Messrs. Robichaud, Fanska, Reynolds and Crooke, respectively, all of which vest, if at all, at the end of a three-year period ending February 1, 2015, in various percentages based on the level of certain performance targets achieved by the Company during that period. Also includes 112,500 shares of restricted stock of the Company held by Mr. Robichaud that vest, if at all, based on the Company attaining certain performance criteria. Such shares were issued to Mr. Robichaud upon his employment as the President and Chief Executive Officer of the Company and the performance criteria for the vesting of such shares is fully explained in the Compensation Discussion and Analysis section of this Proxy Statement.
|
(7)
|
Mr. Obus is president of Wynnefield Capital, Inc. and a managing member of Wynnefield Capital Management, LLC. Both companies have indirect beneficial ownership in securities held in the name of Wynnefield Partners Small Cap Value, L.P., Wynnefield Partners Small Cap Value, L.P. I, Wynnefield Small Cap Value Offshore Fund, Ltd., Channel Partnership II, L.P. and the Wynnefield Capital, Inc. Profit Sharing & Money Purchase Plan, which, combined, own 690 of the indicated shares. Also includes options for the purchase of 13,252 shares of the Company's common stock exercisable within 60 days of March 31, 2012. Also includes 411 shares of restricted stock that will vest on February 1, 2013.
|
(8)
|
Includes options for the purchase of 19,084 shares, 13,030 shares, 9,811 shares and 7,736 shares of the Company's common stock exercisable within 60 days of March 31, 2012, granted to Messrs. Brown, Butler, Helfet and Gilmore, respectively. Also includes 2,055, 1,644 and 2,055 shares of restricted stock that will vest on February 1, 2013, granted to Messrs. Butler, Helfet and Gilmore, respectively.
|
(9)
|
Includes options for the purchase of 661,086 shares of the Company's common stock exercisable within 60 days of March 31, 2012, granted to all directors and executive officers of the Company as a group. Also includes 281,881 shares of restricted stock that have not yet vested that have been granted to all directors and executive officers of the Company as a group.
|
●
|
approval of an increase in the aggregate number of shares authorized for issuance by 284,500 shares, from 2,000,000 to 2,284,500 (of which 782,194 shares would be available for future awards and provided further that this number shall be further reduced by any awards made after the amendment date and prior to the Annual Meeting), enabling continued use of the Plan for share-based awards;
|
●
|
approval of amended Plan provisions governing how unused and forfeited shares and shares issued in connection with replacement equity awards granted pursuant to certain corporate transactions are counted against the Plan's maximum share limit; and
|
●
|
approval of the material terms of an expanded list of performance goals and maximum amounts payable for performance-based awards under the Plan, to provide us with the flexibility to grant awards that qualify as "performance-based" compensation pursuant to Code Section 162(m). As discussed below, by approving the Plan, as proposed to be amended, stockholders also will be approving the material terms of the performance goals for performance-based awards under the Plan.
|
Stock options outstanding
|
1,387,727
|
|
Restricted stock awards outstanding
|
321,400
|
|
Shares remaining available for grant under Plan
|
497,694
|
|
Weighted average exercise price of outstanding options
|
$25.65
|
|
Weighted average remaining term of outstanding options (in years)
|
6.40
|
●
|
if an award that is settled in cash or in another manner where some or all of the shares covered by the award are not issued, only those shares that are ultimately issued would reduce the maximum share limit under the Plan and those shares that are not issued would again be available for issuance under the Plan; and
|
●
|
if shares are issued pursuant to an award that was substituted in replacement of stock or stock-based awards held by current and former employees or non-employee directors of another business that is, or whose stock is, acquired by us or an affiliate in connection with a corporate transaction, those shares would not count against the limit of shares available for issuance under the Plan.
|
●
|
Earnings measures (either in the aggregate or on a per-Share basis), including or excluding one or more of interest, taxes, depreciation, amortization or similar financial accounting measurements and/or adjusted to exclude any one or more of the following:
|
o
|
stock-based compensation expense;
|
o
|
income from discontinued operations;
|
o
|
gain on cancellation of debt;
|
o
|
debt extinguishment and related costs;
|
o
|
restructuring, separation and/or integration charges and costs;
|
o
|
reorganization and/or recapitalization charges and costs;
|
o
|
impairment charges;
|
o
|
gain or loss related to investments or the sale of assets;
|
o
|
sales and use tax settlement; and
|
o
|
gain on non-monetary transaction.
|
●
|
Operating profit, operating income or operating margin (either in the aggregate or on a per-Share basis);
|
●
|
Net earnings on either a LIFO or FIFO basis (either in the aggregate or on a per-Share basis);
|
●
|
Net income or loss (either in the aggregate or on a per-Share basis);
|
●
|
Cash flow provided by operations (either in the aggregate or on a per-Share basis);
|
●
|
Cash flow returns, including cash flow returns on invested capital (cash flow from operating activities minus capital expenditures, the difference of which is divided by the difference between total assets and non-interest bearing current liabilities);
|
●
|
Ratio of debt to debt plus equity;
|
●
|
Net borrowing;
|
●
|
Credit quality or debt ratings;
|
●
|
Inventory levels, inventory turn or shrinkage;
|
●
|
Sales;
|
●
|
Revenues;
|
●
|
Free cash flow (either in the aggregate or on a per-Share basis);
|
●
|
Reductions in expense levels, determined either on a Company-wide basis or with respect to any one or more business units;
|
●
|
Operating and maintenance cost management and employee productivity;
|
●
|
Gross margin;
|
●
|
Return measures (including return on assets, investment, equity, or sales);
|
●
|
Productivity increases;
|
●
|
Share price (including attainment of a specified per-Share price during the Incentive Period; growth measures and total stockholder return or attainment by the Shares of a specified price for a specified period of time);
|
●
|
Growth or rate of growth of any of the above Business Criteria;
|
●
|
Specified revenue, market share, market penetration, business development, geographic business expansion goals, objectively identified project milestones, production volume levels, cost targets, customer satisfaction, and goals relating to acquisitions or divestitures; and
|
●
|
Accomplishment of mergers, acquisitions, dispositions, public offerings, or similar extraordinary business transactions.
|
(a)
|
Audit Fees: Aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements and assessment of internal controls over financial reporting, and review of financial statements included in the Company's Form 10-Q reports, as well as statutory audits for international entities and procedures for registration statements.
|
Fiscal 2011 | Fiscal 2012 | |
$ 1,730,720 | $ 1,905,468 |
(b)
|
Audit-Related Fees: Audit-related fees include benefit plan audits and consultation on various matters.
|
Fiscal 2011 | Fiscal 2012 | |
$ 155,250 | $ 57,970 |
(c)
|
Tax Fees: Tax fees include income tax consultation.
|
Fiscal 2011 | Fiscal 2012 | |
$ 201,100 | $ 108,436 |
(d)
|
All Other Fees: All other fees relate to licensing of access to an on-line accounting research facility and miscellaneous fees for services. The Company did not incur any fees relating to the design and implementation of financial information systems in either fiscal 2011 or fiscal 2012.
|
Fiscal 2011 | Fiscal 2012 | |
$ 18,200 | $ 2,200 |
By Order of the Board of Directors.
|
|
Steven F. Crooke
|
|
Senior Vice President—General Counsel and Secretary
|
SECTION 1 INTRODUCTION | 1 | ||
1.1
|
Establishment and Amendment History
|
1
|
|
1.2
|
Purpose
|
1
|
|
1.3
|
Duration
|
1
|
|
SECTION 2 DEFINITIONS | 1 | ||
2.1
|
Definitions
|
1
|
|
2.2
|
General Interpretive Principles
|
8
|
|
SECTION 3 PLAN ADMINISTRATION | 8 | ||
3.1
|
Composition of Committee
|
8
|
|
3.2
|
Authority of Committee
|
8
|
|
3.3
|
Committee Delegation
|
9
|
|
3.4
|
Determination Under the Plan
|
9
|
|
SECTION 4 STOCK SUBJECT TO THE PLAN | 9 | ||
4.1
|
Number of Shares
|
9
|
|
4.2
|
Unused and Forfeited Stock
|
10
|
|
4.3
|
Adjustments in Authorized Shares
|
10
|
|
4.4
|
General Adjustment Rules
|
10
|
|
SECTION 5 PARTICIPATION | 11 | ||
5.1
|
Basis of Grant
|
11
|
|
5.2
|
Types of Grants; Limits
|
11
|
|
5.3
|
Award Agreements
|
11
|
|
5.4
|
Restrictive Covenants
|
11
|
|
5.5
|
Maximum Annual Award
|
11
|
|
SECTION 6 STOCK OPTIONS | 12 | ||
6.1
|
Grant of Options
|
12
|
|
6.2
|
Option Agreements
|
12
|
|
6.3
|
Stockholder Privileges
|
16
|
|
SECTION 7 STOCK APPRECIATION RIGHTS | 16 | ||
7.1
|
Grant of SARs
|
16
|
|
7.2
|
SAR Award Agreement
|
17
|
7.3
|
Exercise of Tandem SARs
|
17
|
|
7.4
|
Exercise of Freestanding SARs
|
17
|
|
7.5
|
Expiration of SARs
|
17
|
|
7.6
|
Adjustment of SARs
|
18
|
|
7.7
|
Payment of SAR Amount; Automatic Exercise
|
18
|
|
7.8
|
Stockholder Privileges
|
18
|
|
SECTION 8 AWARDS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS | 19 | ||
8.1
|
Restricted Stock Awards Granted by Committee
|
19
|
|
8.2
|
Restricted Stock Unit Awards Granted by Committee
|
19
|
|
8.3
|
Restrictions
|
19
|
|
8.4
|
Privileges of a Stockholder, Transferability
|
19
|
|
8.5
|
Enforcement of Restrictions
|
20
|
|
8.6
|
Termination of Service, Death, Disability, etc
|
20
|
|
SECTION 9 PERFORMANCE AWARDS; SECTION 162(M) PROVISIONS | 20 | ||
9.1
|
Awards Granted by Committee
|
20
|
|
9.2
|
Communication of Award
|
20
|
|
9.3
|
Terms of Performance Awards
|
20
|
|
9.4
|
Performance Goals
|
21
|
|
9.5
|
Determinations and Adjustments
|
23
|
|
9.6
|
Payment of Awards
|
23
|
|
9.7
|
Termination of Employment
|
23
|
|
9.8
|
Other Restrictions
|
24
|
|
SECTION 10 REORGANIZATION, CHANGE IN CONTROL OR LIQUIDATION | 24 | ||
SECTION 11 RIGHTS OF EMPLOYEES; PARTICIPANTS | 25 | ||
11.1
|
Employment
|
25
|
|
11.2
|
Nontransferability
|
25
|
|
11.3
|
Permitted Transfers
|
25
|
|
SECTION 12 GENERAL RESTRICTIONS | 26 | ||
12.1
|
Investment Representations
|
26
|
|
12.2
|
Compliance with Securities Laws
|
26
|
|
12.3
|
Stock Restriction Agreement
|
26
|
|
SECTION 13 OTHER EMPLOYEE BENEFITS | 26 | ||
SECTION 14 PLAN AMENDMENT, MODIFICATION AND TERMINATION | 27 | ||
14.1
|
Amendment, Modification, and Termination
|
27
|
14.2
|
Adjustment Upon Certain Unusual or Nonrecurring Events
|
27
|
|
14.3
|
Awards Previously Granted
|
27
|
|
SECTION 15 WITHHOLDING | 27 | ||
15.1
|
Withholding Requirement
|
27
|
|
15.2
|
Withholding with Stock
|
27
|
|
SECTION 16 NONEXCLUSIVITY OF THE PLAN | 28 | ||
SECTION 17 REQUIREMENTS OF LAW | 28 | ||
17.1
|
Requirements of Law
|
28
|
|
17.2
|
Code Section 409A
|
28
|
|
17.3
|
Rule 16b-3
|
28
|
|
17.4
|
Governing Law
|
29
|
1.1
|
Establishment and Amendment History. Layne Christensen Company, a corporation organized and existing under the laws of the state of Delaware (the “Company”), established effective June 8, 2006, the Layne Christensen Company 2006 Equity Incentive Plan (the “Plan”) for certain employees and non-employee directors of the Company. The Plan was last amended and restated effective June 3, 2009. Provided the Company receives stockholder approval of this amendment and restatement, the Plan has been amended and restated as set forth herein.
|
1.2
|
Purpose. The purpose of this Plan is to encourage employees of the Company and its affiliates and subsidiaries to acquire a proprietary and vested interest in the growth and performance of the Company. The Plan also is designed to assist the Company in attracting and retaining employees and non-employee directors by providing them with the opportunity to participate in the success and profitability of the Company.
|
1.3
|
Duration. The Plan commenced on the Original Effective Date and shall remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Section 14 hereof, until all Shares subject to it shall have been issued, purchased or acquired according to the Plan’s provisions. Unless the Plan shall be reapproved by the stockholders of the Company and the Board renews the continuation of the Plan, no Awards shall be issued pursuant to the Plan after the tenth (10th) anniversary of the Plan’s New Effective Date.
|
2.1
|
Definitions. The following terms shall have the meanings set forth below.
|
(i)
|
Participant’s conviction of, plea of guilty to, or plea of nolo contendere to a felony or other crime that involves fraud or dishonesty;
|
(ii)
|
any willful action or omission by a Participant which would constitute grounds for immediate dismissal under the employment policies of the Company by which Participant is employed, including intoxication with alcohol or illegal drugs while on the premises of the Company, or violation of sexual harassment laws or the internal sexual harassment policy of the Company by which Participant is employed;
|
(iii)
|
Participant’s habitual neglect of duties, including repeated absences from work without reasonable excuse; or
|
(iv)
|
Participant’s willful and intentional material misconduct in the performance of his or her duties that results in financial detriment to the Company;
|
(i)
|
Any Person is or becomes the Beneficial Owner (within the meaning set forth in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company (not including for this purpose any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x) of paragraph (iii) of this definition; or
|
(ii)
|
The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Original Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors on the Original Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or
|
(iii)
|
There is consummated a merger or consolidation of the Company with any other corporation, OTHER THAN (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including for this purpose any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its Affiliates of a business) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or
|
(iv)
|
The stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.
|
2.2
|
General Interpretive Principles. (i) Words in the singular shall include the plural and vice versa, and words of one gender shall include the other gender, in each case, as the context requires; (ii) the terms "hereof," "herein," and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Plan and not to any particular provision of this Plan, and references to Sections are references to the Sections of this Plan unless otherwise specified; (iii) the word "including" and words of similar import when used in this Plan shall mean "including, without limitation," unless otherwise specified; and (iv) any reference to any U.S. federal, state, or local act, statute or law shall be deemed to also refer to all amendments or successor provisions thereto, as well as all rules and regulations promulgated under such act, statute or law, unless the context otherwise requires.
|
3.1
|
Composition of Committee. The Plan shall be administered by the Committee. To the extent the Board considers it desirable for transactions relating to Awards to be eligible to qualify for an exemption under Rule 16b-3, the Committee shall consist of two or more directors of the Company, all of whom qualify as “non-employee directors” within the meaning of Rule 16b-3. To the extent the Board considers it desirable for compensation delivered pursuant to Awards to be eligible to qualify for an exemption from the limit on tax deductibility of compensation under Section 162(m) of the Code, the Committee shall consist of two or more directors of the Company, all of whom shall qualify as “outside directors” within the meaning of Code section 162(m).
|
3.2
|
Authority of Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to:
|
(a)
|
select the Service Providers to whom Awards may from time to time be granted hereunder;
|
(b)
|
determine the type or types of Awards to be granted to eligible Service Providers;
|
(c)
|
determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards;
|
(d)
|
determine the terms and conditions of any Award;
|
(e)
|
determine whether, and to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property;
|
(f)
|
determine whether, and to what extent, and under what circumstance Awards may be canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
|
(g)
|
correct any defect, supply an omission, reconcile any inconsistency and otherwise interpret and administer the Plan and any instrument or Award Agreement relating to the Plan or any Award hereunder;
|
(h)
|
modify and amend the Plan, establish, amend, suspend, or waive such rules, regulations and procedures of the Plan, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
|
(i)
|
make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
|
3.3
|
Committee Delegation. The Committee may delegate to any member of the Board or committee of Board members such of its powers as it deems appropriate, including the power to sub-delegate, except that only a member of the Board (or a committee thereof) may grant Awards from time to time to specified categories of Service Providers in amounts and on terms to be specified by the Board; provided that no such grants shall be made other than by the Board or the Committee to individuals who are then Section 16 Persons or other than by the Committee to individuals who are then or are deemed likely to become a “covered employee” within the meaning of Code Section 162(m). A majority of the members of the Committee may determine its actions and fix the time and place of its meetings.
|
3.4
|
Determination Under the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, adjustments, interpretations, and other decisions under or with respect to the Plan, any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all persons, including the Company, any Participant, any Holder, and any stockholder. No member of the Committee shall be liable for any action, determination or interpretation made in good faith, and all members of the Committee shall, in addition to their rights as directors, be fully protected by the Company with respect to any such action, determination or interpretation.
|
4.1
|
Number of Shares. Subject to adjustment as provided in Section 4.3 and subject to the maximum number of Shares that may be granted to an individual in a calendar year as set forth in Section 5.5, the aggregate number of Shares authorized for issuance under the Plan in accordance with the provisions of the Plan shall be TWO MILLION TWO HUNDRED EIGHTY FOUR THOUSAND FIVE HUNDRED (2,284,500), subject to such restrictions or other provisions as the Committee may from time to time deem necessary (the "Maximum Share Limit"). Any Shares required to satisfy Substitute Awards shall not count against the Maximum Share Limit. Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. The Shares may be divided among the various Plan components as the Committee shall determine; provided, however, the maximum number of Shares that may be issued pursuant to Incentive Stock Options shall be the sum of the Maximum Share Limit and any Incentive Stock Options issued as Substitute Awards. Shares that are subject to an underlying Award and Shares that are issued pursuant to the exercise of an Award shall be applied to reduce the maximum number of Shares remaining available for use under the Plan. The Company shall at all times during the term of the Plan and while any Awards are outstanding retain as authorized and unissued Stock, or as treasury Stock, at least the number of Shares from time to time required under the provisions of the Plan, or otherwise assure itself of its ability to perform its obligations hereunder.
|
4.2
|
Unused and Forfeited Stock. Any Shares that are subject to an Award under this Plan that are not used because the terms and conditions of the Award are not met, including any Shares that are subject to an Award that expires or is terminated for any reason, shall again be available for grant under the Plan. If a SAR is settled in Shares, only the number of Shares delivered in settlement of a SAR shall cease to be available for grant under the Plan, regardless of the number of Shares with respect to which the SAR was exercised. If any Shares subject to an Award granted hereunder are withheld or applied as payment in connection with the exercise of an Award (including the withholding of Shares on the exercise of an Option that is settled in Shares) or the withholding or payment of taxes related thereto, such Shares shall again be available for grant under the Plan. Notwithstanding the foregoing, any Shares used for full or partial payment of the purchase price of the Shares with respect to which an Option is exercised and any Shares retained by the Company pursuant to Section 15.2 that were originally Incentive Stock Option Shares must still be considered as having been granted for purposes of determining whether the Share limitation provided for in Section 4.1 has been reached for purposes of Incentive Stock Option grants.
|
4.3
|
Adjustments in Authorized Shares. If, without the receipt of consideration therefore by the Company, the Company shall at any time increase or decrease the number of its outstanding Shares or change in any way the rights and privileges of such Shares such as, but not limited to, the payment of a stock dividend or any other distribution upon such Shares payable in Stock, or through a stock split, spin-off, extraordinary cash dividend, subdivision, consolidation, combination, reclassification or recapitalization involving the Stock, or any similar corporate event or transaction, such that any adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan then in relation to the Stock that is affected by one or more of the above events, (i) the numbers, rights, privileges and kinds of Shares that may be issued under this Plan or under particular forms of Awards, (ii) the number and kind of Shares subject to outstanding Awards, (iii) the Option Exercise Price or SAR exercise price applicable to outstanding Awards, and (iv) the annual individual limitation set forth in Section 5.5, shall be increased, decreased or changed in like manner as if they had been issued and outstanding, fully paid and non assessable at the time of such occurrence.
|
4.4
|
General Adjustment Rules.
|
(a)
|
If any adjustment or substitution provided for in this Section 4 shall result in the creation of a fractional Share under any Award, such fractional Share shall be rounded to the nearest whole Share and fractional Shares shall not be issued.
|
(b)
|
In the case of any such substitution or adjustment affecting an Option or a SAR (including a Nonqualified Stock Option) such substitution or adjustments shall be made in a manner that is in accordance with the substitution and assumption rules set forth in Treasury Regulations 1.424-1 and the applicable guidance relating to Code section 409A.
|
5.1
|
Basis of Grant. Participants in the Plan shall be those Service Providers, who, in the judgment of the Committee, are performing, or during the term of their incentive arrangement will perform, important services in the management, operation and development of the Company, and significantly contribute, or are expected to significantly contribute, to the achievement of long-term corporate economic objectives.
|
5.2
|
Types of Grants; Limits. Participants may be granted from time to time one or more Awards; provided, however, that the grant of each such Award shall be separately approved by the Committee or its designee, and receipt of one such Award shall not result in the automatic receipt of any other Award. Written or electronic notice shall be given to such Person, specifying the terms, conditions, right and duties related to such Award. Under no circumstance shall Incentive Stock Options be granted to (i) non-employee directors or (ii) any person not permitted to receive Incentive Stock Options under the Code.
|
5.3
|
Award Agreements. Each Participant shall enter into an Award Agreement(s) with the Company, in such form as the Committee shall determine and which is consistent with the provisions of the Plan, specifying such terms, conditions, rights and duties. Unless otherwise explicitly stated in the Award Agreement, Awards shall be deemed to be granted as of the date specified in the grant resolution of the Committee, which date shall be the date of any related agreement(s) with the Participant. Unless explicitly provided for in a particular Award Agreement that the terms of the Plan are being superseded, in the event of any inconsistency between the provisions of the Plan and any such Award Agreement(s) entered into hereunder, the provisions of the Plan shall govern.
|
5.4
|
Restrictive Covenants. The Committee may, in its sole and absolute discretion, place certain restrictive covenants in an Award Agreement requiring the Participant to agree to refrain from certain actions. Such Restrictive Covenants, if contained in the Award Agreement, will be binding on the Participant.
|
5.5
|
Maximum Annual Award. Subject to any adjustments required to be made pursuant to Section 4.3, the maximum number of Shares with respect to which an Award or Awards (including Options and SARs) may be granted to any Participant in any one taxable year of the Company (the “Maximum Annual Participant Award”) shall not exceed 600,000 Shares (increased, proportionately, in the event of any stock split or stock dividend with respect to the Shares). If an Option is in tandem with a SAR, such that the exercise of the Option or SAR with respect to a Share cancels the tandem SAR or Option right, respectively, with respect to each Share, the tandem Option and SAR rights with respect to each Share shall be counted as covering but one Share for purposes of the Maximum Annual Participant Award.
|
6.1
|
Grant of Options. A Participant may be granted one or more Options. The Committee in its sole discretion shall designate whether an Option is an Incentive Stock Option or a Nonqualified Stock Option. The Committee may grant both an Incentive Stock Option and a Nonqualified Stock Option to the same Participant at the same time or at different times. Incentive Stock Options and Nonqualified Stock Options, whether granted at the same or different times, shall be deemed to have been awarded in separate grants, shall be clearly identified, and in no event shall the exercise of one Option affect the right to exercise any other Option or affect the number of Shares for which any other Option may be exercised.
|
6.2
|
Option Agreements. Each Option granted under the Plan shall be evidenced by an Option Award Agreement which shall be entered into by the Company and the Participant to whom the Option is granted (the “Option Holder”), and which shall contain the following terms and conditions, as well as such other terms and conditions not inconsistent therewith, as the Committee may consider appropriate in each case.
|
(a)
|
Number of Shares. Each Option Award Agreement shall state that it covers a specified number of Shares, as determined by the Committee. To the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Option Holder during any calendar year exceeds $100,000 or, if different, the maximum limitation in effect at the time of grant under Section 422(d) of the Code, or any successor provision, such Options in excess of such limit shall be treated as Nonqualified Stock Options. The foregoing shall be applied by taking Options into account in the order in which they were granted. For the purposes of the foregoing, the Fair Market Value of any Share shall be determined as of the time the Option with respect to such Share is granted. In the event the foregoing results in a portion of an Option designated as an Incentive Stock Option exceeding the $100,000 limitation, only such excess shall be treated as a Nonqualified Stock Option.
|
(b)
|
Price. Each Option Award Agreement shall state the Option Exercise Price at which each Share covered by an Option may be purchased. Such Option Exercise Price shall be determined in each case by the Committee, but in no event other than with respect to a Substitute Award shall the Option Exercise Price for each Share covered by an Option be less than the Fair Market Value of the Stock on the Option’s Grant Date, as determined by the Committee; provided, however, that the Option Exercise Price for each Share covered by an Incentive Stock Option granted to an Eligible Employee who then owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or Subsidiary corporation of the Company must be at least 110% of the Fair Market Value of the Stock subject to the Incentive Stock Option on the Option’s Grant Date.
|
(c)
|
Duration of Options; Automatic Exercise.
|
(i)
|
Each Option Award Agreement shall state the period of time, determined by the Committee, within which the Option may be exercised by the Option Holder (the “Option Period”). The Option Period must expire, in all cases, not more than ten years from the Option’s Grant Date; provided, however, that the Option Period of an Incentive Stock Option granted to an Eligible Employee who then owns Stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company must expire not more than five years from the Option’s Grant Date. Each Option Award Agreement shall also state the periods of time, if any, as determined by the Committee, when incremental portions of each Option shall become exercisable. If any Option or portion thereof is not exercised during its Option Period, such unexercised portion shall be deemed to have been forfeited and have no further force or effect.
|
(ii)
|
With respect to any Nonqualified Stock Option granted after the Original Effective Date or any Incentive Stock Option granted after the New Effective Date and to the extent that such Option has not otherwise been exercised, cancelled, terminated or forfeited, if on the last day of the Option Period, the Fair Market Value exceeds the Option Exercise Price, such Option shall be deemed to have been exercised by the Participant on such last day of the Option Period through either a "cashless exercise" or "net exercise" procedure and the Company shall issue the appropriate number of Shares therefor.
|
(d)
|
Termination of Service, Death, Disability, etc. Each Option Agreement shall state the period of time, if any, determined by the Committee, within which the Vested Option may be exercised after an Option Holder ceases to be a Service Provider on account of the Participant’s death, Disability, voluntary resignation, removal from the Board or the Company having terminated such Option Holder’s employment with or without Cause. If, within the period of time specified in the Option Award Agreement following the Option Holder's termination of employment, an Option Holder is prohibited by law or a Company's insider trading policy from exercising any Nonqualified Stock Option, the period of time during which such Option may be exercised will automatically be extended until the 30th day following the date the prohibition is lifted. Notwithstanding the immediately preceding sentence, in no event shall the Option exercise period be extended beyond the tenth anniversary of the Option's Grant Date.
|
(e)
|
Transferability. Except to the extent permitted by the Committee pursuant to Section 11.3, Options shall not be transferable by the Option Holder except by will or pursuant to the laws of descent and distribution. Each Vested Option shall be exercisable during the Option Holder’s lifetime only by him or her, or in the event of Disability or incapacity, by his or her guardian or legal representative. Shares issuable pursuant to any Option shall be delivered only to or for the account of the Option Holder, or in the event of Disability or incapacity, to his or her guardian or legal representative.
|
(f)
|
Exercise, Payments, etc.
|
(i)
|
Unless otherwise provided in the Option Award Agreement, each Vested Option may be exercised by delivery to the Corporate Secretary of the Company a written or electronic notice specifying the number of Shares with respect to which such Option is exercised and payment of the Option Exercise Price. Such notice shall be in a form satisfactory to the Committee or its designee and shall specify the particular Vested Option that is being exercised and the number of Shares with respect to which the Vested Option is being exercised. The exercise of the Vested Option shall be deemed effective upon receipt of such notice by the Corporate Secretary and payment to the Company. The purchase of such Stock shall take place at the principal offices of the Company upon delivery of such notice, at which time the purchase price of the Stock shall be paid in full by any of the methods or any combination of the methods set forth in (ii) below.
|
(ii)
|
The Option Exercise Price shall be paid by any of the following methods:
|
A.
|
Cash or certified bank check;
|
B.
|
By delivery to the Company of certificates representing the number of Shares then owned by the Holder, the Fair Market Value of which equals the purchase price of the Stock purchased pursuant to the Vested Option, properly endorsed for transfer to the Company; provided, however, that Shares used for this purpose must have been held by the Holder for such minimum period of time as may be established from time to time by the Committee; and provided further that the Fair Market Value of any Shares delivered in payment of the purchase price upon exercise of the Options shall be the Fair Market Value as of the exercise date, which shall be the date of delivery of the certificates for the Stock used as payment of the Option Exercise Price.
|
C.
|
For any Holder other than an Executive Officer or except as otherwise prohibited by the Committee, by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board.
|
D.
|
For any Nonqualified Stock Option, by a "net exercise" arrangement pursuant to which the Company will not require a payment of the Option Exercise Price but will reduce the number of Shares of Stock upon the exercise by the largest number of whole shares that has a Fair Market Value on the date of exercise that does not exceed the aggregate Option Exercise Price.
|
E.
|
Any combination of the consideration provided in the foregoing subsections (A), (B), (C) and (D).
|
(iii)
|
The Company shall not guarantee a third-party loan obtained by a Holder to pay part or the entire Option Exercise Price of the Shares.
|
(g)
|
Date of Grant. Unless otherwise specifically specified in the Option Award Agreement, an option shall be considered as having been granted on the date specified in the grant resolution of the Committee.
|
(h)
|
Withholding.
|
(A)
|
Nonqualified Stock Options. Each Option Award Agreement covering Nonqualified Stock Options shall provide that, upon exercise of the Option, the Option Holder shall make appropriate arrangements with the Company to provide for the minimum amount of additional withholding required by applicable federal and state income tax and payroll laws, including payment of such taxes through delivery of Stock or by withholding Stock to be issued under the Option, as provided in Section 15.
|
(B)
|
Incentive Stock Options. In the event that an Option Holder makes a disposition (as defined in Section 424(c) of the Code) of any Stock acquired pursuant to the exercise of an Incentive Stock Option prior to the later of (i) the expiration of two years from the date on which the Incentive Stock Option was granted or (ii) the expiration of one year from the date on which the Option was exercised, the Participant shall send written or electronic notice to the Company at its principal office (Attention: Corporate Secretary) of the date of such disposition, the number of shares disposed of, the amount of proceeds received from such disposition, and any other information relating to such disposition as the Company may reasonably request. The Option Holder shall, in the event of such a disposition, make appropriate arrangements with the Company to provide for the amount of additional withholding, if any, required by applicable Federal and state income tax laws.
|
(i)
|
Adjustment of Options. Subject to the limitations set forth below and those contained in Sections 6 and 14, the Committee may make any adjustment in the Option Exercise Price, the number of Shares subject to, or the terms of, an outstanding Option and a subsequent granting of an Option by amendment or by substitution of an outstanding Option. Such amendment, substitution, or re-grant may result in terms and conditions (including Option Exercise Price, number of Shares covered, vesting schedule or exercise period) that differ from the terms and conditions of the original Option; provided, however, except as permitted under Section 10, the Committee may not, without stockholder approval (i) amend an Option to reduce its Option Exercise Price, (ii) cancel an Option and regrant an Option with a lower Option Exercise Price than the original Option Exercise Price of the cancelled Option, (iii) cancel an Option in exchange for cash or another Award or (iv) take any other action (whether in the form of an amendment, cancellation or replacement grant) that has the effect of "repricing" an Option, as defined under applicable NASDAQ rules or the rules of the established stock exchange or quotation system on which the Company Stock is then listed or traded. The Committee also may not adversely affect the rights of any Option Holder to previously granted Options without the consent of such Option Holder. If such action is affected by the amendment, the effective date of such amendment shall be the date of the original grant. Any adjustment, modification, extension or renewal of an Option shall be effected such that the Option is either exempt from, or is compliant with, Code section 409A.
|
6.3
|
Stockholder Privileges. No Holder shall have any rights as a stockholder with respect to any Shares covered by an Option until the Holder becomes the holder of record of such Stock, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date preceding the date such Holder becomes the holder of record of such Stock, except as provided in Section 4.
|
7.1
|
Grant of SARs. Subject to the terms and conditions of this Plan, a SAR may be granted to a Participant at any time and from time to time as shall be determined by the Committee in its sole discretion. The Committee may grant Freestanding SARs or Tandem SARs, or any combination thereof.
|
(a)
|
Number of Shares. The Committee shall have complete discretion to determine the number of SARs granted to any Participant, subject to the limitations imposed in this Plan and by applicable law.
|
(b)
|
Exercise Price and Other Terms. Except with respect to a Substitute Award, all SARs shall be granted with an exercise price no less than the Fair Market Value of the underlying Shares on the SARs’ Date of Grant. The Committee, subject to the provisions of this Plan, shall have complete discretion to determine the terms and conditions of SARs granted under this Plan. The exercise price per Share of Tandem SARs shall equal the exercise price per Share of the related Option.
|
(c)
|
Duration of SARs. Each SAR Award Agreement shall state the period of time, determined by the Committee, within which the SARs may be exercised by the Holder (the “SAR Period”). The SAR Period must expire, in all cases, not more than ten years from the SAR Grant Date.
|
7.2
|
SAR Award Agreement. Each SAR granted under the Plan shall be evidenced by a SAR Award Agreement which shall be entered into by the Company and the Participant to whom the SAR is granted (the “SAR Holder”), and which shall specify the exercise price per share, the terms of the SAR, the conditions of exercise, and such other terms and conditions as the Committee in its sole discretion shall determine.
|
7.3
|
Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. With respect to a Tandem SAR granted in connection with an Incentive Stock Option: (a) the Tandem SAR shall expire no later than the expiration of the underlying Incentive Stock Option; (b) the value of the payout with respect to the Tandem SAR shall be for no more than one hundred percent (100%) of the difference between the Exercise Price per Share of the underlying Incentive Stock Option and the Fair Market Value per Share of the Shares subject to the underlying Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the Tandem SAR shall be exercisable only when the Fair Market Value per Share of the Shares subject to the Incentive Stock Option exceeds the per share Option Price per Share of the Incentive Stock Option.
|
7.4
|
Exercise of Freestanding SARs. Freestanding SARs shall be exercisable on such terms and conditions as the Committee in its sole discretion shall determine.
|
7.5
|
Expiration of SARs. A SAR granted under this Plan shall expire on the earlier of (i) the tenth anniversary of the SARs Date of Grant or (ii) the date set forth in the SAR Award Agreement, which date shall be determined by the Committee in its sole discretion. Unless otherwise specifically provided for in the SAR Award Agreement, a Freestanding SAR granted under this Plan shall terminate according to the same rules under which a Nonqualified Stock Option would terminate in the event of a SAR Holder’s termination of employment, death or Disability as provided for in the SAR Award Agreement. Unless otherwise specifically provided for in the SAR Award agreement, a Tandem SAR granted under this Plan shall be exercisable at such time or times and only to the extent that the related Option is exercisable. The Tandem SAR shall terminate and no longer be exercisable upon the termination or exercise of the related Options, except that Tandem SARs granted with respect to less than the full number of shares covered by a related Option shall not be reduced until the exercise or termination of the related Option exceeds the number of Shares not covered by the SARs.
|
7.6
|
Adjustment of SARs. Subject to the limitations set forth below and those contained in Sections 7 and 14, the Committee may make any adjustment in the SAR exercise price, the number of Shares subject to, or the terms of, an outstanding SAR and a subsequent granting of an SAR by amendment or by substitution of an outstanding SAR. Such amendment, substitution, or re-grant may result in terms and conditions (including SAR exercise price, number of Shares covered, vesting schedule or exercise period) that differ from the terms and conditions of the original SAR; provided, however, except as permitted under Section 10, the Committee may not, without stockholder approval (i) amend a SAR to reduce its exercise price, (ii) cancel a SAR and regrant a SAR with a lower exercise price than the original SAR exercise price of the cancelled SAR, (iii) cancel a SAR in exchange for cash or another Award or (iv) take any other action (whether in the form of an amendment, cancellation or replacement grant) that has the effect of "repricing" a SAR, as defined under applicable NASDAQ rules or the rules of the established stock exchange or quotation system on which the Company Stock is then listed or traded. The Committee also may not adversely affect the rights of any SAR Holder to previously granted SARs without the consent of such SAR Holder. If such action is affected by the amendment, the effective date of such amendment shall be the date of the original grant. Any adjustment, modification, extension or renewal of a SAR shall be effected such that the SAR is either exempt from, or is compliant with, Code section 409A.
|
7.7
|
Payment of SAR Amount; Automatic Exercise
|
(a)
|
Upon exercise of a SAR, a Holder shall be entitled to receive payment from the Company in an amount determined by multiplying (i) the positive difference between the Fair Market Value of a Share on the date of exercise over the exercise price per Share by (ii) the number of Shares with respect to which the SAR is exercised. At the Committee's discretion, the payment upon a SAR exercise may be in whole Shares of equivalent value, cash, or a combination of whole Shares and cash. Fractional Shares shall be rounded down to the nearest whole Share.
|
(b)
|
With respect to any SAR and to the extent that such SAR has not otherwise been exercised, cancelled, terminated or forfeited, if on the last day of the SAR Period, the Fair Market Value exceeds the SAR exercise price, such SAR shall be deemed to have been exercised by the Participant on such last day of the SAR Period and the Company shall deliver the appropriate number of Shares or amount of cash therefor.
|
7.8
|
Stockholder Privileges. No Holder shall have any rights as a stockholder with respect to any Shares covered by a SAR until the Holder becomes the holder of record of such Stock, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date preceding the date such Holder becomes the holder of record of such Stock, except as provided in Section 4.
|
8.1
|
Restricted Stock Awards Granted by Committee. Coincident with or following designation for participation in the Plan and subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Restricted Stock to any Service Provider in such amounts as the Committee shall determine.
|
8.2
|
Restricted Stock Unit Awards Granted by Committee. Coincident with or following designation for participation in the Plan and subject to the terms and provisions of the Plan, The Committee may grant a Service Provider Restricted Stock Units, in connection with or separate from a grant of Restricted Stock. Upon the vesting of Restricted Stock Units, the Holder shall be entitled to receive the full value of the Restricted Stock Units payable in either Shares or cash.
|
8.3
|
Restrictions. A Holder’s right to retain Shares of Restricted Stock or be paid with respect to Restricted Stock Units shall be subject to such restrictions, including him or her continuing to perform as a Service Provider for a restriction period specified by the Committee, or the attainment of specified performance goals and objectives, as may be established by the Committee with respect to such Award. The Committee may in its sole discretion require different periods of service or different performance goals and objectives with respect to (i) different Holders, (ii) different Restricted Stock or Restricted Stock Unit Awards, or (iii) separate, designated portions of the Shares constituting a Restricted Stock Award. Any grant of Restricted Stock or Restricted Stock Units shall contain terms such that the Award is either exempt from Code section 409A or complies with such section.
|
8.4
|
Privileges of a Stockholder, Transferability. Unless otherwise provided in the Award Agreement, a Participant shall have all voting, dividend, liquidation and other rights with respect to Shares of Restricted Stock, provided however that any dividends paid on Shares of Restricted Stock prior to such Shares becoming vested shall be held in escrow by the Company and subject to the same restrictions on transferability and forfeitability as the underlying Shares of Restricted Stock. Any voting, dividend, liquidation or other rights shall accrue to the benefit of a Holder only with respect to Shares of Restricted Stock held by, or for the benefit of, the Holder on the record date of any such dividend or voting date. A Participant’s right to sell, encumber or otherwise transfer such Restricted Stock shall, in addition to the restrictions otherwise provided for in the Award Agreement, be subject to the limitations of Section 11.2 hereof. The Committee may determine that a Holder of Restricted Stock Units is entitled to receive dividend equivalent payments on such units; provided, however, in no event shall any dividend equivalents relating to Restricted Stock Units subject to one or more performance-based vesting criteria be paid unless and until the underlying Restricted Stock Units are earned. If the Committee determines that Restricted Stock Units shall receive dividend equivalent payments, such feature will be specified in the applicable Award Agreement. Restricted Stock Units shall not have any voting rights.
|
8.5
|
Enforcement of Restrictions. The Committee may in its sole discretion require one or more of the following methods of enforcing the restrictions referred to in Section 8.2 and 8.3:
|
(a)
|
placing a legend on the stock certificates, or the Restricted Stock Unit Award Agreement, as applicable, referring to restrictions;
|
(b)
|
requiring the Holder to keep the stock certificates, duly endorsed, in the custody of the Company while the restrictions remain in effect;
|
(c)
|
requiring that the stock certificates, duly endorsed, be held in the custody of a third party nominee selected by the Company who will hold such Shares of Restricted Stock on behalf of the Holder while the restrictions remain in effect; or
|
(d)
|
inserting a provision into the Restricted Stock Award Agreement prohibiting assignment of such Award Agreement until the terms and conditions or restrictions contained therein have been satisfied or released, as applicable.
|
8.6
|
Termination of Service, Death, Disability, etc. Except as otherwise provided in an Award Agreement, in the event of the death or Disability of a Participant, all service period and other restrictions applicable to Restricted Stock Awards then held by him or her shall lapse, and such Awards shall become fully nonforfeitable. Subject to Section 10 and except as otherwise provided in an Award Agreement, in the event a Participant ceases to be a Service Provider for any other reason, any Restricted Stock Awards as to which the service period or other vesting conditions for have not been satisfied shall be forfeited.
|
9.1
|
Awards Granted by Committee. Coincident with or following designation for participation in the Plan, a Participant may be granted Performance Shares, Performance Units or any other Performance Award.
|
9.2
|
Communication of Award. Written or electronic notice of the maximum amount of a Holder’s Award and the Performance Period determined by Committee shall be given to a Participant as soon as practicable after approval of the Award by the Committee.
|
9.3
|
Terms of Performance Awards. The Committee shall determine (i) whether the Award will be in the form of a Performance Share, Performance Unit or any other type of Performance Award, and (ii) whether, if a payment is due with respect to an Award such payment shall be made in cash, Stock or some combination. Except as provided in Section 10, Performance Awards will be issued or granted, or become vested or payable, only after the end of the relevant Performance Period. The Committee shall establish maximum and minimum performance targets to be achieved during the applicable Performance Period. Each grant of a Performance Share, Performance Unit or other Performance Award shall be subject to additional terms and conditions not inconsistent with the provisions of the Plan. The performance goals to be achieved for each Performance Period and the amount of the Award to be distributed upon satisfaction of those performance goals shall be conclusively determined by the Committee.
|
9.4
|
Performance Goals. If an Award is subject to this Section 9, then the lapsing of restrictions thereon, or the vesting thereof, and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of one or any combination of the following metrics, and which may be established on an absolute or relative basis for the Company as a whole or any of its subsidiaries, operating divisions or other operating units:
|
(a)
|
Earnings measures (either in the aggregate or on a per-Share basis), including earnings per share, earnings before interest, earnings before interest and taxes, earnings before interest, taxes and depreciation or earnings before interest, taxes, depreciation and amortization and in the case of any of the foregoing, adjusted to exclude any one or more of the following:
|
(i)
|
stock-based compensation expense;
|
(ii)
|
income from discontinued operations;
|
(iii)
|
gain on cancellation of debt;
|
(iv)
|
debt extinguishment and related costs;
|
(v)
|
restructuring, separation and/or integration charges and costs;
|
(vi)
|
reorganization and/or recapitalization charges and costs;
|
(vii)
|
impairment charges;
|
(viii)
|
gain or loss related to investments or the sale of assets;
|
(ix)
|
sales and use tax settlement; and
|
(x)
|
gain on non-monetary transaction.
|
(b)
|
Operating profit, operating income or operating margin (either in the aggregate or on a per-Share basis);
|
(c)
|
Net earnings on either a LIFO or FIFO basis (either in the aggregate or on a per-Share basis);
|
(d)
|
Net income or loss (either in the aggregate or on a per-Share basis);
|
(e)
|
Cash flow provided by operations (either in the aggregate or on a per-Share basis);
|
(f)
|
Cash flow returns, including cash flow returns on invested capital (cash flow from operating activities minus capital expenditures, the difference of which is divided by the difference between total assets and non-interest bearing current liabilities);
|
(g)
|
Ratio of debt to debt plus equity;
|
(h)
|
Net borrowing;
|
(i)
|
Credit quality or debt ratings;
|
(j)
|
Inventory levels, inventory turn or shrinkage;
|
(k)
|
Sales;
|
(l)
|
Revenues;
|
(m)
|
Free cash flow (either in the aggregate or on a per-Share basis);
|
(n)
|
Reductions in expense levels, determined either on a Company-wide basis or with respect to any one or more business units;
|
(o)
|
Operating and maintenance cost management and employee productivity;
|
(p)
|
Gross margin;
|
(q)
|
Return measures (including return on assets, return on equity, return on investment or return on sales);
|
(r)
|
Productivity increases;
|
(s)
|
Share price (including attainment of a specified per-Share price during the Incentive Period; growth measures and total stockholder return or attainment by the Shares of a specified price for a specified period of time);
|
(t)
|
Growth or rate of growth of any of the above business criteria;
|
(u)
|
Specified revenue, market share, market penetration, business development, geographic business expansion goals, objectively identified project milestones, production volume levels, cost targets, customer satisfaction, and goals relating to acquisitions or divestitures; and
|
(v)
|
Accomplishment of mergers, acquisitions, dispositions, public offerings, or similar extraordinary business transactions;
|
9.5
|
Determinations and Adjustments. When the Committee determines whether a performance goal has been satisfied for any Performance Period, the Committee, where the Committee deems appropriate, may make such determination using calculations which alternatively include and exclude one, or more than one, "extraordinary items" as determined under U.S. generally accepted accounting principles, and the Committee may determine whether a performance goal has been satisfied for any Performance Period taking into account the alternative which the Committee deems appropriate under the circumstances. The Committee also may take into account any other unusual or non-recurring items, including (i) asset write-downs; (ii) litigation or claim judgments or settlements; and (iii) the charges or costs associated with restructurings of the Company, discontinued operations, and the cumulative effects of accounting changes and, further, may take into account any unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles or such other factors as the Committee may determine reasonable and appropriate under the circumstances (including any factors that could result in the Company's paying non-deductible compensation to an Employee or non-employee director). Notwithstanding any provision of the Plan other than Section 4.3, with respect to any Award that is subject to this Section 9, the Committee may not adjust upwards the amount payable pursuant to such Award, nor may it waive the achievement of the applicable performance goals except in the case of the death or Disability of the Participant.
|
9.6
|
Payment of Awards. Following the conclusion of each Performance Period, the Committee shall determine the extent to which performance targets have been attained, and the satisfaction of any other terms and conditions with respect to an Award relating to such Performance Period. The Committee shall determine what, if any, payment is due with respect to an Award and whether such payment shall be made in cash, Stock or some combination. Payment shall be made in a lump sum, as determined by the Committee, commencing as promptly as practicable following the end of the applicable Performance Period, subject to such terms and conditions and in such forms as may be prescribed by the Committee. All Awards shall be paid no later than March 15th of the Plan Year following the Plan Year in which the Committee determines that a Participant is entitled to receive the performance award.
|
9.7
|
Termination of Employment. If a Participant ceases to be a Service Provider for any reason other than having been terminated for Cause after the end of a Performance Period yet before receiving payment as provided for in Section 9.6, the Holder (or the Holder’s Beneficiaries) shall be entitled to receive the full amount payable as soon as practicable after such amount has been determined by the Committee. Unless otherwise determined by the Committee, if a Holder ceases to be a Service Provider before the end of a Performance Period by reason of his or her death or Disability, the Performance Period for such Holder for the purpose of determining the amount of the Award payable shall end at the end of the calendar quarter immediately preceding the date on which such Holder ceased to be a Service Provider. The amount of an Award payable to a Holder to whom the preceding sentence is applicable shall be paid at the end of the Performance Period and shall be that fraction of the Award computed pursuant to the preceding sentence the numerator of which is the number of calendar quarters during the Performance Period during all of which said Holder was a Service Provider and the denominator of which is the number of full calendar quarters in the Performance Period. In the event a Holder is terminated as a Service Provider for Cause, either before the end of the Performance Period or after the end of the Performance Period but prior to the amount of the Award having been paid, the Holder’s participation in the Plan shall cease, all outstanding Awards of Performance Shares or Performance Units to such Participant and any right to receive the payment for any Awards (whether or not any Performance Period has been completed) shall be canceled.
|
9.8
|
Other Restrictions. The Committee shall have the power to impose such other restrictions on Awards subject to Section 9 as it may deem necessary or appropriate to insure that such Awards satisfy all requirements for "performance-based compensation" within the meaning of Section 162(m)(4)(B) of the Code or any successor thereto.
|
11.1
|
Employment. Nothing contained in the Plan or in any Award granted under the Plan shall confer upon any Participant any right with respect to the continuation of his or her services as a Service Provider or interfere in any way with the right of the Company, subject to the terms of any separate employment or consulting agreement to the contrary, at any time to terminate such services or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award. Whether an authorized leave of absence, or absence in military or government service, shall constitute a termination of Participant’s services as a Service Provider shall be determined by the Committee at the time.
|
11.2
|
Nontransferability. Except as provided in Section 11.3, no right or interest of any Holder in an Award granted pursuant to the Plan shall be assignable or transferable during the lifetime of the Participant, either voluntarily or involuntarily, or be subjected to any lien, directly or indirectly, by operation of law, or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy. In the event of a Participant’s death, a Holder’s rights and interests in all Awards shall, to the extent not otherwise prohibited hereunder, be transferable by testamentary will or the laws of descent and distribution, and payment of any amounts due under the Plan shall be made to, and exercise of any Options or SARs may be made by, the Holder’s legal representatives, heirs or legatees. If, in the opinion of the Committee, a person entitled to payments or to exercise rights with respect to the Plan is disabled from caring for his or her affairs because of a mental condition, physical condition or age, payment due such person may be made to, and such rights shall be exercised by, such person’s guardian, conservator, or other legal personal representative upon furnishing the Committee with evidence satisfactory to the Committee of such status. “Transfers” shall not be deemed to include transfers to the Company or “cashless exercise” procedures with third parties who provide financing for the purpose of (or who otherwise facilitate) the exercise of Awards consistent with applicable laws and the authorization of the Committee.
|
11.3
|
Permitted Transfers. Pursuant to conditions and procedures established by the Committee from time to time, the Committee may permit Awards to be transferred, without consideration other than nominal consideration, exercised by and paid to certain persons or entities related to a Participant, including members of the Participant’s immediate family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of the Participant’s immediate family and/or charitable institutions (a “Permitted Transferee”). In the case of initial Awards, at the request of the Participant, the Committee may permit the naming of the related person or entity as the Award recipient. Any permitted transfer shall be subject to the condition that the Committee receive evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes on a gratuitous or donative basis and without consideration (other than nominal consideration). Notwithstanding the foregoing, Incentive Stock Options shall only be transferable to the extent permitted in Section 422 of the Code, or such successor provision thereto, and the treasury regulations thereunder.
|
12.1
|
Investment Representations. The Company may require any person to whom an Option or other Award is granted, as a condition of exercising such Option or receiving Stock under the Award, to give assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the Stock subject to the Option or the Award for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws. Legends evidencing such restrictions may be placed on the certificates evidencing the Stock.
|
12.2
|
Compliance with Securities Laws.
|
(a)
|
Each Award shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the Shares subject to such Award upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or in connection with, the issuance or purchase of Shares thereunder, such Award may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification.
|
(b)
|
Each Holder who is a director or an Executive Officer is restricted from taking any action with respect to any Award if such action would result in a (i) violation of Section 306 of the Sarbanes-Oxley Act of 2002, and the regulations promulgated thereunder, whether or not such law and regulations are applicable to the Company, or (ii) any policies adopted by the Company restricting transactions in the Stock.
|
12.3
|
Stock Restriction Agreement. The Committee may provide that Shares issuable upon the exercise of an Option shall, under certain conditions, be subject to restrictions whereby the Company has (i) a right of first refusal with respect to such shares, (ii) specific rights or limitations with respect to the Participant’s ability to vote such shares, or (iii) a right or obligation to repurchase all or a portion of such shares, which restrictions may survive a Participant’s cessation or termination as a Service Provider.
|
14.1
|
Amendment, Modification, and Termination. The Board may at any time terminate, and from time to time may amend or modify, the Plan; provided, however, that no amendment or modification may become effective without approval of the amendment or modification by the stockholders if stockholder approval is required to enable the Plan to satisfy any applicable statutory or regulatory requirements, to comply with the requirements for listing on any exchange where the Shares are listed, or if the Company, on the advice of counsel, determines that stockholder approval is otherwise necessary or desirable.
|
14.2
|
Adjustment Upon Certain Unusual or Nonrecurring Events. The Board may make adjustments in the terms and conditions of Awards in recognition of unusual or nonrecurring events (including the events described in Section 4.3) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Board determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.
|
14.3
|
Awards Previously Granted. Notwithstanding any other provision of the Plan to the contrary (but subject to Section 2.1(h) and Section 14.2), no termination, amendment or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written or electronic consent of the Holder of such Award.
|
15.1
|
Withholding Requirement. The Company’s obligations to deliver Shares upon the exercise of an Option, or upon the vesting of any other Award, shall be subject to the Holder’s satisfaction of all applicable federal, state and local income and other tax withholding requirements.
|
15.2
|
Withholding with Stock. For Eligible Employees, the Company may permit the Holder to pay all minimum required amounts of tax withholding, or any part thereof, by electing to transfer to the Company, or to have the Company withhold from Shares otherwise issuable to the Holder, Shares having a value equal to the minimum amount required to be withheld under federal, state or local law or such lesser amount as may be elected by the Holder. All elections shall be subject to the approval or disapproval of the Committee or its delegate. The value of Shares to be withheld shall be based on the Fair Market Value of the Stock on the date that the amount of tax to be withheld is to be determined (the "Tax Date"), as determined by the Committee. Any such elections by Holder to have Shares withheld for this purpose will be subject to the following restrictions:
|
(a)
|
All elections must be made prior to the Tax Date;
|
(b)
|
All elections shall be irrevocable; and
|
(c)
|
If the Holder is an officer or director of the Company within the meaning of Section 16 of the 1934 Act (“Section 16”), the Holder must satisfy the requirements of such Section 16 and any applicable rules thereunder with respect to the use of Stock to satisfy such tax withholding obligation.
|
17.1
|
Requirements of Law. The issuance of Stock and the payment of cash pursuant to the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or stock exchanges as may be required. Notwithstanding any provision of the Plan or any Award, Holders shall not be entitled to exercise, or receive benefits under any Award, and the Company shall not be obligated to deliver any Shares or other benefits to a Holder, if such exercise or delivery would constitute a violation by the Holder or the Company of any applicable law or regulation.
|
17.2
|
Code Section 409A. In the event that any provision of this Plan shall be determined to contravene Code section 409A, the regulations promulgated thereunder, regulatory interpretations or announcements with respect to section 409A or applicable judicial decisions construing section 409A, any such provision shall be void and have no effect. Moreover, this Plan shall be interpreted at all times in such a manner that the terms and provisions of the Plan comply with Code section 409A, the regulations promulgated thereunder, regulatory interpretations or announcements with respect to section 409A and applicable judicial decisions construing section 409A.
|
17.3
|
Rule 16b-3. Transactions under the Plan and to the extent even applicable, within the scope of Rule 16b-3 are intended to comply with all applicable conditions of Rule 16b-3. To the extent any provision of the Plan or any action by the Committee under the Plan fails to so comply, such provision or action shall, without further action by any person, be deemed to be automatically amended to the extent necessary to effect compliance with Rule 16b-3; provided, however, that if such provision or action cannot be amended to effect such compliance, such provision or action shall be deemed null and void to the extent permitted by law and deemed advisable by the Committee.
|
17.4
|
Governing Law. The Plan and all agreements hereunder shall be construed in accordance with and governed by the laws of the State of Delaware without giving effect to the principles of the conflict of laws to the contrary.
|
LAYNE CHRISTENSEN COMPANY
|
|||
By: | |||
Title: |