UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October
28, 2014
THE ALKALINE WATER COMPANY
INC.
Exact name of registrant as specified in its
charter)
Nevada |
000-55096 |
EIN 99-0367049 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
7730 E Greenway Road Ste. 203
Scottsdale, AZ
85260
(Address of principal executive offices and Zip
Code)
Registrants telephone number, including area code: (480)
656-2423
Not Applicable
(Former name or former
address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01
Entry into a Material Definitive Agreement.
Effective as of October 28, 2014, we entered into a master
lease agreement with Veterans Capital Fund, LLC (the Lessor) for the
secured lease line of credit financing in an amount not to exceed $600,000. The
lease is expected to be secured by three new alkaline generating electrolysis
system machines. Our wholly-owned subsidiary, Alkaline 88, LLC, and Water
Engineering Solutions, LLC acted as co-lessees. Water Engineering Solutions, LLC
is an entity that is controlled and owned by our President, Chief Executive
Officer, director and major stockholder, Steven P. Nickolas, and our
Vice-President, Secretary, Treasurer and director, Richard A. Wright.
Pursuant to the master lease agreement, the Lessor agreed to
lease to us the equipment described in any equipment schedule signed by us and
approved by the Lessor. It is expected that any lease under the master lease
agreement will be structured for a three year lease term with fixed monthly
lease rental payments based on a monthly lease rate factor of 3.4667% of the
Lessors capital cost. In addition, because the Lessor from time to time may be
required to fund various deposits and/or partial funding for the equipment that
will be placed under the lease line of credit, we are expected to pay a daily
rental equal to 1/30th of the monthly lease rental payment pro-rated
to the amount funded by the Lessor from the initial funding (deposit) to the
initial term start date of the specific lease schedule associated with the
equipment funded. A prepayment of any lease schedule is subject to all
applicable state and federal tax law requirements and a 5% penalty will be
assessed to the then remaining lease payments.
So long as no default has occurred, we have the option to (i)
purchase all but not less than all of the equipment under this master lease for
the then fair market value (which will not exceed 25% of the Lessors capital
costs); (ii) extend the lease term for a minimum of 12 months at the then
renewal lease rate factor not to exceed the current monthly lease rental; or
(iii) return all but not less than all of the equipment at the conclusion of the
lease term along with a 5% re-stocking fee.
In connection with the entering into the master lease
agreement, we paid the Lessor a one-time non-refundable commitment fee of
$12,000.
Effective as of October 28, 2014, we also entered into a
warrant agreement with the Lessor, pursuant to which we agreed to issue a
warrant to purchase 3,600,000 shares of our common stock to the Lessor and/or
its affiliates at an exercise price of $0.125 per share for a period of five
years. 900,000 shares vested on October 28, 2014 and the remaining 270,000
shares will vest on a pro rata basis according to any mounts the Lessor funds
pursuant to any lease schedules under the master lease agreement, provided that
if we draws on 90% or more of the total lease line under the master lease
agreement, then all such shares will be deemed to be vested. We issued the
warrant to an accredited investor. The issuance the warrant was exempt from
registration pursuant to Section 4(a)(2) of the Securities Act of 1933 and Rule
506 promulgated thereunder.
Effective as of October 28, 2014, we also entered into a
registration rights agreement with the Lessor, pursuant to which we gave
piggyback registration right to the Lessor. Subject to certain limitations, each
time that we propose to register a public offering solely of our common stock,
other than pursuant to a registration statement on Form S-4 or Form S-8, we
agreed to offer the Lessor the right to request inclusion of 3,600,000 shares
underlying the warrant issued under the warrant agreement with the Lessor, if
such shares are not eligible for sale under Rule 144 promulgated under the
Securities Act of 1933, and use our best efforts to cause such shares to be
registered.
Item
3.02
Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this current report
on Form 8-K is responsive to this item.
Item 5.02
Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On October 31, 2014, we amended our 2013 Equity Incentive Plan
to, among other things, increase the number of shares of stock of our company
available for the grant of awards under the plan from 20,000,000 shares to
35,000,000 shares.
On October 31, 2014, we reduced the exercise price of an
aggregate of 6,000,000 stock options granted Steven P. Nickolas and Richard A.
Wright, our directors and executive officers, to $0.15 per share as noted
below:
Name of Optionee |
Grant Date |
Old Exercise Price per
Share |
New Exercise
Price per
Share |
Expiration Date |
Number of Stock Options
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Steven P. Nickolas |
October 9, 2013 |
$0.605 |
$0.15 |
October 9, 2023 |
3,000,000 |
Richard A. Wright |
October 9, 2013 |
$0.605 |
$0.15 |
October 9, 2023 |
3,000,000 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE ALKALINE WATER COMPANY INC. |
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/s/ Steven P.
Nickolas |
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Steven P. Nickolas |
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President, Chief Executive Officer and Director |
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November 4, 2014 |
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THE ALKALINE WATER COMPANY INC.
2013 EQUITY
INCENTIVE PLAN
1.
Purpose; Eligibility.
1.1
General Purpose. The name of this plan is The Alkaline Water Company Inc.
2013 Equity Incentive Plan (the Plan). The purposes of the Plan are to
(a) enable The Alkaline Water Company Inc., a Nevada corporation (the
Company), and any Affiliate to attract and retain the types of
Employees, Consultants and Directors who will contribute to the Companys long
range success; (b) provide incentives that align the interests of Employees,
Consultants and Directors with those of the shareholders of the Company; and (c)
promote the success of the Companys business.
1.2
Eligible Award Recipients. The persons eligible to receive Awards are the
Employees, Consultants and Directors of the Company and its Affiliates and such
other individuals designated by the Committee who are reasonably expected to
become Employees, Consultants and Directors after the receipt of Awards.
1.3
Available Awards. Awards that may be granted under the Plan include: (a)
Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation
Rights, (d) Restricted Awards and (e) Performance Compensation Awards.
2. Definitions.
Affiliate means a corporation or other entity that, directly
or through one or more intermediaries, controls, is controlled by or is under
common control with, the Company.
Applicable Laws means the requirements related to or implicated by the
administration of the Plan under applicable state corporate law, United States
federal and state securities laws, the Code, any stock exchange or quotation
system on which the shares of Common Stock are listed or quoted, and the
applicable laws of any foreign country or jurisdiction where Awards are granted
under the Plan.
Award means any right granted under the Plan, including an Incentive
Stock Option, a Non-qualified Stock Option, a Stock Appreciation Right, a
Restricted Award, or a Performance Compensation Award.
Award Agreement means a written agreement, contract, certificate or
other instrument or document evidencing the terms and conditions of an
individual Award granted under the Plan which may, in the discretion of the
Company, be transmitted electronically to any Participant. Each Award Agreement
shall be subject to the terms and conditions of the Plan.
Beneficial
Owner has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that in calculating the beneficial ownership of
any particular person (as that term is used in Section 13(d)(3) of the
Exchange Act), such person shall be deemed to have beneficial ownership of all
securities that such person has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms Beneficially Owns and
Beneficially Owned have a corresponding meaning.
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Board means the Board of Directors of the Company, as constituted at
any time.
Cause means: With respect to any Employee or Consultant:
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(a) |
If the Employee or Consultant is a party to an employment
or service agreement with the Company or its Affiliates and such agreement
provides for a definition of Cause or other similar term, the definition
contained therein; or |
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(b) |
If no such agreement exists, or if such agreement does
not define Cause or other similar term: (i) the commission of, or plea of
guilty or no contest to, a felony or a crime involving moral turpitude or
the commission of any other act involving willful malfeasance or material
fiduciary breach with respect to the Company or an Affiliate; (ii) conduct
that results in or is reasonably likely to result in harm to the
reputation or business of the Company or any of its Affiliates; (iii)
gross negligence or willful misconduct with respect to the Company or an
Affiliate; or (iv) material violation of state or federal securities
laws. |
With respect to any Director, a determination by a majority of the disinterested
Board members that the Director has engaged in any of the following:
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(a) |
malfeasance in office; |
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(b) |
gross misconduct or neglect; |
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(c) |
false or fraudulent misrepresentation inducing the
directors appointment; |
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(d) |
wilful conversion of corporate funds; or |
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(e) |
repeated failure to participate in Board meetings on a
regular basis despite having received proper notice of the meetings in
advance. |
The Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to whether a Participant has been discharged for
Cause.
Change in Control
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(a) |
The direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of the
properties or assets of the Company and its subsidiaries, taken as a
whole, to any Person that is not a subsidiary of the Company; |
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(b) |
The Incumbent Directors cease for any reason to
constitute at least a majority of the Board; |
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(c) |
The date which is 10 business days prior to the
consummation of a complete liquidation or dissolution of the
Company; |
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(d) |
The acquisition by any Person of Beneficial Ownership of
50% or more (on a fully diluted basis) of either (i) the then outstanding
shares of Common Stock of the Company, taking into account as outstanding for this
purpose such Common Stock issuable upon the exercise of options or
warrants, the conversion of convertible stock or debt, and the exercise of
any similar right to acquire such Common Stock (the Outstanding
Company Common Stock) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the Outstanding Company Voting
Securities); provided, however, that for purposes of this Plan, the
following acquisitions shall not constitute a Change in Control: (A) any
acquisition by the Company or any Affiliate, (B) any acquisition by any
employee benefit plan sponsored or maintained by the Company or any
subsidiary, (C) any acquisition which complies with clauses, (i), (ii) and
(iii) of subsection (e) of this definition or (D) in respect of an Award
held by a particular Participant, any acquisition by the Participant or
any group of persons including the Participant (or any entity controlled
by the Participant or any group of persons including the Participant);
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(e) |
The consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving the Company that requires the approval of the
Companys shareholders, whether for such transaction or the issuance of
securities in the transaction (a Business Combination), unless
immediately following such Business Combination: (i) more than 50% of the
total voting power of (A) the entity resulting from such Business
Combination (the Surviving Company), or (B) if applicable, the
ultimate parent entity that directly or indirectly has beneficial
ownership of sufficient voting securities eligible to elect a majority of
the members of the board of directors (or the analogous governing body) of
the Surviving Company (the Parent Company), is represented by the
Outstanding Company Voting Securities that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by
shares into which the Outstanding Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the
holders thereof is in substantially the same proportion as the voting
power of the Outstanding Company Voting Securities among the holders
thereof immediately prior to the Business Combination; (ii) no Person
(other than any employee benefit plan sponsored or maintained by the
Surviving Company or the Parent Company) is or becomes the Beneficial
Owner, directly or indirectly, of 50% or more of the total voting power of
the outstanding voting securities eligible to elect members of the board
of directors of the Parent Company (or the analogous governing body) (or,
if there is no Parent Company, the Surviving Company); and (iii) at least
a majority of the members of the board of directors (or the analogous
governing body) of the Parent Company (or, if there is no Parent Company,
the Surviving Company) following the consummation of the Business
Combination were Board members at the time of the Boards approval of the
execution of the initial agreement providing for such Business
Combination. |
Code means the Internal Revenue Code of 1986, as it may be amended from
time to time. Any reference to a section of the Code shall be deemed to include
a reference to any regulations promulgated thereunder.
Committee
means the Board or a committee of one or more members of the Board appointed by
the Board to administer the Plan in accordance with Section 3.3 and Section 3.4.
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Common Stock means the common stock, $0.001 par value per share, of the
Company, the preferred stock, $0.001 par value per share, of the Company, or
such other securities of the Company as may be designated by the Committee from
time to time in substitution thereof.
Company means The Alkaline Water Company Inc., a Nevada corporation,
and any successor thereto.
Consultant means any individual who is engaged by the Company or any
Affiliate to render consulting or advisory services.
Continuous Service means that the Participants service with the
Company or an Affiliate, whether as an Employee, Consultant or Director, is not
interrupted or terminated. The Participants Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participants Continuous Service; provided further that if any Award is
subject to Section 409A of the Code, this sentence shall only be given effect to
the extent consistent with Section 409A of the Code. For example, a change in
status from an Employee of the Company to a Director of an Affiliate will not
constitute an interruption of Continuous Service. The Committee or its delegate,
in its sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal or family
leave of absence.
Covered Employee has the same meaning as set forth in Section 162(m)(3)
of the Code, as interpreted by Internal Revenue Service.
Director means a member of the Board.
Disability means that the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment; provided, however, for purposes of determining the term of an
Incentive Stock Option pursuant to Section 6.9 hereof, the term Disability shall
have the meaning ascribed to it under Section 22(e)(3) of the Code. The
determination of whether an individual has a Disability shall be determined
under procedures established by the Committee. Except in situations where the
Committee is determining Disability for purposes of the term of an Incentive
Stock Option pursuant to Section 6.9 hereof within the meaning of Section
22(e)(3) of the Code, the Committee may rely on any determination that a
Participant is disabled for purposes of benefits under any long-term disability
plan maintained by the Company or any Affiliate in which a Participant
participates.
Disqualifying Disposition has the meaning set forth in Section 14.11.
Effective Date shall mean the date as of which this Plan is adopted by
the Board.
Employee
means any person, including an Officer or Director, employed by the Company or
an Affiliate; provided, that, for purposes of determining eligibility to receive
Incentive Stock Options, an Employee shall mean an employee of the Company or a
parent or subsidiary corporation within the meaning of IRC Section 424. Mere
service as a Director or payment of a directors fee by the Company or an
Affiliate shall not be sufficient to constitute employment by the Company or
an Affiliate.
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Exchange
Act means the Securities Exchange Act of 1934, as amended.
Fair Market Value means, as of any date, the value of the Common Stock
as determined below. If the Common Stock is listed or quoted on any established
stock exchange or public market, including without limitation, the New York
Stock Exchange, the NASDAQ Stock Market, the OTC Bulletin Board operated by the
Financial Industry Regulatory Authority, or one of marketplaces operated by the
OTC Markets Group, the Fair Market Value shall be the closing price of a share
of Common Stock (or if no sales were reported the closing price on the date
immediately preceding such date) as quoted on such exchange or public market on
the day of determination, as reported in the source as the Committee deems
reliable. In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Committee and such
determination shall be conclusive and binding on all persons.
Free Standing Rights has the meaning set forth in Section 7.1(a).
Good Reason means:
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(a) |
If an Employee or Consultant is a party to an employment
or service agreement with the Company or its Affiliates and such agreement
provides for a definition of Good Reason or other similar term, the
definition contained therein; or |
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If no such agreement exists or if such agreement does not
define Good Reason, the occurrence of one or more of the following without
the Participants express written consent, which circumstances are not
remedied by the Company within thirty (30) days of its receipt of a
written notice from the Participant describing the applicable
circumstances (which notice must be provided by the Participant within
ninety (90) days of the Participants knowledge of the applicable
circumstances): (i) any material, adverse change in the Participants
duties, responsibilities, authority, title, status or reporting structure;
(ii) a material reduction in the Participants base salary or bonus
opportunity; or (iii) a geographical relocation of the Participants
principal office location by more than fifty (50)
miles. |
Grant Date means the date on which the Committee adopts a resolution,
or takes other appropriate action, expressly granting an Award to a Participant
that specifies the key terms and conditions of the Award or, if a later date is
set forth in such resolution, then such date as is set forth in such resolution.
Incentive Stock Option means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
Incumbent Directors means individuals who, on the Effective Date,
constitute the Board, provided that any individual becoming a Director
subsequent to the Effective Date whose election or nomination for election to
the Board was approved by a vote of at least two- thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
Director without objection to such nomination) shall be an Incumbent Director.
No individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to Directors or
as a result of any other actual or threatened solicitation of proxies by or on
behalf of any person other than the Board shall be an Incumbent Director.
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Negative Discretion means the discretion authorized by the
Plan to be applied by the Committee to eliminate or reduce the size of a
Performance Compensation Award in accordance with Section 7.3(d)(iv) of the
Plan; provided, that, the exercise of such discretion would not cause the
Performance Compensation Award to fail to qualify as performance- based
compensation under Section 162(m) of the Code.
Non-Employee Director means a Director who is a non-employee
director within the meaning of Rule 16b-3.
Non-qualified Stock Option means an Option that by its terms
does not qualify or is not intended to qualify as an Incentive Stock Option.
Officer means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
Option means an Incentive Stock Option or a Non-qualified
Stock Option granted pursuant to the Plan.
Optionholder means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.
Option Exercise Price means the price at which a share of
Common Stock may be purchased upon the exercise of an Option.
Outside Director means a Director who is an outside director
within the meaning of Section 162(m) of the Code and Treasury Regulations
Section 1.162 -27(e)(3) or any successor to such statute and regulation.
Participant means an eligible person to whom an Award is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Award.
Performance Compensation Award means any Award designated by
the Committee as a Performance Compensation Award pursuant to Section 7.3 of the
Plan.
Performance Criteria means the criterion or criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
a Performance Period with respect to any Performance Compensation Award under
the Plan. The Performance Criteria that will be used to establish the
Performance Goal(s) shall be based on the attainment of specific levels of
performance of the Company (or Affiliate, division, business unit or operational
unit of the Company) and shall be limited to the following:
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net earnings or net income (before or after
taxes); |
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(b) |
basic or diluted earnings per share (before or after
taxes); |
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(c) |
net revenue or net revenue growth; |
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(d) |
gross revenue; |
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(e) |
gross profit or gross profit growth; |
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(f) |
net operating profit (before or after
taxes); |
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(g) |
return on assets, capital, invested capital, equity, or
sales; |
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(h) |
cash flow (including, but not limited to, operating cash
flow, free cash flow, and cash flow return on capital); |
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(i) |
earnings before or after taxes, interest, depreciation
and/or amortization; |
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(j) |
gross or operating margins; |
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(k) |
improvements in capital structure; |
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(l) |
budget and expense management; |
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(m) |
productivity ratios; |
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(n) |
economic value added or other value added
measurements; |
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(o) |
share price (including, but not limited to, growth
measures and total shareholder return); |
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expense targets; |
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(q) |
margins; |
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(r) |
operating efficiency; |
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(s) |
working capital targets; |
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(t) |
enterprise value; |
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(u) |
safety record; and |
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(v) |
completion of acquisitions or business
expansion. |
Any one or more of the Performance Criteria may be used on an
absolute or relative basis to measure the performance of the Company and/or an
Affiliate as a whole or any division, business unit or operational unit of the
Company and/or an Affiliate or any combination thereof, as the Committee may
deem appropriate, or as compared to the performance of a group of comparable
companies, or published or special index that the Committee, in its sole
discretion, deems appropriate, or the Committee may select Performance Criterion
(o) above as compared to various stock market indices. The Committee also has
the authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goals pursuant to the Performance Criteria specified
in this paragraph. To the extent required under Section 162 (m) of the Code, the
Committee shall, within the first 90 days of a Performance Period (or, if longer
or shorter, within the maximum period allowed under Section 162(m) of the Code),
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period. In the event that
applicable tax and/or securities laws change to permit the Committee discretion
to alter the governing Performance Criteria without obtaining shareholder
approval of such changes, the Committee shall have sole discretion to make such
changes without obtaining shareholder approval.
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Performance Formula means, for a Performance Period, the one
or more objective formulas applied against the relevant Performance Goal to
determine, with regard to the Performance Compensation Award of a particular
Participant, whether all, some portion but less than all, or none of the
Performance Compensation Award has been earned for the Performance Period.
Performance Goals means, for a Performance Period, the one or
more goals established by the Committee for the Performance Period based upon
the Performance Criteria. The Committee is authorized at any time during the
first 90 days of a Performance Period (or, if longer or shorter, within the
maximum period allowed under Section 162(m) of the Code), or at any time
thereafter (but only to the extent the exercise of such authority after such
period would not cause the Performance Compensation Awards granted to any
Participant for the Performance Period to fail to qualify as performance-based
compensation under Section 162(m) of the Code), in its sole and absolute
discretion, to adjust or modify the calculation of a Performance Goal for such
Performance Period to the extent permitted under Section 162(m) of the Code in
order to prevent the dilution or enlargement of the rights of Participants based
on the following events:
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asset write-downs; |
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litigation or claim judgments or settlements; |
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(c) |
the effect of changes in tax laws, accounting principles,
or other laws or regulatory rules affecting reported results; |
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any reorganization and restructuring programs; |
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(e) |
extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 (or any successor or
pronouncement thereto) and/or in managements discussion and analysis of
financial condition and results of operations appearing in the Companys
annual report to shareholders for the applicable year; |
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acquisitions or divestitures; |
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(g) |
any other specific unusual or nonrecurring events, or
objectively determinable category thereof; |
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foreign exchange gains and losses; and |
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a change in the Companys fiscal
year. |
Performance Period means the one or more periods of time not
less than one fiscal quarter in duration, as the Committee may select, over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participants right to and the payment of a Performance
Compensation Award.
Permitted Transferee means:
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a member of the Optionholders immediate family (child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister- in-law, including adoptive
relationships), any person sharing the Optionholders household (other
than a tenant or employee), a trust in which these persons have more than
50% of the beneficial interest, a foundation in which these persons (or
the Optionholder) control the management of assets, and any other entity
in which these persons (or the Optionholder) own more than 50% of the
voting interests; |
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third parties designated by the Committee in connection
with a program established and approved by the Committee pursuant to which
Participants may receive a cash payment or other consideration in
consideration for the transfer of a Non-qualified Stock Option;
and |
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(c) |
such other transferees as may be permitted by the
Committee in its sole discretion. |
Plan means this The Alkaline Water Company Inc. 2013 Equity
Incentive Plan, as amended and/or amended and restated from time to time.
Related Rights has the meaning set forth in Section 7.1(a).
Restricted Award means any Award granted pursuant to Section
7.2(a).
Restricted
Period has the meaning set forth in Section 7.2(a).
Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act
or any successor to Rule 16b-3, as in effect from time to time.
Securities Act means the Securities Act of 1933, as amended.
Stock Appreciation Right means the right pursuant to an Award
granted under Section 7.1 to receive, upon exercise, an amount payable in cash
or shares equal to the number of shares subject to the Stock Appreciation Right
that is being exercised multiplied by the excess of (a) the Fair Market Value of
a share of Common Stock on the date the Award is exercised, over (b) the
exercise price specified in the Stock Appreciation Right Award Agreement.
Stock for Stock Exchange has the meaning set forth in Section
6.3.
Ten Percent Shareholder means a person who owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of any
of its Affiliates.
3. Administration.
3.1
Authority of Committee. The Plan shall be administered initially by the
Board, except that the Board may, in its discretion, establish a committee
composed of two (2) or more members of the Board to administer the Plan, which
committee may be an executive, compensation or other committee, including a
separate committee especially created for this purpose. Subject to the terms of
the Plan, the Committees charter and Applicable Laws, and in addition to other express powers and authorization conferred by
the Plan, the Committee shall have the authority:
- 10-
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(a) |
to construe and interpret the Plan and apply its
provisions; |
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(b) |
to promulgate, amend, and rescind rules and regulations
relating to the administration of the Plan; |
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(c) |
to authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of the
Plan; |
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(d) |
to delegate its authority to one or more Officers of the
Company with respect to Awards that do not involve Covered Employees or
insiders within the meaning of Section 16 of the Exchange Act; |
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(e) |
to determine when Awards are to be granted under the Plan
and the applicable Grant Date; |
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(f) |
from time to time to select, subject to the limitations
set forth in this Plan, those Participants to whom Awards shall be
granted; |
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(g) |
to determine the number of shares of Common Stock to be
made subject to each Award; |
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(h) |
to determine whether each Option is to be an Incentive
Stock Option or a Non- qualified Stock Option; |
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(i) |
to prescribe the terms and conditions of each Award,
including, without limitation, the exercise price and medium of payment
and vesting provisions, and to specify the provisions of the Award
Agreement relating to such grant; |
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(j) |
to designate an Award (including a cash bonus) as a
Performance Compensation Award and to select the Performance Criteria that
will be used to establish the Performance Goals; |
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(k) |
to amend any outstanding Awards, including for the
purpose of modifying the time or manner of vesting, or the term of any
outstanding Award; provided, however, that if any such amendment impairs a
Participants rights or increases a Participants obligations under his or
her Award or creates or increases a Participants federal income tax
liability with respect to an Award, such amendment shall also be subject
to the Participants consent; |
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(l) |
to determine the duration and purpose of leaves of
absences which may be granted to a Participant without constituting
termination of their employment for purposes of the Plan, which periods
shall be no shorter than the periods generally applicable to Employees
under the Companys employment policies; |
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(m) |
to make decisions with respect to outstanding Awards that
may become necessary upon a change in corporate control or an event that
triggers anti- dilution adjustments; |
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(n) |
to interpret, administer, reconcile any inconsistency in,
correct any defect in and/or supply any omission in the Plan and any
instrument or agreement relating to, or Award granted under, the Plan;
and |
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(o) |
to exercise discretion to make any and all other
determinations which it determines to be necessary or advisable for the
administration of the Plan. |
The Committee also may modify the purchase price or the
exercise price of any outstanding Award, provided that shareholder approval
shall be required before the repricing is effective if such shareholder approval
is necessary to satisfy any Applicable Laws.
3.2
Committee Decisions Final. All decisions made by the Committee pursuant
to the provisions of the Plan shall be final and binding on the Company and the
Participants, unless such decisions are determined by a court having
jurisdiction to be arbitrary and capricious.
3.3
Delegation. The Committee, or if no Committee has been appointed, the
Board, may delegate administration of the Plan to a committee or committees of
one or more members of the Board, and the term Committee shall apply to
any person or persons to whom such authority has been delegated. The Committee
shall have the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board or the Committee shall thereafter be to the committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. The members of the Committee shall be appointed by
and serve at the pleasure of the Board. From time to time, the Board may
increase or decrease the size of the Committee, add additional members to,
remove members (with or without cause) from, appoint new members in substitution
therefor, and fill vacancies, however caused, in the Committee. The Committee
shall act pursuant to a vote of the majority of its members or, in the case of a
Committee comprised of only two members, the unanimous consent of its members,
whether present or not, or by the written consent of the majority of its members
and minutes shall be kept of all of its meetings and copies thereof shall be
provided to the Board. Subject to the limitations prescribed by the Plan and the
Board, the Committee may establish and follow such rules and regulations for the
conduct of its business as it may determine to be advisable.
3.4
Committee Composition. If the Board establishes a committee to administer
the Plan, except as otherwise determined by the Board, the Committee shall
consist solely of two or more Non-Employee Directors who are also Outside
Directors. The Board shall have discretion to determine whether or not it
intends to comply with the exemption requirements of Rule 16b-3 and/or Section
162(m) of the Code. However, if the Board intends to satisfy such exemption
requirements, with respect to Awards to any Covered Employee and with respect to
any insider subject to Section 16 of the Exchange Act, the Committee shall be a
compensation committee of the Board that at all times consists solely of two or
more Non-Employee Directors who are also Outside Directors. Within the scope of
such authority, the Board or the Committee may (a) delegate to a committee of
one or more members of the Board who are not Outside Directors the authority to
grant Awards to eligible persons who are either (i) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of
income resulting from such Award or (ii) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code or (b) delegate to a
committee of one or more members of the Board who are not Non-Employee Directors
the authority to grant Awards to eligible persons who are not then subject to
Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted under the Plan
in the event Awards are granted under the Plan by a compensation committee of
the Board that does not at all times consist solely of two or more Non-Employee
Directors who are also Outside Directors.
- 12-
3.5
Indemnification. In addition to such other rights of indemnification as
they may have as Directors or members of the Committee, and to the extent
allowed by Applicable Laws, the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys fees, actually incurred in
connection with any action, suit or proceeding or in connection with any appeal
therein, to which the Committee may be party by reason of any action taken or
failure to act under or in connection with the Plan or any Award granted under
the Plan, and against all amounts paid by the Committee in settlement thereof
(provided, however, that the settlement has been approved by the Company, which
approval shall not be unreasonably withheld) or paid by the Committee in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee did not act in good faith and in a manner which
such person reasonably believed to be in the best interests of the Company, or
in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within 60 days after
institution of any such action, suit or proceeding, such Committee shall, in
writing, offer the Company the opportunity at its own expense to handle and
defend such action, suit or proceeding.
4. Shares
Subject to the Plan.
4.1 Subject
to adjustment in accordance with Section 11, a total of 35,000,000 shares of
Common Stock shall be available for the grant of Awards under the Plan. During
the terms of the Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Awards.
4.2
Shares of Common Stock available for distribution under the Plan may consist, in
whole or in part, of authorized and unissued shares, treasury shares or shares
reacquired by the Company in any manner.
4.3
Any shares of Common Stock subject to an Award that is canceled, forfeited or
expires prior to exercise or realization, either in full or in part, shall again
become available for issuance under the Plan. Notwithstanding anything to the
contrary contained herein: shares subject to an Award under the Plan shall not
again be made available for issuance or delivery under the Plan if such shares
are (a) shares tendered in payment of an Option, (b) shares delivered or
withheld by the Company to satisfy any tax withholding obligation, or (c) shares
covered by a stock-settled Stock Appreciation Right or other Awards that were
not issued upon the settlement of the Award.
5.
Eligibility.
5.1
Eligibility for Specific Awards. Incentive Stock Options may be granted
only to Employees. Awards other than Incentive Stock Options may be granted to
Employees, Consultants and Directors and those individuals whom the Committee
determines are reasonably expected to become Employees, Consultants and
Directors following the Grant Date.
5.2 Ten
Percent Shareholders. A Ten Percent Shareholder shall not be granted an
Incentive Stock Option unless the Option Exercise Price is at least 110% of the
Fair Market Value of the Common Stock at the Grant Date and the Option is
not exercisable after the expiration of five years from the Grant Date.
- 13-
6. Option
Provisions.
Each Option granted under the Plan shall be evidenced by an Award
Agreement. Each Option so granted shall be subject to the conditions set forth
in this Section 6, and to such other conditions not inconsistent with the Plan
as may be reflected in the applicable Award Agreement. All Options shall be
separately designated Incentive Stock Options or Non-qualified Stock Options at
the time of grant, and, if certificates are issued, a separate certificate or
certificates will be issued for shares of Common Stock purchased on exercise of
each type of Option. Notwithstanding the foregoing, the Company shall have no
liability to any Participant or any other person if an Option designated as an
Incentive Stock Option fails to qualify as such at any time or if an Option is
determined to constitute nonqualified deferred compensation within the meaning
of Section 409A of the Code and the terms of such Option do not satisfy the
requirements of Section 409A of the Code. The provisions of separate Options
need not be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of each
of the following provisions:
6.1 Term.
Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, no
Incentive Stock Option shall be exercisable after the expiration of 10 years
from the Grant Date. The term of a Non-qualified Stock Option granted under the
Plan shall be determined by the Committee; provided, however, no Non-qualified
Stock Option shall be exercisable after the expiration of 10 years from the
Grant Date.
6.2 Exercise
Price of an Incentive Stock Option. Subject to the provisions of Section 5.2
regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive
Stock Option shall be not less than 100% of the Fair Market Value of the Common
Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an
Incentive Stock Option may be granted with an Option Exercise Price lower than
that set forth in the preceding sentence if such Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
6.3
Consideration. The Option Exercise Price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (a) in cash or by certified or bank check at
the time the Option is exercised or (b) in the discretion of the Committee, upon
such terms as the Committee shall approve, the Option Exercise Price may be
paid: (i) by delivery to the Company of other Common Stock, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of delivery equal
to the Option Exercise Price (or portion thereof) due for the number of shares
being acquired, or by means of attestation whereby the Participant identifies
for delivery specific shares of Common Stock that have an aggregate Fair Market
Value on the date of attestation equal to the Option Exercise Price (or portion
thereof) and receives a number of shares of Common Stock equal to the difference
between the number of shares thereby purchased and the number of identified
attestation shares of Common Stock (a Stock for Stock Exchange); (ii) a
cashless exercise program established with a broker; (iii) by reduction in the
number of shares of Common Stock otherwise deliverable upon exercise of such
Option with a Fair Market Value equal to the aggregate Option Exercise Price at
the time of exercise; (iv) any combination of the foregoing methods; or (v) in
any other form of legal consideration that may be acceptable to the Committee.
Unless otherwise specifically provided in the Option, the exercise price of
Common Stock acquired pursuant to an Option that is paid by delivery (or
attestation) to the Company of other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the Company that
have been held for more than six months (or such longer or shorter period of
time required to avoid a charge to earnings for financial accounting purposes).
Notwithstanding the foregoing, during any period for which the Common Stock is
publicly traded an exercise by a Director or Officer that involves or may
involve a direct or indirect extension of credit or arrangement of an extension
of credit by the Company, directly or indirectly, in violation of Section 402(a)
of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award
under this Plan.
- 14-
6.4
Transferability of an Incentive Stock Option. An Incentive Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.
6.5
Transferability of a Non-qualified Stock Option. A Non-qualified Stock
Option may, in the sole discretion of the Committee, be transferable to a
Permitted Transferee, upon written approval by the Committee to the extent
provided in the Award Agreement. If the Non- qualified Stock Option does not
provide for transferability, then the Non-qualified Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
6.6
Vesting of Options. Each Option may, but need not, vest and therefore
become exercisable in periodic installments that may, but need not, be equal.
The Option may be subject to such other terms and conditions on the time or
times when it may be exercised (which may be based on performance or other
criteria) as the Committee may deem appropriate. The vesting provisions of
individual Options may vary. No Option may be exercised for a fraction of a
share of Common Stock. The Committee may, but shall not be required to, provide
for an acceleration of vesting and exercisability in the terms of any Award
Agreement upon the occurrence of a specified event.
6.7
Termination of Continuous Service. Unless otherwise provided in an Award
Agreement or in an employment agreement the terms of which have been approved by
the Committee, in the event an Optionholders Continuous Service terminates
(other than upon the Optionholders death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination) but only within such period
of time ending on the earlier of (a) the date three months following the
termination of the Optionholders Continuous Service or (b) the expiration of
the term of the Option as set forth in the Award Agreement; provided that, if
the termination of Continuous Service is by the Company for Cause, all
outstanding Options (whether or not vested) shall immediately terminate and
cease to be exercisable. If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Award Agreement, the
Option shall terminate.
6.8
Extension of Termination Date. An Optionholders Award Agreement may also
provide that if the exercise of the Option following the termination of the
Optionholders Continuous Service for any reason would be prohibited at any time
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act or any other state or federal securities
law or the rules of any securities exchange or interdealer quotation system,
then the Option shall terminate on the earlier of (a) the expiration of the term
of the Option in accordance with Section 6.1 or (b) the expiration of a period
after termination of the Participants Continuous Service that is three months
after the end of the period during which the exercise of the Option would be in
violation of such registration or other securities law requirements.
- 15-
6.9
Disability of Optionholder. Unless otherwise provided in an Award
Agreement, in the event that an Optionholders Continuous Service terminates as
a result of the Optionholders Disability, the Optionholder may exercise his or
her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination), but only within such period of time
ending on the earlier of (a) the date 12 months following such termination or
(b) the expiration of the term of the Option as set forth in the Award
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified herein or in the Award Agreement, the Option
shall terminate.
6.10
Death of Optionholder. Unless otherwise provided in an Award Agreement,
in the event an Optionholders Continuous Service terminates as a result of the
Optionholders death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholders estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholders death, but only within the period ending on the
earlier of (a) the date 12 months following the date of death or (b) the
expiration of the term of such Option as set forth in the Award Agreement. If,
after the Optionholders death, the Option is not exercised within the time
specified herein or in the Award Agreement, the Option shall terminate.
6.11
Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds $100,000, the Options or portions thereof which exceed
such limit (according to the order in which they were granted) shall be treated
as Non-qualified Stock Options.
7.
Provisions of Awards Other Than Options.
7.1
Stock Appreciation Rights.
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(a) |
General. Each Stock Appreciation Right granted
under the Plan shall be evidenced by an Award Agreement. Each Stock
Appreciation Right so granted shall be subject to the conditions set forth
in this Section 7.1, and to such other conditions not inconsistent with
the Plan as may be reflected in the applicable Award Agreement. Stock
Appreciation Rights may be granted alone (Free Standing Rights)
or in tandem with an Option granted under the Plan (Related
Rights). |
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(b) |
Grant Requirements. Any Related Right that relates
to a Non-qualified Stock Option may be granted at the same time the Option
is granted or at any time thereafter but before the exercise or expiration
of the Option. Any Related Right that relates to an Incentive Stock Option
must be granted at the same time the Incentive Stock Option is
granted. |
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(c) |
Term of Stock Appreciation Rights. The term of a
Stock Appreciation Right granted under the Plan shall be determined by the
Committee; provided, however, no Stock Appreciation Right shall be
exercisable later than the tenth anniversary of the Grant Date. |
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(d) |
Vesting of Stock Appreciation Rights. Each Stock
Appreciation Right may, but need not, vest and therefore become
exercisable in periodic installments that may, but need not, be equal. The
Stock Appreciation Right may be subject to such other terms and conditions
on the time or times when it may be exercised as the Committee may deem
appropriate. The vesting provisions of individual Stock Appreciation
Rights may vary. No Stock Appreciation Right may be exercised for a
fraction of a share of Common Stock. The Committee may, but shall not be
required to, provide for an acceleration of vesting and exercisability in
the terms of any Stock Appreciation Right upon the occurrence of a
specified event. |
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(e) |
Exercise and Payment. Upon exercise of a Stock
Appreciation Right, the holder shall be entitled to receive from the
Company an amount equal to the number of shares of Common Stock subject to
the Stock Appreciation Right that is being exercised multiplied by the
excess of (i) the Fair Market Value of a share of Common Stock on the date
the Award is exercised, over (ii) the exercise price specified in the
Stock Appreciation Right or related Option. Payment with respect to the
exercise of a Stock Appreciation Right shall be made on the date of
exercise. Payment shall be made in the form of shares of Common Stock
(with or without restrictions as to substantial risk of forfeiture and
transferability, as determined by the Committee in its sole discretion),
cash or a combination thereof, as determined by the Committee. |
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(f) |
Exercise Price. The exercise price of a Free
Standing Stock Appreciation Right shall be determined by the Committee. A
Related Right granted simultaneously with or subsequent to the grant of an
Option and in conjunction therewith or in the alternative thereto shall
have the same exercise price as the related Option, shall be transferable
only upon the same terms and conditions as the related Option, and shall
be exercisable only to the same extent as the related Option; provided,
however, that a Stock Appreciation Right, by its terms, shall be
exercisable only when the Fair Market Value per share of Common Stock
subject to the Stock Appreciation Right and related Option exceeds the
exercise price per share thereof and no Stock Appreciation Rights may be
granted in tandem with an Option unless the Committee determines that the
requirements of Section 7.1(b) are satisfied. |
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(g) |
Reduction in the Underlying Option Shares. Upon
any exercise of a Related Right, the number of shares of Common Stock for
which any related Option shall be exercisable shall be reduced by the
number of shares for which the Stock Appreciation Right has been
exercised. The number of shares of Common Stock for which a Related Right
shall be exercisable shall be reduced upon any exercise of any related
Option by the number of shares of Common Stock for which such Option has
been exercised. |
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7.2
Restricted Awards.
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(a) |
General. A Restricted Award is an Award of actual
shares of Common Stock (Restricted Stock) or hypothetical Common
Stock units (Restricted Stock Units) having a value equal to the
Fair Market Value of an identical number of shares of Common Stock, which
may, but need not, provide that such Restricted Award may not be sold,
assigned, transferred or otherwise disposed of, pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation
or for any other purpose for such period (the Restricted Period)
as the Committee shall determine. Each Restricted Award granted under the
Plan shall be evidenced by an Award Agreement. Each Restricted Award so
granted shall be subject to the conditions set forth in this Section 7.2,
and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement. |
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(b) |
Restricted Stock and Restricted Stock
Units. |
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Each Participant granted Restricted Stock shall execute
and deliver to the Company an Award Agreement with respect to the
Restricted Stock setting forth the restrictions and other terms and
conditions applicable to such Restricted Stock. If the Committee
determines that the Restricted Stock shall be held by the Company or in
escrow rather than delivered to the Participant pending the release of the
applicable restrictions, the Committee may require the Participant to
additionally execute and deliver to the Company (A) an escrow agreement
satisfactory to the Committee, if applicable and (B) the appropriate blank
stock power with respect to the Restricted Stock covered by such
agreement. If a Participant fails to execute an agreement evidencing an
Award of Restricted Stock and, if applicable, an escrow agreement and
stock power, the Award shall be null and void. Subject to the restrictions
set forth in the Award, the Participant generally shall have the rights
and privileges of a shareholder as to such Restricted Stock, including the
right to vote such Restricted Stock and the right to receive dividends;
provided that, any cash dividends and stock dividends with respect to the
Restricted Stock shall be withheld by the Company for the Participants
account, and interest may be credited on the amount of the cash dividends
withheld at a rate and subject to such terms as determined by the
Committee. The cash dividends or stock dividends so withheld by the
Committee and attributable to any particular share of Restricted Stock
(and earnings thereon, if applicable) shall be distributed to the
Participant in cash or, at the discretion of the Committee, in shares of
Common Stock having a Fair Market Value equal to the amount of such
dividends, if applicable, upon the release of restrictions on such share
and, if such share is forfeited, the Participant shall have no right to
such dividends. |
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(ii) |
The terms and conditions of a grant of Restricted Stock
Units shall be reflected in an Award Agreement. No shares of Common Stock
shall be issued at the time a Restricted Stock Unit is granted, and the
Company will not be required to set aside a fund for the payment of any
such Award. A Participant shall have no voting rights with respect to any
Restricted Stock Units granted hereunder. At the discretion of
the Committee, each Restricted Stock Unit
(representing one share of Common Stock) may be credited with cash and stock
dividends paid by the Company in respect of one share of Common Stock
(Dividend Equivalents). Dividend Equivalents shall be withheld by the
Company for the Participants account, and interest may be credited on the
amount of cash Dividend Equivalents withheld at a rate and subject to such terms
as determined by the Committee. Dividend Equivalents credited to a Participants
account and attributable to any particular Restricted Stock Unit (and earnings
thereon, if applicable) shall be distributed in cash or, at the discretion of
the Committee, in shares of Common Stock having a Fair Market Value equal to the
amount of such Dividend Equivalents and earnings, if applicable, to the
Participant upon settlement of such Restricted Stock Unit and, if such
Restricted Stock Unit is forfeited, the Participant shall have no right to such
Dividend Equivalents. |
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(c) |
Restrictions |
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(i) |
Restricted Stock awarded to a Participant shall be
subject to the following restrictions until the expiration of the
Restricted Period, and to such other terms and conditions as may be set
forth in the applicable Award Agreement: (A) if an escrow arrangement is
used, the Participant shall not be entitled to delivery of the stock
certificate; (B) the shares shall be subject to the restrictions on
transferability set forth in the Award Agreement; (C) the shares shall be
subject to forfeiture to the extent provided in the applicable Award
Agreement; and (D) to the extent such shares are forfeited, the stock
certificates shall be returned to the Company, and all rights of the
Participant to such shares and as a shareholder with respect to such
shares shall terminate without further obligation on the part of the
Company. |
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(ii) |
Restricted Stock Units awarded to any Participant shall
be subject to (A) forfeiture until the expiration of the Restricted
Period, and satisfaction of any applicable Performance Goals during such
period, to the extent provided in the applicable Award Agreement, and to
the extent such Restricted Stock Units are forfeited, all rights of the
Participant to such Restricted Stock Units shall terminate without further
obligation on the part of the Company and (B) such other terms and
conditions as may be set forth in the applicable Award
Agreement. |
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(iii) |
The Committee shall have the authority to remove any or
all of the restrictions on the Restricted Stock and Restricted Stock Units
whenever it may determine that, by reason of changes in Applicable Laws or
other changes in circumstances arising after the date the Restricted Stock
or Restricted Stock Units are granted, such action is
appropriate. |
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(d) |
Restricted Period. With respect to Restricted
Awards, the Restricted Period shall commence on the Grant Date and end at
the time or times set forth on a schedule established by the Committee in
the applicable Award Agreement. |
- 19-
No Restricted Award may be granted or settled for a fraction of
a share of Common Stock. The Committee may, but shall not be required to,
provide for an acceleration of vesting in the terms of any Award Agreement upon
the occurrence of a specified event.
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(e) |
Delivery of Restricted Stock and Settlement of
Restricted Stock Units. Upon the expiration of the Restricted Period
with respect to any shares of Restricted Stock, the restrictions set forth
in Section 7.2(c) and the applicable Award Agreement shall be of no
further force or effect with respect to such shares, except as set forth
in the applicable Award Agreement. If an escrow arrangement is used, upon
such expiration, the Company shall deliver to the Participant, or his or
her beneficiary, without charge, the stock certificate evidencing the
shares of Restricted Stock which have not then been forfeited and with
respect to which the Restricted Period has expired (to the nearest full
share) and any cash dividends or stock dividends credited to the
Participants account with respect to such Restricted Stock and the
interest thereon, if any. Upon the expiration of the Restricted Period
with respect to any outstanding Restricted Stock Units, the Company shall
deliver to the Participant, or his or her beneficiary, without charge, one
share of Common Stock for each such outstanding Restricted Stock Unit
(Vested Unit) and cash equal to any Dividend Equivalents credited
with respect to each such Vested Unit in accordance with Section
7.2(b)(ii) hereof and the interest thereon or, at the discretion of the
Committee, in shares of Common Stock having a Fair Market Value equal to
such Dividend Equivalents and the interest thereon, if any; provided,
however, that, if explicitly provided in the applicable Award Agreement,
the Committee may, in its sole discretion, elect to pay cash or part cash
and part Common Stock in lieu of delivering only shares of Common Stock
for Vested Units. If a cash payment is made in lieu of delivering shares
of Common Stock, the amount of such payment shall be equal to the Fair
Market Value of the Common Stock as of the date on which the Restricted
Period lapsed with respect to each Vested Unit. |
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(f) |
Stock Restrictions. Each certificate representing
Restricted Stock awarded under the Plan shall bear a legend in such form
as the Company deems appropriate. |
7.3
Performance Compensation Awards.
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(a) |
General. The Committee shall have the authority,
at the time of grant of any Award described in this Plan (other than
Options and Stock Appreciation Rights granted with an exercise price equal
to or greater than the Fair Market Value per share of Common Stock on the
Grant Date), to designate such Award as a Performance Compensation Award
in order to qualify such Award as performance-based compensation under
Section 162(m) of the Code. In addition, the Committee shall have the
authority to make an Award of a cash bonus to any Participant and
designate such Award as a Performance Compensation Award in order to
qualify such Award as performance-based compensation under Section
162(m) of the Code. |
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(b) |
Eligibility. The Committee will, in its sole
discretion, designate within the first 90 days of a Performance Period
(or, if longer or shorter, within the maximum period allowed under Section
162(m) of the Code) which Participants will be eligible to receive
Performance Compensation Awards in respect of such
Performance Period. However, designation of a Participant eligible to
receive an Award hereunder for a Performance Period shall not in any
manner entitle the Participant to receive payment in respect of any
Performance Compensation Award for such Performance Period. The
determination as to whether or not such Participant becomes entitled to
payment in respect of any Performance Compensation Award shall be decided
solely in accordance with the provisions of this Section 7.3. Moreover,
designation of a Participant eligible to receive an Award hereunder for a
particular Performance Period shall not require designation of such
Participant eligible to receive an Award hereunder in any subsequent
Performance Period and designation of one person as a Participant eligible
to receive an Award hereunder shall not require designation of any other
person as a Participant eligible to receive an Award hereunder in such
period or in any other period. |
- 20-
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(c) |
Discretion of Committee with Respect to Performance
Compensation Awards. With regard to a particular Performance Period,
the Committee shall have full discretion to select the length of such
Performance Period (provided any such Performance Period shall be not less
than one fiscal quarter in duration), the type(s) of Performance
Compensation Awards to be issued, the Performance Criteria that will be
used to establish the Performance Goal(s), the kind(s) and/or level(s) of
the Performance Goal(s) that is (are) to apply to the Company and the
Performance Formula. Within the first 90 days of a Performance Period (or,
if longer or shorter, within the maximum period allowed under Section
162(m) of the Code), the Committee shall, with regard to the Performance
Compensation Awards to be issued for such Performance Period, exercise its
discretion with respect to each of the matters enumerated in the
immediately preceding sentence of this Section 7.3(c) and record the same
in writing. |
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(d) |
Payment of Performance Compensation
Awards |
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(i) |
Condition to Receipt of Payment. Unless otherwise
provided in the applicable Award Agreement, a Participant must be employed
by the Company on the last day of a Performance Period to be eligible for
payment in respect of a Performance Compensation Award for such
Performance Period. |
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(ii) |
Limitation. A Participant shall be eligible to
receive payment in respect of a Performance Compensation Award only to the
extent that: (A) the Performance Goals for such period are achieved; and
(B) the Performance Formula as applied against such Performance Goals
determines that all or some portion of such Participants Performance
Compensation Award has been earned for the Performance Period. |
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(iii) |
Certification. Following the completion of a
Performance Period, the Committee shall review and certify in writing
whether, and to what extent, the Performance Goals for the Performance
Period have been achieved and, if so, calculate and certify in writing the
amount of the Performance Compensation Awards earned for the period based
upon the Performance Formula. The Committee shall then determine the
actual size of each Participants Performance Compensation Award for the
Performance Period and, in so doing, may apply Negative Discretion
in accordance with Section 7.3(d)(iv) hereof, if and when it
deems appropriate. |
- 21-
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(iv) |
Use of Discretion. In determining the actual size
of an individual Performance Compensation Award for a Performance Period,
the Committee may reduce or eliminate the amount of the Performance
Compensation Award earned under the Performance Formula in the Performance
Period through the use of Negative Discretion if, in its sole judgment,
such reduction or elimination is appropriate. The Committee shall not have
the discretion to (A) grant or provide payment in respect of Performance
Compensation Awards for a Performance Period if the Performance Goals for
such Performance Period have not been attained or (B) increase a
Performance Compensation Award above the maximum amount payable under
Section 7.3(d)(i) of the Plan. |
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(v) |
Timing of Award Payments. Performance Compensation
Awards granted for a Performance Period shall be paid to Participants as
soon as administratively practicable following completion of the
certifications required by this Section 7.3. |
8.
Securities Law Compliance.
Each Award Agreement shall provide that no shares of Common Stock shall
be purchased or sold thereunder unless and until (a) any then applicable
requirements of state or federal laws and regulatory agencies have been fully
complied with to the satisfaction of the Company and its counsel and (b) if
required to do so by the Company, the Participant has executed and delivered to
the Company a letter of investment intent in such form and containing such
provisions as the Committee may require. The Company shall use reasonable
efforts to seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Awards and
to issue and sell shares of Common Stock upon exercise of the Awards; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act the Plan, any Award or any Common Stock issued or issuable
pursuant to any such Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Awards unless
and until such authority is obtained.
9. Use
of Proceeds from Stock.
Proceeds
from the sale of Common Stock pursuant to Awards, or upon exercise thereof,
shall constitute general funds of the Company.
10.
Miscellaneous.
10.1 Acceleration
of Exercisability and Vesting. The Committee shall have the power to
accelerate the time at which an Award may first be exercised or the time during
which an Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at which it may
first be exercised or the time during which it will vest.
- 22-
10.2
Shareholder Rights. Except as provided in the Plan or an Award Agreement,
no Participant shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares of Common Stock subject to such Award
unless and until such Participant has satisfied all requirements for exercise of
the Award pursuant to its terms and no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions of other rights for which the record date is prior to the date
such Common Stock certificate is issued, except as provided in Section 11
hereof.
10.3
No Employment or Other Service Rights. Nothing in the Plan or any
instrument executed or Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right
of the Company or an Affiliate to terminate (a) the employment of an Employee
with or without notice and with or without Cause or (b) the service of a
Director pursuant to the By-laws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.
10.4
Transfer; Approved Leave of Absence. For purposes of the Plan, no
termination of employment by an Employee shall be deemed to result from either
(a) a transfer to the employment of the Company from an Affiliate or from the
Company to an Affiliate, or from one Affiliate to another, or (b) an approved
leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the Employees right to reemployment is guaranteed
either by a statute or by contract or under the policy pursuant to which the
leave of absence was granted or if the Committee otherwise so provides in
writing, in either case, except to the extent inconsistent with Section 409A of
the Code if the applicable Award is subject thereto.
10.5
Withholding Obligations. To the extent provided by the terms of an Award
Agreement and subject to the discretion of the Committee, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under an Award by any of the following
means (in addition to the Companys right to withhold from any compensation paid
to the Participant by the Company) or by a combination of such means: (a)
tendering a cash payment; (b) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under the
Award, provided, however, that no shares of Common Stock are withheld with a
value exceeding the minimum amount of tax required to be withheld by law; or (c)
delivering to the Company previously owned and unencumbered shares of Common
Stock of the Company.
11.
Adjustments Upon Changes in Stock.
In the event of changes in the outstanding Common Stock or in the capital
structure of the Company by reason of any stock or extraordinary cash dividend,
stock split, reverse stock split, an extraordinary corporate transaction such as
any recapitalization, reorganization, merger, consolidation, combination,
exchange, or other relevant change in capitalization occurring after the Grant
Date of any Award, Awards granted under the Plan and any Award Agreements, the
exercise price of Options and Stock Appreciation Rights and the maximum number
of shares of Common Stock subject to all Awards stated in Section 4 will be
equitably adjusted or substituted, as to the number, price or kind of a share of
Common Stock or other consideration subject to such Awards to the extent
necessary to preserve the economic intent of such Award. In the case of
adjustments made pursuant to this Section 11, unless the Committee specifically determines that such adjustment is in
the best interests of the Company or its Affiliates, the Committee shall, in the
case of Incentive Stock Options, ensure that any adjustments under this Section
11 will not constitute a modification, extension or renewal of the Incentive
Stock Options within the meaning of Section 424(h)(3) of the Code and in the
case of Non-qualified Stock Options, ensure that any adjustments under this
Section 11 will not constitute a modification of such Non-qualified Stock
Options within the meaning of Section 409A of the Code. Any adjustments made
under this Section 11 shall be made in a manner which does not adversely affect
the exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further,
with respect to Awards intended to qualify as performance-based compensation
under Section 162(m) of the Code, any adjustments or substitutions will not
cause the Company to be denied a tax deduction on account of Section 162(m) of
the Code. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
- 23-
12.
Effect of Change in Control.
12.1
Unless otherwise provided in an Award Agreement, notwithstanding any provision
of the Plan to the contrary:
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(a) |
In the event of a Change in Control, all Options and
Stock Appreciation Rights shall become immediately exercisable with
respect to 100% of the shares subject to such Options or Stock
Appreciation Rights, and/or the Restricted Period shall expire immediately
with respect to 100% of the shares of Restricted Stock or Restricted Stock
Units. |
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(b) |
With respect to Performance Compensation Awards, in the
event of a Change in Control, all Performance Goals or other vesting
criteria will be deemed achieved at 100% of target levels and all other
terms and conditions will be deemed met. |
To the extent practicable, any actions taken by the Committee
under the immediately preceding clauses (a) and (b) shall occur in a manner and
at a time which allows affected Participants the ability to participate in the
Change in Control with respect to the shares of Common Stock subject to their
Awards.
12.2
In addition, in the event of a Change in Control, the Committee may in its
discretion and upon at least 10 days advance notice to the affected persons,
cancel any outstanding Awards and pay to the holders thereof, in cash or stock,
or any combination thereof, the value of such Awards based upon the price per
share of Common Stock received or to be received by other shareholders of the
Company in the event. In the case of any Option or Stock Appreciation Right with
an exercise price (or SAR Exercise Price in the case of a Stock Appreciation
Right) that equals or exceeds the price paid for a share of Common Stock in
connection with the Change in Control, the Committee may cancel the Option or
Stock Appreciation Right without the payment of consideration therefor.
12.3
The obligations of the Company under the Plan shall be binding upon any
successor corporation or organization resulting from the merger, consolidation
or other reorganization of the Company, or upon any successor corporation or
organization succeeding to all or substantially all of the assets and business
of the Company and its Affiliates, taken as a whole.
- 24-
13.
Amendment of the Plan and Awards.
13.1
Amendment of Plan. The Board at any time, and from time to time, may
amend or terminate the Plan. However, except as provided in Section 11 relating
to adjustments upon changes in Common Stock and Section 13.3, no amendment shall
be effective unless approved by the shareholders of the Company to the extent
shareholder approval is necessary to satisfy any Applicable Laws. At the time of
such amendment, the Board shall determine, upon advice from counsel, whether
such amendment will be contingent on shareholder approval.
13.2
Shareholder Approval. The Board may, in its sole discretion, submit any
other amendment to the Plan for shareholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
13.3
Contemplated Amendments. It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to provide
eligible Employees, Consultants and Directors with the maximum benefits provided
or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options or to the
nonqualified deferred compensation provisions of Section 409A of the Code and/or
to bring the Plan and/or Awards granted under it into compliance therewith.
13.4
No Impairment of Rights. Rights under any Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (a) the
Company requests the consent of the Participant and (b) the Participant consents
in writing.
13.5
Amendment of Awards. The Committee at any time, and from time to time,
may amend the terms of any one or more Awards; provided, however, that the
Committee may not affect any amendment which would otherwise constitute an
impairment of the rights under any Award unless (a) the Company requests the
consent of the Participant and (b) the Participant consents in writing.
14.
General Provisions.
14.1
Forfeiture Events. The Committee may specify in an Award Agreement that
the Participants rights, payments and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain events, in addition to applicable vesting conditions of an
Award. Such events may include, without limitation, breach of non-competition,
non-solicitation, confidentiality, or other restrictive covenants that are
contained in the Award Agreement or otherwise applicable to the Participant, a
termination of the Participants Continuous Service for Cause, or other conduct
by the Participant that is detrimental to the business or reputation of the
Company and/or its Affiliates. 14.2 Clawback. Notwithstanding any other
provisions in this Plan, any Award which is subject to recovery under any law,
government regulation or stock exchange listing requirement, will be subject to
such deductions and clawback as may be required to be made pursuant to such law,
government regulation or stock exchange listing requirement (or any policy
adopted by the Company pursuant to any such law, government regulation or stock
exchange listing requirement).
- 25-
14.3
Other Compensation Arrangements. Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific
cases.
14.4
Sub-plans. The Committee may from time to time establish sub-plans under
the Plan for purposes of satisfying blue sky, securities, tax or other laws of
various jurisdictions in which the Company intends to grant Awards. Any
sub-plans shall contain such limitations and other terms and conditions as the
Committee determines are necessary or desirable. All sub- plans shall be deemed
a part of the Plan, but each sub-plan shall apply only to the Participants in
the jurisdiction for which the sub-plan was designed.
14.5
Deferral of Awards. The Committee may establish one or more programs
under the Plan to permit selected Participants the opportunity to elect to defer
receipt of consideration upon exercise of an Award, satisfaction of performance
criteria, or other event that absent the election would entitle the Participant
to payment or receipt of shares of Common Stock or other consideration under an
Award. The Committee may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Committee deems
advisable for the administration of any such deferral program.
14.6
Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board
nor the Committee shall be required to establish any special or separate fund or
to segregate any assets to assure the performance of its obligations under the
Plan.
14.7
Delivery. Upon exercise of a right granted under this Plan, the Company
shall issue Common Stock or pay any amounts due within a reasonable period of
time thereafter. Subject to any statutory or regulatory obligations the Company
may otherwise have, for purposes of this Plan, 30 days shall be considered a
reasonable period of time.
14.8
No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan. The Committee shall determine whether
cash, additional Awards or other securities or property shall be issued or paid
in lieu of fractional shares of Common Stock or whether any fractional shares
should be rounded, forfeited or otherwise eliminated. 14.9 Other
Provisions. The Award Agreements authorized under the Plan may contain such
other provisions not inconsistent with this Plan, including, without limitation,
restrictions upon the exercise of the Awards, as the Committee may deem
advisable.
14.10
Section 409A. The Plan is intended to comply with Section 409A of the
Code to the extent subject thereto, and, accordingly, to the maximum extent
permitted, the Plan shall be interpreted and administered to be in compliance
therewith. Any payments described in the Plan that are due within the
short-term deferral period as defined in Section 409A of the Code shall not be
treated as deferred compensation unless Applicable Laws require otherwise.
Notwithstanding anything to the contrary in the Plan, to the extent required to
avoid accelerated taxation and tax penalties under Section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to the Plan during the six (6) month period immediately
following the Participants termination of Continuous Service shall instead be
paid on the first payroll date after the six-month anniversary of the
Participants separation from service (or the Participants death, if earlier).
Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation
to take any action to prevent the assessment of any excise tax or penalty on any
Participant under Section 409A of the Code and neither the Company nor the
Committee will have any liability to any Participant for such tax or penalty.
- 26-
14.11
Disqualifying Dispositions. Any Participant who shall make a
disposition (as defined in Section 424 of the Code) of all or any portion of
shares of Common Stock acquired upon exercise of an Incentive Stock Option
within two years from the Grant Date of such Incentive Stock Option or within
one year after the issuance of the shares of Common Stock acquired upon exercise
of such Incentive Stock Option (a Disqualifying Disposition) shall be
required to immediately advise the Company in writing as to the occurrence of
the sale and the price realized upon the sale of such shares of Common Stock.
14.12
Section 16. It is the intent of the Company that the Plan
satisfy, and be interpreted in a manner that satisfies, the applicable
requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act
so that Participants will be entitled to the benefit of Rule 16b-3, or any other
rule promulgated under Section 16 of the Exchange Act, and will not be subject
to short-swing liability under Section 16 of the Exchange Act. Accordingly, if
the operation of any provision of the Plan would conflict with the intent
expressed in this Section 14.12, such provision to the extent possible shall be
interpreted and/or deemed amended so as to avoid such conflict.
14.13
Section 162(m). To the extent the Committee issues any
Award that is intended to be exempt from the deduction limitation of Section
162(m) of the Code, the Committee may, without shareholder or grantee approval,
amend the Plan or the relevant Award Agreement retroactively or prospectively to
the extent it determines necessary in order to comply with any subsequent
clarification of Section 162(m) of the Code required to preserve the Companys
federal income tax deduction for compensation paid pursuant to any such Award.
14.14 Beneficiary
Designation. Each Participant under the Plan may from time to time name any
beneficiary or beneficiaries by whom any right under the Plan is to be exercised
in case of such Participants death. Each designation will revoke all prior
designations by the same Participant, shall be in a form reasonably prescribed
by the Committee and shall be effective only when filed by the Participant in
writing with the Company during the Participants lifetime. 14.15
Expenses. The costs of administering the Plan shall be paid by the
Company. 14.16 Severability. If any of the provisions of the Plan or any
Award Agreement is held to be invalid, illegal or unenforceable, whether in
whole or in part, such provision shall be deemed modified to the extent, but
only to the extent, of such invalidity, illegality or unenforceability and the
remaining provisions shall not be affected thereby.
14.17
Plan Headings. The headings in the Plan are for purposes of convenience
only and are not intended to define or limit the construction of the provisions
hereof.
14.18
Non-Uniform Treatment. The Committees determinations under the Plan need
not be uniform and may be made by it selectively among persons who are eligible
to receive, or actually receive, Awards. Without limiting the generality of the
foregoing, the Committee shall be entitled to make non-uniform and selective
determinations, amendments and adjustments, and to enter into non-uniform and
selective Award Agreements.
- 27-
15.
Effective Date of Plan.
The Plan shall become effective as of the Effective Date, but no Award shall be
exercised (or, in the case of a stock Award, shall be granted) unless and until
the Plan has been approved by the shareholders of the Company, which approval
shall be within twelve (12) months before or after the date the Plan is adopted
by the Board.
16.
Termination or Suspension of the Plan.
The Plan shall terminate automatically on October 7, 2023. No Award shall be
granted pursuant to the Plan after such date, but Awards theretofore granted may
extend beyond that date. The Board may suspend or terminate the Plan at any
earlier date pursuant to Section 13.1 hereof. No Awards may be granted under the
Plan while the Plan is suspended or after it is terminated. Unless the Company
determines to submit Section 7.3 of the Plan and the definition of Performance
Goal and Performance Criteria to the Companys shareholders at the first
shareholder meeting that occurs in the fifth year following the year in which
the Plan was last approved by shareholders (or any earlier meeting designated by
the Board), in accordance with the requirements of Section 162(m) of the Code,
and such shareholder approval is obtained, then no further Performance
Compensation Awards shall be made to Covered Employees under Section 7.3 after
the date of such annual meeting, but the Plan may continue in effect for Awards
to Participants not in accordance with Section 162(m) of the Code.
17.
Choice of Law.
The law of the State of Nevada shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
states conflict of law rules.
As adopted by the Board of Directors of The Alkaline Water
Company Inc. on October 7, 2013.
As approved by the shareholders of The Alkaline Water Company
Inc. on October 7, 2013.
As amended by the Board of Directors of The Alkaline Water
Company Inc. on October 31, 2014.
AMENDING AGREEMENT TO STOCK OPTION AGREEMENT
THIS AMENDING AGREEMENT is entered into as of <>, 2014.
BETWEEN:
THE ALKALINE WATER COMPANY INC., a company incorporated
pursuant to the laws of the State of Nevada, with an office at 7730 E. Greenway
Road, Suite 203, Scottsdale, Arizona, 85260
(the Company)
AND:
<>, a businessman with an address at <>
(the Optionee)
WHEREAS:
A. The Company
and the Optionee (collectively referred to as the Parties) entered into
a Stock Option Agreement dated October 9, 2013 (the Stock Option
Agreement); and
B. The Parties
wish to amend certain provisions of the Stock Option Agreement to reflect a
change in the Exercise Price (as defined in the Stock Option Agreement).
NOW THEREFORE THIS AMENDING AGREEMENT witnesses that, in
consideration for the payment by the Optionee to the Company of the sum of one
($1.00) dollar, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties do hereby covenant and
agree as follows:
1. |
Subparagraph 1.1 (g) of the Stock Option Agreement is
deleted in its entirety and replaced with the following: |
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(g) Exercise Price
means $0.15 per share; |
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2. |
Except as hereby amended, the Parties agree that the
Stock Option Agreement remains in full force and effect. |
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3. |
This Amending Agreement may be executed in several
counterparts, each of which will be deemed to be an original and all of
which will together constitute one and the same
instrument. |
- 2-
4. |
Delivery of an executed copy of this Amending Agreement
by electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy will be deemed to be
execution and delivery of this Amending Agreement as of the date first set
forth above. |
THE ALKALINE WATER COMPANY INC.
Per: |
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Authorized Signatory |
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WITNESSED BY: |
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