Description of the Plan
The following summary describes briefly the principal features of the Equity Plan as it is currently in effect, without adjustment for the proposed Equity Plan
Amendment, and is qualified in its entirety by reference to the full text of the Equity Plan and the proposed Equity Plan Amendment, which is provided as Appendix A to this Proxy Statement.
Securities Subject to the Equity Plan
. A maximum of 7,734,601 shares of our
common stock may be issued or transferred pursuant to awards under the Equity Plan. The number of shares of our common stock available under the Equity Plan will be reduced by one share for each share issued under an award. The shares of our common
stock covered by the Equity Plan may be treasury shares, authorized but unissued shares or shares purchased in the open market.
In the event of any
termination, expiration, lapse or forfeiture of an award, any shares subject to the award will again be made available for future grants under the Equity Plan. Any shares of restricted stock repurchased by the company at the same price paid for such
shares will be made available for issuance again under the Equity Plan.
Eligibility
. All of our employees, consultants, and directors, and employees and consultants of our affiliates, will be eligible to receive awards under the Equity Plan.
Awards under the Equity Plan
. The Equity Plan provides that the administrator
may grant or issue stock options, which may be non-qualified stock options (NQSOs) or, solely to eligible employees, incentive stock options designed to comply with the applicable provisions of Section 422 of the Internal Revenue Code of
1986, as amended (the Code), stock appreciation rights (SARs), restricted stock, restricted stock units, deferred stock, performance awards and stock payments, or any combination thereof. The terms and conditions of each
award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award. If an incentive stock option is granted to an employee who then owns, directly or by attribution under
the Code, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary, then the term of the option will not exceed five years, and the option price will be at least 110% of the fair market
value of the shares on the date that the option is granted.
Award Limits
. The Equity Plan provides that the maximum aggregate number of shares of common stock subject to all Awards granted to any one employee or consultant in any calendar year, as adjusted, is 1,500,000. The maximum aggregate
number of shares of common stock subject to all Awards granted to any one non-employee director in any calendar year, as adjusted, is 75,000. The maximum amount of any Performance Award granted to a Participant for any calendar year that is payable
solely in cash is $5,000,000.
Vesting and Exercise of Awards
. The
applicable award agreement will contain the period during which the right to exercise the award in whole or in part vests, including the events or conditions upon which the vesting of an award may accelerate. No portion of an award which is not
vested at the participants termination of employment, termination of directorship or termination of consulting relationship, as applicable, will subsequently become vested, except as may be otherwise provided by the administrator either in the
agreement relating to the award or by action following the grant of the award.
Transferability of
Awards
. Awards generally may not be sold, pledged, assigned or transferred in any manner other than by will or by the laws of descent and distribution or, subject to the consent of the administrator,
pursuant to a domestic relations order, unless and until such award has been exercised, or the shares underlying such award have been issued, and all restrictions applicable to such shares have lapsed. Notwithstanding the foregoing, NQSOs may be
transferred without consideration to certain family members and trusts with the administrators consent. Awards may be exercised, during the lifetime of the participant, only by the participant or such permitted transferee.
Forfeiture and Claw-Back Provisions
. In the event (i) a participant
terminates service with the company prior to a specified date or within a specified time following receipt or exercise of the award, (ii) the company terminates the participants service for cause, or (iii) the participant engages
in certain competitive activities with the company, the administrator has the right to require the participant to repay any proceeds, gains or other economic benefit actually or constructively received by the participant or to terminate the award.
In addition, all awards (including any proceeds, gains or other
42 | Keane Group, Inc.