form8k43009.htm
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): April 29, 2009
INTERNATIONAL
SHIPHOLDING CORPORATION
(Exact
name of registrant as specified in its charter)
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DELAWARE
(State
or other jurisdiction
of
incorporation)
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001-10852
(Commission
File
Number)
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36-2989662
(I.R.S.
Employer
Identification
No.)
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11
North Water Street, Suite 18290
Mobile,
Alabama
(Address
of principal executive offices)
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36602
(Zip
Code)
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(251)
243-9100
(Registrant’s
telephone number, including area code)
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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item
2.02. Results of Operations and
Financial Condition.
On April 29, 2009, International
Shipholding Corporation issued an earnings release reporting its financial
results for the first quarter of 2009. A copy of the press release is
furnished as Exhibit 99.1 and incorporated herein by reference.
Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Agreements of Certain
Officers
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(e) The 2009 Stock Incentive
Plan. At the annual stockholders’ meeting on April 29, 2009,
the stockholders of International Shipholding Corporation (the “Company”)
approved the International Shipholding Corporation 2009 Stock Incentive Plan
(the “Plan”).
The
compensation committee of the board of directors of the Company will generally
administer the Plan, and has the authority to grant awards under the Plan,
including setting the terms of the awards. Incentives under the Plan
may be granted in any one or a combination of the following
forms: incentive stock options under Section 422 of the Internal
Revenue Code, nonqualified stock options, restricted stock, restricted stock
units, stock appreciation rights, and other stock-based awards.
A total
of 200,000 shares of the Company’s common stock are authorized to be issued
under the Plan. The Company has no other equity compensation plan
with shares available for issuance. Officers, directors, and key
employees of the Company and the Company’s consultants and advisors will be
eligible to receive incentives under the Plan when designated by the
compensation committee as Plan participants.
This
brief summary of Plan terms is qualified in its entirety by the terms of the
Plan, a copy of which is filed as an exhibit to this report on Form
8-K.
Item
8.01 Other
Events
On April
29, 2009, International Shipholding Corporation issued a press release
announcing its 2009 Annual Meeting results. A copy of the press
release is furnished as Exhibit 99.3 and incorporated herein by
reference.
Item
9.01 Financial
Statements and Exhibits
(d)
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Exhibits
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Exhibit
Number
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Description
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99.1
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Earnings
Release dated April 29, 2009 – 1:51 pm, U.S. Eastern
Time
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99.2
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International
Shipholding Corporation 2009 Stock Incentive Plan
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99.3
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Press
Release dated April 29, 2009 – 4:26 pm, U.S. Eastern
Time
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SIGNATURE
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.
INTERNATIONAL
SHIPHOLDING CORPORATION
April 30,
2009 /s/ Manuel G.
Estrada
Manuel
G. Estrada
Vice President and
Chief Financial Officer
INTERNATIONAL
SHIPHOLDING CORPORATION
2009
STOCK INCENTIVE PLAN
1. Purpose. The
purpose of the International Shipholding Corporation 2009 Stock Incentive Plan
(the “Plan”) is
to increase stockholder value and to advance the interests of International
Shipholding Corporation (“ISC”) and its
subsidiaries (collectively with ISC, the “Company”) by
furnishing stock-based economic incentives (the “Incentives”) designed
to attract, retain, reward and motivate key employees, officers and directors of
the Company and consultants and advisors to the Company and to strengthen the
mutuality of interests between service providers and ISC’s
stockholders. Incentives consist of opportunities to purchase or
receive shares of Common Stock, $1.00 par value per share, of ISC (the “Common Stock”) or
cash valued in relation to common stock, on terms determined under the
Plan. As used in the Plan, the term “subsidiary” means any
corporation, limited liability company or other entity, of which ISC owns
(directly or indirectly) within the meaning of section 424(f) of the Internal
Revenue Code of 1986, as amended (the “Code”), 50% or more
of the total combined voting power of all classes of stock, membership
interests, or other equity interests issued thereby.
2. Administration.
2.1. Composition. The
Plan shall generally be administered by the Compensation Committee (the “Committee”) of the
Board of Directors of ISC (the “Board”). The
Committee shall consist of not fewer than two members of the Board, each of whom
shall (a) qualify as a “non-employee director” under Rule 16b-3 under the
Securities Exchange Act of 1934 (the “1934 Act”) or any
successor rule and (b) qualify as an “outside director” under Section 162(m) of
the Code (“Section
162(m)”).
2.2. Authority. The
Committee shall have plenary authority to award Incentives under the Plan and to
enter into agreements with or provide notices to participants as to the terms of
the Incentives (the “Incentive
Agreements”). The Committee shall have the general authority
to interpret the Plan, to establish any rules or regulations relating to the
Plan that it determines to be appropriate, and to make any other determination
that it believes necessary or advisable for the proper administration of the
Plan. Committee decisions in matters relating to the Plan shall be
final and conclusive on the Company and participants. The Committee
may delegate its authority hereunder to the extent provided in Section 3
hereof.
3. Eligible
Participants. Key employees, officers and directors of the
Company and persons providing services as consultants or advisors to the Company
shall become eligible to receive Incentives under the Plan when designated by
the Committee. With respect to participants not subject to Section 16
of the 1934 Act or Section 162(m) of the Code, the Committee may delegate to
appropriate officers of the Company its authority to designate participants, to
determine the size and type of Incentives to be received by those participants
and to set and modify the terms of such Incentives; provided, however, that the
resolution so authorizing any such officer shall specify the total number of
Incentives such officer may so award and such actions shall be treated for all
purposes as if taken by the Committee, and provided further that the per share
exercise price of any options granted by an officer, rather than by the
Committee, shall be equal to the Fair Market Value (as defined in Section 12.11)
of a share of Common Stock on the later of the date of grant or the date the
participant’s employment with or service to the Company commences.
4. Types of
Incentives. Incentives may be granted under the Plan to
eligible participants in the forms of (a) incentive stock options; (b)
non-qualified stock options; (c) restricted stock, (d) restricted stock units
(“RSUs”); (e)
stock appreciation rights (“SARs”) and (f) Other
Stock-Based Awards (as defined in Section 10).
5. Shares
Subject to the Plan.
5.1. Number of
Shares. Subject to adjustment as provided in Section 12.5, the
maximum number of shares of Common Stock that may be delivered to participants
and their permitted transferees under the Plan shall be 200,000
shares.
5.2. Share Counting. To
the extent any shares of Common Stock covered by a stock option or SAR are not
delivered to a participant or permitted transferee because the Incentive is
forfeited or canceled, or shares of Common Stock are not delivered because an
Incentive is paid or settled in cash, such shares shall not be deemed to have
been delivered for purposes of determining the maximum number of shares of
Common Stock available for delivery under this Plan. In the event
that shares of Common Stock are issued as an Incentive and thereafter are
forfeited or reacquired by the Company pursuant to rights reserved upon issuance
thereof, such forfeited and reacquired Shares may again be issued under the
Plan. With respect to SARs, if the SAR is payable in shares of Common
Stock, all shares to which the SARs relate are counted against the Plan limits,
rather than the net number of shares delivered upon exercise of the
SAR.
5.3. Limitations on
Awards. Subject to adjustment as provided in Section 12.5, the
following additional limitations are imposed under the Plan:
(a) The
maximum number of shares of Common Stock that may be issued upon exercise of
stock options intended to qualify as incentive stock options under Section 422
of the Code shall be 200,000 shares.
(b) The
maximum number of shares of Common Stock that may be covered by Incentives
granted under the Plan to any one individual during any one fiscal-year period
shall be 60,000.
(c) Restricted
stock, restricted stock units and Other Stock-Based Awards with respect to an
aggregate of 10,000 shares of Common Stock may be granted to officers,
employees, consultants, or advisors without compliance with the minimum vesting
periods or exceptions provided in Sections 7.2, 8.2 and 10.2.
(d) Each
director who is not an employee of the Company may be granted Incentives with
respect to no more than 5,000 shares of Common Stock each fiscal
year.
5.4. Type of Common
Stock. Common Stock issued under the Plan may be authorized
and unissued shares or issued shares held as treasury shares.
6. Stock Options. A
stock option is a right to purchase shares of Common Stock from
ISC. Stock options granted under the Plan may be incentive stock
options (as such term is defined in Section 422 of the Code) or non-qualified
stock options. Any option that is designated as a non-qualified stock
option shall not be treated as an incentive stock option. Each stock
option granted by the Committee under this Plan shall be subject to the
following terms and conditions:
6.1. Price. The exercise
price per share shall be determined by the Committee, subject to adjustment
under Section 12.5; provided that in no event shall the exercise price be less
than the Fair Market Value (as defined in Section 12.11) of a share of Common
Stock on the date of grant, except in the case of a stock option granted in
assumption of or substitution for an outstanding award of a company acquired by
the Company or with which the Company combines.
6.2. Number. The number
of shares of Common Stock subject to the option shall be determined by the
Committee, subject to Section 5 and subject to adjustment as provided in Section
12.5.
6.3. Duration and Time for
Exercise. The term of each stock option shall be determined by
the Committee, but shall not exceed a maximum term of ten years. Each
stock option shall become exercisable at such time or times during its term as
shall be determined by the Committee. Notwithstanding the foregoing,
the Committee may accelerate the exercisability of any stock option at any time,
in addition to the automatic acceleration of stock options under Section
12.10.
6.4. Repurchase. Upon
approval of the Committee, the Company may repurchase a previously granted stock
option from a participant by mutual agreement before such option has been
exercised by payment to the participant of the amount per share by
which: (a) the Fair Market Value (as defined in Section 12.11) of the
Common Stock subject to the option on the business day immediately preceding the
date of purchase exceeds (b) the exercise price, or by payment of such other
mutually agreed upon amount; provided, however, that no such repurchase shall be
permitted if prohibited by Section 6.6.
6.5. Manner of
Exercise. A stock option may be exercised, in whole or in
part, by giving written notice to the Company, specifying the number of shares
of Common Stock to be purchased. The exercise notice shall be
accompanied by the full purchase price for such shares. The option
price shall be payable in United States dollars and may be paid (a) in cash; (b)
by check; (c) by delivery of or attestation of ownership of shares of Common
Stock, which shares shall be valued for this purpose at the Fair Market Value on
the business day immediately preceding the date such option is exercised; (d) by
delivery of irrevocable written instructions to a broker approved by the Company
(with a copy to the Company) to immediately sell a portion of the shares,
issuable under the option and to deliver promptly to the Company the amount of
sale proceeds (or loan proceeds if the broker lends funds to the participant for
delivery to the Company) to pay the exercise price; or (e) if approved by the
Committee, through a net exercise procedure whereby the optionee surrenders the
option in exchange for that number of shares of Common Stock with an aggregate
Fair Market Value equal to the difference between the aggregate exercise price
of the options being surrendered and the aggregate Fair Market Value of the
shares of Common Stock subject to the option, (f) in such other manner as may be
authorized from time to time by the Committee.
6.6. Repricing. Except
for adjustments pursuant to Section 12.5 or actions permitted to be taken by the
Committee under Section 12.10(c) in the event of a Change of Control, unless
approved by the stockholders of the Company, (a) the exercise or base price for
any outstanding option or SAR granted under this Plan may not be decreased after
the date of grant and (b) an outstanding option or SAR that has been granted
under this Plan may not, as of any date that such option or SAR has a per share
exercise price that is greater than the then current Fair Market Value of a
share of Common Stock, be surrendered to the Company as consideration for the
grant of a new option or SAR with a lower exercise price, shares of restricted
stock, restricted stock units, an Other Stock-Based Award, a cash payment or
Common Stock.
6.7. Incentive Stock
Options. Notwithstanding anything in the Plan to the contrary,
the following additional provisions shall apply to the grant of stock options
that are intended to qualify as incentive stock options (as such term is defined
in Section 422 of the Code):
(a) Any
incentive stock option agreement authorized under the Plan shall contain such
other provisions as the Committee shall deem advisable, but shall in all events
be consistent with and contain or be deemed to contain all provisions required
in order to qualify the options as incentive stock options.
(b) All
incentive stock options must be granted within ten years from the date on which
this Plan is adopted by the Board of Directors.
(c) No
incentive stock options shall be granted to any non-employee or to any
participant who, at the time such option is granted, would own (within the
meaning of Section 422 of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the employer corporation or of
its parent or subsidiary corporation.
(d) The
aggregate Fair Market Value (determined with respect to each incentive stock
option as of the time such incentive stock option is granted) of the Common
Stock with respect to which incentive stock options are exercisable for the
first time by a participant during any calendar year (under the Plan or any
other plan of ISC or any of its subsidiaries) shall not exceed
$100,000. To the extent that such limitation is exceeded, the excess
options shall be treated as non-qualified stock options for federal income tax
purposes.
7. Restricted
Stock.
7.1. Grant of Restricted
Stock. The Committee may award shares of restricted stock to
such eligible participants as the Committee determines pursuant to the terms of
Section 3. An award of restricted stock shall be subject to such
restrictions on transfer and forfeitability provisions and such other terms and
conditions, including the attainment of specified performance goals, as the
Committee may determine, subject to the provisions of the Plan. To
the extent restricted stock is intended to qualify as “performance-based
compensation” under Section 162(m), it must be granted subject to the attainment
of performance goals as described in Section 11 below and meet the additional
requirements imposed by Section 162(m).
7.2. The Restricted
Period. At the time an award of restricted stock is made, the
Committee shall establish a period of time during which the transfer of the
shares of restricted stock shall be restricted and after which the shares of
restricted stock shall be vested (the “Restricted
Period”). The Restricted Period shall be a minimum of three
years with incremental vesting of portions of the award over the three-year
period permitted, with the following exceptions:
(a) If the
vesting of the shares of restricted stock is based upon the attainment of
performance goals as described in Section 11, a minimum Restricted Period of one
year is allowed.
(b) No
minimum Restricted Period applies to grants to non-employee directors, to grants
issued in payment of cash amounts earned under the Company’s annual incentive
plan, or to grants under Section 5.3(c) hereof.
Each
award of restricted stock may have a different Restricted Period. The
expiration of the Restricted Period shall also occur: (1) as provided under
Section 12.3 in the event of termination of employment under the circumstances
provided in the Incentive Agreement, and (2) as described in Section 12.10 in
the event of a Change of Control of the Company.
7.3. Escrow. The
participant receiving restricted stock shall enter into an Incentive Agreement
with the Company setting forth the conditions of the grant. Any
certificates representing shares of restricted stock shall be registered in the
name of the participant and deposited with the Company, together with a stock
power endorsed in blank by the participant. Each such certificate
shall bear a legend in substantially the following form:
The
transferability of this certificate and the shares of Common Stock represented
by it are subject to the terms and conditions (including conditions of
forfeiture) contained in the International Shipholding Corporation (the
“Company”) 2009 Stock Incentive Plan (the “Plan”), and an agreement entered into
between the registered owner and Company thereunder. Copies of the
Plan and the agreement are on file at the principal office of the
Company.
Alternatively,
in the discretion of the Company, ownership of the shares of restricted stock
and the appropriate restrictions shall be reflected in the records of the
Company’s transfer agent and no physical certificates shall be issued prior to
vesting.
7.4. Dividends on Restricted
Stock. Any and all cash and stock dividends paid with respect
to the shares of restricted stock shall be subject to any restrictions on
transfer, forfeitability provisions or reinvestment requirements as the
Committee may, in its discretion, prescribe in the Incentive
Agreement.
7.5. Forfeiture. In the
event of the forfeiture of any shares of restricted stock under the terms
provided in the Incentive Agreement (including any additional shares of
restricted stock that may result from the reinvestment of cash and stock
dividends, if so provided in the Incentive Agreement), such forfeited shares
shall be surrendered and any certificates cancelled. The participants
shall have the same rights and privileges, and be subject to the same forfeiture
provisions, with respect to any additional shares received pursuant to Section
12.5 due to a recapitalization or other change in capitalization.
7.6. Expiration of Restricted
Period. Upon the expiration or termination of the Restricted
Period and the satisfaction of any other conditions prescribed by the Committee,
the restrictions applicable to the restricted stock shall lapse and, unless
otherwise instructed by the participant, a stock certificate for the number of
shares of restricted stock with respect to which the restrictions have lapsed
shall be delivered, free of all such restrictions and legends, except any that
may be imposed by law, to the participant or the participant’s estate, as the
case may be.
7.7. Rights as a
Stockholder. Subject to the terms and conditions of the Plan
and subject to any restrictions on the receipt of dividends that may be imposed
in the Incentive Agreement, each participant receiving restricted stock shall
have all the rights of a stockholder with respect to shares of stock during the
Restricted Period, including without limitation, the right to vote any shares of
Common Stock.
8. Restricted
Stock Units.
8.1. Grant of Restricted Stock
Units. A restricted stock unit, or RSU, represents the right
to receive from the Company on the respective scheduled vesting or payment date
for such RSU, one share of Common Stock. An award of restricted stock
units may be subject to the attainment of specified performance goals or
targets, forfeitability provisions and such other terms and conditions as the
Committee may determine, subject to the provisions of the Plan. To
the extent an award of restricted stock units is intended to qualify as
performance-based compensation under Section 162(m), it must be granted subject
to the attainment of performance goals as described in Section 11 and meet the
additional requirements imposed by Section 162(m).
8.2. Vesting Period. At
the time an award of restricted stock units is made, the Committee shall
establish a period of time during which the restricted stock units shall vest
(the “Vesting
Period”). The Vesting Period shall be a minimum of three years
with incremental vesting over the three-year period permitted, with the
following exceptions:
(a) If the
vesting of the shares of restricted stock units is based upon the attainment of
performance goals as described in Section 11, a minimum Vesting Period of one
year is allowed.
(b) No
minimum Restricted Period applies to grants of restricted stock units to
non-employee directors, to grants issued in payment of cash amounts earned under
the Company’s annual incentive plan, or to grants under Section 5.3(c)
hereof.
Each
award of restricted stock units may have a different Vesting
Period. The acceleration of the expiration of the Vesting Period
shall occur shall also occur: (1) as provided under Section 12.3 in the event of
termination of employment under the circumstances provided in the Incentive
Agreement, and (2) as described in Section 12.10 in the event of a Change of
Control of the Company.
8.3. Dividend Equivalent
Accounts. Subject to the terms and conditions of this Plan and
the applicable Incentive Agreement, as well as any procedures established by the
Committee, the Committee may determine to pay dividend equivalent rights with
respect to RSUs, in which case, unless determined by the Committee to be paid
currently, the Company shall establish an account for the participant and
reflect in that account any securities, cash or other property comprising any
dividend or property distribution with respect to the share of Common Stock
underlying each RSU. The participant shall have rights to the amounts
or other property credited to such account.
8.4. Rights as a
Stockholder. Subject to the restrictions imposed under the
terms and conditions of this Plan and subject to any other restrictions that may
be imposed in the Incentive Agreement, each participant receiving restricted
stock units shall have no rights as a stockholder with respect to such
restricted stock units until such time as shares of Common Stock are issued to
the participant.
8.5. Compliance with Section 409A of the
Code. Restricted stock unit awards shall be designed and
operated in such a manner that they are either exempt from the application or
comply with the requirements of Section 409A of the Code.
9. Stock
Appreciation Rights.
9.1. Grant of Stock Appreciation
Rights. A stock appreciation right, or SAR, is a right to
receive, without payment to the Company, a number of shares of Common Stock,
cash or any combination thereof, the number or amount of which is determined
pursuant to the formula set forth in Section 9.5. Each SAR granted by
the Committee under the Plan shall be subject to the terms and conditions
provided herein.
9.2. Number. Each SAR
granted to any participant shall relate to such number of shares of Common Stock
as shall be determined by the Committee, subject to adjustment as provided in
Section 12.5.
9.3. Duration and Time for
Exercise. The term of each SAR shall be determined by the
Committee, but shall not exceed a maximum term of ten years. Each SAR
shall become exercisable at such time or times during its term as shall be
determined by the Committee. Notwithstanding the foregoing, the
Committee may accelerate the exercisability of any SAR at any time in its
discretion in addition to the automatic acceleration of SARs under Section
12.10.
9.4. Exercise. A SAR may
be exercised, in whole or in part, by giving written notice to the Company,
specifying the number of SARs that the holder wishes to exercise. The
date that the Company receives such written notice shall be referred to herein
as the “Exercise
Date.” The Company shall, within 30 days of an Exercise Date,
deliver to the exercising holder certificates for the shares of Common Stock to
which the holder is entitled pursuant to Section 9.5 or cash or both, as
provided in the Incentive Agreement.
9.5. Payment. The number
of shares of Common Stock which shall be issuable upon the exercise of a SAR
payable in Common Stock shall be determined by dividing:
(a) the
number of shares of Common Stock as to which the SAR is exercised, multiplied by
the amount of the appreciation in each such share (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of a share of
Common Stock subject to the SAR on the trading day prior to the Exercise Date
exceeds the “Base
Price,” which is an amount, not less than the Fair Market Value of a
share of Common Stock on the date of grant, which shall be determined by the
Committee at the time of grant, subject to adjustment under Section 12.5);
by
(b) the Fair
Market Value of a share of Common Stock on the Exercise Date.
No
fractional shares of Common Stock shall be issued upon the exercise of a SAR;
instead, the holder of a SAR shall be entitled to purchase the portion necessary
to make a whole share at its Fair Market Value on the Exercise
Date.
If so
provided in the Incentive Agreement, a SAR may be exercised for cash equal to
the Fair Market Value of the shares of Common Stock that would be issuable under
this Section 9.5, if the exercise had been for Common Stock.
10. Other
Stock-Based Awards.
10.1. Grant of Other Stock-Based
Awards. Subject to the limitations described in Section 10.2
hereof, the Committee may grant to eligible participants “Other Stock-Based
Awards,” which shall consist of awards (other than options, restricted
stock, restricted stock units or SARs described in Sections 6 through 9 hereof)
paid out in shares of Common Stock or the value of which is based in whole or in
part on the value of shares of Common Stock. Other Stock-Based Awards
may be awards of shares of Common Stock, awards of phantom stock or may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, shares of, or appreciation in the value of,
Common Stock (including, without limitation, securities convertible or
exchangeable into or exercisable for shares of Common Stock), as deemed by the
Committee consistent with the purposes of this Plan. The Committee
shall determine the terms and conditions of any Other Stock-Based Award
(including which rights of a stockholder, if any, the recipient shall have with
respect to Common Stock associated with any such award) and may provide that
such award is payable in whole or in part in cash. An Other
Stock-Based Award may be subject to the attainment of such specified performance
goals or targets as the Committee may determine, subject to the provisions of
this Plan. To the extent that an Other Stock-Based Award is intended
to qualify as “performance-based compensation” under Section 162(m), it must be
granted subject to the attainment of performance goals as described in Section
11 below and meet the additional requirements imposed by Section
162(m).
10.2. Limitations. Except
as permitted in Section 5.3(c) and except for grants to non-employee directors
and grants of shares issued in payment of cash amounts earned under the
Company’s annual incentive plan, Other Stock-Based Awards granted under this
Section 10 shall be subject to a vesting period of at least three years, with
incremental vesting of portions of the award over the three-year period
permitted; provided, however, that if the vesting of the award is based upon the
attainment of performance goals, a minimum vesting period of one year is
allowed, with incremental vesting of portions of the award over the one-year
period permitted.
10.3. Compliance with Section 409A of the
Code. Other Stock-Based Awards shall be designed and operated
in such a manner that they are either exempt from the application or comply with
the requirements of Section 409A of the Code.
11. Performance Goals for Section 162(m)
Awards. To the extent that shares of restricted stock,
restricted stock units or Other Stock-Based Awards granted under the Plan are
intended to qualify as “performance-based compensation” under Section 162(m),
the vesting, grant, or payment of such awards shall be conditioned on the
achievement of one or more performance goals and must satisfy the other
requirements of Section 162(m). The performance goals pursuant to
which such awards shall vest, be granted, or be paid out shall be any or a
combination of the following performance measures applied to the Company, ISC, a
division, or a subsidiary: earnings per share; return on assets; an
economic value-added measure; shareholder return; earnings or earnings before
interest, taxes and amortization; stock price; total shareholder return; return
on equity; return on total capital; return on assets or net assets; revenue;
reduction of expenses; free cash flow; income or net income; income before tax;
operating income or net operating income; gross profit; operating profit or net
operating profit; operating margin or profit margin; return on operating
revenue; return on invested capital; or market segment share. For any
performance period, such performance objectives may be measured on an absolute
basis, relative to a group of peer companies selected by the Committee, relative
to internal goals, or relative to levels attained in prior years. The
performance goals may be subject to such adjustments as are specified in advance
by the Committee in accordance with Section 162(m).
12. General.
12.1. Duration. No
Incentives may be granted under the Plan after January 29, 2019; provided,
however, that subject to Section 12.9, the Plan shall remain in effect after
such date with respect to Incentives granted prior to that date, until all such
Incentives have either been satisfied by the issuance of shares of Common Stock
or otherwise been terminated under the terms of the Plan and all restrictions
imposed on shares of Common Stock in connection with their issuance under the
Plan have lapsed.
12.2. Transferability. No
Incentives granted hereunder may be transferred, pledged, assigned or otherwise
encumbered by a participant except: (a) by will; (b) by the laws of descent and
distribution; (c) pursuant to a domestic relations order, as defined in the
Code; or (d) as to options only, if permitted by the Committee and so provided
in the Incentive Agreement or an amendment thereto, (i) to Immediate Family
Members, (ii) to a partnership in which the participant and/or Immediate Family
Members, or entities in which the participant and/or Immediate Family Members
are the sole owners, members or beneficiaries, as appropriate, are the sole
partners, (iii) to a limited liability company in which the participant and/or
Immediate Family Members, or entities in which the participant and/or Immediate
Family Members are the sole owners, members or beneficiaries, as appropriate,
are the sole members, or (iv) to a trust for the sole benefit of the participant
and/or Immediate Family Members. “Immediate Family
Members” shall be defined as the spouse and natural or adopted children
or grandchildren of the participant and their spouses. To the extent
that an incentive stock option is permitted to be transferred during the
lifetime of the participant, it shall be treated thereafter as a nonqualified
stock option. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of Incentives, or levy of attachment or
similar process upon Incentives not specifically permitted herein, shall be null
and void and without effect.
12.3. Effect of Termination of Employment
or Death. In the event that a participant ceases to be an
employee of the Company or to provide services to the Company for any reason,
including death, disability, early retirement or normal retirement, any
Incentives may be exercised, shall vest or shall expire at such times as may be
determined by the Committee and provided in the Incentive
Agreement.
12.4. Additional
Conditions. Anything in this Plan to the contrary
notwithstanding: (a) the Company may, if it shall determine it
necessary or desirable for any reason, at the time of award of any Incentive or
the issuance of any shares of Common Stock pursuant to any Incentive, require
the recipient of the Incentive, as a condition to the receipt thereof or to the
receipt of shares of Common Stock issued pursuant thereto, to deliver to the
Company a written representation of present intention to acquire the Incentive
or the shares of Common Stock issued pursuant thereto for his own account for
investment and not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive or the
shares of Common Stock issuable pursuant thereto is necessary on any securities
exchange or under any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the award of any Incentive,
the issuance of shares of Common Stock pursuant thereto, or the removal of any
restrictions imposed on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restrictions shall not be
removed, as the case may be, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
12.5. Adjustment. In the
event of any recapitalization, reclassification, stock dividend, stock split,
combination of shares or other similar change in the Common Stock, the number of
shares of Common Stock then subject to the Plan, including shares subject to
outstanding Incentives, and any and all other limitations provided in the Plan
limiting the number of shares of Common Stock that may be issued hereunder,
shall be adjusted in proportion to the change in outstanding shares of Common
Stock. In the event of any such adjustments, the price of any option,
the Base Price of any SAR and the performance objectives of any Incentive shall
also be adjusted to provide participants with the same relative rights before
and after such adjustment. No substitution or adjustment shall
require the Company to issue a fractional share under the Plan and the
substitution or adjustment shall be limited by deleting any fractional
share.
12.6. Withholding.
(a) The
Company shall have the right to withhold from any payments made or stock issued
under the Plan or to collect as a condition of payment, issuance or vesting, any
taxes required by law to be withheld. At any time that a participant
is required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with an Incentive, the participant may,
subject to Section 12.6(b) below, satisfy this obligation in whole or in part by
electing (the “Election”) to deliver
currently owned shares of Common Stock or to have the Company withhold shares of
Common Stock, in each case having a value equal to the minimum statutory amount
required to be withheld under federal, state and local law. The value
of the shares to be delivered or withheld shall be based on the Fair Market
Value of the Common Stock on the date that the amount of tax to be withheld
shall be determined (“Tax
Date”).
(b) Each
Election must be made prior to the Tax Date. For participants who are
not subject to Section 16 of the 1934 Act, the Committee may disapprove of any
Election, may suspend or terminate the right to make Elections, or may provide
with respect to any Incentive that the right to make Elections shall not apply
to such Incentive. If a participant makes an election under Section
83(b) of the Code with respect to shares of restricted stock, an Election to
have shares withheld to satisfy withholding taxes is not permitted to be
made.
12.7. No Continued
Employment. No participant under the Plan shall have any
right, because of his or her participation, to continue in the employ of the
Company for any period of time or to any right to continue his or her present or
any other rate of compensation.
12.8. Deferral
Permitted. Payment of an Incentive may be deferred at the
option of the participant if permitted in the Incentive
Agreement. Any deferral arrangements shall comply with Section 409A
of the Code.
12.9. Amendments to or Termination of the
Plan. The Board may amend or discontinue this Plan at any
time; provided, however, that no such amendment may:
(a) materially
revise the Plan without the approval of the stockholders. A material
revision of the Plan includes (i) except for adjustments permitted herein, a
material increase to the maximum number of shares of Common Stock that may be
issued through the Plan, (ii) a material increase to the benefits accruing to
participants under the Plan, (iii) a material expansion of the classes of
persons eligible to participate in the Plan, (iv) an expansion of the types of
awards available for grant under the Plan, (v) a material extension of the term
of the Plan and (vi) a material change that reduces the price at which shares of
Common Stock may be offered through the Plan;
(b) amend
Section 6.6 to permit repricing of options or SARs without the approval of
stockholders; or
(c) materially
impair, without the consent of the recipient, an Incentive previously granted,
except that the Company retains all of its rights under Section
12.10.
12.10. Change
of Control.
(a) Unless
otherwise defined in an Incentive Agreement, “Change of Control”
shall mean:
(i) the
acquisition by any individual, entity, or group (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the 1934 Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
1934 Act) of 30% or more of the outstanding shares of Common Stock, or 30% or
more of the combined voting power of the Company’s then outstanding securities
entitled to vote generally in the election of directors; provided, however, that
for purposes of this subsection (i), the following acquisitions shall not
constitute a Change of Control:
(1) any
acquisition (other than a Business Combination which constitutes a Change of
Control under Section 12.10(a)(iii) hereof) of Common Stock directly from the
Company,
(2) any
acquisition of Common Stock by the Company or its subsidiaries,
(3) any
acquisition of Common Stock by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled by the Company,
or
(4) any
acquisition of Common Stock by any entity pursuant to a Business Combination
that does not constitute a Change of Control under Section 12.10(a)(iii) hereof;
or
(ii) individuals
who, as of the date this Plan was adopted by the Board of Directors (the “Approval Date”),
constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the Approval Date
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board shall be considered a member of the Incumbent Board, unless such
individual’s initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Incumbent Board; or
(iii) consummation
of a reorganization, share exchange, merger, or consolidation (including any
such transaction involving any direct or indirect subsidiary of the Company), or
sale or other disposition of all or substantially all of the assets of the
Company (a “Business
Combination”); provided, however, that in no such case shall any such
transaction constitute a Change of Control if immediately following such
Business Combination,
(1) all
or substantially all of the individuals and entities who were the beneficial
owners of the outstanding Common Stock and the Company’s voting securities
entitled to vote generally in the election of directors immediately prior to
such Business Combination have direct or indirect beneficial ownership,
respectively, of more than 50% of the then outstanding shares of Common Stock,
and more than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, of the
corporation resulting from such Business Combination (which, for purposes of
this paragraph (1) and paragraphs (2) and (3), shall include a corporation which
as a result of such transaction owns the Company or all or substantially all of
its assets either directly or through one or more subsidiaries),
and
(2) except
to the extent that such ownership existed prior to the Business Combination, no
Person (excluding any corporation resulting from such Business Combination and
any employee benefit plan or related trust of the Company, the corporation
resulting from such Business Combination, or any subsidiary of either
corporation) beneficially owns, directly or indirectly, 20% or more of the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or 20% or more of the combined voting power of the then
outstanding voting securities of such corporation, and
(3) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(iv) approval
by the stockholders of the Company of a plan of complete liquidation or
dissolution of the Company.
(b) Upon a
Change of Control, or immediately prior to the closing of a transaction that
will result in a Change of Control if consummated, all outstanding Incentives
granted pursuant to the Plan shall automatically become fully vested and
exercisable, all restrictions or limitations on any Incentives shall lapse and
all performance criteria and other conditions relating to the payment of
Incentives shall be deemed to be achieved or waived by ISC without the necessity
of action by any person.
(c) No later
than 30 days after the approval by the Board of a Change of Control of the types
described in subsections (iii) or (iv) of Section 12.10(a) and no later than 30
days after a Change of Control of the type described in subsections (i) and (ii)
of Section 12.10(a), the Committee (as the Committee was composed immediately
prior to such Change of Control and notwithstanding any removal or attempted
removal of some or all of the members thereof as directors or Committee
members), acting in its sole discretion without the consent or approval of any
participant, may act to effect one or more of the alternatives listed below and
such act by the Committee may not be revoked or rescinded by persons not members
of the Committee immediately prior to the Change of Control:
(i) require
that all outstanding options and stock appreciation rights be exercised on or
before a specified date (before or after such Change of Control) fixed by the
Committee, after which specified date all unexercised options shall
terminate;
(ii) make
such equitable adjustments to Incentives then outstanding as the Committee deems
appropriate to reflect such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no adjustment is
necessary);
(iii) provide
for mandatory conversion of some or all of the outstanding options and stock
appreciation rights held by some or all participants as of a date, before or
after such Change of Control, specified by the Committee, in which event such
options and stock appreciation rights shall be deemed automatically cancelled
and the Company shall pay, or cause to be paid, to each such participant an
amount of cash per share equal to the excess, if any, of the Change of Control
Value of the shares subject to such option and stock appreciation right, as
defined and calculated below, over the exercise price(s) of such options and
stock appreciation rights or, in lieu of such cash payment, the issuance of
Common Stock or securities of an acquiring entity having a Fair Market Value
equal to such excess; or
(iv) provide
that thereafter upon any exercise of an option or stock appreciation right the
participant shall be entitled to purchase under such option or stock
appreciation right, in lieu of the number of shares of Common Stock then covered
by such option or stock appreciation right, the number and class of shares of
stock or other securities or property (including, without limitation, cash) to
which the participant would have been entitled pursuant to the terms of the
agreement providing for the reorganization, merger, consolidation or asset sale,
if, immediately prior to such Change of Control, the participant had been the
holder of record of the number of shares of Common Stock then covered by such
options and stock appreciation rights.
(d) For the
purpose of paragraph (iii) of Section 12.10(c), the “Change of Control
Value” shall equal the amount determined by whichever of the following
items is applicable:
(i) the
per share price to be paid to stockholders of ISC in any such merger,
consolidation or other reorganization;
(ii) the
price per share offered to stockholders of ISC in any tender offer or exchange
offer whereby a Change of Control takes place;
(iii) in
all other events, the Fair Market Value per share of Common Stock into which
such options being converted are exercisable, as determined by the Committee as
of the date determined by the Committee to be the date of conversion of such
options; or
(iv) in
the event that the consideration offered to stockholders of ISC in any
transaction described in this Section 12.10 consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of
the consideration offered that is other than cash.
12.11. Definition of Fair Market
Value. Whenever “Fair Market Value” of
Common Stock shall be determined for purposes of this Plan, except as provided
below in connection with a cashless exercise through a broker, it shall be
determined as follows: (i) if the Common Stock is listed on an established stock
exchange or any automated quotation system that provides sale quotations, the
closing sale price for a share of the Common Stock on such exchange or quotation
system on the date as of which fair market value is to be determined, (ii) if
the Common Stock is not listed on any exchange or quotation system, but bid and
asked prices are quoted and published, the mean between the quoted bid and asked
prices on the date as of which fair market value is to be determined, and if bid
and asked prices are not available on such day, on the next preceding day on
which such prices were available; and (iii) if the Common Stock is not regularly
quoted, the fair market value of a share of Common Stock on the date as of which
fair market value is to be determined, as established by the Committee in good
faith. In the context of a cashless exercise through a broker, the
“Fair Market Value” shall be the price at which the Common Stock subject to the
stock option is actually sold in the market to pay the option exercise
price.