If any shares of common stock subject to an award are forfeited, expire or otherwise terminate without issuance of such shares, or any award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares of common stock subject to such award, the shares of common stock subject to such award will, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for award under the 2022 Plan; however, shares tendered in payment of the exercise price of stock options or SARs or shares withheld to satisfy tax withholding obligation related to stock options or SARs will not be added back to the 2022 Plan. Substitute awards issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or its affiliates (“Substitute Awards”) will not reduce the shares authorized for grant under the 2022 Plan.
No further awards may be granted under any other equity incentive plans (including the 2013 Plan) on and after the Effective Date, it being understood that awards outstanding under any such prior plans as of the Effective Date shall remain in full force and effect under such plans according to their respective terms, and to the extent that any such award is forfeited, terminates, expires or lapses without being exercised (to the extent applicable), or is settled for cash, the shares subject to such award not delivered as a result thereof shall again be available for awards under the 2022 Plan in accordance with the foregoing paragraph.
No non-employee director may be granted during any calendar year awards under the 2022 Plan with a grant date fair value in excess of $500,000.
Types of Awards. A summary of the material types of awards follows:
Stock Options/Stock Appreciation Rights (SARs). A stock option represents the right to purchase certain number of shares at a specified price during specified time periods. Stock options granted under the 2022 Plan may be either non-qualified stock options or incentive stock options qualifying under Section 422 of the Internal Revenue Code. A SAR represents the right to receive, upon an exercise during specified time periods, the excess of the fair market value of one share of common stock on the date of exercise over the exercise price.
The exercise price of stock option or SAR may not be less than the fair market value of a share of the Company’s common stock on the date the stock option or SAR is granted. The Compensation Committee will decide the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure). The maximum period during which a stock option or SAR may remain outstanding shall be fixed by the Compensation Committee, but no stock option or SAR shall be exercisable more than 10 years from the date of grant.
To date, no stock options or SARs have been granted under the 2013 Plan.
Restricted Stock Awards (RSAs). An RSA represents shares of common stock that are subject to restrictions on transferability and the obligation of the awardee to forfeit and surrender the shares under certain circumstances (“forfeiture restrictions”). The Compensation Committee has sole discretion to determine the forfeiture restrictions and the conditions upon which such forfeitures may lapse. An awardee granted an RSA will generally have all of the rights of a shareholder, including the right to vote restricted stock and the right to receive dividends thereon. Unless otherwise determined by the Compensation Committee, shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, will be subject to restrictions and a risk of forfeiture to the same extent as the restricted stock with respect to which such shares or other property have been distributed.
Restricted Stock Units (RSUs). An RSU is an award of a right to receive, in cash or shares, as the Compensation Committee may determine, the fair market value of one share of common stock, on such terms and conditions as the Compensation Committee may determine. Prior to settlement of an RSU, it carries no voting or dividend or other rights associated with share ownership. The Company began issuing performance-based RSUs (PSUs) to its executive officers in July 2020 under the 2013 Plan.
Other Types of Awards . In addition to stock options, SARs, RSAs and RSUs, the 2022 Plan also authorizes the Compensation Committee to grant bonus stock awards, dividend equivalents, and other stock-based awards. To date, the Company has not granted these types of awards.
Change in Control.
In the event of a change in control, awards under the 2022 Plan may be assumed or substituted by the successor company on their existing terms, in which case, such awards may continue to vest in accordance with their terms. Any assumed or substituted awards would become fully vest upon a termination of employment by the successor company other than for cause within 24 months following such change in control (in the case of any performance-based awards, with performance goals deemed satisfied at the greater of target and actual performance level through such termination).
If an award is not assumed or substituted by the successor company in connection with a change in control: