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o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ	Definitive Proxy Statement
o	Definitive Additional Materials
o	Soliciting Material Pursuant to § 240.14a-12

þ	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:
o	Fee paid previously with preliminary materials:
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount previously paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

 

 

PROFIRE ENERGY, INC.

321 South 1250 West, Suite 1

Lindon, Utah 84042

 

 

1.	To elect seven directors to the Company’s board of directors for the ensuing year and until their successors are elected and qualified;
2.	To approve and ratify the 2014 Equity Incentive Plan;
3.	To conduct an advisory (non-binding) vote approving executive compensation (“Say-on-Pay”);
4.	To ratify the appointment of Sadler, Gibb & Associates, LLC, as the Company’s independent registered public accounting firm for the year ended March 31, 2015; and
5.	To transact any other business as may properly come before the meeting or at any adjournment thereof.

 

	By order of the board of directors,
August 20, 2014	/s/ Brenton W. Hatch
	Brenton W. Hatch
	Chief Executive Officer

 

 

PROFIRE ENERGY, INC.

321 South 1250 West, Suite 1

Lindon, Utah 84042

1.	To elect seven directors to the Board for the ensuing year and until their successors are elected and qualified;
2.	To approve and ratify the 2014 Equity Incentive Plan;
3.	To conduct an advisory (non-binding) vote approving executive compensation (“Say-on-Pay”);
4.	To ratify the appointment of Sadler, Gibb & Associates, LLC, as the Company’s independent registered public accounting firm for the year ended March 31, 2015; and
5.	To transact any other business as may properly come before the meeting or at any adjournment thereof.

 

 

Contents		Page
PROXY INFORMATION		1
PROPOSAL ONE		4
	Board Nominees for Election of Directors	4
	Family Relationships	7
	Involvement in Certain Legal Proceedings	7
	Related Party Transactions	8
	Section 16(a) Beneficial Ownership Reporting Compliance	8
	Director Independence	8
	Board Committees	8
	Board Leadership Structure and Role in Risk Oversight	10
	Report of Audit Regarding 2014 Audited Financial Statements	10
	Board Meetings and Attendance at Annual Meetings	11
	Communications with Directors	11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS		11
	Summary Compensation Table	11
	All Other Compensation	12
	Say-on-Pay	13
	Employment Agreements	13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS		15
PROPOSAL TWO		16
PROPOSAL THREE		22
PROPOSAL FOUR		23
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINEES FOR NEXT ANNUAL MEETING		24
INFORMATION TO BE FURNISHED TO SECURITYHOLDERS		24
HOUSEHOLDING		24
OTHER MATTERS		25
Appendix A Form of Proxy		A-1
Appendix B Profire Energy, Inc. 2014 Equity Incentive Plan		B-1

 

 

There are two ways you can vote:

(1)	Sign and date each proxy card you receive and return it in the prepaid envelope; or
(2)	Vote in person at the Annual Meeting.  If your shares are held of record by a broker, bank or other nominee and you wish to vote your shares at the Annual Meeting, you must contact your broker, bank or other nominee to obtain the proper documentation and bring it with you to the Annual Meeting.

·	Submitting another timely, later-dated proxy;
·	Delivering timely written notice of revocation to the Corporate Secretary, at 321 South 1250 West, Suite 1, Lindon, Utah 84042; or
·	Attending the Annual Meeting and voting in person.

 

 

 

Name		Age		Positions Held		Director Since		Officer Since
Brenton W. Hatch		64		Chief Executive Officer, President and Director		November 2008		October 2008
Harold Albert		51		Chief Operating Officer and Director		November 2008		October 2008
Andrew W. Limpert		44		Chief Financial Officer, Secretary and Director		November 2007		November 2007
Arlen B. Crouch		80		Director		November 2013		N/A
Stephen E. Pirnat		63		Director		January 2014		N/A
Daren J. Shaw		57		Director		August 2013		N/A
Ronald R. Spoehel		56		Director		October 2013		N/A

 

 

·	managing corporate financial controls, forecasts and reporting,
·	overseeing financial and feasibility analyses of all material projects, especially in entering new regions and making significant personnel decisions,
·	overseeing the materials, timing, and execution of corporate communication,
·	overseeing engagements and communication with the financial community (e.g., stockholders, brokers, fund managers, etc.),
·	managing corporate sales strategies, and
·	other responsibilities, as assigned by the CEO or Board of Directors. To our knowledge, none of our officers, directors or affiliates or any owner of record of 5% or more of our common stock, or any associate of any of the foregoing, is a party adverse to the Company or any of our subsidiaries or has a material interest adverse to the Company or any of our subsidiaries.

 

Arlen B. Crouch

 

 

 

Name and Principal Position	Year		Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				All Other Compensation(1) ($)				Total ($)
Brenton W. Hatch	2014			260,346				10,000				-0-				-0-				61,840				332,186
Chief Executive Officer and Director	2013			202,539				149,850				-0-				-0-				25,200				377,589
Andrew W. Limpert	2014			235,059				10,000				-0-				-0-				47,748				292,807
CFO and Director	2013			168,000				40,000				-0-				-0-				16,800				224,800
Harold Albert	2014			251,624				9,498				-0-				-0-				52,723				313,845
COO and Director	2013			203,795				149,850				-0-				-0-				34,066				387,711

(1)	For a breakdown of the compensation components included in “All Other Compensation” please see the “All Other Compensation” table below.

Name	Year		Vehicle Allowance, Fuel, Maintenance and Related Costs ($)				Cell Phone Expenses ($)				Medical  Insurance Premiums ($)
Brenton W. Hatch	2014		$	20,311			$	3,416			$	13,200
	2013		$	9,600			$	3,600			$	12,000
Andrew W. Limpert	2014		$	14,799			$	4,392			$	6,557
	2013		$	-			$	-				7,200
Harold Albert	2014		$	20,110			$	3,054			$	8,663
	2013		$	20,379			$	3,669			$	10,018

 

 

 

 

 

 

 

•	an automobile allowance of up to $1,200 per month;
•	payment of or reimbursement for certain reasonable and necessary out-of-pocket expenses incurred in the performance of their duties, as detailed in the new employment agreements, subject to presentment of appropriate vouchers or receipts;
•	a $2,000 per month personal allowance;
•	payment of the employee’s medical and dental insurance premiums; and
•	four weeks of paid vacation or leave time each year.

 

 

·	Without cause.  The employee may be terminated without cause by the Company at any time, but with 90 days prior written notice.  If terminated without cause, the Company shall pay the employee, as a severance allowance, his then current monthly base salary, and health and other benefits for the two-week period following the month of termination and including the month in which notice of termination occurs if employed for a continuous period of six months or more.
·	For cause upon prior written notice.  If terminated for cause the individual shall be entitled to receive his then current monthly base salary and any employee rights or compensation which would vest in the month of termination pro-rated through the date of termination but off-set by any amounts which have been appropriated or wrongfully taken by the employee or which arise out of damages to the Company through the errors or omissions of the employee.
·	By resignation.  If the employee resigns, he shall be entitled to receive his current monthly base salary and any other compensation or right which would vest in the month the resignation becomes effective, pro-rated to the date of last service.  In the event of a resignation, employment shall terminate on the earlier of 30 days following the written submission of resignation or the date the resignation is accepted by the Company.
·	For disability or death.  The Company shall have the option to terminate the employment agreement should the employee no longer be able to perform his essential functions.  In the event of termination for death or disability the employee shall be entitled to the same compensation and benefits as if the agreement had been terminated without cause.

Name		Fees Earned  or Paid in Cash				Option Awards (5)				Total
Arlen B. Crouch(1)		$	10,000			$	166,670			$	176,670
Stephen E. Pirnat(2)		$	4,000			$	217,854			$	221,854
Daren J. Shaw(3)		$	16,000			$	138,489			$	154,489
Ronald R. Spoehel(4)		$	12,000			$	166,670			$	178,670

(1)	As of March 31, 2014, Mr. Crouch had 50,000 option awards outstanding and 50,000  unvested stock awards outstanding.
(2)	As of March 31, 2014, Mr. Pirnat had 50,000 option awards outstanding and 50,000  unvested stock awards outstanding.
(3)	As of March 31, 2014, Mr. Shaw had 50,000 option awards outstanding and 50,000  unvested stock awards outstanding.
(4)	As of March 31, 2014, Mr. Spoehel had 50,000 option awards outstanding and 50,000 unvested stock awards outstanding.
(5)	The amounts in this column do not reflect compensation actually received by our non-employee directors nor do they reflect the actual value that will be recognized by the non-employee directors. Instead, the amounts reflect the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718, of awards of stock options made to non-employee directors for the fiscal year ended March 31, 2014 but exclude an estimate for forfeitures. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Additional information about the assumptions used in the calculation of these amounts is included in footnote 6 to our audited financial statements for the fiscal year ended March 31, 2014 included in our Annual Report on Form 10-K filed with the Commission on June 30, 2014.

Type of Security	Name and Address		Amount & Nature of  Beneficial Ownership				% of Class
Common	Brenton W. Hatch(1)			15,450,000				32.3	%
	321 South 1250 West, Suite 1
	Lindon, Utah 84042
Common	Harold Albert(1)			15,325,000				31.9	%
	Bay 12, 55 Alberta Ave.
	Spruce Grove, Alberta, Canada T7X 3A6
Common	Andrew W. Limpert(1)			3,571,937				7.5	%
	321 South 1250 West, Suite 1
	Lindon, Utah 84042
Common	Daren J. Shaw(2)			100,000				*	%
	321 South 1250 West, Suite 1 Lindon, UT  84042
Common	Ronald R. Spoehel(3)			50,000				*	%
	321 South 1250 West, Suite 1 Lindon, UT  84042
Common	Arlen B. Crouch(3)			50,000				*	%
	321 South 1250 West, Suite 1 Lindon, UT  84042
Common	Stephen E. Pirnat(3) 321 South 1250 West, Suite 1 Lindon, UT  84042			50,000				*	%
All executive officers and directors as a group (7 persons)				34,546,937				71.9	%
	TOTAL			34,546,937				71.9	%

 

(1)	Messrs. Hatch, Albert and Limpert are named executive officers and directors of the Company.
(2)	Mr. Shaw is a director of the company.  Share number includes 100,000 stock options that are currently exercisable or exercisable within 90 days after June 30, 2014.
(3)	Messrs. Crouch, Pirnat, and Spoehel are directors of the Company. Share number includes 50,000 stock options that are currently exercisable or exercisable within 90 days after June 30, 2014.
	* Less than 1%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	stock options, including both incentive stock options (“ISOs”) and non-qualified stock options (together with ISOs, “options”);
·	stock appreciation rights;
·	restricted stock;
·	restricted stock units;
·	performance awards; and
·	dividend equivalents.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	termination of any award, whether vested or not, in exchange for an amount of cash and/or other property equal to the amount that would have been received upon exercise of the award or the realization of the participant’s rights under the award. Awards may be terminated without payment if the Compensation Committee or the Board determines that no amount is realizable under the award as of the time of the transaction;
·	replacement of any award with other rights or property selected by the Compensation Committee or the Board;
·	the assumption of any award by the successor entity (or its parent or subsidiary) or the arrangement for the substitution for similar awards covering the stock of such successor entity;
·	acceleration of the exercisability or vesting of any award, notwithstanding the language in the participant’s award agreement; or
·	require that the award cannot vest, be exercised or become payable until after a future date, which may be the effective date of the corporate transaction.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan category		Number of securities to be issued upon exercise of outstanding options, warrants and rights      (a)				Weighted-average exercise price of outstanding options, warrants and rights      (b)				Number of securities remaining available  for future issuance  under equity compensation plans (excluding securities reflected in  columns (a))    (c)
Equity compensation plans approved by security holders			2,903,715			$	1.319				997,000
Equity compensation plans not approved by security holders			-0-				n/a				-0-
Total			2,903,715			$	1.319				997,000

 

 

 

 

 

 

		Fiscal 2014				Fiscal 2013
Audit		$	53,750			$	45,000
Audit related			-0-				-0-
Tax			-0-				-0-
All other			-0-				-0-
Total		$	53,750			$	45,000

 

 

 

 

 

 

 

	By order of the board of directors,
August ___, 2014	/s/ Brenton W. Hatch
	Brenton W. Hatch
	Chief Executive Officer

 

 

 

 

[Name and address of stockholder]
		Mark this box with an X if you have made changes to your name or address details above.

 

 

Signature 1 - Please keep signature within the box.		Signature 2 - Please keep signature within the box	.	Date (mm/dd/yyyy)
[                                                    ]		[                                                         ]		[     /             /     ]

 

 

 

Appendix B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	economic value added (EVA);

·	sales or revenue;

·	costs or expenses;

·	net profit after tax;

·	gross profit;

 

·	income (including without limitation operating income, pre-tax income and income attributable to the Company);

·	cash flow (including without limitation free cash flow and cash flow from operating, investing or financing activities or any combination thereof);

·	earnings (including without limitation earnings before or after taxes, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings (whether before or after taxes), EBIT or EBITDA as a percentage of net sales;

·	earnings per share (EPS) (basic or diluted);

·	earnings per share from continuing operations;

·	returns (including one or more of return on actual or pro forma assets, net assets, equity, investment, revenue, sales, capital and net capital employed, total stockholder return (TSR) and total business return (TBR));

·	margins (including one or more of gross, operating and net income margin);

·	ratios (including one or more of price-to-earnings, debt-to-assets, debt-to-net assets and ratios regarding liquidity, solvency, fiscal capacity, productivity or risk);

·	budget comparisons;

·	unit volume;

·	stock price;

·	stockholders’ equity;

·	net working capital;

·	value creation;

·	market share;

·	market capitalization;

·	debt levels and debt reduction;

·	capital expenditures

·	workforce satisfaction and diversity goals;

·	employee retention;

·	production metrics;

·	user satisfaction;

·

billings;

·

bookings;

·	development;

·	implementation or completion of key projects;

·	strategic plan development and implementation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)

Section 162(m) Limitation for Options, SARs and Performance Awards Denominated in Shares.  No Eligible Person may be granted any Options, Stock Appreciation Rights or Performance Awards denominated in Shares, for more than 250,000 Shares (subject to adjustment as provided for in Section 4(c) of the Plan), in the aggregate in any calendar year.

 

(ii)

Section 162(m) Limitation for Performance Awards Denominated in Cash.  The maximum amount payable pursuant to all Performance Awards denominated in cash to any Participant in the aggregate in any taxable year shall be $1,000,000 in value, whether payable in cash, Shares or other property. This limitation contained in this Section 4(d)(ii) does not apply to any Award or Awards subject to the limitation contained in Section 4(d)(i). The limitation contained in this Section 4(d)(ii) shall apply only with respect to any Award or Awards granted under this Plan, and limitations on awards granted under any other stockholder-approved incentive plan maintained by the Company will be governed solely by the terms of such other plan.

 

(iii)

Limit on Awards to Non-Employee Directors.  Directors who are not also employees of the Company or an Affiliate may not be granted Awards in in any calendar year of more than 100,000 Shares, subject to adjustment as provided in Section 4(c) of the Plan.  The foregoing limit shall not apply to any Award made pursuant to any election by the Director to receive an Award in lieu of all or a portion of annual and committee retainers and annual meeting fees.

 

 

 

 

 

 

(i)

Exercise Price.  The purchase price per Share purchasable under an Option shall be determined by the Committee and shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option; provided, however, that the Committee may designate a purchase price below Fair Market Value on the date of grant if the Option is granted in substitution for a stock option previously granted by an entity that is acquired by or merged with the Company or an Affiliate.

 

(ii)

Option Term.  The term of each Option shall be fixed by the Committee at the time but shall not be longer than 10 years from the date of grant.  Notwithstanding the foregoing, the Committee may provide in the terms of an Option (either at grant or by subsequent modification) that, to the extent consistent with Section 409A, in the event that on the last business day of the term of an Option (other than an Incentive Stock Option) (i) the exercise of the Option is prohibited by applicable law or (ii) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option shall be extended for a period of not more than thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement.

 

(iii)

Time and Method of Exercise.  The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms, including, but not limited to, cash, Shares (actually or by attestation), other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable exercise price, in which, payment of the exercise price with respect thereto may be made or deemed to have been made.

 

(A)	Promissory Notes.  Notwithstanding the foregoing, the Committee may not accept a promissory note as consideration.

 

(B)

Net Exercises.  The Committee may, in its discretion, permit an Option to be exercised by delivering to the Participant a number of Shares having an aggregate Fair Market Value (determined as of the date of exercise) equal to the excess, if positive, of the Fair Market Value of the Shares underlying the Option being exercised on the date of exercise, over the exercise price of the Option for such Shares.

 

(iv)	Incentive Stock Options.  Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant of stock options which are intended to qualify as Incentive Stock Options:

 

(A)	The aggregate number of Shares that may be issued under all Incentive Stock Options under the Plan shall be 4,000,000.

 

(B)

The Committee will not grant Incentive Stock Options in which the aggregate Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under this Plan and all other plans of the Company and its Affiliates) shall exceed $100,000.

 

(C)	All Incentive Stock Options must be granted within ten years from the earlier of the date on which this Plan was adopted by the Board or the date this Plan was approved by the stockholders of the Company.

 

(D)

Unless sooner exercised, all Incentive Stock Options shall expire and no longer be exercisable no later than 10 years after the date of grant; provided, however, that in the case of a grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (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 Company or of its Affiliates, such Incentive Stock Option shall expire and no longer be exercisable no later than five years from the date of grant.

 

(E)

The purchase price per Share for an Incentive Stock Option shall be not less than 100% of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option; provided, however, that, in the case of the grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (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 Company or of its Affiliates, the purchase price per Share purchasable under an Incentive Stock Option shall be not less than 110% of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option.

 

(F)	Any Incentive Stock Option 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 all provisions required in order to qualify the Option as an Incentive Stock Option.

 

(v)

Automatic Exercise of Options.  Notwithstanding the foregoing, unless otherwise set forth in an Award Agreement, if on the last day of the term of an Option the Fair Market Value of one Share exceeds the option exercise price per Option and the Option is exercisable but has not been exercised, the Option shall be deemed to have been exercised to the extent it was exercisable on such day with payment made by withholding Shares otherwise issuable in connection with the exercise of the Option. In such event, the Company shall deliver the number of Shares for which the Option was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price and required withholding taxes; provided, however, any fractional Share shall be settled in cash.

 

 

 

 

 

(i)

Restrictions.  Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate.  Notwithstanding the foregoing, rights to dividend or Dividend Equivalent payments shall be subject to the limitations described in Section 6(e).

 

(ii)

Issuance and Delivery of Shares.  Any Restricted Stock granted under the Plan shall be issued at the time such Awards are granted and may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company or held in nominee name by the stock transfer agent or brokerage service selected by the Company to provide such services for the Plan.  Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the restrictions applicable to such Restricted Stock.  Shares representing Restricted Stock that are no longer subject to restrictions shall be delivered (including by updating the book-entry registration) to the Participant promptly after the applicable restrictions lapse or are waived.  In the case of Restricted Stock Units, no Shares shall be issued at the time such Awards are granted.  Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the holder of the Restricted Stock Units.

 

(iii)

Forfeiture.  Except as otherwise determined by the Committee, upon a Participant’s termination of employment or resignation or removal as a Director (in either case, as determined under criteria established by the Committee) during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units held by such Participant at such time shall be forfeited and reacquired by the Company; provided, however, that the Committee may waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock or Restricted Stock Units.

 

 

 

(i)

Timing of Designations; Duration of Performance Periods.  For each Performance Award, the Committee shall, not later than 90 days after the beginning of each performance period, (i) designate all Participants for such performance period and (ii) establish the objective performance factors for each Participant for that performance period on the basis of one or more of the Performance Goals, the outcome of which is substantially uncertain at the time the Committee actually establishes the Performance Goal.  The Committee shall have sole discretion to determine the applicable performance period, provided that in the case of a performance period less than 12 months, in no event shall a performance goal be considered to be pre-established if it is established after 25 percent of the performance period (as scheduled in good faith at the time the Performance Goal is established) has elapsed.  To the extent required under Section 162(m), the terms of the objective performance factors must preclude discretion to increase an amount paid in connection with an Award, but may permit discretion to reduce such amount.

 

(ii)

Certification.  Following the close of each performance period and prior to payment of any amount to a Participant with respect to a Performance Award, the Committee shall certify in writing as to the attainment of all factors (including the performance factors for a Participant) upon which any payments to a Participant for that performance period are to be based.

 

 

 

 

(i)	Consideration for Awards.  Awards may be granted for no cash consideration or for any cash or other consideration as may be determined by the Committee or required by applicable law.

 

(ii)

Awards May Be Granted Separately or Together.  Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate.  Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

 

(iii)

Forms of Payment under Awards.  Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities (but excluding promissory notes), other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee.  Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments.

 

(iv)

Limits on Transfer of Awards.  Except as otherwise provided by the Committee in its discretion and subject to such additional terms and conditions as it determines, no Award (other than fully vested and unrestricted Shares issued pursuant to any Award) and no right under any such Award shall be transferable by a Participant other than by will or by the laws of descent and distribution, and no Award (other than fully vested and unrestricted Shares issued pursuant to any Award) or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.  If the Committee does permit the transfer of an Award other than a fully vested and unrestricted Share, such transfer shall be for no value and in accordance with the rules of Form S-8. The Committee may establish procedures as it deems appropriate for a Participant to designate a person or persons, as beneficiary or beneficiaries, to exercise the rights of the Participant and receive any property distributable with respect to any Award in the event of the Participant’s death.

 

(v)

Restrictions; Securities Exchange Listing.  All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, applicable federal or state securities laws and regulatory requirements, and the Committee may cause appropriate entries to be made with respect to, or legends to be placed on the certificates for, such Shares or other securities to reflect such restrictions.  The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until the requirements of any federal or state securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

 

(vi)

Prohibition on Option and Stock Appreciation Right Repricing. Except as provided in Section 4(c) hereof, the Committee may not, without prior approval of the Company’s shareholders, seek to effect any re-pricing of any previously granted, “underwater” Option or Stock Appreciation Right by:  (i) amending or modifying the terms of the Option or Stock Appreciation Right to lower the exercise price; (ii) canceling the underwater Option or Stock Appreciation Right and granting either (A) replacement Options or Stock Appreciation Rights having a lower exercise price; or (B) Restricted Stock, Restricted Stock Units, Performance Award or Other Stock-Based Award in exchange; or (iii) cancelling or repurchasing the underwater Option or Stock Appreciation Right for cash or other securities.  An Option or Stock Appreciation Right will be deemed to be “underwater” at any time when the Fair Market Value of the Shares covered by such Award is less than the exercise price of the Award.

 

(vii)

Section 409A Provisions.  Notwithstanding anything in the Plan or any Award Agreement to the contrary, to the extent that any amount or benefit that constitutes “deferred compensation” to a Participant under Section 409A and applicable guidance thereunder is otherwise payable or distributable to a Participant under the Plan or any Award Agreement solely by reason of the occurrence of a change in control or due to the Participant’s disability or “separation from service” (as such term is defined under Section 409A), such amount or benefit will not be payable or distributable to the Participant by reason of such circumstance unless the Committee determines in good faith that (i) the circumstances giving rise to such change in control, disability or separation from service meet the definition of a change in ownership or effective control, disability, or separation from service, as the case may be, in Section 409A(a)(2)(A) of the Code and applicable proposed or final regulations, or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise.  Any payment or distribution that otherwise would be made to a Participant who is a Specified Employee (as determined by the Committee in good faith) on account of separation from service may not be made before the date which is six months after the date of the Specified Employee’s separation from service (or if earlier, upon the Specified Employee’s death) unless the payment or distribution is exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise.

 

(viii)

Acceleration of Vesting or Exercisability.   No Award Agreement shall accelerate the exercisability of any Award or the lapse of restrictions relating to any Award in connection with a change-in-control event unless such acceleration occurs upon the consummation of (or effective immediately prior to the consummation of, provided that the consummation subsequently occurs) such change-in-control event.

 

 

 

 

(i)	amend the eligibility for, and limitations or conditions imposed upon, participation in the Plan;

 

(ii)

amend any terms relating to the granting or exercise of Awards, including but not limited to terms relating to the amount and payment of the exercise price, or the vesting, expiry, assignment or adjustment of Awards, or otherwise waive any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively;

 

(iii)

make changes that are necessary or desirable to comply with applicable laws, rules, regulations and policies of any applicable governmental entity or stock exchange (including amendments to Awards necessary or desirable to avoid any adverse tax results under Section 409A, and no action taken to comply with Section 409A shall be deemed to impair or otherwise adversely alter or impair the rights of any holder of an Award or beneficiary thereof); or

 

(iv)	amend any terms relating to the administration of the Plan, including the terms of any administrative guidelines or other rules related to the Plan.

 

 

(i)	require stockholder approval under the rules or regulations of the Securities and Exchange Commission, the NASDAQ Stock Market or any other securities exchange that are applicable to the Company;

 

(ii)	increase the number of shares authorized under the Plan as specified in Section 4(a) of the Plan;

 

(iii)

increase the number of shares or value subject to the limitations contained in Section 4(d) of the Plan or otherwise cause Section 162(m) to become unavailable with respect to the Plan;

 

(iv)	permit repricing of Options or Stock Appreciation Rights, which is currently prohibited bySection 6(f)(vi) of the Plan;

 

(v)	permit the award of Options or Stock Appreciation Rights at a price less than 100% of the Fair Market Value of a Share on the date of grant of such Option or Stock Appreciation Right, contrary to the provisions of Section 6(a)(i) and Section 6(b) of the Plan; or

 

(vi)	increase the maximum term permitted for Options and Stock Appreciation Rights as specified in Section 6(a)(ii) and Section 6(b).

 

 

 

(i)

either (A) termination of any Award, whether or not vested, in exchange for an amount of cash and/or other property, if any, equal to the gain that would have been attained upon the exercise of the Award or realization of the Participant’s rights or (B) the replacement of the Award with other rights or property of comparable value selected by the Committee or the Board, in its sole discretion;

 

(ii)

that the Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

 

(iii)

that, subject to Section 6(f)(viii), the Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby, notwithstanding anything to the contrary in the applicable Award Agreement; or

 

(iv)	that the Award cannot vest, be exercised or become payable after a date certain in the future, which may be the effective date of the event.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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