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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): March 16, 2007
HEICO CORPORATION
(Exact name of registrant as specified in its charter)
Florida 1-4604 65-0341002
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) file number) Identification No.)
3000 Taft Street, Hollywood, Florida 33021
(Address of principal executive offices) (Zip Code)
(954) 987-4000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 16, 2007, upon recommendation of the Board of Directors of HEICO
Corporation (the "Company"), the shareholders approved the HEICO Corporation
2007 Incentive Compensation Plan (the "Incentive Plan"), a copy of which is
attached as Exhibit No. 10.1 to this Form 8-K and the terms of which are hereby
incorporated herein by reference below.
The Incentive Plan will provide to senior members of the Company's
management team who are executive officers the opportunity to earn cash annual
and long-term incentive awards and will enable the Company to claim tax
deductions for incentive awards earned and paid under the Incentive Plan without
limitation under Section 162(m) of the Internal Revenue Code. The Board of
Directors regards the Incentive Plan as an important means by which we can link
executive pay to performance. By providing for competitive levels of incentive
compensation in a program that is fully tax deductible by the Company, the
Incentive Plan will serve as a useful tool for attracting and retaining members
of our senior management team. Employees who are or may be promoted to executive
officers are eligible for selection for participation in the Incentive Plan.
Awards under the Incentive Plan will be granted in the discretion of the
Compensation Committee. Except as described below, the recipients and other
terms of such awards cannot be determined at this time.
The Compensation Committee has authorized certain incentive awards to
executive officers under the Incentive Plan, for the fiscal year ending October
31, 2007. The annual incentive awards will become payable for fiscal 2007
performance if a corporate performance goal relating to net income excluding
extraordinary items (if any) is achieved. No amount will be payable unless a
specified "threshold" performance level is reached, and the award is payable at
a designated maximum rate if performance substantially in excess of the target
performance level is achieved. The table below shows the amounts payable under
this award upon achievement of specified levels of performance for fiscal 2007:
NEW PLAN BENEFITS
PAYOUT FOR PERFORMANCE AT SPECIFIED LEVEL
------------------------------------------
NAME AND PRINCIPAL POSITION THRESHOLD TARGET MAXIMUM
- ------------------------------------------------------ ------------ ------------ ------------
Laurans A. Mendelson $ 437,500 $ 875,000 $ 1,312,000
Chairman of the Board,
President and Chief Executive Officer
Thomas S. Irwin $ 227,500 $ 455,000 $ 682,500
Executive Vice President
and Chief Financial Officer
Eric A. Mendelson $ 227,500 $ 455,000 $ 682,500
President - Flight Support Group;
President and Chief Executive Officer
of HEICO Aerospace Holding Corp.
Victor H. Mendelson $ 227,500 $ 455,000 $ 682,500
President - Electronic Technologies Group
and General Counsel of the Company;
President and Executive Officer of HEICO Electronic
Technologies Corp.
All executive officers as a group (4 persons) $ 1,120,000 $ 2,240,000 $ 3,359,500
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
EXHIBIT NO. DESCRIPTION
----------- ----------------------------------------------------------
10.1 HEICO Corporation 2007 Incentive Compensation Plan
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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.
HEICO CORPORATION
-------------------------------
(Registrant)
Date: March 19, 2007 By: /s/ Thomas S. Irwin
---------------------------
Thomas S. Irwin
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------
10.1 HEICO Corporation 2007 Incentive Compensation Plan
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Exhibit 10.1
HEICO CORPORATION
2007 INCENTIVE COMPENSATION PLAN
1. GENERAL
This 2007 Incentive Compensation Plan (the "Plan") of HEICO Corporation
(the "Company") authorizes the grant of annual incentive and long-term incentive
awards to executive officers and sets forth certain terms and conditions of such
Awards. The purpose of the Plan is to help the Company attract and retain
executive officers of outstanding ability and to motivate such persons to exert
their greatest efforts on behalf of the Company and its subsidiaries by
providing incentives directly linked to the measures of the financial success
and performance of the Company and its businesses. The Plan is intended to
permit the Committee to qualify certain Awards as "performance-based"
compensation under Code Section 162(m).
2. DEFINITIONS
In addition to the terms defined in Section 1 and elsewhere in the
Plan, the following are defined terms under this Plan:
(a) "Annual Incentive Award" means an Award earned based on
performance in a Performance Period of one fiscal year or a portion thereof.
(b) "Award" means the amount of a Participant's Award Opportunity
in respect of a Performance Period determined by the Committee to have been
earned, and the Participant's rights to current or future payments in settlement
thereof.
(c) "Award Opportunity" means the Participant's opportunity to
earn specified amounts based on performance during a Performance Period. An
Award Opportunity constitutes a conditional right to receive settlement of an
Award.
(d) "Cause" means "cause" as defined in an employment agreement
between the Company and the Participant in effect at the time of Termination of
Employment. If, however, there is no such employment agreement, Cause means an
individual's (i) intentional failure to perform reasonably assigned duties, (ii)
willful misconduct in the performance of duties, (iii) knowing misconduct which
results in the Company being required to prepare an accounting restatement due
to the material noncompliance of the Company with any financial reporting
requirement under the securities laws, (iv) willful violation of any law, rule
or regulation in connection with the performance of duties (other than traffic
violations or similar offenses), or (v) the commission of an act of fraud or
intentional misappropriation or conversion of assets or opportunities of the
Company or any subsidiary; provided, however, that the Committee may vary the
definition of "Cause" in any agreement or document relating to an Award to be
earned, but not yet earned.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time. References to any provision of the Code include and successor
provisions thereto and regulations thereunder.
(f) "Committee" means the Compensation Committee of the Board of
Directors, or such other Board committee as the Board may designate to
administer the Plan.
(g) "Covered Employee" means a person designated by the Committee
as likely, with respect to a given fiscal year of the Company, to be the Chief
Executive Officer or one of the other persons who will be named executive
officers whose compensation potentially will be subject to the limitations on
tax deductibility under Code Section 162(m) for that year (or a later year in
which an Award may be settled). This designation generally is required at the
time an Award Opportunity is granted. This designation generally is required at
the time an Award Opportunity is authorized. The Committee may designate more
than five persons as Covered Employees with respect to a given year.
(h) "Participant" means an employee participating in this Plan.
(i) "Performance Goal" means the Company, business unit or
individual performance objectives or accomplishments required as a condition to
the earning of an Award Opportunity.
(j) "Performance Period" means the period, specified by the
Committee, over which an Award Opportunity may be earned.
(k) "Retirement" means Termination of Employment of the
Participant at or after the Participant has reached age 65, at or after the
Participant has reached age 55 with 10 years of service or upon any other
Termination deemed a retirement by the Committee; provided, however, that in the
case of any retirement before age 65, the Participant shall have executed a
general release and has agreed to be subject to covenants relating to
noncompetition, nonsolicitation and other commitments through the end of the
Performance Period in which the Retirement occurs as then may be required by the
Committee for the protection of the Company's business.
(l) "Termination of Employment" means the termination of a
Participant's employment with the Company or a subsidiary immediately after
which the Participant is not employed by the Company or any subsidiary.
3. ADMINISTRATION
(a) Administration by the Committee. The Plan will be administered
by the Committee, provided that the Committee may condition any of its actions
on approval or ratification by the Board of Directors or the independent
directors of the Board. The Committee shall have full and final authority to
take all actions hereunder, subject to and consistent with the provisions of the
Plan. This authority includes authority to correct any defect or supply any
omission or reconcile any inconsistency in the Plan and to construe and
interpret the Plan and any plan rules and regulations, authorization of an Award
Opportunity, Award, Award agreement, or other document hereunder; and to make
all other decisions and determinations as may be required under the terms of the
Plan or as the Committee may deem necessary or advisable for the administration
of the Plan.
(b) Manner of Exercise of Authority. Any action by the Committee
or the Board with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, subsidiaries or affiliates, Participants,
any person claiming any rights under the Plan from or through any Participant,
and shareholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. A memorandum signed by all members of
the Committee shall constitute the act of the Committee without the necessity,
in such event, to hold a meeting. At any time that a member of the
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Committee is not an "outside director" as defined under Code Section 162(m), any
action of the Committee relating to an Award intended by the Committee to
qualify as "performance-based compensation" within the meaning of Section 162(m)
may be taken by a subcommittee, designated by the Committee or the Board,
composed solely of two or more "outside directors." Such action shall be the
action of the Committee for purposes of the Plan. The foregoing notwithstanding,
no action of the Committee shall be void or deemed beyond the authority of the
Committee solely because, at the time such action was taken, one or more members
of the Committee failed to qualify as an "outside director." The Committee may
delegate to specified officers or employees of the Company authority to perform
administrative functions under the Plan, to the extent permitted by law,
provided that no such delegation shall be permitted if it (i) would cause Awards
intended to qualify as performance-based compensation under Code Section 162(m)
to fail to so qualify, and (ii) would result in a related-party transaction with
an executive officer required to be disclosed under Item 404(a) of Regulation
S-K (in accordance with Instruction 5.a.ii thereunder) under the Securities
Exchange Act of 1934.
(c) Limitation of Liability. Each member of the Committee and the
Board of Directors, and any person to whom authority or duties are delegated
hereunder, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or other employee of
the Company or any subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant, legal counsel, or other
professional retained by the Company to assist in the administration of the
Plan. No member of the Board or Committee, nor any person to whom authority or
duties are delegated hereunder, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and any such person shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.
4. ELIGIBILITY
Employees of the Company or any subsidiary who are or may become
executive officers of the Company may be selected by the Committee as eligible
to participate in this Plan.
5. PER-PERSON AWARD LIMITATION
Award Opportunities granted to any one eligible employee shall be
limited such that the amount that may be potentially earned for performance in
any one calendar year shall not exceed the Participant's Annual Limit. For this
purpose, the Annual Limit shall equal $5 million plus the amount of the
Participant's unused Annual Limit as of the close of the previous fiscal year.
For this purpose, (i) "potentially earned" means that if the performance
conditions are satisfied in that year, the Award Opportunity is no longer
subject to further risk related to performance, without regard to whether it is
to be paid currently or on a deferred basis or continues to be subject to any
service requirement or other non-performance condition, and (ii) a Participant's
Annual Limit is used to the extent an amount may be potentially earned or paid
under an Award, regardless of whether such amount is in fact earned or paid.
6. DESIGNATION AND EARNING OF AWARD OPPORTUNITIES
(a) Designation of Award Opportunities and Performance Goals. The
Committee shall select employees to participate in the Plan and shall designate
the Performance Period and, for each such Participant, the Award Opportunity
such Participant may earn for such Performance Period, the nature of the
Performance Goal the achievement of which will result in the earning of the
Award Opportunity, and the levels of earning of the Award Opportunity
corresponding to the levels of achievement of the Performance Goal. The
following terms will apply to Award Opportunities:
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(i) Specification of Amount Potentially Earnable. Unless
otherwise determined by the Committee, the Award Opportunity earnable
by each Participant shall range from 0% to a specified maximum
percentage of a specified target Award Opportunity. The Committee shall
specify a table, grid, formula, or other information that sets forth
the amount of a Participant's Award Opportunity that will be earned
corresponding to the level of achievement of a specified Performance
Goal.
(ii) Denomination of Award Opportunity; Payment of Award.
Award Opportunities will be denominated in cash and Awards will be
payable in cash, except that the Committee may denominate an Award
Opportunity in shares of any class of the Company's stock and/or to
settle an Award Opportunity in shares of Common Stock if and to the
extent that shares of the Company's stock are authorized for use in
incentive awards and available under an equity compensation plan of the
Company.
(b) Limitations on Award Opportunities and Awards for Covered
Employees. If the Committee determines that an Award Opportunity to be granted
to an eligible person who is designated a Covered Employee by the Committee
should qualify as "performance-based compensation" for purposes of Code Section
162(m), the following provisions will apply:
(i) Performance Goal. The Performance Goal for such Award
Opportunities shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section
6(b). The Performance Goal shall be objective and shall otherwise meet
the requirements of Code Section 162(m) and regulations thereunder
(including Treasury Regulation Section 1.162-27(e) and successor
regulations thereto), including the requirement that the level or
levels of performance targeted by the Committee result in the
achievement of performance goals being "substantially uncertain." The
Committee may determine that the Award Opportunity will be earned, or
tentatively earned, based upon achievement of any one measure of
performance or that two or more measures of performance must be
achieved. The Committee may establish a "gate-keeper" Performance Goal
that conforms to this Section 6(b) while specifying or considering
other types of performance (which need not meet the requirements of
this Section 6(b)) as a basis for reducing the amount of the Award
deemed earned upon achievement of the gate-keeper Performance Goal.
Performance Goals may differ for Award Opportunities granted to any one
Participant or to different Participants.
(ii) Business Criteria. One or more of the following
business criteria for the Company, on a consolidated basis, and/or for
specified subsidiaries or affiliates or other business units of the
Company shall be used by the Committee in establishing the Performance
Goal for such Award Opportunities: (1) net sales; (2) gross profit or
pre-tax profit; (3) operating income, earnings before or after taxes,
earnings before or after minority interests, earnings before or after
interest, depreciation, amortization, or extraordinary or special
items; (4) net income or net income per common share (basic or fully
diluted); (5) return measures, including, but not limited to, return on
assets (gross or net), return on investment, return on capital, or
return on equity; (6) cash flow, free cash flow, cash flow return on
investment (discounted or otherwise), net cash provided by operating
activities, or cash flow in excess of cost of capital; (7) interest
expense after taxes; (8) economic value created or economic profit; (9)
operating margin or profit margin; (10) shareholder value creation
measures, including but not limited to stock price or total shareholder
return; (11) revenues from specific assets, projects or lines of
business; (12) targets relating to expense or operating expense,
working capital targets, or operating efficiency; and (13) strategic
business criteria, consisting of one or more objectives based on
meeting specified goals relating to market penetration, geographic
business expansion, operating goals, cost targets, customer
satisfaction, employee satisfaction, human resources management,
supervision of litigation and information technology, and acquisitions
or divestitures of assets, subsidiaries, affiliates or joint ventures.
The
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targeted level or levels of performance with respect to such business
criteria may be established at such levels and in such terms as the
Committee may determine, in its discretion, including in absolute
terms, as a goal relative to performance in prior periods, or as a goal
compared to the performance of one or more comparable companies or an
index covering multiple companies or an industry.
(iii) Performance Period and Timing for Establishing
Performance Goals. The Committee will specify the Performance Period
over which achievement of the Performance Goal in respect of such Award
Opportunities shall be measured. A Performance Goal shall be
established by the date which is the earlier of (A) 90 days after the
beginning of the applicable Performance Period or (B) the time 25% of
such Performance Period has elapsed.
(iv) Annual Incentive Awards Granted to Covered Employees.
The Committee may grant an Annual Incentive Award, intended to qualify
as "performance-based compensation" for purposes of Code Section
162(m), to an eligible person who is designated a Covered Employee for
a given fiscal year.
(v) Changes to Amounts Payable Under Awards During
Deferral Periods. Any settlement or other event that would change the
form of payment from that originally specified shall be implemented in
a manner such that the Award does not, solely for that reason, fail to
qualify as "performance-based compensation" for purposes of Code
Section 162(m).
(c) Additional Participants and Award Opportunity Designations
During a Performance Period. At any time during a Performance Period the
Committee may select a new employee or a newly promoted employee to participate
in the Plan for that Performance Period and/or designate, for any such
Participant, an Award Opportunity (or additional Award Opportunity) amount for
such Performance Period. In determining the amount of the Award Opportunity for
such Participant under this Section 6(c), the Committee may take into account
the portion of the Performance Period already elapsed, the performance achieved
during such elapsed portion of the Performance Period, and such other
considerations as the Committee may deem relevant.
(d) Determination of Award. Within a reasonable time after the end
of each Performance Period, the Committee shall determine the extent to which
the Performance Goal for the earning of Award Opportunities was achieved during
such Performance Period and the resulting Award to the Participant for such
Performance Period. The Committee may adjust upward or downward the amount of an
Award, in its sole discretion, in light of such considerations as the Committee
may deem relevant, except that (i) no such discretionary upward adjustment of a
Performance Goal subject Section 6(b) is permitted, and (ii) any discretionary
adjustment is subject to Section 5, Section 8 and other applicable limitations
of the Plan. Unless otherwise determined by the Committee or as provided under
Section 8(a), the Award shall be deemed earned and vested at the time the
Committee makes the determination pursuant to this Section 6(d) and no
Participant shall have a legal right to receive an Award until such
determination has been made.
(e) Written Determinations. Determinations by the Committee as to
the establishment of Performance Goals, the amount potentially payable in
respect of Award Opportunities, the level of actual achievement of the
Performance Goals and the amount of any final Award earned shall be recorded in
writing in the case of Performance Awards intended to qualify under Section
162(m). Specifically, the Committee shall certify in writing, in a manner
conforming to applicable regulations under Section 162(m), with respect to any
Covered Employee prior to any settlement of each such Award, that the
Performance Goal relating to the Award and other material terms of the Award
upon which settlement was conditioned have been satisfied.
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(f) Other Terms of Award Opportunities and Awards. Subject to the
terms of this Plan, the Committee may specify the circumstances in which Award
Opportunities and Awards shall be paid or forfeited in the event of a change in
control, termination of employment in circumstances other than those specified
in Section 8, or other event prior to the end of a Performance Period or
settlement of an Award, provided that such change occurs before an Award is
earned, provided that, without the consent of an affected Participant, changes
to previously specified terms are authorized only to the extent the Committee
preserved its discretion to make such changes and in any event such changes may
be made no later than the time an award is earned. With respect to Award
Opportunities and Awards under Section 6(b), any payments resulting from a
change in control or termination of employment need not qualify as
performance-based compensation under Section 162(m) if the authorization of such
non-qualifying payments would not otherwise disqualify the Award Opportunity or
Award from Section 162(m) qualification in cases in which no change in control
or termination of employment occurred.
(g) Adjustments. The Committee is authorized to make adjustments
in the terms and conditions of, and the criteria included in, Award
Opportunities and related Performance Goals in recognition of unusual or
nonrecurring events, including stock splits, stock dividends, reorganizations,
mergers, consolidations, large, special and non-recurring dividends, and
acquisitions and dispositions of businesses and assets, affecting the Company
and its subsidiaries or other business unit, or the financial statements of the
Company or any subsidiary, or in response to changes in applicable laws,
regulations, accounting principles, tax rates and regulations or business
conditions or in view of the Committee's assessment of the business strategy of
the Company, any subsidiary or affiliate or business unit thereof, performance
of comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed relevant;
provided, however, that no such adjustment shall be authorized or made if and to
the extent that the existence or exercise of such authority (i) would cause an
Award Opportunity or Award granted under Section 6(b) and intended to qualify as
"performance-based compensation" under Code Section 162(m) and regulations
thereunder to otherwise fail to so qualify, or (ii) would cause the Committee to
be deemed to have authority to change the targets, within the meaning of
Treasury Regulation 1.162-27(e)(4)(vi), under the Performance Goals relating to
an Award Opportunity under Section 6(b) intended to qualify as
"performance-based compensation" under Code Section 162(m) and regulations
thereunder. In the event of an equity restructuring, as defined in Statement of
Financial Accounting Standards 123R, which affects the Common Stock, a
Participant shall have a legal right to an adjustment to the Participant's Award
Opportunity and/or Award (including any performance goal based on market price
per share and any Award Opportunity or Award denominated in Common Stock) which
shall preserve without enlarging the value of the Award Opportunity or Award,
with the manner of such adjustment to be determined by the Committee in its
discretion, and subject to any limitation on this right set forth at the time of
initial authorization of the Award Opportunity in any document or controlling
pronouncement of the Committee limiting this right.
7. SETTLEMENT OF AWARDS.
(a) Deferrals. The Committee may specify, at the time the Award
Opportunity is authorized, that an Award will be deferred as to settlement after
it is earned. In addition, a Participant will be permitted to elect to defer
settlement of an Award if and to the extent such Participant is selected to
participate in a Company deferral program covering such Awards and the
Participant has made a valid deferral election in accordance with that plan.
Deferrals must comply with applicable requirements of Section 409A of the Code.
(b) Settlement of Award. Any non-deferred Award shall be paid and
settled by the Company within 60 days after the date of determination by the
Committee under Section 6(d) hereof. With respect to any deferred amount of a
Participant's Award, such amount will be credited to the Participant's deferral
account under the governing deferral plan of the Company as promptly as
practicable at or after the date of determination by the Committee under Section
6(d) hereof.
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(c) Tax Withholding. The Company shall deduct from any payment in
settlement of a Participant's Award or other payment to the Participant any
Federal, state, or local withholding or other tax or charge which the Company is
then required to deduct under applicable law with respect to the Award. The
Committee may specify other withholding terms relating to an Award that will be
settled by delivery of shares of Common Stock or other property.
(d) Non-Transferability. An Award Opportunity, any resulting
Award, including any deferred cash amount resulting from an Award, and any other
right hereunder shall be non-assignable and non-transferable, and shall not be
pledged, encumbered, or hypothecated to or in favor of any party or subject to
any lien, obligation, or liability of the Participant to any party of than the
Company or a subsidiary or affiliate.
8. EFFECT OF TERMINATION OF EMPLOYMENT.
Except to the extent set forth in subsections (a) and (b) of this
Section 8, upon a Participant's Termination of Employment prior to completion of
a Performance Period or, after completion of a Performance Period but prior to
the Committee's determination of the extent to which an Award has been earned
for such Performance Period, the Participant's Award Opportunity relating to
such Performance Period shall cease to be earnable and shall be canceled, and
the Participant shall have no further rights or opportunities hereunder:
(a) Disability, Death, Retirement or Termination by the Company
not for Cause. If Termination of Employment of the Participant is due to the
permanent disability, death, Retirement or Termination by the Company not for
Cause, the Participant or his or her beneficiary shall be deemed to have earned
and shall be entitled to receive an Award for any Performance Period for which
termination occurs prior to the date of determination under Section 6(d) hereof
equal to the Award which would have been earned had Participant's employment not
terminated multiplied by a fraction the numerator of which is the number of
calendar days from the beginning of the Performance Period to the date of
Participant's Termination of Employment and the denominator of which is the
number of calendar days in the Performance Period (but such fraction shall in no
event be greater than one). Such pro rata Award will be determined at the same
time as Awards for continuing Participants are determined (i.e., normally
following the end of the Performance Period in accordance with Section 6(d)
hereof); provided, however, that the Committee may not exercise negative
discretion with respect to such a Participant's Award except in a manner
consistent with its exercise of negative discretion for all Awards of
Participants who then remain employed by the Company. Upon its determination,
such pro rata Award shall be paid and settled promptly in cash, except to the
extent the settlement has been validly deferred in accordance with Section 7(a).
The portion of the Participant's Award Opportunity not earned will cease to be
earnable and will be canceled. For purposes of the Plan, the existence of a
"permanent disability" shall be determined by, or in accordance with criteria
and standards adopted by, the Committee. The foregoing notwithstanding, the
Committee may limit or expand the Participant's rights upon disability, death or
Retirement with respect to a given Award Opportunity.
(b) Other Terminations. In connection with any Termination of
Employment other than due to death, disability, Retirement, or Termination by
the Company not for Cause, the Committee may determine that the Participant
shall be deemed to have earned none, a portion, or all of an Award Opportunity
for a Performance Period for which the Committee has not yet determined the
extent to which an Award has been earned, in the Committee's sole discretion.
This determination may be specified at the time the Award Opportunity is
established or made at any time thereafter, except, without the consent of an
affected Participant, changes to previously specified terms are authorized only
to the extent the Committee preserved its discretion to make such changes.
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9. ADDITIONAL FORFEITURE PROVISIONS APPLICABLE TO AWARDS.
The Committee may impose as a condition of Award Opportunities and
Awards, and as a condition of a Participant's right to receive or retain cash,
Stock, or other property in connection with an Award, (i) requirements that the
Participant comply with specified conditions relating to non-competition,
confidentiality of information relating to or possessed by the Company,
non-solicitation of customers, suppliers, and employees of the Company,
cooperation in litigation, non-disparagement of the Company and its subsidiaries
and affiliates and the officers, directors and affiliates of the Company and it
subsidiaries and affiliates, and other restrictions upon or covenants of the
Participant, including during specified periods following termination of
employment or service to the Company, and (ii) requirements that, if any such
amounts were earned based on performance that is thereafter adversely affected
by a restatement of financial statements or financial information, that such
amounts shall be subject to forfeiture as specified by the Committee. Any
forfeiture or related provisions authorized under this Section 9 shall be
specified as a term of the Award by the Committee not later than the expiration
of 25% of the relevant Performance Period.
10. GENERAL PROVISIONS.
(a) Changes to this Plan. The Committee may at any time amend,
alter, suspend, discontinue, or terminate this Plan without the consent of
shareholders or Participants; provided, however, that any such action beyond the
scope of the Committee's authority shall be subject to the approval of the Board
of Directors; provided further, that any such action shall be submitted to the
Company's shareholders for approval not later than the earliest annual meeting
for which the record date is at or after the date of such Committee or Board
action if such shareholder approval is required by any federal or state law or
regulation or the rules of the New York Stock Exchange or any other stock
exchange or automated quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion, determine to submit
other amendments to the Plan to shareholders for approval; and provided further,
that, without the consent of an affected Participant, no such Committee or Board
action may materially and adversely affect the rights of such Participant under
any outstanding Award (this restriction does not apply to an Award Opportunity,
however, which remains subject to the discretion of the Committee).
(b) Long-Term Incentives Not Annual Bonus for Purposes of Other
Plans. Amounts earned or payable under the Plan in connection with Awards not
designated by the Committee as "Annual Incentive Awards" shall not be deemed to
be annual incentive or annual bonus compensation (regardless of whether an Award
is earned in respect of a period of one year or less or disclosed as annual
bonus compensation under Securities and Exchange Commission disclosure rules)
for purposes of any retirement or supplemental pension plan of the Company or
any employment agreement or change in control agreement between the Company and
any Participant, or for purposes of any other plan, unless the Company shall in
writing specifically identify this Plan by name and specify that amounts earned
or payable hereunder shall be considered to be annual incentive or annual bonus
compensation.
(c) Unfunded Status of Participant Rights. Awards, accounts,
deferred amounts, and related rights of a Participant represent unfunded
deferred compensation obligations of the Company for ERISA and federal income
tax purposes and, with respect thereto, the Participant shall have rights no
greater than those of an unsecured creditor of the Company.
(d) Nonexclusivity of the Plan. The adoption of this Plan shall
not be construed as creating any limitations on the power of the Board or
Committee to adopt such other compensation arrangements as it may deem desirable
for any Participant.
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(e) No Right to Continued Employment. Neither the Plan, the
authorization of an Award Opportunity, the grant of an Award nor any other
action taken hereunder shall be construed as giving any employee the right to be
retained in the employ of the Company or any of its subsidiaries or affiliates,
nor shall it interfere in any way with the right of the Company or any of its
subsidiaries or affiliates to terminate any employee's employment at any time.
(f) Severability. The invalidity of any provision of the Plan or a
document hereunder shall not deemed to render the remainder of this Plan or such
document invalid.
(g) Successors. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise, and whether
or not the corporate existence of the Company continues) to all or substantially
all of the business and/or assets of the Company to expressly assume and agree
to perform the Company's obligations under the Plan in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place; provided, however, that such successor may replace
the Plan with a plan substantially equivalent in opportunity and achievability,
as determined by a nationally recognized compensation consulting firm, and
covering the participants at the time of such succession. Any successor and the
ultimate parent company of such successor shall in any event be subject to the
requirements of this Section 10(g) to the same extent as the Company. Subject to
the foregoing, the Company may transfer and assign its rights and obligations
hereunder.
(h) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations or document hereunder shall be determined in
accordance with the laws of the State of Florida, without giving effect to
principles of conflicts of laws, and applicable provisions of federal law.
(i) Effective Date of Plan; Shareholder Approval; Termination of
Plan. This Plan shall be effective as of November 1, 2006. The Company shall
submit the Plan, including the material terms of the Plan specified in Treasury
Regulation section 1.162-27(e)(4), to shareholders for approval at the Company's
2007 Annual Meeting of Shareholders, and the Plan shall be terminated without
any Award being deemed earned in the event shareholders decline to approve it at
that Annual Meeting. If approved by shareholders, the Plan will terminate at
such time as may be determined by the Board of Directors or the Committee
(provided that reapproval of the business criteria specified in Section 6(b)(ii)
may be required under Code Section 162(m) every five years in order for
compensation to Covered Employees to be fully deductible).
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