This excerpt taken from the CCRT DEF 14A filed Apr 16, 2008.
Types of Awards.
The 2008 Plan permits the granting of any or all of the following types of awards: (1) incentive and nonqualified stock options; (2) stock appreciation rights; (3) restricted stock; (4) restricted stock units; and (5) other stock or cash-based incentive awards. Awards may be granted either alone or in addition to or in tandem with any other type of award.
Stock Options. Stock options entitle the holder to purchase a specified number of shares of Common Stock at a specified price, which is called the exercise price, subject to the terms and conditions of the option grant. The Compensation Committee can award options intended to be incentive stock options or nonqualified stock options. Also, the Compensation Committee can specify other terms and conditions applicable to the options. Except for certain grants made to assume or substitute awards in connection with acquisition transactions and certain incentive stock option grants, the exercise price of stock options granted under the 2008 Plan must be at least 100% of the fair market value of the Common Stock on the date of grant. However, with respect to an incentive stock option granted to a participant who beneficially owns more than 10% of the combined voting power of CompuCredit or any affiliate (determined by applying certain attribution rules), the exercise price must be at least 110% of the fair market value of the Common Stock on the date of grant. Each option will vest and become exercisable at such time or times as determined by the Compensation Committee consistent with the terms of the 2008 Plan. In the case of incentive stock options, the aggregate fair market value (determined as of the date of grant) of Common Stock with respect to which an incentive stock option may become exercisable for the first time during any calendar year cannot exceed $100,000; and if this limitation is exceeded, the incentive stock options which cause the limitation to be exceeded will be treated as nonqualified stock options.
Options may be exercised, in whole or in part, by payment in full of the purchase price in cash, check or wire transfer and/or one or a combination of the following forms of payment to the extent permitted by the Compensation Committee in an applicable agreement: by the delivery of Common Stock already owned by the participant; by a broker-assisted cashless exercise; through a net exercise in which a portion of the in-the-money value of the option is used; or such other consideration as may be permitted by the Compensation Committee.
After termination of service with CompuCredit or its affiliates, a participant will be able to exercise his or her option for the period of time, if any, and on the terms and conditions determined by the Compensation Committee and stated in the option agreement.
Stock Appreciation Rights. Stock appreciation rights, or SARs, may be granted alone (freestanding) or in tandem with an option award (related option). Except for certain grants made to assume or substitute awards in connection with acquisition transactions, the grant price of a freestanding SAR will be at least 100% of the fair market value of the Common Stock on the date of grant. The grant price of a tandem SAR will be equal to the exercise price of the related option. Upon exercise of a SAR, the holder is entitled to receive the excess of the then fair market value of the shares for which the right is exercised over the grant price of the SAR. Payment upon exercise of a SAR will be in cash, shares or some combination of cash and shares as determined by the Compensation Committee. The Compensation Committee may impose any conditions or restrictions on the exercise of a SAR as it deems appropriate. No participant may be granted SARs in tandem with incentive stock options that are first exercisable in any calendar year for shares of Common Stock having an aggregate fair market value (determined as of the date of grant) that exceeds $100,000. A tandem SAR may be exercised only to the extent that the related option is exercisable and the fair market value of the Common Stock upon exercise exceeds the exercise price of the related option. As set forth in the agreement, the amount payable as a result of the exercise of a SAR may be settled in cash, shares of Common Stock or a combination of each. Any related option will no longer be exercisable to the extent the SAR has been exercised, and the related SAR will be canceled to the extent the related option has been exercised.
Restricted Stock Awards. A restricted stock award is the grant or sale of shares of Common Stock, which may be subject to forfeiture restrictions. The Compensation Committee will prescribe whether the restricted stock award is forfeitable and the conditions to which it is subject. If the participant must pay for a restricted
stock award, payment of the award generally shall be made in cash or, if the agreement so provides, by surrendering shares of common stock, by means of a net exercise procedure or any other medium of payment. Prior to vesting and/or forfeiture, a participant will have all rights of a shareholder with respect to a restricted stock award, including the right to receive dividends and vote the underlying shares; provided, however, the participant may not transfer the shares. CompuCredit may retain custody of the certificates evidencing the shares until they are no longer forfeitable.
Restricted Stock Units. A Restricted Stock Unit (RSU) entitles the participant to receive shares of Common Stock when certain conditions are met. The Compensation Committee will prescribe when the RSUs shall become payable. CompuCredit will pay the participant one share of Common Stock for each RSU that becomes earned and payable.
Other Stock or Cash-Based Incentive Awards. An Incentive Award entitles the participant to receive cash or Common Stock when certain conditions are met. The Compensation Committee will prescribe the terms and conditions of the Incentive Award. As set forth in the participants agreement, an Incentive Award may be paid in cash, shares of Common Stock or a combination of each.
Shares Subject to the 2008 Plan. The maximum number of shares of Common Stock authorized for issuance under the 2008 Plan is 2,000,000 shares. Through April 14, 2008, the Compensation Committee had granted 316,900 restricted stock units (RSUs) under the 2008 Plan. In any calendar year, no participant may be granted options, SARs, Restricted Stock Awards, RSUs, or any combination thereof that relate to more than 500,000 shares. In any calendar year, no participant may be granted an Incentive Award (i) with reference to a specified dollar limit for more than $4 million and (ii) with reference to a specified number of shares of Common Stock for more than 500,000 shares. The maximum number of shares of Common Stock that may be issued pursuant to awards, the individual calendar year limits on awards and the terms of outstanding awards will be adjusted as is equitably required in the discretion of the Compensation Committee in the event of (a) any payment of a stock dividend in respect of the Common Stock, (b) any recapitalization, reclassification, split-up or consolidation of or other change in the Common Stock, or (c) any exchange of the outstanding shares of Common Stock in connection with a merger, consolidation or other reorganization of or involving CompuCredit or a sale by us of all or a portion of our assets, for a different number or class of shares of stock or other securities of CompuCredit or for shares of stock or other securities of any other corporation. Except as set forth above, our issuance of shares of stock of any class of securities convertible into shares of stock of any class shall not affect any equity award granted pursuant to the 2008 Plan.
If any awards expire or are cancelled, terminated or forfeited for any reason other than their exercise, vesting or payment, the shares of Common Stock subject to such awards will again be available for issuance. If shares of Common Stock are issued pursuant to an award, the number of shares that shall be counted against the aggregate number of shares of Common Stock available for issuance shall be the greater of (i) the number of underlying shares of Common Stock with respect to which the award related or (ii) the number of shares of Common Stock actually issued in settlement of the award. If an award is settled in cash or a form other than shares of Common Stock, then the underlying shares with respect to which the award related shall not be counted against the aggregate number of shares available for issuance under the 2008 Plan; however, such underlying shares will be counted against the individual calendar year limits set forth above.
Effective Date and Term of 2008 Plan. The 2008 Plan became effective on March 6, 2008, the date of its adoption by the Board of Directors, subject to shareholder approval. Awards, other than restricted stock awards, may be granted under the 2008 Plan after its adoption by the Board of Directors, provided that no award will be effective unless the shareholders approve the 2008 Plan within 12 months of its adoption. Restricted stock awards may only be granted after the shareholders approve the 2008 Plan. The 2008 Plan, but not any outstanding grants, shall terminate on March 6, 2018, the tenth anniversary of the date the 2008 Plan was adopted by the Board of Directors, subject to earlier termination by the Board of Directors.
Term of Awards. No award shall be exercisable or become vested or payable more than ten years after the date of grant. An incentive stock option granted to a participant who beneficially owns more than 10% of the combined voting power of CompuCredit or any affiliate (determined by applying certain attribution rules) or a tandem SAR that relates to such an incentive stock option may not be exercisable more than five years after the date of grant.
Nontransferability. Generally, equity awards are not transferable other than by will or the laws of descent and distribution, and during the lifetime of the participant to whom the award is granted, the award may only be exercised by, or payable to, the participant. However, the Compensation Committee may provide that awards other than incentive stock options or a corresponding SAR that is related to an incentive stock option may be transferred by a participant to anyone in the class of transferees who may rely on a Form S-8 Registration Statement under the Securities Act of 1933 to sell shares issuable upon exercise or payment of such awards. Any such transfer will be permitted only if (i) the participant does not receive any consideration for the transfer, (ii) the Compensation Committee expressly approves the transfer and (iii) the transfer is on such terms and conditions as are appropriate for the class of transferees who may rely on the Form S-8 Registration Statement. The holder of the transferred award will be bound by the same terms and conditions that governed the award during the period that it was held by the participant, except that such transferee may only transfer the award by will or the laws of descent and distribution.
Change in Control. In the event of or in anticipation of a Change in Control (as defined in the 2008 Plan), the Compensation Committee in its discretion may terminate outstanding awards (i) by giving the participants an opportunity to exercise the awards that are then exercisable and then terminating, without any payment, all awards that have not been exercised (including those that were not exercisable) or (ii) by paying the participant the value of the awards that are then vested, exercisable or payable without payment for any awards that are not then vested, exercisable or payable or that have no value. Alternatively, the Compensation Committee may take such other action as the Compensation Committee determines to be reasonable under the circumstances to permit the participant to realize the value of the award. The Compensation Committee may provide that a participants outstanding awards become fully exercisable or payable on and after a change in control date or immediately before the date the awards will be terminated in connection with a change in control. Awards will not be terminated to the extent they are to be continued after the Change in Control.
Shareholder Rights. No participant shall have any rights as a shareholder of CompuCredit until such award is settled by the issuance of Common Stock (other than a restricted stock award or RSUs for which certain rights may be granted).
Compliance With Applicable Law. No award shall be exercisable, vested or payable except in compliance with all applicable federal and state laws and regulations (including, without limitation, tax and securities laws), any listing agreement with any stock exchange to which CompuCredit is a party, and the rules of all domestic stock exchanges on which CompuCredits shares may be listed.
Amendment and Termination of 2008 Plan. The Board of Directors may amend or terminate the 2008 Plan at any time; provided, however, that no amendment may adversely impair the rights of a participant with respect to outstanding awards without the participants consent. An amendment will be contingent on approval of CompuCredits shareholders to the extent required by law, by the rules of any stock exchange on which CompuCredits securities are then traded or if the amendment would (i) increase the benefits accruing to participants under the 2008 Plan, including without limitation, any amendment to the 2008 Plan or any agreement to permit a repricing or decrease in the exercise price of any outstanding awards, (ii) increase the aggregate number of shares of Common Stock that may be issued under the 2008 Plan, (iii) modify the requirements as to eligibility for participation in the 2008 Plan or (iv) change the stated performance conditions. Additionally, to the extent the Board deems necessary to continue to comply with the performance-based exception to the deduction limits of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), as described below, the Board will submit the material terms of the stated performance conditions to CompuCredits shareholders for approval no later than the first shareholder meeting that occurs in the fifth year following the year in which the shareholders previously approved the performance objectives.
Notwithstanding any other provision of the 2008 Plan, the Compensation Committee may amend any outstanding award without a participants consent if, as determined by the Compensation Committee in its sole discretion, such amendment is required either to (i) confirm exemption from Section 409A of the Code, (ii) comply with Section 409A of the Code or (iii) prevent a participant from being subject to any tax or penalty under Section 409A of the Code.
Forfeiture Provisions. Awards do not confer upon any individual any right to continue in the employ or service of CompuCredit or any affiliate. All rights to any award that a participant has will be forfeited immediately if the participant is discharged from employment or service for cause (as defined in the 2008 Plan).
Miscellaneous Provisions. No right or interest of a participant in any award will be subject to any lien, obligation or liability of the participant. The laws of the State of Georgia govern the 2008 Plan. The 2008 Plan is unfunded, and CompuCredit does not intend to segregate any assets for grants of awards under the 2008 Plan.