CompUSA 2009 Annual Report Download - page 42

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• In order to receive the tax benefits, a grantee must hold the shares acquired upon exercise of an ISO for at least two years
after the grant date and at least one year after the exercise date.
• The aggregate fair market value of shares of Stock (determined on the ISO grant date) with respect to which ISOs are
exercisable for the first time by a grantee during any calendar year (whether issued under the Plan or any other plan of the
Company or its subsidiaries) may not exceed $100,000.
• In the case of an ISO granted to any individual who owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company, the exercise price per share must be at least 110% of the fair market
value of a share of Stock at the time the ISO is granted, and the ISO cannot be exercisable more than five years from the
grant date.
• An option cannot be treated as an ISO if it is exercised more than three months following the grantee’ s termination of
employment for any reason other than death or disability, or more than one year after the grantee’ s termination of
employment for disability, unless the grantee died during such three-month or one-year period. ISOs are not transferable
other than by will or by the laws of descent and distribution.
Stock Appreciation Rights. A stock appreciation right (“SAR”) entitles the grantee to receive upon exercise, for each share subject
to the SAR, an amount equal to the excess of (i) the fair market value of a share of Common Stock on the date of exercise over (ii) the
fair market value of a share of Common Stock on the date of grant. Each SAR shall be exercisable for a term, not to exceed ten years,
established by the Committee on the grant date. A SAR may be settled in cash or shares of Common Stock (valued at their fair market
value on the date of exercise of the SAR), in the Committee’ s discretion.
Restricted Stock. Prior to the vesting of any restricted shares, the shares are not transferable by the grantee and are forfeitable.
Vesting of the shares may be based on continued employment with the Company and/or upon the achievement of specific performance
goals, as the Committee determines on the grant date. The Committee may at the time that shares of restricted stock are granted impose
additional conditions to the vesting of the shares. Unless the Committee provides otherwise, unvested shares of restricted stock are
automatically and immediately forfeited upon a grantee’ s termination of employment for any reason.
Restricted Stock Units. A restricted stock unit entitles the grantee to receive a share of Stock, or in the sole discretion of the
Committee, the value of a share of Common Stock, on the date that the restricted stock unit vests. Payment shall be in cash, other
securities or other property, as determined in the sole discretion of the Committee. Unless the Committee provides otherwise, unvested
restricted stock units are forfeited upon a grantee’ s termination of employment for any reason.
Performance Awards. Performance awards entitle the grantee to either cash or shares of Common Stock, in the Committee’ s sole
discretion, upon the achievement of specified performance goals.
Performance Goals
The Plan provides that granting or vesting of restricted stock, restricted stock units and performance awards may be conditioned on
the achievement of specified performance goals. These goals must be established by the Committee within 90 days of the beginning of
the year (or other period to which the performance goals relate) or, if shorter, within the first 25% of the performance period. As
discussed below under “Summary of Federal Tax Consequences – $1 Million Limit,” performance-based awards can have significant
tax benefits for the Company. The maximum amount with respect to which performance awards may be granted to an individual in a
calendar year is $10,000,000 with respect to performance awards denominated in cash and 1,500,000 shares with respect to
performance awards denominated in shares.
The performance goals may be based on one or more of: share price, revenues, earnings (including but not limited to EBITDA),
earnings per share, return on equity, expenses, and objective strategic and governance business goals. Each such performance goal may
(1) be expressed with respect to the Company as a whole or with respect to one or more divisions or business units, (2) be expressed on
a pre-tax or after-tax basis, (3) be expressed on an absolute and/or relative basis, (4) employ comparisons with past performance of the
Company (including one or more divisions) and/or (5) employ comparisons with the current or past performance of other companies,
and in the case of earnings-based measures, may employ comparisons to capital, stockholders’ equity and shares outstanding.
To the extent applicable, the measures used in performance goals set under the Plan shall be determined in a manner consistent
with the methods used in the Company’ s Forms 10-K and 10-Q, except that adjustments will be made for certain items, including
special, unusual or non-recurring items, acquisitions and dispositions and changes in accounting principles.