Proposal No.
2 Summary of the Proposed Plan
which consists of 3,500,000 shares approved in 2008, 850,000 shares approved in 2013, 2,000,000 shares approved in 2021, and an additional 3,400,000 shares to be
approved in 2023. Of these shares, we expect that only 3,470,483 shares will be available for new grants under the Proposed Plan, subject to its share counting rules. This pool of shares may be used for all types of equity awards available under the
Proposed Plan. If the proposed amendment is approved, all shares available for issuance under the Proposed Plan may be issued in the form of full-value awards, as described in more detail below. The shares of common stock covered by the Proposed
Plan are authorized but unissued shares or shares currently held (or subsequently acquired) by the Company as treasury shares.
Shares of common stock that are
issued under the Proposed Plan or that are potentially issuable pursuant to outstanding awards will reduce the maximum number of shares remaining for issuance under the Proposed Plan by one share for each share issued or issuable pursuant to an
Award.
In general, if an award granted under the Proposed Plan expires, is canceled, is unearned in full or terminates without the issuance of shares, or if shares
are forfeited under an award, then such shares will again be available for issuance under the Proposed Plan.
Types of Awards
Awards under the Proposed Plan may include stock options, SARs, restricted stock, restricted stock units, performance awards and other stock-based awards. The Human
Capital and Compensation Committee may grant any type of award to any participant who is an employee, and only employees of the Company and our subsidiaries may receive grants of incentive stock options. As described in the Proposed Plan, awards
granted under the Proposed Plan are generally subject to a one-year minimum vesting or performance period, provided that the Human Capital and Compensation Committee can permit acceleration of vesting,
including in the event of a participants death, disability, retirement or a change in control. The Human Capital and Compensation Committee can grant awards covering no more than 5% of the total shares authorized for issuance under the
Proposed Plan without respect to the minimum vesting requirement.
Stock Options. The Human Capital and Compensation Committee may grant to a participant
options to purchase our common stock that qualify as incentive stock options for purposes of Section 422 of the Code (incentive stock options), options that do not qualify as incentive stock options
(non-qualified stock options) or a combination thereof. The terms and conditions of stock option grants, including the number of shares, exercise price, vesting periods, and other conditions on
exercise, will be determined by the administrator.
The per share exercise price for stock options will be determined by the administrator in its discretion but may
not be less than the fair market value of the common stock on the date when the stock option is granted (apart from substitute awards as described in the Proposed Plan). Stock options must be exercised within a period fixed by the administrator that
may not exceed ten years from the date of grant.
At the administrators discretion, payment for shares of common stock on the exercise of stock options may be
made in cash, in shares of common stock held by the participant (including by attestation), by withholding a number of shares otherwise deliverable upon exercise of the option, or in any manner acceptable to the administrator (including one or more
forms of broker-assisted cashless exercise).
Stock Appreciation Rights. The administrator may grant to a participant an award of SARs, which
entitles the participant to receive, upon its exercise, a payment equal to (i) the excess of the fair market value of a share of common stock on the exercise date over the SAR exercise price, times (ii) the number of shares of common stock
with respect to which the SAR is exercised. The payment upon exercise of a SAR may be made in cash, shares of common stock, or any combination thereof, as approved by the administrator in its sole discretion.
The per share exercise price of a SAR will be determined by the administrator in its discretion, but may not be less than 100% of the fair market value of one share of
our common stock on the date when the SAR is granted (apart from substitute awards as described in the Proposed Plan). SARs must be exercised within the period fixed by the administrator that may not exceed ten years from the date of grant.
26 | Superior Industries International, Inc.