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TECHNE CORPORATION
2010 EQUITY INCENTIVE PLAN
SECTION 1.
DEFINITIONS
As used herein, the following terms shall have the meanings indicated
below:
(a) "Administrator" shall mean the Board of Directors of the Company,
or one or more Committees appointed by the Board, as the case may be.
(b) "Affiliate(s)" shall mean a Parent or Subsidiary of the Company.
(c) "Award" shall mean any grant of an Option, Restricted Stock Award,
Restricted Stock Unit Award, Stock Appreciation Right or Performance Award.
(d) "Change of Control" shall mean the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
events in subsections (i) through (iv) below. For purposes of this
definition, a person, entity or group shall be deemed to "Own," to have
"Owned," to be the "Owner" of, or to have acquired "Ownership" of securities
if such person, entity or group directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares voting
power, which includes the power to vote or to direct the voting, with respect
to such securities.
(i) Any person, entity or group becomes the Owner, directly or
indirectly, of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company's then
outstanding securities other than by virtue of a merger, consolidation
or similar transaction. Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur (A) on account of the acquisition
of securities of the Company by an investor, any affiliate thereof or
any other person, entity or group from the Company in a transaction or
series of related transactions the primary purpose of which is to
obtain financing for the Company through the issuance of equity
securities or (B) solely because the level of Ownership held by any
person, entity or group (the "Subject Person") exceeds the designated
percentage threshold of the outstanding voting securities as a result
of a repurchase or other acquisition of voting securities by the
Company reducing the number of shares outstanding, provided that if a
Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and
after such share acquisition, the Subject Person becomes the Owner of
any additional voting securities that, assuming the repurchase or other
acquisition had not occurred, increases the percentage of the then
outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be
deemed to occur;
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(ii) There is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior
thereto do not Own, directly or indirectly, either (A) outstanding
voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving entity in such
merger, consolidation or similar transaction or (B) more than fifty
percent (50%) of the combined outstanding voting power of the parent of
the surviving entity in such merger, consolidation or similar
transaction, in each case in substantially the same proportions as
their Ownership of the outstanding voting securities of the Company
immediately prior to such transaction;
(iii) There is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the total gross value of the
consolidated assets of the Company and its subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all
of total gross value of the consolidated assets of the Company and its
subsidiaries to an entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as
their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition
(for purposes of this Section 1(d)(iii), "gross value" means the value
of the assets of the Company or the value of the assets being disposed
of, as the case may be, determined without regard to any liabilities
associated with such assets); or
(iv) Individuals who, at the beginning of any consecutive twelve-month
period, are members of the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the members of the Board at
any time during that consecutive twelve-month period; (provided,
however, that if the appointment or election (or nomination for
election) of any new Board member was approved or recommended by a
majority vote of the members of the Incumbent Board then still in
office, such new member shall, for purposes of this Plan, be considered
as a member of the Incumbent Board).
For the avoidance of doubt, the term Change in Control shall not include a
sale of assets, merger or other transaction effected exclusively for the
purpose of changing the domicile of the Company. To the extent required, the
determination of whether a Change of Control has occurred shall be made in
accordance with Internal Revenue Code Section 409A and the regulations,
notices and other guidance of general applicability issued thereunder.
(e) "Committee" shall mean a Committee of two or more directors who
shall be appointed by and serve at the pleasure of the Board. To the extent
necessary for compliance with Rule 16b-3, or any successor provision, each of
the members of the Committee shall be a "non-employee director." Solely for
purposes of this Section 1(e), "non-employee director" shall have the same
meaning as set forth in Rule 16b-3, or any successor provision, as then in
effect, of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended. Further, to the extent necessary for compliance
with the limitations set forth in Code Section 162(m), each of the members of
the Committee shall be an "outside director" within the meaning of Code
Section 162(m) and the regulations issued thereunder.
(f) The "Company" shall mean Techne Corporation, a Minnesota
corporation.
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(g) "Fair Market Value" as of any date shall mean (i) if such stock is
listed on the Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq
Capital Market or an established stock exchange, the price of such stock at
the close of the regular trading session of such market or exchange on such
date, as reported by The Wall Street Journal or a comparable reporting
service, or, if no sale of such stock shall have occurred on such date, on
the next preceding date on which there was a sale of stock; (ii) if such
stock is not so listed on the Nasdaq Global Select Market, Nasdaq Global
Market, Nasdaq Capital Market, or an established stock exchange, the average
of the closing "bid" and "asked" prices quoted by the OTC Bulletin Board, the
National Quotation Bureau, or any comparable reporting service on such date
or, if there are no quoted "bid and "asked" prices on such date, on the next
preceding date for which there are such quotes; or (iii) if such stock is not
publicly traded as of such date, the per share value as determined by the
Board, or the Committee, in its sole discretion by applying principles of
valuation with respect to the Company's Common Stock.
(h) The "Internal Revenue Code" or "Code" is the Internal Revenue Code
of 1986, as amended from time to time.
(i) "Option" means an incentive stock option or nonqualified stock
option granted pursuant to the Plan.
(j) "Parent" shall mean any corporation which owns, directly or
indirectly in an unbroken chain, fifty percent (50%) or more of the total
voting power of the Company's outstanding stock.
(k) The "Participant" means (i) a key employee or officer of the
Company or any Affiliate to whom an incentive stock option has been granted
pursuant to Section 9; (ii) a consultant or advisor to, or director, key
employee or officer of, the Company or any Affiliate to whom a nonqualified
stock option has been granted pursuant to Section 10; (iii) a consultant or
advisor to, or director, key employee or officer of, the Company or any
Affiliate to whom a Restricted Stock Award or Restricted Stock Unit Award has
been granted pursuant to Section 11; (iv) a consultant or advisor to, or
director, key employee or officer of, the Company or any Affiliate to whom a
Performance Award has been granted pursuant to Section 12; or (v) a
consultant or advisor to, or director, key employee or officer of, the
Company or any Affiliate to whom a Stock Appreciation Right has been granted
pursuant to Section 13.
(l) "Performance Award" shall mean any Performance Shares or
Performance Units granted pursuant to Section 12 hereof.
(m) "Performance Objective(s)" shall mean one or more performance
objectives established by the Administrator, in its sole discretion, for
Awards granted under this Plan. For any Awards that are intended to qualify
as "performance-based compensation" under Code Section 162(m), the
Performance Objectives shall be limited to any one, or a combination of, (i)
revenue, (ii) net income, (iii) earnings per share, (iv) return on equity,
(v) return on assets, (vi) increase in revenue, (vii) increase in share price
or earnings, (viii) return on investment, or (ix) increase in market share,
in all cases including, if selected by the Administrator, threshold, target
and maximum levels.
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(n) "Performance Period" shall mean the period, established at the
time any Performance Award is granted or at any time thereafter, during which
any Performance Objectives specified by the Administrator with respect to
such Performance Award are to be measured.
(o) "Performance Share" shall mean any grant pursuant to Section 12
hereof of an Award, which value, if any, shall be paid to a Participant by
delivery of shares of Common Stock of the Company upon achievement of such
Performance Objectives during the Performance Period as the Administrator
shall establish at the time of such grant or thereafter.
(p) "Performance Unit" shall mean any grant pursuant to Section 12
hereof of an Award, which value, if any, shall be paid to a Participant by
delivery of cash upon achievement of such Performance Objectives during the
Performance Period as the Administrator shall establish at the time of such
grant or thereafter.
(q) The "Plan" means the Techne Corporation 2010 Equity Incentive
Plan, as amended hereafter from time to time, including the form of
Agreements as they may be modified by the Administrator from time to time.
(r) "Restricted Stock Award" or "Restricted Stock Unit Award" shall
mean any grant of restricted shares of Stock of the Company or the grant of
any restricted stock units pursuant to Section 11 hereof.
(s) "Stock," "Option Stock" or "Common Stock" shall mean Common Stock
of the Company (subject to adjustment as described in Section 15).
(t) "Stock Appreciation Right" shall mean a grant pursuant to Section
13 hereof.
(u) A "Subsidiary" shall mean any corporation of which fifty percent
(50%) or more of the total voting power of the Company's outstanding Stock is
owned, directly or indirectly in an unbroken chain, by the Company.
SECTION 2.
PURPOSE
The purpose of the Plan is to promote the success of the Company and
its Affiliates by facilitating the employment and retention of competent
personnel and by furnishing incentive to officers, directors, employees,
consultants, and advisors upon whose efforts the success of the Company and
its Affiliates will depend to a large degree.
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It is the intention of the Company to carry out the Plan through the
granting of Options which will qualify as "incentive stock options" under the
provisions of Section 422 of the Internal Revenue Code, or any successor
provision, pursuant to Section 9 of this Plan; through the granting of
"nonqualified stock options" pursuant to Section 10 of this Plan; through the
granting of Restricted Stock Awards and Restricted Stock Unit Awards pursuant
to Section 11 of this Plan; through the granting of Performance Awards
pursuant to Section 12 of this Plan; and through the granting of Stock
Appreciation Rights pursuant to Section 13 of this Plan. Adoption of this
Plan shall be and is expressly subject to the condition of approval by the
shareholders of the Company within twelve (12) months before or after the
adoption of the Plan by the Board of Directors. Awards may be granted prior
to the date this Plan is approved by the shareholders of the Company;
provided, however, that any incentive stock options granted after adoption of
the Plan by the Board of Directors shall be treated as nonqualified stock
options if shareholder approval is not obtained within such twelve-month
period.
SECTION 3.
EFFECTIVE DATE OF PLAN
The Plan shall be effective as of the date of adoption by the Board of
Directors, subject to approval by the shareholders of the Company as required
in Section 2.
SECTION 4.
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company
(hereinafter referred to as the "Board") or by a Committee which may be
appointed by the Board from time to time to administer the Plan (hereinafter
collectively referred to as the "Administrator"). Except as otherwise
provided herein, the Administrator shall have all of the powers vested in it
under the provisions of the Plan, including but not limited to exclusive
authority to determine, in its sole discretion, whether an Award shall be
granted; the individuals to whom, and the time or times at which, Awards
shall be granted; the number of shares subject to each Award; the option
price; and the performance criteria, if any, and any other terms and
conditions of each Award. The Administrator shall have full power and
authority to administer and interpret the Plan, to make and amend rules,
regulations and guidelines for administering the Plan, to prescribe the form
and conditions of the respective agreements evidencing each Award (which may
vary from Participant to Participant), and to make all other determinations
necessary or advisable for the administration of the Plan. The
Administrator's interpretation of the Plan, and all actions taken and
determinations made by the Administrator pursuant to the power vested in it
hereunder, shall be conclusive and binding on all parties concerned.
No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith in connection with the
administration of the Plan. In the event the Board appoints a Committee as
provided hereunder, any action of the Committee with respect to the
administration of the Plan shall be taken pursuant to a majority vote of the
Committee members or pursuant to the written resolution of all Committee
members.
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SECTION 5.
PARTICIPANTS
The Administrator shall from time to time, at its discretion and
without approval of the shareholders, designate those employees, officers,
directors, consultants, and advisors of the Company or of any Affiliate to
whom Awards shall be granted under this Plan; provided, however, that
consultants or advisors shall not be eligible to receive Awards hereunder
unless such consultant or advisor is a natural person, renders bona fide
services to the Company or any Affiliate and such services are not in
connection with the offer or sale of securities in a capital raising
transaction and do not directly or indirectly promote or maintain a market
for the Company's securities. The Administrator shall, from time to time, at
its discretion and without approval of the shareholders, designate those
employees of the Company or any Affiliate to whom Awards, including incentive
stock options, shall be granted under this Plan. The Administrator may grant
additional Awards, including incentive stock options, under this Plan to some
or all Participants then holding Awards, or may grant Awards solely or
partially to new Participants. In designating Participants, the Administrator
shall also determine the number of shares to be optioned or awarded to each
such Participant and the performance criteria applicable to each Performance
Award. The Administrator may from time to time designate individuals as being
ineligible to participate in the Plan.
SECTION 6.
STOCK
The Stock to be optioned under this Plan shall consist of authorized
but unissued shares of Common Stock. The maximum aggregate number of shares
of Stock reserved and available for Awards under the Plan is Three Million
(3,000,000); provided, however, that all shares of Stock reserved and
available under the Plan shall constitute the maximum aggregate number of
shares of Stock that may be issued through incentive stock options. The
following shares of Stock shall continue to be reserved and available for
Awards granted pursuant to the Plan: (i) any outstanding Award that expires
for any reason, (ii) any portion of an outstanding Option or Stock
Appreciation Right that is terminated prior to exercise, (iii) any portion of
an Award that is terminated prior to the lapsing of the risks of forfeiture
on such Award, (iv) shares of Stock used to pay the exercise price under any
Award, (v) shares of Stock used to satisfy any tax withholding obligation
attributable to any Award, whether such shares are withheld by the Company or
tendered by the Participant, and (vi) shares of Stock covered by an Award to
the extent the Award is settled in cash.
Notwithstanding anything in the Plan to the contrary, for any Awards
granted under the Plan that are intended to qualify as "performance-based
compensation" under Code Section 162(m), the following limits will apply:
(a) In no event shall a Participant be granted Options or Stock
Appreciation Rights during any fiscal year of the Company covering in the
aggregate more than One Hundred Thousand (100,000) shares of Stock, subject
to adjustment as provided in Section 15; provided, however, that a share of
Stock subject to a Stock Appreciation Right that is granted in tandem with an
Option shall count as one share against this limitation.
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(b) In no event shall a Participant be granted Restricted Stock Awards
or, to the extent payable in or measured by the value of shares of Stock,
Restricted Stock Unit Awards during any fiscal year of the Company covering
in the aggregate more than One Hundred Thousand (100,000) shares of Stock,
subject to adjustment as provided in Section 15.
(c) To the extent payable in or measured by the value of shares of
Stock, in no event shall a Participant be granted Performance Awards during
any fiscal year of the Company covering in the aggregate more than One
Hundred Thousand (100,000) shares of Stock, subject to adjustment as provided
in Section 15.
SECTION 7.
DURATION OF PLAN
Incentive stock options may be granted pursuant to the Plan from time
to time during a period of ten (10) years from the effective date as defined
in Section 3. Other Awards may be granted pursuant to the Plan from time to
time after the effective date of the Plan and until the Plan is discontinued
or terminated by the Administrator.
SECTION 8.
PAYMENT
Participants may pay for shares upon exercise of Options granted
pursuant to this Plan (i) in cash, or with a personal check or certified
check, (ii) by the transfer from the Participant to the Company of previously
acquired shares of Common Stock, (iii) through the withholding of shares of
Stock from the number of shares otherwise issuable upon the exercise of the
Option (e.g., a net share settlement), (iv) through broker-assisted cashless
exercise, or (v) by a combination thereof. Any stock tendered as part of
such payment shall be valued at such stock's then-current Fair Market Value,
or such other form of payment as may be authorized by the Administrator. In
the event the Optionee elects to pay the exercise price in whole or in part
with previously acquired shares of Common Stock or through a net share
settlement, the Fair Market Value of the shares of Stock delivered or
withheld shall equal the total exercise price for the shares being purchased
in such manner. The Administrator may, in its sole discretion, limit the
forms of payment available to the Participant and may exercise such
discretion any time prior to the termination of the Option granted to the
Participant or upon any exercise of the Option by the Participant.
"Previously-owned shares" means shares of the Company"s Common Stock which
the Participant has owned for at least six (6) months prior to the exercise
of the Option, or for such other period of time, if any, as may be required
by generally accepted accounting principles.
With respect to payment in the form of Common Stock of the Company, the
Administrator may require advance approval or adopt such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor provision,
as then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.
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SECTION 9.
TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
Each incentive stock option granted pursuant to this Section 9 shall be
evidenced by a written incentive stock option agreement (the "Option
Agreement"). The Option Agreement shall be in such form as may be approved
from time to time by the Administrator and may vary from Participant to
Participant; provided, however, that each Participant and each Option
Agreement shall comply with and be subject to the following terms and
conditions:
(a) Number of Shares and Option Price. The Option Agreement shall
state the total number of shares covered by the incentive stock option.
Except as permitted by Code Section 424(a), or any successor provision, the
option price per share shall not be less than one hundred percent (100%) of
the per share Fair Market Value of the Common Stock on the date the
Administrator grants the Option; provided, however, that if a Participant
owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of its Parent or any
Subsidiary, the option price per share of an incentive stock option granted
to such Participant shall not be less than one hundred ten percent (110%) of
the per share Fair Market Value of the Company's Common Stock on the date of
the grant of the Option. The Administrator shall have full authority and
discretion in establishing the option price and shall be fully protected in
so doing.
(b) Term and Exercisability of Incentive Stock Option. The term
during which any incentive stock option granted under the Plan may be
exercised shall be established in each case by the Administrator. Except as
permitted by Code Section 424(a), in no event shall any incentive stock
option be exercisable during a term of more than ten (10) years after the
date on which it is granted; provided, however, that if a Participant owns
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of its Parent or any
Subsidiary, the incentive stock option granted to such Participant shall be
exercisable during a term of not more than five (5) years after the date on
which it is granted.
The Option Agreement shall state when the incentive stock option
becomes exercisable and shall also state the maximum term during which the
Option may be exercised. In the event an incentive stock option is
exercisable immediately, the manner of exercise of the Option in the event it
is not exercised in full immediately shall be specified in the Option
Agreement. The Administrator may accelerate the exercisability of any
incentive stock option granted hereunder which is not immediately exercisable
as of the date of grant.
(c) Nontransferability. No incentive stock option shall be
transferable, in whole or in part, by the Participant other than by will or
by the laws of descent and distribution. During the Participant's lifetime,
the incentive stock option may be exercised only by the Participant. If the
Participant shall attempt any transfer of any incentive stock option granted
under the Plan during the Participant's lifetime, such transfer shall be void
and the incentive stock option, to the extent not fully exercised, shall
terminate.
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(d) No Rights as Shareholder. A Participant (or the Participant's
successor or successors) shall have no rights as a shareholder with respect
to any shares covered by an incentive stock option until the date of the
issuance of a stock certificate evidencing such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date
is prior to the date such stock certificate is actually issued (except as
otherwise provided in Section 15 of the Plan).
(e) Withholding. The Company or its Affiliate shall be entitled to
withhold and deduct from any future payments to the Participant all legally
required amounts necessary to satisfy any and all withholding and employment-
related taxes attributable to the Participant's exercise of an incentive
stock option or a "disqualifying disposition" of shares acquired through the
exercise of an incentive stock option as defined in Code Section 421(b). In
the event the Participant is required under the Option Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment
of, such withholding and employment-related taxes, the Administrator may, in
its discretion and pursuant to such rules as it may adopt, permit the
Participant to satisfy such obligation, in whole or in part, by delivering
shares of the Company's Common Stock or by electing to have the Company
withhold shares of Common Stock otherwise issuable to the Participant as a
result of the exercise of the incentive stock option. Such shares shall have
a Fair Market Value equal to the minimum required tax withholding, based on
the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from such exercise or disqualifying disposition. In no event may
the Participant deliver shares, nor may the Company or any Affiliate withhold
shares, having a Fair Market Value in excess of such statutory minimum
required tax withholding. The Participant's election to have shares withheld
for this purpose shall be made on or before the later of (i) the date the
incentive stock option is exercised or the date of the disqualifying
disposition, as the case may be, or (ii) the date that the amount of tax to
be withheld is determined under applicable tax law. Such election shall be
approved by the Administrator and otherwise comply with such rules as the
Administrator may adopt to assure compliance with Rule 16b-3, or any
successor provision, as then in effect, of the General Rules and Regulations
under the Securities Exchange Act of 1934, if applicable.
(f) Vesting Limitation. Notwithstanding any other provision of the
Plan, the aggregate Fair Market Value (determined as of the date an Option is
granted) of the Stock with respect to which incentive stock options are
exercisable for the first time by a Participant during any calendar year
(under the Plan and any other "incentive stock option" plans of the Company,
any "subsidiary" of the Company within the meaning of Code Section 424(f),
and any "parent corporation" of the Company within the meaning of Code
Section 424(e)) shall not exceed $100,000 (or such other amount as may be
prescribed by the Code from time to time); provided, however, that if the
exercisability or vesting of an incentive stock option is accelerated as
permitted under the provisions of the Plan and such acceleration would result
in a violation of the limit imposed by this Section 9(f), such acceleration
shall be of full force and effect but the number of shares of Stock that
exceed such limit shall be treated as having been granted pursuant to a
nonqualified stock option; and provided, further, that the limits imposed by
this Section 9(f) shall be applied to all outstanding incentive stock options
(under the Plan and any other "incentive stock option" plans of the Company,
any "subsidiary" of the Company within the meaning of Code Section 424(f),
and any "parent corporation" of the Company within the meaning of Code
Section 424(e)), in chronological order according to the dates of grant.
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(g) Other Provisions. The Option Agreement authorized under this
Section 9 shall contain such other provisions as the Administrator shall deem
advisable. Any such Option Agreement shall contain such limitations and
restrictions upon the exercise of the Option as shall be necessary to ensure
that such Option will be considered an "incentive stock option" as defined in
Section 422 of the Internal Revenue Code or to conform to any change therein.
SECTION 10.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
Each nonqualified stock option granted pursuant to this Section 10
shall be evidenced by a written nonqualified stock option agreement (the
"Option Agreement"). The Option Agreement shall be in such form as may be
approved from time to time by the Administrator and may vary from Participant
to Participant; provided, however, that each Participant and each Option
Agreement shall comply with and be subject to the following terms and
conditions:
(a) Number of Shares and Option Price. The Option Agreement shall
state the total number of shares covered by the nonqualified stock option.
Unless otherwise determined by the Administrator, the option price per share
shall be one hundred percent (100%) of the per share Fair Market Value of the
Common Stock on the date the Administrator grants the Option.
(b) Term and Exercisability of Nonqualified Stock Option. The term
during which any nonqualified stock option granted under the Plan may be
exercised shall be established in each case by the Administrator. The Option
Agreement shall state when the nonqualified stock option becomes exercisable
and shall also state the maximum term during which the Option may be
exercised. In the event a nonqualified stock option is exercisable
immediately, the manner of exercise of the Option in the event it is not
exercised in full immediately shall be specified in the Option Agreement.
The Administrator may accelerate the exercisability of any nonqualified stock
option granted hereunder which is not immediately exercisable as of the date
of grant.
(c) Transferability. A nonqualified stock option shall be
transferable, in whole or in part, by the Participant by will or by the laws
of descent and distribution. In addition, the Administrator may, in its sole
discretion, permit the Participant to transfer any or all nonqualified stock
options to any member of the Participant"s "immediate family" as such term is
defined in Rule 16a-1(e) promulgated under the Securities Exchange Act of
1934, or any successor provision, or to one or more trusts whose
beneficiaries are members of such Participant's "immediate family" or
partnerships in which such family members are the only partners; provided,
however, that the Participant cannot receive any consideration for the
transfer and such transferred nonqualified stock option shall continue to be
subject to the same terms and conditions as were applicable to such
nonqualified stock option immediately prior to its transfer.
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(d) No Rights as Shareholder. A Participant (or the Participant's
successor or successors) shall have no rights as a shareholder with respect
to any shares covered by a nonqualified stock option until the date of the
issuance of a stock certificate evidencing such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date
is prior to the date such stock certificate is actually issued (except as
otherwise provided in Section 15 of the Plan).
(e) Withholding. The Company or its Affiliate shall be entitled to
withhold and deduct from any future payments to the Participant all legally
required amounts necessary to satisfy any and all withholding and employment-
related taxes attributable to the Participant's exercise of a nonqualified
stock option. In the event the Participant is required under the Option
Agreement to pay the Company, or make arrangements satisfactory to the
Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its discretion and pursuant to such rules as it may
adopt, permit the Participant to satisfy such obligation, in whole or in
part, by delivering shares of the Company's Common Stock or by electing to
have the Company withhold shares of Common Stock otherwise issuable to the
Participant as a result of the exercise of the nonqualified stock option.
Such shares shall have a Fair Market Value equal to the minimum required tax
withholding, based on the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes, that are applicable to the
supplemental income resulting from such exercise. In no event may the
Participant deliver shares, nor may the Company or any Affiliate withhold
shares, having a Fair Market Value in excess of such statutory minimum
required tax withholding. The Participant's election to deliver shares or to
have shares withheld for this purpose shall be made on or before the later of
(i) the date the nonqualified stock option is exercised, or (ii) the date
that the amount of tax to be withheld is determined under applicable tax law.
Such election shall be approved by the Administrator and otherwise comply
with such rules as the Administrator may adopt to assure compliance with Rule
16b-3, or any successor provision, as then in effect, of the General Rules
and Regulations under the Securities Exchange Act of 1934, if applicable.
(f) Automatic Granting to Non-Employee Directors. Each non-employee
director who, on and after the date this Plan is approved by the Company's
shareholders, is elected or re-elected as a director of the Company or, in
the event the Company adopts staggered terms for its directors, whose term of
office continues after a meeting of shareholders at which directors are
elected shall, as of the date of such re-election or shareholder meeting,
automatically be granted an option to purchase 5,000 shares of the Common
Stock at an option price per share equal to 100% of the Fair Market Value of
the Common Stock on the date of such election, re-election or shareholder
meeting; provided however, that if such non-employee director is elected
other than by shareholders at an annual meeting, the number of shares subject
to the option shall be determined by multiplying 5,000 by a fraction, the
numerator of which is the number of months until the next regular annual
meeting of shareholders and the denominator of which is 12. Options granted
pursuant to this subsection (f) shall be immediately exercisable in full.
(g) Other Provisions. The Option Agreement authorized under this
Section 10 shall contain such other provisions as the Administrator shall
deem advisable.
11
SECTION 11.
RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS
Each Restricted Stock Award or Restricted Stock Unit Award granted
pursuant to the Plan shall be evidenced by a written restricted stock or
restricted stock unit agreement (the "Restricted Stock Agreement" or
"Restricted Stock Unit Agreement," as the case may be). The Restricted Stock
Agreement or Restricted Stock Unit Agreement shall be in such form as may be
approved from time to time by the Administrator and may vary from Participant
to Participant; provided, however, that each Participant and each Restricted
Stock Agreement or Restricted Stock Unit Agreement shall comply with and be
subject to the following terms and conditions:
(a) Number of Shares. The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall state the total number of shares of Stock covered
by the Restricted Stock Award or Restricted Stock Unit Award.
(b) Risks of Forfeiture. The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall set forth the risks of forfeiture, if any,
including risks of forfeiture based on Performance Objectives, which shall
apply to the shares of Stock covered by the Restricted Stock Award or
Restricted Stock Unit Award, and shall specify the manner in which such risks
of forfeiture shall lapse. The Administrator may, in its sole discretion,
modify the manner in which such risks of forfeiture shall lapse but only with
respect to those shares of Stock which are restricted as of the effective
date of the modification.
(c) Issuance of Shares; Rights as Shareholder.
(i) With respect to a Restricted Stock Award, the Company
shall cause to be issued a stock certificate representing such shares of
Stock in the Participant's name, and shall deliver such certificate to the
Participant; provided, however, that the Company shall place a legend on such
certificate describing the risks of forfeiture and other transfer
restrictions set forth in the Participant's Restricted Stock Agreement and
providing for the cancellation and return of such certificate if the shares
of Stock subject to the Restricted Stock Award are forfeited. Until the
risks of forfeiture have lapsed or the shares subject to such Restricted
Stock Award have been forfeited, the Participant shall be entitled to vote
the shares of Stock represented by such stock certificates and shall receive
all dividends attributable to such shares, but the Participant shall not have
any other rights as a shareholder with respect to such shares.
(ii) With respect to a Restricted Stock Unit Award, as the
risks of forfeiture on the restricted stock units lapse, the Participant
shall be entitled to payment of the Restricted Stock Units. The
Administrator may, in its sole discretion, pay Restricted Stock Units in
cash, shares of Stock or any combination thereof. If payment is made in
shares of Stock, the Administrator shall cause to be issued one or more stock
certificates in the Participant's name and shall deliver such certificates to
the Participant in satisfaction of such restricted stock units. Until the
risks of forfeiture on the restricted stock units have lapsed, the
Participant shall not be entitled to vote any shares of stock which may be
acquired through the restricted stock units, shall not receive any dividends
attributable to such shares, and shall not have any other rights as a
shareholder with respect to such shares.
12
(d) Withholding Taxes. The Company or its Affiliate shall be entitled
to withhold and deduct from any future payments to the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant's Restricted Stock
Award or Restricted Stock Unit Award. In the event the Participant is
required under the Restricted Stock Agreement or Restricted Stock Unit
Agreement to pay the Company, or make arrangements satisfactory to the
Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its discretion and pursuant to such rules as it may
adopt, require the Participant to satisfy such obligations, in whole or in
part, by delivering shares of Common Stock, including shares of Stock
received pursuant to the Restricted Stock Award or Restricted Stock Unit
Award on which the risks of forfeiture have lapsed. Such shares shall have a
Fair Market Value equal to the minimum required tax withholding, based on the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from the lapsing of the risks of forfeiture on such restricted
stock or restricted stock unit. In no event may the Participant deliver
shares having a Fair Market Value in excess of such statutory minimum
required tax withholding. The Participant's election to deliver shares of
Common Stock for this purpose shall be made on or before the date that the
amount of tax to be withheld is determined under applicable tax law. Such
election shall be approved by the Administrator and otherwise comply with
such rules as the Administrator may adopt to assure compliance with Rule
16b-3, or any successor provision, as then in effect, of the General Rules
and Regulations under the Securities Exchange Act of 1934, if applicable.
(e) Nontransferability. No Restricted Stock Award or Restricted Stock
Unit Award shall be transferable, in whole or in part, by the Participant,
other than by will or by the laws of descent and distribution, prior to the
date the risks of forfeiture described in the Restricted Stock Agreement or
Restricted Stock Unit Agreement have lapsed. If the Participant shall
attempt any transfer of any Restricted Stock Award or Restricted Stock Unit
Award granted under the Plan prior to such date, such transfer shall be void
and the Restricted Stock Award or Restricted Stock Unit Award shall
terminate.
(f) Other Provisions. The Restricted Stock Agreement or Restricted
Stock Unit Agreement authorized under this Section 11 shall contain such
other provisions as the Administrator shall deem advisable.
SECTION 12.
PERFORMANCE AWARDS
Each Performance Award granted pursuant to this Section 12 shall be
evidenced by a written performance award agreement (the "Performance Award
Agreement"). The Performance Award Agreement shall be in such form as may be
approved from time to time by the Administrator and may vary from Participant
to Participant; provided, however, that each Participant and each Performance
Award Agreement shall comply with and be subject to the following terms and
conditions:
13
(a) Awards. Performance Awards in the form of Performance Units or
Performance Shares may be granted to any Participant in the Plan. Performance
Units shall consist of monetary awards which may be earned or become vested
in whole or in part if the Company or the Participant achieves certain
Performance Objectives established by the Administrator over a specified
Performance Period. Performance Shares shall consist of shares of Stock or
other Awards denominated in shares of Stock that may be earned or become
vested in whole or in part if the Company or the Participant achieves certain
Performance Objectives established by the Administrator over a specified
Performance Period.
(b) Performance Objectives, Performance Period and Payment. The
Performance Award Agreement shall set forth:
(i) the number of Performance Units or Performance Shares subject
to the Performance Award, and the dollar value of each Performance Unit;
(ii) one or more Performance Objectives established by the
Administrator;
(iii) the Performance Period over which Performance Units or
Performance Shares may be earned or may become vested;
(iv) the extent to which partial achievement of the Performance
Objectives may result in a payment or vesting of the Performance Award, as
determined by the Administrator; and
(v) the date upon which payment of Performance Units will be made
or Performance Shares will be issued, as the case may be, and the extent to
which such payment or the receipt of such Performance Shares may be deferred.
(c) Withholding Taxes. The Company or its Affiliates shall be
entitled to withhold and deduct from any future payments to the Participant
all legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant's Performance Award.
In the event the Participant is required under the Performance Award
Agreement to pay the Company or its Affiliates, or make arrangements
satisfactory to the Company or its Affiliates respecting payment of, such
withholding and employment-related taxes, the Administrator may, in its
discretion and pursuant to such rules as it may adopt, permit the Participant
to satisfy such obligations, in whole or in part, by delivering shares of
Common Stock, including shares of Stock received pursuant to the Performance
Award. Such shares shall have a Fair Market Value equal to the minimum
required tax withholding, based on the minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes. In no event may
the Participant deliver shares having a Fair Market Value in excess of such
statutory minimum required tax withholding. The Participant's election to
deliver shares of Common Stock for this purpose shall be made on or before
the date that the amount of tax to be withheld is determined under applicable
tax law. Such election shall be approved by the Administrator and otherwise
comply with such rules as the Administrator may adopt to assure compliance
with Rule 16b-3, or any successor provision, as then in effect, of the
General Rules and Regulations under the Securities Exchange Act of 1934, if
applicable.
14
(d) Nontransferability. No Performance Award shall be transferable,
in whole or in part, by the Participant, other than by will or by the laws of
descent and distribution. If the Participant shall attempt any transfer of
any Performance Award granted under the Plan, such transfer shall be void and
the Performance Award shall terminate.
(e) No Rights as Shareholder. A Participant (or the Participant's
successor or successors) shall have no rights as a shareholder with respect
to any shares covered by a Performance Award until the date of the issuance
of a stock certificate evidencing such shares. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or
other property), distributions or other rights for which the record date is
prior to the date such stock certificate is actually issued (except as
otherwise provided in Section 15 of the Plan).
(f) Other Provisions. The Performance Award Agreement authorized
under this Section 12 shall contain such other provisions as the
Administrator shall deem advisable.
SECTION 13.
STOCK APPRECIATION RIGHTS
Each Stock Appreciation Right granted pursuant to this Section 13 shall
be evidenced by a written stock appreciation right agreement (the "Stock
Appreciation Right Agreement"). The Stock Appreciation Right Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and each Stock Appreciation Right Agreement shall comply with and
be subject to the following terms and conditions:
(a) Awards. A Stock Appreciation Right shall entitle the Participant
to receive, upon exercise, cash, shares of Stock, or any combination thereof,
having a value equal to the excess of (i) the Fair Market Value of a
specified number of shares of Stock on the date of such exercise, over (ii) a
specified exercise price. Unless otherwise determined by the Administrator,
the specified exercise price shall not be less than 100% of the Fair Market
Value of such shares of Stock on the date of grant of the Stock Appreciation
Right. A Stock Appreciation Right may be granted independent of or in tandem
with a previously or contemporaneously granted Option.
(b) Term and Exercisability. The term during which any Stock
Appreciation Right granted under the Plan may be exercised shall be
established in each case by the Administrator. The Stock Appreciation Right
Agreement shall state when the Stock Appreciation Right becomes exercisable
and shall also state the maximum term during which such Stock Appreciation
Right may be exercised. In the event a Stock Appreciation Right is
exercisable immediately, the manner of exercise of such Stock Appreciation
Right in the event it is not exercised in full immediately shall be specified
in the Stock Appreciation Right Agreement. The Administrator may accelerate
the exercisability of any Stock Appreciation Right granted hereunder which is
not immediately exercisable as of the date of grant. If a Stock Appreciation
Right is granted in tandem with an Option, the Stock Appreciation Right
Agreement shall set forth the extent to which the exercise of all or a
portion of the Stock Appreciation Right shall cancel a corresponding portion
of the Option, and the extent to which the exercise of all or a portion of
the Option shall cancel a corresponding portion of the Stock Appreciation
Right.
15
(c) Withholding Taxes. The Company or its Affiliate shall be entitled
to withhold and deduct from any future payments to the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant's Stock Appreciation
Right. In the event the Participant is required under the Stock Appreciation
Right to pay the Company or its Affiliate, or make arrangements satisfactory
to the Company or its Affiliate respecting payment of, such withholding and
employment-related taxes, the Administrator may, in its discretion and
pursuant to such rules as it may adopt, permit the Participant to satisfy
such obligation, in whole or in part, by delivering shares of the Company's
Common Stock or by electing to have the Company withhold shares of Common
Stock otherwise issuable to the Participant as a result of the exercise of
the Stock Appreciation Right. Such shares shall have a Fair Market Value
equal to the minimum required tax withholding, based on the minimum statutory
withholding rates for federal and state tax purposes, including payroll
taxes, that are applicable to the supplemental income resulting from such
exercise. In no event may the Participant deliver shares, nor may the
Company or any Affiliate withhold shares, having a Fair Market Value in
excess of such statutory minimum required tax withholding. The Participant's
election to deliver shares or to have shares withheld for this purpose shall
be made on or before the later of (i) the date the Stock Appreciation Right
is exercised, or (ii) the date that the amount of tax to be withheld is
determined under applicable tax law. Such election shall be approved by the
Administrator and otherwise comply with such rules as the Administrator may
adopt to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.
(d) Nontransferability. No Stock Appreciation Right shall be
transferable, in whole or in part, by the Participant, other than by will or
by the laws of descent and distribution. If the Participant shall attempt
any transfer of any Stock Appreciation Right granted under the Plan, such
transfer shall be void and the Stock Appreciation Right shall terminate.
(e) No Rights as Shareholder. A Participant (or the Participant's
successor or successors) shall have no rights as a shareholder with respect
to any shares covered by a Stock Appreciation Right until the date of the
issuance of a stock certificate evidencing such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date
is prior to the date such stock certificate is actually issued (except as
otherwise provided in Section 15 of the Plan).
(f) Other Provisions. The Stock Appreciation Right Agreement
authorized under this Section 13 shall contain such other provisions as the
Administrator shall deem advisable, including but not limited to any
restrictions on the exercise of the Stock Appreciation Right which may be
necessary to comply with Rule 16b-3 of the Securities Exchange Act of 1934,
as amended.
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SECTION 14
PERFORMANCE-BASED COMPENSATION
The Committee may specify that an Award or a portion of an Award is
intended to satisfy the requirements for "performance-based compensation" of
Code Section 162(m); provided that, notwithstanding anything in this Plan to
the contrary, the performance criteria for such Award or portion of an Award
(either, a "Section 162(m) Award") shall be a measure based on one or more
Performance Objectives selected by the Committee and established on or before
the time required to qualify such Performance Objective as a "preestablished
goal" under Code Section 162(m) and the regulations issued thereunder. The
Committee shall certify the extent to which any Performance Objective has
been satisfied, and the amount payable as a result thereof, prior to the
payment, settlement or vesting of any Award that is intended to satisfy the
requirements for "performance-based compensation" under Code Section 162(m).
In determining the amounts earned by a Participant pursuant to a Section
162(m) Award, the Committee, in its discretion, will have the right to reduce
or eliminate (but not to increase) the amount payable at a given level of
performance on a formula or discretionary basis, or any combination thereof.
Notwithstanding anything in this Plan to the contrary, if the vesting,
settlement or payment of any Award intended to be a Section 162(m) Award is
accelerated by reason of the Participant's termination of employment for any
reason other than death, disability or a Change of Control, such Award will
not be deemed to be "performance-based compensation" for purposes of Code
Section 162(m) to the extent prohibited by Code Section 162(m), or the
regulations, notices and other guidance of general applicability issued
thereunder.
SECTION 15.
RECAPITALIZATION, SALE, MERGER, EXCHANGE
OR LIQUIDATION
In the event of an increase or decrease in the number of shares of
Common Stock resulting from a stock dividend, stock split, reverse split,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company, the Board may, in its sole
discretion, adjust the number of shares of Stock reserved under Section 6
hereof, the number of shares of Stock covered by each outstanding Award, and,
if applicable, the price per share thereof to reflect such change.
Additional shares which may become covered by the Award pursuant to such
adjustment shall be subject to the same restrictions as are applicable to the
shares with respect to which the adjustment relates.
Unless otherwise provided in the agreement evidencing an Award, in the
event of a Change of Control, the Board may provide for one or more of the
following:
(a) the acceleration of the exercisability of any outstanding Options
or Stock Appreciation Rights, the vesting and payment of any Performance
Awards, or the lapsing of the risks of forfeiture on any Restricted Stock
Awards or Restricted Stock Unit Awards;
17
(b) the complete termination of this Plan, the cancellation of
outstanding Options or Stock Appreciation Rights not exercised prior to a
date specified by the Board (which date shall give Participants a reasonable
period of time in which to exercise such Option or Stock Appreciation Right
prior to the effective date of such Change of Control), the cancellation of
any Performance Award and the cancellation of any Restricted Stock Awards or
Restricted Stock Unit Awards for which the risks of forfeiture have not
lapsed;
(c) that Participants holding outstanding Options and Stock
Appreciation Rights shall receive, with respect to each share of Stock
subject to such Option or Stock Appreciation Right, as of the effective date
of any such Change of Control, cash in an amount equal to the excess of the
Fair Market Value of such Stock on the date immediately preceding the
effective date of such Change of Control over the price per share of such
Options or Stock Appreciation Rights; provided that the Board may, in lieu of
such cash payment, distribute to such Participants shares of Common Stock of
the Company or shares of stock of any corporation succeeding the Company by
reason of such Change of Control, such shares having a value equal to the
amount specified in this Section 15(c);
(d) that Participants holding outstanding Restricted Stock Awards,
Restricted Stock Unit Awards and Performance Share Awards shall receive, with
respect to each share of Stock subject to such Awards, as of the effective
date of any such Change of Control, cash in an amount equal to the Fair
Market Value of such Stock on the date immediately preceding the effective
date of such Change of Control; provided that the Board may, in lieu of such
cash payment, distribute to such Participants shares of Common Stock of the
Company or shares of stock of any corporation succeeding the Company by
reason of such Change of Control, such shares having a value equal to the
amount specified in this Section 15(d);
(e) the continuance of the Plan with respect to the exercise of
Options or Stock Appreciation Rights which were outstanding as of the date of
adoption by the Board of such plan for such Change of Control and the right
to exercise such Options and Stock Appreciation Rights as to an equivalent
number of shares of stock of the corporation succeeding the Company by reason
of such Change of Control; and
(f) the continuance of the Plan with respect to Restricted Stock
Awards or Restricted Stock Unit Awards for which the risks of forfeiture have
not lapsed as of the date of adoption by the Board of such plan for such
Change of Control and the right to receive an equivalent number of shares of
stock of the corporation succeeding the Company by reason of such Change of
Control.
(g) the continuance of the Plan with respect to Performance Awards
and, to the extent applicable, the right to receive an equivalent number of
shares of stock of the corporation succeeding the Company by reason for such
Change of Control.
The Board may restrict the rights of or the applicability of this Section 15
to the extent necessary to comply with Section 16(b) of the Securities
Exchange Act of 1934, the Internal Revenue Code or any other applicable law
or regulation. The grant of an Award pursuant to the Plan shall not limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate,
sell or transfer all or any part of its business or assets.
18
SECTION 16.
INVESTMENT PURPOSE
No shares of Stock shall be issued pursuant to the Plan unless and
until there has been compliance, in the opinion of Company's counsel, with
all applicable legal requirements, including without limitation, those
relating to securities laws and stock exchange listing requirements. As a
condition to the issuance of Stock to Participant, the Administrator may
require Participant to (a) represent that the shares of Stock are being
acquired for investment and not resale and to make such other representations
as the Administrator shall deem necessary or appropriate to qualify the
issuance of the shares as exempt from the Securities Act of 1933 and any
other applicable securities laws, and (b) represent that Participant shall
not dispose of the shares of Stock in violation of the Securities Act of 1933
or any other applicable securities laws.
As a further condition to the grant of any Option or the issuance of
Stock to Participant, Participant agrees to the following:
(a) In the event the Company advises Participant that it plans an
underwritten public offering of its Common Stock in compliance with the
Securities Act of 1933, as amended, and the underwriter(s) seek to impose
restrictions under which certain shareholders may not sell or contract to
sell or grant any option to buy or otherwise dispose of part or all of their
stock purchase rights of the Common Stock underlying Awards, Participant will
not, for a period not to exceed 180 days from the prospectus, sell or
contract to sell or grant an option to buy or otherwise dispose of any Option
granted to Participant pursuant to the Plan or any of the underlying shares
of Common Stock without the prior written consent of the underwriter(s) or
its representative(s).
(b) In the event the Company makes any public offering of its
securities and determines in its sole discretion that it is necessary to
reduce the number of issued but unexercised stock purchase rights so as to
comply with any state's securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to
accelerate the exercisability of any Option and the date on which such Option
must be exercised, provided that the Company gives Participant prior written
notice of such acceleration, and (ii) to cancel any Options or portions
thereof which Participant does not exercise prior to or contemporaneously
with such public offering.
(c) In the event of a Change of Control, Participant will comply with
Rule 145 of the Securities Act of 1933 and any other restrictions imposed
under other applicable legal or accounting principles if Participant is an
"affiliate" (as defined in such applicable legal and accounting principles)
at the time of the transaction, and Participant will execute any documents
necessary to ensure compliance with such rules.
The Company reserves the right to place a legend on any stock
certificate issued in connection with an Award pursuant to the Plan to assure
compliance with this Section 16.
19
SECTION 17.
AMENDMENT OF THE PLAN
The Board may from time to time, insofar as permitted by law, suspend
or discontinue the Plan or revise or amend it in any respect; provided,
however, that no such revision or amendment, except as is authorized in
Section 15, shall impair the terms and conditions of any Award which is
outstanding on the date of such revision or amendment to the material
detriment of the Participant without the consent of the Participant.
Notwithstanding the foregoing, no such revision or amendment shall (i)
materially increase the number of shares subject to the Plan except as
provided in Section 15 hereof, (ii) change the designation of the class of
employees eligible to receive Awards, (iii) decrease the price at which
Options may be granted, or (iv) materially increase the benefits accruing to
Participants under the Plan without the approval of the shareholders of the
Company if such approval is required for compliance with the requirements of
any applicable law or regulation. Furthermore, the Plan may not, without the
approval of the shareholders, be amended in any manner that will cause
incentive stock options to fail to meet the requirements of Code Section 422.
Notwithstanding anything in the Plan to the contrary, the Board may amend
this Plan to the extent necessary or desirable to comply with the
requirements of Code Section 409A and the regulations, notices and other
guidance of general applicability issued thereunder.
SECTION 18.
NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the
Participant to exercise such Option. Further, the granting of an Award
hereunder shall not impose upon the Company or any Affiliate any obligation
to retain the Participant in its employ for any period.
20
