GRACO INC.
STOCK INCENTIVE PLAN
Section 1. Purpose; Effect on Prior Plans.
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(a) Purpose. The purpose of the Plan is to promote the interests of
the Company and its shareholders by aiding the Company in attracting and
retaining employees, officers and non-employee Directors capable of assuring the
future success of the Company, to offer such persons incentives to put forth
maximum efforts for the success of the Company's business and to provide such
persons with opportunities for stock ownership in the Company, thereby aligning
the interests of such persons with the Company's shareholders.
(b) Effect on Prior Plans. After the date of shareholder approval of
this Plan, no awards shall be granted under the Company's Long-Term Stock
Incentive Plan or the Company's Non-Employee Directors Stock Option Plan, but
all outstanding awards granted under either of those two plans prior to or on
the date of shareholder approval of this Plan shall remain outstanding in
accordance with the terms thereof. The Company's Employee Stock Incentive Plan
shall remain in effect, and awards will continue to be granted under that plan.
Section 2. Definitions.
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As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company and
(ii) any entity in which the Company has a significant equity interest, in each
case as determined by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent
or Other Stock-Based Award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing an Award granted under the Plan. Each
Award Agreement shall be subject to the applicable terms and conditions of the
Plan and any other terms and conditions (not inconsistent with the Plan)
determined by the Committee.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.
(f) "Committee" shall mean a committee of Directors designated by
the Board to administer the Plan. The Committee shall be comprised of not less
than such number of Directors as shall be required to permit Awards granted
under the Plan to qualify under Rule 16b-3, and each member of the Committee
shall be a "Non-Employee Director" within the meaning of Rule 16b-3 and an
"outside director" within the meaning of Section 162(m) of the Code. The Company
expects to have the Plan administered in accordance with requirements for the
award of "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.
(g) "Company" shall mean Graco Inc., a Minnesota corporation, and
any successor corporation.
(h) "Director" shall mean a member of the Board.
(i) "Dividend Equivalent" shall mean any right granted under
Section 6(e) of the Plan.
(j) "Eligible Person" shall mean any employee, officer, consultant,
independent contractor or non-employee Director providing services to the
Company or any Affiliate whom the Committee determines to be an Eligible Person.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(l) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee. Notwithstanding the foregoing,
unless otherwise determined by the Committee, the Fair Market Value of Shares
for purposes of the Plan shall be the last sale price of the Shares as reported
on the composite tape by the New York Stock Exchange on the date immediately
preceding the date as of which fair market value is being determined or, if
there were no sales of Shares reported on the composite tape on such date, on
the most recent preceding date on which there were sales.
(m) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code or any successor provision.
(n) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
(o) "Option"shall mean an Incentive Stock Option or a Non-Qualified
Stock Option, and shall include Reload Options.
(p) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.
(q) "Participant" shall mean an Eligible Person designated to be
granted an Award under the Plan.
(r) "Performance Award" shall mean any right granted under Section
6(d)of the Plan.
(s) "Person" shall mean any individual, corporation, partnership,
association or trust.
(t) "Plan" shall mean this Graco Inc. Stock Incentive Plan, as
amended from time to time.
(u) "Reload Option" shall mean any Option granted under Section
6(a)(iv)of the Plan.
(v) "Restricted Stock" shall mean any Share granted under Section
6(c) of the Plan.
(w) "Restricted Stock Unit" shall mean any unit granted under
Section 6(c) of the Plan evidencing the right to receive a Share (or a cash
payment equal to the Fair Market Value of a Share) at some future date.
(x) "Rule 16b-3"shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act or any successor rule or
regulation.
(y) "Shares" shall mean shares of Common Stock, par value $1.00 per
share, of the Company or such other securities or property as may become subject
to Awards pursuant to an adjustment made under Section 4(c) of the Plan.
(z) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
Section 3. Administration.
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(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan and
to applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of Shares to be
covered by (or the method by which payments or other rights are to be calculated
in connection with) each Award; (iv) determine the terms and conditions of any
Award or Award Agreement; (v) amend the terms and conditions of any Award or
Award Agreement, provided, however, that except as otherwise provided in Section
4(c) hereof, the Committee shall not adjust or amend the exercise price of
Options or Stock Appreciation Rights previously awarded to any Participant,
whether through amendment, cancellation and replacement grant, or any other
means; (vi) accelerate the exercisability of any Award or the lapse of
restrictions relating to any Award; (vii) determine whether, to what extent and
under what circumstances Awards may be exercised in cash, Shares, promissory
notes, other securities, other Awards or other property, or canceled, forfeited
or suspended; (viii) determine whether, to what extent and under what
circumstances cash, Shares, promissory notes, other securities, other Awards,
other property and other amounts payable with respect to an Award under the Plan
shall be deferred either automatically or at the election of the holder thereof
or the Committee; (ix) interpret and administer the Plan and any instrument or
agreement, including an Award Agreement, relating to the Plan; (x) establish,
amend, suspend or waive such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and (xi) make
any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon any Participant, any holder
or beneficiary of any Award and any employee of the Company or any Affiliate.
(b) Power and Authority of the Board of Directors. Notwithstanding
anything to the contrary contained herein, the Board may, at any time and from
time to time, without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan.
Section 4. Shares Available for Awards.
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(a) Shares Available. Subject to adjustment as provided in Section
4(c) of the Plan, the aggregate number of Shares which may be issued under all
Awards under the Plan shall be 1,500,000; provided, however, that a maximum of
1,500,000 Shares shall be available for issuance pursuant to Awards of
Restricted Stock and Restricted Stock Units. Shares to be issued under the Plan
will be authorized but unissued Shares. If any Shares covered by an Award or to
which an Award relates are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Shares, then the number of Shares
counted against the aggregate number of Shares available under the Plan with
respect to such Award, to the extent of any such forfeiture or termination,
shall again be available for granting Awards under the Plan. Notwithstanding the
foregoing, the number of Shares available for granting Incentive Stock Options
under the Plan shall not exceed 1,500,000, subject to adjustment as provided in
the Plan and subject to the provisions of Section 422 or 424 of the Code or any
successor provision.
(b) Accounting for Awards. For purposes of this Section 4, if an
Award entitles the holder thereof to receive or purchase Shares, the number of
Shares covered by such Award or to which such Award relates shall be counted on
the date of grant of such Award against the aggregate number of Shares available
for granting Awards under the Plan.
(c) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or other property) that
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards and (iii)
the purchase or exercise price with respect to any Award; provided, however,
that the number of Shares covered by any Award or to which such Award relates
shall always be a whole number.
(d) Award Limitations Under the Plan. No Eligible Person may be
granted any Award or Awards under the Plan, the value of which Award or Awards
is based solely on an increase in the value of the Shares after the date of
grant of such Award or Awards, for more than 200,000 Shares (subject to
adjustment as provided in Section 4(c) of the Plan) in the aggregate in any
calendar year. The foregoing annual limitation specifically includes the grant
of any Award or Awards representing "qualified performance-based compensation"
within the meaning of Section 162(m) of the Code.
Section 5. Eligibility.
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Any Eligible Person shall be eligible to be designated a
Participant. In determining which Eligible Persons shall receive an Award and
the terms of any Award, the Committee may take into account the nature of the
services rendered by the respective Eligible Persons, their present and
potential contributions to the success of the Company or such other factors as
the Committee, in its discretion, shall deem relevant. Notwithstanding the
foregoing, an Incentive Stock Option may only be granted to full-time or
part-time employees (which term as used herein includes, without limitation,
officers and Directors who are also employees), and an Incentive Stock Option
shall not be granted to an employee of an Affiliate unless such Affiliate is
also a "subsidiary corporation" of the Company within the meaning of Section
424(f) of the Code or any successor provision.
Section 6. Awards.
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(a) Options. The Committee is hereby authorized to grant Options to
Eligible Persons with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable
under an Option shall be determined by the Committee; provided, however, that
such purchase price shall not be less than 100% of the Fair Market Value of a
Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by
the Committee.
(iii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, promissory notes, other securities, other
Awards or other property, or any combination thereof, having a Fair Market Value
on the exercise date equal to the applicable exercise price) in which, payment
of the exercise price with respect thereto may be made or deemed to have been
made.
(iv) Reload Options. The Committee may grant Reload Options,
separately or together with another Option, pursuant to which, subject to the
terms and conditions established by the Committee, the Participant would be
granted a new Option when the payment of the exercise price of a previously
granted option is made by the delivery of Shares owned by the Participant
pursuant to Section 6(a)(iii) hereof or the relevant provisions of another plan
of the Company, and/or when Shares are tendered or withheld as payment of the
amount to be withheld under applicable income tax laws in connection with the
exercise of an Option, which new Option would be an Option to purchase the
number of Shares not exceeding the sum of (A) the number of Shares so provided
as consideration upon the exercise of the previously granted option to which
such Reload Option relates and (B) the number of Shares, if any, tendered or
withheld as payment of the amount to be withheld under applicable tax laws in
connection with the exercise of the option to which such Reload Option relates
pursuant to the relevant provisions of the plan or agreement relating to such
option. Reload Options may be granted with respect to Options previously granted
under the Plan or any other stock option plan of the Company or may be granted
in connection with any Option granted under the Plan or any other stock option
plan of the Company at the time of such grant. Such Reload Options shall have a
per share exercise price equal to the Fair Market Value of one Share as of the
date of grant of the new Option. Any Reload Option shall be subject to
availability of sufficient Shares for grant under the Plan. Shares surrendered
as part or all of the exercise price of the Option to which it relates that have
been owned by the optionee less than six months will not be counted for
purposes of determining the number of Shares that may be purchased pursuant to
a Reload Option.
(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Eligible Persons subject to the terms of
the Plan and any applicable Award Agreement. A Stock Appreciation Right granted
under the Plan shall confer on the holder thereof a right to receive upon
exercise thereof the excess of (i) the Fair Market Value of one Share on the
date of exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant price
of the Stock Appreciation Right as specified by the Committee, which price shall
not be less than 100% of the Fair Market Value of one Share on the date of grant
of the Stock Appreciation Right. Subject to the terms of the Plan and any
applicable Award Agreement, the grant price, term, methods of exercise, dates of
exercise, methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units. The Committee is
hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units
to Eligible Persons with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other right or property
with respect thereto), which restrictions may lapse separately or in combination
at such time or times, in such installments or otherwise as the Committee may
deem appropriate.
(ii) Stock Certificates; Delivery of Shares. Any Restricted
Stock granted under the Plan shall be evidenced by issuance of a stock
certificate or certificates, which certificate or certificates shall be held by
the Company. Such certificate or certificates shall be registered in the name of
the Participant and shall bear an appropriate legend referring to the
restrictions applicable to such Restricted Stock. Stock certificates registered
in the name of the Participant shall be delivered to the Participant promptly
after the applicable restrictions lapse or are waived. In the case of Restricted
Stock Units, no Shares shall be issued at the time such Awards are granted. Upon
the lapse or waiver of restrictions and the restricted period relating to
Restricted Stock Units evidencing the right to receive Shares, such Shares shall
be issued and delivered to the holder of the Restricted Stock Units.
(iii) Forfeiture. Except as otherwise determined by the
Committee, upon a Participant's termination of employment (as determined under
criteria established by the Committee) during the applicable restriction period,
all Shares of Restricted Stock and all Restricted Stock Units held by the
Participant at such time shall be forfeited and reacquired by the Company;
provided, however, that the Committee may, when it finds that a waiver would be
in the best interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units.
(d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Eligible Persons subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities, other Awards or
other property and (ii) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish. Subject to the
terms of the Plan and any applicable Award Agreement, the performance goals to
be achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee.
(e) Dividend Equivalents. The Committee is hereby authorized to
grant Dividend Equivalents to Eligible Persons under which the Participant shall
be entitled to receive payments (in cash, Shares, other securities, other Awards
or other property as determined in the discretion of the Committee) equivalent
to the amount of cash dividends paid by the Company to holders of Shares with
respect to a number of Shares determined by the Committee. Subject to the terms
of the Plan and any applicable Award Agreement, such Dividend Equivalents may
have such terms and conditions as the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is hereby authorized to
grant to Eligible Persons, subject to the terms of the Plan and any applicable
Award Agreements, such other Awards that are denominated or payable in, valued
in whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan. Shares,
or other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including, without limitation,
cash, Shares, promissory notes, other securities, other Awards or other
property, or any combination thereof), as the Committee shall determine, the
value of which consideration, as established by the Committee, shall not be less
than 100% of the Fair Market Value of such Shares or other securities as of the
date such purchase right is granted.
(g) General.
(i) No Cash Consideration for Awards. Awards may be granted
for no cash consideration or for such other consideration as may be determined
by the Committee or required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted either alone or in addition to,
in tandem with or in substitution for any other Award or any award granted under
any plan of the Company or any Affiliate other than the Plan. Awards granted in
addition to or in tandem with other Awards or in addition to or in tandem with
awards granted under any such other plan of the Company or any Affiliate may be
granted either at the same time as or at a different time from the grant of such
other Awards or awards.
(iii) Forms of Payment under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be made
by the Company or an Affiliate upon the grant, exercise or payment of an Award
may be made in such form or forms as the Committee shall determine (including,
without limitation, cash, Shares, promissory notes, other securities, other
Awards or other property, or any combination thereof), and may be made in a
single payment or transfer, in installments or on a deferred basis, in each case
in accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents with respect to installment or
deferred payments.
(iv) Limits on Transfer of Awards. No Award (other than
Non-Qualified Stock Options, as hereinafter set forth) and no right under any
such Award shall be transferable by a Participant other than by will or by the
laws of descent and distribution; provided, however, that, if so determined by
the Committee, a Participant may, in the manner established by the Committee,
designate a beneficiary or beneficiaries to exercise the rights of the
Participant and receive any property distributable with respect to any Award
upon the death of the Participant. Each Award or right under any such Award
shall be exercisable during the Participant's lifetime only by the Participant
or, if permissible under applicable law, by the Participant's guardian or legal
representative. No Award or right under any such Award may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.
(v) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee.
(vi) Restrictions; Securities Exchange Listing. All Shares or
other securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such restrictions as the Committee may deem
advisable under the Plan, applicable federal or state securities laws and
regulatory requirements, and the Committee may cause appropriate entries to be
made or legends to be placed on the certificates for such Shares or other
securities to reflect such restrictions. If the Shares or other securities are
traded on a securities exchange, the Company shall not be required to deliver
any Shares or other securities covered by an Award unless and until such Shares
or other securities have been admitted for trading on such securities exchange.
Section 7. Amendment and Termination; Adjustments.
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(a) Amendments to the Plan. The Board of Directors of the Company
may amend, alter, suspend, discontinue or terminate the Plan; provided, however,
that, notwithstanding any other provision of the Plan or any Award Agreement,
prior approval of the shareholders of the Company shall be required for any
amendment to the Plan that:
(i) requires shareholder approval under the rules or
regulations of the New York Stock Exchange, any other securities exchange or
the National Association of Securities Dealers, Inc. that are applicable to the
Company;
(ii) permits repricing of Options or Stock Appreciation Rights
which is prohibited by Section 3(a)(v) of the Plan;
(iii) increases the number of shares authorized under the Plan
as specified in Section 4(a);
(iv) permits the award of Options or Stock Appreciation Rights
at a price less than 100% of the Fair Market Value of a Share on the date of
grant of such Option or Stock Appreciation Right, as prohibited by Sections
6(a)(i), 6(a)(iv) and 6(b)(ii) of the Plan; or
(v) without such shareholder approval,would cause the Company
to be unable, under the Code, to grant Incentive Stock Options under the Plan.
(b) Amendments to Awards. Subject to the provisions of the Plan,the
Committee may waive any conditions of or rights of the Company under any
outstanding Award, prospectively or retroactively. Except as otherwise provided
herein or in an Award Agreement, the Committee may not amend, alter, suspend,
discontinue or terminate any outstanding Award, prospectively or retroactively,
if such action would adversely affect the rights of the holder of such Award,
without the consent of the Participant or holder or beneficiary thereof.
(c) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
Section 8. Income Tax Withholding.
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In order to comply with all applicable federal, state or local
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state or local payroll,
withholding, income or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or a portion of the
federal and state taxes to be withheld or collected upon exercise or receipt of
(or the lapse of restrictions relating to) an Award, the Committee, in its
discretion and subject to such additional terms and conditions as it may adopt,
may permit the Participant to satisfy such tax obligation by (a) electing to
have the Company withhold a portion of the Shares otherwise to be delivered upon
exercise or receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the minimum statutory amount of such taxes
required to be withheld by the Company or (b) delivering to the Company Shares
other than Shares issuable upon exercise or receipt of (or the lapse of
restrictions relating to) such Award and owned by the Participant for more than
(6) months with a Fair Market Value equal to the amount of such taxes. The
election, if any, must be made on or before the date that the amount of tax to
be withheld is determined.
Section 9. General Provisions.
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(a) No Rights to Awards. No Eligible Person, Participant or other
Person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.
(b) Award Agreements. No Participant shall have rights under an
Award granted to such Participant unless and until an Award Agreement shall have
been duly executed on behalf of the Company and, if requested by the Company,
signed by the Participant.
(c) No Rights of Shareholders. Except with respect to Restricted
Stock, neither a Participant nor the Participant's legal representative shall
be, or have any of the rights and privileges of, a shareholder of the Company
with respect to any Shares issuable upon the exercise or payment of any Award,
in whole or in part, unless and until the Shares have been issued.
(d) No Limit on Other Compensation Plans or Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation plans or arrangements,
and such plans or arrangements may be either generally applicable or applicable
only in specific cases.
(e) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained as an employee of the
Company or any Affiliate, or a non-employee Director to be retained as a
Director, nor will it affect in any way the right of the Company or an Affiliate
to terminate such employment at any time, with or without cause. In addition,
the Company or an Affiliate may at any time dismiss a Participant from
employment free from any liability or any claim under the Plan or any Award,
unless otherwise expressly provided in the Plan or in any Award Agreement.
(f) Governing Law. The internal law, and not the law of conflicts,
of the State of Minnesota, shall govern all questions concerning the validity,
construction and effect of the Plan or any Award, and any rules and regulations
relating to the Plan or any Award.
(g) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(i) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash shall be paid in lieu of any fractional Share or whether such
fractional Share or any rights thereto shall be canceled, terminated or
otherwise eliminated.
(j) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 10. Effective Date of the Plan.
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The Plan shall be subject to approval by the shareholders of the
Company at the annual meeting of shareholders of the Company to be held in 2001
and the Plan shall be effective as of the date of such shareholder approval.
Section 11. Term of the Plan.
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Awards shall only be granted under the Plan during a 10-year period
beginning on the effective date of the Plan, unless the Plan is terminated
earlier pursuant to Section 7(a) of the Plan. However, unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
theretofore granted may extend beyond the end of such 10-year period, and the
authority of the Committee provided for hereunder with respect to the Plan and
any Awards, and the authority of the Board of Directors of the Company to amend
the Plan, shall extend beyond the termination of the Plan.