SELECT COMFORT CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
(As Amended through February 13, 2001)
1. PURPOSE.
The purpose of this 1999 Employee Stock Purchase Plan (the "Plan") is to
advance the interests of Select Comfort Corporation (the "Company") and its
shareholders by allowing eligible employees of the Company and its Participating
Subsidiaries to use payroll deductions to acquire shares of the Company's Common
Stock on favorable terms. The Company intends that the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Code. Accordingly,
provisions of the Plan will be construed so as to extend and limit participation
in a manner consistent with the requirements of Section 423 of the Code.
2. DEFINITIONS.
2.1 "BOARD" means the Board of Directors of the Company.
2.2 "CHANGE IN CONTROL" means an event described in Section 9.1 of the
Plan.
2.3 "CODE" means the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" means the group of individuals administering the Plan, as
provided in Section 3 of the Plan.
2.5 "COMMON STOCK" means the common stock, par value $0.01 per share, of
the Company, or the number and kind of shares of stock or other securities into
which such common stock may be changed in accordance with Section 4.3 of the
Plan.
2.6 "COMPENSATION" means all gross cash compensation (including wage,
salary, incentive, bonus and overtime earnings) paid by the Company or any
Participating Subsidiary to a Participant, including amounts that would have
constituted compensation but for a Participant's election to defer or reduce
compensation pursuant to any deferred compensation, cafeteria, capital
accumulation or any other similar plan of the Company; provided, however, that
the Committee, in its sole discretion, may expand or limit the amounts that will
be deemed compensation for purposes of the Plan in such manner as it deems
appropriate.
2.7 "ELIGIBLE EMPLOYEE" means any employee of the Company or a
Participating Subsidiary (other than an employee whose customary employment with
the Company or a Participating Subsidiary is for five months or less per
calendar year) who, with respect to any Offering Period, is employed by the
Company or a Participating Subsidiary prior to the Offering Commencement Date
for such Offering Period.
2.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
2.9 "FAIR MARKET VALUE" means, with respect to the Common Stock, as of any
date (or, if no shares were traded or quoted on such date, as of the next
preceding date on which there
was such a trade or quote) (a) the mean between the reported high and low sale
prices of the Common Stock if the Common Stock is listed, admitted to unlisted
trading privileges or reported on any foreign or national securities exchange or
on the Nasdaq National Market or an equivalent foreign market on which sale
prices are reported; (b) if the Common Stock is not so listed, admitted to
unlisted trading privileges or reported, the closing bid price as reported by
the Nasdaq SmallCap Market, OTC Bulletin Board, National Quotation Bureau, Inc.
or other comparable service; or (c) if the Common Stock is not so listed or
reported, such price as the Committee determines in good faith in the exercise
of its reasonable discretion.
2.10 "OFFERING COMMENCEMENT DATE" means the first day of an Offering
Period.
2.11 "OFFERING PERIOD" means any of the offerings to Participants of
Options under the Plan, each continuing for three months, as described in
Section 6 of the Plan.
2.12 "OFFERING TERMINATION DATE" means the last day of an Offering Period.
2.13 "OPTION" means a right to purchase shares of Common Stock granted to a
Participant in connection with an Offering Period pursuant to Section 7 of the
Plan
2.14 "OPTION PRICE" means, with respect to any Offering Period, 85% of the
Fair Market Value of one share of Common Stock on the Offering Termination Date.
2.15 "PARTICIPANT" means an Eligible Employee who elects to participate in
the Plan pursuant to Section 5 of the Plan.
2.16 "PARTICIPATING SUBSIDIARY" means a Subsidiary that has been designated
by the Committee from time to time, in its sole discretion, as a corporation
whose Eligible Employees may participate in the Plan.
2.17 "SECURITIES ACT" means the Securities Act of 1933, as amended.
2.18 "SUBSIDIARY" means any subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code.
2.19 "TERMINATION OF EMPLOYMENT" means a Participant's complete termination
of employment with the Company and all Participating Subsidiaries for any
reason, including without limitation death, disability or retirement. In the
event that a Participant is in the employ of a Participating Subsidiary and the
Participating Subsidiary ceases to be a Participating Subsidiary of the Company
for any reason, such event will be deemed a termination of employment unless the
Participant continues in the employ of the Company or another Participating
Subsidiary.
3. ADMINISTRATION.
The Plan will be administered by the Board or by a committee of the Board.
So long as the Company has a class of its equity securities registered under
Section 12 of the Exchange Act, any committee administering the Plan will
consist solely of two or more members of the Board who are "non-employee
directors" within the meaning of Rule 16b-3 under the Exchange Act.
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Such a committee, if established, will act by majority approval of the members
(at a meeting in person or by telephone conference or by written consent), and a
majority of the members of such a committee will constitute a quorum. As used in
the Plan, "Committee" will refer to the Board or to such a committee, if
established. To the extent consistent with corporate law, the Committee may
delegate to any officers of the Company the duties, power and authority of the
Committee under the Plan pursuant to such conditions or limitations as the
Committee may establish; provided, however, that only the Committee may exercise
such duties, power and authority with respect to Participants who are subject to
Section 16 of the Exchange Act. The Committee may exercise its duties, power and
authority under the Plan in its sole discretion without the consent of any
Participant or other party, unless the Plan specifically provides otherwise.
Each determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will be final, conclusive and
binding for all purposes and on all persons, including, without limitation, the
Company, the shareholders of the Company, the participants and their respective
successors-in-interest. No member of the Committee will be liable for any action
or determination made in good faith with respect to the Plan or any Option
granted under the Plan.
4. SHARES AVAILABLE FOR ISSUANCE; ADJUSTMENTS FOR CERTAIN EVENTS.
4.1 MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as provided
in Section 4.3 of the Plan, the maximum number of shares of Common Stock
available for issuance under the Plan will be 1,000,000 shares of Common Stock.
If the total number of shares of Common Stock that would otherwise be issuable
upon the exercise of Options granted pursuant to Section 7 of the Plan on any
Offering Termination Date exceeds the number of shares then available for
issuance under the Plan, the Committee will make a pro rata allocation of the
shares of Common Stock remaining available for issuance under the Plan in as
uniform and equitable a manner as it deems appropriate.
4.2 ACCOUNTING FOR OPTIONS. Shares of Common Stock that are issued under
the Plan or that are subject to outstanding Options will be applied to reduce
the maximum number of shares of Common Stock remaining available for issuance
under the Plan. Any shares of Common Stock that are subject to an Option that is
terminated unexercised will automatically again become available for issuance
under the Plan.
4.3 ADJUSTMENTS TO SHARES AND OPTIONS. In the event of any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off) or any other change in the
corporate structure or shares of the Company, the Committee (or, if the Company
is not the surviving corporation in any such transaction, the board of directors
of the surviving corporation) will make appropriate adjustment (which
determination will be conclusive) as to the number and kind of securities or
other property (including cash) available for issuance or payment under the Plan
and, in order to prevent dilution or enlargement of the rights of Participants,
the number and kind of securities or other property (including cash) subject to,
and the exercise price of, outstanding Options.
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5. PARTICIPATION; PAYROLL DEDUCTIONS.
5.1 PARTICIPATION. Participation in the Plan is voluntary and is not a
condition of employment. Eligible Employees may elect to participate in the
Plan, beginning with the first Offering Period to commence after such person
becomes an Eligible Employee, by properly completing an enrollment form in the
form provided by the Company and filing the enrollment form with the Company's
Human Resources Department not later than the 15th day of the month immediately
preceding the Offering Commencement Date of the first Offering Period in which
the Participant wishes to participate (or on such later date prior to the first
Offering Period after adoption of the Plan as may be reasonably necessary to
enable Eligible Employees to participate in such first Offering Period). An
Eligible Employee who elects to participate with respect to an Offering Period
will be deemed to have elected to participate in each subsequent Offering
Period, unless such Participant properly withdraws from participation on a
timely basis. An Eligible Employee may withdraw from participation as to any
subsequent Offering Period by properly completing a notice of withdrawal in the
form provided by the Company and filing the notice of withdrawal with the
Company's Human Resources Department not later than 4:30 p.m., Minneapolis,
Minnesota time on the 15th day of the last month of an Offering Period. Any such
notice of withdrawal will be effective for the next Offering Period commencing
after the Offering Period in which such notice of withdrawal is given, all as
further described in Section 8.1 of the Plan.
5.2 LIMITATION ON PARTICIPATION. Notwithstanding any provisions of the Plan
to the contrary, an Eligible Employee may not participate in the Plan and will
not be granted an Option under the Plan if, immediately after the grant of such
Option, such Eligible Employee (or any other person whose stock ownership would
be attributed to such Eligible Employee pursuant to Section 424(d) of the Code)
would own stock or options possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company or of its "parent" or
"subsidiary" corporations (within the meaning of Section 424 of the Code).
5.3 PAYROLL DEDUCTIONS.
(a) By completing and filing an enrollment form, a Participant will
elect to have payroll deductions made from such Participant's total
Compensation in whole percentages from a minimum of 1% to a maximum of 15%,
(or such other minimum or maximum percentages as the Committee may from
time to time (a) establish).
(b) All payroll deductions authorized by a Participant will be
credited as of each payday to an account established under the Plan for the
Participant. Such account will be solely for bookkeeping purposes, no
separate fund, trust or other segregation of such amounts will be
established or made and the amounts represented by such account will be
held as part of the Company's general assets, usable for any corporate
purpose. A Participant may not make any separate cash payment or
contribution to such Participant's account. No interest will accrue on
amounts held in such accounts under the Plan.
(c) No increases or decreases in the amount of payroll deductions for
a Participant may be made during an Offering Period. A Participant may
increase or decrease the amount of his or her payroll deductions under the
Plan for subsequent
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Offering Periods by properly completing an amended enrollment form and
filing it with the Company's Human Resources Department not later than the
15th day of the month immediately preceding the Offering Commencement Date
of the Offering Period for which such change in payroll deductions is to be
effective.
(d) A Participant may withdraw from participation in the Plan as
provided in Section 8.1 of the Plan.
6. OFFERING PERIODS.
Options to purchase shares of Common Stock will be offered to Participants
under the Plan through a continuous series of Offering Periods, each continuing
for three months, and each of which will commence on January 1, April 1, July 1
and October 1 of each year, as the case may be, and will terminate on March 31,
June 30, September 30 and December 31 of such year, as the case may be.
7. OPTIONS.
7.1 GRANT OF OPTIONS. With respect to any Offering Period, each Participant
participating in such Offering Period will be granted, by operation of the Plan
on the Offering Commencement Date for such Offering Period, an Option to
purchase (at the Option Price) as many full shares of Common Stock as such
Participant will be able to purchase with the accumulated payroll deductions
credited to such Participant's account during such Offering Period plus the
balance (if any) carried forward from the Participant's payroll deduction
account from the preceding Offering Period.
7.2 LIMITATIONS ON PURCHASE. Notwithstanding Section 7.1 or any other
provision of the Plan to the contrary, the number of shares of Common Stock that
may be purchased under the Plan will be limited as follows:
(a) No Participant may purchase more than 2,000 shares of Common Stock
under the Plan in any given Offering Period.
(b) No Participant may be granted an Option that permits such
Participant's right to purchase Common Stock under the Plan and any other
"employee stock purchase plans" (within the meaning of Section 423 of the
Code) of the Company and its Subsidiaries to accrue (i.e., become
exercisable) at a rate that exceeds $25,000 of Fair Market Value of Common
Stock (determined at the time such Option is granted) for each calendar
year in which such Option is outstanding at any time.
7.3 EXERCISE OF OPTIONS.
(a) Unless a Participant withdraws from the Plan as provided in
Section 8.1 of the Plan, the Participant's Option for the purchase of
shares of Common Stock granted with respect to an Offering Period will be
exercised automatically at the Offering Termination Date of such Offering
Period for the purchase of the number of full shares of
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Common Stock that the accumulated payroll deductions in such Participant's
account as of such Offering Termination Date will purchase at the
applicable Option Price.
(b) A Participant may only purchase one or more full shares in
connection with the exercise of an Option granted for any Offering Period.
The portion of any balance remaining in a Participant's payroll deduction
account at the close of business on the Offering Termination Date of any
Offering Period that is less than the Option Price of one full share of
Common Stock will be carried forward into the Participant's payroll
deduction account for the following Offering Period. In no event, however,
will the balance carried forward be equal to or greater than the Option
Price of one full share of Common Stock on the Offering Termination Date of
an Offering Period.
(c) No Participant (or any person claiming through such Participant)
will have any interest in any Common Stock subject to an Option under the
Plan until such Option has been exercised, at which point such interest
will be limited to the interest of a purchaser of the Common Stock
purchased upon such exercise pending the delivery of such Common Stock.
(d) Shares of Common Stock acquired by each Participant shall be held
in a general securities brokerage account maintained for the benefit of all
Participants with a registered securities broker/dealer selected by the
Company (the "Agent"). The Agent shall maintain individual subaccounts for
each Participant in such general account to which shall be allocated such
Participant's shares of Common Stock. The Committee, in its discretion, may
direct the Agent to issue and deliver to any Participant a certificate or
certificates for the whole number of shares of Common Stock held in such
Participant's subaccount at any time ninety (90) days or more after the
Participant ceases to be an Eligible Employee, which certificates shall be
registered in the name of the Participant or in the form directed by the
Participant. No certificates for fractional shares will be issued. Instead,
Participants will receive a cash distribution representing any fractional
shares.
(e) Cash dividends with respect to a Participant's shares of Common
Stock held in the general securities brokerage account maintained by the
Agent shall automatically be reinvested in additional shares of Common
Stock. The purchase price of any shares ("Reinvestment Shares") purchased
through the reinvestment of dividends shall be the Fair Market Value of a
share on the date such dividend is paid. There shall be allocated to each
Participant's individual subaccount such Participant's Reinvestment Shares
purchased with the dividend funds credited to such Participant.
(f) Each Participant shall be entitled to vote all shares held for the
benefit of such Participant in the general securities brokerage account
maintained by the Agent.
8. WITHDRAWAL FROM PLAN.
8.1 VOLUNTARY WITHDRAWAL.
(a) A Participant may, at any time on or before 4:30 p.m.,
Minneapolis, Minnesota time on the 15th day of the last month of an
Offering Period, terminate his or
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her participation in the Plan and withdraw all, but not less than all, of
the payroll deductions credited during the applicable Offering Period to
such Participant's account under the Plan by giving written notice of
withdrawal to the Company's Human Resources Department. Such notice shall
be substantially in the form of the notice of withdrawal provided by the
Company and must state that the Participant wishes to terminate his or her
participation in the Plan and request the withdrawal of all of the
Participant's payroll deductions credited during the applicable Offering
Period to such Participant's account under the Plan. Following the receipt
by the Company of a timely notice of withdrawal, (a) all of the payroll
deductions credited during the applicable Offering Period to such
Participant's account under the Plan will be paid to such Participant as
soon as practicable after receipt of the notice of withdrawal; (b) such
Participant's Option for such Offering Period will automatically be
canceled and will no longer be exercisable; and (c) payroll deductions
under the Plan will (a) cease as soon as practicable after receipt of the
notice of withdrawal and until such time, if any, that a valid and timely
enrollment form is subsequently filed by such Participant.
(b) A Participant's voluntary withdrawal pursuant to this Section 8.1
will not have any effect upon such Participant's eligibility to participate
in a subsequent Offering Period (so long as such Participant completes and
files a new enrollment form pursuant to Section 5 of the Plan) or in any
similar plan that may hereafter be adopted by the Company.
8.2 TERMINATION OF EMPLOYMENT.
(a) Upon the Termination of Employment of a Participant at any time,
(a) all of the payroll deductions credited during the current Offering
Period to such Participant's account under the Plan will be paid to such
Participant (or, in the case of death, to the person or persons entitled
thereto under Sections 10 and 11.3 of the Plan) as soon as practicable
after the effective date of the Termination of Employment; (b) such
Participant's Option for such Offering Period will automatically be
canceled and will no longer be exercisable; and (c) payroll deductions
under the Plan will cease as soon as practicable after the effective date
of the Termination of Employment.
(b) Unless the Committee otherwise determines in its sole discretion,
a Participant's employment will, for purposes of the Plan, be deemed to
have terminated on the date recorded on the personnel or other records of
the Company or the Participating Subsidiary for which the Participant
provides employment, as determined by the Committee in its sole discretion
based upon such records.
9. CHANGE IN CONTROL.
9.1 CHANGE IN CONTROL. For purposes of this Section 9, a "Change in
Control" of the Company will mean the following:
(a) the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to any Person (as
defined below);
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(b) the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;
(c) any Person, other than a Bona Fide Underwriter (as defined below),
becomes after the effective date of the Plan the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
(i) 20% or more, but not more than 50%, of the combined voting power of the
Company's outstanding securities ordinarily having the right to vote at
elections of directors, unless the transaction resulting in such ownership
has been approved in advance by the Continuity Directors (as defined
below), or (ii) more than 50% of the combined voting power of the Company's
outstanding securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the Continuity Directors);
(d) a merger or consolidation to which the Company is a party if the
shareholders of the Company immediately prior to the effective time of such
merger or consolidation have, solely on account of ownership of securities
of the Company at such time, "beneficial ownership" (as defined in Rule
13d-3 under the Exchange Act), immediately following the effective time of
such merger or consolidation, of securities of the surviving corporation
representing (i) 50% or more, but not more than 80%, of the combined voting
power of the surviving corporation's then outstanding securities ordinarily
having the right to vote at elections of directors, unless such merger or
consolidation has been approved in advance by the Continuity Directors, or
(ii) less than 50% of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right to
vote at elections of directors (regardless of any approval by the
Continuity Directors); or
(e) the Continuity Directors cease for any reason to constitute at
least a majority of the Board.
9.2 CHANGE IN CONTROL DEFINITIONS. For purposes of this Section 9:
(a) "Continuity Director" means any individual who was a member of the
Board on the effective date of the Plan, while he or she is a member of the
Board, and any individual who subsequently becomes a member of the Board
whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors who are
Continuity Directors (either by a specific vote or by approval of the proxy
statement of the Company in which such individual is named as a nominee for
director without objection to such nomination). For example, assuming that
seven individuals comprise the entire Board as of the effective date of the
Plan, if a majority of such individuals approved a proxy statement in which
two different individuals were nominated to replace two of the individuals
who were members of the Board as of the effective date of the Plan, these
two newly elected directors would join the remaining five directors who
were members of the Board as of the effective date of the Plan as
Continuity Directors. Similarly, if subsequently a majority of these
directors approved a proxy statement in which three different individuals
were nominated to replace three other directors who were members of the
Board as of the effective date of the Plan, these three newly elected
directors would also become, along with the other four
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directors, Continuity Directors. Individuals subsequently joining the Board
could become Continuity Directors under the principles reflected in this
example.
(b) "Bona Fide Underwriter" means a Person engaged in business as an
underwriter of securities that acquires securities of the Company from the
Company through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of
such acquisition.
(c) "Person" means any individual, corporation, partnership, group,
association or other "person," as such term is used in Section 13(d) or
Section 14(d) of the Exchange Act, other than the Company, any affiliate or
any benefit plan sponsored by the Company or any affiliate. For this
purpose, an affiliate is (i) any corporation at least a majority of whose
outstanding securities ordinarily having the right to vote at elections of
directors is owned directly or indirectly by the Company or (ii) any other
form of business entity in which the Company, by virtue of a direct or
indirect ownership interest, has the right to elect a majority of the
members of such entity's governing body.
9.3 ADJUSTMENT OF OFFERING PERIOD. Without limiting the authority of the
Committee under Sections 3, 4.3 and 13 of the Plan, if a Change in Control of
the Company occurs, the Committee, in its sole discretion, may (a) accelerate
the Offering Termination Date of the then current Offering Period and provide
for the exercise of Options thereunder by Participants in accordance with
Section 7.3 of the Plan, or (b) accelerate the Offering Termination Date of the
then current Offering Period and provide that all payroll deductions credited to
the accounts of Participants will be paid to Participants as soon as practicable
after such Offering Termination Date and that all Options for such Offering
Period will automatically be canceled and will no longer be exercisable.
10. DESIGNATION OF BENEFICIARY.
A Participant may file with the Company's Human Resources Department a
written designation of a beneficiary who is to receive shares of Common Stock
and cash, if any, under the Plan in the event of such Participant's death prior
to delivery of such shares or cash to such Participant. The Participant may
change such designation of beneficiary at any time by written notice to the
Company's Human Resources Department. In the event of the death of a Participant
in the absence of a valid designation of a beneficiary who is living at the time
of such Participant's death, (a) the Company will deliver such shares of Common
Stock and cash to the executor or administrator of the estate of the
Participant, or (b) if to the Company's knowledge no such executor or
administrator has been appointed, the Company, in its sole discretion, may
deliver such shares of Common Stock and cash to the spouse or to any one or more
dependents or relatives of the Participant or, if no spouse, dependent or
relative is known to the Company, to such other person as the Company may
designate.
11. RIGHTS OF ELIGIBLE EMPLOYEES AND PARTICIPANTS; TRANSFERABILITY.
11.1 NO RIGHT TO EMPLOYMENT. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Participating Subsidiary to
terminate the employment of any
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Eligible Employee or Participant at any time, nor confer upon any Eligible
Employee or Participant any right to continue in the employ of the Company or
any Participating Subsidiary.
11.2 RIGHTS AS A SHAREHOLDER. As a holder of an Option under the Plan, a
Participant will have no rights as a shareholder unless and until such Option is
exercised and the Participant becomes the holder of record of shares of Common
Stock. Except as otherwise provided in the Plan, no adjustment will be made for
dividends or distributions with respect to Options as to which there is a record
date preceding the date the Participant becomes the holder of record of such
shares, except as the Committee may determine in its sole discretion.
11.3 RESTRICTIONS ON TRANSFER. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an Option or
to receive shares of Common Stock under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution, or as provided in Section 10 of the Plan) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition will be without effect, except that the Company may treat such act
as an election to withdraw from the Plan in accordance with Section 8.1 of the
Plan. During his or her lifetime, a Participant's Option to purchase shares of
Common Stock under the Plan is exercisable only by such Participant.
12. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Plan or any agreements entered
into pursuant to the Plan, the Company will not be required to issue any shares
of Common Stock under the Plan, and a Participant may not sell, assign, transfer
or otherwise dispose of shares of Common Stock issued pursuant to Options
granted under the Plan, unless (a) there is in effect with respect to such
shares a registration statement under the Securities Act and any applicable
state or foreign securities laws or an exemption from such registration under
the Securities Act and applicable state or foreign securities laws, and (b)
there has been obtained any other consent, approval or permit from any other
regulatory body that the Committee, in its sole discretion, deems necessary or
advisable. The Company may condition such issuance, sale or transfer upon the
receipt of any representations or agreements from the parties involved, and the
placement of any legends on certificates representing shares of Common Stock, as
may be deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.
13. AMENDMENT OR TERMINATION.
The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Options under the Plan will conform to any change
in applicable laws or regulations or in any other respect the Board may deem to
be in the best interests of the Company; provided, however, that no amendments
to the Plan will be effective without approval of the shareholders of the
Company if shareholder approval of the amendment is then required pursuant to
Section 423 of the Code or the rules of any stock exchange or Nasdaq or similar
regulatory body. Upon termination of the Plan, the Committee, in its sole
discretion, may take any of the actions described in Section 9.3 of the Plan.
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14. EFFECTIVE DATE OF PLAN.
The Plan will be effective as of June 10, 1999, the date it was adopted by
the Board. The Plan will terminate at midnight on December 31, 2020 and may be
terminated prior to such time by Board action, and no Option will be granted
after such termination. The Plan has been adopted by the Board subject to
shareholder approval.
15. MISCELLANEOUS.
15.1 GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota, notwithstanding the conflicts of laws
principles of any jurisdictions.
15.2 SUCCESSORS AND ASSIGNS. The Plan will be binding upon and inure to the
benefit of the successors and permitted assigns of the Company and the
Participants.
15.3 WITHHOLDING. Delivery of shares of Common Stock or of cash pursuant to
the Plan shall be subject to any required withholding taxes. A person entitled
to receive shares of Common Stock may, as a condition precedent to receiving
such shares, be required to pay the Company a cash amount equal to the amount of
any required withholdings.
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