Exhibit 10.21
LabOne, Inc.
LONG-TERM INCENTIVE PLAN
1. Purpose.
The purpose of the LabOne, Inc. Long-Term Incentive Plan (the Plan) is to
further the earnings of LabOne, Inc. (LabOne) and its subsidiaries (collectively
the Company) by assisting the Company in attracting, retaining and motivating
management employees and directors of high caliber and potential. The Plan
provides for the award of long-term incentives to those officers, other key
executives and directors who make substantial contributions to the Company
by their loyalty, industry and invention.
2. Administration.
(a)Committee. The Plan shall be administered by a committee (the
Committee) consisting of three or more members of the Board of Directors of
LabOne (the Board of Directors), each of whom (i) shall be an Outside Director
of LabOne, (ii) shall be a "disinterested person" within the meaning of Rule
16b-3(c)(2)(i) under the Securities and Exchange Act of 1934, as amended from
time to time (the 1934 Act), or any successor rule of similar import, and (c)
shall be selected from time to time by the Board of Directors. For purposes of
the Plan, an "Outside Director" means a member of the Board of Directors who is
not an employee of LabOne or any parent corporation or subsidiary corporation of
LabOne (which terms, as used hereinafter, shall have the meanings ascribed
thereto in Sections 424(e) and (f) of the Internal Revenue Code of 1986, as
amended from time to time (the Code), or any amendment or substitute or
successor thereto or regulation thereunder).
(b)Authority. The Committee shall have full and final authority in its
discretion to interpret the provisions of the Plan and to decide all questions
of fact arising in its application. Subject to the provisions hereof, the
Committee shall have full and final authority in its discretion to determine
the employees and directors to whom awards shall be made under the Plan; to
determine the type of awards to be made and the amount, size and terms and
conditions of each such award; to determine the time when awards shall be
granted; to determine the provisions of each agreement evidencing an award; and
to make all other determinations necessary or advisable for the administration
of the Plan; provided, however, that the Committee shall have no authority or
discretion with respect to awards to Outside Directors subsequent to June 1,
1991, which awards shall be made only as provided in paragraph 24 hereof.
3. Stock Subject to the Plan.
LabOne may grant awards under the Plan with respect to not more than a
total of 1,800,000 shares of common stock of LabOne (Shares), subject, however,
to adjustment as provided in paragraph 18 below. Such Shares may be authorized
and unissued Shares or treasury Shares. Except as otherwise provided herein,
any Shares subject to an option or right which for any reason is surrendered
before exercise or expires or is terminated unexercised as to such Shares shall
again be available for the granting of awards under the Plan. Similarly, if
any Shares granted pursuant to restricted stock awards are forfeited, such
forfeited Shares shall again be available for the granting of awards under the
Plan.
4. Eligibility to Receive Awards.
Persons eligible to receive awards under the Plan shall be limited to
those officers, other key executive employees and directors of the Company who
are in positions in which their decisions, actions and counsel have a
significant impact upon the profitability and success of the Company. Each
Outside Director as of June 1, 1991 received prior grants of Nonqualified Stock
Options to purchase 22,000 Shares. Subsequent to June 1, 1991, no Outside
Director shall be eligible to receive any additional award under the Plan,
except as provided in paragraph 24 hereof.
5. Form of Awards.
Awards may be made from time to time by the Committee in the form of stock
options to purchase Shares, stock appreciation rights, performance units,
restricted stock, or any combination of the above. Stock options may be
options which are intended to qualify as incentive stock options within the
meaning of Section 422A(b) of the Code (Incentive Stock Options) or options
which are not intended to so qualify (Nonqualified Stock Options).
6. Stock Options.
Stock options for the purchase of Shares shall be evidenced by written
agreements in such form not inconsistent with the Plan as the Committee shall
approve from time to time; provided, however, that the form of such agreements
with respect to Nonqualified Stock Options granted to Outside Directors
subsequent to June 1, 1991 shall be as specified in paragraph 24 hereof. Such
agreements shall contain the terms and conditions applicable to the options,
including in substance the following terms and conditions:
(a) Type of Option. Each option agreement shall identify the options
represented thereby as Incentive Stock Options or Nonqualified Stock Options,
as the case may be, and shall set forth the number of Shares subject to the
options.
(b) Option Price. The option exercise price to be paid by the optionee
to the Company for each Share purchased upon the exercise of an option shall be
determined by the Committee, but shall in no event be less than the par value
of a Share.
(c) Exercise Term. Each option agreement shall state the period or
periods of time within which the option may be exercised, in whole or in part,
as determined by the Committee and subject to such terms and conditions as are
prescribed for such purpose by the Committee, provided that no Incentive Stock
Option shall be exercisable after ten years, and no Nonqualified Stock Option
shall be exercisable after ten years and one day, from the date of grant
thereof. The Committee, in its discretion, may provide in the option agreement
circumstances under which the option shall become immediately exercisable, in
whole or in part, and, notwithstanding the foregoing, may accelerate the
exercisability of any option, in whole or in part, at any time.
(d) Payment for Shares. The purchase price of the Shares with respect to
which an option is exercised shall be payable in full at the time of exercise
in cash, Shares at fair market value, or a combination thereof, as the
Committee may determine and subject to such terms and conditions as may be
prescribed by the Committee for such purpose. All optionees granted options at
any time under the Plan, except Outside Directors granted options pursuant to
paragraph 24, shall have the right, with the consent of, and subject to such
terms and conditions as may be established by, the Committee, to elect to pay
all or a part of such purchase price by requesting the Company to reduce the
number of Shares otherwise issuable to the optionee upon the exercise of the
option by a number of Shares having a fair market value equal to such purchase
price.
(e) Rights Upon Termination of Employment. In the event that an optionee
ceases to be an employee or director of the Company for any cause other than
Retirement (as defined below), death or Disability (as defined below), the
optionee shall have the right to exercise the option during its term within a
period of three months after such termination to the extent that the option was
exercisable at the time of termination, or within such other period, and
subject to such terms and conditions, as may be specified by the Committee.
(Asused herein, the term Retirement means retirement pursuant to the pension
plan maintained by LabOne, as amended from time to time, and the term Retires
has the corresponding meaning. As used herein, the term Disability means a
condition that, in the judgment of the Committee, has rendered a grantee
completely and presumably permanently unable to perform any and every duty of
his regular occupation, and the term Disabled has the corresponding meaning.)
In the event that an optionee Retires, dies or becomes Disabled prior to the
expiration of his option and without having fully exercised his option, the
optionee or his Beneficiary (as defined below) shall have the right to exercise
the option during its term within a period of (i) one year after termination of
employment due to Retirement, death or Disability, or (ii) one year after death
if death occurs either within one year after termination of employment due to
Retirement or Disability or within three months after termination of employment
for other reasons, to the extent that the option was exercisable at the time of
death or termination, or within such other period, and subject to such terms
and conditions, as may be specified by the Committee. As used herein, the term
Beneficiary means the person or persons designated in writing by the grantee as
his Beneficiary with respect to an award under the Plan; or, in the absence of
an effective designation or if the designated person or persons predecease the
grantee, the grantee's Beneficiary shall be the person or persons who acquire
by bequest or inheritance the grantee's rights in respect of an award. In
order to be effective, a grantee's designation of a Beneficiary must be on file
with the Committee before the grantee's death, but any such designation may be
revoked and a new designation substituted therefor at any time before the
grantee's death.
(f) Nontransferability. Each option agreement shall provide that the
option is not transferable other than by will or by the laws of descent and
distribution, and that during the lifetime of the optionee the option is
exercisable only by him.
(g) Incentive Stock Options. In the case of an Incentive Stock Option,
each option agreement shall contain such other terms, conditions and provisions
as the Committee determines necessary or desirable in order to qualify such
option as an incentive stock option (within the meaning of Section 422A(b) of
the Code) including in substance, without limitation, the following:
(i) The purchase price of stock subject to an Incentive Stock Option shall
be not less than 100 percent of the fair market value of such stock on the date
the option is granted, as determined by the Committee.
(ii) The aggregate fair market value (determined as of the time the option
is granted) of the stock with respect to which Incentive Stock Options are
exercisable for the first time by any optionee in any calendar year (under all
plans of LabOne and its parent and subsidiary corporations) shall not exceed
$100,000.
(iii) No Incentive Stock Option shall be granted to any employee if at the
time the option is granted the individual owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or of a parent corporation or subsidiary corporation of the Company,
unless at the time such option is granted the option price is at least 110
percent of the fair market value (as determined by the Committee) of the stock
subject to the option and such option by its terms is not exercisable after the
expiration of five years from the date of grant.
(iv) Directors who are not employees of the Company shall not be eligible
to receive Incentive Stock Options.
7. Stock Appreciation Rights.
Stock appreciation rights (SARs) shall be evidenced by written SAR
agreements in such form not inconsistent with the Plan as the Committee shall
approve from time to time. Such SAR agreements shall contain the terms and
conditions applicable to the SARs, including in substance the following terms
and conditions:
(a)Award. SARs may be granted in connection with a previously or
contemporaneously granted stock option, or independently of a stock option.
SARs shall entitle the grantee, subject to such terms and conditions as may be
determined by the Committee, to receive upon exercise thereof all or a portion
of the excess of (i) the fair market value at the time of exercise, as
determined by the Committee, of a specified number of Shares with respect to
which the SAR is exercised, over (ii) a specified price which shall not be less
than 100 percent of the fair market value of the Shares at the time the SAR is
granted, or, if the SAR is granted in connection with a previously issued stock
option, not less than 100 percent of the fair market value of the Shares at the
time such option was granted. Upon exercise of an SAR, the number of Shares
reserved for issuance hereunder shall be reduced by the number of Shares
covered by the SAR. Shares covered by an SAR shall not be used more than once
to calculate the amount to be received pursuant to the exercise of the SAR.
(b)SARs Related to Stock Options. If an SAR is granted in relation to a
stock option, (i) the SAR shall be exercisable only at such times, and by such
persons, as the related option is exercisable; (ii) the grantee's right to
exercise the related option shall be canceled if and to the extent that the
Shares subject to the option are used to calculate the amount to be received
upon the exercise of the related SAR; (iii) the grantee's right to exercise the
related SAR shall be canceled if and to the extent that the Shares subject to
the SAR are purchased upon the exercise of the related option; and (iv) the SAR
shall not be transferable other than by will or by the laws of descent and
distribution, and shall be exercisable during the lifetime of the grantee only
by him.
(c)Term. Each SAR agreement shall state the period or periods of time
within which the SAR may be exercised, in whole or in part, as determined by
the Committee and subject to such terms and conditions as are prescribed for
such purpose by the Committee, provided that no SAR shall be exercisable
earlier than six months after the date of grant or later than ten years after
the date of grant. The Committee may, in its discretion, provide in the SAR
agreement circumstances under which the SARs shall become immediately
exercisable, in whole or in part, and may, notwithstanding the foregoing,
accelerate the exercisability of any SAR, in whole or in part, at any time.
(d)Termination of Employment. SARs shall be exercisable only during the
grantee's employment by the Company, except that, in the discretion of the
Committee, an SAR may be made exercisable for up to three months after the
grantee's employment (or tenure as a director) is terminated for any reason
other than Retirement, death or Disability, and for up to one year after the
grantee's employment (or tenure as a director) is terminated because of
Retirement, death or Disability.
(e)Payment. Upon exercise of an SAR, payment shall be made in cash, in
Shares at fair market value on the date of exercise, or. in a combination
thereof, as the Committee may determine.
(f)Other Terms. SARs shall be granted in such manner and such form, and
subject to such additional terms and conditions, as the Committee in its sole
discretion deems necessary or desirable, including without limitation: (i) if
granted in connection with an Incentive Stock Option, in order to satisfy any
requirements set forth under Section 422A of the Code; or, (ii) in order to
avoid any insider-trading liability in connection with an SAR under Section
16(b) of the 1934 Act.
8. Restricted Stock Awards.
Restricted stock awards under the Plan shall consist of Shares free of any
purchase price or for such purchase price as may be established by the
Committee, restricted against transfer, subject to forfeiture, and subject to
such other terms and conditions (including attainment of performance
objectives) as may be determined by the Committee. Restricted stock shall be
evidenced by written restricted stock agreements in such form not inconsistent
with the Plan as the Committee shall approve from time to time, which
agreements shall contain the terms and conditions applicable to such awards,
including in substance the following terms and conditions:
(a)Restriction Period. Restrictions shall be imposed for such period or
periods as may be determined by the Committee. The Committee, in its
discretion, may provide in the agreement circumstances under which the
restricted stock shall become immediately transferable and nonforfeitable, or
under which the restricted stock shall be forfeited, and, notwithstanding the
foregoing, may accelerate the expiration of the restriction period imposed on
any Shares at any time.
(b)Restrictions Upon Transfer. Restricted stock and the right to vote
such Shares and to receive dividends thereon, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise encumbered, except
as herein provided, during the restriction period applicable to such Shares.
Notwithstanding the foregoing, and except as otherwise provided in the Plan,
the grantee shall have all of the other rights of a stockholder, including, but
not limited to, the right to receive dividends and the right to vote such
Shares.
(c)Certificates. A certificate or certificates representing the number of
restricted Shares granted shall be registered in the name of the grantee. The
Committee, in its sole discretion, shall determine when the certificate or
certificates shall be delivered to the grantee (or, in the event of the
grantee's death, to his Beneficiary), may provide for the holding of such
certificate or certificates in escrow or in custody by the Company or its
designee pending their delivery to the grantee or Beneficiary, and may provide
for any appropriate legend to be borne by the certificate or certificates.
(d)Lapse of Restrictions. The Agreement shall specify the terms and
conditions upon which any restrictions upon restricted stock awarded under the
Plan shall expire, lapse, or be removed, as determined by the Committee. Upon
the expiration, lapse, or removal of such restrictions, Shares free of the
restrictive legend shall be issued to the grantee or his legal representative.
9. Performance Units.
Performance unit awards under the Plan shall entitle grantees to future
payments based upon the achievement of pre-established long-term performance
objectives and shall be evidenced by written performance unit agreements in
such form not inconsistent with this Plan as the Committee shall approve from
time to time. Such agreements shall contain the terms and conditions
applicable to the performance unit awards, including in substance the following
terms and conditions:
(a)Performance Period. The Committee shall establish with respect to each
unit award a performance period of not fewer than two years.
(b)Unit Value. The Committee shall establish with respect to each unit
award value for each unit which shall not thereafter change, or which may vary
thereafter pursuant to criteria specified by the Committee.
(c)Performance Targets. The Committee shall establish with respect to
each unit award maximum and minimum performance targets to be achieved during
the applicable performance period. Achievement of maximum targets shall
entitle grantees to payment with respect to the full value of a unit award.
Grantees shall be entitled to payment with respect to a portion of a unit award
according to the level of achievement of targets as specified by the Committee
for performance which achieves or exceeds the minimum target but fails to
achieve the maximum target.
(d)Performance Measures. Performance targets established by the Committee
shall relate to corporate, division, or unit performance and may be established
in terms of growth in gross revenue, earnings per share, ratios of earnings to
equity or assets, or such other measures or standards as may be determined by
the Committee in its discretion. Multiple targets may be used and may have the
same or different weighting, and they may relate to absolute performance or
relative performance measured against other companies or businesses.
(e)Adjustments. At any time prior to payment of a unit award, the
Committee may adjust previously established performance targets or other terms
and conditions, including the Company's or other corporations' financial
performance for Plan purposes, to reflect major unforeseen events such as
changes in laws, regulations or accounting practices, mergers, acquisitions or
divestitures or other extraordinary, unusual or non-recurring items or events.
(f)Payment of Unit Awards. Following the conclusion of each performance
period, the Committee shall determine the extent to which performance targets
have been attained and any other terms and conditions satisfied for such
period. The Committee shall determine what, if any, payment is due on the unit
award and whether such payment shall be made in cash, Shares, or a combination
thereof. Payment shall be made in a lump sum or installments, as determined by
the Committee, commencing as promptly as practicable following the end of the
performance period unless deferred subject to such terms and conditions and in
such form as may be prescribed by the Committee.
(g)Termination of Employment. In the event that a grantee ceases to be
employed by the Company prior to the end of the performance period by reason of
death, Disability, or Retirement with the consent of the Company, any unit
award, to the extent earned under the applicable performance targets, shall be
payable at the end of the performance period according to the portion of the
performance period during which the grantee was employed by the Company,
provided that the Committee shall have the power to provide for an appropriate
settlement of a unit award before the end of the performance period. Upon any
other termination of employment, participation shall terminate forthwith and
all outstanding unit awards shall be canceled.
10. Loans and Supplemental Cash.
The Committee, in its sole discretion to further the purpose of the Plan,
may provide for supplemental cash payments or loans to individuals in
connection with all or any part of an award under the Plan. Supplemental cash
payments shall be subject to such terms and conditions as shall be prescribed
by the Committee at the time of grant, provided that in no event shall the
amount of payment exceed:
(a)In the case of an option, the excess of the fair market value of a
Share on the date of exercise over the option price multiplied by the number of
Shares for which such option is exercised, or
(b)In the case of an SAR, performance unit, or restricted stock award, the
value of the Shares and other consideration issued in payment of such award.
Any loan shall be evidenced by a written loan agreement or other instrument in
such form and containing such terms and conditions (including, without
limitation, provisions for interest, payment schedules, collateral, forgiveness
or acceleration) as the Committee may prescribe from time to time.
11. General Restrictions.
Each award under the Plan shall be subject to the requirement that if any
time the Company shall determine that (i) the listing, registration or
qualification of the Shares subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any regulatory body, or (iii) an agreement by the recipient of an award with
respect to the disposition of Shares, or (iv) the satisfaction of withholding
tax or other withholding liabilities is necessary or desirable as a condition
of or in connection with the granting of such award or the issuance or purchase
of Shares thereunder, such award shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval, agreement,
or withholding shall have been effected or obtained free of any conditions not
acceptable to the Company. Any such restriction affecting an award shall not
extend the time within which the award may be exercised; and neither the
Company nor its directors or officers nor the Committee shall have any
obligation or liability to the grantee or to a Beneficiary with respect to any
Shares with respect to which an award shall lapse or with respect to which the
grant, issuance or purchase of Shares shall not be effected, because of any
such restriction.
12. Single or Multiple Agreements.
Multiple awards, multiple forms of awards, or combinations thereof may be
evidenced by a single agreement or multiple agreements, as determined by the
Committee.
13. Rights of a Shareholder.
The recipient of any award under the Plan, unless otherwise provided by
the Plan, shall have no rights as a shareholder with respect thereto unless and
until certificates for Shares are issued to him, and the issuance of Shares
shall confer no retroactive right to dividends.
14. Rights to Terminate Employment.
Nothing in the Plan or in any agreement entered into pursuant to the Plan
shall confer upon any person the right to continue in the employment of the
Company or affect any right which the Company may have to terminate the
employment of such person.
15. Withholding.
(a)Prior to the issuance or transfer of Shares under the Plan, the
recipient shall remit to the Company an amount sufficient to satisfy any
Federal, state or local withholding tax requirements. The recipient may
satisfy the withholding requirement in whole or in part by electing to have the
Company withhold Shares having a value equal to the amount required to be
withheld. The value of the Shares to be withheld shall be the fair market
value, as determined by the Committee, of the stock on the date that the amount
of tax to be withheld is determined (the Tax Date). Such Election must be made
prior to the Tax Date, must comply with all applicable securities law and other
legal requirements, as interpreted by the Committee, and may not be made unless
approved by the Committee, in its discretion.
(b)Whenever payments to a grantee in respect of an award under the Plan
are to be made in cash, such payments shall be net of the amount necessary to
satisfy any Federal, state or local withholding tax requirements.
16. Non-Assignability.
No award under the Plan shall be assignable or transferable by the
recipient thereof except by will or by the laws of descent and distribution or
by such other means as the Committee may approve. During the life of the
recipient, such award shall be exercisable only by such person or by such
person's guardian or legal representative.
17. Non-Uniform Determinations.
The Committee's determinations under the Plan (including without
limitation determinations of the persons to receive awards, the form, amount
and timing of such awards, the terms and provisions of such awards and the
agreements evidencing same, and the establishment of values and performance
targets) need not be uniform and may be made selectively among persons who
receive, or are eligible to receive, awards under the Plan, whether or not such
persons are similarly situated (except Options granted to Outside Directors
pursuant to paragraph 24 hereof).
18. Adjustments.
In the event of any change in the outstanding common stock of the Company,
by reason of a stock dividend or distribution, recapitalization, merger,
consolidation, reorganization, splitup, combination, exchange of Shares or the
like, the Board of Directors, in its discretion, may adjust proportionately the
number of Shares which may be issued under the Plan, the number of Shares
subject to outstanding awards, and the option exercise price of each
outstanding option, and may make such other changes in outstanding options,
SARs, performance units and restricted stock awards, as it deems equitable in
its absolute discretion to prevent dilution or enlargement of the rights of
grantees; provided, however, that the number and option exercise price with
respect to the Shares subject to outstanding options granted to Outside
Directors prior to June 1, 1991, and the number and option exercise price with
respect to the Shares subject to future Options to be granted to Outside
Directors pursuant to paragraph 24, shall be subject to adjustment only as set
forth in paragraph 24. Fractional Shares resulting from any such adjustments
shall be eliminated.
19. Amendment.
The Board of Directors may terminate, amend, modify or suspend the Plan at
any time, except that the Board shall not, without the authorization of the
holders of a majority of Company's outstanding Shares, increase the maximum
number of Shares which may be issued under the Plan (other than increases
pursuant to paragraph 18 hereof), extend the last date on which awards may be
granted under the Plan, extend the date on which the Plan expires, change the
class of persons eligible to receive awards, or change the minimum option
price. No termination, modification, amendment or suspension of the Plan shall
adversely affect the rights of any grantee or Beneficiary under an award
previously granted, unless the grantee or Beneficiary shall consent; but it
shall be conclusively presumed that any adjustment pursuant to paragraph 18
hereof does not adversely affect any such right. In no event shall the
provisions relating to the timing, amount and exercise price of Options
provided for in paragraph 24 of the Plan be amended more than once every six
months, other than to comport with changes in the Code, Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder.
20. Effect on Other Plans.
Participation in this Plan shall not affect a grantee's eligibility to
participate in any other benefit or incentive plan of the Company. Any awards
made pursuant to this Plan shall not be used in determining the benefits
provided under any other plan of the Company unless specifically provided
therein.
21. Effective Date and Duration of Plan.
The Plan shall become effective when adopted by the Board of Directors,
provided that the Plan is approved by the holders of a majority of the
outstanding Shares on the date of its adoption by the Board or before the first
anniversary of that date. Unless it is sooner terminated in accordance with
paragraph 19 hereof, the Plan shall remain in effect until all awards under the
Plan have been satisfied by the issuance of Shares or the payment of cash or
have expired or otherwise terminated, but no award shall be granted more than
ten years after the earlier of the date the Plan is adopted by the Board of
Directors or is approved by the Company's shareholders.
22. Unfunded Plan.
The Plan shall be unfunded, except to the extent otherwise provided in
accordance with Section 8 hereof. Neither the Company nor any affiliate shall
be required to segregate any assets that may be represented by stock options,
SARs, or performance units, and neither the Company nor any affiliate shall be
deemed to be a trustee of any amounts to be paid under any stock option, SAR or
performance unit. Any liability of the Company or any affiliate to pay any
grantee or Beneficiary with respect to an option, SAR or performance unit shall
be based solely upon any contractual obligations created pursuant to the
provisions of the Plan; no such obligations will be deemed to be secured by a
pledge or encumbrance on any property of the Company or an affiliate.
23. Governing Law.
The Plan shall be construed and its provisions enforced and administered
in accordance with the laws of the State of Delaware except to the extent that
such laws may be superseded by any Federal law.
24. Outside Directors' Options.
(a) Grant of Nonqualified Stock Options. At each annual meeting of
stockholders of LabOne commencing with the year 1993, each person who is for the
first time elected to serve as an Outside Director at such annual meeting of
stockholders, excluding any Outside Director elected at any prior annual
meeting of stockholders of LabOne, shall automatically receive a one-time grant
of Nonqualified Stock Option to purchase 22,000 Shares (the Option), such grant
to be effective as of the date of such annual meeting of stockholders;
provided, however, that any Outside Director shall not be entitled to receive
and shall not be granted an Option if he does not continue to serve as an
Outside Director immediately following such annual meeting of stockholders.
(b) Option Price. The Option exercise price to be paid by each such
Outside Director for each Share purchased upon the exercise of the Option shall
be one hundred percent (100%) of the fair market value of the Shares on the
date the Option is granted. Fair market value for purposes of this paragraph
24 shall be deemed to be the average of the high and low sales prices for the
Shares on the National Association of Securities Dealers Automated Quotations
System as of the date the Option is granted, or if no sales of Shares shall
have been reported on that date, as of the next preceding date on which a sale
of Shares was reported.
(c) Vesting Schedule. Each Option granted to an Outside Director may be
exercised with respect to twenty percent (20%) of the Shares subject to the
Option after one year from the date of grant, an additional twenty percent
(20%) of the Shares subject to the Option after two years from the date of
grant, an additional twenty percent (20%) of the Shares subject to the Option
after three years from the date of grant, an additional twenty percent (20%) of
the Shares subject to the Option after four years from the date of grant and an
additional twenty percent (20%) of the Shares subject to the Option after five
years from the date of grant.
(d) Other Terms and Conditions. Each Option granted to an Outside
Director shall be subject to all of the other terms and conditions set forth in
the form of Stock Option Agreement adopted by the Committee and approved by the
Board of Directors on March 22, 1991; provided, however, that in the event of
any change in the Shares of the Company, by reason of a stock dividend or
distribution, recapitalization, merger, consolidation, reorganization,
split-up, combination, exchange of Shares or the like, thereafter the number of
Shares subject to outstanding options granted to Outside Directors prior to
June 1, 1991 and the number of Shares subject to future Options to be granted
to Outside Directors pursuant to the provisions of this paragraph 24 shall be
increased or decreased, as the case may be, in direct proportion to the
increase or decrease in the number of Shares by reason of such change (provided
that fractional Shares resulting from any such adjustment shall be eliminated),
and the exercise price per Share of any such outstanding option or Option
shall, in the case of an increase in the number of Shares, be proportionately
reduced, and in the case of a decrease in the number of Shares, shall be
proportionately increased; and provided further, however, that each Outside
Director granted an Option at any time under the Plan shall have the right to
elect to pay all or a part of the purchase price of the Shares with respect to
which the Option is exercised by requesting the Company to reduce the number of
Shares otherwise issuable to the Outside Director upon the exercise of the
Option by a number of Shares having a fair market value equal to such purchase
price.