TECHNE CORPORATION
1998 NONQUALIFIED STOCK OPTION PLAN
SECTION 1.
DEFINITIONS
As used herein, the following terms shall have the meanings indicated
below:
(a) "Committee" shall mean a Committee of two or more directors who shall
be appointed by and serve at the pleasure of the Board. As long as the
Company's securities are registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, then, to the extent necessary for compliance
with Rule 16b-3, or any successor provision, each of the members of the
Committee shall be a "Non-Employee Director." For purposes of this Section
1(b) "Non-Employee Director" shall have the same meaning as set forth in Rule
16b-3, or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.
(b) The "Company" shall mean Techne Corporation, a Minnesota corporation.
(c) "Fair Market Value" shall mean (i) if such stock is reported by the
Nasdaq National Market or Nasdaq SmallCap Market or is listed upon an
established stock exchange or exchanges, the reported closing price of such
stock by the Nasdaq National Market or Nasdaq SmallCap Market or on such
stock exchange or exchanges on the date the option is granted or, if no
sale of such stock shall have occurred on that date, on the next preceding
day on which there was a sale of stock; (ii) if such stock is not so
reported by the Nasdaq National Market or Nasdaq SmallCap Market or listed
upon an established stock exchange, the average of the closing "bid" and
"asked" prices quoted by the National Quotation Bureau, Inc. (or any
comparable reporting service) on the date the option is granted, or if
there are no quoted "bid" and "asked" prices on such date, on the next
preceding date for which there are such quotes; or (iii) if such stock is
not publicly traded as of the date the option is granted, the per share
value as determined by the Board, or the Committee, in its sole discretion
by applying principles of valuation with respect to all such options.
(d) The "Internal Revenue Code" is the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Non-Employee Director" shall mean members of the Board who are not
employees of the Company or any subsidiary.
(f) "Option Stock" shall mean Common Stock of the Company (subject to
adjustment as described in Section 13) reserved for options pursuant to
this Plan.
(g) The "Optionee" means an employee, officer, director, consultant,
advisor or such other individual of the Company or any Subsidiary to whom
an option is granted pursuant to this Plan.
(h) "Parent" shall mean any corporation which owns, directly or indirectly
in an unbroken chain, fifty percent (50%) or more of the total voting power
of the Company's outstanding stock.
(i) The "Plan" means the Techne Corporation 1998 Nonqualified Stock Option
Plan, as amended hereafter from time to time, including the form of Option
Agreements as they may be modified by the Board from time to time.
(j) A "Subsidiary" shall mean any corporation of which fifty percent (50%)
or more of the total voting power of outstanding stock is owned, directly
or indirectly in an unbroken chain, by the Company.
SECTION 2.
PURPOSE
The purpose of the Plan is to promote the success of the Company and
its Subsidiaries by facilitating the retention of competent personnel and
by furnishing incentive to officers, directors, employees, consultants, and
advisors upon whose efforts the success of the Company and its Subsidiaries
will depend to a large degree.
SECTION 3.
EFFECTIVE DATE OF PLAN
The Plan shall be effective as of the date of approval by the
shareholders of the Company.
SECTION 4.
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the
Company (hereinafter referred to as the "Board") or by a Committee which
may be appointed by the Board from time to time (whether the Board or such
a Committee, referred to herein as the "Administrator"). The Administrator
shall have all of the powers vested in it under the provisions of the Plan,
including but not limited to exclusive authority (where applicable and
within the limitations described herein) to determine, in its sole discretion,
whether an option shall be granted, the individuals to whom, and the time or
times at which, options shall be granted, the number of shares subject to each
option and the option price and terms and conditions of each option. The
Administrator shall have full power and authority to administer and interpret
the Plan, to make and amend rules, regulations and guidelines for
administering the Plan, to prescribe the form and conditions of the respective
stock option agreements (which may vary from Optionee to Optionee) evidencing
each option and to make all other determinations necessary or advisable for
the administration of the Plan. The Administrator's interpretation of the
Plan, and all actions taken and determinations made by the Administrator
pursuant to the power vested in it hereunder, shall be conclusive and binding
on all parties concerned. Notwithstanding anything in the Plan to the
contrary, an Optionee shall not, in any calendar year, be granted options
which, in total, provide for the purchase of more than 200,000 shares of
Option Stock.
No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith in connection with the
administration of the Plan. In the event the Board appoints a Committee as
provided hereunder, any action of the Committee with respect to the ad
ministration of the Plan shall be taken pursuant to a majority vote of the
Committee members or pursuant to the written resolution of all Committee
members.
SECTION 5.
PARTICIPANTS
The Administrator shall from time to time, at its discretion and
without approval of the shareholders, designate those employees, officers,
directors, consultants, and advisors of the Company or of any Subsidiary to
whom options shall be granted under this Plan; provided, however, that
consultants or advisors shall not be eligible to receive stock options
hereunder unless such consultant or advisor renders bona fide services to
the Company or Subsidiary and such services are not in connection with the
offer or sale of securities in a capital raising transaction. The
Administrator may grant additional options under this Plan to some or all
participants then holding options or may grant options solely or partially
to new participants. In designating participants, the Administrator shall
also determine the number of shares to be optioned to each such participant.
The Board may from time to time designate individuals as being ineligible to
participate in the Plan.
SECTION 6.
STOCK
The Stock to be optioned under this Plan shall consist of authorized
but unissued shares of Option Stock. Three hundred thousand (300,000)
shares of Option Stock shall be reserved and available for options under
the Plan; provided, however, that the total number of shares of Option
Stock reserved for options under this Plan shall be subject to adjustment
as provided in Section 12 of the Plan. In the event that any outstanding
option under the Plan for any reason expires or is terminated prior to the
exercise thereof, the shares of Option Stock allocable to the unexercised
portion of such option shall continue to be reserved for options under the
Plan and may be optioned hereunder.
SECTION 7.
DURATION OF PLAN
The Plan shall have no fixed termination date. Options may be granted
pursuant to the Plan from time to time after the effective date of the Plan
and until the Plan is discontinued or terminated by the Board. Any option
granted prior to the termination of the Plan by the Board shall remain in
full force and effect until the expiration of the option as specified in
the written stock option agreement and shall remain subject to the terms
and conditions of this Plan.
SECTION 8.
PAYMENT
Optionees may pay for shares upon exercise of options granted pursuant
to this Plan with cash, personal check, certified check or, if approved by
the Administrator in its sole discretion, Common Stock of the Company
valued at such Stock's then Fair Market Value, or such other form of
payment as may be authorized by the Administrator. The Administrator may,
in its sole discretion, limit the forms of payment available to the Optionee
and may exercise such discretion any time prior to the termination of the
option granted to the Optionee or upon any exercise of the option by the
Optionee.
With respect to payment in the form of Common Stock of the Company,
the Administrator may require advance approval or adopt such rules as it
deems necessary to assure compliance with Rule 16b-3, or any successor
provision of the General Rules and Regulations under the Securities Exchange
Act of 1934 and to achieve accounting treatment for the financial statements
of the Company most advantageous to it.
SECTION 9.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
Each nonqualified stock option granted pursuant to this Plan shall be
evidenced by a written Option Agreement. The Option Agreement shall be in
such form as may be approved from time to time by the Administrator and may
vary from Optionee to Optionee; provided, however, that each Optionee and
each Option Agreement shall comply with and be subject to the following
terms and conditions:
(a) Number of Shares and Option Price. The Option Agreement shall
state the total number of shares covered by the nonqualified stock
option. Unless otherwise determined by the Administrator, the option
price per share shall be one hundred percent (100%) of the Fair Market
Value of the Common Stock per share on the date the Administrator
grants the option.
(b) Term and Exercisability of Nonqualified Stock Option. Except as
provided in Section 10, the term during which any nonqualified stock
option granted under the Plan may be exercised shall be established in
each case by the Administrator. The Option Agreement shall state when
the nonqualified stock option becomes exercisable and shall also state
the maximum term during which the option may be exercised. In the
event a nonqualified stock option is exercisable immediately, the
manner of exercise of the option in the event it is not exercised in
full immediately shall be specified in the stock option agreement.
The Administrator may accelerate the exercisability of any nonqualified
stock option granted hereunder which is not immediately exercisable as of
the date of grant.
(c) Withholding. The Company or its Subsidiary shall be entitled to
withhold and deduct from future wages of the Optionee all legally
required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Optionee's exercise of a
nonqualified stock option. In the event the Optionee is required
under the Option Agreement to pay the Company, or make arrangements
satisfactory to the Company respecting payment of, such withholding
and employment-related taxes, the Administrator may, in its discretion
and pursuant to such rules as it may adopt, permit the Optionee to
satisfy such obligation, in whole or in part, by electing to have the
Company withhold shares of Common Stock otherwise issuable to the
Optionee as a result of the option's exercise equal to the amount
required to be withheld for tax purposes. Any stock elected to be
withheld shall be valued at its Fair Market Value, as of the date the
amount of tax to be withheld is determined under applicable tax law.
The Optionee's election to have shares withheld for this purpose shall
be made on or before the date the option is exercised or, if later,
the date that the amount of tax to be withheld is determined under
applicable tax law. Such election shall be approved by the Administrator
and otherwise comply with such rules as the Administrator may adopt to
assure compliance with Rule 16b-3, or any successor provision, as then in
effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.
(d) Other Provisions. The Option Agreement authorized under this
Section 10 shall contain such other provisions as the Administrator
shall deem advisable.
SECTION 10.
GRANTING OF AUTOMATIC OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Upon Election or Re-election to or Continuation on the Board. Each
Non-Employee Director who, on and after the date this Plan is approved by
the Company's shareholders, is elected or re-elected as a director of the
Company or, in the event the Company adopts staggered terms for its
directors, whose term of office continues after a meeting of shareholders
at which directors are elected shall, as of the date of such re-election or
shareholder meeting, automatically be granted an option to purchase 10,000
shares of the Common Stock at an option price per share equal to 100% of
the Fair Market Value of the Common Stock on the date of such election, re-
election or shareholder meeting; provided however, that if such Non-
Employee Director is elected other than by shareholders at an annual
meeting, the number of shares subject to the option shall be determined by
multiplying 10,000 by a fraction, the numerator of which is the number of
months until the next regular annual meeting of shareholders and the
denominator of which is 12. Options granted pursuant to this subsection
(a) shall be immediately exercisable in full.
(b) General. Options granted pursuant to this Section 10 shall be
immediately exercisable in full and shall terminate, subject to the earlier
termination provisions of this Section, 10 years from date of grant. If a
Non-Employee Director's membership on the Board and service to the Company
as an employee, advisor or consultant terminates for any reason other than
death or disability, the options shall terminate on the earlier of (i) the
close of business on the date twelve months following the date of termination
or (ii) the 10 year anniversary of the date of grant. If a Non-Employee
Director dies (i) while a member of the Board or serving as an employee,
advisor or consultant, or (ii) within twelve months following the date of
termination of membership on the Board, the options shall terminate on the
earlier of (i) the close of business on the twelve-month anniversary of the
date of death or (ii) the 10 year anniversary of the date of grant. If a Non-
Employee Director terminates his or her membership on the Board and service to
the Company as an employee, advisor or consultant by reason of disability,
the options shall expire on the earlier of (i) the close of business on the
twelve-month anniversary of the date of termination, or (ii) the 10 year
anniversary of the date of grant. In the event of a change in the accounting
treatment of options to be granted automatically pursuant to this Section 10,
the Board in its discretion may modify or amend the terms of such options
provided that no such modification or amendment shall change the terms of
outstanding options or materially increase the benefits accruing to recipients
of future automatic grants.
SECTION 11.
TRANSFER OF OPTION
The Administrator may, in its sole discretion, permit the Optionee to
transfer any or all nonqualified stock options to any member of the
Optionee's "immediate family" as such term is defined in Rule 16a-1(e)
promulgated under the Securities Exchange Act of 1934, or any successor
provision, or to one or more trusts whose beneficiaries are members of such
Optionee's "immediate family" or partnerships in which such family members
are the only partners; provided, however, that the Optionee receives no
consideration for the transfer and such transferred nonqualified stock
option shall continue to be subject to the same terms and conditions as
were applicable to such nonqualified stock option immediately prior to its
transfer.
SECTION 12.
RECAPITALIZATION, SALE, MERGER, EXCHANGE
OR LIQUIDATION
In the event of an increase or decrease in the number of shares of
Common Stock resulting from a subdivision or consolidation of shares or the
payment of a stock dividend or any other increase or decrease in the number
of shares of Common Stock effected without receipt of consideration by the
Company, the number of shares of Option Stock reserved under Section 6
hereof, the number of shares of Option Stock covered by each outstanding
option and the price per share thereof, and the number of shares subject to
automatic grant to Non-Employee Directors pursuant to Section 10 above
shall automatically be adjusted to reflect such change, provided that the
Board in its discretion may in such event decrease but not increase the
number of shares subject to the automatic grants of Section 10 above made
subsequent to the date of such event. Additional shares which may be
credited pursuant to such adjustment shall be subject to the same
restrictions as are applicable to the shares with respect to which the
adjustment relates.
Unless otherwise provided in the stock option agreement, in the event
of an acquisition of the Company through the sale of substantially all of
the Company's assets and the consequent discontinuance of its business or
through a merger, consolidation, exchange, reorganization, reclassification,
extraordinary dividend, divestiture or liquidation of the Company
(collectively referred to as a "transaction"), all outstanding options shall
become immediately exercisable, whether or not such options had become
exercisable prior to the transaction; provided, however, that if the acquiring
party seeks to have the transaction accounted for on a "pooling of interests"
basis and, in the opinion of the Company's independent certified public
accountants, accelerating the exercisability of such options would preclude a
pooling of interests under generally accepted accounting principles, the
exercisability of such options shall not accelerate. In addition to the
foregoing, in the event of such a transaction, the Board may provide for one
or more of the following:
(a) the complete termination of this Plan and cancellation of
outstanding options not exercised prior to a date specified by the
Board (which date shall give Optionees a reasonable period of time in
which to exercise the options prior to the effectiveness of such
transaction);
(b) that Optionees holding outstanding incentive or nonqualified
options shall receive, with respect to each share of Option Stock
subject to such options, as of the effective date of any such
transaction, cash in an amount equal to the excess of the Fair Market
Value of such Option Stock on the date immediately preceding the
effective date of such transaction over the option price per share of
such options; provided that the Board may, in lieu of such cash
payment, distribute to such Optionees shares of stock of the Company
or shares of stock of any corporation succeeding the Company by reason
of such transaction, such shares having a value equal to the cash
payment herein; or
(c) the continuance of the Plan with respect to the exercise of
options which were outstanding as of the date of adoption by the Board
of such plan for such transaction and provide to Optionees holding
such options the right to exercise their respective options as to an
equivalent number of shares of stock of the corporation succeeding the
Company by reason of such transaction.
The Board may restrict the rights of or the applicability of this Section
12 to the extent necessary to comply with Section 16(b) of the Securities
Exchange Act of 1934, the Internal Revenue Code or any other applicable law
or regulation. The grant of an option pursuant to the Plan shall not limit
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate,
sell or transfer all or any part of its business or assets.
SECTION 13.
SECURITIES LAW COMPLIANCE
No shares of Common Stock shall be issued pursuant to the Plan unless
and until there has been compliance, in the opinion of Company's counsel,
with all applicable legal requirements, including without limitation, those
relating to securities laws and stock exchange listing requirements. As a
condition to the issuance of Option Stock to Optionee, the Administrator
may require Optionee to (i) represent that the shares of Option Stock are
being acquired for investment and not resale and to make such other
representations as the Administrator shall deem necessary or appropriate to
qualify the issuance of the shares as exempt from the Securities Act of
1933 and any other applicable securities laws, and (ii) represent that
Optionee shall not dispose of the shares of Option Stock in violation of
the Securities Act of 1933 or any other applicable securities laws.
As a further condition to the grant of any incentive or nonqualified
stock option or the issuance of Option Stock to Optionee, Optionee agrees
to the following:
(a) In the event the Company advises Optionee that it plans an
underwritten public offering of its Common Stock in compliance with
the Securities Act of 1933, as amended, and the underwriter(s) seek to
impose restrictions under which certain shareholders may not sell or
contract to sell or grant any option to buy or otherwise dispose of
part or all of their stock purchase rights of the underlying Common
Stock, Optionee will not, for a period not to exceed 180 days from the
prospectus, sell or contract to sell or grant an option to buy or
otherwise dispose of any incentive or nonqualified stock option
granted to Optionee pursuant to the Plan or any of the underlying
shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).
(b) In the event of a transaction (as defined in Section 13 of the
Plan) which is treated as a "pooling of interests" under generally
accepted accounting principles, Optionee will comply with Rule 145 of
the Securities Act of 1933 and any other restrictions imposed under
other applicable legal or accounting principles if Optionee is an
"affiliate" (as defined in such applicable legal and accounting
principles) at the time of the transaction, and Optionee will execute
any documents necessary to ensure compliance with such rules.
The Company reserves the right to place a legend on any stock
certificate issued upon exercise of an option granted pursuant to the Plan
to assure compliance with this Section 13.
SECTION 14.
RIGHTS AS A SHAREHOLDER
An Optionee (or the Optionee's successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an option
until the date of the issuance of a stock certificate evidencing such shares.
No adjustment shall be made for dividends (ordinary or extraordinary, whether
in cash, securities or other property), distributions or other rights for
which the record date is prior to the date such stock certificate is actually
issued (except as otherwise provided in Section 12 of the Plan).
SECTION 15.
AMENDMENT OF THE PLAN
The Board may from time to time, insofar as permitted by law, suspend
or discontinue the Plan or revise or amend it in any respect; provided,
however, that no such revision or amendment, except as is authorized in
Section 12, shall impair the terms and conditions of any option which is
outstanding on the date of such revision or amendment to the material
detriment of the Optionee without the consent of the Optionee. Notwith
standing the foregoing, no such revision or amendment shall (i) materially
increase the number of shares subject to the Plan except as provided in
Section 12 hereof, (ii) change the designation of the class of employees
eligible to receive options, (iii) decrease the price at which options may
be granted, or (iv) materially increase the benefits accruing to Optionees
under the Plan without the approval of the shareholders of the Company if
such approval is required for compliance with the requirements of any
applicable law or regulation.
SECTION 16.
NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the Optionee
to exercise such option. Further, the granting of an option hereunder shall
not impose upon the Company or any Subsidiary any obligation to retain the
Optionee as an employee, officer, director, consultant or advisor for any
period.