EXHIBIT 10.47
ARROW INTERNATIONAL, INC.
DIRECTORS STOCK INCENTIVE PLAN
Arrow International, Inc. (the "Company") hereby
establishes the Arrow International, Inc. Directors Stock Incentive Plan
(the "Plan").
1. PURPOSE
The purpose of the Plan is to enable the Company and its
subsidiaries to attract and retain outside directors and provide them with
an incentive to maintain and enhance the Company's long-term
performance record. It is intended that this purpose will best be
achieved by granting eligible directors non-qualified stock options
("options") and, in connection with grants of options, certain stock
appreciation rights ("SARs" and, collectively with options, are
hereinafter referred to as "awards") under this Plan pursuant to the rules
set forth in Section 83 of the Internal Revenue Code, as amended from
time to time.
2. ADMINISTRATION
The Plan shall be administered by the Company's Board
of Directors (the "Board"). Subject to the provisions of the Plan, the
Board shall possess the authority, in its discretion, (a) to prescribe the
form of the stock option and SAR agreements, including any appropriate
terms and conditions applicable to these awards, and to make any
amendments to such agreements or awards; (b) to interpret the Plan; (c)
to make and amend rules and regulations relating to the Plan; and (d) to
make all other determinations necessary or advisable for the
administration of the Plan. The Board's determinations shall be
conclusive and binding. No member of the Board shall be liable for any
action taken or decision made in good faith relating to the Plan or any
award granted hereunder.
3. ELIGIBLE DIRECTORS
Members of the Board of Directors of the Company and
its subsidiaries are eligible to participate in this Plan if they are not also
employees or consultants of the Company or its subsidiaries, were not
shareholders at the time of the Company's initial public offering on June
9, 1992, and do not serve on the Board as representatives of the interests
of shareholders who have made an investment in the Company.
4. SHARES AVAILABLE
The total number of shares of the Company's Common
Stock, no par value (the "Common Stock"), available in the aggregate
for options under this Plan shall not exceed 100,000 (subject to
substitution or adjustment as provided in Section 9). Such shares may
be authorized and unissued shares. If an option expires, terminates or is
canceled without being exercised, new options may thereafter be granted
covering such shares. No option may be granted more than ten years
after the effective date of the Plan.
5. TERMS AND CONDITIONS OF OPTIONS
Each option granted under the Plan shall be evidenced by
an option agreement in such form as the Board shall approve from time
to time, which agreement shall conform with this Plan and contain
the following terms and conditions:
(a) Number of Shares. On the date the Plan is first
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adopted by the Company's shareholders or on the date on
which an eligible director is first elected to the Board,
whichever is later, such eligible director shall receive an
option to purchase 5,000 shares of the Common Stock
(each such option grant is hereinafter referred to as an
"Initial Option"). Subsequent to an eligible director's
initial election to the Board and provided that such eligible
director has served on the Board for at least twelve
months, each year when new members are elected to the
Board, each eligible director who will be serving on the
new Board shall receive an option to purchase 500 shares
of the Common Stock.
(b) Exercise Price. The exercise price under each
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option shall equal the fair market value of the Common
Stock at the time such option is granted.
(c) Duration of Option. Each option by its terms
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shall not be exercisable after the expiration of ten years
from the date such option is granted.
(d) Options Nontransferable. Each option by its
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terms shall not be transferable by the participant otherwise
than by will or the laws of descent and distribution, and
shall be exercisable, during the participant's lifetime, only
by the participant, the participant's guardian or the
participant's legal representative.
(e) Exercise Terms. Each option granted under
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the Plan shall become exercisable with respect to the
shares subject thereto on the first anniversary of the date
of grant. Options may be partially exercised from time to
time during the period extending from the time they
first become exercisable until the tenth anniversary of the
date of grant.
(f) Payment of Exercise Price. An option shall
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be exercised upon written notice to the Company
accompanied by payment in full for the shares being
acquired. The payment shall be made in cash, by check
or, if the option agreement so permits, by delivery of
shares of Common Stock of the Company registered in the
name of the participant, duly assigned to the Company
with the assignment guaranteed by a bank, trust company
or member firm of the New York Stock Exchange, or by
a combination of the foregoing. Any such shares so
delivered shall be deemed to have a value per share equal
to the fair market value of the shares on such date. For
this purpose, fair market value shall equal the closing
price of the Common Stock on the Nasdaq National
Market System on the date the option is exercised, or, if
there was no trading in such stock on the date of such
exercise, the closing date on the last preceding day on
which there was such trading.
6. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
Each SAR granted under the Plan shall be granted to
eligible directors in conjunction with options then being granted to such
persons hereunder and shall be evidenced by an SAR agreement in such
form as the Board shall approve from time to time, which agreement
may be incorporated within and made part of an option agreement
referred to in Section 5 and shall conform with this Plan and contain the
following terms and conditions:
(a) Each SAR granted hereunder shall be made
part of an option at the time of grant of the
option.
(b) Such SAR shall entitle the holder to
receive, in lieu of exercising the option to
which it relates, an amount in cash equal to
100% of the excess of:
(1) the fair market value per share of the
Common Stock on the date of exercise
of such right, multiplied by the
number of shares with respect to which
the right is being exercised, over
(2) the aggregate option exercise price for
such number of shares.
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(c) Such SAR shall be exercisable only upon
the occurrence of a change in control
of the Company (as defined in Section 13)
and only to the extent that it has a positive
value as of the date of any such change in
control, except that, notwithstanding the
foregoing, no SAR shall be exercisable
during the first six (6) months after the date
of its grant.
(d) Upon exercise of an SAR, the option (or
portion thereof) with respect to which
such right is exercised shall be surrendered
and shall not thereafter be exercisable.
(e) The exercise of an SAR will reduce the
number of shares purchasable pursuant to
the related option and available under the
Plan to the extent of the number of shares
with respect to which the right is exercised.
7. GENERAL RESTRICTION ON ISSUANCE OF STOCK CERTIFICATES
The Company shall not be required to deliver any
certificate upon the exercise of an option until it has been furnished with
such opinion, representation or other document as it may reasonably
deem necessary to insure compliance with any law or regulation of the
Securities and Exchange Commission or any other governmental
authority having jurisdiction under this Plan. Certificates delivered upon
such exercise may bear a legend restricting transfer absent such
compliance. Each option shall be subject to the requirement that, if at
any time the Board shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to such option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting of such option or
the issue or purchase of shares thereunder, such option may not be
exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Board in the exercise of its
reasonable judgment.
8. TERMINATION OF DIRECTORSHIP
If a director's directorship terminates for any reason
(including, without limitation, resignation or removal), all nonvested
options (and the SARs which relate thereto) shall be forfeited. Vested
but unexercised options (and the SARs which relate thereto) may be
exercised by the director or, in the case of death, by his or her legal
representative or beneficiary in accordance with the terms of the Plan
and the option and SAR agreement.
9. ADJUSTMENT OF SHARES
In the event of any change in the Common Stock by
reason of any stock dividend, stock split, recapitalization,
reorganization, merger, consolidation, split-up, combination, or
exchange of shares, or of any similar change affecting the Common
Stock, the number and kind of shares authorized under Section 4, the
number and kind of shares which thereafter are subject to an option
under the Plan and the number and kind of shares set forth in options
under outstanding agreements and the price per share shall be adjusted
automatically consistent with such change to prevent substantial dilution
or enlargement of the rights granted to, or available for, participants in
the Plan.
10. NO EMPLOYMENT RIGHTS
The Plan and any awards granted under the Plan shall not
confer upon any director any right with respect to continuance as a
director of the Company or any subsidiary, nor shall they interfere in
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any way with any right the Company or its subsidiaries may have to
terminate the director's position as a director at any time.
11. RIGHTS AS A SHAREHOLDER
The recipient of any option under the Plan shall have no
rights as a shareholder with respect thereto unless and until certificates
for the underlying shares of Common Stock are issued to the recipient.
12. AMENDMENT AND DISCONTINUANCE
This Plan may be amended, modified or
terminated by the shareholders of the Company or by the Board,
provided that Plan provisions relating to the amount, price and timing of
awards may not be amended more than once every six months other than
to comport with changes in the Internal Revenue Code or the regulations
thereunder and provided further that the Board may not, without
approval of the shareholders, materially increase the benefits accruing to
participants under the Plan, increase the maximum number of shares as
to which options may be granted under the Plan, change the minimum
exercise price, change the class of eligible persons, extend the period for
which awards may be granted or exercised, change the consideration
payable upon exercise of an SAR, change the terms and conditions upon
which SARs become exercisable, or withdraw the authority to administer
the Plan from the Board. Notwithstanding the foregoing, to the extent
permitted by law, the Board may amend the Plan without the approval of
shareholders, to the extent it deems necessary to cause the Plan to
comply with Securities and Exchange Commission Rule 16b-3 or any
successor rule, as it may be amended from time to time. Except as
required by law, no amendment, modification or termination of the Plan
may, without the written consent of a director to whom any award shall
theretofore have been granted, adversely affect the rights of such
director under such award.
13. CHANGE IN CONTROL
For purposes of the Plan, a "change in control" shall be
deemed to have occurred upon the acquisition of thirty (30%) percent or
more of the Company's outstanding shares of capital stock having
general voting rights by an unaffiliated person, entity or group. The
Board shall promptly notify, in writing, each holder of an outstanding
option or SAR of the occurrence of any such change in control.
Notwithstanding any other provision of the Plan or any option or SAR
agreement, all options and SARs shall become fully exercisable on
receipt of such notice. All outstanding options and SARs shall expire if
not exercised within 30 days of receipt of the notice of a change of
control.
14. EFFECTIVE DATE
The effective date of this Plan is the date of adoption of
this Plan by the shareholders.
15. DEFINITIONS
Any terms or provisions used herein which are defined in
Section 83 of the Internal Revenue Code, as amended, or the regulations
thereunder or corresponding provisions of subsequent laws and
regulations in effect at the time awards are made hereunder, shall have
the meanings as therein defined.
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16. GOVERNING LAW
To the extent not inconsistent with the provisions of the
Internal Revenue Code that relate to non-qualified stock options and
stock appreciation rights, this Plan and any award agreement adopted
pursuant to it shall be construed under the laws of the Commonwealth of
Pennsylvania.
Dated as of October 19, 1995 ARROW INTERNATIONAL, INC.
By: /s/ Marlin Miller, Jr.
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Marlin Miller, Jr.
Chairman, President and
Chief Executive Officer
Date of Shareholder Approval: 1/17/96
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