E-Z-EM, Inc.
1983 STOCK OPTION PLAN
(As amended through October 19, 1999)
1. PURPOSE OF PLAN
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The purpose of the Plan is to assist the Company in the continued
employment of valued employees by offering them a greater stake in the Company's
success and a closer identity with it, and to aid in gaining the services of
individuals whose employment would be helpful to the Company and would
contribute to its success.
2. DEFINITIONS
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(a) "Board" means the board of directors of the Parent Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee described in Paragraph 5.
(d) "Company" means E-Z-EM, Inc. and each of its Subsidiary Companies.
(e) "Date of Grant" means the date on which an Option is granted.
(f) "Incentive Stock Option" shall mean an option granted under the Plan,
designated by the Committee at the time of such grant as an Incentive Stock
Option and containing the terms specified herein for Incentive Stock Options.
(g) "Non-Qualified Option" shall mean an option granted under the Plan,
designated by the Committee at the time of such grant as a Non-Qualified Option
and containing the terms specified herein for Non-Qualified Options.
(h) "Option" means any stock option granted under the Plan and described
either in Paragraph 3(a) or 3(b).
(i) "Optionee" means a person to whom an Option has been granted under the
Plan, which Option has not been exercised and has not expired or terminated.
(j) "Parent Company" means E-Z-EM, Inc.
(k) "Shares" means shares of common stock of the Parent Company.
(l) "Subsidiary Companies" means all corporations that, at the time in
question, are subsidiary corporations of the Parent Company within the meaning
of Section 425(f) of the Code.
(m) "Ten Percent Shareholder" means a person who on the Date of the Grant
owns, either directly or within the meaning of the attribution rules contained
in Section 425(d) of the Code, stock possessing more than ten percent of the
total combined voting power of all classes of stock of his or her employer
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corporation or of its parent or subsidiary corporations, as defined respectively
in Sections 425 (e) and (f) of the Code.
(n) "Value" means on any given date, the closing price of the Shares as
reported by NASDAQ, or if listed on a national exchange, the closing price of
the Shares of such exchange on such date.
3. RIGHTS TO BE GRANTED
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Rights that may be granted under the Plan are:
(a) Incentive Stock Options, that give the Optionee the right for a
specified time period to purchase a specified number of Shares for a price not
less than their Value on the Date of Grant; and
(b) Non-Qualified Options, that give the Optionee the right for a specified
time period to purchase a specified number of Shares for a price not less than
their Value on the Date of the Grant.
Options granted prior to and exercised on or after October 26, 1992 are
exercisable for Shares consisting of half Class A Common Stock and half Class B
Common Stock. Options granted on or after October 26, 1992 are exercisable for
Shares consisting of Class B Common Stock only.
4. STOCK SUBJECT TO PLAN
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Not more than 2,400,000 Shares in the aggregate may be issued pursuant to
the Plan upon exercise of Options. If an Option terminates without having been
exercised in whole or part, other Options may be granted covering the Shares as
to which the Options was not exercised. Notwithstanding anything contained in
the Plan to the contrary, no recipient of Options may be granted options to
purchase in excess of twenty-five percent (25%) of the maximum number of Shares
authorized to be issued under the Plan.
5. ADMINISTRATION OF PLAN
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To the extent required by Rule 16b-3 under the Securities Exchange Act of
1934 (or any similar rule of the Securities and Exchange Commission), the Plan
shall be administered by the Compensation Committee, which shall be composed of
two directors of the Parent Company, appointed by the Board.
6. GRANT OF RIGHTS
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The Committee may grant Options to eligible employees of the Company.
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7. ELIGIBILITY
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(a) Options may be granted only to employees of the Company who are
officers or persons whose principal duties consist of supervising the work of
other employees of the Company, including employees who are also directors.
(b) An Incentive Stock Option shall not be granted to a Ten Percent
Shareholder except on such terms concerning the Option Price and period of
exercise as are provided in Paragraph 8 with respect to such a person.
8. OPTION AGREEMENTS AND TERMS
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All options shall be granted within ten years of December 31, 1995 and be
evidenced by option agreements that shall be executed on behalf of the Parent
Company and by the respective Optionees. The terms of each such agreement shall
be determined from time to time by the Committee consistent, however, with the
following:
(a) Option Price. The option price per Share shall be determined by the
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Committee but shall not be less than 100 percent of the Value of the Shares on
the Date of Grant; provided that with respect to any Incentive Stock Options
granted to a Ten Percent Shareholder, the option price per Share shall not be
less than 110 percent of the Value of the Shares on the Date of Grant.
(b) Restriction on Transferability. An Option shall not be transferable
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otherwise than by will or the laws of descent and distribution and, during the
lifetime of the Optionee, shall be exercisable only by him or her. Upon the
death of an Optionee, the person to whom the rights shall have passed by will or
by the laws of descent and distribution may exercise any Options in accordance
with the provisions of Paragraph 8(e).
(c) Payment. Full payment for Shares purchased upon the exercise of an
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Option shall be made in cash or, at the election of the Optionee and subject to
the approval of the Committee, by surrendering Shares with an aggregate Value
equal to the aggregate option price or by delivering such combination of Shares
and cash as the Committee may in its discretion approve.
(d) Issuance of Certificates; Payment of Cash. Only whole Shares shall be
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issuable upon exercise of Options. Any right to a fractional Share shall be
satisfied in cash. Upon payment of the option price, a certificate for the
number of whole Shares and a check for the Value on the date of exercise of the
fractional share to which the Optionee is entitled shall be delivered to such
Optionee by the Parent Company. If listed on a national exchange, the Parent
Company shall not be obligated to deliver any certificates for Shares until such
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Shares have been listed (or authorized for listing upon official notice of
issuance) upon each stock exchange upon which outstanding Shares of such class
at the time are listed nor until there has been compliance with such laws or
regulations as the Parent Company may deem applicable. The Parent Company shall
use its best efforts to effect such listing and compliance.
(e) Periods of Exercise of Options. An Option shall be exercisable in whole
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or in part at such time as may be determined by the Committee and stated in the
option agreement, provided that an Incentive Stock Option shall not be
exercisable after five years from the Date of Grant in the case of an Option
granted to a Ten Percent Shareholder and any other Option shall not be
exercisable after ten years from the Date of Grant in all other cases, except as
provided below:
(i) Subject to the limitations on the exercise of Incentive Stock Options
contained in Paragraph 9, in the event that an Optionee ceases to be employed by
the Company for any reason other than death, an Option shall not be exercisable
after 3 months from the date the Optionee ceases to be employed by the Company;
provided that if such cessation of employment is due to the disability or the
retirement of the Optionee he or she shall have the right to exercise his or her
Options to the extent determined by the Committee in its discretion and set
forth in the option agreement, even if the date of exercise is within any time
period prescribed by the Plan prior to which such Option shall not be
exercisable, provided, however,
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that in no event shall an Incentive Stock Option be exercisable after five years
from the Date of Grant in the case of Ten Percent Shareholder and no other
Option shall be exercisable after ten years from the Date of Grant in all other
cases; and
(ii) In the event that an Optionee ceases to be employed by the Company by
reason of his or her death, an Incentive Stock Option shall not be exercisable
after six months from the date of death and a Non-Qualified Option shall not be
exercisable after one year from the date of death; provided that in such event,
the person to whom the rights of the Optionee shall have passed by will or by
the laws of descent and distribution may exercise any of the descendent's
Options to the extent determined by the Committee in its discretion and set
forth in the option agreement, even if the date of exercise is within any time
period prescribed by the Plan prior to which such Option shall not be
exercisable, and provided that an Incentive Stock Option shall not be
exercisable after five years from the Date of Grant in the case of a Ten Percent
Shareholder and any to her Option shall not be exercisable after ten years from
the Date of
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Grant in all other cases.
(f) Date of Exercise. The date of exercise of an Option shall be the
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date on which written notice of exercise, addressed to the Parent Company at its
main office to the attention of its Treasurer, is hand delivered, telecopied or
mailed, first class postage prepaid; provided that the Parent Company shall not
be obliged to deliver any certificates for Shares pursuant to the exercise of an
Option until the Optionee shall have made payment in full of the option price
for such Shares. Each such exercise shall be irrevocable when given. Each notice
of exercise must state whether the Optionee is exercising an Incentive Stock
Option or a Non-Qualified Option and must include a statement of preference as
to the manner in which payment to the Parent Company shall be made (Shares or
cash or a combination of Shares and cash).
(g) Termination of Status. For the purposes of the Plan a transfer of an
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employee between two employers, each of which is a Company, shall not be deemed
a termination of employment.
(h) No Relation Between Incentive Stock Options and Non-Qualified Options.
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The grant, exercise, termination or expiration of any Incentive Stock Option
granted to an Optionee shall have no effect upon any Non-Qualified Option held
by such Optionee, nor shall the grant, exercise, termination or expiration of
any Non-Qualified Option granted to an Optionee have any effect upon any
Incentive Stock Option held by such Optionee.
(i) Continued Employment. Each Optionee holding an Incentive Stock Option
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shall agree that the Company shall have the right to require him or her to
continue in the service of the Company for such period, not less than two years
from the date the option was granted, as the Board may determine and as may be
stated in the option agreement.
(j) Conversion of Incentive Stock Options. With the consent of the
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Committee, an Optionee holding an Incentive Stock Option may convert such Option
to a Non-Qualified Option in which event, unless otherwise determined by the
Committee and stated in the amended option agreement (i) such Option shall be
exercisable until ten years from the original Date of Grant, (ii) the option
price per Share shall be 100 percent of the Value of the Shares on the original
Date of Grant, and (iii) such Option shall thereupon cease to be an Incentive
Stock Option hereunder and shall be a Non-Qualified Option hereunder.
9. LIMITATION ON EXERCISE OF INCENTIVE STOCK OPTIONS
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The aggregate fair market value (determined as of the time Options are
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granted) of the shares with respect to which Incentive Stock Options may first
become exercisable by an Optionee in any one calendar year under the Plan and
any other plan of his or her employer corporation and its parent subsidiary
corporations, as defined respectively in Sections 425(e) and (f) of the Code,
shall not exceed $100,000. The foregoing limitation shall apply only to
Incentive Stock Options granted under the Plan, and not to any other Options
granted under the Plan.
10. RIGHTS AS STOCKHOLDERS
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An Optionee shall have no rights as a stockholder with respect to any
Shares covered by his or her Options until the date of issuance of a stock
certificate to him or her for such Shares.
11. CHANGES IN CAPITALIZATION
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In the event of a stock dividend, stock split, recapitalization,
combination, subdivision, issuance of rights to all stockholders, or other
similar corporate change, the Board shall make an appropriate adjustment in the
aggregate number of Shares that may be subject to Options, and the number of
Shares subject to, and the option price of, each then-outstanding Option.
12. MERGERS, DISPOSITIONS AND CERTAIN OTHER TRANSACTIONS
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If during the term of any Option the Parent Company or any of the
Subsidiary Companies shall be merged into or consolidated with or otherwise
combined with or acquired by another person or entity, or there is a divisive
reorganization or a liquidation or partial liquidation of the Parent Company,
the Parent Company may choose to take no action with regard to the Options
outstanding or to take any of the following courses of action:
(a) Subject to the limitations on the exercise of Incentive Stock Options
contained in Paragraph 9, not less than 15 days nor more than 60 days prior to
any such transaction all Optionees shall be notified that their Options shall
expire on the 15th day after the date of such notice, in which event all
Optionees shall have the right to exercise all of their Options prior to such
new expiration date;
(b) The Parent Company shall provide in any agreement with respect to any
such merger, consolidation, combination or acquisition that the surviving, new
or acquiring corporation shall grant options to the Optionees to acquire shares
in such corporation with respect to which the excess of the fair market value of
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the shares of such corporation immediately after the consummation of such
merger, consolidation, combination or acquisition over the option price, shall
not be greater than the excess of the Value of the Shares over the option price
of Options, immediately prior to the consummation of such merger, consolidation,
combination or acquisition; or
(c) The Parent Company shall take such other action as the Board shall
determine to be reasonable under the circumstances in order to permit Optionees
to realize the value of rights granted to them under the Plan.
13. PLAN NOT TO AFFECT EMPLOYMENT
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Neither the Plan nor any Option shall confer upon any employee of the
Company any right to continue in the employment of the Company.
14. INTERPRETATION
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The Committee shall have the power to interpret the Plan and to make and
amend rules for putting it into effect and administering it. It is intended that
the Incentive Stock Options shall constitute incentive stock options within the
meaning of Section 422A of the Code, that the Non-Qualified Options shall
constitute property subject to federal income tax pursuant to the provisions of
Section 83 of the Code and that the Plan shall qualify for the exemption
available under Rule 16b-3 (or any similar rule) of the Securities and Exchange
Commission. The provisions of the Plan shall be interpreted and applied insofar
as possible to carry out such intent.
15. AMENDMENTS
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The Plan may be amended by the Board, but any amendment that increases the
aggregate number of Shares that may be issued pursuant to the Plan upon exercise
of Options (otherwise than pursuant to Paragraph 11), that changes the class of
eligible employees, or that otherwise requires the approval of the shareholders
of the Parent Company in order to maintain the exemption available under Rule
16b-3 (or any similar rule) of the Securities and Exchange Commission shall
require the approval of the holders of such portion of the shares of the capital
stock of the Parent Company present and entitled to vote on such amendment as is
required by applicable state law and the terms of Parent Company's capital stock
to make the amendment effective. No outstanding Option shall be affected by any
such amendment without the written consent of the Optionee or other person then
entitled to exercise such Option.
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16. SECURITIES LAWS
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The Committee shall have the power to make each grant under the Plan
subject to such conditions as it deems necessary or appropriate to comply with
the then existing requirements of Rule 16b-3 (or any similar rule) of the
Securities and Exchange Commission.
17. EFFECTIVE DATE AND TERM OF PLAN
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The Plan shall become effective on August 9, 1983, the date on which the
Plan was adopted by the Board and shall expire on December 31, 2005 unless
sooner terminated by the Board. The Board shall submit the Plan to the
shareholders of the Parent Company for their approval at the first annual
meeting of shareholders held after August 8, 1983 unless such shareholders'
approval shall have been obtained prior to such meeting. Any Option granted
before the approval of the Plan by the Parent Company's shareholders shall be
expressly conditioned upon, and shall not be exercisable until, such approval.
If such shareholder approval is not received before August 7, 1984 the Board
shall have the right to terminate the Plan, in which case all Options granted
under the Plan shall expire.
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