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EXHIBIT 10.1
TR FINANCIAL CORP. 1993 INCENTIVE STOCK OPTION PLAN,
AS AMENDED AND RESTATED
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T R FINANCIAL CORP.
1993 INCENTIVE STOCK OPTION PLAN
AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 23, 1997
1. PURPOSE.
The purpose of the T R Financial Corp. 1993 Incentive Stock Option
Plan, as amended and restated as of January 23, 1997 (the "Plan"), is to advance
the interests of T R Financial Corp. (the "Company") and its stockholders by
providing those employees of the Company and its Affiliates, as hereinafter
defined, including Roosevelt Savings Bank (the "Bank"), upon whose judgment.
initiative and efforts the successful conduct of the business of the Company and
its Affiliates largely depends, with additional incentive to perform in a
superior manner. A purpose of the Plan is also to attract people of experience
and ability to the service of the Company and its Affiliates.
2. DEFINITIONS.
The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context:
(a) "Affiliate" means (i) a member of a controlled group of
corporations of which the Company is a member or (ii) an unincorporated trade or
business which is under common control with the Company as determined in
accordance with Section 414(c) of the Code and the regulations issued
thereunder. For purposes hereof, a "controlled group of corporations" shall mean
a controlled group of corporations as defined in Section 1563(a) of the Code
determined without regard to Sections 1563(a)(4) and (e)(3)(C).
(b) "Award" means a grant of Non-Statutory Stock Options, Incentive
Stock Options, and/or Limited Rights under the provisions of this Plan.
(c) "Beneficiary" means the person or persons designated by a
Participant, or otherwise determined to be entitled to a benefit under the Plan,
under Section 14.
(d) "Board of Directors" or "Board" means the board of directors of the
Company.
(e) "Change in Control" means an event of a nature that: (i) would be
required to be reported in response to Item 1(a) of the current report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); (ii) results
in a Change in Control of the Bank or the Company within the meaning of the
Change in Bank Control Act and the Rules and Regulations promulgated by the
Federal Deposit Insurance Corporation (the "FDIC") at 12 C.F.R. ss. 303.4(a)
with respect to the Bank and the Board of Governors of the Federal Reserve
System ("FRB") at 12 C.F.R. ss. 225.41(b) with respect to the Company, as in
effect on the date hereof, but excluding any such Change in Control resulting
from the purchase of securities by the Company's or the Bank's tax-qualified
employee benefit plans and trusts; (iii) results in a transaction requiring
prior FRB approval under the Bank Holding Company Act of 1956, as amended, and
the regulations promulgated thereunder by the FRB at 12 C.F.R. ss. 225.11, as in
effect on the date hereof, except for the Company's acquisition of the Bank and
any transaction resulting from the purchase of securities by the Company's or
the Bank's tax-qualified employee benefit plans and trusts: or (iv) without
limitation, such a Change in Control shall be deemed to have occurred at such
time as (a) any "person"
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(as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Bank or the Company
representing 20% or more of the Bank's or the Company's outstanding securities
except for any securities of the Bank purchased by the Company in connection
with the initial conversion of the Bank from mutual to stock form (the
"Conversion") and any securities purchased by the Company's or the Bank's
tax-qualified employee benefit plans and trusts; or (b) individuals who
constitute the Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Company's stockholders was
approved by the same Nominating Committee serving under an Incumbent Board,
shall be, for purposes of this clause (b), considered as though he were a member
of the Incumbent Board, but excluding, for this purpose, any such person whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or (c) a plan of reorganization. merger,
consolidation, sale of all or substantially all the assets of the Bank or the
Company or similar transaction occurs in which the Bank or Company is not the
resulting entity; or (d) a proxy statement shall be distributed soliciting
proxies from stockholders of the Company, by someone other than the current
management of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or Bank or similar
transaction with one or more corporations as a result of which the outstanding
shares of the class of securities then subject to such plan or transaction are
exchanged for or convened into cash or property or securities not issued by the
Bank or the Company; or (e) a tender offer is made for 20% or more of the voting
securities of the Bank or Company then outstanding.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means a committee consisting of two or more members of
the Board, each of whom (i) is not a current employee of the Company or a
subsidiary thereof, (ii) is not a former employee of the Company who receives
compensation for prior services for the Company (other than benefits under a
tax-qualified retirement plan) during the taxable year, (iii) is not currently
and has not been an officer of the Company or a subsidiary thereof, (iv) does
not receive remuneration or consideration from the Company or a subsidiary
thereof, either directly or indirectly, for services rendered in any capacity
other than as a director and (v) does not possess an interest in any other
transaction, and is not engaged in a business relationship, for which disclosure
would be required pursuant to Item 404(a) or (b) of the proxy solicitation rules
of the Securities and Exchange Commission. Each member of the Committee shall be
a "non-employee director" as such term is defined under Rule 16b-3 under the
Exchange Act and an "outside director" as such term is defined under Section
162(m) of the Code and any regulations thereunder.
(h) "Date of Grant" means the date an Award granted by the Committee is
effective pursuant to the terms hereof.
(i) "Common Stock" means the Common Stock of the Company, par value
$.01 per share.
(j) "Disability" means disability as defined in the Bank's Retirement
Plan, or if not so defined, it shall mean a condition of total incapacity,
mental or physical, preventing further performance of duties with the Company or
the Bank, which the Board shall have determined, on the basis of competent
medical evidence, is likely to be permanent.
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(k) "Fair Market Value" means, with respect to a share of Common Stock
on a specified date:
(i) the final reported sales price on the date in question (or if there
is no reported sale on such date, on the last preceding date on which
any reported sale occurred) as reported in the principal consolidated
reporting system with respect to securities listed or admitted to
trading on the principal United States securities exchange on which the
shares of Common Stock are listed or admitted to trading; or
(ii) if the shares of Common Stock are not listed or admitted to
trading on any such exchange, the closing bid quotation with respect to
a share of Common Stock on such date on the Nasdaq Stock Market, or, if
no such quotation is provided, on another similar system, selected by
the Committee, then in use; or
(iii) if Sections 2(k)(i) and (ii) are not applicable, the fair market
value of a share of Common Stock as the Committee may determine.
For purposes of the grant of Options in the Conversion, Fair Market Value shall
mean the initial public offering price of the Common Stock.
(l) "Incentive Stock Option" means an Option granted by the Committee
to a Participant, which Option is designed as an Incentive Stock Option pursuant
to Section 8.
(m) "Limited Right" means the right to receive an amount of cash based
upon the terms set forth in Section 9.
(n) "Non-statutory Stock Option" means an Option granted by the
Committee to a Participant, which is not designated by the Committee as an
Incentive Stock Option.
(o) "Option" means an Award granted under Section 7 or Section 8.
(p) "Participant" means an employee of the Company or its Affiliates
chosen by the Committee to participate in the Plan.
(q) "Plan" means the T R Financial Corp. 1993 Incentive Stock Option
Plan, as amended from time to time, and may be referred to as the "T R Financial
Corp. 1993 Incentive Stock Option Plan."
(r) "Plan Year(s)" means a calendar year or years commencing on or
after January 1, 1993.
(s) "Retirement" means retirement at the normal or early retirement
date as set forth in the Retirement Plan of Roosevelt Savings Bank in RSI
Retirement Trust, or, if such plan has been terminated, in any other
tax-qualified retirement or pension plan of the Bank.
(t) "Termination for Cause" means the termination upon an intentional
failure to perform stated duties, breach of a fiduciary duty involving personal
dishonesty, which results in material loss to the Company or one of its
Affiliates or willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or a final cease-and-desist order which
results in material loss to the Company or one of its Affiliates.
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3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it sees necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it sees as necessary or advisable. All determinations and interpretations made
by the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
4. TYPES OF AWARDS.
Awards under the Plan may be granted in any one or a combination of:
(a) Non-statutory Stock Options;
(b) Incentive Stock Options; and
(c) Limited Rights
as defined below in paragraphs 7 through 9 of the Plan.
5. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 15, the maximum number of
shares of Common Stock reserved for purchase pursuant to the exercise of Options
granted under the Plan is 1,288,275 shares of Common Stock. These shares of
Common Stock may be either authorized but unissued shares or shares previously
issued and reacquired by the Company. To the extent that Options or Limited
Rights are granted under the Plan, the shares underlying such Options will be
unavailable for future grants under the Plan except that, to the extent that
Options together with any related Limited Rights granted under the Plan
terminate, expire or are cancelled without having been exercised (in the case of
Limited Rights, exercised for cash), new Awards may be made with respect to
these shares.
6. ELIGIBILITY.
Officers and other employees of the Company or its Affiliates shall be
eligible to receive Incentive Stock Options, Non-statutory Stock Options and/or
Limited Rights under the Plan. Directors who are not employees or officers of
the Company or its Affiliates shall not be eligible to receive Awards under the
Plan.
7. NON-STATUTORY STOCK OPTIONS.
7.1 GRANT OF NON-STATUTORY STOCK OPTIONS.
The Committee may, from time to time, grant Non-statutory Stock Options
to eligible employees and, upon such terms and conditions as the Committee may
determine, grant Non-statutory Stock Options in exchange for and upon surrender
of previously granted Awards under this Plan. Non-statutory Stock Options
granted under this Plan are subject to the following terms and conditions:
(a) PRICE. The exercise price per share of Common Stock which shall be
deliverable upon the exercise of each Non-statutory Stock Option shall
be determined by the Committee on the date
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the Option is granted. Such exercise price shall not be less than 100%
of the Fair Market Value of the Company's Common Stock on the Date of
Grant. Shares may be purchased only upon full payment of the exercise
price. Non-statutory Stock Options may be exercised pursuant to a
"cashless exercise" of an Option in accordance with applicable
securities laws. Payment of the exercise price may be made, in whole or
in part through the surrender of shares of the Common Stock of the
Company at the Fair Market Value of such shares on the date of
surrender.
(b) TERMS OF OPTIONS. The term during which each Non-statutory Stock
Option may be exercised shall be determined by the Committee, but in no
event shall a Non-statutory Stock Option be exercisable in whole or in
part more than 10 years from the Date of Grant. The Committee shall
determine the date on which each Non-statutory Stock Option shall
become exercisable and may provide that a Non-statutory Stock Option
shall become exercisable in installments. The shares comprising each
installment may be purchased in whole or in part at any time after such
installment becomes exercisable. The Committee may, in its sole
discretion, accelerate the time at which any Non-statutory Stock Option
may be exercised in whole or in part. Notwithstanding the above, in the
event of a Change in Control of the Company, all Non-statutory Stock
Options shall become immediately exercisable.
(c) TERMINATION OF EMPLOYMENT. Upon the termination of a Participant?s
employment with the Bank or the Company for any reason other than
Disability, Retirement, death, Change in Control or Termination for
Cause, the Participant's Non-statutory Stock Options shall be
exercisable only as to those shares which were immediately purchasable
by the Participant at the date of termination and only for a period of
three months following such termination. In the event of Termination
for Cause, all rights under the Participant's Non-statutory Stock
Options shall expire upon the date of such termination. In the event of
the death, Disability, Change in Control or Retirement of any
Participant, all Non-statutory Stock Options held by the Participant,
whether or not exercisable at such time, shall be exercisable by the
Participant or such Participant's legal representatives or
Beneficiaries for one year or such longer period as determined by the
Committee following the date of the Change in Control or the
Participant's death, Retirement or cessation of employment due to
Disability, provided that in no event shall the period extend beyond
the expiration of the Non-statutory Stock Option term.
8. INCENTIVE STOCK OPTIONS.
8.1 GRANT OF INCENTIVE STOCK OPTIONS.
The Committee may. from time to time, grant Incentive Stock Options to
eligible employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) PRICE. The exercise price per share of Common Stock deliverable
upon the exercise of each Incentive Stock Option shall be not less than
100% of the Fair Market Value of the Company's Common Stock on the Date
of Grant. However, if at the Date of Grant a Participant owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiary
corporation (or, under Section 424(d) of the Code, is deemed to own
stock representing more than 10% of the total combined voting power of
all such classes of stock, by reason of the ownership of such classes
of stock, directly or indirectly, by or for his brothers and sisters
(whether by the whole or half blood), spouse, ancestors and lineal
descendants of such employee, or by or for any corporation,
partnership, estate or trust of which such employee is a shareholder,
partner or beneficiary), the exercise price per share of
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Common Stock deliverable upon the exercise of each Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the
Company's Common Stock on the Date of Grant. Shares may be purchased
only upon payment of the full exercise price. Incentive Stock Options
may be exercised pursuant to a "cashless exercise" of an Option in
accordance with applicable securities laws. Payment of the exercise
price may be made, in whole or in part, through the surrender of shares
of Common Stock of the Company at the Fair Market Value of such shares
on the date of surrender.
(b) AMOUNTS OF OPTIONS. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Committee. In
the case of an Option intended to qualify as an Incentive Stock Option,
the aggregate Fair Market Value (determined as of the time the Option
is granted) of the Common Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by the Participant
during any calendar year (under all plans of the Participant's employer
corporation and its parent and subsidiary corporations) shall not
exceed $100,000. The provisions of this Section 8.1(b) shall be
construed and applied in accordance with Section 422(d) of the Code and
the regulations, if any, promulgated thereunder. To the extent an Award
under this Section 8.1 exceeds this $100,000 limit, the portion of the
Award in excess of such limit shall be deemed a Non-statutory Stock
Option.
(c) TERMS OF OPTIONS. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event
shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. If at the time an Incentive Stock
Option is granted to an employee, the employee owns stock representing
more than 10% of the total combined voting power of the Company or of
its parent or subsidiary corporation (or, under Section 424(d) of the
Code, is deemed to own stock representing more than 10% of the total
combined voting power of all such classes of stock, by reason of the
ownership of such classes of stock, directly or indirectly, by or for
his brothers and sisters (whether by the whole or half blood), spouse,
ancestors and lineal descendants of such employee, or by or for any
corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Stock Option
granted to such employee shall not be exercisable after the expiration
of five years from the Date of Grant. No Incentive Stock Option granted
under this Plan is transferable except by will or the laws of descent
and distribution and is exercisable in his lifetime only by the
employee to whom it is granted.
The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock
Option shall become exercisable in installments. The shares comprising
each installment may be purchased in whole or in part at any time after
such installment becomes purchasable, provided that the amount able to
be first exercised in a given year is consistent with the terms of
Section 422 of the Code. The Committee may, in its sole discretion,
accelerate the time at which any Incentive Stock Option may be
exercised in whole or in part, provided that it is consistent with the
terms of Section 422 of the Code. Notwithstanding the above, in the
event of a Change in Control of the Company, all Incentive Stock
Options shall become immediately exercisable.
(d) TERMINATION OF EMPLOYMENT. Upon the termination of a Participant's
employment with the Company or the Bank for any reason other than
Disability, Retirement, Change in Control, death or Termination for
Cause, the Participant's Incentive Stock Options shall be exercisable
only as to those shares which were immediately purchasable by the
Participant at the date of such termination and only for a period of
three months following such termination. In the event of Termination
for Cause, all rights under the Participant's Incentive Stock Options
shall expire upon
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such termination. In the event of death or Disability of any employee,
all Incentive Stock Options held by such Participant, whether or not
exercisable at such time, shall be exercisable by the Participant or
the Participant's legal representatives or Beneficiaries for one year
following the date of the Participant's death or cessation of
employment due to Disability. Upon termination of the Participant's
service with the Company due to Retirement or a Change in Control, all
Incentive Stock Options held by such Participant, whether or not
exercisable at such time, shall be exercisable for a period of one year
following the date of Participant's cessation of employment; PROVIDED,
HOWEVER, that such Option shall not be eligible for treatment as an
Incentive Stock Option in the event such Option is exercised more than
three months following the date of the Participant's Retirement. In no
event shall the exercise period extend beyond the expiration of the
Incentive Stock Option term.
(e) COMPLIANCE WITH CODE. The Options granted under this Section 8 of
the Plan are intended to qualify as incentive stock options within the
meaning of Section 422 of the Code, but the Company makes no warranty
as to the qualification of any Option as an incentive stock option
within the meaning of Section 422 of the Code.
9. LIMITED RIGHTS.
9.1 GRANT OF LIMITED RIGHTS.
Simultaneously with the grant of any Option, the Committee may grant a
Limited Right with respect to all or some of the shares covered by such Option.
Limited Rights granted under this Plan are subject to the following terms and
conditions:
(a) TERMS OF RIGHTS. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six months from the Date
of Grant of the Limited Right. A Limited Right may be exercised only in
the event of a Change in Control of the Company.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, and only when the Fair Market Value of the
underlying shares on the day of exercise is greater than the exercise
price of the related Option.
Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related
Limited Rights shall terminate. The Limited Rights may be for no more
than 100% of the difference between the exercise price and the Fair
Market Value of the Common Stock subject to the underlying Option. The
Limited Right is transferable only when the underlying Option is
transferable and under the same conditions.
(b) PAYMENT. Upon exercise of a Limited Right, the holder shall
promptly receive from the Company an amount of cash equal to the
difference between the Fair Market Value on the Date of Grant of the
related Option and the Fair Market Value of the underlying shares on
the date the Limited Right is exercised, multiplied by the number of
shares with respect to which such Limited Right is being exercised.
(c) TERMINATION OF EMPLOYMENT. Upon the termination of a Participant's
service for any reason other than Termination for Cause, any Limited
Rights held by the Participant shall then be exercisable for a period
of one year following termination. In the event of Termination for
Cause, all Limited Rights held by the Participant shall expire
immediately. Upon termination of the Participant's employment for
reason of death, Retirement or Disability, all Limited Rights held by
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such Participant shall be exercisable by the Participant or the
Participant's legal representative or Beneficiaries for a period of one
year from the date of such termination. In no event shall the period
extend beyond the expiration of the term of the related Option.
10. SURRENDER OF OPTIONS.
In the event of a Participant's termination of employment as a result
of death, Disability or Retirement, the Participant (or the Participant's
Beneficiaries, personal representative(s), heir(s), or devisee(s)) may, in a
form acceptable to the Committee make application to surrender all or part of
the Options held by such Participant in exchange for a cash payment from the
Company of an amount equal to the difference between the Fair Market Value of
the Common Stock on the date of termination of employment and the exercise price
per share of the Option on the Date of Grant; PROVIDED, HOWEVER, that in the
event of Retirement, the application must be submitted by the Participant within
a "window period" beginning on the third business day following the date of
release of the Company's quarterly and annual earnings statements and ending on
the twelfth business day following such date. Whether the Committee accepts such
application or determines to make payment, in whole or part, is within its
absolute and sole discretion, it being expressly understood that the Committee
is under no obligation to any Participant whatsoever to make such payments. In
the event that the Committee accepts such application and the Company determines
to make payment, such payment shall be in lieu of the exercise of the underlying
Option and such Option shall cease to be exercisable.
11. MAXIMUM LIMITATION ON OPTIONS
Notwithstanding anything contained herein to the contrary, the maximum
number of shares of Common Stock for which Options may be granted to any
Participant during any Plan Year shall not exceed 100,000 shares of Common
Stock.
12. RIGHTS OF A STOCKHOLDER: NONTRANSFERABILITY.
No Participant shall have any rights as a stockholder with respect to
any shares covered by a Non-statutory and/or Incentive Stock Option until the
date of issuance of a stock certificate for such shares. Nothing in this Plan or
in any Award granted confers on any person any right to continue in the
employment of the Company or its Affiliates or to continue to perform services
for the Company or its Affiliates or interferes in any way with the right of the
Company or its Affiliates to terminate a Participant's services as an officer or
other employee at any time.
No Award under the Plan shall be transferable by the optionee other
than by will or the laws of descent and distribution and may only be exercised
during his lifetime by the optionee, or by a guardian or legal representative.
13. AGREEMENT WITH GRANTEES.
Each Award of Options, and/or Limited Rights will be evidenced by a
written agreement, executed by the Participant and the Company or its Affiliates
which describes the conditions for receiving the Awards including the date of
Award, the exercise price, if any, applicable periods, and any other terms and
conditions as may be required by the Board of Directors or applicable securities
law.
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14. DESIGNATION OF BENEFICIARY.
A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any Option or Limited
Rights Award to which the Participant would then be entitled. Such designation
will be made upon forms supplied by and delivered to the Company and may be
revoked in writing. If a Participant fails effectively to designate a
Beneficiary, then the Participant's estate will be deemed to be the Beneficiary.
15. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, the Committee will
make such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock which may be Awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan; or
(c) adjustments in the exercise price of outstanding Incentive and/or
Non-statutory Stock Options, or any Limited Rights attached to such
Options.
No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award.
16. WITHHOLDING.
There may be deducted from each distribution of cash and/or Common
Stock under the Plan the amount of tax required by any governmental authority to
be withheld.
17. AMENDMENT OF THE PLAN.
The Board of Directors may amend, revise or terminate the Plan in whole
or in part at any time; PROVIDED, HOWEVER, that, to the extent required to
comply with Section 162(m) of the Code, no such amendment or revision shall be
effective if it amends a material term of the Plan unless approved by the
holders of a majority of the voting shares of the Company. No such termination,
modification or amendment may affect the rights of a Participant under an
outstanding Award.
18. EFFECTIVE DATE OF PLAN.
The Plan became effective upon the consummation of the Conversion of
the Bank on June 29, 1993 (the "Effective Date") and was approved by the
stockholders of the Company on December 13, 1993. The Plan was amended and
restated as of January 23, 1997 as provided herein, and as so amended and
restated, is effective as of January 23, 1997. Following such date, the Plan, as
amended and restated, will be presented to the stockholders of the Company at
its next annual meeting of stockholders for approval for purposes of: (i)
satisfying one of the requirements of Section 422 of the Code governing the
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tax treatment for Incentive Stock Options; (ii) satisfying one of the
requirements of Section 162(m) of the Code governing the tax deductibility of
certain amounts upon the exercise of certain Non-statutory Stock Options and
Limited Rights; and (iii) maintaining listing on the Nasdaq Stock Market. The
failure to obtain stockholder approval of the Plan, as amended and restated,
will not affect the validity of the Plan prior to its amendment and restatement,
or any Options granted thereunder, and in such event, the Plan as in effect
prior to such amendment and restatement, and any Options granted thereunder,
shall continue in full force and effect.
19. TERMINATION OF THE PLAN.
The right to grant Awards under the Plan will terminate upon the
earlier of 10 years after the Effective Date of the Plan or the issuance of
Common Stock or the exercise of Options or related Limited Rights equivalent to
the maximum number of shares reserved under the Plan as set forth in Section 5.
The Board of Directors has the right to suspend or terminate the Plan at any
time, provided that no such action will, without the consent of a Participant,
adversely affect such Participant's rights under a previously granted Award.
20. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of the State
of Delaware.
21. HEADINGS.
The headings of sections are included solely for convenience of
reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.