COLOR SPOT NURSERIES, INC.
STOCK INCENTIVE PLAN
COLOR SPOT NURSERIES, INC.
STOCK INCENTIVE PLAN
TABLE OF CONTENTS
Page
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ARTICLE I ESTABLISHMENT. . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
2.1 "Affiliate". . . . . . . . . . . . . . . . . . . . . . . . . . -1-
2.2 "Agreement" or "Option Agreement" or "Stock Option Agreement". -1-
2.3 "Board of Directors" or "Board". . . . . . . . . . . . . . . . -1-
2.4 "Cause". . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
2.5 "Code" or "Internal Revenue Code". . . . . . . . . . . . . . . -2-
2.6 "Commission" . . . . . . . . . . . . . . . . . . . . . . . . . -2-
2.7 "Committee". . . . . . . . . . . . . . . . . . . . . . . . . . -2-
2.8 "Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . -2-
2.9 "Company". . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
2.10 "Controlled Entity". . . . . . . . . . . . . . . . . . . . . . -2-
2.11 "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.12 "Disinterested Person" . . . . . . . . . . . . . . . . . . . . -3-
2.13 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . -3-
2.14 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.15 "Executive". . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.16 "Exercisable Option" . . . . . . . . . . . . . . . . . . . . . -3-
2.17 "Grant Date" . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.18 "Heller" . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.19 "Incentive Stock Option" . . . . . . . . . . . . . . . . . . . -4-
2.20 "Management Stockholder" . . . . . . . . . . . . . . . . . . . -4-
2.21 "Nonqualified Stock Option". . . . . . . . . . . . . . . . . . -4-
2.22 "Option Period". . . . . . . . . . . . . . . . . . . . . . . . -4-
2.23 "Option Price" . . . . . . . . . . . . . . . . . . . . . . . . -4-
2.24 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
2.25 "Public Offering". . . . . . . . . . . . . . . . . . . . . . . -4-
2.26 "Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . -4-
2.27 "Redemption Event" . . . . . . . . . . . . . . . . . . . . . . -4-
2.28 "Redemption Price" . . . . . . . . . . . . . . . . . . . . . . -5-
2.29 "Representative" . . . . . . . . . . . . . . . . . . . . . . . -5-
2.30 "Rule 16b-3 and Rule 16a-1(c)(3)". . . . . . . . . . . . . . . -6-
2.31 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . -6-
2.32 "Stock Option" or "Option" . . . . . . . . . . . . . . . . . . -6-
2.33 "Stockholders' Agreement". . . . . . . . . . . . . . . . . . . -6-
2.34 "Termination of Employment". . . . . . . . . . . . . . . . . . -6-
2.35 "Vested Option". . . . . . . . . . . . . . . . . . . . . . . . -6-
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Page
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ARTICLE III ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . -6-
3.1 Committee Structure and Authority. . . . . . . . . . . . . . . -6-
ARTICLE IV STOCK SUBJECT TO PLAN . . . . . . . . . . . . . . . . . . . . . -9-
4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . -9-
4.2 Release of Shares. . . . . . . . . . . . . . . . . . . . . . . -9-
4.3 Restrictions on Shares . . . . . . . . . . . . . . . . . . . . -9-
4.4 Stockholder Rights . . . . . . . . . . . . . . . . . . . . . . -10-
4.5 Committee's Right to Adjust. . . . . . . . . . . . . . . . . . -10-
ARTICLE V ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
5.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . -10-
ARTICLE VI STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . -11-
6.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
6.2 Grant and Exercise . . . . . . . . . . . . . . . . . . . . . . -11-
6.3 Terms and Conditions . . . . . . . . . . . . . . . . . . . . . -11-
6.4 Redemption of Options. . . . . . . . . . . . . . . . . . . . . -13-
ARTICLE VII PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THIS PLAN. . . . -13-
7.1 Limited Transfer During Offering . . . . . . . . . . . . . . . -13-
7.2 Restriction on Disposition . . . . . . . . . . . . . . . . . . -13-
7.3 Stockholders' Agreement. . . . . . . . . . . . . . . . . . . . -13-
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . -14-
8.1 Amendments and Termination . . . . . . . . . . . . . . . . . . -14-
8.2 Unfunded Status of Plan. . . . . . . . . . . . . . . . . . . . -14-
8.3 General Provisions . . . . . . . . . . . . . . . . . . . . . . -15-
8.4 Mitigation of Excise Tax . . . . . . . . . . . . . . . . . . . -16-
8.5 Status of Stock Options Under Code Section 162(m). . . . . . . -16-
8.6 Rights with Respect to Continuance of Employment . . . . . . . -16-
8.7 Stock Options in Substitution for Stock Options Granted by
Other Corporations . . . . . . . . . . . . . . . . . . . . . . -17-
8.8 Procedure for Adoption . . . . . . . . . . . . . . . . . . . . -17-
8.9 Procedure for Withdrawal . . . . . . . . . . . . . . . . . . . -17-
8.10 Delay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
8.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
8.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . -17-
8.13 Successors and Assigns . . . . . . . . . . . . . . . . . . . . -18-
8.14 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . -18-
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COLOR SPOT NURSERIES, INC.
STOCK INCENTIVE PLAN
ARTICLE I
ESTABLISHMENT
1.1 PURPOSE.
The Color Spot Nurseries, Inc. Stock Incentive Plan ("Plan") is hereby
established by Color Spot Nurseries, Inc. ("Company"). The purpose of this Plan
is to promote the overall financial objectives of the Company and its
stockholders by motivating those persons selected to participate in this Plan to
achieve long-term growth in stockholder equity in the Company and by retaining
the association of those individuals who are instrumental in achieving this
growth. The Plan and the grant of Options (as hereinafter defined) hereunder is
expressly conditioned upon the Plan's approval by the security holders of the
Company. If such approval is not obtained, then this Plan and all Stock Options
hereunder shall be null and void AB INITIO. This Plan is adopted effective as
of the Effective Date.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms are defined as set forth
below:
2.1 "AFFILIATE" means any individual, corporation, partnership,
association, joint-stock company, limited liability company, trust,
unincorporated association or other entity (other than the Company) that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company including, without
limitation, any member of an affiliated group of which the Company is a common
parent corporation as provided in Section 1504 of the Code.
2.2 "AGREEMENT" or "OPTION AGREEMENT" or "STOCK OPTION AGREEMENT"
means, individually or collectively, any agreement entered into pursuant to this
Plan pursuant to which an Option is granted to an Executive.
2.3 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of
the Company.
2.4 "CAUSE" means
(a) that term as defined in any written agreement or arrangement
of employment between the Company and the Executive, or
(b) if no such written agreement or arrangement exists or such
term is not defined therein, then the occurrence of any of
the following events:
(i) the commission by the Executive of theft or
embezzlement of Company property or other acts of
dishonesty or other crime resulting in injury to
the business, property or reputation of the
Company or the commission by the Executive of
other significant activities harmful to the
business, property or reputation of the Company;
(ii) the commission by the Executive while an employee
of the Company or an Affiliate of an act
determined by the Board (in its sole discretion)
to amount to gross, willful or wanton negligence
of the Executive's duties under the terms of his
or her employment;
(iii) the refusal by the Executive while an employee of
the Company or an Affiliate to perform, or
substantial neglect of, the duties assigned to the
Executive by the Company; and
(iv) any significant violation by the Executive of any
statutory or common law duty of loyalty to the
Company.
2.5 "CODE" or "INTERNAL REVENUE CODE" means the Internal Revenue Code
of 1986, as amended, final Treasury Regulations thereunder and any subsequent
Internal Revenue Code.
2.6 "COMMISSION" means the Securities and Exchange Commission or any
successor agency.
2.7 "COMMITTEE" means the person or persons appointed by the Board of
Directors to administer this Plan, as further described herein.
2.8 "COMMON STOCK" means the shares of the regular voting Common
Stock, par value $.01 per share, of the Company, whether presently or hereafter
issued, and any other stock or security resulting from adjustment thereof as
described hereinafter or the common stock of any successor to the Company which
is designated for the purpose of this Plan.
2.9 "COMPANY" means Color Spot Nurseries, Inc., a Delaware
corporation, and includes any successor or assignee corporation or corporations
into which the Company may be merged, changed or consolidated; any corporation
for whose securities substantially all of the securities of the Company shall be
exchanged; and any assignee of or successor to substantially all of the assets
of the Company.
2.10 "CONTROLLED ENTITY" means any entity purchasing or acquiring all
of the assets of the Company, if, immediately following such purchase or
acquisition, the Management Stockholders or Heller, or a combination of the
Management Stockholders and Heller, own, directly or indirectly, more than fifty
percent (50%) of (a) the then outstanding shares of capital stock, or any other
then outstanding ownership interests, of such entity, and (b) the combined
voting power of the then outstanding securities, or any other then outstanding
interests, entitled to vote generally with respect to the matters relating to
such entity. A "Controlled Entity" shall include, without limitation, an entity
which purchases or acquires all or substantially all of the
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assets of the Company through one or more subsidiaries or controlled entities,
if, immediately following such purchase or acquisition, the Management
Stockholders or Heller, or a combination of the Management Stockholders and
Heller, own the shares of capital stock and voting securities (or any other
ownership or voting interests) of such parent or controlling entity as set forth
in the preceding sentence.
2.11 "DISABILITY" means (a) that term as defined in any written
agreement or arrangement of employment between the Company and the Executive or
(b) if there is no such written agreement or arrangement that defines such term
or such term is not defined therein, then a mental or physical illness that
renders an Executive incapable of performing the Executive's duties for the
Company or an Affiliate. Notwithstanding the foregoing, a Disability shall not
qualify under this Plan if it is the result of (a) a willfully self-inflicted
injury or willfully self-induced sickness; or (b) an injury or disease
contracted, suffered, or incurred, while participating in a criminal offense.
The determination of Disability shall be made by the Committee. The
determination of Disability for purposes of this Plan shall not be construed to
be an admission of disability for any other purpose.
2.12 "DISINTERESTED PERSON" shall have the meaning set forth in Rule
16b-3, or any successor definition adopted by the Commission, and shall mean a
person who is also an "outside director" under Section 162(m) of the Code.
2.13 "EFFECTIVE DATE" means September 7, 1995.
2.14 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.15 "EXECUTIVE" means a person who satisfies the eligibility
conditions of Article V and to whom a Stock Option has been granted by the
Committee under this Plan, and in the event a Representative is appointed for an
Executive or a person becomes a Representative, then the term "Executive" shall
mean such Representative. The term shall also include a trust for the benefit
of the Executive, a partnership all of the interests of which are held by or for
the benefit of the Executive, the Executive's parents, spouse or descendants, or
a custodian under a uniform gifts to minors act or similar statute for the
benefit of the Executive's descendants, to the extent permitted by the Committee
and not inconsistent with Rule 16b-3.
2.16 "EXERCISABLE OPTION" shall mean an outstanding Vested Option with
respect to which an employment term and all other conditions imposed by the Plan
or an Option Agreement have been satisfied, and which the Executive may exercise
pursuant to the Plan and an Option Agreement.
2.17 "GRANT DATE" means the date as of which a Stock Option is granted
for purposes of the Plan.
2.18 "HELLER" means Heller Equity Capital Corporation, a Delaware
corporation, and any successor thereto and any entity controlling, controlled by
or under common control with Heller.
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2.19 "INCENTIVE STOCK OPTION" means any Stock Option intended to be
and designated as an "incentive stock option" within the meaning of Section 422
of the Code.
2.20 "MANAGEMENT STOCKHOLDER" means an employee, officer, director or
independent contractor of the Company who is a stockholder by virtue of shares
of Common Stock issued in connection with employment with the Company as an
Affiliate. A person shall continue as a "Management Stockholder" for purposes
of the Plan as long as the person is an owner of shares of Common Stock even
though he ceases to render services to the Company or an Affiliate.
2.21 "NONQUALIFIED STOCK OPTION" means an Option to purchase Common
Stock in the Company granted under this Plan the taxation of which is pursuant
to Section 83 of the Code.
2.22 "OPTION PERIOD" means the period during which the Option shall be
exercisable in accordance with an Agreement and Article VI.
2.23 "OPTION PRICE" means the price at which the Common Stock may be
purchased under an Option as provided in Section 6.3.
2.24 "PLAN" means this Color Spot Nurseries, Inc. Stock Incentive
Plane, as the same may be amended from time to time.
2.25 "PUBLIC OFFERING" means a public offering of shares of Common
Stock under the Securities Act.
2.26 "PURCHASE PRICE" means the per share value of the Common Stock
based upon of the following calculation: (a) the product of the amount of the
Company's earnings before interest, taxes, depreciation and amortization
(calculated for the twelve (12) month period preceding the date of the event
causing a purchase of the Option ("Valuation Date")) multiplied by five (5),
less (b) all long-term debt (including, without limitation, the average
outstanding amounts under any revolving credit facility of the Company for the
twelve (12) months preceding the Valuation Date), divided by (c) the total
number of the then issued and outstanding shares of Common Stock, determined as
if all then outstanding options (whether or not vested), warrants, debt and
other rights exercisable, convertible or exchangeable into shares of Common
Stock have been exercised, converted or exchanged (as the case may be).
2.27 "REDEMPTION EVENT" means the occurrence of any of the following
events:
(a) the completion of a sale by Heller of all or substantially
all of the shares of Common Stock owned by Heller, other than a sale of
shares of Common Stock by Heller to Management Stockholders or to an
entity which controls, is controlled by or is under common control with
Heller;
(b) the completion of sale or disposition of all or
substantially all of the assets of the Company other than a disposition or
sale of assets to a Controlled Entity; or
(c) the completion of a reorganization, recapitalization, merger
or consolidation of the Company such that Heller and the Management
Stockholders, voting their shares
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of Common Stock together, no longer can elect a majority of the members of
the Board or of a board of directors of the surviving or resulting
corporation or entity.
A Public Offering shall not constitute a Redemption Event.
2.28 "REDEMPTION PRICE" means the following (as the case may be):
(a) In the event the Redemption Event is the event described in
Section 2.27(a), the Redemption Price shall mean the per share price paid
to Heller in connection with Heller's sale of its shares of Common Stock;
(b) In the event the Redemption Event is the event described
in Section 2.27(b) (a "Redemption Sale"), the Redemption Price shall
mean the result of the following calculation: (i) the aggregate
consideration received by the Company in connection with the Redemption
Sale, plus (ii) the aggregate consideration received by the Company in
connection with the liquidation of the remaining assets of the Company
following the Redemption Sale (the "Liquidation Sale"), less (iii) all
expenses incurred in connection with the Redemption Sale and Liquidation
Sale, less (iv) all remaining liabilities of the Company following the
Redemption Sale and the Liquidation Sale (including, without limitation,
all tax liabilities), divided by (v) the total number of the then issued
and outstanding shares of Common Stock, determined as if all the then
outstanding options (whether or not vested), warrants, debt or other
rights exercisable, convertible or exchangeable into shares of Common
Stock have been exercised, converted or exchanged (as the case may be);
or
(c) In the event the Redemption Event is the event described in
Section 2.27(c) (the "Merger Redemption"), the Redemption Price shall be
the Purchase Price
2.29 "REPRESENTATIVE" means
(a) the person or entity acting as the executor or administrator
of an Executive's estate pursuant to the last will and testament of an
Executive or pursuant to the laws of the jurisdiction in which the
Executive had the Executive's primary residence at the date of the
Executive's death;
(b) the person or entity acting as the guardian or temporary
guardian of an Executive;
(c) the person or entity which is the beneficiary of the
Executive upon or following the Executive's death or who has acquired any
right, title or interest in or to the Common Stock or an Option whether
pursuant to community property law or other laws of any jurisdiction by
reason of the death of the Executor; or
(d) any person to whom an Option has been transferred with the
permission of the Committee or by operation of law; provided that only one
of the foregoing shall be the Representative at any point in time as
determined under applicable law and recognized by the Committee.
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2.30 "RULE 16b-3 AND RULE 16a-1(c)(3)" means Rule 16b-3 and Rule
16a-1(c)(3), as promulgated under the Exchange Act, as amended from time to time
and applicable to the Plan and Executive, or any successor thereto.
2.31 "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
2.32 "STOCK OPTION" or "OPTION" means an option granted to an
Executive under Article VI to purchase Common Stock at a specified price during
specified time periods.
2.33 "STOCKHOLDERS' AGREEMENT" means an agreement in substantially the
same form attached as an exhibit to the Option Agreement, the execution of which
is a condition precedent to the Executive's receipt of any shares of Common
Stock hereunder.
2.34 "TERMINATION OF EMPLOYMENT" means the Executive's ceasing to be
an officer, independent contractor, director, trustee or employee of the Company
or of an Affiliate (if the Executive is principally employed by, or principally
renders services to, such Affiliate) as a result of (a) dismissal by the Company
or such Affiliate (with or without Cause), (b) a voluntary resignation by the
Executive, (c) a voluntary retirement by the Executive, or (d) the dissolution
or liquidation of the Company or such Affiliates (other than as a result of a
Redemption Event).
2.35 "VESTED OPTION" shall mean the portion of an Executive's Option
for which the Executive has satisfied a condition of employment or other
obligation specified by the Committee, but which shall be forfeited in the event
the Executive incurs a Termination of Employment for Cause or a Termination of
Employment as a result of a voluntary resignation or retirement or fails to
satisfy some other condition specified by the Committee. If the Executive
incurs a Termination of Employment (for any reason) or dies or is Disabled on or
before a specified date or the satisfaction of any other condition, the portion
of the Option which is not a Vested Option shall be cancelled, and the Executive
shall have no further rights with respect thereto. All of an Option granted to
an Executive shall be a Vested Option on the date of a Redemption Event if the
Executive has not incurred a Termination of Employment (for any reason), died or
incurred a Disability prior to the date of the Redemption Event.
In addition, certain other terms used herein are hereinafter defined.
ARTICLE III
ADMINISTRATION
3.1 COMMITTEE STRUCTURE AND AUTHORITY. This Plan shall be
administered by the Committee which, except as provided herein, shall be
comprised of one or more persons. The Committee shall be the Compensation
Committee of the Board of Directors, unless such committee does not exist or the
Board establishes a committee whose purpose is the administration of this Plan.
In the absence of an appointment, the Board or the portion thereof that is a
Disinterested Person shall be the Committee. A majority of the Committee shall
constitute a quorum at any meeting thereof (including telephone conference) and
the acts of a majority of the
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member present, or acts approved in writing by a majority of the entire
Committee without a meeting, shall be the acts of the Committee for purposes
of this Plan. The Committee may authorize any one or more of its members or
an officer of the Company to execute and deliver documents on behalf of the
Committee. On and after a Public Offering, the Committee shall be comprised
of such number of Disinterested Persons as is required for application of
Rule 16b-3 and the deduction of compensation under Section 162(m) of the
Code. A member of the Committee shall not exercise any discretion respecting
himself or herself under this Plan. The Board shall have the authority ro
remove, replace or fill any vacancy of any member of the Committee upon
notice to the Committee and the affected member. Any member of the Committee
may resign upon notice to the Board. The Committee may allocate among one or
more of its members, or may delegate to one or more of its agents, such
duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to the
terms of this Plan (including, without limitation, Section 8.1):
(a) to select those persons to whom Stock Options may be granted
from time to time;
(b) to determine whether and to what extent Stock Options are to
be granted hereunder;
(c) to determine the number of shares of Common Stock to be
covered by each Stock Option granted hereunder;
(d) to determine the terms and conditions of any Stock Option
granted hereunder (including, but not limited to, the Option Price, the
Option Period, any exercise restriction or limitation and any exercise
acceleration or forfeiture waiver regarding any Stock Option and the shares
of Common Stock relating thereto);
(e) to adjust the terms and conditions, at any time or from time
to time, of any Stock Option;
(f) to provide for the forms of Stock Option Agreement and
Stockholders' Agreement to be utilized in connection with this Plan;
(g) to determine whether an Executive has a Disability;
(h) to determine what securities law requirements are
applicable to this Plan, Stock Options, and the issuance of shares of
Common Stock and to require of an Executive that appropriate action be
taken with respect to such requirements;
(i) to cancel, with the consent of the Executive or as otherwise
provided in this Plan or an Agreement, outstanding Stock Options;
(j) to interpret and make a final determination with respect to
the remaining number of shares of Common Stock available under this Plan;
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(k) to require as a condition of the exercise of a Stock Option
or the issuance or transfer of a certificate of Common Stock, the
withholding from an Executive of the amount of any federal, state or local
taxes as may be necessary in order for the Company or any other employer to
obtain a deduction or as may be otherwise required by law;
(l) to determine whether and with what effect an individual has
incurred a Termination of Employment;
(m) to determine whether the Company or any other person has a
right or obligation to purchase an Option or Common Stock from an Executive
and, if so, the terms and conditions on which such Common Stock is to be
purchased;
(n) to determine the restrictions or limitations on the transfer
of Common Stock;
(o) to determine whether a Stock Option is to be adjusted,
modified or purchased, or is to become fully exercisable, under this Plan
or the terms of an Agreement;
(p) to determine the permissible methods of Stock Option
exercise;
(q) to approve and modify the form and terms of the Stock Option
Agreement or Stockholders' Agreement;
(r) to adopt, amend and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan; and
(s) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan as it
shall, from time to time, deem advisable, to interpret the terms and
provisions of this Plan, any Stock Option Agreement and any Stockholders'
Agreement issued under or in connection with this Plan and to otherwise
supervise the administration of this Plan. The Committee's policies and
procedures may differ with respect to Stock Options granted at different
times or different Executive.
Any determination made by the Committee pursuant to the provisions of
this Plan shall be made in its sole discretion, and in the case of any
determination relating to a Stock Option, may to be made at the time of the
grant of the Stock Option or, unless in contravention of any express term of
this Plan, an Option Agreement or Stockholders' Agreement, at any time
thereafter. All decisions made by the Committee pursuant to the provisions
of this Plan shall be final and binding on all persons, including the Company
and Executive. Any determination shall not be subject to DE NOVO review if
challenged in court.
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ARTICLE IV
STOCK SUBJECT TO PLAN
4.1 NUMBER OF SHARES. Subject to the adjustment under Section 4.5,
the total number of shares of Common Stock reserved and available for
distribution pursuant to Stock Options under this Plan shall be 608,350 shares
of Common Stock authorized for issuance of the Effective Date. Such shares may
consist, in whole of in part, of authorized and unissued shares or treasury
shares. The Board may amend this Plan at any time in order to increase the
number of shares of Common Stock reserved and available for distribution
pursuant to Stock Options under this Plan.
4.2 RELEASE OF SHARES. The Committee shall have full authority to
determine the number of shares of Common Stock available under the Plan, and
in its discretion may include (without limitation) as available for
distribution any shares of Common Stock that have ceased to be subject to a
Stock Option, any shares of Common Stock subject to any Stock Option that are
forfeited, any Stock Option that otherwise terminates without issuance of
shares of Common Stock being made to the Executive, or any shares (whether or
not restricted) of Common Stock that are received by the Company in
connection with the exercise of a Stock Option including the satisfaction of
any tax liability or the satisfaction of a tax withholding obligation. If
any shares could not again be available for Options to a particular Executive
under any applicable law, such shares shall be available exclusively for
Options to Executive who are not subject to such limitations.
4.3 RESTRICTIONS ON SHARES. Shares of Common Stock issued upon
exercise of a Stock Option shall be subject to the terms and conditions
specified herein and to such other terms, conditions and restrictions as the
Committee in its discretion may determine or provide in a Stock Option Agreement
or Stockholders' Agreement. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock, cash or other property prior
to (a) the listing of such shares on any stock exchange (or other public market)
on which the Common Stock may then be listed (or regularly traded), (b) the
completion of any registration or qualification of such shares under federal or
state law, or any ruling or regulation of any government body which the
Committee determines to be necessary or advisable, and (c)) the satisfaction of
any applicable withholding obligation in order for the Company or an Affiliate
to obtain a deduction with respect to the exercise of a Stock Option. The
Company may cause any certificate for any share of Common Stock to be delivered
to be properly marked with a legend or other notation reflecting the limitations
on transfer of such Common Stock as provided in this Plan or as the Committee
may otherwise require. The Committee may require any person exercising a Stock
option to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of the shares
of Common Stock in compliance with applicable law or otherwise. All shares of
Common Stock issued to Executive upon exercise of the Option shall be subject to
the Stockholders' Agreement. No person shall have any right regarding the
registration of shares of Common Stock except and only to the extent expressly
provided in the Stockholders' Agreement and subject to any requirement or
condition imposed by the Company or an underwriter managing an offering of the
Company's securities. Fractional shares shall not be delivered, but shall be
rounded to the next lower whole number of shares with
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appropriate payment for such fractional shares as shall reasonably be
determined by the Committee.
4.4 STOCKHOLDER RIGHTS. No person shall have any rights of a
stockholder as to shares of Common Stock subject to a Stock Option until, after
proper exercise of the Stockholders' Agreement or other action required, such
shares shall have been recorded on the Company's official stockholder records as
having been issued and transferred. Upon exercise of the Stock option or any
portion thereof, the company will have thirty (30) days in which to issue the
shares, and the Executive will not be treated as a stockholder for any purpose
whatsoever prior to such issuance. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date such
shares are recorded as issued and transferred in the Company's official
stockholder records, except as provided herein or in an Agreement.
4.5 COMMITTEE'S RIGHT TO ADJUST. The number of Options granted under
the Plan, the Option Prices of any outstanding Options (or other characteristics
or terms of such Options), the number or class of shares of Common Stock subject
to outstanding Options and the number or class of shares of Common Stock
available for issuance upon exercise of Options may be adjusted by the
Committee, in its sole discretion, if it shall deem such an adjustment to be
necessary or appropriate to reflect any Company stock dividend, stock split or
reverse stock split, any recapitalization, corporate separation or division, or
other change in the capital structure of the Company. Any fractional shares
resulting from adjustment shall be eliminated by rounding to the next lower
whole number of shares with appropriate payment for such fractional share as
shall reasonably be determined by the Board. Nothing in the Plan or a Stock
Option Agreement or Shareholders Agreement shall grant or be implied to grant a
preemption or similar right to a Participant.
ARTICLE V
ELIGIBILITY
5.5 ELIGIBILITY. Except as herein provided, the persons who shall
be eligible to participate in this Plan and be granted Stock Options shall be
those persons who are directors, officers, employees and consultants of the
Company or any subsidiary, who shall be in a position, in the opinion of the
Committee, to make contributions to the growth, management, protection and
success of the Company and its subsidiaries. Of those persons described in
the preceding sentence, the Committee may, from time to time, select persons
to be granted Stock Options and shall determine the terms and conditions with
respect thereto. In making any such selection and in determining the form of
the Stock Option, the Committee may give consideration to the functions and
responsibilities of the person's contributions to the Company and its
subsidiaries, the value of the individual's service to the Company and its
subsidiaries and such other factors deemed relevant by the Committee. The
Committee may designate any person as not eligible to participate in this
Plan if such person would otherwise be eligible to participate in this Plan
(and members of the Committee are expressly excluded to the extent such
persons are intended to be Disinterested Persons).
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ARTICLE VI
STOCK OPTIONS
6.1 GENERAL. The Committee shall have authority to grant Options
under this Plan at any time or from time to time. Stock Options may be granted
alone or in addition to other Stock Options and may be either Incentive Stock
Options or Non-Qualified Stock Options. An Option shall be entitle the Executive
to receive shares of Common Stock upon exercise of such Option, subject to the
Executive's satisfaction in full of any conditions, restrictions or limitations
imposed in accordance with this Plan or an Agreement (the terms and provisions
of which may differ from other Agreements) including without limitation, payment
of the Option Price. After the effective date of a Public Offering, the
Committee may limit the number of Options granted to any Executive during a
certain period.
6.2 GRANT AND EXERCISE. The grant of a Stock Option shall occur as
of the date the Committee determines. Each Option granted under this Plan
shall be evidenced by an Agreement, in a form approved by the Committee,
which shall embody the terms and conditions of such Option and which shall be
subject to the express terms and conditions set forth in this Plan. Such
Agreement shall become effective upon execution by the Executive. Only a
person who is a common-law employee of the Company, any parent corporation of
the Company or a subsidiary (as such terms are defined in Section 424 of the
Code) on the date of grant shall be eligible to be granted an Option which is
intended to be and is an Incentive Stock Option. To the extent that any Stock
Option is not designated as an Incentive Stock Option or even if so
designated does not qualify as an Incentive Stock Option, it shall constitute
a Non-Qualified Stock Option. Anything in this Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, not shall any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan
under Section 422 of the Code or, without consent of the Executive affected,
to disqualify any Incentive Stock Option under such Section 422.
6.3 TERMS AND CONDITIONS. Stock Options shall be subject to such
terms and conditions as shall be determined by the Committee, including the
following:
(a) OPTION PERIOD. The Option Period of each Stock Option shall be
fixed by Committee; provided that no Non-Qualified Stock Option shall be
exercisable more that fifteen (15) years after the date the Stock Option is
granted. In the case of an Incentive Stock Option, the Option Period shall
not exceed ten (10) years from the date of grant or five (5) years in the
case of an individual who owns more than ten percent (10%) of the combined
voting power of all classes of stock of the Company, a corporation which is a
parent corporation of the Company or any subsidiary of the Company (each as
defined in Section 424 of the Code). No Option which is intended to be an
Incentive Stock Option shall be granted more than ten (10) years from the
date this Plan is adopted by the Company or the date this Plan is approved by
the stockholders of the Company, whichever is earlier.
(b) OPTION PRICE. The Option Price per share of the Common Stock
purchasable under an Option shall be determined by the Committee. If such Option
is intended to qualify as an Incentive Stock Option, the Option Price per share
shall be not less than the fair market value
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per share on the date the Option is granted, or where granted to an individual
who owns or who is deemed to own stock possessing more than ten percent (10%) of
the combined voting power of all classes of stock of the Company, a corporation
which is a parent corporation of the Company or any subsidiary of the Company
(each as defined in Section 424 of the Code), not less than one hundred ten
percent (110%) of such fair market value per share.
(c) EXERCISABILITY. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined
by the Committee. Subject to the Plan and unless otherwise provided in an
Agreement, an Option shall be exercisable only during the Option Period, and
only to the extent the Option is a Vested Option and an Exercisable Option.
Unless otherwise provided in an Agreement, the portion of an Option which is
a Vested Option shall be an Exercisable Option if the Executive incurs a
Termination of Employment other than for Cause or other than as a result of
voluntary resignation or retirement or if the Executive dies or incurs a
Disability prior to his Termination of Employment. Unless otherwise provided
in an Agreement, if the Executive incurs a Termination of Employment for
Cause or incurs a Termination of Employment due to a voluntary resignation or
retirement, any Option (whether or not a Vested Option) granted to the
Executive and outstanding shall be cancelled immediately, no payment of any
kind shall be made in respect of the Option and the Executive shall have no
further rights with respect to the Option. If the Committee intends that an
Option be an Incentive Stock Option, the Committee may, in its discretion,
provide that the aggregate fair market value (determined at the Grant Date)
of the Incentive Stock Option which is exercisable for the first time during
the calendar year shall not exceed $100,000.
(d) METHOD OF EXERCISE. Subject to the provisions of this Article VI
and an Agreement, an Executive may exercise Stock Options, in whole or in part,
during the Option Period only after satisfying any conditions to the exercise of
the Option as provided in an Option Agreement or under the Plan, by the
Executive's executing the Stockholders' Agreement and by the Executive's giving
written notice of exercise on a form provided by the Committee (if available) to
the Company specifying the number of shares of Common Stock subject to the Stock
Option to be purchased and such other information as requested by the Committee.
Such notice shall be accompanied by payment in full of the purchase price by
cash or check or such other form or method of payment as the Company may accept.
No shares of Common Stock shall be issued until full payment therefor, as
determined by the Committee, has been made. An Executive shall have all of the
rights of a stockholder of the Company holding the class of Common Stock that is
subject to such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends), when the Executive has given written
notice of exercise, satisfied the conditions to exercise, has paid in full for
such shares and such shares have been recorded on the Company's official
stockholder records as having been issued and transferred.
(e) NON-TRANSFERABILITY OF OPTIONS. Except as provided herein or in
an Agreement and then only consistent with the intent that the Option be an
Incentive Stock Option, no Stock Option or interest therein shall be
transferable by the Executive other than by will or by the laws of descent and
distribution or by a designation of beneficiary effective upon the death of the
Executive, and all Stock Options shall be exercisable during the Executive's
lifetime only by the Executive.
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6.4 REDEMPTION OF OPTIONS.
(a) Upon the occurrence of a Redemption Event, the Executive
shall have the right to cause the Company to redeem the Vested Options that
the Executive may own, and the Company shall redeem such Vested Options,
based upon the terms and conditions specified in the Option Agreement. Unless
provided otherwise in an Option Agreement, the amount to be paid for the
redemption of the Vested Options pursuant to this Section 6.4(a) shall be the
Redemption Price less the Option Price per share.
(b) In the event of Executive's Termination of Employment
other than for Cause or other than as a result of voluntary resignation or
retirement, or if the Executive dies or suffers a Disability (prior to or
after his Termination of Employment), the Company shall have the right to
redeem the Executive's Vested Options on the terms and conditions set forth
in the Option Agreement. Unless provided otherwise in an Option Agreement,
the amount to be paid for the redemption of the Vested Options pursuant to
this Section 6.49(b) shall be the Purchase Price less any Option Price per
share.
ARTICLE VII
PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THIS PLAN
7.1 LIMITED TRANSFER DURING OFFERING. In the event there is an
effective registration statement under the Securities Act pursuant to which
shares of Common Stock shall be offered for sale in an underwritten offering,
an Executive shall not, during the period requested by the underwriters
managing the registered public offering, effect any public sale or
distribution of shares received directly or indirectly pursuant to an
exercise of a Stock Option.
7.2 RESTRICTION ON DISPOSITION. Other than in accordance with the
terms and conditions of this Plan, an Agreement or a Stockholders' Agreement,
any attempted sale, transfer, conveyance, gift, assignment, pledge,
encumbrance, hypothecation, alienation or other disposition of any of the
shares of Common Stock by the Executive is void and transfers no right,
title, or interest in or to such shares of Common Stock, or any portion of
them, to the purported buyer, transferee, donee, assignee, pledgee or
encumbrance holder. Notwithstanding the foregoing or anything to the contrary
contained in an Agreement, the Executive may transfer some or all of the
shares of Common Stock (or any interest therein) to his or her spouse;
provided, however, prior to any such transfer, the Executive's spouse shall
execute and deliver to the Company a counterpart of the Stockholders'
Agreement indicating the spouse's consent to be bound by its terms to the
same extent as the Executive but in any event the Executive's spouse shall be
deemed to be bound by the terms and conditions of the Stockholders' Agreement
to the same extent as the Executive.
7.3 STOCKHOLDERS' AGREEMENT. Shares of common stock issued upon the
exercise of an Option shall be subject to terms and conditions of the
Stockholders' Agreement which may contain such terms as the Committee may
determine.
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ARTICLE VIII
MISCELLANEOUS
8.1 AMENDMENTS AND TERMINATION. The Board may amend, alter, or
discontinue this Plan at any time, but no amendment, alteration or
discontinuation shall be made which would impair the rights of an Executive
under a Stock Option theretofore granted without the Executive's consent,
except such an amendment (a) made to avoid an expense charge to the Company
or an Affiliate, (b) made to qualify the Plan for the exemption provided by
Rule 16b-3, (c) made to prevent the Plan from being disqualified from the
exemption provided by Rule 16b-3 or (d) made to permit the Company or an
Affiliate a deduction under the Code. In addition, no such amendment shall be
made without the approval of the Company's stockholders to the extent such
approval is required by law or agreement. On and after a Public Offering, the
Board may amend the Plan to remove or eliminate the Company's obligation to
purchase, or the obligation of any Executive to sell, the Option.
The Committee may amend this Plan at any time provided that (a) an
amendment shall be subject to the same limitations (and the exceptions to the
limitations) as apply to any amendment by the Board and (b) any amendment
shall be subject to the approval or rejection of the Board.
The Committee may amend the terms of any Stock Option theretofore
granted, prospectively or retroactively, but no such amendment shall impair
the rights of any Executive without the Executive's consent, except such an
amendment (a) made to avoid an expense charge to the Company or an Affiliate,
(b) made to qualify the Plan for the exemption provided by Rule 16b-3, (c)
made to prevent the Plan from being disqualified from the exemption provided
by Rule 16b-3 or (d) made to permit the Company or an Affiliate a deduction
under the Code. In addition, no such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is
required by law or agreement. On and after a Public Offering, the Company may
amend any Option Agreement to remove or eliminate its obligation or the
obligation of Heller to purchase, or the obligation of any Executive to sell
to the Company or Heller, the Option.
Subject to the above provisions, the Board shall have authority to amend
this Plan to take into account changes in law and tax and accounting rules,
as well as other developments and to grant Stock Options which qualify for
beneficial treatment under such rules without stockholder approval.
Notwithstanding anything in the Plan to the contrary, if any right under
this Plan or in an Option Agreement or the Stockholders' Agreement would
cause a transaction to be ineligible for pooling of interest accounting (and
such transaction is otherwise eligible for such accounting treatment), the
Committee may modify or adjust the right so that pooling of interest
accounting shall be available.
8.2 UNFUNDED STATUS OF PLAN. It is intended that this Plan be an
"unfunded" plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the
obligations created under this Plan to deliver Common Stock or make payments;
provided, however, that, unless the Committee otherwise determines, the
existence of such trusts or other arrangements is consistent with the
"unfunded" status of this Plan.
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8.3 GENERAL PROVISIONS.
(a) REPRESENTATION. The Committee may require each
person purchasing or receiving shares pursuant to a Stock Option to
represent to and agree with the Company in writing that such person is
acquiring the shares without a view to the distribution thereof. The
certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.
(b) NO ADDITIONAL OBLIGATION. Nothing contained in this
Plan shall prevent the Company or an Affiliate from adopting other or
additional compensation arrangements for its employees.
(c) WITHHOLDING. No later than the date as of which an
amount first becomes includible in the gross income of the Executive for
Federal income tax purposes with respect to any Stock Option, the
Executive shall pay to the Company (or other entity identified by the
Committee), or make arrangements satisfactory to the Company or other
entity identified by the Committee regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount required in order for the Company
or an Affiliate to obtain a current deduction. Unless otherwise
determined by the Committee, withholding obligations may be settled with
Common Stock, including Common Stock that is part of the Stock Option
that gives rise to the withholding requirement provided that any
applicable requirements under Section 16 of the Exchange Act are
satisfied. The obligations of the Company under this Plan shall be
conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the Executive.
If the Executive disposes of shares of Common Stock acquired pursuant to
an Incentive Stock Option in any transaction considered to be a
disqualifying transaction under the Code, the Executive must give
written notice of such transfer and the Company shall have the right to
deduct any taxes required by law to be withheld from any amounts
otherwise payable to the Executive.
(d) REPRESENTATION. The Committee shall establish such
procedures as it deems appropriate for an Executive to designate a
Representative to whom any amounts payable in the event of the
Executive's death are to be paid.
(e) CONTROLLING LAW. This Plan and all Stock Options made and
actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of California (other than its law
respecting choice of law except in so far as the Delaware General
Corporation law and federal Laws and regulations may be applicable).
This Plan shall be construed to comply with all applicable law, and to
avoid liability to the Company, an Affiliate or an Executive, including,
without limitation, liability under Section 16(b) of the Exchange Act.
(f) OFFSET. Any amounts owed to the Company or an Affiliate
by the Executive of whatever nature may be offset by the Company from
the value of any shares of Common Stock, cash or other thing of value
under this Plan or an Agreement to be transferred to the Executive, and
no shares of Common Stock, cash or other thing of value
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under this Plan or an Option Agreement shall be transferred unless
and until all disputes between the Company and the Executive have been
fully and finally resolved and the Executive has waived all claims to such
against the Company or an Affiliate.
(g) FAIL-SAFE. With respect to persons subject to Section 16 of
the Exchange Act, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or Rule 16a-1(c)(3), as
applicable. To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee. Moreover,
in the event the Plan does not include a provision required by Rule
16b-3 or Rule 16a-1(c)(3), as applicable to be stated therein, such
provision (other than one relating to eligibility requirements, or the
price and amount of Stock Options) shall be deemed to be incorporated by
reference into the Plan with respect to Executives subject to Section 16.
8.4 MITIGATION OF EXCISE TAX. If any payment or right accruing to
an Executive under this Plan (without the application of this Section 8.4),
either alone or together with other payments or rights accruing to the
Executive from the Company or an Affiliate ("Total Payments") would
constitute a "parachute payment" (as defined in Section 280G of the Code and
regulations thereunder), such payment or right shall be reduced to the
largest amount or greatest right that will result in no portion of the amount
payable or right accruing under this Plan being subject to an excise tax
under Section 4999 of the Code or being disallowed as a deduction under
Section 280G of the Code. The determination of whether any reduction in the
rights or payments under this Plan is to apply shall be made by the Committee
in good faith after consultation with the Executive, and such determination
shall be conclusive and binding on the Executive. The Executive shall
cooperate in good faith with the Committee in making such determination and
providing the necessary information for this purpose.
8.5 STATUS OF STOCK OPTIONS UNDER CODE SECTION 162(m). After
Section 162(m) of the Code applies to the Company, it is the intent of the
Company that Stock Options granted to persons who are "covered employees"
within the meaning of the Code Section 162(m) shall constitute "qualified
performance-based compensation" satisfying the requirements of Code Section
162(m). Accordingly, the provisions of the Plan shall be interpreted in a
manner consistent with Code Section 162(m). If any provision of the Plan or
any agreement relating to such Stock Option does not comply or is
inconsistent with the requirements of Code Section 162(m), such provision
shall be construed or deemed amended to the extent necessary to conform to
such requirements.
8.6 RIGHTS WITH RESPECT TO CONTINUANCE OF EMPLOYMENT. Nothing
contained herein shall be deemed to alter the relationship between the
Company or an Affiliate and an Executive, or the contractual relationship
between an Executive and the Company or an Affiliate if there is a written
contract regarding such relationship. Nothing contained herein shall be
construed to constitute a contract of employment between the Company or an
Affiliate and an Executive. The Company or an Affiliate and each of the
Executives continue to have the right to terminate the employment or service
relationship at any time for any reason, except as provided in a written
contract. The Company or an Affiliate shall have no obligation to retain the
Executive in its employ or service as a result of this Plan. There shall be
no inference as to the length of employment or service hereby, and the
Company or an Affiliate reserves the same rights to
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terminate the Executive's employment or service as existed prior to the
individual becoming an Executive in this Plan.
8.7 STOCK OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS. Stock Options may be granted under this Plan from time
to time in substitution for awards held by employees, directors or service
providers of other corporations who are about to become officers, directors
or employees of the Company or an Affiliate as the result of a merger or
consolidation of the employing corporation with the Company or an Affiliate,
or the acquisition by the Company or an Affiliate of the assets of the
employing corporation, or the acquisition by the Company or Affiliate of the
stock of the employing corporation, as the result of which it becomes a
designated employer under this Plan. The terms and conditions of the Stock
Options so granted may vary from the terms and conditions set forth in this
Plan at the time of such grant as the majority of the members of the
Committee may deem appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.
8.8 PROCEDURE FOR ADOPTION. Any Affiliate of the Company may by
resolution of such Affiliate's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the
Board of Directors, adopt this Plan for the benefit of its employees as of
the date specified in the board resolution.
8.9 PROCEDURE FOR WITHDRAWAL. Any Affiliate which has adopted this
Plan may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its
adoption of this Plan.
8.10 DELAY. If at the time an Executive incurs a Termination of
Employment (other than with Cause) or if at the time of a Change in Control,
the Executive is subject to "short-swing" liability under Section 16 of the
Exchange Act, any time period provided for under this Plan or an Agreement to
the extent necessary to avoid the imposition of liability shall be suspended
and delayed during the period the Executive would be subject to such
liability, but not more than six (6) months and one (1) day and not to exceed
the Option Period. The Company shall have the right to suspend or delay any
time period described in this Plan or an Agreement if the Committee shall
determine that the action may constitute a violation of any law or result in
liability under any law to the Company, an Affiliate or a stockholder of the
Company until such time as the action required or permitted shall not
constitute a violation of law or result in liability to the Company, an
Affiliate or a stockholder of the Company. The Committee shall have the
discretion to suspend the application of the provisions of this Plan required
solely to comply with Rule 16b-3 if the Committee shall determine that Rule
16b-3 does not apply to this Plan.
8.11 HEADINGS. The headings contained in this Plan are for
reference purposes only and shall not affect the meaning or interpretation of
this Plan.
8.12 SEVERABILITY. If any provision of this Plan shall for any
reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not effect any other provision hereby, and this Plan
shall be construed as if such invalid or unenforceable provision were omitted.
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8.13 SUCCESSORS AND ASSIGNS. This Plan shall inure to the benefit
of and be binding upon each successor and assign of the Company. All
obligations imposed upon an Executive, and all rights granted to the Company
hereunder, shall be binding upon the Executive's heirs, legal representatives
and successors.
8.14 ENTIRE AGREEMENT. This Plan, the Agreement and the
Stockholders' Agreement, and any documents referenced herein or therein,
constitute the entire agreement with respect to the subject matter hereof and
thereof, provided that in the event of any inconsistency among such
documents, the terms and conditions of the Agreement shall control, followed
by the terms of this Plan.
Executed on this 22nd day of July, 1996.
COLOR SPOT NURSERIES, INC.
By: /s/ [ILLEGIBLE]
-------------------------------
Title: /s/ [ILLEGIBLE]
----------------------------
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