[LOGO OF USANA APPEARS HERE]
a Utah corporation
Amended and Restated
Long-Term Stock Investment and Incentive Plan
USANA, Inc. (the "Company" or "USANA") previously adopted its 1995 Long-Term
Stock Investment and Incentive Plan (the "1995 Plan") and the 1995 Directors'
Stock Option Plan ("Directors' Plan"), collectively referred to herein as the
"Prior Plans." The Company has issued options under each of these plans, but
desires now to combine the Prior Plans into one integrated stock option plan.
The currently outstanding option grants will not be altered and will continue in
full force and effect in accordance with their terms. The "plan" referred to in
such agreements, however, will be this Amended and Restated Long-Term Stock
Investment and Incentive Plan (the "Plan" or the "Amended and Restated Plan").
ARTICLE I.
GENERAL
1.1 Purpose. This Plan has been established to: (i) attract and retain
persons eligible to participate in the Plan; (ii) motivate Participants, by
means of appropriate incentives, to achieve long-range goals; (iii) provide
incentive compensation opportunities that are competitive with those of
other similar companies; and (iv) identify the interests of Participants
with Company performance, as reflected in increased shareholder value.
1.2 Eligibility for Participation. Subject to the terms and conditions of the
Plan, the Committee will determine and designate, from time to time, from
among the Eligible Individuals, those persons who will be granted Awards
under the Plan and thereby become "Participants" in the Plan. In making
this selection and in determining the persons to whom awards under the Plan
shall be granted and the form and amount of awards under the Plan, the
Committee shall consider any factors deemed relevant in connection with
accomplishing the purposes of the Plan, including the duties of the
respective persons and the value of their present and potential services
and contributions to the success, profitability and sound growth of the
Company. Awards may be granted as alternatives to or replacement of awards
outstanding under the Plan or any other plan or arrangement of the Company
or a Related Company (including a plan or arrangement of a business or
entity, all or a portion of which is acquired by the Company or a Related
Company).
1.3 Administration (General). The operation and administration of the Plan,
including Awards made under the Plan, shall be subject to the provisions of
Article 2, below, relating to
Operation and Administration. Capitalized terms in the Plan will be defined
as set forth herein, including the definition provisions contained in
Article 5, below.
ARTICLE II
OPERATION AND ADMINISTRATION
2.1 Effective Date and Term of Plan. The Plan shall become effective as of the
23/rd/ day of June 1998 (the "Effective Date"), the date the Plan is
adopted by a majority of the Board and approved by vote of a majority of
the issued and outstanding shares of the Company's Common Stock at the 1998
Annual Meeting of Shareholders. To the extent Awards are made under the
Plan prior to its approval by shareholders (but only if they were not made
pursuant to one of the predecessor plans described above), they shall be
contingent on approval of the Plan by the shareholders of the Company. The
Plan will be unlimited in duration and, in the event of termination of the
Plan, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that, to the extent required by the Code,
no Incentive Stock Options may be granted under the Plan on a date that is
more than ten years from the date the Plan is adopted or, if earlier, the
date the Plan is approved by the shareholders.
2.2 Aggregate Limitation on Awards.
(a) Shares Subject to Plan. Except as may be adjusted pursuant to Section
2.2(c) and Article VI, below, shares of stock which may be issued
under Awards granted under the Plan shall be authorized and unissued
or treasury shares of Common Stock of the Company ("Common Stock").
The number of shares of Common Stock the Company shall reserve for
issuance hereunder, and the maximum number of shares of Common Stock
which may be issued under the Plan, shall not exceed in the aggregate
1,500,000 shares of Common Stock, including (i) any shares of Common
Stock available for future awards under the Prior Plans as of the
Effective Date; and (ii) any shares represented by awards previously
granted under the Prior Plans.
(b) Determination of Maximum. For purposes of calculating the maximum
number of shares of Common Stock which may be issued under the Plan:
(i) Any shares that are forfeited because of the failure to meet an
Award contingency or condition shall again be available for
delivery pursuant to new Awards granted under the Plan. To the
extent any shares of Common Stock covered by an Award are not
delivered to a Participant or beneficiary because the Award is
canceled or forfeited, or the shares are not delivered because
the Award is settled in cash, such shares shall not be deemed
to have been
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delivered for purposes of determining the maximum number of
shares available for delivery under the Plan.
(ii) If the Exercise Price of any Option granted under the Plan or
any Prior Plan is satisfied by tendering shares of Common Stock
to the Company (by either actual delivery or by attestation),
only the number of shares issued net of the shares tendered
will be deemed delivered for purposes of determining the
maximum number of shares available for delivery under the Plan.
(iii) Shares delivered under the Plan in settlement, assumption or
substitution of outstanding awards (or obligations to grant
future awards) under the plans or arrangements of another
entity shall not reduce the maximum number of shares available
for delivery under the Plan, to the extent that such
settlement, assumption or substitution as a result of the
Company or a Related Company acquiring another entity (or an
interest in another entity).
(iv) All shares issued (including the shares, if any, withheld for
tax withholding requirements) as Stock Bonuses shall be
counted.
(c) Certain Adjustments. In the event of a corporate transaction
involving the Company (including, without limitation, any change in
the outstanding Common Stock of the Company by reason of a stock
dividend or distribution, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares or the like), the Committee
may appropriately adjust Awards to preserve the benefits or potential
benefits of the Awards. Action by the Committee may include
adjustment of (i) the number and kind of shares which may be
delivered under the Plan, (ii) the number and kind of shares subject
to Awards theretofore granted under the Plan, (iii) the Exercise
Price of Options and SARs theretofore granted under the Plan; and
(iv) any and all other adjustments that the Committee may determine
to be appropriate and equitable.
(d) Limit on Distribution. Distribution of shares of Common Stock under
the Plan will be subject to the following:
(i) Notwithstanding any other provision of the Plan, the Company
will have no liability to deliver any shares of Common Stock
under the Plan or make any other distribution of benefits under
the Plan unless such delivery or distribution would comply with
all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933, as amended), and
the applicable requirements of any securities exchange or
similar entity.
(ii) To the extent the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Common Stock,
the issuance may be effected on a non-
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certificated basis, to the extent not prohibited by applicable
law or the applicable rules of any stock exchange.
(e) Tax Withholding. Whenever the Company proposes or is required to
issue or deliver shares of Common Stock under the Plan, the Company
may, to the extent permitted or required by law, require the
recipient, as a condition of delivery of the Common Stock, to remit
to the Company or make arrangements satisfactory to the Committee
regarding payment of, any amount sufficient to satisfy any Federal,
state and/or local taxes of any kind, including, but not limited to,
withholding tax requirements prior to the delivery of any certificate
or certificates for such shares. If the recipient fails to pay the
amount required by the Committee, the Company shall have the right to
withhold such amount from other amounts payable by the Company to the
participant, including but not limited to, salary, fees or benefits,
subject to applicable law. Alternatively, the Company may withhold
from the shares to be delivered such shares of Common Stock
sufficient to satisfy all or a portion of the taxes, including, but
not limited to, the withholding tax requirements. For withholding tax
purposes, the shares of Common Stock withheld shall be valued on the
date the withholding obligation is incurred.
(f) Payment Shares. Subject to the overall limitation on the number of
shares that may be delivered under the Plan, the Committee may use
available shares of Common Stock as the form of payment for
compensation, grants or rights earned or due under any other
compensation plans or arrangements of the Company or a Related
Company, including the plans and arrangements of the Company or a
Related Company acquiring another entity (or an interest in another
entity).
(g) Dividends and Dividend Equivalents. An Award may provide the
recipient with the right to receive dividends or dividend equivalent
payments with respect to Common Stock which may be either paid
currently or credited to an account for the Participant, and may be
settled in cash or Common Stock as determined by the Committee. Any
such settlements, and any such crediting of dividends or dividend
equivalents or reinvestment in shares of Common Stock, may be subject
to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts
in Stock equivalents.
(h) Payments. Awards may be settled through cash payments, delivery of
shares of Common Stock, the granting of replacement Awards, or
combination thereof as the Committee shall determine. Any Award
settlement, including payment deferrals, may be subject to such
conditions, restrictions, contingencies as the Committee shall
determine. The Committee may permit or require the deferral of any
Award payment, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such
credits into deferred Common Stock equivalents.
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(i) Transferability. Except as otherwise provided by the Committee,
Awards under the Plan are not transferable except as designated by
the Participant by will or by the laws of descent and distribution.
(j) Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted
modification, or revocation thereof, shall be in writing filed with
the Committee at such times, in such form, and subject to such
restrictions and limitations, not inconsistent with the terms of the
Plan, as the Committee shall require.
(k) Agreement With the Company. At the time of an Award to a Participant
under the Plan, the Committee may require a Participant to enter into
an agreement with the Company (the "Agreement") in a form specified
by the Committee, agreeing to the terms and conditions of the Plan
and to such additional terms and conditions, not inconsistent with
the Plan, as the Committee may, in its sole discretion, prescribe.
(l) Limitation of Implied Rights. Neither a Participant nor any other
person shall, by reason of the Plan, acquire any right in or title to
any assets, funds or property of the Company or any Related Company
whatsoever, including, without limitation, any specific funds,
assets, or other property which the Company or any Related Company,
in their sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual
right to the Common Stock or amounts, if any, payable under the Plan,
unsecured by any assets of the Company or any Related Company.
Nothing contained herein shall constitute a guarantee that the assets
of such companies will be sufficient to pay any benefits to any
person. A Participant shall have no rights as a shareholder with
respect to any Award under the Plan unless and until certificates for
shares of Common Stock are issued to him or her following
satisfaction of all conditions for receipt of such shares. Nothing
herein shall constitute a contract of employment, and selection of a
Participant will not give any person the right to be retained in the
employ or service of the Company or any Related Company, nor any
right or claim to any benefit under the Plan, unless such right or
claim has specifically accrued under the terms of the Plan.
(m) Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include
the plural and the plural shall include the singular.
(n) Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed,
made or presented by the proper party or parties.
2.3 Administration.
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(a) The Board of Directors of USANA (the "Board") shall appoint a
Committee consisting of two or more directors to administer the Plan
(the "Committee"). Any Committee member shall also be a member of the
Board. Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time, the Board may
increase or change the size of the Committee, and appoint new members
thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies, however caused, or
remove all members of the Committee.
(b) The Committee shall have the authority without limitation, in its
sole discretion, subject to and not inconsistent with the express
provisions of the Plan, to manage and control the operation and
administration of the Plan, including the authority to:
(i) administer the Plan and to exercise all the powers and
authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan;
(ii) designate the employees or classes of employees eligible to
participate in the Plan;
(iii) grant Awards provided in the Plan in such form, amount and
under such terms as the Committee shall determine;
(iv) determine the purchase price of shares of Common Stock covered
by each Award;
(v) determine the Fair Market Value of Common Stock for purposes of
Options or of determining the appreciation of Common Stock with
respect to Stock Appreciation Rights;
(vi) determine the time or times at which Options and/or Stock
Appreciation Rights shall be granted;
(vii) determine the terms and provisions of the various agreements
(none of which need be identical or uniform) evidencing Awards
granted under the Plan and to impose such limitations,
restrictions and conditions upon any such Award as the
Committee shall deem appropriate; and
(viii) interpret the Plan, adopt, amend and rescind rules and
regulations relating to the Plan, and make all other
determinations and take all other action necessary or advisable
for the implementation and administration of the Plan.
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(c) The Committee may delegate to one or more of its members or to one or
more agents such administrative duties as it may deem advisable, and
the Committee or any delegate may employ one or more persons to
render advice with respect to any responsibility the Committee or
such person may have under the Plan.
(d) All decisions, determinations and interpretations of the Committee on
all matters relating to the Plan shall be in its sole discretion and
shall be final, binding and conclusive on all Participants and the
Company.
(e) One member of the Committee shall be elected by the Board as
Committee Chairman. The Committee shall hold its meetings at such
times and places as it shall deem advisable. All determinations of
the Committee shall be made by a majority of its members either
present in person or participating by conference telephone at a
meeting or by written consent. The Committee may appoint a secretary
and make such rules and regulations for the conduct of its business
as it shall deem advisable, and shall keep minutes of its meetings.
(f) No member of the Board or Committee shall be liable for any action
taken or decision or determination made in good faith with respect to
any Award or the Plan.
ARTICLE III
STOCK OPTIONS AND SARS
3.1 Definitions of Stock Options and SARs.
(a) Options. An Option entitles the Participant to purchase shares of the
Company's Common Stock at an Exercise Price established by the
Committee. Options may be either Incentive Stock Options or Non-
Qualified Stock Options, as determined in the discretion of the
Committee. Incentive Stock Options are Options that are intended to
satisfy the requirements applicable to "incentive stock options"
described in (S)422(b) of the Code. Non-Qualified Stock Options are
options that are not intended to be incentive stock options as
defined in (S)422(b) of the Code.
(b) SARs. A stock appreciation right (SAR) entitles the Participant to
receive, in cash or shares of Common Stock (as determined in
accordance with Section 3.5, below, value equal to all or a portion
of the excess of: (i) the Fair Market Value of a specified number of
shares of Common Stock at the time of exercise, over (ii) an Exercise
Price established by the Committee.
3.2 Exercise Price. The Exercise Price of each Option and SAR granted under
this section of the Plan shall be established by the Committee or
determined by a method established by the Committee at the time the Option
or the SAR is granted; except that the Exercise Price shall not be less
than 100% of the Fair Market Value of a share of Common Stock as of the day
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the Option or SAR is granted (the "Pricing Date"), except that the
Committee may provide that: (i) the Pricing Date is the date on which the
recipient is hired or promoted (or similar event) if the grant of the
Option or SAR occurs not more than 90 days after the date of such hiring,
promotion or other event; and (ii) if an Option or SAR is granted in tandem
with, or in substitution for, an outstanding award, the Pricing Date may be
the date of grant of such outstanding Award.
3.3 Term and Exercise. Each Stock Option and SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee. Unless the agreement by which the Award is
granted specifies to the contrary, however, the following shall apply to
Awards made to employees of the Company or a Related Company:
(a) No Option may be exercised by an employee Participant: (i) prior to the
date on which the Participant completes one continuous year of
employment with the Company or any Related Company after the date as of
which the Option is granted (provided, however, that the Committee may
permit earlier exercise following the Participant's Date of Termination
by reason of death or Disability); or (ii) after the Expiration Date
applicable to that Option;
(b) Expiration Date. The "Expiration Date" with respect to an Option means
the date established as the Expiration Date by the Committee at the
time of the grant; provided, however, that the Expiration Date with
respect to any Option shall not be later than the earliest to occur of:
(i) the ten-year anniversary date on which the Option is granted;
(ii) if the Participant's Date of Termination occurs by reason of
death or Disability, the one-year anniversary of such Date of
Termination;
(iii) if the Participant's Date of Termination occurs by reason of
Retirement, the three-year anniversary of such Date of
Termination; or
(iv) if the Participant's Date of Termination occurs for reasons
other than Retirement, death or Disability, the 90-day
anniversary of such Date of Termination.
(c) For purposes of the foregoing subsections only: (i) "Retirement" of a
Participant shall mean the occurrence of the Participant's Date of
Termination after completing at least five years of service with the
Company or a Related Company and attaining age 65; and (ii)
"Disability" shall mean a person's inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or that has lasted or can be expected to last for a continuous period
of not less than six months.
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(d) Nothing in the Plan or in any agreement entered into pursuant to the
Plan shall confer upon any Participant the right to continue in the
employment of the Company or a Related Company or otherwise affect any
right which the Company may have to terminate the employment of such
Participant.
3.4 Manner of Payment of Option Exercise Price. The payment of the Exercise
Price of an Option granted hereunder shall be subject to the following:
(a) Subject to the following provisions of this Section 3.4, the full
Exercise Price for shares of Common Stock purchased upon the exercise
of any Option shall be paid at the time of such exercise (except that,
in the case of an exercise arrangement approved by the Committee and
described in 3.4(c), below, payment may be made as soon as practicable
after the exercise).
(b) The Exercise Price shall be payable in cash or by tendering shares of
Common Stock (by either actual delivery of shares or by attestation,
with such shares valued at Fair Market Value as of the date of
exercise), or in any combination thereof, as determined by the
Committee.
(c) The Committee may permit a Participant to elect to pay the Exercise
Price upon the exercise of an Option by authorizing a third party to
sell shares of Common Stock (or a sufficient portion of the shares)
acquired upon exercise of the Option and remit to the Company a
sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
3.5 Settlement of Award. Distribution following exercise of an Option or SAR,
and shares of Common Stock distributed pursuant to such exercise, shall be
subject to such conditions, restrictions and contingencies as the Committee
may establish. Settlement of SARs may be made in shares of Common Stock
(valued at their Fair Market Value at the time of exercise), in cash, or in
a combination thereof, as determined in the discretion of the Committee.
The Committee, in its discretion, may impose such conditions, restrictions
and contingencies with respect to shares of Common Stock acquired pursuant
to the exercise of an Option or an SAR as the Committee determines to be
desirable.
3.6 Authorization of Reload Options. Concurrently with the award of Options
under the Plan, the Committee may, subject to the provisions of the Plan
and such other terms and conditions as the Committee may prescribe,
authorize reload options to purchase for cash or for Company shares a
number of shares of Common Stock allotted by the Committee ("Reload
Options"). The number of Reload Options shall equal (i) the number of
shares of Common Stock used to exercise the underlying Options and (ii) to
the extent authorized by the Committee, the number of shares of Common
Stock used to satisfy any tax withholding requirement incident to the
exercise of the underlying Options. The grant of a Reload Option will
become effective upon the exercise of underlying Options or other Reload
Options
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through the use of shares of Common Stock held by the Participant for at
least 12 months. Notwithstanding the fact that the underlying Option may be
an Incentive Stock Option, a Reload Option is not intended to qualify as an
"incentive stock option" under (S)422 of the Code. Each stock option
agreement shall state whether the Committee has authorized Reload Options
with respect to the underlying Options. Upon the exercise of an underlying
Option or other Reload Option, the Reload Option will be evidenced by an
amendment to the underlying agreement. The Exercise Price of a Reload
Option shall be the Fair Market Value of a share of Common Stock on the
date the grant of the Reload Option becomes effective, unless the Committee
shall determine, in its sole discretion, that there are circumstances which
reasonably justify the establishment of a lower Option Price. The term of a
Reload Option will terminate with the termination or expiration of the
underlying Option.
3.7 Other Stock Awards. The Committee may from time to time, and subject to the
provisions of the Plan and such other terms and conditions as the Committee
may prescribe, grant to a Participant as compensation the number of shares
of Common Stock allotted by the Committee ("Stock Bonuses"). Stock awarded
as a Stock Bonus shall be subject to the terms, conditions and restrictions
determined by the Committee at the time of the award. The Committee may
require the recipient to sign an agreement as a condition of the award. The
agreement may contain such terms, conditions, representations, and
warranties as the Committee may require.
ARTICLE IV
AMENDMENT AND TERMINATION
The Board of Directors may, at any time, without further action by the
shareholders and without receiving further consideration from the participants,
amend this Plan or condition or modify awards under this Plan in response to
changes in securities, tax or other laws or rules, regulations or regulatory
interpretations thereof applicable to this Plan or to comply with stock exchange
rules or requirements. Without shareholder approval the Committee may not
increase the maximum number of shares of Common Stock which may be issued under
the Plan (other than increases pursuant to adjustments required by certain
business combinations, stock splits or similar transactions). The termination or
any modification or amendment of the Plan, except as provided in the first
sentence of this Article, shall not without the consent of a Participant, affect
his other rights under an award previously granted to him or her. Each Award
under the Plan shall be subject to the requirement that, if at any time the
Committee shall determine that (i) the listing, registration or qualification of
the shares of Common Stock subject or related thereto upon any securities
exchange or under any state or Federal law, or (ii) the consent or approval of
any government regulatory body, or (iii) an agreement by the Participant with
respect to the disposition of shares of Common Stock, is necessary or desirable
as a condition of, or in connection with, the granting of such Award or the
issue or purchase of shares of Common Stock thereunder, such Award may not be
exercised or consummated in whole or in part unless and until such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.
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ARTICLE V
DEFINED TERMS
As used in this Plan, the words and phrases listed below shall be defined as
follows:
(a) Award means any award or benefit granted to any Participant under the
Plan, including, without limitation, the grant of Options, SARs and
Stock Awards.
(b) Board means the Board of Directors of the Company.
(c) Code means the Internal Revenue Code of 1986, as amended. A reference
to any provision of the Code shall include reference to any successor
provision of the Code.
(d) Eligible Individual means any director, key executive, management
employee, employee, or consultant of the Company or a Related Company.
(e) Fair Market Value per share in respect of any share of Common Stock as
of any particular date means (i) the closing sales price per share of
Common Stock reflected on a national securities exchange for the last
preceding date on which there was a sale of such Common Stock on such
exchange; or (ii) if the shares of Common Stock are then traded on an
over-the-counter market, the average of the closing bid and asked
prices for the shares of Common Stock in such over-the-counter market
for the last preceding date on which there was a sale of such Common
Stock in such market; or (iii) in case no reported sale takes place,
the average of the closing bid and asked prices on the National
Association of Securities Dealers' Automated Quotation System
("Nasdaq") or any comparable system, or if the shares of Common Stock
are not listed on Nasdaq or comparable system, the closing sale price
or, in case no reported sale takes place, the average of the closing
bid and asked prices, as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by
the Company for that purpose; or (iv) if the shares of Common Stock
are not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Committee in its discretion
may determine in any such other manner as the Committee may deem
appropriate. In no event shall the Fair Market Value of any share of
Common Stock be less than its par value. In the case of Incentive
Stock Options, the Fair Market Value shall not be discounted for
restrictions, lack of marketability and other such limitations on the
enjoyment of the Common Stock. In the case of other type of Options,
the Fair Market Value of the Common Stock shall be so discounted.
(f) Option means any Non-Qualified Stock Option, Incentive Stock Option or
Reload Option.
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(g) Related Company means any company during any period in which it is a
"parent company" as that term is defined in Code (S)422(e) with
respect to the Company, or a "subsidiary corporation" as that term is
defined in Code (S)422(f) with respect to the Company.
(h) Common Stock means the common stock of the Company, no par value.
ARTICLE VI
GENERAL TERMS AND CONDITIONS
Unless otherwise stated herein and in the agreement by which an Award is
granted, the following shall apply to all Awards granted hereunder.
6.1 Non-transferability. Awards granted under the Plan shall not be
transferable other than (i) by will; (ii) by the laws of descent and
distribution; or (iii) to a revocable inter vivos trust for the primary
benefit of the Participant and his or her spouse. Awards may be exercised
during the lifetime of the Participant only by the Participant, his or her
guardian, legal representative or the Trustee of an above described trust.
Except as permitted by the preceding sentences, no Award granted under the
Plan or any of the rights and privileges thereby conferred shall be
transferred, assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise), and no such Award, right, or privilege
shall be subject to execution, attachment, or similar process. Upon any
attempt so to transfer, assign, pledge, hypothecate, or otherwise dispose
of the Option, or of any right or privilege conferred thereby, contrary to
the provisions of this Plan, or upon the levy of any attachment or similar
process upon such Award, right, or privilege, the Award and such rights and
privileges shall immediately become null and void.
6.2 Effect of Certain Changes.
(a) If there is any change in the number of shares of Common Stock through
the declaration of stock dividends, or through recapitalization
resulting in stock splits, or combinations or exchanges of such
shares, the number of shares of Common Stock available for awards
under the Plan, the number of such shares covered by outstanding
Awards and the Exercise Price of such Awards shall be proportionately
adjusted by the Committee to reflect any increase or decrease in the
number of issued shares of Common Stock; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated.
(b) In the event of the proposed dissolution or liquidation of the
Company, in the event of any corporate separation or division,
including, but not limited to split-up, split-off or spin-off, or in
the event of a merger, consolidation or other reorganization of the
Corporation with another corporation, the Committee may provide that
the holder of each Award then exercisable shall have the right to
exercise such Award (at its then
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Exercise Price) solely for the kind and amount of shares of stock and
other securities, property, cash or any combination thereof receivable
upon such dissolution, liquidation, or corporate separation or
division, or merger, consolidation or other reorganization by a holder
of the number of shares of Common Stock for which such Award might
have been exercised immediately prior to such dissolution,
liquidation, or corporate separation or division, or merger,
consolidation or other reorganization; or the Committee may provide,
in the alternative, that each Award granted under the Plan shall
terminate as of a date to be fixed by the Committee; provided,
however, that not less than 90-days' written notice of the date so
fixed shall be given to each Participant, who shall have the right,
during the period of 90 days preceding such termination, to exercise
the Awards as to all or any part of the shares of Common Stock covered
thereby, including shares as to which such Awards would not otherwise
be exercisable; provided, further, that failure to provide such notice
shall not invalidate or affect the action with respect to which such
notice was required.
(c) If while unexercised Awards remain outstanding under the Plan, the
stockholders of the Corporation approve a definitive agreement to
merge, consolidate or otherwise reorganize the Company with or into
another corporation or to sell or otherwise dispose of all or
substantially all of its assets, or adopt a plan of liquidation (each,
a "Disposition Transaction"), then the Committee may: (i) make an
appropriate adjustment to the number and class of shares available for
awards under the Plan and to the amount and kind of shares or other
securities or property (including cash) receivable upon exercise of
any outstanding Awards after the effective date of such transaction,
and the price thereof, or, in lieu of such adjustment, provide for the
cancellation of all Awards outstanding at or prior to the effective
date of such transaction; (ii) provide that exercisability of all
Awards shall be accelerated, whether or not otherwise exercisable; or
(iii) in its discretion, permit Participants to surrender outstanding
Awards for cancellation. Upon any cancellation of an outstanding Award
pursuant to this section, the Participant shall be entitled to
receive, in exchange therefor, a cash payment under any such Award in
an amount per share determined by the Committee in its sole
discretion, but not less than the difference between the per share
exercise price of such Award and the Fair Market Value of a share of
Company Common Stock on such date as the Committee shall determine.
(d) Paragraphs (b) and (c) of this Section shall not apply to a merger,
consolidation or other reorganization in which the Company is the
surviving corporation and shares of Common Stock are not converted
into or exchanged for stock, securities of any other corporation, cash
or any other thing of value. Notwithstanding the preceding sentence,
in case of any consolidation, merger or other reorganization of
another corporation into the Company in which the Company is the
surviving corporation and in which there is a reclassification or
change (including a change to the right to receive cash or other
property) of the shares of Common Stock (other than a change in par
value, or from par value to no par value, or as a result of a
subdivision or
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combination, but including any change in such shares into two or more
classes or series of shares), the Committee may provide that the
holder of each Award then exercisable shall have the right to exercise
such Award solely for the kind and amount of shares of stock and other
securities (including those of any new direct or indirect parent of
the Company), property, cash or any combination thereof receivable
upon such reclassification, change, consolidation or merger by the
holder of the number of shares of Common Stock for which such Award
might have been exercised.
(e) In the event of a change in the Common Stock of the Company as
presently constituted which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from
any such change shall be deemed to be the Common Stock within the
meaning of the Plan.
(f) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding
and conclusive, provided that each Incentive Stock Option granted
pursuant to this Plan shall not be adjusted in a manner that causes
such option to fail to continue to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code.
(g) Except as hereinbefore expressly provided in this Section, the
Participant shall have no rights by reason of any subdivision or
consolidation of shares of stock or any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, merger, consolidation or other reorganization or spin-off
of assets or stock of another corporation; and any issue by the
Company of shares of stock of any class shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number
of price of shares of Common Stock subject to the Award. The grant of
an Award pursuant to the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures or to
merge or to consolidate or to dissolve, liquidate or sell, or transfer
all or part of its business or assets.
6.3 Rights as a Shareholder. A Participant shall have no right as a shareholder
with respect to any shares covered by an Award until the date of the
issuance of a certificate evidencing shares purchased pursuant to and in
accordance with such Award. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property)
or distribution of other rights for which the record date is prior to the
date such certificate is issued, except as provided in Section 6.2 hereof.
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6.4 Other Provisions. Any agreement evidencing an Award under the Plan shall
contain such other provisions, including, without limitation, (i) the
imposition of restrictions upon the exercise of an Award; (ii) in the case
of an Incentive Stock Option, the inclusion of any condition not
inconsistent with such Option qualifying as an Incentive Stock Option; and
(iii) conditions relating to compliance with applicable federal and state
securities laws, as the Committee shall deem advisable.
6.5 Non-Uniform Determinations. The Committee's determinations under the Plan
(including without limitation determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the agreements evidencing same) need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, awards under the Plan, whether or not such persons are
similarly situated.
6.6 Fractional Shares. Fractional shares shall not be granted under any Award
under this Plan, unless the provision of the Plan which authorizes such
Award also specifies the terms under which fractional shares or interests
may be granted.
ADOPTED BY RESOLUTION OF THE BOARD OF DIRECTORS, EFFECTIVE THE 23/RD/ DAY OF
JUNE 1998.
, Secretary
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