EXHIBIT 10.9
EPITOPE, INC.
AMENDED AND RESTATED 1991 STOCK AWARD PLAN
ARTICLE 1
ESTABLISHMENT AND PURPOSE
1.1 Establishment; Amendment and Restatement. Epitope, Inc. ("Corporation"),
hereby establishes the Epitope, Inc., 1991 Stock Award Plan (the "Plan"),
effective as of January 8, 1991, subject to shareholder approval as provided in
Article 17. The Plan was previously amended and restated effective March 25,
1991, December 8, 1992, December 14, 1993, and December 13, 1994, and is further
amended and restated as set forth herein effective December 17, 1996.
1.2 Purpose. The purpose of the Plan is to promote and advance the interests of
Corporation and its shareholders by enabling Corporation to attract, retain, and
reward key employees, outside advisors, and directors of Corporation and its
subsidiaries. It is also intended to strengthen the mutuality of interests
between such employees, advisors, and directors and Corporation's shareholders.
The Plan is designed to meet this intent by offering stock options and other
equity-based incentive awards, thereby providing a proprietary interest in
pursuing the long-term growth, profitability, and financial success of
Corporation.
ARTICLE 2
DEFINITIONS
2.1 Defined Terms. For purposes of the Plan, the following terms shall have the
meanings set forth below:
"Advisor" means a member of an Advisory Committee of Corporation or a
Subsidiary, or any other consultant selected by the Committee, who is neither an
employee of Corporation or a Subsidiary nor a Non-Employee Director.
"Advisory Committee" means a scientific advisory committee to Corporation or a
Subsidiary.
"Agritope Share" means a share of Agritope Stock.
"Agritope Stock Proposal Date" means the effective date of the amendment of
Corporation's Articles of Incorporation to create Agritope Stock and to
redesignate Corporation's previously existing common stock as Medical Products
Stock.
"Agritope Stock" means the Agritope Common Stock, no par value, of Corporation
or any security of Corporation issued in substitution, exchange, or in lieu of
such stock.
"Award" means an award or grant made to a Participant of Options, Stock
Appreciation Rights, Restricted Awards, Performance Awards, or Other Stock-Based
Awards pursuant to the Plan.
"Award Agreement" means an agreement as described in Section 6.4.
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"Board" means the Board of Directors of Corporation.
"Code" means the Internal Revenue Code of 1986, as amended and in effect from
time to time, or any successor thereto, together with rules, regulations, and
interpretations promulgated thereunder. Where the context so requires, any
reference to a particular Code section shall be construed to refer to the
successor provision to such Code section.
"Committee" means the committee appointed by the Board to administer the Plan as
provided in Article 3 of the Plan.
"Common Stock" means the Common Stock, no par value, of Corporation or any
security of Corporation issued in substitution, exchange, or in lieu of such
stock. For all periods after the Agritope Stock Proposal Date, references in
this Plan to Common Stock include either Agritope Stock, Medical Products Stock,
or both, as the context may require.
"Continuing Restriction" means a Restriction contained in Sections 6.5(h), 16.4,
16.5, and 16.7 of the Plan and any other Restrictions expressly designated by
the Committee in an Award Agreement as a Continuing Restriction.
"Corporation" means Epitope, Inc., an Oregon corporation, or any successor
corporation.
"Deferred Compensation Option" means a Nonqualified Option granted with an
option price less than Fair Market Value on the date of grant pursuant to
Section 7.9 of the Plan.
"Disability" means the condition of being "disabled" within the meaning of
Section 422(c)(7) of the Code. However, the Committee may change the foregoing
definition of "Disability" or may adopt a different definition for purposes of
specific Awards.
"Exchange Act" means the Securities Exchange Act of 1934, as amended and in
effect from time to time, or any successor statute. Where the context so
requires, any reference to a particular section of the Exchange Act, or to any
rule promulgated under the Exchange Act, shall be construed to refer to
successor provisions to such section or rule.
"Fair Market Value" means with respect to either Agritope Shares or Medical
Products Shares, on a particular day, without regard to any restrictions (other
than a restriction which, by its terms, will never lapse), the mean between the
reported high and low sale prices, or, if there is no sale on such day, the mean
between the reported bid and asked prices, of Shares of the applicable class on
that day or, if that day is not a trading day, the last prior trading day, on
the securities exchange or automated securities interdealer quotation system on
which such Shares shall have been traded.
"Incentive Stock Option" or "ISO" means any Option granted pursuant to the Plan
that is intended to be and is specifically designated in its Award Agreement as
an "incentive stock option" within the meaning of Section 422 of the Code.
"Medical Products Share" means a share of Medical Products Stock.
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"Medical Products Stock" means the Epitope Medical Products Common Stock, no par
value, of Corporation or any security of Corporation issued in substitution,
exchange, or in lieu of such stock.
"Non-Employee Director" means a member of the Board who is not an employee of
Corporation or any Subsidiary.
"Nonqualified Option" or "NQO" means any Option, including a Deferred
Compensation Option, granted pursuant to the Plan that is not an Incentive Stock
Option.
"Option" means an ISO, an NQO, or a Deferred Compensation Option.
"Other Stock-Based Award" means an Award as defined in Section 11.1.
"Participant" means an employee of Corporation or a Subsidiary, an Advisor, or a
Non-Employee Director who is granted an Award under the Plan.
"Performance Award" means an Award granted pursuant to the provisions of Article
10 of the Plan, the Vesting of which is contingent on performance attainment.
"Performance Cycle" means a designated performance period pursuant to the
provisions of Section 10.3 of the Plan.
"Performance Goal" means a designated performance objective pursuant to the
provisions of Section 10.4 of the Plan.
"Plan" means this Epitope, Inc., 1991 Stock Award Plan, as amended and restated
and set forth herein and as it may be hereafter amended from time to time.
"Reporting Person" means a Participant who is subject to the reporting
requirements of Section 16(a) of the Exchange Act.
"Restricted Award" means a Restricted Share or a Restricted Unit granted
pursuant to Article 9 of the Plan.
"Restricted Share" means an Award described in Section 9.1(a) of the Plan.
"Restricted Unit" means an Award of units representing Shares described in
Section 9.1(b) of the Plan.
"Restriction" means a provision in the Plan or in an Award Agreement which
limits the exercisability or transferability, or which governs the forfeiture,
of an Award or the Shares, cash, or other property payable pursuant to an Award.
"Retirement" means:
(a) For Participants who are employees, retirement from active employment
with Corporation and its Subsidiaries at or after age 50, or such earlier
retirement date as approved by the Committee for purposes of the Plan;
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(b) For Participants who are Non-Employee Directors, termination of
membership on the Board after attaining age 50, or such earlier retirement
date as approved by the Committee for purposes of the Plan; and
(c) For Participants who are Advisors, termination of service as an Advisor
after attaining age 50, or such earlier retirement date as approved by the
Committee for purposes of the Plan.
However, the Committee may change the foregoing definition of "Retirement" or
may adopt a different definition for purposes of specific Awards.
"Share" means a share of Common Stock. For all periods after the Agritope Stock
Proposal Date, references in this Plan to Shares include either Agritope Shares,
Medical Products Shares, or both, as the context may require.
"Stock Appreciation Right" or "SAR" means an Award to benefit from the
appreciation of Common Stock granted pursuant to the provisions of Article 8 of
the Plan.
"Subsidiary" means a "subsidiary corporation" of Corporation within the meaning
of Section 425 of the Code, namely any corporation in which Corporation directly
or indirectly controls 50 percent or more of the total combined voting power of
all classes of stock having voting power.
"Vest" or "Vested" means:
(a) In the case of an Award that requires exercise, to be or to become
immediately and fully exercisable and free of all Restrictions (other than
Continuing Restrictions);
(b) In the case of an Award that is subject to forfeiture, to be or to
become nonforfeitable, freely transferable, and free of all Restrictions
(other than Continuing Restrictions);
(c) In the case of an Award that is required to be earned by attaining
specified Performance Goals, to be or to become earned and nonforfeitable,
freely transferable, and free of all Restrictions (other than Continuing
Restrictions); or
(d) In the case of any other Award as to which payment is not dependent
solely upon the exercise of a right, election, exercise, or option, to be
or to become immediately payable and free of all Restrictions (except
Continuing Restrictions).
2.2 Gender and Number. Except where otherwise indicated by the context, any
masculine or feminine terminology used in the Plan shall also include the
opposite gender; and the definition of any term in Section 2.1 in the singular
shall also include the plural, and vice versa.
ARTICLE 3
ADMINISTRATION
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3.1 General. Except as provided in Section 3.7, the Plan shall be administered
by a Committee composed as described in Section 3.2.
3.2 Composition of the Committee. The Committee shall be appointed by the Board
from among its members in a number and with such qualifications as will meet the
requirements for approval by a committee pursuant to Rule 16b-3 under the
Exchange Act. The Board may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, however caused, shall be
filled by the Board. The initial members of the Committee shall be the members
of Corporation's existing Executive Compensation Committee. The Board may at any
time replace the Executive Compensation Committee with another Committee. In the
event that the Executive Compensation Committee shall cease to satisfy the
requirements of Rule 16b-3, the Board shall appoint another Committee satisfying
such requirements.
3.3 Authority of the Committee. The Committee shall have full power and
authority (subject to such orders or resolutions as may be issued or adopted
from time to time by the Board) to administer the Plan in its sole discretion,
including the authority to:
(a) Construe and interpret the Plan and any Award Agreement;
(b) Promulgate, amend, and rescind rules and procedures relating to the
implementation of the Plan;
(c) With respect to employees and Advisors:
(i) Select the employees and Advisors who shall be granted Awards;
(ii) Determine the number and types of Awards to be granted to each
such Participant;
(iii) Determine the number of Shares, or Share equivalents, to be
subject to each Award and whether the Shares subject to an Award are
to be Agritope Shares, Medical Products Shares, or a combination of
both;
(iv) Determine the option price, purchase price, base price, or
similar feature for any Award; and
(v) Determine all the terms and conditions of all Award Agreements,
consistent with the requirements of the Plan.
Decisions of the Committee, or any delegate as permitted by the Plan, shall be
final, conclusive, and binding on all Participants.
3.4 Action by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. Action approved by a
majority of the members present at any meeting at which a quorum is present, or
action in writing by all the members of the Committee, shall be the valid acts
of the Committee.
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3.5 Delegation. Notwithstanding the foregoing, the Committee may delegate to
one or more officers of Corporation the authority to determine the recipients,
types, amounts, and terms of Awards granted to Participants who are not
Reporting Persons.
3.6 Liability of Committee Members. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan, any
Award, or any Participant.
3.7 Awards to Non-Employee Directors. The Board may grant Awards from time to
time to Non-Employee Directors. Awards to Non-Employee Directors shall be
governed by and shall be subject to the terms and conditions set forth in an
Award Agreement in a form approved by the Board.
3.8 Costs of Plan. The costs and expenses of administering the Plan shall be
borne by Corporation.
ARTICLE 4
DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN
4.1 Duration of the Plan. The Plan is effective January 8, 1991, subject to
approval by Corporation's shareholders as provided in Article 17. The Plan shall
remain in effect until Awards have been granted covering all the available
Shares or the Plan is otherwise terminated by the Board. Termination of the Plan
shall not affect outstanding Awards.
4.2 Shares Subject to the Plan.
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4.2.1 General. The shares which may be made subject to Awards under
the Plan shall be Shares of Common Stock, which may be either authorized
and unissued Shares or reacquired Shares. No fractional Shares shall be
issued under the Plan. If an Award under the Plan is canceled or expires
for any reason prior to having been fully Vested or exercised by a
Participant or is settled in cash in lieu of Shares or is exchanged for
other Awards, all Shares covered by such Awards shall be made available for
future Awards under the Plan. Furthermore, any Shares used as full or
partial payment to Corporation by a Participant of the option, purchase, or
other exercise price of an Award and any Shares covered by a Stock
Appreciation Right which are not issued upon exercise shall become
available for future Awards.
4.2.2 Medical Products Shares. The maximum number of Medical Products
Shares for which Awards may be granted under the Plan shall be 3,400,000
Medical Products Shares, plus the number of Shares which were available for
grant under Corporation's Incentive Stock Option Plan for Key Employees of
Epitope, Inc. (the "ISOP"), on January 8, 1991, subject to adjustment
pursuant to Article 14.
4.2.3 Agritope Shares. The maximum number of Agritope Shares for
which Awards may be granted under the Plan shall be (i) 1,000,000 Agritope
Shares plus (ii) that number of Agritope Shares which is one-half of the
number of shares of Epitope Common Stock (rounded down to the nearest whole
number) subject to outstanding Options under the Plan on the Agritope Stock
Proposal Date, in each case subject to adjustment pursuant to Article 14.
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4.2.4 Availability of Shares for Future Awards. If an Award under the
Plan or under the ISOP is canceled or expires for any reason prior to
having been fully Vested or exercised by a Participant or is settled in
cash in lieu of Shares or is exchanged for other Awards, all Shares covered
by such Awards shall be made available for future Awards under the Plan.
Furthermore, any Shares used as full or partial payment to Corporation by a
Participant of the option, purchase, or other exercise price of an Award
and any Shares covered by a Stock Appreciation Right which are not issued
upon exercise shall become available for future Awards.
ARTICLE 5
ELIGIBILITY
5.1 Employees and Advisors. Officers and other key employees of Corporation and
its Subsidiaries (who may also be directors of Corporation or a Subsidiary) and
Advisors who, in the Committee's judgment, are or will be contributors to the
long-term success of Corporation shall be eligible to receive Awards under the
Plan.
5.2 Non-Employee Directors. All Non-Employee Directors shall be eligible to
receive Awards as provided in Section 3.7 of the Plan.
ARTICLE 6
AWARDS
6.1 Types of Awards. The types of Awards that may be granted under the Plan
are:
(a) Options governed by Article 7 of the Plan;
(b) Stock Appreciation Rights governed by Article 8 of the Plan;
(c) Restricted Awards governed by Article 9 of the Plan;
(d) Performance Awards governed by Article 10 of the Plan; and
(e) Other Stock-Based Awards or combination awards governed by Article 11
of the Plan.
In the discretion of the Committee, any Award may be granted alone, in addition
to, or in tandem with other Awards under the Plan.
6.2 General. Subject to the limitations of the Plan, the Committee may cause
Corporation to grant Awards to such Participants, at such times, of such types,
in such amounts, for such periods, with such option prices, purchase prices, or
base prices, and subject to such terms, conditions, limitations, and
restrictions as the Committee, in its discretion, shall deem appropriate. Awards
may be granted as additional compensation to a Participant or in lieu of other
compensation to such Participant. A Participant may receive more than one Award
and more than one type of Award under the Plan.
6.3 Nonuniform Determinations. The Committee's determinations under the Plan or
under one or more Award Agreements, including without limitation, (a) the
selection of Participants to
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receive Awards, (b) the type, form, amount, and timing of Awards, (c) the terms
of specific Award Agreements, and (d) elections and determinations made by the
Committee with respect to exercise or payments of Awards, need not be uniform
and may be made by the Committee selectively among Participants and Awards,
whether or not Participants are similarly situated.
6.4 Award Agreements. Each Award shall be evidenced by a written Award
Agreement between Corporation and the Participant. Award Agreements may, subject
to the provisions of the Plan, contain any provision approved by the Committee.
6.5 Provisions Governing All Awards. All Awards shall be subject to the
following provisions:
(a) Type of Shares. Each Award Agreement shall specify whether the Award
covers Agritope Shares, Medical Products Shares, or a specified combination
of both.
(b) Alternative Awards. If any Awards are designated in their Award
Agreements as alternative to each other, the exercise of all or part of one
Award automatically shall cause an immediate equal (or pro rata)
corresponding termination of the other alternative Award or Awards.
(c) Rights as Shareholders. No Participant shall have any rights of a
shareholder with respect to Shares subject to an Award until such Shares
are issued in the name of the Participant.
(d) Employment Rights. Neither the adoption of the Plan nor the granting of
any Award shall confer on any person the right to continued employment with
Corporation or any Subsidiary or the right to remain as a director of
Corporation or a member of any Advisory Committee, as the case may be, nor
shall it interfere in any way with the right of Corporation or a Subsidiary
to terminate such person's employment or to remove such person as an
Advisor or as a director at any time for any reason, with or without cause.
(e) Termination Of Employment. The terms and conditions under which an
Award may be exercised, if at all, after a Participant's termination of
employment or service as an Advisor or as a Non-Employee Director shall be
determined by the Committee and specified in the applicable Award
Agreement.
(f) Change in Control. The Committee, in its discretion, may provide in any
Award Agreement that in the event of a change in control of Corporation (as
the Committee may define such term in the Award Agreement), as of the date
of such change in control:
(i) All, or a specified portion of, Awards requiring exercise shall
become fully and immediately exercisable, notwithstanding any other
limitations on exercise;
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(ii) All, or a specified portion of, Awards subject to Restrictions
shall become fully Vested; and
(iii) All, or a specified portion of, Awards subject to Performance
Goals shall be deemed to have been fully earned.
The Committee, in its discretion, may include change in control provisions in
some Award Agreements and not in others, may include different change in control
provisions in different Award Agreements, and may include change in control
provisions for some Awards or some Participants and not for others.
(g) Reporting Persons. With respect to all Awards granted to Reporting
Persons, the Award Agreement shall provide that:
(i) Awards requiring exercise shall not be exercisable until at least
six months after the date the Award was granted, except in the case of
the death or Disability of the Participant; and
(ii) Shares issued pursuant to any other Award may not be sold by the
Participant for at least six months after acquisition, except in the
case of the death or Disability of the Participant;
provided, however, that (unless an Award Agreement provides otherwise) the
limitation of this Section 6.5(g) shall apply only if or to the extent required
by Rule 16b-3 under the Exchange Act or any applicable successor provision.
Award Agreements for Awards to Reporting Persons shall also comply with any
future restrictions imposed by such Rule 16b-3.
(h) Service Periods. At the time of granting Awards, the Committee may
specify, by resolution or in the Award Agreement, the period or periods of
service performed or to be performed by the Participant in connection with
the grant of the Award.
ARTICLE 7
OPTIONS
7.1 Types of Options. Options granted under the Plan may be in the form of
Incentive Stock Options or Nonqualified Options (including Deferred Compensation
Options). The grant of each Option and the Award Agreement governing each Option
shall identify the Option as an ISO or an NQO. In the event the Code is amended
to provide for tax-favored forms of stock options other than or in addition to
Incentive Stock Options, the Committee may grant Options under the Plan meeting
the requirements of such forms of options.
7.2 General. Options shall be subject to the terms and conditions set forth in
Article 6 and this Article 7 and shall contain such additional terms and
conditions, not inconsistent with the express provisions of the Plan, as the
Committee (or the Board with respect to Awards to Non-Employee Directors) shall
deem desirable.
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7.3 Option Price. Each Award Agreement for Options shall state the option
exercise price per Share of Common Stock purchasable under the Option, which
shall not be less than:
(a) $1 per share in the case of a Deferred Compensation Option;
(b) 75 percent of the Fair Market Value of a Share on the date of grant for
all other Nonqualified Options; or
(c) 100 percent of the Fair Market Value of a Share on the date of grant
for all Incentive Stock Options.
7.4 Option Term. The Award Agreement for each Option shall specify the term of
each Option, which may be unlimited or may have a specified period during which
the Option may be exercised, as determined by the Committee.
7.5 Time of Exercise. The Award Agreement for each Option shall specify, as
determined by the Committee:
(a) The time or times when the Option shall become exercisable and whether
the Option shall become exercisable in full or in graduated amounts over a
period specified in the Award Agreement;
(b) Such other terms, conditions, and restrictions as to when the Option
may be exercised as shall be determined by the Committee; and
(c) The extent, if any, to which the Option shall remain exercisable after
the Participant ceases to be an employee, Advisor, or director of
Corporation or a Subsidiary.
An Award Agreement for an Option may, in the discretion of the Committee,
provide whether, and to what extent, the Option will become immediately and
fully exercisable (i) in the event of the death, Disability, or Retirement of
the Participant, or (ii) upon the occurrence of a change in control of
Corporation.
7.6 Method of Exercise. The Award Agreement for each Option shall specify the
method or methods of payment acceptable upon exercise of an Option. An Award
Agreement may provide that the option price is payable in full in cash or, at
the discretion of the Committee:
(a) In installments on such terms and over such period as the Committee
shall determine;
(b) In previously acquired Shares (including Restricted Shares);
(c) By surrendering outstanding Awards under the Plan denominated in Shares
or in Share-equivalent units;
(d) By delivery (in a form approved by the Committee) of an irrevocable
direction to a securities broker acceptable to the Committee:
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(i) To sell Shares subject to the Option and to deliver all or a part
of the sales proceeds to Corporation in payment of all or a part of
the option price and withholding taxes due; or
(ii) To pledge Shares subject to the Option to the broker as security
for a loan and to deliver all or a part of the loan proceeds to
Corporation in payment of all or a part of the option price and
withholding taxes due; or
(e) In any combination of the foregoing or in any other form approved by
the Committee.
If Restricted Shares are surrendered in full or partial payment of an Option
price, a corresponding number of the Shares issued upon exercise of the Option
shall be Restricted Shares subject to the same Restrictions as the surrendered
Restricted Shares.
7.7 Special Rules for Incentive Stock Options. In the case of an Option
designated as an Incentive Stock Option, the terms of the Option and the Award
Agreement shall be in conformance with the statutory and regulatory requirements
specified in Section 422 of the Code, as in effect on the date such ISO is
granted. ISOs may be granted only to employees of Corporation or a Subsidiary.
ISOs may not be granted under the Plan after January 8, 2001, unless the
ten-year limitation of Section 422(b)(2) of the Code is removed or extended.
7.8 Restricted Shares. In the discretion of the Committee, the Shares issuable
upon exercise of an Option may be Restricted Shares if so provided in the Award
Agreement.
7.9 Deferred Compensation Options. The Committee may, in its discretion, grant
Deferred Compensation Options with an option price less than Fair Market Value
to provide a means for deferral of compensation to future dates. The option
price shall be determined by the Committee subject to Section 7.3(a) of the
Plan. The number of Shares subject to a Deferred Compensation Option shall be
determined by the Committee, in its discretion, by dividing the amount of
compensation to be deferred by the difference between the Fair Market Value of a
Share on the date of grant and the option price of the Deferred Compensation
Option. Amounts of compensation deferred with Deferred Compensation Options may
include amounts earned under Awards granted under the Plan or under any other
compensation program or arrangement of Corporation as permitted by the
Committee. The Committee shall grant Deferred Compensation Options only if it
reasonably determines that the recipient of such an Option is not likely to be
deemed to be in constructive receipt for income tax purposes of the income being
deferred.
7.10 Reload Options. The Committee, in its discretion, may provide in an Award
Agreement for an Option that in the event all or a portion of the Option is
exercised by the Participant using previously acquired Shares, the Participant
shall automatically be granted a replacement Option (with an option price equal
to the Fair Market Value of a Share on the date of such exercise) for a number
of Shares equal to (or equal to a portion of) the number of shares surrendered
upon exercise of the Option. Such reload Option features may be subject to such
terms and conditions as the Committee shall determine, including without
limitation, a condition that the Participant retain the Shares issued upon
exercise of the Option for a specified period of time.
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7.11 Limitation on Number of Shares Subject to Options. In no event may options
for more than 500,000 Shares be granted to any individual under the Plan during
any fiscal year period.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1 General. Stock Appreciation Rights shall be subject to the terms and
conditions set forth in Article 6 and this Article 8 and shall contain such
additional terms and conditions, not inconsistent with the express terms of the
Plan, as the Committee (or the Board with respect to Awards to Non-Employee
Directors) shall deem desirable.
8.2 Nature of Stock Appreciation Right. A Stock Appreciation Right is an Award
entitling a Participant to receive an amount equal to the excess (or if the
Committee shall determine at the time of grant, a portion of the excess) of the
Fair Market Value of a Share of Common Stock on the date of exercise of the SAR
over the base price, as described below, on the date of grant of the SAR,
multiplied by the number of Shares with respect to which the SAR shall have been
exercised. The base price shall be designated by the Committee in the Award
Agreement for the SAR and may be the Fair Market Value of a Share on the grant
date of the SAR or such other higher or lower price as the Committee shall
determine.
8.3 Exercise. A Stock Appreciation Right may be exercised by a Participant in
accordance with procedures established by the Committee. The Committee may also
provide that a SAR shall be automatically exercised on one or more specified
dates or upon the satisfaction of one or more specified conditions. In the case
of SARs granted to Reporting Persons, exercise of the SAR shall be limited by
the Committee to the extent required to comply with the applicable requirements
of Rule 16b-3 under the Exchange Act.
8.4 Form of Payment. Payment upon exercise of a Stock Appreciation Right may be
made in cash, in installments, in Shares, by issuance of a Deferred Compensation
Option, or in any combination of the foregoing, or in any other form as the
Committee shall determine.
ARTICLE 9
RESTRICTED AWARDS
9.1 Types of Restricted Awards. Restricted Awards granted under the Plan may be
in the form of either Restricted Shares or Restricted Units.
(a) Restricted Shares. A Restricted Share is an Award of Shares transferred
to a Participant subject to such terms and conditions as the Committee
deems appropriate, including, without limitation, restrictions on the sale,
assignment, transfer, or other disposition of such Restricted Shares and
may include a requirement that the Participant forfeit such Restricted
Shares back to Corporation upon termination of Participant's employment (or
service as an Advisor) for specified reasons within a specified period of
time or upon other conditions, as set forth in the Award Agreement for such
Restricted Shares. Each Participant receiving a Restricted Share shall be
issued a stock certificate in respect of such Shares, registered in the
name of such Participant, and shall execute a stock power in blank with
respect to the Shares evidenced by such certificate. The certificate
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evidencing such Restricted Shares and the stock power shall be held in
custody by Corporation until the Restrictions thereon shall have lapsed.
(b) Restricted Units. A Restricted Unit is an Award of units (with each
unit having a value equivalent to one Share) granted to a Participant
subject to such terms and conditions as the Committee deems appropriate,
and may include a requirement that the Participant forfeit such Restricted
Units upon termination of Participant's employment (or service as an
Advisor) for specified reasons within a specified period of time or upon
other conditions, as set forth in the Award Agreement for such Restricted
Units.
9.2 General. Restricted Awards shall be subject to the terms and conditions of
Article 6 and this Article 9 and shall contain such additional terms and
conditions, not inconsistent with the express provisions of the Plan, as the
Committee (or the Board with respect to Awards to Non-Employee Directors) shall
deem desirable.
9.3 Restriction Period. Restricted Awards shall provide that such Awards, and
the Shares subject to such Awards, may not be transferred, and may provide that,
in order for a Participant to Vest in such Awards, the Participant must remain
in the employment (or remain as an Advisor) of Corporation or its Subsidiaries,
subject to relief for reasons specified in the Award Agreement, for a period
commencing on the date of the Award and ending on such later date or dates as
the Committee may designate at the time of the Award (the "Restriction Period").
During the Restriction Period, a Participant may not sell, assign, transfer,
pledge, encumber, or otherwise dispose of Shares received under or governed by a
Restricted Award grant. The Committee, in its sole discretion, may provide for
the lapse of restrictions in installments during the Restriction Period. Upon
expiration of the applicable Restriction Period (or lapse of Restrictions during
the Restriction Period where the Restrictions lapse in installments) the
Participant shall be entitled to settlement of the Restricted Award or portion
thereof, as the case may be. Although Restricted Awards shall usually Vest based
on continued employment (or service as an Advisor) and Performance Awards under
Article 10 shall usually Vest based on attainment of Performance Goals, the
Committee, in its discretion, may condition Vesting of Restricted Awards on
attainment of Performance Goals as well as continued employment (or service as
an Advisor). In such case, the Restriction Period for such a Restricted Award
shall include the period prior to satisfaction of the Performance Goals.
9.4 Forfeiture. If a Participant ceases to be an employee or Advisor of
Corporation or a Subsidiary during the Restriction Period for any reason other
than reasons which may be specified in an Award Agreement (such as death,
Disability, or Retirement) the Award Agreement may require that all non-Vested
Restricted Awards previously granted to the Participant be forfeited and
returned to Corporation.
9.5 Settlement of Restricted Awards.
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(a) Restricted Shares. Upon Vesting of a Restricted Share Award, the legend
on such Shares will be removed and the Participant's stock power will be
returned and the Shares will no longer be Restricted Shares. The Committee
may also, in its discretion, permit a Participant to receive, in lieu of
unrestricted Shares at the
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conclusion of the Restriction Period, payment in cash, installments, or by
issuance of a Deferred Compensation Option equal to the Fair Market Value
of the Restricted Shares as of the date the Restrictions lapse.
(b) Restricted Units. Upon Vesting of a Restricted Unit Award, a
Participant shall be entitled to receive payment for Restricted Units in an
amount equal to the aggregate Fair Market Value of the Shares covered by
such Restricted Units at the expiration of the Applicable Restriction
Period. Payment in settlement of a Restricted Unit shall be made as soon as
practicable following the conclusion of the applicable Restriction Period
in cash, in installments, in Shares equal to the number of Restricted
Units, by issuance of a Deferred Compensation Option, or in any other
manner or combination of such methods as the Committee, in its sole
discretion, shall determine.
9.6 Rights as a Shareholder. A Participant shall have, with respect to
unforfeited Shares received under a grant of Restricted Shares, all the rights
of a shareholder of Corporation, including the right to vote the shares, and the
right to receive any cash dividends. Stock dividends issued with respect to
Restricted Shares shall be treated as additional Shares covered by the grant of
Restricted Shares and shall be subject to the same Restrictions.
ARTICLE 10
PERFORMANCE AWARDS
10.1 General. Performance Awards shall be subject to the terms and conditions
set forth in Article 6 and this Article 10 and shall contain such other terms
and conditions not inconsistent with the express provisions of the Plan, as the
Committee (or the Board with respect to Awards to Non-Employee Directors) shall
deem desirable.
10.2 Nature of Performance Awards. A Performance Award is an Award of units
(with each unit having a value equivalent to one Share) granted to a Participant
subject to such terms and conditions as the Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such
Performance Award or a portion thereof in the event specified performance
criteria are not met within a designated period of time.
10.3 Performance Cycles. For each Performance Award, the Committee shall
designate a performance period (the "Performance Cycle") with a duration to be
determined by the Committee in its discretion within which specified Performance
Goals are to be attained. There may be several Performance Cycles in existence
at any one time and the duration of Performance Cycles may differ from each
other.
10.4 Performance Goals. The Committee shall establish Performance Goals for
each Performance Cycle on the basis of such criteria and to accomplish such
objectives as the Committee may from time to time select. Performance Goals may
be based on performance criteria for Corporation, a Subsidiary, or an operating
group, or based on a Participant's individual performance. Performance Goals may
include objective and subjective criteria. During any Performance Cycle, the
Committee may adjust the Performance Goals for such Performance Cycle as it
deems equitable in recognition of unusual or nonrecurring events
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affecting Corporation, changes in applicable tax laws or accounting principles,
or such other factors as the Committee may determine.
10.5 Determination of Awards. As soon as practicable after the end of a
Performance Cycle, the Committee shall determine the extent to which Performance
Awards have been earned on the basis of performance in relation to the
established Performance Goals.
10.6 Timing and Form of Payment. Settlement of earned Performance Awards shall
be made to the Participant as soon as practicable after the expiration of the
Performance Cycle and the Committee's determination under Section 10.5, in the
form of cash, installments, Shares, Deferred Compensation Options, or any
combination of the foregoing or in any other form as the Committee shall
determine.
ARTICLE 11
OTHER STOCK-BASED AND COMBINATION AWARDS
11.1 Other Stock-Based Awards. The Committee (or the Board with respect to
Awards to Non-Employee Directors) may grant other Awards under the Plan pursuant
to which Shares are or may in the future be acquired, or Awards denominated in
or measured by Share equivalent units, including Awards valued using measures
other than the market value of Shares. Such Other Stock-Based Awards may be
granted either alone, in addition to, or in tandem with, any other type of Award
granted under the Plan.
11.2 Combination Awards. The Committee may also grant Awards under the Plan in
tandem or combination with other Awards or in exchange of Awards, or in tandem
or combination with, or as alternatives to, grants or rights under any other
employee plan of Corporation, including the plan of any acquired entity. No
action authorized by this section shall reduce the amount of any existing
benefits or change the terms and conditions thereof without the Participant's
consent.
ARTICLE 12
DEFERRAL ELECTIONS
The Committee may permit a Participant to elect to defer receipt of the payment
of cash or the delivery of Shares that would otherwise be due to such
Participant by virtue of the exercise, earn-out, or Vesting of an Award made
under the Plan. If any such election is permitted, the Committee shall establish
rules and procedures for such payment deferrals, including, but not limited to:
(a) payment or crediting of reasonable interest on such deferred amounts
credited in cash, (b) the payment or crediting of dividend equivalents in
respect of deferrals credited in Share equivalent units, or (c) granting of
Deferred Compensation Options.
ARTICLE 13
DIVIDEND EQUIVALENTS
Any Awards may, at the discretion of the Committee, earn dividend equivalents.
In respect of any such Award which is outstanding on a dividend record date for
Common Stock, the Participant may be credited with an amount equal to the amount
of cash or stock dividends that would have been paid on the Shares covered by
such Award, had such covered Shares been issued and outstanding on such dividend
record date. The Committee shall establish such rules
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and procedures governing the crediting of dividend equivalents, including the
timing, form of payment, and payment contingencies of such dividend equivalents,
as it deems are appropriate or necessary.
ARTICLE 14
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
14.1 Plan Does Not Restrict Corporation. The existence of the Plan and the
Awards granted hereunder shall not affect or restrict in any way the right or
power of the Board or the shareholders of Corporation to make or authorize any
adjustment, recapitalization, reorganization, or other change in Corporation's
capital structure or its business, any merger or consolidation of the
Corporation, any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting Corporation's capital stock or the rights thereof,
the dissolution or liquidation of Corporation or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding.
14.2 Adjustments by the Committee. In the event of any change in capitalization
affecting the Common Stock of Corporation, such as a stock dividend, stock
split, recapitalization, merger, consolidation, split-up, combination or
exchange of shares or other form of reorganization, or any other change
affecting the Common Stock, such proportionate adjustments, if any, as the
Committee, in its sole discretion, may deem appropriate to reflect such change,
shall be made with respect to the aggregate number of Shares for which Awards in
respect thereof may be granted under the Plan, the maximum number of Shares
which may be sold or awarded to any Participant, the number of Shares covered by
each outstanding Award, and the price per Share in respect of outstanding
Awards. The Committee may also make such adjustments in the number of Shares
covered by, and price or other value of any outstanding Awards in the event of a
spin-off or other distribution (other than normal cash dividends), of
Corporation assets to shareholders.
ARTICLE 15
AMENDMENT AND TERMINATION
Without further approval of Corporation's shareholders, the Board may at any
time terminate the Plan, or may amend it from time to time in such respects as
the Board may deem advisable, except that the Board may not, without approval of
the shareholders, make any amendment that would materially increase the
aggregate number of shares of Common Stock that may be issued under the Plan
(except for adjustments pursuant to Article 14 of the Plan). Without further
shareholder approval, the Board may amend the Plan to take into account changes
in applicable securities, federal income tax laws, and other applicable laws.
Further, should the provisions of Rule 16b-3, or any successor rule, under the
Exchange Act be amended, the Board, without further shareholder approval, may
amend the Plan as necessary to comply with any modifications to such rule.
ARTICLE 16
MISCELLANEOUS
16.1 Tax Withholding.
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16.1.1 General. Corporation shall have the right to deduct from any
settlement, including the delivery or vesting of Shares, made under the
Plan any federal, state, or local taxes of any kind required by law to be
withheld with respect to such payments or to take such other action as may
be necessary in the opinion of Corporation to satisfy all obligations for
the payment of such taxes. The recipient of any payment or distribution
under the Plan shall make arrangements satisfactory to Corporation for the
satisfaction of any such withholding tax obligations. Corporation shall not
be required to make any such payment or distribution under the Plan until
such obligations are satisfied.
16.1.2 Stock Withholding. The Committee, in its sole discretion, may
permit a Participant to satisfy all or a part of the withholding tax
obligations incident to the settlement of an Award involving payment or
delivery of Shares to the Participant by having Corporation withhold a
portion of the Shares that would otherwise be issuable to the Participant.
Such Shares shall be valued based on their Fair Market Value on the date
the tax withholding is required to be made. Any stock withholding with
respect to a Reporting Person shall be subject to such limitations as the
Committee may impose to comply with the requirements of the Exchange Act.
16.2 Unfunded Plan. The Plan shall be unfunded and Corporation shall
not be required to segregate any assets that may at any time be represented
by Awards under the Plan. Any liability of Corporation to any person with
respect to any Award under the Plan shall be based solely upon any
contractual obligations that may be effected pursuant to the Plan. No such
obligation of Corporation shall be deemed to be secured by any pledge of,
or other encumbrance on, any property of Corporation.
16.3 Payments to Trust. The Committee is authorized to cause to be
established a trust agreement or several trust agreements whereunder the
Committee may make payments of amounts due or to become due to Participants
in the Plan.
16.4 Annulment of Awards. Any Award Agreement may provide that the
grant of an Award payable in cash is provisional until cash is paid in
settlement thereof or that grant of an Award payable in Shares is
provisional until the Participant becomes entitled to the certificate in
settlement thereof. In the event the employment (or service as an Advisor
or membership on the Board) of a Participant is terminated for cause (as
defined below), any Award which is provisional shall be annulled as of the
date of such termination for cause. For the purpose of this Section 16.4,
the term "for cause" shall have the meaning set forth in the Participant's
employment agreement, if any, or otherwise means any discharge (or removal)
for material or flagrant violation of the policies and procedures of
Corporation or for other job performance or conduct which is materially
detrimental to the best interests of Corporation, as determined by the
Committee.
16.5 Engaging in Competition With Corporation. Any Award Agreement may
provide that, if a Participant terminates employment with Corporation or a
Subsidiary for any reason whatsoever, and within 18 months after the date
thereof accepts employment with any competitor of (or otherwise engages in
competition with) Corporation, the Committee, in its sole discretion, may
require such Participant to return to Corporation the economic value of any
Award that is realized or obtained (measured at the date of exercise,
Vesting, or payment) by
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such Participant at any time during the period beginning on the date that
is six months prior to the date of such Participant's termination of
employment with Corporation.
16.6 Other Corporation Benefit and Compensation Programs. Payments and
other benefits received by a Participant under an Award made pursuant to
the Plan shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law
of any state or country and shall not be included in, or have any effect
on, the determination of benefits under any other employee benefit plan or
similar arrangement provided by Corporation or a Subsidiary unless
expressly so provided by such other plan or arrangements, or except where
the Committee expressly determines that an Award or portion of an Award
should be included to accurately reflect competitive compensation practices
or to recognize that an Award has been made in lieu of a portion of cash
compensation. Awards under the Plan may be made in combination with or in
tandem with, or as alternatives to, grants, awards, or payments under any
other Corporation or Subsidiary plans, arrangements, or programs. The Plan
notwithstanding, Corporation or any Subsidiary may adopt such other
compensation programs and additional compensation arrangements as it deems
necessary to attract, retain, and reward employees and directors for their
service with Corporation and its Subsidiaries.
16.7 Securities Law Restrictions. No Shares shall be issued under the
Plan unless counsel for Corporation shall be satisfied that such issuance
will be in compliance with applicable federal and state securities laws.
Certificates for Shares delivered under the Plan may be subject to such
stop-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed, and any applicable federal or state securities
law. The Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
16.8 Governing Law. Except with respect to references to the Code or
federal securities laws, the Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the state of
Oregon.
ARTICLE 17
SHAREHOLDER APPROVAL
The amendment and restatement of the Plan is expressly subject to the approval
of the Plan by the shareholders at the 1997 annual meeting of Corporation's
shareholders.
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