Exhibit 10
HUNT MANUFACTURING CO.
1993 STOCK OPTION AND STOCK GRANT PLAN
(As Amended and Restated, Effective January 1, 1997)
1. Purpose.
The 1993 Stock Option and Stock Grant Plan (the "Plan") is
designed to enable Hunt Manufacturing Co. (the "Company") and its subsidiaries
to attract and retain capable officers and key management level employees and
independent consultants who perform services for the Company and to provide an
inducement to such personnel to promote the best interests of the Company and
its subsidiaries by enabling and encouraging them, through the grant of
incentive and nonqualified stock options ("Options") and/or stock ("Stock
Grants") to acquire stock in the Company.
As used in the Plan, the term "incentive stock options" means
options which, at the time such options are granted under the Plan, qualify as
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and are designated as incentive
stock options in the Option Agreement (as hereinafter defined). The term
"nonqualified stock options" means all other options granted under the Plan. The
term "subsidiary" means any corporation which, at the time an Option is granted
or Stock Grant is made under the Plan, qualifies as a subsidiary of the Company
under the definition of "subsidiary corporation" contained in Section 424(f) of
the Code, or any similar provision hereafter enacted, except that such term
shall not include any corporation which is classified as a foreign corporation
pursuant to Section 7701 of the Code.
2. Administration.
The Plan shall be administered by the Company's Compensation
Committee (the "Committee") which shall consist of not less than three
non-employee directors (within the meaning of Rule 16b-3(b)(3) under the
Securities Exchange Act of 1934 (the "Exchange Act"), or any successor thereto)
who are also outside directors (within the meaning of Treas. Reg. ss.
1.162-27(e)(3), or any successor thereto) of the Company who shall be appointed
by, and shall serve at the pleasure of, the Company's Board of Directors (the
"Board"). Each member of the Committee, while serving as such, shall be deemed
to be acting in his/her capacity as a director of the Company.
The Committee shall have full authority to construe and
interpret the Plan and, subject to the provisions of the Plan: to establish,
amend, and rescind appropriate rules and regulations relating to the Plan; to
take such action as may be appropriate or necessary to insure the continued
qualification of any incentive stock options granted
under the Plan; to select the persons to whom Options will be granted and/or
Stock Grants made under the Plan; to grant Options and make Stock Grants and set
the date of grant and other terms and conditions thereof; to make
recommendations to the Board; and to take all such steps and make all such
determinations in connection with the Plan and the Options granted and the Stock
Grants made hereunder as it may deem necessary or advisable. All such rules,
regulations, determinations, and interpretations of the Committee shall be
final, conclusive, and binding on all persons.
3. Stock Subject to the Plan.
Subject to the provisions of Section 8, up to an aggregate
maximum of 3,500,000 of the Company's Common Shares, par value $.10 per share
("Shares"), shall be authorized for the grant of Options and/or Stock Grants
under the Plan; provided, however, that, of such amount, not more than 525,000
Shares shall be available for Stock Grants, and further provided, that, no
Eligible Employee (as hereinafter defined) or Consultant (as defined below)
shall receive Options and/or Stock Grants for more than 300,000 Shares over any
one-year period. Shares issuable under the Plan may be authorized but unissued
Shares or reacquired Shares, as the Board shall determine. If any Option granted
under the Plan expires or otherwise terminates, in whole or in part, without
having been exercised, or if any Stock Grant hereunder is terminated, in whole
or in part, the Shares subject to the unexercised portion of such Option and the
unvested Shares covered by such Stock Grant shall be available for the granting
of Options and Stock Grants under the Plan as fully as if such Shares had never
been subject to an Option or a Stock Grant; provided, however, that:
(a) If an Option is cancelled or if a Stock Grant is
terminated, the Shares subject to the unexercised portion of such
Option and/or the unvested Shares covered by such Stock Grant shall
continue to be counted against the maximum number of Shares specified
above which may be awarded to an Eligible Employee or Consultant during
the one-year period in which the Option or Stock Grant was originally
awarded, and
(b) If the exercise price of an Option is reduced
after the date of grant, the transaction shall be treated as a
cancellation of the original Option and the grant of a new Option for
purposes of such maximum.
4. Eligibility.
Those persons eligible to participate in the Plan shall be the
officers and other key management level employees of the Company and any of its
subsidiaries ("Eligible Employees"), including directors who are also officers
or key management level employees of the Company or any of its subsidiaries.
Independent consultants who perform consulting services for the Company and any
of its subsidiaries ("Consultants")
-2-
shall also be eligible to participate. Incentive stock options, nonqualified
stock options, or Shares, or a combination thereof, may be granted under the
Plan to an Eligible Employee, and nonqualified stock options and Shares, or a
combination thereof, but not incentive stock options, may be granted under the
Plan to a Consultant. In making any determination as to whether a given employee
or Consultant shall receive a grant under the Plan, and in determining the size
and nature of any such grant, the Committee shall take into account the duties
of such employee or Consultant, his/her past, present, and potential
contributions to the success of the Company and its subsidiaries, and such other
factors as the Committee shall deem relevant in accomplishing the purposes of
the Plan.
5. Grants, Terms and Conditions of Options.
From time to time until the expiration or earlier termination
of the Plan, the Committee may grant to Eligible Employees and/or Consultants
("Optionees") under the Plan such incentive and/or nonqualified stock options as
it determines are warranted; provided, however, that grants of incentive and
nonqualified options shall be separate and not in tandem; and provided further
that incentive stock options shall not be granted to Consultants. Options
granted pursuant to the Plan shall be in such form as the Committee, from time
to time, shall approve, and shall be subject to the following terms and
conditions:
(a) Price. Except as provided in Subsection (j), the
price per Share under each Option granted under the Plan shall be
determined and fixed by the Committee in its discretion but shall not
be less than the higher of 100 percent of the Fair Market Value of the
Shares or the par value thereof on the date of grant of such Option. As
used in the Plan, the term "Fair Market Value" shall mean:
(i) If the principal market for the Shares
is a registered securities exchange, the mean between the
highest and lowest quoted selling prices of such Shares on the
date of grant, or, if there are no such reported sales on that
date, then on the last previous date (within a reasonable
period prior to the date of grant) on which there were such
reported sales; or
(ii) Such other method of determining fair
market value as shall be authorized by the Code, or the rules
or regulations thereunder, and adopted by the Committee.
(b) Term. Subject to earlier termination as provided
in Subsections (c) through (g) and in Section 8, and except as
otherwise provided in Subsection (j), the term of each Option shall not
be less than two nor more than ten years from the date of grant.
-3-
(c) Exercise and Payment. Options shall be
exercisable in such installments and on such dates, not less than one
year from the date of grant, as the Committee may specify. Except as
otherwise expressly provided in the Plan, Options shall be exercisable
by an Optionee only while he/she remains in the employment of the
Company or a subsidiary. Any Option Shares, the right to the purchase
of which has accrued, may be purchased at any time up to the expiration
or termination of the Option. Options may be exercised, in whole or in
part, from time to time, by giving written notice of exercise to the
Company at its principal office, specifying the number of Shares to be
purchased and accompanied by payment in full of the aggregate purchase
price for such Shares. Only full shares shall be issued, and any
fractional share which might otherwise be issuable upon exercise of an
Option granted hereunder shall be forfeited. The purchase price of
Option Shares shall be payable:
(i) In cash or its equivalent;
(ii) If the Committee, in its discretion,
permits, in whole or in part through the surrender or delivery
of Shares previously acquired by the Optionee (provided that
if such Shares are statutory option stock, as defined in
Section 424(c)(3) of the Code, such Shares have been held by
the Optionee for a period which is not less than the holding
period described in Section 422(a)(1) or 423(a)(1) of the
Code, as applicable);
(iii) If and to the extent the Committee, in
its discretion, permits, in whole or in part through the
surrender or delivery of Shares newly acquired by the Optionee
upon exercise of such Option (which surrender or delivery
shall constitute a disqualifying disposition in the case of an
Option which is an incentive stock option); or
(iv) If and to the extent the Committee, in
its discretion, permits, by delivering a properly executed
notice of exercise of the Option to the Company and a broker,
with irrevocable instructions to the broker promptly to
deliver to the Company the amount of sale or loan proceeds
necessary to pay the exercise price of the Option (the sale of
Shares pursuant to such instructions shall constitute a
disqualifying disposition in the case of an Option which is an
incentive stock option).
In the event such purchase price is paid, in whole or
in part, with Shares, the portion of the purchase price so paid shall
be equal to the Fair Market Value, on the date of exercise of the
Option, of the Shares surrendered or delivered in payment of such
purchase price.
-4-
(d) Termination of Optionee's Employment. If an
Optionee's employment by the Company and its subsidiaries is terminated
prior to the expiration date of his/her Option by either party for any
reason, with or without cause, other than by reason of death,
disability, or retirement (as provided in Subsections (e), (f), and
(g)), such Option shall terminate immediately upon such termination of
employment, provided that the Committee, in its discretion, may extend
the period for exercise following any such termination of employment,
to the extent of the number of Shares with respect to which the
Optionee could have exercised it on the date of such termination, for
up to three months, but not beyond the expiration date of such Option.
Notwithstanding the foregoing, in the event an Optionee's employment is
terminated as contemplated in this Subsection and Options held by
him/her have not yet become exercisable in accordance with their terms,
the Committee, in its discretion, may allow all or a part of such
Options to be exercised pursuant to this Subsection, provided that such
Options have been outstanding for at least one year at the time of the
Optionee's termination of employment. For purposes of the Plan, a leave
of absence of one year or less which has been expressly approved by the
Board shall not be deemed to constitute a termination of employment. A
leave of absence longer than one year shall be deemed to constitute a
termination of employment, unless the Committee determines otherwise.
For purposes of this Section 5, an Optionee who is a Consultant shall
be deemed to have terminated employment if such person's consulting
relationship with the Company and its subsidiaries is terminated.
(e) Death of Optionee. If an Optionee's employment is
terminated (within the meaning of Subsection (d)) by reason of his/her
death prior to the expiration of his/her Option, or if an Optionee
shall die following his/her termination of employment but prior to the
expiration date of his/her Option or expiration of the period
determined under Subsection (d), (f), or (g), if earlier, such Option
may be exercised, by the Optionee's estate, personal representative, or
beneficiary who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of the Optionee, in whole or
in part, but only to the extent of the number of Shares with respect to
which the Optionee could have exercised it on the date of his/her
death, at any time prior to the earlier of:
(i) One year following the date of the
Optionee's death, or
(ii) The expiration date of such Option
(which, in the case of death following a termination of
employment pursuant to Subsection (d), (f), or (g), shall be
deemed to mean the expiration of the exercise period
determined thereunder).
Notwithstanding the foregoing, in the event that an
Optionee's employment is terminated by his/her death and Options held
by him/her have not
-5-
yet become exercisable in accordance with their terms, the Committee,
in its discretion, may allow all or a part of such Options to be
exercised pursuant to this Subsection, provided that such Options have
been outstanding for at least one year at the time of the Optionee's
death.
(f) Disability of Optionee. If an Optionee shall
become permanently and totally disabled (within the meaning of Section
22(e)(3) of the Code) and his/her employment with the Company and its
subsidiaries is terminated (within the meaning of Subsection (d)) as a
consequence of such disability prior to the expiration date of his/her
Option, such Option may be exercised by the Optionee, in whole or in
part, but only to the extent of the number of Shares with respect to
which the Optionee could have exercised it on the date of such
termination of employment, at any time prior to the earlier of:
(i) One year following the date of the
Optionee's termination of employment, or
(ii) The expiration date of such Option.
Notwithstanding the foregoing, if at the time of
termination of an Optionee's employment due to disability, Options held
by such Optionee have not yet become exercisable in accordance with
their terms, the Committee, in its discretion, may allow all or a part
of such Options to be exercised pursuant to this Subsection, provided
that such Options have been outstanding for at least one year at the
time of the Optionee's termination of employment.
(g) Retirement of Optionee. If an Optionee retires in
accordance with the retirement policy of the Company, or with the
express consent of the Board, prior to the expiration date of his/her
Option, such Option may be exercised by the Optionee, in whole or in
part, but only to the extent of the number of Shares with respect to
which the Optionee could have exercised it on the date of his/her
retirement, at any time prior to the earlier of:
(i) Three months after the date of
retirement, or
(ii) The expiration date specified in such
Option.
Notwithstanding the foregoing, the Committee may, in
its discretion, extend the period for exercise following an Optionee's
retirement for up to nine additional months, but not beyond the
expiration date of such Option, despite the fact that such an extension
would prevent an Option from qualifying as an incentive stock option
under the Code and/or in the event that any Options held by a retiring
Optionee have not yet become exercisable in accordance with their
terms, allow all
-6-
or a part of such Options to be exercised pursuant to this Subsection
provided that such Options have been outstanding for at least one year
at the time of the Optionee's retirement.
(h) Transferability. No Option intended to be an
incentive stock option shall be assignable or transferable by an
Optionee otherwise than by will or by the laws of descent and
distribution. Unless otherwise permitted by the Committee, all other
Options shall not be assignable or transferable by an Optionee
otherwise than by will or by the laws of descent and distribution.
A transferred Option shall continue to be subject to
the same terms and conditions as were applicable to such Option
immediately prior to transfer, and the Optionee shall remain subject to
tax withholding under Section 5(l) with respect to such Option. The
events of termination of employment of Section 5 shall also continue to
be applied with respect to the original Optionee, following which
events the transferred Option shall be exercisable by the transferee
only to the extent, and for the periods specified in, Sections 5(c),
(d), (e), (f) and (g).
(i) Rights as a Stockholder. An Optionee shall have
no rights as a stockholder with respect to any Shares covered by
his/her Option until the issuance of a stock certificate to him/her
representing such Shares.
(j) Ten Percent Shareholder. Notwithstanding any
other provision of the Plan, if an Eligible Employee owns more than ten
percent of the total combined voting power of all shares of stock of
the Company or of a Related Corporation at the time an incentive stock
option is granted to such Eligible Employee, the incentive stock option
price shall not be less than 110 percent of the Fair Market Value of
the optioned Shares on the date the incentive stock option is granted,
and such incentive stock option by its terms shall not be exercisable
after the expiration of five years from the date the incentive stock
option is granted. As used in this Plan, the term "Related Corporation"
shall mean a subsidiary or a corporate parent of the Company as defined
in Section 424 of the Code.
(k) Annual Limit on Grant of Incentive Stock Options.
The aggregate Fair Market Value (determined as of the time an incentive
stock option is granted) of the Shares with respect to which incentive
stock options are exercisable for the first time during any calendar
year (under this Plan and any other incentive stock option plan of the
Company or a Related Corporation) shall not exceed $100,000.
(l) Use of Shares to Satisfy Tax Obligation. When an
Optionee is required to pay to the Company or a Related Corporation an
amount required to be withheld under applicable Federal, state, or
local income tax or similar laws in
-7-
connection with the exercise of nonqualified stock options under the
Plan, the Committee may, in its discretion and subject to such rules as
it may adopt, permit the Optionee to satisfy the obligation, in whole
or in part, by electing to have the Company withhold Shares (or by
returning to the Company previously held Shares), which shares shall be
valued, for this purpose, at their Fair Market Value on the date of
exercise of the nonqualified stock option (or, if later, the date on
which the Optionee recognizes ordinary income with respect to such
exercise). If Shares acquired by exercise of an incentive stock option
are used for such purpose, and if the holding period requirements of
Section 422(a)(1) of the Code have not been met with respect to such
Shares, the use of such Shares to satisfy the withholding obligation
will be a disqualifying disposition of such Shares.
(m) Option Agreement and Further Conditions. Each
Optionee shall enter into, and be bound by the terms of, a stock option
agreement (the "Option Agreement") which shall include or incorporate
by reference the terms of the Option and the Plan and which shall
contain such other terms, conditions, and restrictions not inconsistent
with the Plan (or, in the case of incentive stock options, the
provisions of Section 422(b) of the Code) as the Committee shall
determine. Without limiting the generality of the foregoing, the
Committee, in its discretion, may impose further conditions upon the
exercisability of Options, and restrictions on transferability and
repurchase rights with respect to Shares issued upon exercise of
Options.
6. Terms and Conditions of Stock Grants.
From time to time until the expiration or earlier termination
of the Plan, the Committee may make such Stock Grants under the Plan to Eligible
Employees and/or Consultants ("Grantees") as it determines are warranted. Stock
Grants shall be subject to the following terms and conditions:
(a) Vesting Period. The Committee shall establish one
or more vesting periods ("Vesting Periods") with respect to the Shares
covered by a Stock Grant. The length of such Vesting Period shall be
within the discretion of the Committee, except that (subject to
Subsection (c) and Section 8) such period or periods shall not be less
than one year nor more than five years from the date of grant. Subject
to the provisions of this Section 6, Shares subject to a Stock Grant
shall vest in the Grantee upon the expiration of the Vesting Period
with respect to such Shares.
(b) Bonus Payment. For so long as a Grantee's Stock
Grant remains outstanding and unvested, the Company shall pay to the
Grantee a cash bonus equal to the dividends which the Grantee would
have received from the Company had he/she actually held the Shares
represented by the unvested portion
-8-
of his/her Stock Grant. Such payments shall be made within 60 days
following the end of each fiscal quarter of the Company with respect to
any dividends which may have been paid by the Company on its Shares
during such quarter, and will constitute wages subject to withholding
for Federal income tax purposes.
(c) Termination.
(i) Death, Disability, or Retirement. If,
prior to the expiration of the Vesting Period with respect to
Shares subject to a Stock Grant ("Unvested Shares"), a
Grantee's employment with the Company and its subsidiaries is
terminated by reason of his/her death, or by reason of his/her
disability or retirement (as provided in Sections 5(f) and
(g), respectively), then in each such case there shall
immediately be vested in the Grantee, or in his/her
beneficiary or estate, that number of full Shares that bears
the same ratio to all the Grantee's Unvested Shares having the
same Vesting Period as the number of the days which have
elapsed from the date of the original Stock Grant of such
Shares to the date of such termination of the Grantee's
employment bears to the total number of days in the Vesting
Period with respect to such Shares. [An example of the
operation of the preceding sentence is set forth in the
Appendix to the Plan.] The remainder of the Grantee's Stock
Grant not vested pursuant to the preceding sentence shall
immediately terminate, except that the Committee, if it
determines that the circumstances warrant, may direct that all
or a portion of such remaining Unvested Shares also be vested
in the Grantee, subject to such further terms and conditions,
if any, as the Committee may determine. For purposes of this
Section 6, a Grantee who is a Consultant shall be deemed to
have terminated employment if such person's consulting
relationship with the Company and its subsidiaries is
terminated.
(ii) Other Terminations of Employment. If a
Grantee's employment is terminated (within the meaning of
Paragraph (i)) for any reason other than his/her death,
disability, or retirement as aforesaid, the unvested portion
of the Grantee's Stock Grant shall immediately terminate,
except that the Committee, if it determines that the
circumstances warrant, may direct that all or a portion of the
Grantee's Unvested Shares be vested in the Grantee, subject to
such further terms and conditions, if any, as the Committee
may determine.
(d) Delivery of Certificates. Upon the vesting of a
Stock Grant, the Company shall promptly issue certificates representing
the vested Shares to the Grantee or to his/her beneficiary or estate.
Only full shares shall be issued, and any fractional shares which might
otherwise be issuable pursuant to a Stock Grant shall be forfeited.
-9-
(e) Transferability. Unless otherwise permitted by
the Committee, no Stock Grant shall be assignable or transferable by a
Grantee otherwise than by will or by the laws of descent and
distribution.
A transferred Stock Grant shall continue to be
subject to the same terms and conditions as were applicable to such
Stock Grant immediately prior to transfer, and the Grantee shall remain
subject to tax withholding under Section 6(g) with respect to such
Stock Grant. The events of termination of employment of Section 6 shall
also continue to be applied with respect to the original Grantee,
following which events the transferred Stock Grant shall become vested
in the transferee only to the extent provided in Section 6(c).
(f) Rights as a Stockholder. A Grantee shall have no
rights as a stockholder with respect to any Shares covered by a Stock
Grant until the issuance of a stock certificate to him/her representing
such Shares.
(g) Use of Shares to Satisfy Tax Obligation. When a
Grantee is required to pay the Company or a Related Corporation an
amount required to be withheld under applicable Federal, state, or
local income tax or similar laws in connection with the vesting of a
Stock Grant under this Plan, the Committee may, in its discretion and
subject to such rules as it may adopt, permit the Grantee to satisfy
the obligation, in whole or in part, by electing to have the Company
withhold Shares (or by returning to the Company previously held
Shares), which Shares shall be valued, for this purpose, at their Fair
Market Value on the date of vesting of the Stock Grant (or, if later,
the date on which the Grantee recognizes ordinary income with respect
to such Stock Grant). If Shares acquired by exercise of an incentive
stock option are used for such purpose, and if the holding period
requirements of Section 422(a)(1) of the Code have not been met with
respect to such Shares, the use of such Shares to satisfy the
withholding obligation will be a disqualifying disposition of such
Shares.
(h) Stock Grant Agreement. Each Grantee shall enter
into, and be bound by the terms of, a Stock Grant Agreement (the "Stock
Grant Agreement") which shall include or incorporate by reference the
terms of the Stock Grant and of the Plan and which shall contain such
other terms, conditions, and restrictions not inconsistent with the
Plan as the Committee shall determine.
7. Listing and Registration of Shares.
Each Option and each Stock Grant under the Plan shall be
subject to the requirement that, if at any time the Board shall determine, in
its discretion, that the listing, registration, or qualification of the Shares
covered thereby upon any securities exchange or under the laws of any
jurisdiction, or the consent or approval of any regulatory body, is
-10-
necessary or desirable as a condition of, or in connection with, the granting of
such Option, the making of such Stock Grant, or the purchase or vesting of
Shares thereunder, then no such Option may be exercised in whole or in part, and
no certificate representing Shares shall be issued pursuant to such Stock Grant,
unless and until such listing, registration, qualification, consent, or approval
shall have been effected or obtained, on conditions acceptable to the Board.
Each Optionee and Grantee, or his/her legal representative or beneficiaries,
also may be required to give satisfactory assurance that Shares purchased upon
exercise of an Option or received pursuant to a Stock Grant are being acquired
for investment and not with a view to distribution, and certificates
representing such Shares may be legended accordingly.
8. Adjustment Upon Changes in Capitalization, Mergers,
and Other Events.
The number of Shares which may be issued under the Plan and
the maximum number of Shares with respect to which Options and/or Stock Grants
may be awarded to any Eligible Employee or Consultant under the Plan, both as
stated in Section 3, and the number of Shares issuable upon exercise of
outstanding Options (as well as the exercise price per Share under such
outstanding Options) or issuable upon vesting of outstanding Stock Grants shall
be adjusted, as may be determined appropriate by the Committee (which
determination shall be subject to ratification by the Board), to reflect any
stock dividend, stock split, share combination, or similar change in the
capitalization of the Company.
In the event the Company is liquidated or a corporate
transaction described in Section 424(a) of the Code and the Treasury Regulations
issued thereunder (including, for example, a merger, consolidation, acquisition
of property or stock, separation, or reorganization) occurs, each outstanding
Option and Stock Grant shall be assumed by the surviving or successor
corporation, if any; provided, however, that the Committee, in its discretion,
may terminate all or a portion of the outstanding Options and/or Stock Grants if
it determines that such termination would be in the best interests of the
Company. If the Committee decides to terminate an outstanding Option by reason
of such liquidation or corporate transaction, the Committee shall give the
holder thereof not less than 21 days' prior notice of any such termination, and
such outstanding Option may be exercised up to, and including, the date
immediately preceding such termination, if the Option has not otherwise expired,
and if it is then exercisable under the Option Agreement. With respect to any
Option which has not yet become exercisable, the Committee also, in its
discretion, may allow an Optionee to exercise such Option, in whole or in part
(if it has not otherwise terminated or expired). If the Committee decides to
terminate an outstanding Stock Grant by reason of such liquidation or corporate
transaction, the Stock Grant shall vest on such termination date to the same
extent as is provided in the first sentence of Section 6(c)(i). The Committee,
in its discretion, may also immediately vest all or a portion of the remaining
unvested Shares under any Stock Grant which is to be so determined.
-11-
The Committee, in its discretion, may also change the number
of Shares issuable upon exercise of outstanding Options (as well as the exercise
price per Share under such outstanding Options) and Shares covered by
outstanding Stock Grants to reflect any such corporate transaction, provided, in
the case of an incentive stock option, that any such change is made in
accordance with Section 424(a) of the Code and is excluded from the definition
of "modification" under Section 424(h) of the Code.
Notwithstanding any other provisions of the Plan, the
Committee, in its discretion, may accelerate, in whole or in part, the date on
which Options become exercisable and/or the vesting of any Stock Grant in the
event that the Committee determines that a change in control of the Company has
occurred or is likely to occur.
9. Amendment or Discontinuance of the Plan.
The Board, from time to time, may suspend or discontinue the
Plan or amend it, and the Committee may amend any outstanding Options and Stock
Grants, in any respect whatsoever; provided, however, that, without the approval
of the holders of at least a majority of the votes cast at a duly held
stockholders' meeting at which a quorum representing a majority of the
outstanding shares of the Company is, either in person or by proxy, present and
voting on the action:
(a) The class of individuals eligible to receive
Options or Stock Grants shall not be changed;
(b) The maximum number of Shares with respect to
which grants may be made under the Plan shall not be increased
otherwise than as permitted under Section 8;
(c) The limitations on the price at which Options may
be granted shall not be changed; and
(d) The duration of the Plan, as specified in Section
12, shall not be extended.
Notwithstanding the foregoing, no such suspension,
discontinuance, or amendment shall impair the rights of any holder of an
outstanding Option or Stock Grant without the consent of such holder.
10. Absence of Rights.
The recommendation or selection of an Eligible Employee or
Consultant as a recipient of an Option or a Stock Grant under the Plan shall not
entitle such person to any Option or Stock Grant unless and until the grant
actually has been made by
-12-
appropriate action of the Committee; and any such grant is subject to the
provisions of the Plan. Further, the granting of an Option or the making of a
Stock Grant to a person shall not entitle that person to continued employment by
the Company or its subsidiaries, and the Company shall have the absolute right,
in its discretion, to retire such person in accordance with its retirement
policies or otherwise to terminate his/her employment, whether or not such
termination may result in a partial or total termination of his/her Option or of
his/her Stock Grant.
11. Application of Funds.
The funds received by the Company upon the exercise of Options
and otherwise under the Plan shall be used for general corporate purposes.
12. Effective Date and Duration.
The Plan became effective on February 7, 1993. Unless earlier
terminated as provided in the Plan, the Plan shall terminate at 12:00 midnight
on February 6, 2003, and no Options or Stock Grants shall be granted or made
thereafter. However, termination of the Plan shall not affect any Options or
Stock Grants theretofore granted or made, which Options and Stock Grants shall
remain in effect in accordance with their terms and the terms of the Plan.
-13-
APPENDIX
Accelerated Vesting Pursuant to Section 6(c) of the Plan
Example: If a Stock Grant of 30,000 shares is made to a
Grantee on February 10, 1996, to vest in three annual increments of 10,000
Shares each on February 10, 1997, 1998, and 1999, respectively, and if the
Grantee, while still an employee of the Company, should die on August 10, 1997,
the number of Shares vested would be 22,465, calculated as follows:
1. The 10,000 Share increment scheduled to vest on February
10, 1997, would already have vested in full.
2. The 10,000 Share increment scheduled to vest on February
10, 1998, would vest automatically as to 7,479 Shares (i.e., out of the
total Vesting Period of 730 days with respect to such Shares, 546 days
would have elapsed; 546/730 = .747945 x 10,000 Shares = 7,479 Shares).
3. The 10,000 Share increment scheduled to vest on February
10, 1999, would vest automatically as to 4,986 Shares (i.e., out of the
total Vesting Period of 1,095 days with respect to such Shares 546 days
would have elapsed; 546/1,095 = .498630 x 10,000 Shares = 4,986
Shares).
-14-