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EXHIBIT 10.19a
AMENDED AND RESTATED
STEEL DYNAMICS, INC.
1996 INCENTIVE STOCK OPTION PLAN
I. PURPOSE AND SCOPE OF PLAN.
1.1 Steel Dynamics, Inc. (the "Company") wishes to provide all
Employees of the Company and its Subsidiaries, each of whom is a key employee
and each of whom is in a position to materially affect the profitability and
growth of the Company and its Subsidiaries, an opportunity to acquire an
ownership interest in the Company and in the stockholder values which everyone
is working to create, and in so doing to encourage and motivate each such
person to more fully identify his or her increased welfare and well-being with
that of the Company. These objectives will be attained through periodic grants
to such Employees of options to purchase shares of the Company's common stock
("Stock").
1.2 Directors who are also Employees are eligible to participate in
this Amended and Restated 1996 Incentive Stock Option Plan (the "Plan").
1.3 The awards offered hereunder are not in lieu of but are
supplemental to any salary or other forms of compensation for services.
II. EFFECTIVE DATE AND TERM OF PLAN.
2.1 The original Plan became effective on October 28, 1996, upon
the approval by the Company's stockholders on the same date. The Plan, as
amended, was approved by the Board of Directors November 2, 2000, and when
approved by stockholders on May 24, 2001, will be deemed effective as of
November 2, 2000. From and after the Effective Date, subject to Section 2.2
the Plan shall remain in effect until all Stock subject to the Plan has been
purchased or acquired according to the Plan's provisions; provided, however,
that in no event may any options be granted under the Plan on or after
December 31, 2006.
2.2 The Board of Directors may at any time suspend or terminate the
Plan. An option may not be granted while the Plan is suspended or after it is
terminated, but any rights and obligations under any option granted while the
Plan is in effect shall not be deemed altered or impaired by suspension or
termination of the Plan, except with the consent of the person to whom the
option was granted. The power of the Board of Directors to administer and
construe any option granted prior to suspension or termination of the Plan
under Section 5.3 shall nevertheless continue after any such suspension or
termination.
III. DEFINITIONS.
When any word or phrase appears in this Plan with the initial
letter capitalized, and the word or phrase does not commence a sentence, that
word or phrase, unless a clearly different meaning is required by the context,
shall generally be given a meaning ascribed to it in this Section or elsewhere
if the word or phrase is defined within quotation marks. The following words
or phrases shall have the following meanings:
3.1 "Board" means the Board of Directors of the Company.
3.2 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
3.3 "Committee" means the Committee of the Board described in
Article V, if any, or, in lieu of a separate Committee, the full Board.
3.4 "Company" means Steel Dynamics, Inc., an Indiana corporation,
and its Subsidiaries.
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3.5 "Disability" means termination of employment with the Company
or any of its Subsidiaries as a result of an Employee's inability to perform
substantially his or her duties and responsibilities to the Company or any of
its Subsidiaries by reason of a physical or mental disability or infirmity (i)
for a continuous period of six (6) months, or (ii) at such earlier time as
such Employee submits medical evidence satisfactory to the Committee, or the
Committee otherwise determines, that such Employee has a physical or mental
disability or infirmity that will prevent such Employee from substantially
performing his or her duties and responsibilities for six months or longer.
3.6 "Effective Date" means the date determined under Section 2.1.
3.7 "Employees" means full time employees of the Company and its
Subsidiaries, including officers, managers, supervisors, professionals, and
hourly employees, whose jobs contemplate service of not less than 1,000 hours
annually.
3.8 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
3.9 "Fair Market Value" means, as of any date, the value of the
Stock determined as follows:
(i) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the NASDAQ
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation (NASDAQ) System, the Fair Market Value of a share
of Stock shall be the closing sales price for such Stock (or the
closing bid, if no sales were reported) as quoted on such system or
exchange (or the exchange with the greatest volume of trading in the
Stock) on the last market trading day prior to the Grant Date, as
reported in the Wall Street Journal or such other source as the
Committee deems reliable;
(ii) If the Stock is quoted on the NASDAQ System (but not on the
NASDAQ National Market thereof) or is regularly quoted by a recognized
securities dealer but selling prices were not reported, the Fair Market
Value of a share of Common Stock shall be the mean between the high bid
and low asked prices for the Stock on the last market trading day prior
to the Grant Date, as reported in the Wall Street Journal or such other
source as the Committee deems reliable;
(iii) In the absence of an established market for the Stock, the
Fair Market Value shall be determined in good faith by the Committee,
and for purposes of the first Grant Date described in Section 6.2 Fair
Market Value shall be deemed to be the price of a share of Common Stock
established by the Company's underwriters on the effective date of the
Company's Registration Statement and reflected in the pricing amendment
filed with the Securities and Exchange Commission in connection
therewith.
3.10 "Grant Date" means the date upon which an Option has been
granted as prescribed in Section 6.2.
3.11 "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
3.12 "Nonstatutory Stock Option" means an Option not intended to
qualify or otherwise not qualifying as an Incentive Stock Option.
3.13 "Option" means a stock option granted pursuant to the Plan.
3.14 "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
3.15 "Optionee" means an Employee who holds an outstanding Option.
3.16 "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
3.17 "Plan" means the Steel Dynamics, Inc. 1996 Incentive Stock
Option Plan, as Amended and Restated herein.
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3.18 "Rules" means the regulations promulgated by the Securities
and Exchange Commission under Section 16 of the Exchange Act.
3.19 "Securities Act" means the Securities Act of 1933, as amended
from time to time.
3.20 "Stock" means the $0.01 par value common stock of the Company
and such other securities of the Company as may be substituted for Stock
pursuant to the terms of the Plan.
3.21 "Subsidiary" means and is limited to any wholly-owned
subsidiary.
IV. SHARES OF STOCK SUBJECT TO THE PLAN.
4.1 The total number of shares of Stock of the Company reserved and
available for distribution pursuant to Options granted hereunder shall not
exceed, in the aggregate, 4,903,000 shares of the authorized Stock of the
Company, subject to adjustment described below. Any shares issued by the
Company through the assumption or substitution of outstanding grants from an
acquired company shall not reduce the shares available for Options under the
Plan.
4.2 Stock which may be acquired under the Plan may be either
authorized but unissued shares or shares of issued Stock held by the Company's
treasury, or both, at the discretion of the Committee. Whenever any
outstanding Option or portion thereof expires, is canceled, is forfeited or is
otherwise terminated for any reason without having been exercised or without
having been fully vested, the shares allocable to the expired, canceled,
forfeited or otherwise terminated portion of the Option may again be the
subject of Options granted hereunder.
4.3 In the event of any stock dividend, stock split, combination or
exchange of shares, recapitalization or other change in the capital structure
of the Company, corporate separation or division (including, but not limited
to, split-up, split-off, spin-off or distribution to Company stockholders
other than a normal cash dividend), sale by the Company of all or a
substantial portion of its assets, rights offering, merger, consolidation,
reorganization or partial or complete liquidation, or any other corporate
transaction or event having an effect similar to any of the foregoing, the
aggregate number of shares reserved for issuance under the Plan, the number
and Option price of shares subject to outstanding Options, and any other
characteristics or terms of the Options as the Committee shall deem necessary
or appropriate to reflect equitably the effects of such changes to the
Optionees, shall be appropriately substituted for new shares or adjusted, as
determined by the Committee in its discretion. Notwithstanding the foregoing,
each such adjustment, if any, with respect to any Option shall comply with the
rules of Section 424(a) of the Code, and in no event shall any adjustment be
made which would render any Option granted hereunder anything other than an
incentive stock option for purposes of Section 422 of the Code, except as
otherwise contemplated by Section 6.4(d), or without the consent of the
Optionee.
V. ADMINISTRATION.
5.1 The Plan shall be administered by the Board. If the Board
elects to do so, however, it may appoint a committee of directors to
administer the Plan and make such rules as it deems necessary to govern the
operation of such committee. Such Committee shall be composed solely of two or
more members of the Board, each of whom shall be both (i) a "non-employee
director" as such term is defined in Rule 16b-3 promulgated under Section 16
of the Exchange Act or any successor provision, and (ii) "outside directors"
as that term is used in Section 162 of the Code and the regulations
promulgated thereunder.
5.2 The Board shall administer the Plan so as to comply at all
times with Rule 16b-3 of the Exchange Act, and Sections 162, 421, 422, and 424
of the Code. To the extent that any provision hereof or in any option granted
hereunder is not in compliance with any such rule or requirement, such
provision shall be deemed modified so as to be in compliance with such rule or
requirement, or if such modification is not possible, shall be deemed to be
null and void as it relates solely to such noncompliance.
5.3 The Board has the exclusive power, authority and discretion,
without further stockholder approval, to:
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(a) Determine the terms and conditions, not inconsistent with
the terms hereof, of any Option granted hereunder;
(b) Adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to
time deem advisable;
(c) Interpret the terms and provisions of the Plan and any
Option granted and any Option Agreements relating thereto;
(d) Accelerate or waive any term, condition, or restriction, but
solely in such a manner as not to render any Option otherwise qualified
hereunder nonqualified;
(e) Notwithstanding anything to contrary herein, but subject at
all times to the requirements of SEC Rule 16b-3, Regulation T, the
Code, and other federal, state and local tax and securities laws, the
Board may determine the methods and manner of exercise of options or
the means by which the exercise price of an Option may be paid,
including the form of payment and the methods by which shares of Stock
shall be delivered or transferred to Employees. Without limiting the
power and discretion conferred on the Board pursuant to the preceding
sentence, the Board may, in the exercise of its discretion, but need
not, delegate to and contract with an authorized and licensed bank,
trust company or broker to provide any administrative or other services
otherwise required to be provided under the terms hereof by the Company
or by the Board, in which case notices and deliveries to and from such
bank, trust company or broker shall be deemed for all purposes
hereunder to be notice and delivery to or from the Company or the
Board, as the case may be. Likewise, the Board may allow an Optionee to
pay the exercise price of an Option, in addition to the manner
described in Section 6.4(f), by one or more of the following methods:
(i) in the form of shares of our common stock already owned by the
option holder having an aggregate fair market value on the date the
option is exercised equal to the aggregate exercise price to be paid;
(ii) by requesting cancellation, without payment, of outstanding and
exercisable options for the number of shares of our common stock whose
aggregate fair market value on the date of exercise, when reduced by
their aggregate exercise price, equals the aggregate exercise price of
the options being exercised; or (iii) by employing a "cashless
exercise" or "same day sale" facility provided by an authorized bank,
trust company or broker.
(f) Prescribe the form of each Option Agreement, which need not
be identical for each Optionee; and
(g) Supervise the administration of the Plan and decide all
other matters that must be determined in connection with an Option or
this Plan.
If an option expires or terminates without having been exercised in full, the
unpurchased shares will continue to be available for subsequent award under
the Amended Plan.
5.4 The Board's interpretation of the Plan, any Options granted
under the Plan, any Option Agreement, and all decisions and determinations by
the Board with respect to the Plan shall be final, binding, and conclusive on
all parties.
5.5 The Board may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of the Plan and may rely upon
any opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Board in
engaging such counsel, consultant or agent shall be paid by the Company.
VI. STOCK OPTIONS.
6.1 All Employees are eligible to receive grants of Options
hereunder.
6.2 Subject to the provisions of this Plan, grants of Options to
Employees shall occur twice annually, on November 21 for the six (6) month
period May 21 through November 20, and on May 21 for the six (6) month period
November 21 through May 20. Options on each Grant Date shall be provided to
each Employee in the following position categories and in the following
amounts, based upon the Fair Market Value of the Stock for that
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particular Grant Date, as determined under the provisions of Section 3.9 (any
fractional share of Stock to be rounded up to the next whole share):
Position Grants Per Year Semi-Annual Grant Value
-------- --------------- -----------------------
President 2 $ 80,000.00
Vice-President 2 60,000.00
Vice-President 2 45,000.00
Manager 2 30,000.00
Supervisors/Professionals
Grade 3 2 15,000.00
Grade 2 2 12,500.00
Grade 1 2 10,000.00
Hourly 2 2,500.00
6.3 The Options granted hereunder shall be evidenced by an Option
Certificate, or an electronic equivalent thereof, issued on behalf of the
Company by an officer designated by the Board, which Option Certificate or
electronic confirmation shall be subject to the terms of an Option Agreement
to be executed or otherwise entered into or confirmed by the Company and the
Optionee. Unless otherwise provided by the Board, the terms of the Option
Agreement shall be deemed incorporated into all future Option Certificates or
electronic confirmations. The Option Agreement shall describe the Options and
shall state that the Options reflected in all Option Certificates or
electronic confirmations issued pursuant thereto shall be subject to all of
the terms and provisions of the Plan. The Option Agreement may also contain
such other terms and provisions, consistent with the Plan, as the Board may
approve.
6.4 Subject to the Board's authority under Section 5.3, Options
granted under the Plan shall be governed by the following additional terms and
conditions:
(a) EXERCISE PRICE. The price per share under any Option granted
hereunder shall be at one hundred percent (100%) of the Fair Market
Value (110% in the case of an Incentive Stock Option granted to an
Employee who, at the time the Option is granted, owns Stock of the
Company or any Subsidiary or Parent of the Company possessing more that
ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any Subsidiary or Parent of the Company) on
the date of grant, determined in the manner required by Section 3.9
(b) TERM OF OPTION: EXERCISE. The time within which any Option
granted hereunder shall be exercisable shall be not earlier than six
(6) months nor later than five (5) years from the applicable Grant
Date, subject to Sections 6.4(j), (k) and (l). The Optionee must remain
in the continuous employment of the Company or any of its Subsidiaries
from the date of the grant of the Option to and including the date of
exercise of the Option in order to be entitled to exercise such Option.
Options granted hereunder shall be exercisable in such manner and at
such dates as the Board may specify or otherwise permit. Any options
granted prior to the approval of this Plan by the Company's
stockholders shall not be exercisable until such time as the Plan has
been so approved. Continuous employment shall not be deemed to be
interrupted by transfers between the Company and one or more of its
Subsidiaries. The Board shall, at its discretion, determine the effect
of approved leaves of absence and all other matters having to do with
"continuous employment." Where an Optionee dies or is disabled while
employed by the Company or any of its Subsidiaries, his or her Options
may be exercised following such death or disability in accordance with
the provisions of Sections 6.4(j) and (k) hereof.
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(c) TYPE OF OPTION. Each Option granted hereunder shall be
designated in the Option Agreement as either an Incentive Stock Option
or as a Nonstatutory Stock Option, in order to take into account that
the limitations described in Section 6.4(d) and/or elsewhere herein are
or may be exceeded by the cumulative total of the grants contemplated
by Section 6.2 to a specific person, such that the Options covered by
such excess grants are rendered Nonstatutory Stock Options.
(d) INDIVIDUAL DOLLAR LIMITATIONS. The aggregate Fair Market
Value (determined as of the time of Option Grant) of all shares of
Stock with respect to which Incentive Stock Options are first
exercisable by an Optionee in any calendar year may not exceed
$100,000.00. To the extent that the aggregate Fair Market Value of the
Stock with respect to which Incentive Stock Options are exercisable for
the first time by the Optionee during any calendar year (under all
plans of the Company and any Parent or Subsidiary) exceeds $100,000.00,
such Options shall be treated as Nonstatutory Stock Options, and such
Nonstatutory Stock Options, at the time of grant, shall be specifically
so designated.
(e) INDIVIDUAL SHARE LIMITATIONS. In any fiscal year of the
Company, no Employee shall be granted Options to purchase more than
three hundred thousand (300,000) shares.
(f) PAYMENT. No shares of Stock shall be issued until full
payment therefor has been made, and an Optionee shall not have any
rights to dividends or other rights of a stockholder with respect to
shares subject to an Option until such time as the Stock is issued in
the name of the Optionee following exercise of the Option in accordance
herewith. Payment may be made in cash (by certified or bank check or
such other instrument as the Board may prescribe or accept) or in any
other manner, including those described in Section 5.3(e). Full payment
shall also be made, no later than the time of issuance of the shares
subject to answer, in respect of any tax withholding obligations
contemplated by Section 9.2, either in cash, as described herein, or by
any of the methods described in Section 5.3(e).
(g) NOTICE. Each Option shall be exercised, in whole or in part,
by notifying the Company, in written form or electronically in the
manner prescribed by the Board and in sufficient detail to enable the
Company to determine the person's intent, and by delivering or
transmitting full payment to the Company for the shares being
purchased.
Unless the Board determines that such restrictions are no longer
applicable because the Stock being issued is registered under the
Securities Act of 1933, as amended (the "Act") and a prospectus in
respect thereof is current, each such notice shall be deemed to contain
representations on behalf of the Optionee that he or she acknowledges
that the Company is selling the shares being acquired by him or her
under a claim of exemption from registration under the Act, as a
transaction not involving any public offering; that he or she
represents and warrants that the shares are being acquired with a view
to "investments" and not with a view to distribution or resale; and
that he or she agrees not to transfer, encumber or dispose of the
shares unless: (i) a registration statement with respect to the shares
shall be effective under the Act, together with proof satisfactory to
the Company that there has been compliance with applicable state laws,
or (ii) the Company shall have received an opinion of counsel in form
and content satisfactory to the Company to the effect that the transfer
qualifies under Rule 144 or some other disclosure exemption from
registration and that no violation of the Act or applicable state
securities laws will be involved in such transfer, and/or such other
documentation in connection therewith as the Company's counsel may
require.
(h) The Company may endorse such legend or legends upon the
certificates for Stock issued pursuant to a grant hereunder, and may
issue such "stop transfer" instructions to its transfer agent in
respect of such Stock, on the electronic equivalent thereof, as, in its
discretion, it determines necessary or appropriate to prevent a
violation of, or to perfect an exemption from, the registration
requirements of the Act, to implement the provisions of the Plan and
any Option Agreement hereunder, or to permit the Company to determine
the occurrence of a disqualifying disposition, as described in Section
421(b) of the Code, of Stock transferred upon execution of an Option
granted under the Plan.
(i) NONTRANSFERABILITY OF OPTIONS. No Options shall be
transferable by the Optionee otherwise than by will, by the laws of
descent and distribution, pursuant to a Qualified Domestic Relations
Order ("QDRO"), or as permitted under the Rules, and all Options shall
be exercisable, during the Optionee's lifetime, only by the
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Optionee. No right or interest of an Employee in any Option may be
pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Employee to any other party other than
the Company or a Subsidiary.
(j) TERMINATION BY REASON OF DEATH. Unless otherwise determined
by the Board at or after grant, if an Optionee's employment by the
Company terminates by reason of death, any Option held by such Optionee
may thereafter be exercised, to the extent then exercisable or on such
accelerated basis as the Board may determine at or after grant, by the
legal representative of the estate or by the legatee of the Optionee
under the will of the Optionee, for a period of one hundred eighty
(180) days (or such shorter period as the Board may specify at grant)
from the date of such death or until the expiration of the stated term
of such Option, whichever period is shorter.
(k) TERMINATION BY REASON OF DISABILITY. Unless otherwise
determined by the Board at or after grant, if an Optionee's employment
by the Company terminates by reason of Disability, any Option held by
such Optionee may thereafter be exercised by the Optionee, to the
extent it was exercisable at the time of termination, or on such
accelerated basis as the Board may determine at or after grant, for a
period of ninety (90) days (or such shorter period as the Board may
specify at grant) from the date of such termination of employment or
until the expiration of the stated term of such Option, whichever
period is shorter; provided, however, that, if the Optionee dies within
such ninety day (or such shorter period as the Board shall specify at
grant), any unexercised Option held by such Optionee shall thereafter
be exercisable to the extent to which it was exercisable at the time of
death for a period of one hundred eighty (180) days from the date of
such death or until the expiration of the stated term of such Option,
whichever period is shorter.
(l) RESIGNATION BY OPTIONEE; TERMINATION BY COMPANY WITHOUT
CAUSE. Unless otherwise determined by the Board at or after grant, if
an Optionee voluntarily resigns from his employment with the Company,
or is terminated by the Company other than for cause (as herein
defined), any Option held by such Optionee may thereafter be exercised
by the Optionee, to the extent it was exercisable at the time of
termination, or on such accelerated basis as the Board may determine at
or after grant, for a period of ninety (90) days (or such shorter
period as Board may specify at grant) from the date of such resignation
or termination of employment or the expiration of the stated term of
such Option, whichever period is shorter; provided, however, that, if
the Optionee dies within such ninety (90)-day period, any unexercised
Option held by such Optionee shall thereafter be exercisable, to the
extent to which it was exercisable at the time of death, for a period
of one hundred eighty (180) days from the date of such death or until
the expiration of the stated term of such Option, whichever period is
shorter. "Cause" shall mean either (i) if the Optionee has an
employment agreement with the Company, the definition of Cause included
in such employment agreement, or (ii) if the Optionee does not have an
employment agreement with the Company, the termination of the
Optionee's employment with the Company because of (i) the willful
failure by the Optionee (other than by reason of incapacity due to
physical or mental illness) to perform any material duty in connection
with the Optionee's employment with the Company, (ii) the conviction of
the Optionee of a felony or the Optionee's plea of no contest to a
felony, or (iii) the perpetration by the Optionee of a material
dishonest act or fraud against the Company or any Parent or Subsidiary
thereof.
(m) OTHER TERMINATION. Unless otherwise determined by the Board
at or after grant, if an Optionee's employment by the Company
terminates for any reason other than death, disability, the Optionee's
resignation, or termination by the Company other than for Cause, the
Option shall thereupon terminate.
VII. AMENDMENTS AND TERMINATION.
7.1 PLAN AMENDMENT. The Board may amend, alter or discontinue the
Plan at any time and from time to time, but no amendment, alteration, or
discontinuation shall be made (i) which would impair the rights of an Optionee
under an Option award previously granted, without the Optionee's consent, or
(ii) which, if such approval is not obtained, requires stockholder approval
under the Rules.
7.2 INCENTIVE STOCK OPTION AMENDMENT. The Board may amend the terms
of any Option granted, prospectively or retroactively, but no such amendment
shall impair the rights of any Optionee without the Optionee's consent. The
Board may also substitute new Options for previously granted Options,
including previously granted Options having higher option prices. Subject to
the above provisions, the Board shall have broad
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authority to amend the Plan to take into account changes in applicable tax
laws, securities laws and accounting rules, as well as other developments.
VIII. UNFUNDED STATUS OF PLAN.
8.1 The Plan is intended to constitute an "unfunded" plan for
incentive compensation. With respect to any payments not yet made to an
Optionee by the Company, nothing contained herein shall give any such Optionee
any rights that are greater than those of a general creditor of the Company.
In its sole discretion, the Board may authorize the creation of trusts or
other arrangements to meet the obligations created under the Plan to deliver
Stock; provided, however, that, unless the Board otherwise determines with the
consent of the affected Optionee, the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
IX. GENERAL PROVISIONS.
9.1 NONGUARANTY OF EMPLOYMENT. The adoption of the Plan shall not
confer upon any Optionee any right to continued employment with the Company
nor shall it interfere in any way with the right of the Company to terminate
its relationship with any of its employees at any time.
9.2 WITHHOLDING OF TAXES. No later than the date as of which an
amount first becomes includible in the gross income of the Optionee for
federal income tax purposes with respect to any Option under the Plan, the
Optionee shall pay to the Company or make arrangements satisfactory to the
Board regarding the payment of any federal state or local taxes of any kind
required by law to be withheld with respect to such amount. The obligations of
the Company under the Plan shall be conditioned on such payment or
arrangements and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
the Optionee.
9.3 NO STOCKHOLDER RIGHTS. No Option shall give the Employee any of
the rights of a stockholder of the Company unless and until shares of Stock
are in fact issued to such person in connection with such Option.
9.4 EXPENSES. The expenses of administering the Plan shall be
borne by the Company and its Subsidiaries.
9.5 FRACTIONAL SHARES. No fractional shares of Stock shall be
issued, and the Board shall determine, in its discretion, whether cash shall
be given in lieu of fractional shares or whether such fractional shares shall
be eliminated by rounding up.
9.6 SEVERABILITY. The provisions of this Plan, and any
administrative rules and regulations prescribed by the Board in connection
with this Plan, shall be applied in all cases so as to comply with the
requirements of Rule 16b-3 of the Securities Exchange Act of 1934 and with
Sections 162, 421, 422 and 424 of the Internal Revenue Code, and any Plan
provision, administrative rule or other action that would conflict with or
violate any of the foregoing will be deemed severed from the Plan, amended as
deemed necessary to comply, or otherwise rendered ineffective to the maximum
extent permissible to maintain compliance with such applicable rules or
statutes. Specifically, but without limitation, any change to the terms of an
option that would require approval by the Board of Directors as a new option
grant or which would otherwise not be exempt from Section 16(b) of the
Securities Exchange Act of 1934 in the absence of Board approval shall be
deemed ineffective and of no force whatsoever unless and until such approval
has been properly secured (provided, however, that, unless otherwise
prohibited, such approval may be declared effective retroactively). In like
manner, should any provision of this Plan or administrative rule, regulation
or action taken pursuant to this Plan, by the Board or otherwise, if applied
to an existing option, be such as to constitute a modification, extension or
renewal of that option, within the meaning of Section 424(h)(1) of the
Internal Revenue Code, such provision, ruling or action shall not be applied
retroactively to any existing options but shall be applied only prospectively
to then current and future options.
9.7 GOVERNING LAW. To the extent not governed by federal law, the
Plan and all Option Agreements shall be construed in accordance with and
governed by the laws of the State of Indiana.
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