Exhibit 10.21
BIOGEN, INC.
1985 NON-QUALIFIED STOCK OPTION PLAN
(As amended and restated through February 7, 2003,
effective as of February 7, 2003)
I. PURPOSE OF THE PLAN
The Plan is intended to encourage ownership of shares of the Common Stock
by certain Employees and Directors of the Company and its Affiliates and to
provide an additional incentive to those Employees and Directors to promote the
success of the Company and its Affiliates.
II. DEFINITIONS
1. "Affiliate" means (a) a corporation in respect of which the Company
owns directly or indirectly fifty percent (50%) or more of the voting securities
thereof or which is otherwise controlled by the Company; or (b) to the extent
not inconsistent with Section 424 of the Code, an unincorporated trade or
business controlled by the Company which has elected, for federal income tax
purposes, to be either (i) classified as an association taxable as a corporation
or (ii) disregarded as an entity separate from its owner (as provided in Section
301.7701-3 of the federal income tax regulations). For purposes of this
definition, the Company shall be deemed to control another entity if the Company
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through ownership of voting
securities, by contract or otherwise.
2. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
3. "Committee" means the Stock and Option Plan Administration Committee of
the Board of Directors of the Company or, if such committee ceases to exist, the
Board of Directors of the Company or a committee thereof to which responsibility
for administering the Plan shall have been delegated.
4. "Common Stock" means the common stock of the Company, par value $0.01
per share.
5. "Company" means Biogen, Inc., a Massachusetts corporation.
6. "Corporate Change in Control" shall be deemed to have occurred upon:
(i) the acquisition of beneficial ownership (as determined pursuant
to the provisions of Rule 13d-3 under the Exchange Act) of securities of
the Company representing more than fifty percent (50%) of the combined
voting power of the Company's then outstanding securities by a person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act (excluding for this purpose, the Company or its
Affiliates, or any employee benefit plan of the Company),
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pursuant to a transaction or series of related transactions which the
Board of Directors does not approve; or
(ii) at such time as individuals who as of April 27, 2001 constitute
the Board of Directors (the "Incumbent Board") cease for any reason to
constitute a majority of the Board of Directors of the Company, provided
that any person becoming a director subsequent to April 27, 2001 whose
election or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board, shall, for purposes of the Plan, be considered as
though such person were a member of the Incumbent Board (other than an
individual whose initial assumption of office is in connection with an
actual or threatened election contest related to the election of the
directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or
(iii) the occurrence of any other event which the Incumbent Board in
its sole discretion determines should be considered a Corporate Change of
Control.
7. "Corporate Transaction" shall mean the following unless and until the
transaction becomes a Corporate Change in Control:
(i) a reorganization, recapitalization, merger or consolidation
unless more than fifty percent (50%) of the Company's outstanding voting
stock or the voting stock of the corporation resulting from the
transaction (or the parent of such corporation) is held subsequent to the
transaction by the persons who held the stock of the Company immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company to a successor in interest to the
business of the Company.
8. "Designated Employee" means an Employee or Director designated by the
Committee, in its sole discretion, as a "Designated Employee" for purposes of
the Plan at any time prior to the effective date of a Corporate Transaction.
9. "Director" means a member of the Board of Directors of the Company or
an Affiliate.
10. "Employee" means an individual employed by the Company or an Affiliate
as a common law employee (determined under the regular personnel policies,
practices and classifications of the Company or the Affiliate, as applicable).
An individual is not considered an Employee for purposes of the Plan if the
individual is classified as a consultant or contractor under the Company or an
Affiliate's regular personnel classifications and practices, or if the
individual is a party to an agreement to provide services to the Company or an
Affiliate without participating in the Plan, notwithstanding that such
individual may be treated as a common law employee for payroll tax, coverage
requirements under Section 410(b) of the Code, nondiscrimination requirements
under Section 401(a)(4) or other legal purposes.
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11. "Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.
12. "Fair Market Value" shall have the meaning set forth in Section VI.A.
13. "For Cause" shall have the meaning set forth in Section VI.G.
14. "Incumbent Board" shall have the meaning set forth in the definition
of "Corporate Change of Control."
15. "Involuntary Employment Action" shall have the meaning set forth in
Section VI.R.
16. "ISO Plan" shall have the meaning set forth in Article III.
17. "Option" means a stock option granted under this Plan.
18. "Option Certificate" means a certificate delivered to an Option holder
by the Company pursuant to the Plan, in such form as the Committee shall
approve, which sets forth the terms and conditions of an Option.
19. "Plan" shall mean this 1985 Non-Qualified Stock Option Plan, as
amended and/or restated from time to time.
20. "Retirement" shall have the meaning set forth in Section VI.J.
21. "Securities Act" shall mean the United States Securities Act of 1933,
as amended from time to time.
III. SHARES SUBJECT TO THE PLAN
The aggregate number of shares as to which Options may be granted from
time to time shall be 54,208,000 shares of the Common Stock; provided, however
that such aggregate number shall be reduced by the number of shares which has
been sold under, or may be sold pursuant to options granted from time to time
under, the Company's 1982 Incentive Stock Option Plan (the "ISO Plan"), to the
same extent as if such sales had been made or options granted pursuant to the
Plan.
Notwithstanding the foregoing, on the first day of each fiscal year of the
Company (beginning in 2003) the number of shares as to which Options may be
granted from time to time pursuant to the Plan shall be increased by an amount
equal to the lesser of (i) 3,695,000 shares or the equivalent of such number of
shares of the Common Stock after the Committee, in its sole discretion, has
interpreted the effect of any stock split, stock dividend, combination,
recapitalization or similar transaction in accordance with Article VIII of this
Plan; or (ii) 2.5% of the number of outstanding shares of the Common Stock on
the last trading day of the immediately preceding fiscal year.
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If any Option granted under the Plan or the ISO Plan ceases to be
"outstanding", in whole or in part, other than by reason of the exercise of such
Option, the shares which were subject to such Option shall be available for the
granting of other Options. Any Option shall be treated as "outstanding" until
such Option is exercised in full, terminates under the provisions of the Plan or
the ISO Plan, as the case may be, or expires by reason of lapse of time.
Except as expressly provided above, the aggregate number of shares as to
which Options may be granted shall be subject to change only by means of an
amendment adopted in accordance with Article XI below, subject to the provisions
of Article VIII.
IV. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The membership of the
Committee shall be determined, and shall be subject to change without cause and
without notice from time to time, by the Board of Directors of the Company.
The Committee is authorized to interpret the provisions of the Plan or of
any Option and to make all rules and determinations necessary or advisable for
the administration of the Plan. The interpretation and construction by the
Committee of any provision of the Plan or of any Option granted under it shall
be final, unless otherwise determined by the Incumbent Board. The Committee's
determinations under the Plan do not need to be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options under
the Plan (whether or not such persons are similarly situated). Subject to the
provisions of the Plan, Options may be granted upon such terms and conditions as
the Committee may prescribe.
V. ELIGIBILITY FOR PARTICIPATION
The Committee shall determine which Employees and Directors shall be
eligible to participate in the Plan. Without limiting the generality of the
foregoing, Options may be awarded for reasons of performance, merit, promotion,
bonus or upon new Employees joining the Company or any Affiliate.
The Committee may grant to one or more such Employees or Directors one or
more Options, and shall designate the number of shares to be optioned under each
Option so granted; provided, however, that no Options shall be granted after
December 31, 2011. In no event shall any Employee be granted in any calendar
year Options to purchase or receive more than 2,400,000 shares, as adjusted
pursuant to Article VIII, of the Common Stock pursuant to the Plan.
VI. TERMS AND CONDITIONS OF OPTIONS
No Option issued pursuant to the Plan shall be an incentive stock option
under Section 422 of the Code. No purported grant of any Option shall be
effective until such Option shall have been approved by the Committee, except as
otherwise provided in Section VI.N below. The Committee may provide that Options
be granted subject to such conditions as the Committee may deem appropriate,
including without limitation, subsequent approval by the shareholders of
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the Company of the Plan or any amendments thereto. Each Option shall be subject
to at least the following terms and conditions:
A. Option Price: Each Option Certificate shall state the Option price per
share of the Common Stock covered by such Option grant. Except as otherwise
determined by the Committee, the Option price per share for Options granted
under the Plan shall be equal to the fair market value per share of Common Stock
(the "Fair Market Value") on the date of grant of the Option; provided, however,
that in no event shall the Option price be less than the par value per share of
Common Stock. Fair Market Value shall be calculated as follows: (i) if the
Common Stock is listed on a national securities exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market and sale prices are regularly
reported for the Common Stock, then the Fair Market Value shall be the
arithmetic mean between the "high" and "low" sale prices for the Common Stock
reported on the applicable composite tape or other comparable reporting system
on the date of grant, or if the date of grant is not a trading day, on the most
recent trading day immediately prior to the date of grant; or (ii) if sale
prices are not regularly reported for the Common Stock as described in clause
(i) above but bid and asked prices for the Common Stock are regularly reported,
then the Fair Market Value shall be the arithmetic mean between the closing or
last bid and asked prices for the Common Stock on the date of grant or, if the
date of grant is not a trading day, on the most recent trading day immediately
prior to the date of grant; or (iii) if sale prices are not regularly reported
for the Common Stock as described in clause (i) or (ii) above, then the Fair
Market Value shall be such value as the Committee in good faith determines.
B. Number of Shares: Each Option Certificate shall state the number of
shares of the Common Stock to which it pertains.
C. Term of Option: Each Option Certificate shall state the term of the
Option which shall be ten (10) years from the date of the grant thereof, or at
such earlier or later time as the Committee shall expressly state in the Option
Certificate.
D. Date of Exercise: Each Option Certificate shall state the date or dates
on which the Option becomes exercisable, and may provide that the Option rights
accrue or become exercisable in installments over a period of months or years,
or upon the attainment of stated goals or events or through other circumstances
or programs approved by the Committee. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option.
E. Cancellation and Repurchase Rights: An Option Certificate may stipulate
that an Option which becomes exercisable shall be subject to cancellation or
that shares purchased upon the exercise of such Option shall be subject to
repurchase rights in favor of the Company. In such event the Committee shall
determine the date or dates, or event or events, upon which such cancellation or
repurchase rights shall become effective or shall lapse, as the case may be and
those provisions shall be set forth in the Option Certificate.
F. Medium of Payment: The Option price shall be payable upon the exercise
of the Option. It shall be payable (a) in United States dollars in cash or by
check, (b) if permitted by
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the Committee, in shares of the Common Stock held by the Option holder for at
least six months having a fair market value (determined in the manner provided
in Section VI.A above as of the date of exercise) equal to the cash exercise
price of the Option, (c) at the discretion of the Committee, by delivery of the
Option holder's personal note, for full, partial or no recourse, bearing
interest payable not less than annually at market rate on the date of exercise
and no less than 100% of the applicable Federal rate, as defined in Section
1274(d) of the Code, with or without the pledge of shares of the Common Stock as
collateral, (d) at the discretion of the Committee, in accordance with a
cashless exercise program established with a securities brokerage firm, or (e)
at the discretion of the Committee, by any combination of (a), (b), (c) and (d)
above.
G. Termination of Employment: An Option holder who ceases (for any reason
other than death, total and permanent disability, Retirement or termination of
employment For Cause) to be an Employee or Director of the Company or of an
Affiliate may exercise any Option granted to the extent that the right to
purchase shares thereunder has accrued on the date of such termination. Except
as set forth in the next sentence or as otherwise set forth in the Plan, such
Option shall be exercisable only within three (3) months after such date of
termination, or, if earlier, within the originally prescribed term of the
Option, unless the Committee shall set forth a different period in the Option
Certificate. Notwithstanding anything in this Plan to the contrary, unless a
different time period is specified in the Option Certificate, an Option holder
(or permitted transferee of such individual) who ceases (for any reason other
than For Cause) to be a member of the Board of Directors of the Company after
the completion of at least six (6) full years of services on the Board may
exercise any Option granted within the originally prescribed term of the Option
but solely to the extent the right to purchase shares thereunder has accrued on
the date of such termination. For purposes of the Plan, employment shall not be
deemed terminated by reason of a transfer to another employer which is the
Company or an Affiliate. If any Option is not exercised following the Option
holder's termination within the time specified, the Option shall terminate and
the shares covered by such Option shall revert to the Plan.
An Option holder whose employment with the Company or an Affiliate is
terminated For Cause or a Director who is removed from the Board of Directors
For Cause shall forthwith immediately upon notice of such termination cease to
have any right to exercise any Option, and the Option shall terminate and the
shares covered by such Option shall revert to the Plan. For purposes of the
Plan, termination "For Cause" shall be deemed to include (and is not limited to)
dishonesty with respect to the Company or any Affiliate, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized disclosure of
confidential information, breach by an Option holder of any provision of any
employment, nondisclosure, non-competition or similar agreement between the
Option holder and the Company or any Affiliate, and conduct substantially
prejudicial to the business of the Company or an Affiliate. The determination of
the Committee as to the existence of cause shall be conclusive. Any definition
in an agreement between an Option holder and the Company or an Affiliate, which
contains a conflicting definition of For Cause and which is in effect at the
time of such termination, shall supersede the definition in the Plan with
respect to the Option holder.
An Option holder to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of temporary
disability, or who is on a
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permitted leave of absence for any purpose, shall not, during the period of any
such absence, be deemed by virtue of such absence alone, to have terminated his
employment with the Company or with an Affiliate except as the Committee may
otherwise expressly provide in the Option Certificate.
H. Total and Permanent Disability: If an Option holder ceases to be an
Employee or Director of the Company or of an Affiliate by reason of total and
permanent disability, as determined by the Committee, any Option held by him or
her on the date of disability shall be exercisable as to all or any part of the
shares subject to the Option, all of which shares shall be fully vested as of
the date of such disability. A disabled Option holder may exercise such Option
only within a period of one (1) year after the date as of which the Committee
determines that he or she became disabled or within such different period as may
be determined by the Committee and set forth in the Option Certificate, or, if
earlier, within the originally prescribed term of the Option. If any Option is
not exercised following the Option holder's total and permanent disability
within the time specified, the Option shall terminate and the shares covered by
such Option shall revert to the Plan.
I. Death: If an Option holder dies while the he is an Employee or Director
of the Company or of an Affiliate, any Option held by him at the date of death
shall be exercisable as to all or any part of the shares subject to the Option,
all of which shares shall be fully vested as of the date of the Option holder's
death. A deceased Option holder's legal representatives or one who acquires the
Option by will or by the laws of descent and distribution may exercise such
Option only within a period of one (1) year after the date of death or within
such different period as may be determined by the Committee and set forth in the
Option Certificate, or, if earlier, within the originally prescribed term of the
Option. If any Option is not exercised following the Option holder's death
within the time specified, the Option shall terminate and the shares covered by
such Option shall revert to the Plan.
J. Retirement: Unless otherwise set forth in an Option Certificate,
immediately upon an Option holder's Retirement, such individual's then unvested
Options, including those held by a permitted transferee of such individual,
shall automatically accelerate and become fully vested for fifty percent (50%)
of the number of shares covered by such unvested Options and for an additional
ten percent (10%) of the number of shares covered by such unvested Options for
every year of employment by the Company or any of its Affiliates beyond ten (10)
years, up to the remaining number of unvested Options. Upon Retirement, a
retired Option holder (or permitted transferee of such individual) may exercise
any then outstanding Options solely to the extent the right to purchase shares
has accrued or has been accelerated only within a period of three (3) years
after the date of Retirement or within such different period as may be
determined by the Committee and set forth in the Option Certificate, or, if
earlier, within the originally prescribed term of the Option. If any Option is
not exercised following the Option holder's Retirement within the time
specified, the Option shall terminate and the shares covered by such Option
shall revert to the Plan. For purposes of the Plan, the term "Retirement" as to
any Employee or Director of the Company or any of its Affiliates shall mean such
person's leaving the employment of the Company and its Affiliates after reaching
age 55 with ten (10) years of service with the Company or its Affiliates, but
not including pursuant to any termination For
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Cause or pursuant to any termination for insufficient performance, as determined
by the Company.
The provisions of this Section VI.J shall be retroactive and shall apply
to all outstanding Options granted under the Plan, regardless of the date of
grant.
K. Exercise of Option and Issue of Shares: Options shall be exercised by
giving written notice to the Company or its designee, together with provision
for payment of the Option price in accordance with Section VI.F. Such written
notice shall be signed by the person exercising the Option, shall state the
number of shares of the Common Stock with respect to which the Option is being
exercised, and shall contain any warranty required by Article VII of the Plan.
The issuance of the shares of the Common Stock upon exercise of the Option may
be delayed by the Company if any law or regulation requires the Company to take
any action with respect to the shares prior to the issuance thereof. Without
limiting the generality of the foregoing, nothing contained herein shall be
deemed to require the Company to issue any shares of the Common Stock if
prohibited by law or applicable regulation.
The shares of the Common Stock shall, upon issuance, be paid-up,
non-assessable shares.
L. Assignability and Transferability of Option: By its terms, an Option
granted to an Option holder shall not be transferable by such Option holder
other than (i) by will or by the laws of descent and distribution, or (ii)
pursuant to a qualified domestic relations order, as defined by the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
or (iii) as otherwise determined by the Committee. The designation of a
beneficiary of an Option by an Option holder shall not be deemed a transfer
prohibited by this Section. Except as provided in the preceding sentence, an
Option shall be exercisable, during an Option holder's lifetime, only by the
Option holder (or by his or her legal representative) and shall not be assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation, or other disposition of
any Option or of any rights granted thereunder contrary to the provisions of
this Section, or the levy of any attachment or similar process upon an Option or
other such rights, shall be null and void.
M. Other Provisions: The Option Certificates shall be subject to such
other terms and conditions, including, without limitation, restrictions upon the
exercise of the Option, as the Committee shall deem advisable.
N. Non-Employee Director Options: Each Director of the Company who is not
an Employee of the Company or any of its Affiliates and who is appointed or
elected to the Board of Directors of the Company on or after February 7, 2003,
upon first being appointed or elected to the Board shall be automatically
granted an Option to purchase 20,000 shares of Common Stock(each, an "Initial
Grant")
Each Director of the Company who is not an Employee of the Company or any
of its Affiliates shall be automatically granted an Option to purchase an
additional 10,000 shares of Common Stock (each a "Subsequent Grant"); provided
that on the date of grant such person is
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still a member of the Board of Directors of the Company. The date of grant of
each Subsequent Grant to any Director appointed or elected to the Board of
Directors of the Company on or after February 7, 2003 shall be the anniversary
date of such Director's initial appointment or election to the Board. The date
of grant of each Subsequent Grant to any Director appointed or elected to the
Board of Directors of the Company prior to February 7, 2003 shall be the
anniversary date of such Director's most recent prior Option grant under the
Plan.
The Initial Grant shall be exercisable as to 8,000 of the shares subject
thereto upon completion of one full year of service on the Board of Directors of
the Company after the date of grant, and as to an additional 6,000 shares upon
completion of the second full year of such service, and as to the remaining
6,000 shares upon completion of the third full year of such service. Each
Subsequent Grant shall be exercisable as to 4,000 of the shares subject thereto
upon completion of one full year of service on the Board of Directors of the
Company after the date of grant, and as to an additional 3,000 shares upon
completion of the second full year of such service, and as to the remaining
3,000 shares upon completion of the third full year of such service.
Each Option granted under this Section VI.N shall have an exercise price
equal to the fair market value per share of Common Stock on the date of grant,
as determined under Section VI.A. above, and a term of ten (10) years, unless
earlier terminated pursuant to the other provisions of the Plan or the terms of
the grant. Section VI.G, which cancels the Options of any Option holder
determined by the Committee to have been terminated For Cause, shall not apply
to the awards under this Section VI.N.
O. Tax Withholding: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act withholdings or
other amounts are required by applicable law or governmental regulation to be
withheld from the Option holder's salary in connection with the exercise of an
Option, the Option holder shall advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Option holder, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Common Stock, is authorized by the Committee (and permitted
by law), provided, however, that with respect to persons subject to Section 16
of the Exchange Act, any such withholding arrangement involving use of shares
shall be in compliance with any applicable provisions of Rule 16b-3 promulgated
under Section 16 of the Exchange Act. If the Committee allows withholding
through use of shares of the Common Stock, it shall be only to the statutory
minimum amount. For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in the manner
provided in Section VI.A. as of the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings required,
the Option holder may be required to advance the difference in cash to the
Company or the Affiliate employer.
P. Reload Options: The Committee may authorize reload Options ("Reload
Options") to purchase for cash or shares a number of shares of the Common Stock.
The number of Reload Options shall equal (i) the number of shares of the Common
Stock used to exercise the underlying Options and (ii) to the extent authorized
by the Committee, the number of shares of the Common Stock used to satisfy any
tax withholding requirement incident to the exercise
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of the underlying Options. The grant of a Reload Option will become effective
upon the exercise of underlying Options through the use of shares of the Common
Stock held by the option holder for at least 6 months. Reload Options must be
evidenced in Option Certificates or agreements. The Option price per share of
the Common Stock deliverable upon the exercise of a Reload Option shall be the
Fair Market Value on the date the grant of the Reload Option becomes effective.
The term of each Reload Option shall be equal to the remaining option term of
the underlying Option. No additional Reload Options shall be granted to Option
holders when Options and/or Reload Options are exercised pursuant to the terms
of the Plan following termination of the Option holder's employment or on
account of death or total and permanent disability. All other provisions of the
Plan with respect to Options shall apply equally to Reload Options.
Q. Rights as a Shareholder: No Option holder shall have rights as a
shareholder with respect to any shares of the Common Stock covered by such
Option except as to such shares as have been registered in the Company's share
register in the name of such person upon the due exercise of the Option.
R. Effect of Corporate Transaction: In the event of a Corporate
Transaction, the Committee shall, prior to the effective date of the Corporate
Transaction, as to each outstanding Option under the Plan either (i) make
appropriate provisions for the Options to be assumed by the successor
corporation or its parent or be replaced with a comparable options to purchase
shares of the capital stock of the successor corporation or its parent; or (ii)
upon written notice to the Option holders provide that all Options must be
exercised and the Plan will terminate (all Options having been made fully
exercisable as set forth below in this Section VI.R); or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the then aggregate
Fair Market Value of the shares subject to such Options (all Options having been
made fully exercisable as set forth below in this Section VI.R) over the
aggregate Option price thereof. The determination of comparability under this
Section shall be made by the Committee and its determination shall be final,
binding and conclusive.
Each outstanding Option under the Plan which is assumed in connection with
a Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been issued,
in consummation of such Corporate Transaction, to an actual holder of the same
number of shares of the Common Stock as are subject to such Option immediately
prior to such Corporate Transaction. Appropriate adjustments shall also be made
to the Option price payable per share, provided the aggregate Option price
payable for such securities shall remain the same. In addition, the class and
number of securities available for issuance under the Plan on both an aggregate
and per participant basis shall be appropriately adjusted to reflect the effect
of the Corporate Transaction upon the Company's capital structure.
If at any time within two (2) years of the effective date of a Corporate
Transaction there is an Involuntary Employment Action with respect to any
Designated Employee, each then outstanding Option assumed or replaced under this
Section and held by such Designated Employee (or a permitted transferee of such
person) shall, upon the occurrence of such Involuntary Employment Action,
automatically accelerate so that each such Option shall
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immediately become exercisable for the total number of shares of Common Stock at
the time subject to such Option, as assumed or replaced, and may be exercised
for all or any portion of those shares to the extent not previously exercised.
Upon the occurrence of an Involuntary Employment Action with respect to a
Designated Employee, any outstanding Options held by such Designated Employee
(and his or her permitted transferees) shall be exercisable within one (1) year
of the Involuntary Employment Action or, if earlier, within the originally
prescribed term of the Option. An "Involuntary Employment Action" as to an
Designated Employee shall mean the involuntary termination of the Designated
Employee's employment with the Company or an Affiliate other than For Cause, or
the termination by the Designated Employee of his employment with the Company
and its Affiliates upon the occurrence, without the Option holder's express
written consent, of any of the following circumstances unless such circumstances
are corrected (provided such circumstances are capable of correction): (i) any
adverse and material alteration and diminution in the Option holder's position,
title or responsibilities (other than a mere change in title or reporting
relationship) as they existed immediately prior to the Corporate Transaction or
as the same may be increased from time to time thereafter, (ii) a reduction of
the Option holder's annual base salary or targeted bonus opportunity, in each
case as in effect on the date prior to the Corporate Transaction or as the same
may be increased from time to time thereafter, or (iii) relocation of the
offices at which the Option holder is employed which increases the Option
holder's daily commute by more than 100 miles on a round trip basis.
In the event the Company terminates the Plan or elects to cash out the
Options in accordance with clauses (ii) and (iii) of the first paragraph of this
Section VI.R, then the exercisability of each Option outstanding under the Plan
shall be automatically accelerated so that each such Option shall immediately
prior to such Corporate Transaction, become exercisable for the full number of
shares of the Common Stock purchasable under such Option to the extent not
previously exercised and may be exercised prior to such Corporate Transaction
for all or any portion of such shares. The Committee shall, in its discretion,
determine the timing and mechanics required to implement the foregoing sentence.
S. Acceleration Upon Corporate Change in Control: In the event of a
Corporate Change in Control then the exercisability of each Option outstanding
under the Plan shall be automatically accelerated so that each such Option shall
immediately prior to such Corporate Change in Control, become exercisable for
the full number of shares of the Common Stock purchasable under such Option to
the extent not previously exercised and may be exercised for all or any portion
of such shares consistent with Article VIII within the originally prescribed
term of the Option. The Committee shall, in its discretion, determine the timing
and mechanics required to implement the foregoing sentence. However, an
outstanding Option under the Plan shall not be accelerated under this Section if
and to the extent one or more limitations imposed by the Committee at the time
of grant preclude such acceleration upon a Corporate Change in Control.
T. The provisions of Sections VI.R and VI.S shall be retroactive and shall
apply to all Options granted under the Plan, regardless of the date of grant.
U. The grant of Options under the Plan shall in no way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or
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to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
VII. PURCHASE FOR INVESTMENT
If and to the extent that the issuance of shares pursuant to the exercise
of Options is deemed by the Company to be subject to the Securities Act, or to
the securities law of any other jurisdiction, the Company shall be under no
obligation to issue shares covered by such exercise unless the person or persons
who exercises or who exercise such Option shall make such warranty or take such
action as may be required by any applicable securities law of any applicable
jurisdiction and shall, in the case of the applicability of the Securities Act,
in the absence of an effective registration under the Securities Act with
respect to such shares, warrant to the Company, at the time of such exercise,
that such person is or that they are acquiring the shares to be issued to such
person or to them, pursuant to such exercise of the Option, for investment and
not with a view to, or for sale in connection with, the distribution of any such
shares; and in such events the person or persons acquiring such shares shall be
bound by the provisions of a legend endorsed upon any share certificates
expressing the requirements of any applicable non-United States securities law,
or, in cases deemed governed by the Securities Act, substantially the following
legend, which shall be endorsed upon the certificate or certificates evidencing
the shares issued by the Company pursuant to such exercise:
"The shares have not been registered under the securities laws of
any country, including the United States Securities Act of 1933, as
amended, and the Company may refuse to permit the sale or transfer
of all or any of the shares until (1) the Company has received an
opinion of counsel satisfactory to the Company that any such
transfer is exempt from registration under all applicable securities
laws or (2) in the case of sales or transfers to which the United
States Securities Act of 1933, as amended, is applicable, unless a
registration statement with respect to such shares shall be
effective under such Act, as amended."
Without limiting the generality of the foregoing, the Company may delay issuance
of the shares until completion of any action or obtaining of any consent which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that outstanding shares of the Common Stock are changed into
or exchanged for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, change in par value, stock
split-up, combination of shares or dividend payable in capital stock, or the
like except in a Corporate Transaction for which such adjustments are set forth
in Section VI.R above, appropriate adjustment shall be made in the number and
kind of shares for the purchase of which Options may be granted under the Plan,
including Options to be granted pursuant to Section VI.N above, and, in
addition, appropriate adjustment shall be made in the number and kind of shares
and in the Option price per share subject to outstanding Options so that each
Option holder shall be in a position equivalent to the position the Option
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holder would have been in had the Option holder exercised the Options
immediately prior to the applicable event.
IX. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in
connection with transactions to which the preceding Article VIII is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights hereunder of an Option holder or one who
acquired an Option by will or by the laws of descent and distribution have not
otherwise terminated and expired, the Option holder or such person shall have
the right immediately prior to such dissolution or liquidation to exercise any
Option granted hereunder to the extent that the right to purchase shares
thereunder has accrued as of the date of exercise immediately prior to such
dissolution or liquidation.
X. TERMINATION OF THE PLAN
Unless the Committee shall decide to reduce or, subject to shareholder
approval, if required under Article XI, to extend the duration of the Plan, the
Plan shall terminate on December 31, 2011. Termination of the Plan shall not
affect any Options granted or any Option Certificates or agreements executed
prior to the effective date of termination.
XI. AMENDMENT OF THE PLAN
The Plan may be amended by the Committee or the Board of Directors of the
Company; provided, however, that if the scope of any amendment is such as to
require shareholder approval then such amendment shall require approval by the
shareholders. Any amendment shall not affect any Options theretofore granted and
any Option Certificates or agreements theretofore executed by the Company and
any Option holder unless such amendment shall expressly so provide. No amendment
shall adversely affect any Option holder with respect to an outstanding Option
without the written consent of such Option holder. With the consent of the
Option holder affected, the Committee may amend any outstanding Option
Certificate or agreement in a manner not inconsistent with the Plan, including,
without limitation, to accelerate the date of exercise of any installment of any
Option.
XII. EMPLOYMENT RELATIONSHIP
Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of any Employee, nor to prevent any
Employee from terminating his employment with the Company or an Affiliate.
XIII. EFFECTIVE DATE
The Plan first became effective on January 2, 1985.
XIV GOVERNING LAW
The Plan shall be construed and enforced in accordance with the law of The
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Commonwealth of Massachusetts.
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