EXHIBIT 10.1
LANCE, INC.
1991 STOCK OPTION PLAN
(As amended through October 21, 2004)
1. Purpose. This Plan is intended to aid the Corporation and its
Subsidiaries in maintaining and developing strong management through encouraging
Key Employees and stimulating their efforts by giving suitable recognition, in
addition to salaries, to the ability and industry which contributes materially
to the success of the business of the Corporation and its Subsidiaries, and in
connection with the aforesaid to encourage the ownership by Key Employees of the
Corporation's Common Stock so as to increase their proprietary interest in the
success of the Corporation and its Subsidiaries. To this end, Incentive Stock
Options, Non-Qualified Stock Options and Stock Appreciation Rights may be
granted under the Plan.
2. Definitions. Whenever used in the Plan, unless the context clearly
indicates otherwise, the following terms shall have the following meanings:
(a) Board or Board of Directors means the Board of Directors of the
Corporation.
(b) Change of Control means the acquisition or contracting to acquire
or otherwise control beneficial ownership of in excess of thirty-five
percent (35%) of the then outstanding voting securities of the Corporation
by any person, corporation or other entity and its "affiliates" (as defined
in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as
amended from time to time) excluding, however, for purposes of determining
such ownership (but not the number of shares outstanding) voting securities
beneficially owned by members of the Van Every Family and any trust
custodian or fiduciary account for the benefit of any one or more members
of the Van Every Family. Van Every Family means the lineal descendants of
Salem A. Van Every, Sr. (whether by blood or adoption) and their spouses.
(c) Code means the Internal Revenue Code of 1986.
(d) Common Stock means the $.83-1/3 par value Common Stock of the
Corporation and any other stock or securities resulting from the adjustment
thereof or substitution therefor as described in Paragraph 9 below.
(e) Corporation means Lance, Inc., a North Carolina corporation.
(f) Disability means the condition which results when an individual
has become permanently and totally disabled within the meaning of Section
22(e)(3) of the Code.
(g) Fair Market Value, with respect to a share of the Common Stock at
a particular time, shall be that value as determined by the Stock Option
Committee which shall be (i) if such Common Stock is listed on a national
securities exchange or traded on the National Market System, the mean
between the highest price and the lowest price at which the Common Stock
shall have been sold regular way on a national securities exchange or the
National Market System on said date, or, if no sales occur on said date,
then on the next preceding date on which there were such sales of Common
Stock, or (ii) if the Common Stock shall not be listed on a national
securities exchange or traded on the National Market System, the mean
between the bid and asked prices last reported by the National Association
of Securities Dealers, Inc. for the over-the-counter market on said date
or, if no bid and asked prices are reported on said date, then on the next
preceding date on which there were such quotations or (iii) if at any time
quotations for the Common Stock shall not be reported by the National
Association of Securities Dealers, Inc. for the over-the-counter market and
the Common Stock shall not be listed on any national securities exchange or
traded on the National Market System, the fair market value determined by
the Stock Option Committee on the basis of available prices for such Common
Stock or in such other manner as the Stock Option Committee may deem
reasonable.
(h) Incentive Stock Option means an option to purchase shares of
Common Stock which is granted under the Plan and which qualifies as an
incentive stock option under Section 422 of the Code.
(i) Key Employee means a regular employee, whether or not a director,
of the Corporation or a Subsidiary who is an officer or in a managerial or
other key position, as determined by the Stock Option Committee, and who,
in the opinion of the Stock Option Committee, has demonstrated a capacity
for contributing in a substantial measure to the success of the business
and operations of the Corporation or a Subsidiary.
(j) Non-Qualified Option means an option to purchase shares of Common
Stock which is granted under the Plan and which is not an Incentive Stock
Option.
(k) Parent means a "parent corporation" within the meaning of Section
424(e) of the Code and the Regulations thereunder.
(l) Plan means the Lance, Inc. 1991 Stock Option Plan as set forth in
this instrument, as the same may be amended from time to time.
(m) Regulations means regulations promulgated by the United States
Department of Treasury and in effect with respect to the Code.
(n) Retirement means the termination of an employee's employment with
the Corporation, its Subsidiaries and any Parent at any time on or after
the last day of the fiscal year of the Corporation in which the employee
attains the age of 60 years.
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(o) Stock Appreciation Right means the right of the holder of an
unexercised option granted under the Plan to receive, pursuant to the terms
of such holder's Stock Appreciation Right Agreement, either cash or a
number of shares of Common Stock based on the increase in the value of the
optioned shares, as more particularly described in Paragraph 10 below.
(p) Stock Appreciation Right Agreement means the written agreement
between a Key Employee and the Corporation evidencing the grant of a Stock
Appreciation Right under the Plan and setting forth the terms and
conditions thereof; such Stock Appreciation Right Agreement may be combined
in the same document with a Stock Option Agreement between the Key Employee
and the Corporation.
(q) Stock Option Agreement means the written agreement between a Key
Employee and the Corporation evidencing the grant of an option under the
Plan and setting forth the terms and conditions thereof and expressly
stating whether the option granted therein is an Incentive Stock Option or
a Non-Qualified Option; such Stock Option Agreement may be combined in the
same document with a Stock Appreciation Right Agreement between the Key
Employee and the Corporation.
(r) Stock Option Committee means a committee of the Board of Directors
appointed by the Board to administer the Plan and perform the functions set
forth herein for the Stock Option Committee, which committee shall be
composed of two or more members of the Board who are all "disinterested
persons" within the meaning of Section 240.16b-3 of the regulations issued
under the Securities Exchange Act of 1934.
(s) Subsidiary means a "subsidiary corporation" within the meaning of
Section 424(f) of the Code and the Regulations thereunder.
(t) Successor Corporation means a corporation, or a parent or
subsidiary corporation of such corporation, which issues or assumes a stock
option in a transaction to which Section 424(a) of the Code applies.
Further, unless the context or an express reference indicates otherwise, the
term "option" as used in the Plan refers to both Incentive Stock Options and
Non-Qualified Stock Options.
3. Administration. The Plan shall be administered by the Stock Option
Committee. The Stock Option Committee shall have all of the powers necessary to
enable it properly to carry out its duties under the Plan, and not in limitation
of the foregoing, the Stock Option Committee shall have the power and duty to
construe and interpret the Plan and to determine all questions that shall arise
under the Plan, which interpretations and determinations shall be conclusive and
binding upon all persons. The Stock Option Committee may establish from time to
time such regulations, provisions, procedures and conditions of the options and
Stock Appreciation Rights,
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and the grants thereof, which in its opinion may be advisable in the
administration of the Plan. The Stock Option Committee shall keep minutes of its
meetings. A majority of the Stock Option Committee shall constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by the entire Stock Option
Committee, shall be the acts of the entire Stock Option Committee.
4. Eligibility. Only Key Employees shall be eligible to be granted options
to purchase the Corporation's Common Stock under the Plan and to be granted
Stock Appreciation Rights under the Plan. The Stock Option Committee shall, from
time to time, determine (i) those Key Employees to whom options and Stock
Appreciation Rights shall be granted, (ii) whether the options to be granted
shall be Incentive Stock Options or Non-Qualified Options and (iii) the number
of shares and conditions of each such option and Stock Appreciation Right. The
Stock Option Committee shall then grant such options and Stock Appreciation
Rights. No member of the Stock Option Committee while serving as such shall be
eligible to receive any option or Stock Appreciation Right hereunder of the
Corporation or any Parent or Subsidiary entitling the participants therein to
acquire stock or options to purchase Common Stock or the stock or securities of
any Parent or Subsidiary. Further, no Key Employee shall be eligible to receive
any option hereunder who, within the meaning of Section 422(b)(6) of the Code,
at the time the option is granted owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation or of its Parent or Subsidiary corporations.
5. Shares Available for Option. The Board of Directors shall reserve for
the purposes of the Plan, out of the authorized but unissued Common Stock, a
total of 400,000 shares of Common Stock (or the number and kind of shares of
stock or other securities which, in accordance with Paragraph 9 of the Plan,
shall be substituted for such 400,000 shares or to which said 400,000 shares
shall be adjusted). The number of shares of Common Stock with respect to which
options may be granted hereunder shall not exceed 400,000 (subject to adjustment
in accordance with said Paragraph 9), which options in the discretion of the
Stock Option Committee may be either Incentive Stock Options or Non-Qualified
Options or a combination of both. No Key Employee shall be granted one or more
options under this Plan for an aggregate number of shares in excess of ten
percent (10%) of the total number of shares permitted to be granted under the
Plan, subject to adjustment as provided in Paragraph 9 of the Plan. In the event
that an option granted under the Plan to any Key Employee expires or is
terminated unexercised as to any shares covered thereby, such shares shall
thereafter be available for the granting of options under the Plan.
6. Grant of Options. Subject to the provisions of the Plan, the Stock
Option Committee shall have full and final authority to select the Key Employees
to whom options or Stock Appreciation Rights shall be awarded and to determine
(i) the number of shares to be covered by each option, (ii) whether the option
to be granted shall be an Incentive Stock Option or a Non-Qualified Option,
(iii) whether and the extent to which Stock Appreciation Rights shall be granted
with respect to an option and (iv) the consideration to the Corporation for the
granting of options and Stock Appreciation Rights, as well as the conditions, if
any, which it may deem appropriate to ensure that such consideration will be
received by, or will accrue to, the Corporation. In the discretion of the Stock
Option Committee such consideration need not be the
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same, but may vary for options and Stock Appreciation Rights granted under the
Plan at the same time or from time to time. The Stock Option Committee may grant
more than one option and related Stock Appreciation Right to a Key Employee
during the term of the Plan, and any such option and related Stock Appreciation
Right may be in addition to, or in substitution for, one or more options and
related Stock Appreciation Right previously granted. Each option shall be
confirmed by a Stock Option Agreement, and each Stock Appreciation Right shall
be confirmed by a Stock Appreciation Right Agreement. Subject to the terms and
conditions and within the limitations of the Plan, the Stock Option Committee
may modify, extend, replace or renew outstanding options and Stock Appreciation
Rights granted under the Plan, or accept the surrender of outstanding options
and Stock Appreciation Rights under the Plan (to the extent not theretofore
exercised) and grant new options and Stock Appreciation Rights in substitution
therefor (to the extent not theretofore exercised). Notwithstanding the
foregoing, however, no modification of an option or Stock Appreciation Right
shall, without the consent of the affected optionee, alter or impair any rights
or obligations under any option or Stock Appreciation Right theretofore granted
under the Plan.
7. Option Price. The Stock Option Committee shall establish the option
price at the time an option is granted. An Incentive Stock Option shall have an
option price per share of Common Stock not less than 100% of the Fair Market
Value per share of Common Stock subject to said option at the time said option
is granted. The option price of Non-Qualified Options granted hereunder may in
the discretion of the Stock Option Committee, be greater than, less than or
equal to the Fair Market Value per share of Common Stock at the time such
options are granted.
8. Exercise of Options.
(a) Subject to the further provisions of this Paragraph 8, each option
granted under the Plan shall be exercisable at such times and on such conditions
as may be determined by the Stock Option Committee at the time of the grant. In
the event any option is exercisable in installments, the right to purchase
shares pursuant to the exercise of the option shall be cumulative, so that when
the right to purchase any shares has accrued, such shares or any part thereof
may be purchased at any time thereafter until the expiration or termination of
the option.
(b) Each option granted under the Plan by its terms shall require the Key
Employee granted such option to remain in the continuous employ of the
Corporation or a Parent or Subsidiary for at least six months from the date of
the grant of such option before the right to exercise any part of such option
will accrue.
(c) The Stock Option Committee shall determine the term of each option at
the time of the grant; however, no Incentive Stock Option granted hereunder
shall be exercisable after the expiration of ten (10) years from the date it is
granted.
(d) Each option granted hereunder by its terms shall be exercisable in full
after the expiration of the required period of continuous service of not less
than six months set forth in the Stock Option Agreement in the event of a Change
of Control.
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(e) Not less than 100 shares of the Common Stock may be purchased at any
one time upon the exercise of an option unless the number of shares purchased is
the total number at such time purchasable under the option.
(f) Options granted under the Plan shall not be transferable by the
optionee otherwise than by will, or if the optionee dies intestate, by the laws
of descent and distribution of the state of the optionee's domicile at the time
of the optionee's death, and such options shall be exercisable during such
optionee's lifetime only by such optionee.
(g) (i) If the employment of an optionee by the Corporation, a Parent or
Subsidiary of the Corporation, or a Successor Corporation shall terminate
otherwise than by (A) such optionee's voluntary resignation with the consent of
the Corporation, a Parent or Subsidiary of the Corporation, or a Successor
Corporation (of which the Stock Option Committee shall be the sole judge), (B)
such optionee's Retirement or (C) such optionee's death or Disability, then such
optionee's rights under all then outstanding options and Stock Appreciation
Rights shall terminate immediately.
(ii) If after the period referred to in Paragraph 8(b) above an
optionee shall voluntarily terminate such optionee's employment with the
Corporation, a Parent or Subsidiary of the Corporation, or a Successor
Corporation with the consent of the Corporation, a Parent or Subsidiary of the
Corporation, or a Successor Corporation (of which the Stock Option Committee
shall be the sole judge) and otherwise than by Retirement, then all options and
Stock Appreciation Rights held by such optionee at the time of such termination
of employment shall be exercisable by such optionee but only (A) if and to the
extent the same were exercisable at the time of such termination of employment
and (B) prior to the earlier of (a) the expiration dates of such options and
Stock Appreciation Rights and (b) that date which is three months from the date
of such termination of employment, such three month period to include the date
that such termination of employment occurs.
(iii) If the employment of an optionee by the Corporation, a Parent or
Subsidiary of the Corporation, or a Successor Corporation shall terminate after
the period referred to in Paragraph 8(b) above and by reason of such optionee's
Retirement, then all options and Stock Appreciation Rights held by such optionee
on the date of such termination of employment shall be exercisable in full,
whether or not exercisable on the date of such termination of employment, at any
time prior to the earlier of (A) the expiration dates of such options and Stock
Appreciation Rights or (B) that date which is three months from the date of such
termination of employment, such three month period to include the date that such
termination of employment occurs.
(iv) If the employment of an optionee by the Corporation, a Parent or
Subsidiary of the Corporation, or a Successor Corporation shall terminate after
the period referred to in Paragraph 8(b) above and by reason of such optionee's
death or Disability, then all options and Stock Appreciation Rights held by such
optionee on the date of such termination of employment shall be exercisable in
full, whether or not exercisable on the date of such termination of employment,
at any time prior to the earlier of (A) the expiration dates of such options and
Stock Appreciation Rights or (B) that date which is one year from the date of
such termination of employment, such one year period to include the date that
such termination of employment
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occurs. In the event of the death of an optionee, such optionee's options and
Stock Appreciation Rights shall be exercisable to the extent herein otherwise
provided by the executor or any other person that may be empowered to do so
under the optionee's will, or, if the optionee shall fail to make a testamentary
disposition of said option and Stock Appreciation Rights or shall die intestate,
by the optionee's legal representative.
(h) The option price for each share of Common Stock purchased pursuant to
the exercise of each option shall, at the time of the exercise of the option, be
paid in full (i) in cash or (ii) with the consent of the Stock Option Committee,
in whole or in part in shares of Common Stock. If shares of Common Stock are
accepted in payment of any part of the option price, such shares for such
purpose shall be valued at the Fair Market Value of such shares on the date of
exercise. Any such shares of Common Stock so accepted in payment of any part of
the option price shall not serve to increase the number of shares of Common
Stock otherwise available for issuance under the Plan. Each purchased share
shall be issued and delivered to the person entitled thereto at Charlotte, North
Carolina.
(i) To the extent that an option is not exercised within the period of time
prescribed therefor as set forth in the Plan and the Stock Option Agreement
confirming such option, the option shall lapse and all rights of the optionee
thereunder shall terminate. The exercise of Non-Qualified Options granted
hereunder shall not affect the exercise of Incentive Stock Options granted
hereunder or vice versa.
9. Adjustment of Number of Shares. (a) In the event that a dividend shall
be declared upon the Common Stock payable in shares of Common Stock, the number
of shares of Common Stock then subject to any such option and the number of
shares reserved for issuance pursuant to the Plan but not yet covered by an
option shall be adjusted by adding to each such share the number of shares which
would be distributable thereon if such share had been outstanding on the date
fixed for determining the shareholders entitled to receive such stock dividend.
In the event that the outstanding shares of Common Stock shall be changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Corporation or of another corporation, or changed into or
exchanged for cash or property or the right to receive cash or property (but not
including any dividend payable in cash or property other than a liquidating
distribution), whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, then there shall be substituted
for each share of Common Stock subject to any such option and for each share of
Common Stock reserved for issuance pursuant to the Plan but not yet covered by
an option, the number and kind of shares of stock or other securities or cash or
property or right to receive cash or property into which each outstanding share
of Common Stock shall be so changed or for which each such share shall be
exchanged. In the event there shall be any change, other than as specified above
in this Paragraph 9, in the number or kind of outstanding shares of Common Stock
or of any stock or other securities into which such Common Stock shall have been
changed or for which it shall have been exchanged, then if the Stock Option
Committee shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of shares theretofore reserved for
issuance pursuant to the Plan but not yet covered by an option and of the shares
then subject to an option or options, such adjustment shall be made by the Stock
Option Committee and shall be effective and binding for all purposes of the Plan
and each Stock Option Agreement
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entered into under the Plan. In the case of any such substitution or adjustment
as provided for in this Paragraph 9 the option price in each Stock Option
Agreement for each share covered thereby prior to such substitution or
adjustment will be the option price for all shares of stock or other securities
or cash or property or right to receive cash or property which shall have been
substituted for such share or to which such share shall have been adjusted
pursuant to this Paragraph 9. No adjustment or substitution provided for in this
Paragraph 9 shall require the Corporation in any Stock Option Agreement to issue
a fractional share and the total substitution or adjustment with respect to each
Stock Option Agreement shall be limited accordingly.
(b) In the event of (i) a dissolution or liquidation of the Company, (ii) a
sale of all or substantially all of the Company's assets, (iii) a merger or
consolidation involving the Company in which the Company is not the surviving
corporation or (iv) a merger or consolidation involving the Company in which the
Company is the surviving corporation but the holders of shares of the Company's
Common Stock receive securities of another corporation and/or other property,
including cash, the Stock Award Committee (as successor to the Stock Option
Committee) shall, in its absolute discretion, have the power to cancel,
effective immediately prior to the occurrence of such event, each option
(whether an Incentive Stock Option or a Non-Qualified Option) and each Stock
Appreciation Right outstanding immediately prior to such event (whether or not
then exercisable) and, in consideration of such cancellation, the Company will
pay to the Participant an amount in cash for each share of Common Stock subject
to such option or Stock Appreciation Right equal to the excess of (A) the value
as determined by the Stock Award Committee, in its absolute discretion, of the
property (including cash) received by the holder of one share of Common Stock as
a result of such event over (B) the exercise price of such option or Stock
Appreciation Right; or provide for the exchange of each option and Stock
Appreciation Right outstanding immediately prior to such event (whether or not
then exercisable) for an option on or stock appreciation right with respect to,
as appropriate, some or all of the property which a holder of the number of
shares of Common Stock subject to such option or Stock Appreciation Right would
have received in such transaction and, incident thereto, make an equitable
adjustment as determined by the Stock Award Committee, in its absolute
discretion, in the exercise price of the option or stock appreciation right, or
the number of shares or amount of property subject to the option or stock
appreciation right or, if appropriate, provide for a cash payment to the
Participant to whom such option or Stock Appreciation Right was granted in
partial consideration for the exchange of the option or Stock Appreciation
Right.
10. Stock Appreciation Rights. A Stock Appreciation Right may be granted
with respect to any option granted under the Plan. Such Stock Appreciation Right
may be granted contemporaneously with the grant of an option or at any time
after an option is granted. Such Stock Appreciation Right may be exercised by
surrendering the related option or applicable portion thereof, and to the extent
options have been so surrendered, they shall no longer be exercisable. Stock
Appreciation Rights shall be subject to the following terms and conditions:
(a) A Stock Appreciation Right shall be exercisable to the extent, and
only to the extent, the related option is exercisable, and Stock
Appreciation Rights shall not be exercisable unless (i) the related option
surrendered to the
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Corporation in connection therewith is for at least 100 shares of Common
Stock or (ii) all of the Stock Appreciation Rights then exercisable are
exercised in full;
(b) A Stock Appreciation Right shall entitle the optionee to surrender
to the Corporation unexercised the related option or any portion thereof
and to receive from the Corporation in exchange therefor the value thereof,
which value shall be that amount equal to (i) the excess of the Fair Market
Value on the date of the exercise of the Stock Appreciation Right of one
share of Common Stock over the purchase price per share specified in such
option, multiplied by (ii) the number of shares of Common Stock subject to
the option, or portion thereof, which is so surrendered;
(c) Upon the exercise of a Stock Appreciation Right, the Stock Option
Committee shall have the sole and exclusive discretion to determine the
form in which payment of the said value thereof shall be made to the
optionee, which form of payment may be in cash, Common Stock valued at its
Fair Market Value on the date of the exercise of the Stock Appreciation
Right or any combination thereof;
(d) No fractional shares shall be issued upon the exercise of a Stock
Appreciation Right;
(e) A Stock Appreciation Right granted under the Plan shall not be
transferable by the optionee otherwise than by will, or if the optionee
dies intestate, by the laws of descent and distribution of the state of the
optionee's domicile at the time of the optionee's death, and such Stock
Appreciation Right shall be exercisable during such optionee's lifetime
only by such optionee;
(f) A Stock Appreciation Right shall be subject to such other terms
and conditions not inconsistent with the Plan as shall be determined from
time to time by the Stock Option Committee;
(g) If at the close of business on the last business day within the
term of a Stock Appreciation Right such Stock Appreciation Right is
exercisable under the terms of the Plan and if the optionee holding such
Stock Appreciation Right has not exercised the related option in full then
such Stock Appreciation Right or any portion thereof which is related to
the unexercised portion of an option shall be automatically exercised in
full;
(h) A Stock Appreciation Right may be exercised only when the Fair
Market Value of the shares of Common Stock subject to the related option
exceeds the option price of such shares; and
(i) Each Stock Appreciation Right granted under the Plan by its terms
shall require the Key Employee granted such Stock Appreciation Right to
remain in the continuous employ of the Corporation or a Parent or
Subsidiary for at least
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six months from the date of the grant of such Stock Appreciation Right
before the right to exercise any part of such Stock Appreciation Right will
accrue.
Upon the exercise of a Stock Appreciation Right, the option or part thereof to
which such Stock Appreciation Right is related shall be forfeited, and such
forfeiture shall have the effect of an exercise of the option for the purpose of
the limitation imposed on the number of shares of Common Stock to be issued
under the Plan or to any Key Employee under Paragraph 5 above. Upon the exercise
or partial exercise of an option, any related Stock Appreciation Right shall be
forfeited to the extent of such exercise.
11. Amendment of Plan. The Board of Directors shall have the right to
amend, suspend or terminate the Plan at any time provided that except as and to
the extent authorized and permitted by Paragraph 9 above, no amendment shall be
made which shall (i) increase the total number of shares which may be issued and
sold pursuant to options or Stock Appreciation Rights granted under the Plan,
(ii) decrease the minimum option price in the case of Incentive Stock Options,
(iii) change the class of employees eligible to receive options or (iv) withdraw
the administration of the Plan from a committee of Directors, none of whom is
eligible to be allotted stock or to receive options under the Plan, unless such
amendment is made by or with the approval of the shareholders of the
Corporation. Notwithstanding the foregoing, the Board of Directors shall have
the right without shareholder approval to amend the Plan in any manner necessary
to qualify the Plan as a plan under which Incentive Stock Options may be granted
or to change the Plan in any manner not previously permitted by the Code for
Incentive Stock Options, but authorized by amendments to the Code enacted
subsequent to the effective date of the Plan, regardless of whether such
amendment is mandatory or permissive under the Code, or expands or restricts the
Plan, unless such shareholder approval is required by the Code, Regulations or
by any other applicable law.
12. Indemnification of Stock Option Committee. The members of the Stock
Option Committee shall be indemnified by the Corporation to the fullest extent
permitted by North Carolina law.
13. Compliance with Law and Other Conditions. No shares shall be issued
pursuant to the exercise of any option or Stock Appreciation Right granted under
the Plan prior to compliance by the Corporation to the satisfaction of its
counsel with any applicable laws or Regulations.
14. Good Faith Attempts. To the extent consistent with Section 422(c)(1)
of the Code and the Regulations thereunder, the requirement set forth in
Paragraph 7 of the Plan that the option price of an Incentive Stock Option
granted under the Plan be not less than 100% of the Fair Market Value of the
Common Stock subject to such option at the time such option is granted shall be
considered to have been met if the Stock Option Committee has made a good faith
attempt to meet the requirements of Section 422(b)(4) of the Code and the
Regulations thereunder, as applicable, and such requirements are considered to
have been met pursuant to Section 422(c)(1) of the Code.
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15. Construction. It is intended that all Incentive Stock Options granted
under the Plan shall constitute "incentive stock options" under Section 422 of
the Code and to that end the Plan and all Stock Option Agreements providing for
Incentive Stock Options entered into pursuant to the Plan shall be construed and
interpreted so that all Incentive Stock Options granted under the Plan shall
constitute "incentive stock options" within the meaning of Section 422 of the
Code.
16. Effective Date and Duration of Plan. The effective date of the Plan
shall be February 19, 1991, the date on which it was adopted by the Board,
subject to the approval and ratification of the Plan by the shareholders of the
Corporation at the next meeting of the shareholders to be held no later than
February 18, 1992, by affirmative vote of the holders of a majority of those
shares of the Common Stock present or represented and entitled to vote at the
meeting. No options may be granted under the Plan subsequent to February 18,
2001.
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