HACH COMPANY
1995 NON-EMPLOYEE DIRECTOR STOCK PLAN
AS AMENDED AND RESTATED AS OF NOVEMBER 25, 1997
ARTICLE I - PURPOSE OF THE PLAN
The purpose of the Hach Company 1995 Non-Employee Director
Stock Plan is to promote the long-term growth of Hach Company by increasing
the proprietary interest of Non-Employee Directors in Hach Company and to
attract and retain highly qualified and capable Non-Employee Directors.
ARTICLE II - DEFINITIONS
Unless the context clearly indicates otherwise, the following
terms shall have the following meanings:
2.1 "ANNUAL RETAINER" means the annual cash retainer fee
payable by the Corporation to a Non-Employee Director for services as a
director of the Corporation, as such amount may be changed from time to time.
2.2 "AWARD" means an award granted to a Non-Employee
Director under the Plan in the form of Options or Shares, or any combination
thereof.
2.3 "BOARD" means the Board of Directors of Hach Company.
2.4 "CORPORATION" means Hach Company.
2.5 "COMMON STOCK" shall mean the $1.00 par value Common
Stock of Hach Company.
2.6 "CLASS A COMMON STOCK" shall mean the $1.00 par value
Class A Common Stock of Hach Company.
2.7 "FAIR MARKET VALUE" shall mean the value of one Share of
Common Stock or Class A Common Stock determined as follows:
(a) If the Shares are traded on an exchange, the price at which
Shares traded at the close of business on the date of
valuation; or
(b) If the Shares are traded over-the-counter on the NASDAQ
System, the closing price, if one is available, or the mean
between the bid and asked prices on said System at the
close of business on the date of valuation; or
(c) If neither (a) nor (b) above applies, the fair market value
of Common Stock and Class A Common Stock as determined by
the Board or the Committee in good faith. Such determination
shall be conclusive and binding on all persons.
2.8 "OPTION" means an Option to purchase Shares awarded under
Article VII or IX which does not meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended, or any successor law.
2.9 "OPTION GRANT DATE" means the date upon which an Option
is granted to a Non-Employee Director.
2.10. "OPTIONEE" means a Non-Employee Director of the
Corporation to whom an Option has been granted or, in the event of such
Non-Employee Director's death prior to the expiration of an Option, such
Non-Employee Director's executor, administrator, beneficiary or similar
person, or, in the event of a transfer permitted by Article VII hereof, such
permitted transferee.
2.11 "NON-EMPLOYEE DIRECTOR" means a director of the
Corporation who is not an employee of the Corporation or any subsidiary of
the Corporation.
2.12 "PLAN" means the Hach Company 1995 Non-Employee
Director Stock Plan, as amended and restated from time to time.
2.13 "STOCK AWARD DATE" means the date on which Shares are
awarded to a Non-Employee Director.
2.14 "SHARES" shall include Common Stock and Class A Common
Stock as indicated by the context of the reference.
2.15 "STOCK OPTION AGREEMENT" means a written agreement
between a Non-Employee Director and the Corporation evidencing an Option.
ARTICLE III - ADMINISTRATION OF THE PLAN
3.1 ADMINISTRATOR OF THE PLAN. The Plan shall be
administered by a Committee appointed by the Board and consisting of two or
more Directors who are not eligible to participate in the Plan ("Committee").
3.2 AUTHORITY OF COMMITTEE. Subject to the provisions of the
Plan, the Committee shall have full power and authority to: (i) interpret and
construe the Plan and adopt such rules and regulations as it shall deem
necessary and advisable to implement and administer the Plan and (ii)
designate persons other than members of the Committee to carry out its
responsibilities, subject to such limitations, restrictions and conditions as
it may prescribe, such determinations to be made in accordance with the
Committee's best business judgment as to the best interests of the
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Corporation and its stockholders and in accordance with the purposes of the
Plan; provided, however, that the Committee shall have no discretion with
respect to the eligibility or selection of Non-Employee Directors to receive
options under the Plan, the number of Shares subject to any such options or
the Plan, or the purchase price thereunder, nor shall the Committee have
authority to take any action or make any determination that would materially
increase the benefits accruing to participants under the Plan. The Committee
may delegate administrative duties under the Plan to one or more agents as it
shall deem necessary or advisable.
3.3 DETERMINATION OF COMMITTEE. A majority of the Committee
shall constitute a quorum at any meeting of the Committee, and all
determinations of the Committee shall be made by a majority of its members.
Any determination of the Committee under the Plan may be made without notice
or a meeting of the Committee by a written consent signed by all members of
the Committee.
3.4 EFFECT OF COMMITTEE DETERMINATIONS. No member of the
Committee or the Board shall be personally liable for any action or
determination made in good faith with respect to the Plan or any Award or to
any settlement of any dispute between a Non-Employee Director and the
Corporation. Any decision or action taken by the Committee or the Board with
respect to an Award or the administration or interpretation of the Plan shall
be conclusive and binding upon all persons.
ARTICLE IV - AWARDS UNDER THE PLAN
Awards in the form of Options shall be granted to Non-Employee
Directors in accordance with Article VIII. Awards in the form of Options,
Shares of Common Stock or of Class A Common Stock, or any of such Options or
Shares, or a combination thereof, may be granted to Non-Employee Directors in
accordance with Article IX. Each Option granted under the Plan shall be
evidenced by a Stock Option Agreement in such form and containing such terms
and conditions (not inconsistent with the Plan) as the Committee shall adopt.
ARTICLE V - ELIGIBILITY
Non-Employee Directors of the Corporation shall be eligible to
participate in the Plan in accordance with Articles VIII and IX.
ARTICLE VI - SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Article XII, the
aggregate number of Shares which may be issued upon the award of Shares and
the exercise of Options shall not exceed One Hundred Fifty Thousand (150,000)
Shares of Common Stock and One Hundred Fifty Thousand (150,000) Shares of
Class A Common Stock. To the extent that Shares subject to an outstanding
Option are not issued or delivered by reason of the expiration, termination,
cancellation or forfeiture of such Option or by reason of the delivery of
Shares (either actually or by attestation) to pay all or a portion of the
exercise price of such Option, then such Shares shall again be available
under the Plan.
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ARTICLE VII - NON-TRANSFERABILITY OF OPTIONS
All Options granted under the Plan shall not be transferable
by a Non-Employee Director during his or her lifetime and may not be
assigned, exchanged, pledged, transferred or otherwise encumbered or disposed
of except by court order, will or by the laws of descent and distribution.
Notwithstanding the foregoing, in the event Options may be transferable
without failing to comply with Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, then each Option shall be transferable to the extent set
forth in the related Stock Option Agreement, as determined by the Committee
(provided that all Options granted under Article VIII with the same Option
Grant Date shall have identical provisions relating to the transferability of
such Options). In the event that any Option is thereafter transferred as
permitted by the preceding sentence, the permitted transferee thereof shall
be deemed the Optionee hereunder. Options shall be exercisable during the
Optionee's lifetime only by the Optionee or by the Optionee's guardian, legal
representative or similar person.
ARTICLE IX - NON-ELECTIVE OPTIONS
Each Non-Employee Director shall be granted Options, subject
to the following terms and conditions.
8.1 TIME OF GRANT. On the date of the adoption of this Plan
by the Board each present Non-Employee Director shall be granted an Option to
purchase Five Thousand (5,000) Shares. Each Non-Employee Director who is
first elected or begins to serve as a Non-Employee Director on or after
September 10, 1977 shall be granted an Option to purchase Four Thousand
(4,000) Shares on the date he or she is elected. On the first business day
of September of each year (or, if later, on the date on which a person is
first elected or begins to serve as a Non-employee director), each person who
is a Non-Employee Director shall be automatically granted an Option to
purchase Two Thousand (2,000) Shares which number shall be pro-rated if such
Non-Employee Director is first elected or begins to serve as a Non-Employee
Director on a date other than the date of an annual meeting of stockholders.
Shares subject to options granted pursuant to the preceding two sentences
after September 9, 1997 shall be apportioned equally between Common Stock and
Class A Common Stock.
8.2 PURCHASE PRICE. The purchase price per Share under each
Option granted pursuant to this Article shall be 100% of the Fair Market
Value per Share on the Option Grant Date.
8.3 EXERCISE OF OPTIONS. Each Option shall be fully
exercisable on and after that date which is six months after the Option Grant
Date and, subject to Article X, shall not be exercisable prior to such date.
In no event shall the period of time over which the Option may be exercised
exceed ten years from the Option Grant Date. An Option, or portion thereof,
may be exercised in whole or in part only with respect to whole Shares.
An Option shall be deemed to be exercised when written notice
of such exercise (designating the class of stock being exercised if the
Option was granted for both classes and both
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classes are then subject to exercise) has been given to the Corporation in
accordance with the terms of the Option by the person entitled to exercise
the Option. In the event no class is specified in the written notice, the
notice of exercise shall be deemed to first apply to Class A Common Stock and
secondly to Common Stock if both classes are subject to exercise at the time
written notice of exercise is given.
Shares shall be issued to the Optionee pursuant to the
exercise of an Option only upon receipt by the Corporation from the Optionee
of payment in full either in cash or by surrendering (or attesting to the
ownership of) Shares of the class to be issued together with proof acceptable
to the Committee that such Shares have been owned by the Optionee for at
least six months prior to the date of exercise of the Option, or a
combination of cash and such Shares, in an amount or having a combined value
equal to the aggregate purchase price for the Shares subject to the Option or
portion thereof being exercised. The Shares issued to an Optionee for the
portion of any Option exercised by attesting to the ownership of Shares shall
not exceed the number of Shares issuable as a result of such exercise
(determined as though payment in full therefor were being made in cash) less
the number of Shares for which attestation of ownership is submitted. The
value of owned Shares submitted (directly or by attestation) in full or
partial payment for the Shares purchased upon exercise of an Option shall be
equal to the aggregate Fair Market Value of such owned Shares on the date of
the exercise of such Option.
8.4 TERMINATION OF SERVICE. In the event of the termination
of service on the Board by the holder of any Option by reason of voluntary
resignation, (other than for disability or mandatory retirement) or failure,
as a nominee, to be elected at an annual meeting of stockholders, the then
outstanding Options of such holder shall be exercisable on their stated
exercisable date and shall expire three years after such termination, or on
their stated expiration date, whichever occurs first. In the case of removal
for cause, the then outstanding Options of such holder shall be exercisable
only to the extent that they were exercisable on the date of such removal and
shall expire six months after such removal or on their stated expiration
date, whichever occurs first. Options that are not exercisable on the date
of such removal shall be forfeited.
8.5 RETIREMENT. In the event of termination of service by
reason of mandatory retirement pursuant to Board policy, the then outstanding
Options shall be exercisable on their stated exercisable dates and shall
expire on their stated expiration dates. In the case of retirement prior to
the retirement date required by mandatory Board policy, all Options
outstanding on the retirement date shall be exercisable on their stated
exercisable date and shall expire three years after the retirement date, or
on their stated expiration date, whichever comes first.
8.6 DISABILITY. In the event of termination of service by
reason of disability (as defined herein), the outstanding Options shall be
exercisable on their stated exercisable dates and shall expire on their
stated expiration dates. "Disability" as used herein shall mean an
Optionee's inability to engage in any substantial gainful activity because of
any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to last,
for a continuous period of six months or longer.
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8.7 DEATH. In the event of the death of the holder of any
Option, each of the then outstanding Options of such holder shall become
immediately exercisable, and shall be exercisable by the holder's beneficiary
at any time until the expiration date of the Option (as may be adjusted
pursuant to Sections 8.4 or 8.5). Optionee shall designate beneficiaries in
accordance with procedures established by the Committee.
8.8 PAYMENT OF TAX WITHHOLDING. In order to enable the
Corporation to meet any applicable federal, state or local withholding tax
requirements arising as a result of the exercise of an Option, the Optionee
shall pay the Corporation the amount of tax to be withheld or may elect to
satisfy such obligation by delivering to the Corporation Shares owned by the
Optionee for six months prior to exercising the Option, or by making a
payment to the Corporation consisting of a combination of cash and such
Shares. The value of any Share of Common Stock or Class A Common Stock
delivered to the Corporation pursuant to this Section 8.8 shall be the Fair
Market Value on the date to be used to determine the amount of tax to be
withheld.
ARTICLE IX - ELECTIVE OPTIONS AND SHARES
Each Non-Employee Director shall be granted Options or Shares,
or a combination thereof, subject to the following terms and conditions:
9.1 TIME OF GRANT. On the first business day of September of
each year, Options, Shares of Common Stock or of Class A Common Stock, or any
of such Options or Shares, or a combination thereof, shall be granted to each
Non-Employee Director who, at least one month prior thereto, files with the
Committee or its designee a written election to receive Options or Shares, or
a combination thereof, in lieu of all or a portion of such Non-Employee
Director's Annual Retainer. No statement in such written election as to the
class of Shares to be received shall be of any effect. In the event a
Non-Employee Director does not file a written election in accordance with the
second preceding sentence by reason of becoming a Non-Employee Director after
the date which is one month prior to the first business day of September in
any year, Options, Shares of Common Stock, Class A Common Stock, or any of
such Options or Shares, or a combination thereof, shall be granted to such
Non-Employee Director on the first day (the "Effective Date") which is one
month after the date such Non-Employee Director files with the Committee or
its designee such written election; provided, however, that such election may
apply only to the portion of such Non-Employee Director's Annual Retainer
determined by multiplying such Non-Employee Director's Annual Retainer by a
fraction, the numerator of which is the number of days from and including the
Effective Date to and including the last day of the period for which such
Annual Retainer would otherwise be payable, and the denominator of which is
365 or 366, as the case may be. An election pursuant to the first sentence
of this Section 9.1 may be revoked or changed only on or prior to the date
which is one month prior to the first business day of the following
September. An election pursuant to the third sentence of this Section 9.1
shall be irrevocable. Shares payable in options or shares awarded with
respect to an election pursuant to this Section shall be apportioned equally
in value between Common Stock and Class A Common Stock.
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9.2 NUMBER AND TERMS OF OPTIONS. The number of Shares
subject to an Option granted pursuant to this Article shall be determined as
follows: (i) the portion of the Annual Retainer which the Non-Employee
Director has elected pursuant to Section 9.1 to be payable in Options shall
be multiplied by four (4); (ii) one-half of that product shall be divided by
the Fair Market Value per share of Common Stock on the Option Grant Date to
determine the number of Shares of Common Stock to be subject to the Option
granted; (iii) the other one-half of that product shall be divided by the
Fair Market Value per share of Class A Common Stock on the Option Grant Date
to determine the number of Shares of Class A Common Stock to be subject to
the Option granted. Any fraction of a Share shall be disregarded and the
remaining amount of such Annual Retainer shall be paid in cash. The purchase
price per share under each Option granted pursuant to this Article shall be
100% of the Fair Market Value per Share on the Option Grant date. Each
Option granted pursuant to this Article shall be exercisable in accordance
with and subject to the terms and provisions of Article VIII other than
Section 8.1 thereof.
9.3 NUMBER OF SHARES. The Number of Shares granted pursuant
to this Article shall be determined as follows: (i) the portion of the
Annual Retainer which the Non-Employee Director has elected pursuant to
Section 9.1 to be payable in Shares shall be divided in two (2); (ii)
one-half of that portion shall be divided by the Fair Market Value per share
of Common Stock on the Stock Award Date to determine the number of Shares of
Common Stock to be granted pursuant to this Article; (iii) the other one-half
of that portion shall be divided by the Fair Market Value per share of Class
A Common Stock on the Stock Award Date to determine the number of Shares of
Class A Common Stock to be granted pursuant to this Article. Any fraction of
a Share shall be disregarded and the remaining amount of such Annual Retainer
shall be paid in cash. Upon an Award of Shares to a Non-Employee Director,
the stock certificate representing such Shares shall be issued and delivered
to the Non-Employee Director, whereupon the Non-Employee Director shall
become a stockholder of the Corporation with respect to such Shares and shall
be entitled to vote the Shares.
ARTICLE X - CHANGE OF CONTROL
10.1 EFFECT OF CHANGE OF CONTROL. Upon the occurrence of an
event of "Change of Control", as defined below, any and all outstanding
Options shall become immediately exercisable.
10.2 DEFINITION OF CHANGE CONTROL. A "Change of Control"
shall occur when:
(a) the stockholders of the Corporation approve a definitive
agreement or plan to merge or consolidate the Corporation
with or into another corporation (other than a merger or
consolidation which would result in the Voting Stock (as
defined below) of the Corporation outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent of the
combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately
after such merger or consolidation), or to sell, or
otherwise dispose of, all or substantially all of the
Corporation's property and assets, or to liquidate the
Corporation; or
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(b) the individuals who are Continuing Directors of the
Corporation (as defined below) cease for any reason to
constitute at least a majority of the Board of the
Corporation.
The term "Continuing Director" means (i) any member of the
Board who is a member of the Board on September 1, 1995 or (ii) any person
who subsequently becomes a member of the Board whose nomination for election
or election to the Board is recommended or approved by a majority of the
Continuing Directors. The term "Voting Stock" means all capital stock of the
Corporation which by its terms may be voted on all matters submitted to
stockholders of the Corporation generally.
ARTICLE XI - AMENDMENT AND TERMINATION
The Board may amend the Plan from time to time or terminate
the Plan at any time; provided, however, that no action authorized by this
Article shall adversely change the terms and conditions of an outstanding
Option without the Optionee's consent and, subject to Article XII, the number
of Shares subject to an Option granted under Article VIII, the purchase price
therefor, the date of grant of any such Option and the termination provisions
relating to such Option shall not be amended more than once every six months,
other than to comply with changes in the Internal Revenue Code of 1986, as
amended, or any successor law, or the Employee Retirement Income Security Act
of 1974, as amended, or any successor law, or the rules and regulations
thereunder.
ARTICLE XII - ADJUSTMENT PROVISIONS
12.1 If the Corporation shall at any time change the number
of issued Shares of Common Stock, Class A Common Stock, or both classes of
stock without new consideration to the Corporation (such as by stock
dividend, stock split, recapitalization, reorganization, exchange of shares,
liquidation, combination or other change in corporate structure affecting the
Shares of Common Stock, Class A Common Stock, or both classes of Stock) or
make a distribution of cash or property which has a substantial impact on the
value of issued Shares of Common Stock, of Class A Common Stock, or both
classes of stock, the total number of Shares of Common Stock, Class A Common
Stock, or both classes of stock reserved for issuance under the Plan shall be
appropriately adjusted and the number of Shares covered by each outstanding
Option and the purchase price per Share under each outstanding Option and the
number of Shares underlying Options to be issued annually pursuant to Section
8.1 shall be adjusted so that the aggregate consideration payable to the
Corporation and the value of each such Option shall not be changed.
12.2 Notwithstanding any other provision of the Plan, and
without affecting the number of Shares reserved or available hereunder, the
Committee shall authorize the issuance, continuation or assumption of
outstanding Options or provide for other equitable adjustments after changes
in the Shares resulting from any merger, consolidation, sale of assets,
acquisitions of property or stock, recapitalization, reorganization or
similar occurrence in which the Corporation
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is the continuing or surviving corporation, upon such terms and conditions as
it may deem necessary to preserve Optionees' rights under the Plan.
12.3 In the case of any sale of assets, merger, consolidation
or combination of the Corporation with or into another corporation other than
a transaction in which the Corporation is the continuing or surviving
corporation and which does not result in the outstanding Shares being
converted into or exchanged for different securities, cash or other property,
or any combination thereof (an "Acquisition"), any Optionee who holds an
outstanding Option shall have the right (subject to the provisions of the
Plan and any limitation applicable to the Option) thereafter and during the
term of the Option, to receive upon exercise thereof the Acquisition
Consideration (as defined below) receivable upon the Acquisition by the
holder of the number of Shares which would have been obtained upon exercise
of the Option or portion thereof, as the case may be, immediately prior to
the Acquisition. The term "Acquisition Consideration" shall mean the kind
and amount of shares of the surviving or new corporation, cash, securities,
evidence of indebtedness, other property or any combination thereof
receivable in respect of one Share of the Corporation upon consummation of an
Acquisition.
ARTICLE XIII - COMPLIANCE WITH SEC REGULATIONS
It is the Corporation's intent that the Plan comply in all
respects with Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any related regulations. If any provision
of this Plan is later found not to be in compliance with such Rule and
regulations, the provision shall be deemed null and void. All grants and
exercises of Options under this Plan shall be executed in accordance with the
requirements of Section 16 of the Exchange Act and regulations promulgated
thereunder.
ARTICLE XIV - MISCELLANEOUS PROVISIONS
14.1 RIGHTS AS STOCKHOLDER. An Optionee under the Plan shall
have no rights as a holder of Common Stock or Class A Common Stock with
respect to Option grants hereunder, unless and until certificates for Shares
of such stock are issued to the Optionee or such Shares are credited to the
Optionee's Account.
14.2 COMPLIANCE WITH LEGAL REGULATIONS. During the term of
the Plan and the term of any Options granted under the Plan, the Corporation
shall at all times reserve and keep available such number of Shares as may be
issuable under the Plan, and shall seek to obtain from any regulatory body
having jurisdiction any requisite authority required in the opinion of
counsel for the Corporation in order to grant Options to purchase Shares of
Common Stock or Class A Common Stock or to issue Shares of either class of
stock pursuant thereto. If in the opinion of counsel for the Corporation the
transfer, issue or sale of any Shares under the Plan shall not be lawful for
any reason, including the inability of the Corporation to obtain from any
regulatory body having jurisdiction authority deemed by such counsel to be
necessary to such transfer, issuance or sale, the Corporation shall not be
obligated to transfer, issue or sell any such Shares. In any event, the
Corporation shall not be obligated to transfer, issue or sell any Shares to
any participant unless a registration statement which complies with the
provisions of the Securities
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Act of 1933, as amended (the "Securities Act"), is in effect at the time with
respect to such Shares or other appropriate action has been taken under and
pursuant to the terms and provisions of the Securities Act, or the
Corporation receives evidence satisfactory to the Committee that the
transfer, issuance or sale of such Shares, in the absence of an effective
registration statement or other appropriate action, would not constitute a
violation of the terms and provisions of the Securities Act.
14.3 COSTS AND EXPENSES. The costs and expenses of
administering the Plan shall be borne by the Corporation and not charged to
any Option or to any Non-Employee Director receiving an Option.
ARTICLE XV - EFFECTIVE DATE
The Plan shall be submitted to the stockholders of the
Corporation for approval and, if approved by a majority of all the votes cast
at the 1996 annual meeting of stockholders, shall become effective as of the
date of approval by the Board. If stockholder approval is not obtained at
the 1996 annual meeting of stockholders, the Plan shall be nullified.
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