Exhibit 99.1
CASCADE BANCORP
2002 EQUITY INCENTIVE PLAN
SECTION 1. Purpose. The purpose of the Cascade Bancorp Equity Incentive
Plan ("Plan") is to further the interest of Cascade Bancorp (the "Company"), its
subsidiaries and its shareholders by providing a means whereby key employees and
directors of the Company or of any subsidiary who contribute materially to the
success and profitability of the Company may be granted either Restricted Stock
or incentive and/or nonqualified stock options to purchase the Common Stock (as
defined in Section 3) of the Company. The grants will recognize and reward
outstanding individual performances and contributions and will give such persons
a proprietary interest in the Company, enhancing their personal interest in the
Company's continued success and performance. This program will also assist the
Company and its subsidiaries in attracting and retaining key employees and
qualified corporate directors. The options granted under this Plan may be
incentive stock options, as defined in Section 422A of the Code, or nonqualified
stock options taxed under Section 83 of the Code, from time to time.
SECTION 2. Definitions. The following definitions shall apply to this
plan:
(a) "Board" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(c) "Committee" means the Compensation Committee consisting of three or
more persons appointed by the Board. If no committee is appointed, the term
"committee' means the Board, except in those instances where the text clearly
states otherwise.
(d) "Common Stock" means the Common Stock, no par value, of the Company or
such other class of shares or securities as to which the Plan may be applicable.
(e) "Company" means Cascade Bancorp.
(f) "Continuous Service" means the absence of any interruption or
termination of employment with or service to the Company or any parent or
subsidiary of the Company that now exists or hereafter is organized or acquired
by or acquires the Company. Continuous Service shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Company or in the case of transfers between locations of
the Company or between the Company, its parent its subsidiaries or its
successor.
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(g) "Date of Grant" means the date on which the Committee grants an Option
or share(s) of Restricted Stock.
(h) "Director" means any person who renders services to the Company, or a
Subsidiary of the Company, as a member of either (i) the board of directors of
the Company or (ii) the board of directors of a Subsidiary of the Company.
(i) "Employee" means any person employed on an hourly or salaried basis by
the Company or any parent or Subsidiary of the Company that now exists or
hereafter is organized or acquired by or acquires the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934 as amended
from time to time.
(k) "Fair Market Value" means the fair market value of the Common Stock on
the Date of Grant. If the Common Stock is not publicly traded on the Date of
Grant, the Board shall determine the fair market value of the Shares as of that
date, using such factors as the Board considers relevant, such as the price at
which recent sales have been made, the book value of the Common Stock, and the
Company's current and projected earnings. If the Common Stock is publicly traded
on the Date of Grant, the fair market value on that date is the mean between the
closing bid and asked prices of the Common Stock as reported by the National
Association of Securities Dealer Automated Quotations ("NASDAQ") on that date
or, if the Common Stock is listed on a stock exchange, the mean between the high
and low sales prices of the stock on that date, reported in the Wall Street
Journal. If trading in the stock or a price quotation does not occur on the Date
of Grant, the next preceding date on which the stock was traded or a price was
quoted will determine the fair market value.
(l) "Incentive Stock Option" means a stock option, granted under this Plan
or any other plan of the Company or a parent or Subsidiary of the Company
(determined at the Date of Grant) that satisfies the requirements of Section
422A of the Code and that entitles the Optionee to purchase stock in the Company
or in a corporation that at the time of grant of the option was a parent or
Subsidiary of the Company or predecessor corporation of any such corporation.
(m) "Option" means a stock option granted pursuant to the Plan.
(n) "Option Period" means the period beginning on the Date of Grant and
ending on the earlier of the ending date set by the Committee or (i) in the case
of an Option granted to a Director who is not an Employee, ninety (90) days
after the tenth anniversary of the Date of Grant or (ii) in the case of an
Option granted to an Employee on the tenth anniversary of the Date of Grant.
(o) "Optionee" means an Employee or Director who receives an Option.
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(p) "Person" means any group, corporation, partnership, association (other
than any trust holding stock for the account of employees of the Company
pursuant to any stock purchase, ownership, or employee benefit plan of the
Company), business, entity, estate, or natural person, and "beneficial
ownership" means the direct or indirect power to dispose or direct the
disposition of the security.
(q) "Plan" means the Cascade Bancorp 2002 Incentive Stock Option Plan
(r) "Restricted Stock" means Common Stock granted to a Participant
pursuant to the Plan, which may be forfeitable and/or have restrictions on
transfer in any form as defined in Section 5.
(s) "Share" means the Common Stock, as adjusted in accordance with
paragraph 13 of the Plan.
(t) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
SECTION 3. Administration. This Plan shall be administered by the
Committee. The Board is authorized to appoint a successor to any Committee
member who ceases to serve. Members of the Committee who are either eligible for
Options or have been granted Options may vote on any matters affecting the
administration of the Plan or the grant of any Options pursuant to the Plan,
except that no such member shall act on the granting of an Option to himself,
but any such member may be counted in determining the existence of a quorum at
any meeting of the Committee during which action is taken with respect to the
granting of Options to him. A majority of the full Committee constitutes a
quorum for purposes of administering the Plan, and all determinations of the
Committee shall be made by a majority of the members present at a meeting at
which a quorum is present or by the unanimous, written consent of the Committee.
If no Committee has been appointed, the Plan shall be administered by the Board
and all powers enumerated in this Section shall belong to the Board. Members of
the Board who are either eligible for Options or have been granted Options may
vote on any matters affecting the administration of the Plan or the grant of any
Options pursuant to the Plan, except as provided above. If at any time an
insufficient number of disinterested directors is available to serve on the
Committee, interested members may serve on the Committee; however, during such
time, no options shall be granted under this Plan to any person if the granting
of such option would not meet the requirements of Section 16(b) of the Exchange
Act.
For purposes of this Section 3, a disinterested director is a member of
the Board who meets the definition of "disinterested person" as set forth in the
rules and regulations promulgated under Section 16(b) of the Exchange Act.
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SECTION 4. Shares Subject to the Plan. The stock subject to this Plan
shall be the Company's Common Stock, presently authorized but unissued or
subsequently acquired by the Company. Subject to adjustment as provided in
Section 13 hereof, the aggregate amount of Common Stock to be granted under this
Plan shall not exceed 420,000 shares as such Common Stock was constituted on the
effective date of this Plan. The percentage of Common Stock available for
issuance as Restricted Stock under this Plan shall at no time exceed 30%
(126,000) of the total number of all shares of Common Stock authorized for
issuance under this Plan. If any option granted under this Plan shall expire, be
surrendered, exchanged for another option, cancelled, or terminated for any
reason without having been exercised in full, the unpurchased shares subject
thereto shall thereupon again be available for purposes of this Plan, including
forreplacement options which may be granted in exchange for such surrendered,
cancelled or terminated options.
SECTION 5. Restricted Stock. The Committee shall, from time to time,
select particular employees and Directors of the Company and its Subsidiaries to
whom the Restricted Stock is to be granted and/or distributed in recognition of
each such Participant's contribution to the Company's or the Subsidiary's
success.
(a) Grant of Stock. All grants of Restricted Stock under this Section 5
shall be awarded by the Committee. Each grant of Restricted Stock shall be
evidenced by a Restricted Stock agreement setting forth the total number of
Shares subject to restrictions, the grant price, and such other terms and
conditions as are approved by the Committee, but, except to the extent permitted
herein, are not inconsistent with the Plan.
(b) Grant Value. The value for Restricted Stock shall be equal to the Fair
Market Value per share of the Common Stock on the Date of Grant.
(c) Grant Period. The grant period will begin and terminate on the
respective dates specified by the Committee, but may not terminate later than
ten years from the Date of Grant. The Committee may provide for the vesting of
Restricted Stock in installments and upon such terms, conditions and
restrictions as it may determine. In addition to the provisions contained
elsewhere herein concerning automatic acceleration of unvested installments of
Restricted Stock, the Committee shall have the right to accelerate the time at
which any Restricted Stock granted to an employee or director shall become
vested.
(d) Limitation on Stock Available for Issuance as Restricted Stock. The
percentage of Common Stock available for issuance as Restricted Stock under this
Plan shall at no time exceed 30% (126,000) of the total number of all shares of
Common Stock authorized for issuance under this Plan.
SECTION 6. Participants.
(a) Eligible Participants. Every Employee and Director, as the Committee
in its sole discretion designates, is eligible to participate in this Plan. The
Committee's award of an Option to participate in any year does not require the
Committee to award an Option to that participant in any other year. Furthermore,
the Committee may award different
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Options under different terms to different participants. The Committee may
consider such factors as it deems pertinent in selecting participants and in
determining the amount of their Options, including, without limitation, (i) the
financial condition of the Company or its Subsidiaries; (ii) expected profits
for the current or future years, (iii) the contributions of a prospective
participant to the profitability and success of the Company or its Subsidiaries;
and (iv) the adequacy of the prospective participant's other compensation.
Participants may include persons to whom stock, stock options, or other benefits
previously were granted under this or another plan of the Company or any
Subsidiary, whether or not the previously granted benefits have been fully
exercised.
(b) No Right of Employment. An Optionee's right, if any, to continue to
serve the Company and its Subsidiaries as an officer, Employee, Director or
otherwise will not be enlarged or otherwise affected by his designation as a
participant under this Plan, and such designation will not in any way restrict
the right of the Company or any Subsidiary, as the case may be, to terminate at
any time the employment or affiliation of any participant.
SECTION 7. Option Requirements. Options granted under this. Plan shall be
evidenced by written agreements which shall contain such terms, limitations and
restrictions as the Plan Administrator shall deem advisable and which are not
inconsistent with this Plan. Notwithstanding the foregoing, each written
agreement shall include (i) the number of Shares that may be purchased by its
exercise, (ii) the intent of the Committee as to whether they intend the Option
to be an Incentive Stock Option or a nonqualified Option, and (iii) such terms
and conditions consistent with the Plan as the Committee shall determine.
(a) Duration of Option. Each Option may be exercised only during the
Option Period applicable to the Option. The Option Period will either be the
period designated for the Option by the Committee on granting the Option, or, if
no option period is designated by the Committee, the date specified in Section
2(n) above. At the end of the Option Period the Option shall expire.
(b) Exercisability of Options. An Option is exercisable only if the
issuance of Shares pursuant to the exercise would be in compliance with
applicable securities laws, as contemplated by this Plan. To the extent an
Option is either unexercisable or unexercised, the unexercised portion shall
accumulate until the Option both becomes exercisable and is exercised but in no
case beyond the expiration date of the Option determined by its Option Period.
(c) Exercisability of Options Granted to Non-Employee Directors. Subject
to subsection (d) of this Section, unless otherwise provided by the Committee on
the grant of an Option to a Director who is not also an Employee, each such
Option may be exercised to the extent that it is vested (i) on a schedule
adopted by the Committee or (ii) the date the Director ceases serving as a
Director. If a Director dies before the end of an Option Period, the Director's
outstanding Options shall receive a
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full year of vesting for the year in which the Director dies, regardless of the
date of the Director's death, unless otherwise directed by the Committee.
(d) Acceleration of Vesting and Exercisability. The Board may in its
discretion, provide for the exercise of Options either as to an increased
percentage of shares per year or as to all remaining shares. Such acceleration
of vesting may be declared by the Board at anytime before the end of the Option
Period, including, if, applicable, after termination of the Optionee's
continuous service by reason of death, disability, retirement or termination of
employment. At the Board's discretion, vesting of Options may be accelerated due
to exceptional performance (financial) of the Company during any of the years
included in the Option Period. Such "performance vesting" will be specified in
each individual grant, if applicable, at the Committee's discretion. The
criteria included in any such "performance vesting" schedule shall be identified
and adopted by the Committee, in it's discretion, and may be amended as the
Committee deems appropriate. Further, in the event of a change of control of the
Company's ownership, all Options outstanding on the date of change control shall
be immediately 100% vested and exercisable irrespective of the length of time
that has expired since the Option was granted. For this purpose, a "change of
control" will occur on the occurrence of the following events:
(i) the closing of any transaction in which any Person becomes the
beneficial owner of more than fifty percent (50%) of the total number of voting
shares of the Company; (ii) the effective date of a merger by the Company or a
Subsidiary with any other banking institution or entity, whether or not the
Company and/or a Subsidiary is the surviving entity, or the sale by the Company
and/or a Subsidiary of substantially all of its or their assets to another
banking institution or entity; or (iii) as the result of, or in connection with,
any cash tender or exchange offer, merger, or other business combination, sale
of assets or any combination of the foregoing transactions, the persons who were
directors of the Company before such transactions cease to constitute at least a
majority of the board of directors of the Company or any successor entity.
(e) Exercise Price. Except as provided in Section 7(a) and 8, the exercise
price of each Share subject to the Option shall equal the Fair Market Value of
the Share on the Option's Date of Grant.
(f) Termination of Services. If a Non-Employee Director ceases Continuous
Service for any reason other than death, disability or mandatory retirement, all
Options held by the Director shall lapse on the earlier of the end of the Option
Period or ninety (90) days following the effective date of the termination of
his services to the Company. If an Employee ceases Continuous Service for any
reason other than death, disability or retirement on or after age 65 of the
Optionee, all Options held by the Employee shall lapse immediately following the
Employee's last day of Continuous Service. If an Employee is terminated for
cause, any option granted hereunder shall automatically terminate as of the
first discovery by the Company of any reason for termination for cause, and such
Optionee shall thereupon have no right
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to purchase any shares pursuant to such option. "Termination for cause" shall
mean dismissal for dishonesty, conviction or confession of a crime punishable by
law (except misdemeanors), fraud, misconduct or disclosure of confidential
information. If an Optionee's relationship with the Company or any related
corporation is suspended pending an investigation of whether or not the Optionee
shall be terminated for cause, all Optionee's rights under any option granted
hereunder likewise shall be suspended during the period of investigation. On the
grant of an Option, the Committee may, in its discretion, extend the time during
which the Option may be exercised after termination of services. Any such Option
shall lapse at the earlier of the end of the Option Period or the end of the
period established by the Committee for exercise after termination of services.
The Option may be exercised only for the number of Shares for which it could
have been exercised on such termination date, subject to any adjustment under
Section 13.
(g) Death. In the case of death of the Optionee, the beneficiaries
designated by the Optionee shall have one year from the Optionee's death or to
the end of the Option Period, whichever is earlier, to exercise the Option,
provided, however, the Option may be exercised only for the number of Shares for
which it could have be exercised at the time the Optionee died, subject to any
adjustment under Section 13.
(h) Retirement. If the Optionee retires on or after attaining the
mandatory retirement age for Directors, or age 65 for Employees, or later as
determined appropriate by the Committee, the Option shall lapse at the earlier
of the end of the Option Period or three months after the date of retirement;
provided, however, the Option can be exercised only for the number of Shares for
which it could have been exercised on the retirement date, subject to any
adjustment under Section 13.
(i) Disability. In the event of termination of Continuous Service due to
total and permanent disability (within the meaning of Section 105 of the Code,
or in the opinion of the Company and two independent physicians causes the
Optionee to be unable to perform his or her duties for the Company) the Option
shall lapse at the earlier of the end of the Option Period or twelve months
after the date of such termination, provided, however, the Option can be
exercised only for the number of Shares for which it could have been exercised
at the time the Optionee became disabled, subject to any adjustment under
Section 13. For purposes of this Section, total disability shall be deemed to
have occurred on the first day after the Company and the two independent
physicians have furnished their opinion of total disability to the Committee.
SECTION 8. Incentive Stock Options. Any Option intended to qualify as an
Incentive Stock Option shall satisfy the following requirements in addition to
those requirements stated in Section 6 above:
(a) Ten Percent Shareholders. An Option intended to qualify as an
Incentive Stock Option granted to an individual who, on the Date of Grant, owns
stock possessing more than ten (10) percent of the total combined voting power
of
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all classes of stock of either the Company or any parent or Subsidiary, shall be
granted at an exercise price of 110 percent of Fair Market Value on the Date of
Grant and shall bear an Option Period no greater than five years. In calculating
stock ownership of any person, the attribution rules of Section 424(d) of the
Code will apply. Furthermore, in calculating stock ownership, any stock that the
individual may purchase under outstanding options will not be considered.
(b) Maximum Option Grants. Each Option granted under the Plan shall be
limited so that the aggregate Fair Market Value, determined on the Date of
Grant, of stock in the Company with respect to which any Incentive Stock Options
under the Plan and all other plans of the Company or its parent or Subsidiaries
(within the meaning of Subsection (b) of Section 422(d) of the Code) may become
exercisable by one, Optionee for the first time in any calendar year shall not
exceed $100,000.
(c) Non-Employee Directors. Incentive Stock Options may not be granted to
any Director who is not also an Employee.
SECTION 9. Non-statutory Options. Any Option not intended to qualify as an
Incentive Stock Option shall be a non-statutory Option. Non-statutory Options
shall satisfy each of the requirements of Section 6 of the Plan.
SECTION 10. Exercise. Subject to the terms and conditions and conditions
of the written Option Agreement pursuant to which an Option is granted, and to
any additional holding period required by applicable law, each Option may be
exercised in whole or in part, but not less than 10 shares, or if greater, 10%
of the full number of Shares as to which it can be exercised; provided however,
that only whole shares will be issued pursuant to the exercise of any option. A
partial exercise of an Option will not affect the holder's right to exercise the
Option from time to time in accordance with this Plan as to the remaining Shares
subject to the Option. During an Optionee's lifetime, any incentive stock
options granted under this Plan are personal to him or her and are exercisable
solely by such Optionee. Options shall be exercised by delivery to the Company
of notice of the number of shares with respect to which the Option is exercised,
together with payment of the exercise price.
SECTION 11. Payment of Exercise Price. Payment of the Option exercise
price shall be made in full at the time the notice of exercise of the Option is
delivered to the Company and shall be in cash, bank certified or cashier's
check, personal check (unless at the time of exercise the Plan Administrator in
a particular case determines not to accept a personal check), or Common Stock of
the Company at Fair Market Value or a combination of such cash, bank certified
or cashier's check, personal check or Common Stock, 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. To the extent permitted under the
applicable laws and regulations including Section 16 of the Exchange Act, and
with the consent of the Committee, the Company agrees to cooperate in a
"cashless exercise" of an Option. The cashless exercise shall be effected by the
Company, Director or Employee
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delivering to a registered securities broker acceptable to the Company
instructions to sell a sufficient number of shares of Common Stock and assigning
the sale proceeds to the Company to cover the costs and expenses associated
therewith for the Common Stock being purchased. At the discretion of the Plan
Administrator, as evidenced in each Optionee's written option agreement, payment
may be made through delivery of a full-recourse promissory note executed by the
Optionee; provided, that (i) such note delivered in connection with an Incentive
Stock Option shall, and such note delivered in connection with a nonqualified
stock option may, in the sole discretion of the Plan Administrator, bear
interest at a rate specified by the Plan Administrator but in no case less than
the rate required to avoid imputation of interest (taking into account any
exceptions to the imputed interest rules) for federal income tax purposes, and
(ii) the Plan Administrator in its sole discretion shall specify the term and
other provisions of such note at the time an Incentive Stock Option is granted
or at any time prior to exercise of a nonqualified stock option, and (iii) the
Plan Administrator may require that the Optionee pledge the Optionee's shares to
the Company for the purpose of securing the payment of such note and may require
that the certificate representing such shares be held in escrow in order to
perfect the Company's security and (iv) the Plan Administrator in its sole
discretion may at any time restrict or rescind this right upon notification to
the Optionee.
SECTION 12. Taxes; Compliance with Law; Approval of Regulatory Bodies. The
Company or any related corporation shall have the right to retain and withhold
from any payment of cash or Common Stock under the Plan the amount of taxes
required by any government to be withheld or otherwise deducted and paid with
respect to such payment. At its discretion, the Company may require an Optionee
receiving shares of Common Stock to reimburse the Company for any such taxes
required to be withheld by the Company and withhold any distribution in whole or
in part until the Company is so reimbursed. In lieu thereof, the Company shall
have the right to withhold from any other cash amounts due or to become due from
the Company to the Optionee an amount equal to such taxes or retain and withhold
a number of shares having a market value not less than that of such taxes
required to be withheld by the Company to reimburse the Company for any such
taxes and cancel (in whole or in part) any such shares so withheld. If required
by Section 16(b) of the Exchange Act, the election to pay withholding taxes by
delivery of shares held by any person who at the time of exercise is subject to
Section 16(b) of the Exchange Act, shall be made either six months prior to the
date the option exercise becomes taxable or during the quarterly 10-day window
period required under Section 16(b) of the Exchange Act for exercises of stock
appreciation rights. Options are exercisable and Shares can be delivered and
payments made under this Plan, only in compliance with all applicable federal
and state laws and regulations, including, without limitation, state and federal
securities laws, and the rules of all stock exchanges on which the Company's
stock is listed at any time. An Option is exercisable only if either (a) a
registration statement pertaining to the Shares to be issued upon exercise of
the Option has been filed with and declared effective by the Securities and
Exchange Commission and remains effective on the date of exercise,
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or (b) an exemption from the registration requirements of applicable securities
laws is available. This Plan does not require the Company, however, to file such
a registration statement or to assure the availability of such exemptions. Any
certificate issued to evidence Shares issued under the Plan may bear such
legends and statements, and shall be subject to such transfer restrictions, as
the Committee deems advisable to assure compliance with federal and state laws
and regulations and with the requirements of this Section. Each Option may not
be exercised, and Shares may not be issued under this Plan, until Company has
obtained the consent or approval of every regulatory body, federal or state,
having jurisdiction over such matters as the Committee deems advisable.
Each person who acquires the right to exercise an Option by bequest or
inheritance may be required by the Committee to furnish reasonable evidence of
ownership of the Option as a condition to his exercise of the Option. In
addition the Committee may require such consents and releases of taxing
authorities the Committee deems advisable.
SECTION 13. Assignability. An Option granted under this Plan is not
transferable except by will or the laws of descent and distribution. During the
lifetime of an Optionee, his Options are exercisable only by him.
SECTION 14. Adjustment Upon Change in Capitalization. If a reorganization,
merger. consolidation, reclassification, recapitalization, combination or
exchange of shares, split, stock dividend, rights offering, or other expansion
or contraction of the Common Stock of the Company occurs, the number and class
of Shares for which Options are authorized to be granted under this Plan, the
number and class of Shares subject to Options previously granted under this
Plan, and the price per Share payable upon exercise of each Option outstanding
under this Plan shall be equitably adjusted by the Committee to reflect such
changes. To the extent deemed equitable and appropriate by the Board, subject to
any required action by stockholders, in any merger, consolidation,
reorganization, liquidation or dissolution, any Option granted under the Plan
shall pertain to the securities and other property to which a holder of the
number of Shares of stock covered by the Option would have been entitled to
receive in connection with such event.
(a) Cash, Stock or Other Property for Stock. Except as provided in
subsection (b) below, upon a merger (other than a merger of the Company in which
the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation,
reorganization (other than a mere reincorporation or the creation of a holding
company) or liquidation of the Company, as a result of which the shareholders of
the Company receive cash, stock or other consideration in connection with their
shares of Common Stock, any option granted hereunder shall terminate, but the
Optionee shall have the right immediately prior to any such merger,
consolidation, acquisition of property or stock, separation, reorganization or
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liquidation to exercise such in whole or in part whether or not the vesting
requirements set forth in the option agreement have been satisfied.
(b) Conversion of Options on Stock for Stock Exchange. If the shareholders
of the Company receive capital stock of another corporation ("Exchange Stock) in
exchange for their shares of Common Stock in any transaction involving a merger
(other than a merger of the Company in which the holders of Common Stock
immediately prior to the merger have the same proportionate ownership of Common
Stock in the surviving corporation immediately after the merger), consolidation,
acquisition of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company), all Options granted
hereunder shall be converted into Options to purchase shares of Exchange Stock
unless the Company and the corporation issuing the Exchange Stock, in their sole
discretion, determine that any or all such Options granted hereunder shall not
be converted into Options to purchase shares of Exchange Stock but instead shall
terminate in accordance with the provision of subsection (a) above. The amount
and price of converted Options shall be determined by adjusting the amount and
price of the Options granted hereunder in the same proportion as used for
determining the number of shares of Exchange Stock the holders of the Common
Stock receive in such merger, consolidation, acquisition of property or stock,
separation or reorganization. Unless accelerated by the Board, the vesting
schedule set forth in the option agreement shall continue to apply for the
Exchange Stock.
SECTION 15. Liability of the Company. The Company, its parent and any
Subsidiary that is in existence or hereafter comes into existence shall not be
liable to any person for any tax consequences expected but not realized by an
Optionee or other person due to the exercise of an Option.
SECTION 16. Amendment and Termination of Plan. The Board may alter, amend
or terminate this Plan from time to time without approval of the shareholders.
However, without the approval of the shareholders, no amendment will be
effective that:
(a) materially increases the benefits accruing to participants under the
Plan;
(b) increases the aggregate number of Shares that may be delivered upon
the exercise of Options granted under the Plan;
(c) materially modifies the eligibility requirements for participation in
the Plan; or
(d) amends the requirements of subparagraphs (a) - (c) of this paragraph.
Any amendment, whether with or without the approval of shareholders, that alters
the terms or provisions of an Option granted before the amendment (unless the
alteration is
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expressly permitted under this Plan) will be effective only with the consent of
the Optionee to whom the Option was granted or the holder currently entitled to
exercise it.
SECTION 17. Expenses of Plan. The Company or its Subsidiaries shall bear
the expenses of administering the Plan.
SECTION 18. Duration of Plan. Options may be granted under this Plan only
during the 10 years immediately following the effective date of this Plan,
unless sooner terminated by the Board.
SECTION 19. Applicable Law. The validity, interpretation, and enforcement
of this Plan are governed in all respects by the laws of Oregon and the United
States of America.
SECTION 20. Effective Date. The effective date of this Plan shall be the
earlier of (i) the date on which the Board adopts the Plan or (ii) the date on
which the Shareholders approve the Plan.
Adopted by the Board of
Directors on January 20, 2003
Approved by the Shareholders
on April 21, 2003
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