Exhibit 10.3
MID-WISCONSIN FINANCIAL SERVICES, INC.
1999 STOCK OPTION PLAN
As amended April 22, 2008
MID-WISCONSIN FINANCIAL SERVICES, INC.
1999 STOCK OPTION PLAN
Section 1. PURPOSE. The Plan has been adopted to (a) enable the
Company to attract and retain superior employees by providing incentive
opportunities with respect to future services that are competitive with
those of other similar companies, (b) further identify the interests of
participating employees with those of the Company's other shareholders
through compensation based on the performance of the Company's common
stock, (c) attract and retain qualified employees, and (d) promote the
long-term financial interests of the Company and its shareholders.
Section 2. CERTAIN DEFINITIONS. As used in this Plan, and in
addition to any terms elsewhere defined in this Plan, the following terms,
when capitalized, shall have the meanings set forth in this Section 2.
Section 2.1. "BOARD" means the Board of Directors of the Company.
Section 2.2. "CAUSE" means any one or more of the following on the
part of the participant: (a) the commission of an act which results in a
payment of a claim filed by the Company or a Subsidiary under a blanket
banker fidelity bond policy as from time to time and at any time
maintained; (b) an intentional failure to perform assigned duties; (c)
willful misconduct in the course of the participant's employment; (d)
breach of a fiduciary duty involving personal profit or acts or omissions
of personal dishonesty, including, but not limited to, commission of any
crime of theft, embezzlement, misapplication of funds, unauthorized
issuance of obligations, or false entries; (e) any intentional, reckless,
or negligent act or omission to act which results in the violation by the
participant of any policy established by the Company or a Subsidiary which
is designed to insure compliance with applicable banking, securities,
employment discrimination or other laws or which causes or results in the
Company's or a Subsidiary's violation of such laws, except any act done by
the participant in good faith, as determined in the reasonable discretion
of the Board, or which results in a violation of such policies or law which
is, in the reasonable sole discretion of such Board, immaterial; or (f) any
of the foregoing which results in material loss to the Company or any of
its Subsidiaries. Except to the extent of the discretion granted to the
Board in clause (e), the Committee shall have the sole discretion to
determine whether "Cause" exists, and the Committee's determination shall
be final.
Section 2.3. "CHANGE IN CONTROL" has the meaning set forth in Section
9.2.
Section 2.4. "CODE" means the Internal Revenue Code of 1986, as
amended. The reference to any specific section of the Code shall include
any successor section or sections.
Section 2.5. "COMMITTEE" means, subject to the provisions of Section
4, the Executive Committee of the Board, or such other committee as may be
designated by the Board to administer this Plan.
Section 2.6. "COMMON STOCK" means the common stock, $.10 par value
per share, of the Company.
Section 2.7. "COMPANY" means Mid-Wisconsin Financial Services, Inc.,
a Wisconsin corporation.
Section 2.8. "DISABILITY" means (a) a physical or mental condition
which qualifies as a total and permanent disability under the terms of any
plan or policy maintained by the Company or a Subsidiary and for which the
Optionee is eligible to receive benefits under such plan or policy, or (b)
if the Optionee does not participate in a disability plan, or is not
covered by a disability policy, of the Company or a Subsidiary,
"Disability" means the permanent and total inability of a participant by
reason of mental or physical infirmity, or both, to perform the work
customarily assigned to him or her, if a medical doctor selected or
approved by the Board, and knowledgeable in the field of such infirmity,
advises the Committee either that it is not possible to determine when such
Disability will terminate or that it appears probable that such Disability
will be permanent during the remainder of said participant's lifetime.
Section 2.9. "EFFECTIVE DATE" means December 31, 1999.
Section 2.10. "EMPLOYED," and any variation thereof such as
"employment," means, as appropriate, employed by or employment with any of
the Company or any present or future Subsidiary.
Section 2.11. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
Section 2.12. "FAIR MARKET VALUE" of a share of the Common Stock as
of any date means the price per Share on the immediately preceding date as
determined in accordance with the following:
(a) EXCHANGE. If the principal market for the Common Stock is a
national securities exchange, "Fair Market Value" means the closing
price of the Common Stock on the New York Stock Exchange composite
transaction tape if the Common Stock is then listed for trading on
such exchange, otherwise, the closing price of the Common Stock in any
transaction reported on the principal exchange on which the Common
Stock is then listed for trading.
(b) OVER-THE-COUNTER. If the principal market for the Common
Stock is an over-the-counter market, "Fair Market Value" means the
closing (last) price of the Common Stock reported in The Nasdaq
National Market, or The Nasdaq Small Cap Market, or if the Common
Stock is not then listed for trading in either of such markets, the
closing (last) price of the Common Stock reported on the OTC Bulletin
Board, or, if prices for the Common Stock are not quoted on the OTC
Bulletin Board, the closing (last) price reported on any other bona
fide over-the-counter stock market selected in good faith by the
Committee.
(c) OTHER DETERMINATION. If subparagraphs (a) and (b) are not
applicable, "Fair Market Value" shall mean such amount as may be
determined by the Committee by whatever means or method as the
Committee, in the good faith exercise of its discretion, shall at such
time deem appropriate.
(d) DATE. If the date on which "Fair Market Value" is to be
determined is not a business day, or, if there shall be no reported
transactions for such date, such determination shall be made on the
next preceding business day for which transactions were reported.
Section 2.13. "INCENTIVE STOCK OPTION" means an Option granted
pursuant to the terms of the Plan which is intended by the Committee to
meet the requirements of an "incentive stock option" within the meaning of
Section 422 of the Code, or any successor section or sections; provided,
however, that to the extent an Incentive Stock Option is exercised after
the expiration of any limitation on the time of exercise applicable under
Section 422 of the Code, or such Option does not meet the qualifications of
an "incentive stock option" within the meaning of such Section 422, such
Option shall thereafter be a Non-Qualified Option.
Section 2.14. "NON-QUALIFIED OPTION" means an Option granted pursuant
to the terms of the Plan which the Committee intends shall not meet the
requirements of an "incentive stock option" within the meaning of Section
422 of the Code, or any successor section or sections, and any Option
intended to be an Incentive Stock Option which does not satisfy the terms,
or is not exercised in accordance with the requirements of, Section 422 of
the Code.
Section 2.15. "OPTION" means an option to purchase Shares awarded
pursuant to the provisions of Section 6.
Section 2.16. "OPTION AGREEMENT" means the written document which
evidences an award of Options, whether or not such document requires the
signature of the Optionee.
Section 2.17. "OPTIONEE" means an eligible employee, as determined in
accordance with Section 5, who has been granted an Option.
Section 2.18. "OPTION PRICE" means, with respect to each Option, the
price per Share at which such Option may be exercised and the Shares
subject to such Option purchased.
Section 2.19. "PLAN" means the Mid-Wisconsin Financial Services, Inc.
1999 Stock Option Plan as set forth herein or as hereafter amended.
Section 2.20. "RETIREMENT DATE" means a participant's Termination of
Employment at or after the normal or early retirement date of such
participant under the terms of any retirement or pension plan sponsored by
the Company which is qualified under the provisions of the Code.
Section 2.21. "SHARE" means a share of Common Stock.
Section 2.22. "SUBSIDIARY" means any corporation, partnership, or
other entity in which the Company owns, directly or indirectly, at least a
50% interest in the voting rights or profits.
Section 2.23. "TERMINATION OF EMPLOYMENT" means the termination of
the participant's employment with, or performance of services for, the
Company and any of its Subsidiaries. A participant employed by, or
performing services for, a Subsidiary shall also be deemed to incur a
Termination of Employment if the Subsidiary ceases to be such a Subsidiary
and the participant does not immediately thereafter become an employee of
the Company or another Subsidiary. Temporary absences from employment
because of illness, vacation, or leave of absence and transfers among the
Company and its Subsidiaries shall not be considered Terminations of
Employment. For purposes of the Plan, a participant's employment shall be
deemed to have terminated at the close of business on the day preceding the
first date on which he or she is no longer for any reason whatsoever
employed by the Company or any of its Subsidiaries.
Section 3. NUMBER OF SHARES AVAILABLE FOR OPTIONS.
Section 3.1 SHARES SUBJECT. The aggregate number of Shares which may
be delivered under Options awarded pursuant to the Plan shall be equal to
the sum of (a) 200,000 and (b) any Shares available for future awards under
all prior stock option plans of the Company (the "Prior Plans") as of the
Effective Date, including any Shares with respect to which options awarded
under any Prior Plans are hereafter forfeited, expire, or are canceled
without delivery of Shares.
Section 3.2 UNDELIVERED SHARES. To the extent any Shares subject to
an Option are not delivered to an Optionee (or the estate or other
transferee of such Optionee) because the Option is forfeited, expires, or
otherwise becomes unexercisable, or the Shares are not delivered because
the Shares are used to satisfy the applicable tax withholding obligation of
the Optionee, such Shares shall be deemed not to have been delivered for
purposes of determining the maximum number of Shares available for delivery
under the Plan.
Section 3.3 EXERCISE USING SHARES. If the Option Price of any Option
awarded under the Plan or any Prior Plan is satisfied by tendering Shares
to the Company (by actual delivery or attestation), only the number of
Shares issued to the Optionee (or the estate or other transferee of such
Optionee), net of the Shares tendered, shall be deemed delivered for
purposes of determining the maximum number of Shares available for delivery
under the Plan.
Section 3.4 STOCK DIVIDENDS, ETC. If the Company shall, after the
Effective Date, change the Common Stock into a greater or lesser number of
Shares through a stock dividend, stock split-up or combination of Shares,
then (a) the number of Shares then subject to the Plan as provided for in
Section 3.1, but which are not then subject to any outstanding Option, (b)
the number of Shares subject to each then outstanding Option (to the extent
not previously exercised), and (c) the price per Share payable upon
exercise of each then outstanding Option, shall all be proportionately
increased or decreased as of the record date for such stock dividend, stock
split-up or combination of Shares in order to give effect thereto.
Notwithstanding any such proportionate increase or decrease, no fraction of
a Share shall be issued upon the exercise of an Option and the Shares
subject to an Option shall be rounded to the nearest whole Share.
Section 3.5 OTHER CHANGES. If, after the Effective Date, there shall
be any change in the Common Stock or other change in the capitalization of
the Company other than through a stock dividend, stock split-up or
combination of Shares, including, but not limited to, a change which
results from a merger, consolidation, spin-off, or other distribution of
stock or property of the Company, any reorganization (whether or not such
reorganization is within the meaning of Section 368 of the Code), or any
partial or complete liquidation of the Company, then if, and only if, the
Committee shall determine that such change equitably requires an adjustment
in (a) the number or kind of shares of stock then reserved for issuance
under Section 3.1, (b) the number or kind of shares of stock then subject
to an Option, (c) the Option Price with respect to an Option, or (d) any
other limitation on the Option which may be granted to any participant, to
the extent such adjustment does not cause any Option to fail to satisfy the
requirements for exemption from the limitations on deductibility imposed by
Section 162(m) of the Code that is set forth in Section 162(m)(4)(c) of the
Code if such Option would have satisfied such requirements immediately
prior to such adjustment and if such Option, if then exercised, would, when
added to the Optionee's estimated compensation from the Company and all
Subsidiaries for such year, exceed the deductibility limits of Section
162(m) of the Code, such adjustment as the Committee shall determine is
equitable and as shall be approved by the Board shall be made and shall be
effective and binding for all purposes of such Option and the Plan. If any
member of the Board shall, at the time of such approval, be an Optionee, he
shall not participate in action in connection with such adjustment.
Section 4. ADMINISTRATION OF THE PLAN.
Section 4.1 COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall, subject to the terms of the Plan, have the
authority to, in its sole discretion, (a) select eligible employees to
receive an award of one or more Options and to participate in the Plan, (b)
determine the number of Shares subject to each award and the Option Price
associated therewith, (c) establish terms and conditions concerning the
time of, and conditions precedent to, the exercisability of each Option
(including, without limitation, conditions with respect to the passage of
time, performance of the Company, or a Subsidiary, or the Optionee,
restrictions on competitive employment or satisfaction of Company policies,
and any other conditions which the Committee deems reasonably related to
the satisfaction of the purposes of the Plan), (d) determine the form of
each Option Agreement and all terms and conditions thereof with respect to
each award, (e) interpret the Plan and the application thereof and
establish such rules and regulations as it deems necessary or desirable for
the administration of the Plan, (f) modify or cancel any award or Option or
take such action to cause the vesting or exercisability of any or all
outstanding Options to become exercisable in part or in full for any reason
at any time, subject to the limitation of Section 9.1, and (g) exercise
such other authority as is reasonably related to the administration of
and/or the fulfillment of the purpose of the Plan. All actions,
interpretations, rules, regulations and conditions taken or established by
the Committee shall be final, binding and conclusive upon the Company, each
Subsidiary, and all Optionees.
Section 4.2 MEMBERSHIP OF THE COMMITTEE.
(a) MEMBERSHIP QUALIFICATIONS. Except as provided in this
Section 4.2, at all times the Committee shall consist of not less than
three members designated by the Board from among those of its members
who are not officers or employees of the Company or a Subsidiary and
each of whom is (a) a "non-employee director" within the meaning of
Rule 16b-3 under the Exchange Act (a "Non-Employee Director") and (b)
an "outside director" within the meaning of Section 162(m) of the Code
(an "Outside Director"); provided, however, that in addition to the
Board's general authority to amend the Plan as provided for in Section
10.1, the Board shall have the specific authority to modify or
eliminate the foregoing qualifications or adopt such other
qualifications as are reasonably intended to result in (x) the award
of Options, and transactions with respect to the award or exercise of
such Options, satisfying an exemption from Section 16(b) of the
Exchange Act, or any successor thereto, and (y) compensation
recognized by Optionees qualifying as a deductible expense of the
Company under the "performance-based compensation" exception to
compensation deduction limits which would otherwise be imposed on the
Company under Section 162(m) of the Code.
(b) APPOINTMENT OF OTHER MEMBERS. In the event that one or more
members of the Committee shall fail to meet the qualifications set
forth in Section 4.2(a), the Board shall remove such member or members
and appoint a successor or successors who satisfy such qualifications.
The Board shall act in a reasonably prompt manner to fill any vacancy
on the Committee from among such of its members who are both Non-
Employee Directors and Outside Directors.
(c) VALIDITY OF GRANTS. Notwithstanding the qualifications for
members of the Committee established in Section 4.2(a), any award of
Options made by the Committee in good faith and without the knowledge
that one or more of its members did not satisfy such qualifications,
shall be valid and enforceable by the Optionee even though the members
of the Committee did not, at the time of such award, satisfy such
qualifications.
Section 4.3 ACTIONS BY THE COMMITTEE. A majority of the members of
the Committee shall constitute a quorum. In the absence of specific rules
to the contrary, action by the Committee shall require the consent of a
majority of the members of the Committee, expressed either orally at a
meeting of the Committee or in writing in the absence of a meeting.
Section 4.4 ACTIONS BY THE BOARD. Any authority granted to the
Committee may also be exercised by the full Board, except to the extent
that the grant or exercise of such authority would cause any Option or
transaction to become subject to (or lose an exemption under) the short-
swing profit recovery provisions of Section 16 of the Exchange Act or cause
an Option not to qualify for, or to cease to qualify for, the exemption as
"performance-based compensation" under Section 162 of the Code, and the
regulations promulgated thereunder. To the extent that any permitted action
taken by the Board conflicts with action taken by the Committee, the Board
action shall control.
Section 4.5 LIMITATION ON LIABILITY AND INDEMNIFICATION OF BOARD. No
member of the Board, no executive officer or other employee of the Company,
and no other agent or representative of the Company shall be liable for any
act, omission, interpretation, construction, or determination made in
connection with the Plan in good faith, and all such persons shall be
entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage, or expense (including attorneys fees) arising
therefrom to the full extent permitted by law, except as otherwise may be
provided in the Company's articles of incorporation and/or by-laws, and
under any directors' and officers' liability insurance that may be in
effect from time to time.
Section 5. PERSONS ELIGIBLE TO BECOME OPTIONEES. Persons who are (a)
employees of the Company and any Subsidiary, (b) prospective employees who
have accepted offers of employment from the Company or a Subsidiary, or (c)
directors of the Company and its Subsidiaries shall be eligible to be
selected, in the sole discretion of the Committee, to participate in, and
receive an award of one or more Options pursuant to, the Plan; provided,
however, that only employees of the Company or a Subsidiary shall be
eligible to receive an Incentive Stock Option Award.
Section 6. AWARDING OF OPTIONS.
Section 6.1 OPTIONEES. Subject to the limitations of Section 5,
Options shall be awarded to such eligible employees and directors of the
Company and its Subsidiaries as the Committee may, from time to time and at
any time, select. Membership of an employee or a director in a class shall
not, without specific Committee action, entitle such employee or director
to receive an Option award.
Section 6.2 OPTION AGREEMENT. Each Option shall be evidenced by an
Option Agreement, the terms of which may differ from other Option
Agreements. Each Option Agreement shall be signed on behalf of the Company
and, if so provided by the Committee, the Optionee, and shall set forth
with respect to the Option or Options awarded therein, the name of the
Optionee, the date awarded, the Option Price, whether the Option is an
Incentive Stock Option or a Non-Qualified Stock Option, the number of
Shares subject to the Option, and such other terms and conditions
consistent with the Plan as determined by the Committee. The Committee may
at the time of award or at any time thereafter impose such additional terms
and conditions on the exercise of such Option as it deems necessary or
desirable for such Option, or the exercise thereof, to be exempt under
Section 16(b) of the Exchange Act, and the regulations promulgated
thereunder, and to qualify as "performance-based compensation" under
Section 162 of the Code, and the regulations promulgated thereunder. Each
Option Agreement shall incorporate by reference all terms, conditions and
limitations set forth in the Plan.
Section 6.3 TERMS AND CONDITIONS OF THE OPTIONS. In addition to any
other terms, conditions, and limitations specified in the Plan, each Option
awarded hereunder shall, as to each Optionee, satisfy the following
requirements:
(a) DATE OF AWARD. Awards intended to qualify as Incentive Stock
Options must be made on or before December 14, 2009. Awards of Non-
Qualified Stock Options must be awarded on or before the date on which
the Plan terminates as determined in accordance with Section 10.
(b) EXPIRATION. No Incentive Stock Option shall be exercisable
after the expiration of ten years from the date such Option is
awarded. No Non-Qualified Stock Option shall be exercisable after the
expiration of twenty years from the date such Option is awarded.
(c) PRICE. The Option Price as to any Share subject to an Option
may not be less than the Fair Market Value of the Share on the date
the Option is awarded.
(d) LIMITATIONS ON TRANSFERABILITY. No Incentive Stock Option
shall be transferable by the Optionee other than by will or the laws
of descent and distribution, nor can it be exercised by anyone other
than the Optionee during the Optionee's lifetime. Except as otherwise
provided in an Option Agreement or other action taken by the
Committee, each of which conform to the provisions of Section 6.4, no
Non-Qualified Option shall be transferable by the Optionee other than
by will or the laws of descent and distribution, nor can it be
exercised by anyone other than the Optionee during the Optionee's
lifetime. Except as provided in Section 6.4, no Option may be sold,
transferred, assigned, pledged, hypothecated, encumbered, or otherwise
disposed of (whether by operation of law or otherwise), or be subject
to execution, attachment, or similar process. Upon any attempt to so
sell, transfer (other than in accordance with Section 6.4), assign,
pledge, hypothecate, encumber, or otherwise dispose of any such award,
such award and all rights thereunder shall immediately become null and
void.
(e) EXERCISE. Except as otherwise permitted by the Committee, or
as provided in Section 6.5, Options must be exercised in accordance
with the following time limitations:
(i) Termination by Death. If an Optionee incurs a
Termination of Employment by reason of death, any Option held by
such Optionee may thereafter be exercised, to the extent then
exercisable, for a period of one year from the date of such death
or until the expiration of the stated term of such Option,
whichever period is shorter.
(ii) Termination by Reason of Disability. If an Optionee
incurs a Termination of Employment by reason of Disability, any
Option held by such Optionee may thereafter be exercised by the
Optionee (or the estate of the Optionee in the event of death),
to the extent it was exercisable at the time of such Termination
of Employment, for a period of one year.
(iii) Termination by Reason of Retirement. If an Optionee
incurs a Termination of Employment by reason of Retirement, any
Option held by such Optionee may thereafter be exercised by the
Optionee (or the estate of the Optionee in the event of death),
to the extent it was exercisable at the time of such Termination
of Employment by reason of Retirement, for a period of two years.
(iv) Other Termination. If an Optionee incurs a
Termination of Employment for any reason other than death,
Disability, or Retirement, any Option held by such Optionee shall
terminate.
(v) Notwithstanding any other provision of this Plan to the
contrary, in the event an Optionee incurs a Termination of
Employment other than for Cause during the 24-month period
following a Change in Control, any Option held by such Optionee
may thereafter be exercised by the Optionee, to the extent it was
exercisable at the time of termination, for (x) the longer of (i)
one year from such date of termination or (ii) such other period
as may be provided in the Plan for such Termination of
Employment, or (y) until expiration of the stated term of such
Stock Option, whichever period is shorter. If an Incentive Stock
Option is exercised after the expiration of the post-termination
exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Non-
Qualified Stock Option.
If an Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the Code,
such Option will thereafter be treated as a Non-Qualified Stock
Option.
(f) MINIMUM HOLDING PERIOD. No Option may be exercised before
the date which is six months after the later of (i) the date on which
the Plan is approved by the shareholders of the Company, or (ii) the
date on which such Option was awarded.
(g) ADDITIONAL RESTRICTIONS RELATING TO INCENTIVE STOCK OPTIONS.
To the extent that the aggregate Fair Market Value (determined as of
the time the Option is awarded) of the Shares for which Incentive
Stock Options are exercisable for the first time by an individual
during any calendar year (under the Plan, any Prior Plans, or any
other plan of the Company or a Subsidiary) exceeds $100,000 (or such
other individual limit as may be in effect under the Code on the date
of award), such Options shall not be Incentive Stock Options. No
Incentive Stock Option shall be awarded to an employee who, at the
time such Option is awarded, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company
or any Subsidiary within the meaning of Section 422(b)(6) of the Code
unless (i) at the time the Option is awarded, the Option Price is at
least 110% of the Fair Market Value of the Shares subject to the
Option, and (ii) such Option by its terms is not exercisable after the
expiration of five years from the date such Option is awarded.
(h) LIMITATION ON OPTION AWARDS. No Optionee may be awarded
Options under the Plan in any calendar year with respect to more than
5,000 Shares.
(i) RELOAD OPTIONS. In the exercise of its authority pursuant to
Section 4.1 and Section 6, the Committee may provide that in
connection with the award of an Option (the "Original Option"),
subject to the terms and conditions established by the Committee, the
Optionee shall be awarded a new Option (a "Reload Option") when (i)
the payment of the exercise price of the Original Option is made by
(A) the delivery of Shares owned by the Optionee pursuant to Section
7.2(b), (B) the withholding of Shares pursuant to Section 7.2(c), or
(C) the sale of Shares acquired upon exercise of the Original Option
pursuant to the procedure permitted by Section 7.2(d) and/or (ii)
Shares are tendered or withheld as payment of the amount to be
withheld in order to satisfy applicable tax withholding requirements
in connection with the exercise of the Original Option pursuant to
Section 7.3. A Reload Option shall be an Option to purchase the
number of Shares not exceeding the sum of (i) the number of Shares
tendered, withheld, or sold as consideration upon the exercise of the
Original Option and (ii) the number of Shares tendered or withheld as
payment of the amount to be withheld under applicable tax laws in
connection with the exercise of the Original Option, in each case
pursuant to the relevant provisions of the Option Agreement or
Committee action relating to the Original Option. Reload Options may
be granted only with respect to an Original Option awarded under the
Plan after January 17, 2006. A Reload Option shall be subject to the
following terms and conditions:
(i) the Option Price as to any Shares subject to a Reload
Option may not be less than the Fair Market Value of the Shares
on the date the Reload Option is awarded;
(ii) the date of award of the Reload Option shall be the
date on which Shares are surrendered, withheld, or sold in
connection with the payment of the Option Price or withholding of
taxes with respect to the Original Option;
(iii) except as provided in this Section 6.3(i), the term
of the Reload Option shall be identical to the term of the
Original Option and shall be exercisable only to the extent the
Original Option would have been exercisable;
(iv) the Reload Option shall not be exercisable after the
Optionee's Termination of Employment;
(v) the Reload Option can be exercised only by the
Optionee; and
(vi) except as provided in this Section 6.3(i), the Reload
Option shall be awarded subject to all other terms and conditions
of the Original Option.
Notwithstanding any other provision of this Section 6.3(i), no Reload
Option shall be awarded with respect to the exercise of any other
Reload Option.
Section 6.4 TRANSFERABILITY OF NON-QUALIFIED OPTIONS. The Committee
may, in its discretion, under the terms of the Option Agreement with
respect to, or at any time on or after the date of the initial award of, a
Non-Qualified Option, permit transfer of such Non-Qualified Option by the
Optionee to (a) the spouse, children or grandchildren of the Optionee
("Immediate Family"), (b) a trust for the exclusive benefit of the Optionee
or the Optionee's Immediate Family, (c) a partnership in which the Optionee
or the Optionee's Immediate Family are the only partners, or (d) to a
former spouse of the Optionee pursuant to a domestic relations order within
the meaning of Rule 16a-12, as promulgated under Section 16 of the Exchange
Act; provided, however, that (x) there may be no consideration for any such
transfer unless the payment of such consideration to the Optionee is
specifically authorized by the Committee, (y) the Option Agreement, or any
amendment thereof approved by the Committee, must expressly provide for
transferability of the Option evidenced in such agreement in a manner
consistent with this Section 6.4, and (z) once transferred pursuant to the
preceding provisions of this Section 6.4, no subsequent transfer of such
Options shall be permitted except a transfer by will or the laws of descent
and distribution. In authorizing all or any portion of an Option to be
transferred, the Committee may impose any conditions on exercise, prescribe
a holding period for the Shares acquired upon such exercise, and/or impose
any other conditions or limitations it deems desirable or necessary in
order to carry out the purposes and requirements of the Plan. Following
transfer, the terms and conditions of the Plan and the Option Agreement
relating to such Option shall continue to be applicable in all respects to
the Optionee who made such transfer and each transferred Option shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer as if such Option had not been transferred,
including, but not limited to, the terms and conditions with respect to the
lapse and termination of such Option. For purposes of Section 7, the
transferee of an Option, where applicable, shall be deemed an "Optionee."
None of the Company, the Committee, or any Optionee shall have any
obligation to inform any transferee of the termination or lapse of any
Option for any reason. Notwithstanding any other provision of the Plan,
following the termination of Employment of an Optionee, a transferred Non-
Qualified Option shall be exercisable by the transferee only to the extent,
and for the periods specified in Section 6.3(e) as if such Option had not
been transferred.
Section 6.5 TERMINATION OR LAPSE OF OPTIONS. Each Option shall
terminate or lapse upon the first to occur of (a) the expiration date or
any date as of which the Option is deemed to be forfeited as set forth in
the applicable Option Agreement, (b) the applicable date set forth in
Section 6.3(b), or (c) the date which is the day next following the last
day such Option could be exercised under Section 6.3(e).
Section 7. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 7.1 EXERCISE OF OPTIONS. Options shall be exercised as to
all or a portion of the Shares subject to the Option by written notice to
the Company setting forth the exact number of Shares as to which the Option
is being exercised and including with such notice payment of the Option
Price (plus the minimum required tax withholding). The date of exercise
shall be the date such written notice and payment have been delivered (in
cash or in such other manner as provided in Section 7.2) to the Secretary
of the Company either in person or by depositing said notice and payment in
the United States mail, postage pre-paid and addressed to such officer at
the Company's home office. Notwithstanding the fact that an Option has
been transferred pursuant to Section 6.4, the Optionee with respect to such
transferred Option shall remain liable for any required tax withholding.
Section 7.2 PAYMENT FOR SHARES. Payment of the Option Price (plus
required tax withholding) may be made (a) by tendering cash (in the form of
a check or otherwise) in such amount; (b) with the consent of the
Committee, and if authorized in the Option Agreement, by tendering, by
either actual delivery of Shares owned by the Optionee or by attestation,
Shares with a Fair Market Value on the date of exercise equal to such
amount; (c) with the consent of the Committee, by instructing the Committee
to withhold a number of Shares having a Fair Market Value on the date of
exercise equal to the aggregate exercise price of such Option; (d) by
delivering a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the sale or
loan proceeds equal to such amount; or (e) any combination of (a), (b), (c)
and (d); provided, however, that any Shares delivered in payment of the
Option Price pursuant to (b) shall have been purchased on the open market
and held by the Optionee for at least six months at the time of exercise of
the Option. Notwithstanding the fact that an Option has been transferred
pursuant to Section 6.4, the Optionee with respect to such transferred
Option shall remain liable for any required tax withholding.
Section 7.3 TAX WITHHOLDING. The delivery of Shares under the Plan
is subject to withholding of all applicable taxes, and the Committee may
condition the delivery of any Shares or other benefits on satisfaction of
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the
occurrence of such withholding, may permit withholding obligations to be
satisfied through cash payment by the Optionee or other person exercising
an Option, through the surrender of Shares which the Optionee or other
person already owns, or through the surrender of Shares to which the
Optionee or other person is otherwise entitled under the Plan.
Section 7.4 ISSUANCE OF SHARES. No Shares shall be issued until full
payment therefor has been made. An Optionee shall have all of the rights
of a shareholder of the Company holding the Common Stock that is subject to
such Option (including, if applicable, the right to vote the Shares and the
right to receive dividends), when the Optionee has given written notice of
exercise, has paid in full for such Shares and, if requested, has given the
representation described in Section 12.
Section 8. DIRECTOR STOCK OPTIONS. In addition to any Options which
may be granted to a director pursuant to the provisions of Section 6.1 the
Committee may also grant Options to directors of the Company and/or its
Subsidiaries which satisfy the following requirements:
(a) AUTOMATIC GRANTS. Each such director who is not otherwise
an employee of the Company or any of its Subsidiaries, shall, on the
first day after his or her first election as a director, and
thereafter on the day after each annual meeting of shareholders of the
Company during such director's term, automatically be granted Non-
Qualified Options in an amount specified by the Committee to purchase
Common Stock having an exercise price of 100% of the Fair Market Value
of the Common Stock on the date of grant of such Non-Qualified Stock
Option.
(b) LIMITATIONS ON AUTOMATIC GRANTS. An automatic director
Option shall be granted hereunder only if as of each date of grant the
director (i) is not otherwise an employee of the Company or any of its
Subsidiaries, (ii) has not been an employee of the Company or any of
its Subsidiaries for any part of the preceding fiscal year, and (iii)
has served on the Board continuously since the commencement of his
term.
(c) RIGHTS OF OPTIONEE. Each holder of a Stock Option granted
pursuant to this Section 8 shall also have the rights specified in
Section 9.
(d) INSUFFICIENT SHARES. In the event that the number of shares
of Common Stock available for future grant under the Plan is
insufficient to make all automatic grants required to be made on such
date, then all non-employee directors entitled to a grant on such date
shall share ratably in the number of Options on shares available for
grant under the Plan.
(e) TERMS AND CONDITIONS OF DIRECTOR OF OPTIONS. Except as
expressly provided in this 8, any Non-Qualified Option granted
hereunder shall be subject to the terms and conditions of the Plan as
if the grant were made pursuant to Section 6 hereof.
Section 9. CHANGE IN CONTROL.
Section 9.1 ADJUSTMENT OF OPTIONS.
(a) VESTING AND CASH PAYMENT. In the event of a Change of
Control,
(i) all Options outstanding on the date on which such
Change in Control has occurred (the "Change in Control Date")
shall, to the extent not then exercisable or vested, immediately
become exercisable in full, and
(ii) each Optionee may elect (the Optionee's "Election
Right") with respect to each Option held by such Optionee on the
Change in Control Date to surrender such Option for an immediate
lump sum cash payment in an amount equal to the product of (A)
the number of Shares then subject to the Option as to which the
election is being exercised multiplied by (B) the excess, if any,
of (1) the greater of (a) the Change in Control Price or (b) the
highest Fair Market Value of a Share on any day in the 60-day
period ending on the Change in Control Date, over (2) the Option
Price of such Option. For purposes of this Section 9.1(a), the
"Change in Control Price" shall mean, if the Change in Control is
the result of a tender or exchange offer or a Corporate
Transaction (as defined in Section 9.2(c)), the highest price per
Share paid in such tender or exchange offer or Corporate
Transaction, and, to the extent that the consideration paid in
any such transaction consists all or in part of securities or
other noncash consideration, the value of such securities or
other noncash consideration shall be determined in the sole
discretion of the Committee.
(b) ELECTION. The exercise of an Election Right must be in
writing, specify the Option or Options and the number of Shares as to
which the election is being exercised, and be delivered to the
Secretary of the Company either in person or by depositing said notice
and payment in the United States mail, postage pre-paid and addressed
to such officer at the Company's home office on or before the 60th day
following the Change in Control Date.
(c) PAYMENT DATE. All payments due an Optionee pursuant to the
provisions of this Section 9.1 shall be made by the Company on or
before the 5th business day following the date on which the Optionee's
election has been delivered to the Company pursuant to Section 9.1(b).
Section 9.2 DEFINITION OF "CHANGE OF CONTROL." For purposes of the
Plan, a "Change of Control" means the happening of any of the following
events:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of either (i) the
then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power
of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
paragraph (a), the following acquisitions shall not constitute a
Change in Control: (A) any acquisition directly from the Company other
than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired
directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any entity controlled by the Company,
and (D) any acquisition pursuant to a transaction which complies with
clauses (i), (ii), and (iii) of paragraph (c) of this Section 9.2; or
(b) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, for purposes of the Plan, that any individual who
becomes a member of the Board subsequent to the Effective Date whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be deemed
to be and shall be considered as though such individual were a member
of the Incumbent Board, but provided, further, that any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board shall not be so
deemed or considered as a member of the Incumbent Board; or
(c) Consummation of a reorganization, merger or consolidation,
or sale or other disposition of all or substantially all of the assets
of the Company or the acquisition of the assets or securities of any
other entity (a "Corporate Transaction"); excluding, however, such a
Corporate Transaction pursuant to which (i) all or substantially all
of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than
60% of, respectively, the outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
(the "Resulting Company") in substantially the same proportions as
their ownership, immediately prior to such Corporate Transaction, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than the
Company, any employee benefit plan (or related trust) of the Company)
will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the Resulting
Company or the combined voting power of the then outstanding voting
securities of such Resulting Company entitled to vote generally in the
election of directors except to the extent that such ownership existed
with respect to the Company prior to the Corporate Transaction, and
(iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of the Resulting Company; or
(d) The approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
Section 10. AMENDMENT AND TERMINATION OF PLAN.
Section 10.1 AMENDMENT OF PLAN. The Board may amend the Plan from
time to time and at any time; provided, however, that (a) except as
specifically provide herein, no amendment shall, in the absence of written
consent to the change by an affected Optionee, adversely affect such
Optionee's rights under any Option which has been awarded prior to the
amendment except to the extent such amendment is, in the sole opinion of
the Committee, required to comply with any stock exchange rules, accounting
rules, or laws applicable to the Company or the Plan, (b) no amendment with
respect to the maximum number of Shares which may be issued pursuant to
Options under the Plan or to any individual in any calendar year made be
made unless approved by a majority of the Shares entitled to vote at a
meeting of the shareholders if such amendment would, in the absence of such
approval and in the sole opinion of the Committee, have an adverse effect
on the Company under applicable tax or securities laws or accounting rules,
and (c) no amendment shall be made without the approval of the Company's
shareholders to the extent such approval is required by applicable law or
stock exchange rules.
Section 10.2. TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) the date on which all Shares authorized pursuant to
Section 3.1 have been delivered pursuant to the exercise of Options and (b)
the date specified by the Board as the effective date of Plan termination;
provided, however, that the termination of the Plan shall not limit or
otherwise affect any Options outstanding on the date of termination.
Section 11. EFFECTIVE DATE. Notwithstanding any provision of this
Plan to the contrary, the Plan shall not be effective, and any Options
awarded under the Plan shall be null and void, unless the adoption of the
Plan is approved at the annual meeting of the Company's shareholders next
following the Effective Date by the majority of the shares entitled to vote
at such meeting.
Section 12. INVESTMENT INTENT. The Committee may require each person
purchasing or receiving Shares pursuant to an Option to represent to and
agree with the Company in writing that such person is acquiring the Shares
without a view to the distribution thereof. The certificates for such
Shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer.
Section 13. AVAILABILITY OF INFORMATION. If the Shares subject to an
Optionee's Option are not registered or to be registered under the
Securities Act of 1933 as amended, the Company shall furnish each Optionee
with (a) a copy of the Plan and the Company's most recent annual report to
its shareholders at the time the Option Agreement is delivered to the
Optionee and (b) a copy of each subsequent annual report and proxy
statement, on or about the same date as such report shall be made available
to shareholders of the Company. The Company will furnish, upon written
request addressed to the Secretary of the Company, but at no charge to the
Optionee or any duly authorized representative of the Optionee, copies of
all reports filed by the Company with the Securities and Exchange
Commission, including, but not limited to, the Company's annual reports on
Form 10-K, its quarterly reports on Form 10-Q, and its proxy statements.
Notwithstanding the foregoing provisions of this Section 13, the Company
shall not be required to furnish any such report or statement if a copy of
such report is otherwise provided to the Optionee in connection with
another plan maintained by the Company or such Optionee's status as a
shareholder of the Company.
Section 14. LIMITATION OF RIGHTS.
(a) CONDITIONS OF EMPLOYMENT. The Plan shall not constitute a
contract of employment, and participation in or eligibility for
participation in the Plan shall not confer upon any employee the right
to be continued as an employee of the Company or any present or future
Subsidiary and the Company and each Subsidiary, hereby expressly
reserves the right to terminate the employment of any employee, with
or without cause, as if the Plan and any Options awarded pursuant to
it were not in effect.
(b) COMPANY ASSETS. Neither an Optionee nor any other person
shall, by reason of receiving an award of an Option under the Plan
acquire any right, title, or interest in any assets of the Company or
any Subsidiary by reason of such Option or the Plan. To the extent an
Optionee or any other person shall acquire a right to receive payments
from the Company pursuant to an Option Agreement or the Plan, such
right shall be no greater than the right of any unsecured general
creditor of the Company.
(c) ISSUANCE OF SHARES. Notwithstanding any other provision of
the Plan or agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for
Shares under the Plan prior to fulfillment of all of the following
conditions:
(i) Listing or approval for listing upon notice of
issuance, of such Shares on the exchange or over-the-counter
market as may at the time be the principal market for the Common
Stock;
(ii) Any registration or other qualification of the Shares
under any state or federal law or regulation, or the maintaining
in effect of any such registration or other qualification which
the Committee shall, in its absolute discretion upon the advice
of counsel, deem necessary or advisable; and
(iii) Obtaining any other consent, approval, or permit from
any state or federal governmental agency which the Committee
shall, in its absolute discretion after receiving the advice of
counsel, determine to be necessary or advisable.
Section 15. COMPLIANCE WITH APPLICABLE LAWS. If at any time the
Company shall be advised by its counsel that the exercise of any Option or
the delivery of Shares upon the exercise of an Option is required to be
approved, listed, registered or qualified under any securities law, that
certain actions must be taken under the rules of any stock exchange or
over-the-counter market, that such exercise or delivery must be accompanied
or preceded by a prospectus or similar circular meeting the requirements of
any applicable law, or that some other action is required to be taken by
the Company in compliance with applicable law, the Company will use
reasonable efforts to take all actions required within a reasonable time,
but exercise of the Options or delivery by the Company of certificates for
Shares may be deferred until the Company shall be in compliance with all
such requirements.
Section 16. GOVERNING LAW. The Plan, each Option awarded hereunder
and the related Option Agreement, and all determinations made and actions
taken pursuant thereto, to the extent not otherwise governed by the Code or
the laws of the United States, shall be governed by the internal laws of
the State of Wisconsin and construed in accordance therewith without giving
effect to the principles of conflicts of laws applied by any state.