Exhibit
10.1
MATTHEWS
INTERNATIONAL CORPORATION
1992
STOCK INCENTIVE PLAN
(as
amended through April 25, 2006)
The
purposes of the 1992 Stock Incentive Plan (as amended, the "Plan") are to
encourage eligible employees of Matthews International Corporation (the
"Corporation") and its Subsidiaries to increase their efforts to make the
Corporation and each Subsidiary more successful, to provide an additional
inducement for such employees to remain with the Corporation or a Subsidiary,
to
reward such employees by providing an opportunity to acquire shares of the
Class
A Common Stock, par value $1.00 per share, of the Corporation (the "Class A
Common Stock") and the Class B Common Stock, par value $1.00 per share, of
the
Corporation (the "Class B Common Stock") on favorable terms and to provide
a
means through which the Corporation may attract able persons to enter the employ
of the Corporation or one of its Subsidiaries. As used herein, except where
the
context otherwise so requires, the term "Common Stock" shall mean both the
Class
A Common Stock and the Class B Common Stock. For the purposes of the Plan,
the
term "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing at least fifty percent
(50%) or more of the total combined voting power of all classes of stock in
one
of the other corporations in the chain.
SECTION
1
Administration
The
Plan
shall be administered by a Committee (the "Committee") appointed by the Board
of
Directors of the Corporation (the "Board") and consisting of not less than
two
members of the Board, who, at the time of their appointment to the Committee
and
at all times during their service as members of the Committee, are
(i) "Non-Employee Directors" as then defined under Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
successor rule, and (ii) "outside directors" under
Section 162(m)(4)(C) of the Internal Revenue Code of 1986 (the "Code"), or
any successor provision.
The
Committee shall interpret the Plan and prescribe such rules, regulations and
procedures in connection with the operations of the Plan as it shall deem to
be
necessary and advisable for the administration of the Plan consistent with
the
purposes of the Plan.
The
Committee shall keep records of action taken at its meetings. A majority of
the
Committee shall constitute a quorum at any meeting and the acts of a majority
of
the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the
Committee.
SECTION
2
Eligibility
Those
employees of the Corporation or any Subsidiary (including, but not limited
to,
covered employees as defined in Section 162(m)(3) of the Code, or any
successor provision) who share responsibility for the management, growth or
protection of the business of the Corporation or any Subsidiary shall be
eligible to be granted stock options (with or without cash payment rights)
and
to receive restricted share awards as described herein.
Subject
to the provisions of the Plan, the Committee shall have full and final
authority, in its discretion, to grant stock options (with or without cash
payment rights) and to award restricted shares as described herein, to determine
whether Class A Common Stock or Class B Common Stock shall be issued, and to
determine the employees to whom any such grant or award shall be made and the
number of shares to be covered thereby. In determining the eligibility of any
employee, as well as in determining the number of shares covered by each grant
of a stock option or award of restricted shares and whether cash payment rights
shall be granted in conjunction with a stock option, the Committee shall
consider the position and the responsibilities of the employee being considered,
the nature and value to the Corporation or a Subsidiary of his or her services,
his or her present and/or potential contribution to the success of the
Corporation or a Subsidiary and such other factors as the Committee may deem
relevant.
SECTION
3
Shares
Available under the Plan
The
maximum aggregate number of shares of the Common Stock for which grants of
stock
options or awards of restricted shares may be made under the Plan on any given
date shall be equal to 15% of the then aggregate issued and outstanding shares
of the Common Stock (not including treasury shares, but including outstanding
restricted shares), less the aggregate number of (i) all outstanding stock
options granted at any time under the Plan since the initial date of adoption
of
the Plan, which remain unexercised and outstanding (and which have not expired)
as of such date and (ii) all restricted shares granted at any time under
the Plan which have not yet vested or been forfeited to the Corporation pursuant
to their terms as of such date, subject to adjustment and substitution as set
forth in Section 8, and shares of the Common Stock may be issued with respect
to
any such grants or awards, provided that the Corporation has authorized but
unissued shares which are reserved at the time of any such grant or award and
are available and unissued at the time of any such issuance equal to or greater
than the number of shares to be so issued. Stated differently, as any
outstanding stock options granted under the Plan are either exercised,
cancelled, terminated or expire for any reason without being exercised, or
any
restricted shares granted under the Plan are either vested (all restrictions
lapse) or forfeited for any reason, the number of shares subject or related
to
such stock options or restricted shares shall again be available for grant
or
award under the Plan.
Notwithstanding
the immediately prior paragraph, the maximum aggregate number of shares of
the
Common Stock which may be issued and as to which grants of incentive stock
options or awards of restricted shares may be made under the Plan is 2,400,000
shares and 500,000 shares, respectively, subject to adjustment and substitution
as set forth in Section 8. If any such incentive stock option granted under
the
Plan and counted against such sub-limit is cancelled by mutual consent or
terminates or expires for any reason without having been exercised, the number
of shares subject thereto shall again be available for purposes of granting
incentive stock options under the Plan. If any shares of the Common Stock are
forfeited to the Corporation pursuant to the restrictions applicable to
restricted shares awarded under the Plan and counted against such sub-limit,
the
number of shares so forfeited shall again be available for purposes of awarding
restricted shares under the Plan.
To
the
extent that the Corporation has such shares available to it and can issue such
shares without violating any law or regulation, including without limitation
the
By-laws of the National Association of Securities Dealers, Inc. concerning
disenfranchisement of shareholders, the Corporation will reserve for issuance
upon the grant of any option and issue when such option is exercised and will
issue upon the award of restricted shares Class B Common Stock of the
Corporation. To the extent Class B Common Stock is not available for
reservation at the time of grant or issuance at the time of award, the
Corporation retains the right to reserve for issuance and to issue Class A
Common Stock and not Class B Common Stock. The shares which may be issued
under the Plan may be either authorized but unissued shares or shares previously
issued and thereafter acquired by the Corporation or partly each, as shall
be
determined from time to time by the Board.
SECTION
4
Grant
of Stock Options and Cash Payment Rights
and
Awards of Restricted Shares
The
Committee shall have authority, in its discretion, (a) to grant "incentive
stock
options" pursuant to Section 422 of the Code, to grant "nonstatutory stock
options" (i.e., stock options which do not qualify under Sections 422 or 423
of
the Code) or to grant both types of stock options (but not in tandem) and (b)
to
award restricted shares. The Committee also shall have the authority, in its
discretion, to grant cash payment rights in conjunction with nonstatutory stock
options with the effect provided in Section 5(D). Cash payment rights may not
be
granted in conjunction with incentive stock options. Cash payment rights granted
in conjunction with a nonstatutory stock option may be granted either at the
time the stock option is granted or at any time thereafter during the term
of
the stock option.
The
maximum number of shares as to which stock options may be granted and as to
which shares may be awarded under the Plan to any one employee in any one
calendar year is 250,000 shares, subject to adjustment and substitution as
set
forth in Section 8. For the purposes of this limitation, any adjustment or
substitution made pursuant to Section 8 in a calendar year with respect to
the maximum number of shares set forth in the preceding sentence shall also
be
made with respect to any shares subject to stock options or share awards
previously granted under the Plan to such employee in the same calendar
year.
Notwithstanding
any other provision contained in the Plan or in any stock option agreement
or an
amendment thereto, but subject to the possible exercise of the Committee's
discretion contemplated in the last sentence of this Section 4, the aggregate
fair market value, determined as provided in Section 5(H) on the date of grant
of incentive stock options, of the shares with respect to which such incentive
stock options are exercisable for the first time by an employee during any
calendar year under all plans of the corporation employing such employee, any
parent or subsidiary corporation of such corporation and any predecessor
corporation of any such corporation shall not exceed $100,000. If the date
on
which one or more incentive stock options could first be exercised would be
accelerated pursuant to any provision of the Plan or any stock option agreement
or an amendment thereto, and the acceleration of such exercise date would result
in a violation of the $100,000 restriction set forth in the preceding sentence,
then, notwithstanding any such provision, but subject to the provisions of
the
next succeeding sentence, the exercise dates of such incentive stock options
shall be accelerated only to the extent, if any, that does not result in a
violation of such restriction and, in such event, the exercise dates of the
incentive stock options with the lowest option prices shall be accelerated
to
the earliest such dates. The Committee may, in its discretion, authorize the
acceleration of the exercise date of one or more incentive stock options even
if
such acceleration would violate the $100,000 restriction set forth in the first
sentence of this paragraph and even if one or more such incentive stock options
are thereby converted in whole or in part to nonstatutory stock options.
SECTION
5
Terms
and Conditions of Stock Options
and
Cash Payment Rights
Stock
options and cash payment rights granted under the Plan shall be subject to
the
following terms and conditions:
(A)
The
purchase price at which each stock option may be exercised (the "option price")
shall be such price as the Committee, in its discretion, shall determine but
shall not be less than one hundred percent (100%) of the fair market value
per
share of the Common Stock covered by the stock option on the date of grant,
except that in the case of an incentive stock option granted to an employee
who,
immediately prior to such grant, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation or any Subsidiary (a "Ten Percent Employee"), the option price
shall
not be less than one hundred ten percent (110%) of such fair market value on
the
date of grant. For purposes of this Section 5(A), the fair market value of
the
Common Stock shall be determined as provided in Section 5(H). For purposes
of
this Section 5(A), an individual (i) shall be considered as owning not only
shares of stock owned individually but also all shares of stock that are at
the
time owned, directly or indirectly, by or for the spouse, ancestors, lineal
descendants and brothers and sisters (whether by the whole or half blood) of
such individual and (ii) shall be considered as owning proportionately any
shares owned, directly or indirectly, by or for any corporation, partnership,
estate or trust in which such individual is a stockholder, partner or
beneficiary.
(B)
The
option price for each stock option shall be paid in full upon exercise and
shall
be payable in cash in United States dollars (including check, bank draft or
money order), which may include cash forwarded through a broker or other
agent-sponsored exercise or financing program; provided, however, that in lieu
of such cash the person exercising the stock option may (if authorized by the
Committee at the time of grant in the case of an incentive stock option, or
at
any time in the case of a nonstatutory stock option) pay the option price in
whole or in part by delivering to the Corporation shares of the Common Stock
having a fair market value on the date of exercise of the stock option,
determined as provided in Section 5(H), equal to the option price for the shares
being purchased; except that (i) any portion of the option price representing
a
fraction of a share shall in any event be paid in cash and (ii) no shares of
the
Common Stock which have been held for less than one year may be delivered in
payment of the option price of a stock option. If the person exercising a stock
option participates in a broker or other agent-sponsored exercise or financing
program, the Corporation will cooperate with all reasonable procedures of the
broker or other agent to permit participation by the person exercising the
stock
option in the exercise or financing program. Notwithstanding any procedure
of
the broker or other agent-sponsored exercise or financing program, if the option
price is paid in cash, the exercise of the stock option shall not be deemed
to
occur and no shares of the Common Stock will be issued until the Corporation
has
received full payment in cash (including check, bank draft or money order)
for
the option price from the broker or other agent. The date of exercise of a
stock
option shall be determined under procedures established by the Committee, and
as
of the date of exercise the person exercising the stock option shall be
considered for all purposes to be the owner of the shares with respect to which
the stock option has been exercised. Payment of the option price with shares
shall not increase the number of shares of the Common Stock which may be issued
under the Plan as provided in Section 3.
(C)
Unless the Committee, in its discretion, shall otherwise determine, stock
options shall be exercisable by a grantee during employment commencing on the
date of grant. Subject to the terms of Section 5(F) providing for earlier
termination of a stock option, no stock option shall be exercisable after the
expiration of ten years (five years in the case of an incentive stock option
granted to a Ten Percent Employee) from the date of grant. Unless the Committee,
in its discretion, shall otherwise determine, a stock option to the extent
exercisable at any time may be exercised in whole or in part.
(D)
Cash
payment rights granted in conjunction with a nonstatutory stock option shall
entitle the person who is entitled to exercise the stock option, upon exercise
of the stock option or any portion thereof, to receive cash from the Corporation
(in addition to the shares to be received upon exercise of the stock option)
equal to such percentage as the Committee, in its discretion, shall determine
not greater than one hundred percent (100%) of the excess of the fair market
value of a share of the Common Stock covered by the stock option on the date
of
exercise of the stock option over the option price per share of the stock option
times the number of shares covered by the stock option, or portion thereof,
which is exercised. Payment of the cash provided for in this Section 5(D)
shall be made by the Corporation as soon as practicable after the time the
amount payable is determined. For purposes of this Section 5(D), the fair
market value of the Common Stock shall be determined as provided in
Section 5(H).
(E)
Unless the Committee, in its discretion, shall otherwise determine in the case
of nonstatutory stock options, (i) no stock option shall be transferable by
the grantee otherwise than by Will, or if the grantee dies intestate, by the
laws of descent and distribution of the state of domicile of the grantee at
the
time of death, and (ii) all stock options shall be exercisable during the
lifetime of the grantee only by the grantee.
(F)
Unless the Committee, in its discretion, shall otherwise determine but subject
to the provisions of Section 4 in the case of incentive stock
options:
(i)
If
the employment of a grantee who is not disabled within the meaning of Section
422(c)(6) of the Code (a "Disabled Grantee") is voluntarily terminated with
the
consent of the Corporation or a Subsidiary or a grantee retires under any
retirement plan of the Corporation or a Subsidiary, any then outstanding
incentive stock option held by such grantee shall be exercisable by the grantee
(but only to the extent exercisable by the grantee immediately prior to the
termination of employment) at any time prior to the expiration date of such
incentive stock option or within three months after the date of termination
of
employment, whichever is the shorter period;
(ii)
If
the employment of a grantee who is not a Disabled Grantee is voluntarily
terminated with the consent of the Corporation or a Subsidiary or a grantee
retires under any retirement plan of the Corporation or a Subsidiary, any then
outstanding nonstatutory stock option held by such grantee shall be exercisable
by the grantee (but only to the extent exercisable by the grantee immediately
prior to the termination of employment) at any time prior to the expiration
date
of such nonstatutory stock option or within one year after the date of
termination of employment, whichever is the shorter period;
(iii)
If
the employment of a grantee who is a Disabled Grantee is voluntarily terminated
with the consent of the Corporation or a Subsidiary, any then outstanding stock
option held by such grantee shall be exercisable in full (whether or not so
exercisable by the grantee immediately prior to the termination of employment)
by the grantee at any time prior to the expiration date of such stock option
or
within one year after the date of termination of employment, whichever is the
shorter period;
(iv)
Following the death of a grantee during employment, any outstanding stock option
held by the grantee at the time of death shall be exercisable in full (whether
or not so exercisable by the grantee immediately prior to the death of the
grantee) by the person entitled to do so under the Will of the grantee, or,
if
the grantee shall fail to make testamentary disposition of the stock option
or
shall die intestate, by the legal representative of the grantee at any time
prior to the expiration date of such stock option or within one year after
the
date of death, whichever is the shorter period;
(v)
Following the death of a grantee after termination of employment during a period
when a stock option is exercisable, any outstanding stock option held by the
grantee at the time of death shall be exercisable by such person entitled to
do
so under the Will of the grantee or by such legal representative (but only
to
the extent the stock option was exercisable by the grantee immediately prior
to
the death of the grantee) at any time prior to the expiration date of such
stock
option or within one year after the date of death, whichever is the shorter
period; and
(vi)
Unless the exercise period of a stock option following termination of employment
has been extended as provided in Section 9(C), if the employment of a grantee
terminates for any reason other than voluntary termination with the consent
of
the Corporation or a Subsidiary, retirement under any retirement plan of the
Corporation or a Subsidiary or death, all outstanding stock options held by
the
grantee at the time of such termination of employment shall automatically
terminate.
Whether
termination of employment is a voluntary termination with the consent of the
Corporation or a Subsidiary and whether a grantee is a Disabled Grantee shall
be
determined in each case, in its discretion, by the Committee and any such
determination by the Committee shall be final and binding.
If
a
grantee of a stock option engages in the operation or management of a business
(whether as owner, partner, officer, director, employee or otherwise and whether
during or after termination of employment) which is in competition with the
Corporation or any of its Subsidiaries, the Committee may immediately terminate
all outstanding stock options held by the grantee; provided, however, that
this
sentence shall not apply if the exercise period of a stock option following
termination of employment has been extended as provided in Section 9(C).
Whether a grantee has engaged in the operation or management of a business
which
is in competition with the Corporation or any of its Subsidiaries shall also
be
determined, in its discretion, by the Committee, and any such determination
by
the Committee shall be final and binding.
(G)
All
stock options shall be confirmed by a written agreement or an amendment thereto
in a form prescribed by the Committee, in its discretion. Each agreement or
amendment thereto shall be executed on behalf of the Corporation by the Chief
Executive Officer (if other than the President), the President or any Vice
President and by the grantee. The agreement confirming a stock option shall
specify whether the stock option is an incentive stock option or a nonstatutory
stock option. The provisions of such agreements need not be
identical.
(H)
Fair
market value of the Common Stock shall be the mean between the following prices,
as applicable, for the date as of which fair market value is to be determined
as
quoted in The Wall
Street Journal
(or in
such other reliable publication as the Committee, in its discretion, may
determine to rely upon): (a) if the Common Stock is listed on the New York
Stock
Exchange, the highest and lowest sales prices per share of the Common Stock
as
quoted in the NYSE-Composite Transactions listing for such date, (b) if the
Common Stock is not listed on such exchange, the highest and lowest sales prices
per share of Common Stock for such date on (or on any composite index including)
the principal United States securities exchange registered under the 1934 Act
on
which the Common Stock is listed or (c) if the Common Stock is not listed on
any
such exchange, the highest and lowest sales prices per share of the Common
Stock
for such date on the National Association of Securities Dealers Automated
Quotations System or any successor system then in use ("NASDAQ"). If there
are
no such sale price quotations for the date as of which fair market value is
to
be determined but there are such sale price quotations within a reasonable
period both before and after such date, then fair market value shall be
determined by taking a weighted average of the means between the highest and
lowest sales prices per share of the Common Stock as so quoted on the nearest
date before and the nearest date after the date as of which fair market value
is
to be determined. The average should be weighted inversely by the respective
numbers of trading days between the selling dates and the date as of which
fair
market value is to be determined. If there are no such sale price quotations
on
or within a reasonable period both before and after the date as of which fair
market value is to be determined, then fair market value of the Common Stock
shall be the mean between the bona fide bid and asked prices per share of Common
Stock as so quoted for such date on NASDAQ, or if none, the weighted average
of
the means between such bona fide bid and asked prices on the nearest trading
date before and the nearest trading date after the date as of which fair market
value is to be determined, if both such dates are within a reasonable period.
The average is to be determined in the manner described above in this Section
5(H). If the fair market value of the Common Stock cannot be determined on
the
basis previously set forth in this Section 5(H) on the date as of which fair
market value is to be determined, the Committee shall in good faith determine
the fair market value of the Common Stock on such date. Fair market value shall
be determined without regard to any restriction other than a restriction which,
by its terms, will never lapse.
Subject
to the foregoing provisions of this Section and the other provisions of the
Plan, any stock option granted under the Plan may be exercised at such times
and
in such amounts and be subject to such restrictions and other terms and
conditions, if any, as shall be determined, in its discretion, by the Committee
and set forth in the agreement referred to in Section 5(G) or an amendment
thereto.
SECTION
6
Terms
and Conditions of
Restricted
Share Awards
Restricted
share awards shall be evidenced by a written agreement in a form prescribed
by
the Committee, in its discretion, which shall set forth the number of shares
of
the Common Stock awarded, the restrictions imposed thereon (including, without
limitation, restrictions on the right of the grantee to sell, assign, transfer
or encumber such shares while such shares are subject to other restrictions
imposed under this Section 6), the duration of such restrictions, events (which
may, in the discretion of the Committee, include performance-based events)
the
occurrence of which would cause a forfeiture of the restricted shares and such
other terms and conditions as the Committee in its discretion deems appropriate.
Restricted share awards shall be effective only upon execution of the applicable
restricted share agreement on behalf of the Corporation by the Chief Executive
Officer (if other than the President), the President or any Vice President,
and
by the awardee. The provisions of such agreements need not be identical. Awards
of restricted shares shall be effective on the date determined, in its
discretion, by the Committee.
Following
a restricted share award and prior to the lapse or termination of the applicable
restrictions, the share certificates representing the restricted shares shall
be
held by the Corporation in escrow together with related stock powers in blank
signed by the grantee. Except as provided in Section 8, the Committee, in
its discretion, may determine that dividends and other distributions on the
shares held in escrow shall not be paid to the awardee until the lapse or
termination of the applicable restrictions. Unless otherwise provided, in its
discretion, by the Committee, any such dividends or other distributions shall
not bear interest. Upon the lapse or termination of the applicable restrictions
(and not before such time), the share certificates representing the restricted
shares and unpaid dividends, if any, shall be delivered to the awardee. From
the
date a restricted share award is effective, the grantee shall be a shareholder
with respect to all the shares represented by the share certificates for the
restricted shares and shall have all the rights of a shareholder with respect
to
the restricted shares, including the right to vote the restricted shares and
to
receive all dividends and other distributions paid with respect to the
restricted shares, subject only to the preceding provisions of this paragraph
and the other restrictions imposed by the Committee.
If
an
awardee of restricted shares engages in the operation or management of a
business (whether as owner, partner, officer, director, employee or otherwise
and whether during or after termination of employment) which is in competition
with the Corporation or any of its Subsidiaries, the Committee may immediately
declare forfeited all restricted shares held by the awardee as to which the
restrictions have not yet lapsed. Whether an awardee has engaged in the
operation or management of a business which is in competition with the
Corporation or any of its Subsidiaries shall also be determined, in its
discretion, by the Committee, and any such determination by the Committee shall
be final and binding.
Neither
this Section 6 nor any other provision of the Plan shall preclude an
awardee from transferring or assigning restricted shares to (i) the trustee
of a trust that is revocable by such awardee alone, both at the time of the
transfer or assignment and at all times thereafter prior to such awardee's
death
or (ii) the trustee of any other trust to the extent approved in advance by
the Committee in writing. A transfer or assignment of restricted shares from
such trustee to any person other than such awardee shall be permitted only
to
the extent approved in advance by the Committee in writing, and restricted
shares held by such trustee shall be subject to all of the conditions and
restrictions set forth in the Plan and in the applicable agreement as if such
trustee were a party to such agreement.
SECTION
7
Issuance
of Shares
The
obligation of the Corporation to issue shares of the Common Stock under the
Plan
shall be subject to (i) the effectiveness of a registration statement under
the
Securities Act of 1933, as amended, with respect to such shares, if deemed
necessary or appropriate by counsel for the Corporation, (ii) the condition
that
the shares shall have been listed (or authorized for listing upon official
notice of issuance) upon each stock exchange, if any, on which the shares of
Common Stock may then be listed and (iii) all other applicable laws,
regulations, rules and orders which may then be in effect.
SECTION
8
Adjustment
and Substitution of Shares
If
a
dividend or other distribution shall be declared upon the Common Stock payable
in shares of the Common Stock, the number of shares of the Common Stock then
subject to any outstanding stock options, the maximum aggregate number of shares
as to which incentive stock options may be granted and as to which restricted
shares may be awarded under Section 3 of the Plan, and the maximum number
of shares as to which stock options may be granted and as to which shares may
be
awarded to any employee under Section 4 of the Plan on the date fixed for
determining the stockholders entitled to receive such stock dividend or
distribution shall be adjusted by adding thereto the number of shares of the
Common Stock which would have been distributable thereon if such shares had
been
outstanding on such date. Shares of Common Stock so distributed with respect
to
any restricted shares held in escrow, shall also be held by the Corporation
in
escrow and shall be subject to the same restrictions as are applicable to the
restricted shares on which they were distributed.
If
the
outstanding shares of the Common Stock shall be changed into or exchangeable
for
a different number or kind of shares of stock or other securities of the
Corporation or another corporation, whether through reorganization,
reclassification, recapitalization, stock split-up, combination of shares,
merger or consolidation or otherwise, then there shall be substituted for each
share of the Common Stock subject to any then outstanding stock option, for
each
share of the Common Stock set forth in the first sentence of Section 3 of
the Plan, for the maximum aggregate number of shares as to which incentive
stock
options may be granted and as to which restricted shares may be awarded under
Section 3 of the Plan, and for the maximum number of shares as to which
stock options may be granted and as to which shares may be awarded to any
employee under Section 4 of the Plan the number and kind of shares of stock
or other securities into which each outstanding share of the Common Stock shall
be so changed or for which each such share shall be exchangeable. Unless
otherwise determined by the Committee, in its discretion, any such stock or
securities, as well as any cash or other property, into or for which any
restricted shares held in escrow shall be changed or exchangeable in any such
transaction, shall also be held by the Corporation in escrow and shall be
subject to the same restrictions as are applicable to the restricted shares
in
respect of which such stock, securities, cash or other property was issued
or
distributed.
In
case
of any adjustment or substitution as provided for in this Section 8, the
aggregate option price for all shares subject to each then outstanding stock
option prior to such adjustment or substitution shall be the aggregate option
price for all shares of stock or other securities (including any fraction)
to
which such shares shall have been adjusted or which shall have been substituted
for such shares. Any new option price per share shall be carried to at least
three decimal places with the last decimal place rounded upwards to the nearest
whole number.
If
the
outstanding shares of the Common Stock shall be changed in value by reason
of
any spin-off, split-off or split-up, or dividend in partial liquidation,
dividend in property other than cash or extraordinary distribution to holders
of
the Common Stock, (i) the Committee shall make any adjustments to any then
outstanding stock option which it determines are equitably required to prevent
dilution or enlargement of the rights of grantees which would otherwise result
from any such transaction, and (ii) unless otherwise determined by the
Committee, in its discretion, any stock, securities, cash or other property
distributed with respect to any restricted shares held in escrow or for which
any restricted shares held in escrow shall be exchanged in any such transaction
shall also be held by the Corporation in escrow and shall be subject to the
same
restrictions as are applicable to the restricted shares in respect of which
such
stock, securities, cash or other property was distributed or
exchanged.
No
adjustment or substitution provided for in this Section 8 shall require the
Corporation to issue or sell a fraction of a share or other security.
Accordingly, all fractional shares or other securities which result from any
such adjustment or substitution shall be eliminated and not carried forward
to
any subsequent adjustment or substitution. Owners of restricted shares held
in
escrow shall be treated in the same manner as owners of Common Stock not held
in
escrow with respect to fractional shares created by an adjustment or
substitution of shares, except that, unless otherwise determined by the
Committee, in its discretion, any cash or other property paid in lieu of a
fractional share shall be subject to restrictions similar to those applicable
to
the restricted shares exchanged therefor.
If
any
such adjustment or substitution provided for in this Section 8 requires the
approval of shareholders in order to enable the Corporation to grant incentive
stock options or to comply with Section 162(m) of the Code, then no such
adjustment or substitution shall be made without the required shareholder
approval. Notwithstanding the foregoing, in the case of incentive stock options,
if the effect of any such adjustment or substitution would be to cause the
stock
option to fail to continue to qualify as an incentive stock option or to cause
a
modification, extension or renewal of such stock option within the meaning
of
Section 424 of the Code, the Committee may determine that such adjustment or
substitution not be made but rather shall use reasonable efforts to effect
such
other adjustment of each then outstanding stock option as the Committee, in
its
discretion, shall deem equitable and which will not result in any
disqualification, modification, extension or renewal (within the meaning of
Section 424 of the Code) of such incentive stock option.
Except
as
provided in this Section 8, a grantee shall have no rights by reason of any
issue by the Corporation of stock of any class or securities convertible into
stock of any class, any subdivision or consolidation of shares of stock of
any
class, the payment of any stock dividend or any other increase or decrease
in
the number of shares of stock of any class.
SECTION
9
Additional
Rights in Certain Events
(A)
Definitions.
For
purposes of this Section 9, the following terms shall have the following
meaning:
(1)
The
term "Person" shall be used as that term is used in Section 13(d) and 14(d)
of
the 1934 Act.
(2)
"Beneficial Ownership" shall be determined as provided in Rule 13d-3 under
the
1934 Act as in effect on the effective date of the Plan.
(3)
"Voting Shares" shall mean all securities of a company entitling the holders
thereof to vote in an annual election of Directors (without consideration of
the
rights of any class of stock other than the Common Stock to elect Directors
by a
separate class vote); and a specified percentage of "Voting Power" of a company
shall mean such number of the Voting Shares as shall enable the holders thereof
to cast such percentage of all the votes which could be cast in an annual
election of directors (without consideration of the rights of any class of
stock
other than the Common Stock to elect Directors by a separate class
vote).
(4)
"Tender Offer" shall mean a tender offer or exchange offer to acquire securities
of the Corporation (other than such an offer made by the Corporation or any
Subsidiary), whether or not such offer is approved or opposed by the Board.
(5)
"Section 9 Event" shall mean the date upon which any of the following events
occurs:
(a)
The
Corporation acquires actual knowledge that any Person other than the
Corporation, a Subsidiary or any employee benefit plan(s) sponsored by the
Corporation has acquired the Beneficial Ownership, directly or indirectly,
of
securities of the Corporation entitling such Person to 20% or more of the Voting
Power of the Corporation;
(b)(i)
A
Tender Offer is made to acquire securities of the Corporation entitling the
holders thereof to 20% or more of the Voting Power of the Corporation; or (ii)
Voting Shares are first purchased pursuant to any other Tender Offer;
(c)
At
any time less than 60% of the members of the Board of Directors shall be
individuals who were either (i) Directors on the effective date of the Plan
or
(ii) individuals whose election, or nomination for election, was approved by
a
vote (including a vote approving a merger or other agreement providing the
membership of such individuals on the Board of Directors) of at least two-thirds
of the Directors then still in office who were Directors on the effective date
of the Plan or who were so approved;
(d)
The
shareholders of the Corporation shall approve an agreement or plan providing
for
the Corporation to be merged, consolidated or otherwise combined with, or for
all or substantially all its assets or stock to be acquired by, another
corporation, as a consequence of which the former shareholders of the
Corporation will own, immediately after such merger, consolidation, combination
or acquisition, less than a majority of the Voting Power of such surviving
or
acquiring corporation or the parent thereof; or
(e)
The
shareholders of the Corporation shall approve any liquidation of all or
substantially all of the assets of the Corporation or any distribution to
security holders of assets of the Corporation having a value equal to 10% or
more of the total value of all the assets of the Corporation;
provided,
however, that (i) if securities beneficially owned by a grantee are
included in determining the Beneficial Ownership of a Person referred to in
paragraph 5(a) or (ii) a grantee is required to be named pursuant
Item 2 of the Schedule 14D-1 (or any similar successor filing requirement)
required to be filed by the bidder making a Tender Offer referred to in
paragraph 5(b), then no Section 9 Event with respect to such grantee
shall be deemed to have occurred by reason of such event.
(B)
Acceleration of the Exercise Date of Stock Options.
Subject
to the provisions of Section 4 in the case of incentive stock options, unless
the agreement referred to in Section 5(G), or an amendment thereto, shall
otherwise provide, notwithstanding any other provision contained in the Plan,
in
case any Section 9 Event occurs all outstanding stock options shall become
immediately and fully exercisable whether or not otherwise exercisable by their
terms.
(C)
Extension of the Expiration Date of Stock Options.
Subject
to the provisions of Section 4 in the case of incentive stock options, unless
the agreement referred to in Section 5(G), or an amendment thereto, shall
otherwise provide, notwithstanding any other provision contained in the Plan,
all stock options held by a grantee whose employment with the Corporation or
a
Subsidiary terminates within one year of any Section 9 Event for any reason
other than voluntary termination with the consent of the Corporation or a
Subsidiary, retirement under any retirement plan of the Corporation or a
Subsidiary or death shall be exercisable for a period of three months from
the
date of such termination of employment, but in no event after the expiration
date of the stock option.
(D)
Lapse
of Restrictions on Restricted Share Awards.
Unless
the agreement referred to in Section 6, or an amendment thereto, shall otherwise
provide, notwithstanding any other provision contained in the Plan, if any
Section 9 Event occurs prior to the scheduled lapse of all restrictions
applicable to restricted share awards under the Plan, all such restrictions
shall lapse upon the occurrence of any such Section 9 Event regardless of the
scheduled lapse of such restrictions.
SECTION
10
Effect
of the Plan on the Rights of Employees and Employer
Neither
the adoption of the Plan nor any action of the Board or the Committee pursuant
to the Plan shall be deemed to give any employee any right to be granted a
stock
option (with or without cash payment rights) or to be awarded restricted shares
under the Plan. Nothing in the Plan, in any stock option or cash payment rights
granted under the Plan, in any restricted share award under the Plan or in
any
agreement providing for any of the foregoing or amendment thereto shall confer
any right to any employee to continue in the employ of the Corporation or any
Subsidiary or interfere in any way with the rights of the Corporation or any
Subsidiary to terminate the employment of any employee at any time or adjust
the
compensation of any employee at any time.
SECTION
11
Amendment
or Termination
The
right
to amend the Plan at any time and from time to time and the right to terminate
the Plan are hereby specifically reserved to the Board; provided that no such
amendment of the Plan shall, without shareholder approval (a) increase the
maximum aggregate number of shares for which grants of stock options or awards
of restricted shares may be made under the first sentence of Section 3 of
the Plan, (b) increase the maximum aggregate number of shares as to which
incentive stock options may be granted or as to which restricted shares may
be
awarded under Section 3 of the Plan, (c) make any changes in the class
of employees eligible to receive options or awards under the Plan,
(d) change the maximum number of shares as to which stock options may be
granted and as to which shares may be awarded to any employee under
Section 4 of the Plan, (e) change the option price permitted under
Section 5(A) of the Plan, or (f) be made if shareholder approval of
the amendment is at the time required for stock options or restricted shares
under the Plan to qualify for the exemption from Section 16(b) of the 1934
Act
provided by Rule 16b-3 or by the rules of the NASDAQ National Market System
or any stock exchange on which the Common Stock may then be listed. No amendment
or termination of the Plan shall, without the written consent of the holder
of a
stock option, cash payment rights or restricted shares theretofore granted
or
awarded under the Plan, adversely affect the rights of such holder with respect
thereto.
SECTION
12
Effective
Date and Duration of Plan
The
effective date and date of adoption of the Plan shall be May 8, 1992, the
date of adoption of the Plan by the Board, and the effective date of the
amendments to the Plan adopted by the Board on December 23, 1998 shall be
December 23, 1998, provided that such amendments are approved by a majority
of the votes cast at a meeting of shareholders duly called, convened and held
on
or prior to December 22, 1999, at which a quorom representing a majority of
the
outstanding voting stock of the Corporation is, either in person or by proxy,
present and voting on the Plan. No stock option granted under the Plan on or
after December 23, 1998 may be exercised until after such approval and any
restricted shares awarded under the Plan shall be forfeited to the Corporation
on December 22, 1999 if such approval has not been obtained on or prior to
that
date; provided,
that
the foregoing shall not apply to stock options granted or restricted shares
awarded with shares which were available under the Plan prior to the amendment
of the Plan on December 23, 1998. No stock option or cash payment rights
may be granted and no restricted shares may be awarded under the Plan subsequent
to December 22, 2008.