Exhibit 10.1

 

IMCLONE SYSTEMS INCORPORATED
2005 INDUCEMENT STOCK OPTION PLAN

 

1.  Purpose.  The purpose of the ImClone Systems Incorporated 2005 Inducement
Stock Option Plan (the “Plan”) is to enhance the ability of ImClone Systems
Incorporated (the “Company”) and its Subsidiaries to attract and retain new key
employees by providing them with an appropriate and material incentive to accept
employment with the Company.   The term “Company” as used in the Plan with
reference to employment or service shall include the Company and its
Subsidiaries, as appropriate.

 

2.  Definitions.

 

(a)  “Board” shall mean the Board of Directors of the Company.

 

(b)  “Cause” shall mean (i) if a Participant is party to an employment agreement
or similar agreement with the Company and such agreement includes a definition
of Cause, the definition contained therein or (ii) if no such employment or
similar agreement exists, “Cause” shall mean (A) the Participant’s failure to
substantially perform the duties reasonably assigned to him or her by the
Company, which has not been cured by the Participant within 10 days following
written notice from the Company, (B) a good faith finding by the Company of the
Participant’s dishonesty, gross negligence or misconduct, (C) a material breach
by the Participant of any written Company employment policies or rules, or (D)
the Participant’s conviction for, or his or her plea of guilty or nolo
contendere to, a felony or for any other crime which involves fraud, dishonesty
or moral turpitude.

 

(c)  “Change in Control” of the Company means the occurrence of one of the
following events:

 

(i)  individuals who, on the Effective Date, constitute the Board (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to the
Effective Date whose election or nomination for election was approved by a vote
of at least two-thirds of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such nomination)
shall be an Incumbent Director; provided, further, that no individual initially
elected or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf of any person
other than the Board shall be an Incumbent Director;

 

(ii)  any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) is or becomes, after the Effective Date, a
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 35% or more of the
combined voting power of the

 

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Company’s then outstanding securities eligible to vote for the election of the
Board (the “Company Voting Securities”); provided, however, that an event
described in this paragraph (ii) shall not be deemed to be a Change in Control
if any of the following becomes such a beneficial owner: (A) the Company or any
majority-owned subsidiary (provided, that this exclusion applies solely to the
ownership levels of the Company or the majority-owned subsidiary), (B) any
tax-qualified, broad-based employee benefit plan sponsored or maintained by the
Company or any majority-owned subsidiary, (C) any underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) any person
pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii));

 

(iii)  the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company’s stockholders, whether
for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(A) 60% or more of the total voting power of (x) the corporation resulting from
such Business Combination (the “Surviving Corporation”), or (y) if applicable,
the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the
Surviving Corporation (the “Parent Corporation”), is represented by Company
Voting Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which such Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan (or related trust) sponsored or maintained
by the Surviving Corporation or the Parent Corporation), is or becomes the
beneficial owner, directly or indirectly, of 35% or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (C) at least a majority of the members of the board of
directors of the Parent Corporation (or if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination
were Incumbent Directors at the time of the Board’s approval of the execution of
the initial agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (A), (B) and (C)
above shall be deemed to be a “Non-Qualifying Transaction”); or

 

(iv)  stockholder approval of a liquidation or dissolution of the Company,
unless the voting common equity interests of an ongoing entity (other than a
liquidating trust) are beneficially owned, directly or indirectly, by the
Company’s shareholders in substantially the same proportions as such
shareholders owned the Company’s outstanding voting common equity interests
immediately prior to such liquidation and such ongoing entity assumes all
existing obligations of the Company under the Plan.

 

Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than

 

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35% of the Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which reduces the number of Company Voting
Securities outstanding; provided, that, if after such acquisition by the Company
such person becomes the beneficial owner of Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially
owned by such person, a Change in Control of the Company shall then occur.

 

(d)  “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(e)  “Committee” shall mean a committee of at least two members of the Board
appointed by the Board to administer the Plan and to perform the functions set
forth herein and who are “non-employee directors” within the meaning of
paragraph (b)(3)(i) of Rule 16b-3 as promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and who are
also “outside directors” within the meaning of Section 162(m) of the Code.

 

(f)  “Common Stock” shall mean the common stock of the Company.

 

(g)  “Continuous Service” means that the Participant’s service as an employee,
with the Company or a Subsidiary is not interrupted or terminated.  The
Participant’s Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders service to
the Company or a Subsidiary following the date the option is granted to the
participant under the Plan (i.e., as an employee, director or consultant) or a
change in the entity for which the Participant renders such service; provided,
that, there is no interruption or termination of the Participant’s Continuous
Service other than an approved leave of absence.  The Committee, in its sole
discretion, may determine whether Continuous Service shall be considered
interrupted.

 

(h)  “Disability” shall have the same meaning as provided in any long-term
disability plan maintained by the Company or any Subsidiary in which a
Participant then participates (the “LTD Plans”); provided, that, if no such plan
exists, it shall have the meaning set forth in Section 22(e)(3) of the Code.

 

(i)  “Fair Market Value” per share as of a particular date shall mean, unless
otherwise determined by the Board, the last reported sale price of the Common
Stock on the NASDAQ (or any other exchange or national market system upon which
price quotations for the Company’s Common Stock is regularly available) for such
date.

 

(j)  “Immediate Family Members” shall mean, except as otherwise determined by
the Committee, a Participant’s spouse, ancestors and descendants.

 

(k)  “Nonqualified Stock Option” shall mean a stock option which is not intended
to be an Incentive Stock Option within the meaning of Section 422 of the Code.

 

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(l)  “Option” shall mean an option to purchase Common Stock granted under the
Plan.  Each Option granted hereunder shall be a Non-Qualified Stock Option and
shall be clearly identified as such in the applicable Stock Option Agreement.

 

(m)  “Participant” shall mean anyone who is selected to participate in the Plan
in accordance with Section 5.

 

(n)  “Stock Option Agreement” shall mean, with respect to any Option, a written
document entered into by the Company and a Participant evidencing the grant of
the Option to such Participant and setting forth the terms and conditions, as
determined by the Committee, which apply to such Option, in addition to the
terms and conditions set forth in the Plan.

 

(o)  “Subsidiary” shall mean any affiliate of the Company selected by the Board.

 

(p)  “Substitute Awards” shall mean Options granted or shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, by a company acquired
by the Company or with which the Company is combined.

 

3.  Shares Subject to the Plan.  Subject to adjustment in accordance with
Section 12, the total number of shares of Common Stock which shall be available
for the grant of Options under the Plan shall not exceed 600,000 shares of
Common Stock; provided, that, for purposes of this limitation, any Common Stock
subject to an Option granted under the Plan which is canceled, forfeited or
expires prior to exercise shall again become available for grant under the
Plan.  In addition, any shares of Common Stock tendered and/or withheld for the
payment of all or a part of an Option granted under the Plan or any applicable
withholding taxes shall again become available for the grant of an Option under
the Plan.  The Company may, but is not required to, use the proceeds it receives
in connection with the exercise of an Option under the Plan for exercises
occurring after the Effective Date, to purchase shares of its Common Stock in
the open market and any such shares of Common Stock so purchased may be used for
the issuance of Options under the Plan.  Substitute Awards shall not reduce the
shares of Common Stock available for grants under the Plan or to a Participant
over a period of time.  Subject to adjustment in accordance with Section 12, no
employee shall be granted during any three (3) year period, Options to purchase
more than 3,300,000 shares of Common Stock.  Common Stock available for issue or
distribution under the Plan shall be authorized and unissued shares or shares
reacquired by the Company in any manner.

 

4.  Administration.

 

(a)  The Plan shall be administered by the Committee.  All references to the
Committee hereinafter shall mean the Board if no such Committee has been
appointed, provided that under such circumstances the grant of an Option under
the Plan shall be approved by a majority of the “independent directors” of the
Board.

 

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(b)  The Committee shall (i) approve the selection of Participants, (ii)
determine the number of shares of Common Stock subject to Options, (iii)
determine the terms and conditions of any Option granted hereunder (including,
but not limited to, any forfeiture conditions on such Option) and (iv) have the
authority to interpret the Plan, to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of any
agreements entered into hereunder, and to make all other determinations
necessary or advisable for the administration of the Plan.  The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Option in the manner and to the extent it shall deem desirable to
carry it into effect.

 

(c)  Any action, decision, interpretation or determination by the Committee with
respect to the application or administration of the Plan, any Option or any
Stock Option Agreement shall be final, conclusive and binding on all persons,
including the Company and its Subsidiaries and shareholders, Participants and
persons claiming rights from or through a Participant.

 

(d)  The Committee may delegate to officers or employees of the Company or any
Subsidiary, and to service providers, the authority, subject to such terms as
the Committee shall determine, to perform administrative functions with respect
to the Plan, the Options and the Stock Option Agreements.

 

(e)  Members of the Committee and any officer or employee of the Company or any
Subsidiary acting at the direction of, or on behalf of, the Committee shall not
be personally liable for any action or determination taken or made in good faith
with respect to the Plan, any Option or any Stock Option Agreement, and shall,
to the extent permitted by law, be fully indemnified by the Company with respect
to any such action or determination.

 

5.  Eligibility.  Individuals eligible to receive Options under the Plan shall
be individuals who have not been previously employed by the Company or served as
a member of the Board and who are new employees of the Company, including
individuals who become new employees of the Company in connection with a merger
or acquisition, as selected by the Committee.  The Options may be granted to any
such individual, as selected by the Committee as a material inducement to such
individual accepting employment with the Company, provided, however, that any
such grant of an Option shall not become effective unless and until such
individual actually commences employment with the Company.

 

6.  Options.  Options may be granted under the Plan in such form as the
Committee may from time to time approve pursuant to terms set forth in the Plan
and any applicable Stock Option Agreement.

 

(a)  Option Price.  The purchase price per share of the Common Stock purchasable
under an Option shall be determined by the Committee and shall not be less than
100% of the Fair Market Value of the Common Stock on the date of grant, which
such

 

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date of grant shall be the date specified by the Committee and specified in the
applicable Stock Option Agreement.

 

(b)  Option Term.  Unless otherwise provided in the applicable Stock Option
Agreement, the term of each Option shall be ten (10) years from the date the
Option is granted.   Notwithstanding the foregoing, unless otherwise provided in
a Stock Option Agreement, upon the death or Disability of a Participant, Options
that would otherwise remain exercisable following such death or Disability shall
remain exercisable for one year following such death or Disability
notwithstanding the term of such Option.

 

(c)  Exercisability.  Each Option shall vest and become exercisable at a rate
determined by the Committee on the date of grant and set forth in the applicable
Stock Option Agreement.

 

(d)  Termination of Continuous Service.  Unless otherwise provided in the
applicable Stock Option Agreement, any Options held by a Participant upon
termination of Continuous Service shall remain exercisable as follows:

 

(i)  If the Participant’s termination of Continuous Service is due to the
Participant’s death, all unvested Options shall automatically terminate and all
vested Options shall be exercisable by the Participant’s designated beneficiary,
or, if none, the person(s) to whom such Participant’s rights under the Option
are transferred by will or the laws of descent and distribution for one year
following such termination of Continuous Service (but in no event beyond the
term of the Option, except as provided in clause (b) above), and shall
thereafter terminate.

 

(ii)  If the Participant’s termination of Continuous Service is due to
Disability, all unvested Options shall automatically terminate and all vested
Options shall be exercisable by the Participant for one year following such
termination of Continuous Service due to Disability (but in no event beyond the
term of the Option, except as provided in clause (b) above), and shall
thereafter terminate.

 

(iii)  If the Participant’s termination of Continuous Service is for Cause, all
Options shall automatically terminate on the commencement of business on the
date such Participant’s Continuous Service is terminated for Cause, regardless
of whether such Options were then vested and exercisable.

 

(iv)  If the Participant’s termination of Continuous Service is for any other
reason, all unvested Options shall terminate on the date of termination of
Continuous Service and all Options which are exercisable as of the date of
termination shall be exercisable for a period of 30-days following such date of
termination of Continuous Service (but in no event beyond the term of the
Option), and shall thereafter terminate.  The Participant’s status as an
employee shall not be considered terminated in the case of a leave of absence
agreed to in writing by the Company (including, but not limited to, military and
sick leave).

 

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(e)  Method of Exercise.  Options may be exercised, in whole or in part, by
giving written notice of exercise to the Company in a form approved by the
Committee specifying the number of shares of Common Stock to be purchased.  Such
notice shall be accompanied by the payment in full of the Option exercise
price.  Unless otherwise provided at the time of grant, the exercise price of
the Option may be paid by (i) cash or certified or bank check, (ii) surrender of
Common Stock held by the Participant for at least six (6) months prior to
exercise (or such longer or shorter period as may be required to avoid a charge
to earnings for financial accounting purposes) or the attestation of ownership
of such shares, in either case, if so permitted by the Company, (iii) through a
“same day sale” commitment from a Participant and a broker-dealer, which is
reasonably acceptable to the Company and which is a member of the National
Association of Securities Dealers, under such terms and conditions which are
reasonably acceptable to the Company, (iv) through additional methods prescribed
by the Committee, as deemed appropriate by the Committee in its discretion, or
(v) by any combination of the foregoing, and, in all instances, to the extent
permitted by applicable law.  A Participant’s subsequent transfer or disposition
of any Common Stock acquired upon exercise of an Option shall be subject to any
Federal and state laws then applicable, specifically securities law, and the
terms and conditions of the Plan.

 

7.  Special Provisions.

 

(a)  Change in Control.  Unless otherwise provided in a Stock Option Agreement
or a change in control plan with the Company in which the Participant
participates, upon the occurrence of a Change in Control, all Options shall
automatically become vested and exercisable in full.  The Committee may, in its
discretion, include such further provisions and limitations in any award
documenting such Options as it may deem equitable and in the best interests of
the Company.

 

(b)  Forfeiture.  Notwithstanding anything in the Plan to the contrary and
unless otherwise specifically provided in a Stock Option Agreement, in the event
of a serious breach of conduct by a Participant or former Participant
(including, without limitation, any conduct prejudicial to or in conflict with
the Company or its Subsidiary) the Committee may (i) cancel any outstanding
Option granted to such Participant or former Participant, in whole or in part,
whether or not vested, and/or (ii) if such conduct or activity occurs within one
year following the exercise of an Option, require such Participant or former
Participant to repay to the Company any gain realized upon the exercise of such
Option (with such gain or payment valued as of the date of exercise).  Such
cancellation or repayment obligation shall be effective as of the date specified
by the Committee.  Any repayment obligation shall be satisfied in cash or, if
permitted in the sole discretion of the Committee, it may be satisfied in shares
of Common Stock (based upon the Fair Market Value of the share of Common Stock
on the date of payment), and the Committee may provide for an offset to any
future payments owed by the Company or any Subsidiary to the Participant or
former Participant if necessary to satisfy the repayment obligation.  The
determination of whether a Participant or former Participant has engaged in a
serious breach of conduct shall be determined by the Committee in good faith and
in its sole discretion.

 

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8.  Withholding.  Upon (a) exercise of an Option or (b) under any other
circumstances determined by the Committee in its sole discretion, the Company
shall have the right to require any Participant, and such Participant by
accepting the Options granted under the Plan agrees, to pay to the Company the
amount of any taxes which the Company shall be required to withhold with respect
thereto.  In the event of clauses (a) or (b), with the consent of the Committee,
at its sole discretion, such Participant may elect to have the Company withhold
shares of Common Stock having a Fair Market Value equal to the amount of the
withholding tax obligation as determined by the Company; provided, however, that
no shares of Common Stock are withheld with a value exceeding the minimum amount
of tax required to be withheld by law.  Such shares so delivered to satisfy the
minimum withholding obligation may be either shares withheld by the Company upon
the exercise of the Option or other shares.  At the Committee’s sole discretion,
a Participant may elect to have additional taxes withheld and satisfy such
withholding with cash or shares of Common Stock held for at least six months
prior to exercise, if, in the opinion of the Company’s outside accountants,
doing so, would not result in a charge against earnings.

 

9.  Nontransferability, Beneficiaries.  Unless otherwise determined by the
Committee with respect to the transferability of Options by a Participant to his
Immediate Family Members (or to trusts or partnerships or limited liability
companies established for such Immediate Family Members), no Options shall be
assignable or transferable by the Participant, otherwise than by will or the
laws of descent and distribution or pursuant to a beneficiary designation, and
Options shall be exercisable, during the Participant’s lifetime, only by the
Participant (or by the Participant’s legal representatives in the event of the
Participant’s incapacity).  Each Participant may designate a beneficiary to
exercise any Option held by the Participant at the time of the Participant’s
death.  If no beneficiary has been named by a deceased Participant, any Option
held by the Participant at the time of death shall be transferred as provided in
his will or by the laws of descent and distribution.  Except in the case of the
holder’s incapacity, an Option may only be exercised by the holder thereof.

 

10.  No Right to Continuous Service.  Nothing contained in the Plan or in any
Stock Option Agreement shall confer upon any Participant any right with respect
to the continuation of service with the Company or any of its Subsidiaries, or
interfere in any way with the right of the Company or its Subsidiaries to
terminate his or her Continuous Service at any time.  Nothing contained in the
Plan shall confer upon any Participant or other person any claim or right to any
Option under the Plan.

 

11.  Governmental Compliance.  Each Option under the Plan shall be subject to
the requirement that if at any time the Committee shall determine that the
listing, registration or qualification of any shares issuable or deliverable
thereunder upon any securities exchange or under any Federal or state law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition thereof, or in connection therewith, no such Option may
be exercised or shares issued or delivered unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

 

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12.  Adjustments; Corporate Events.

 

(a)  In the event of any dividend or other distribution (whether in the form of
cash, Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event (an “Event”), and in the Committee’s opinion,
such Event affects the Common Stock such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to an Option, then the Committee shall, in such manner as it may
deem equitable, including, without limitation, adjust any or all of the
following: (i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options may be granted; (ii) the
number and kind of shares of Common Stock (or other securities or property)
subject to outstanding Options; and (iii) the exercise price with respect to any
Option.  The Committee’s determination under this Section 12(a) shall be final,
binding and conclusive.

 

(b)  Upon the occurrence of an Event in which outstanding Options are not to be
assumed or otherwise continued following such an Event, the Committee may, in
its discretion, terminate any outstanding Option (whether or not vested) without
a Participant’s consent and (i) provide for either (A) the purchase of any such
Option for an amount of cash equal to the product of (I) and (II), where (I) is
equal to the number of shares of Common Stock subject to such Option and (II) is
equal to the difference between (a) the Fair Market Value of one share of Common
Stock and (b) the per share exercise price of such Option; provided, that, if
such amount would result in a negative number, the Option shall automatically
terminate and cease to be exercisable without payment for such termination or
(B) the replacement of such Option with other rights or property selected by the
Committee in its sole discretion and/or (ii) provide that such Option shall be
exercisable (whether or not vested) as to all shares covered thereby for at
least thirty (30) days prior to such Event.

 

(c)  The existence of the Plan, the Stock Option Agreements and the Options
granted hereunder shall not affect or restrict in any way the right or power of
the Company or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

 

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13.  Stock Option Agreement.  Each Option under the Plan shall be evidenced by a
Stock Option Agreement.  In the event of a conflict between the terms of the
Plan and the terms of any Stock Option Agreement, the terms of the Plan shall
govern.

 

14.  Amendment.  The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, provided that (a) no amendment shall be made
without shareholder approval if such approval is necessary to comply with any
applicable law, regulation or stock exchange rule and (b) except as provided in
Section 12, no amendment shall be made that would adversely affect the rights of
a Participant under an Option theretofore granted, without such Participant’s
written consent.

 

15.  General Provisions.

 

(a)  The Committee may require each Participant acquiring shares pursuant to an
Option under the Plan to represent to and agree with the Company in writing that
such Participant is acquiring the shares for investment and without a view to
distribution thereof.

 

(b)  All certificates for Common Stock delivered under the Plan pursuant to any
Option shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.  If the
Committee determines that the issuance of Common Stock hereunder is not in
compliance with, or subject to an exemption from, any applicable Federal or
state securities laws, such shares shall not be issued until such time as the
Committee determines that the issuance is permissible.

 

(c)  It is the intent of the Company that the Plan satisfy, and be interpreted
in a manner that satisfies, the applicable requirements of Rule 16b-3 as
promulgated under Section 16 of the Exchange Act so that Participants will be
entitled to the benefit of Rule 16b-3, or any other rule promulgated under
Section 16 of the Exchange Act, and will not be subject to short-swing liability
under Section 16 of the Exchange Act.  Accordingly, if the operation of any
provision of the Plan would conflict with the intent expressed in this Section
15(c), such provision to the extent possible shall be interpreted and/or deemed
amended so as to avoid such conflict.

 

(d)  Except as otherwise provided by the Committee in the applicable Stock
Option Agreement, a Participant shall have no rights as a shareholder with
respect to any shares of Common Stocks subject to an Option until a certificate
or certificates evidencing shares of Common Stock shall have been issued to the
Participant and, subject to Section 12, no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date on which Participant shall become the holder of
record thereof.

 

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(e)  The law of the State of Delaware shall apply to all Options and
interpretations under the Plan regardless of the effect of such state’s conflict
of laws principles.

 

(f)  Where the context requires, words in any gender shall include any other
gender.

 

(g)  Headings of Sections are inserted for convenience and reference; they do
not constitute any part of the Plan.

 

16.  Expiration of the Plan.  Subject to earlier termination pursuant to Section
14, the Plan shall terminate on the tenth anniversary of the Effective Date.

 

17.  Effective Date.  The Plan is effective as of the date it is approved by the
majority of the members of the Compensation Committee of the Board.

 

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