Exhibit 10(r)

 

FLEXIBLE STOCK INCENTIVE PLAN OF INDIGO N.V.

 

 

1.             Establishment, Purpose, and Definitions.

 

a.                                                                There is
hereby adopted the Flexible Stock Incentive Plan (the “Plan”) of Indigo N.V.
(the “Company”).

b.                                                               The purpose of
the Plan is to provide a means whereby eligible individuals (as defined in
paragraph 4 below) can acquire Common Stock of the Company (the “Stock”).  The
plan provides employees (including officers and directors who are employees) of
the Company and of its Affiliates (as hereinafter defined) an opportunity to
purchase shares of Stock pursuant to options.  The Plan also provides for the
sale or bonus of Stock to eligible individuals in connection with the
performance of services for the Company or its Affiliates.  Moreover, the Plan
authorizes the grant of stock appreciation rights (“SARs”), either separately or
in tandem with stock options, entitling holders to cash compensation measured by
appreciation in the value of the Stock.  Options may be granted either on the
basis of past or future services (“Service Options”) or on the basis of
performance (“Performance Options”).  The Plan also allows for sub-plans with
respect to the Company or an Affiliate, or with respect to citizens or residents
of one or more countries, provided the sub-plan is no less restrictive than the
Plan.

c.                                                                The term
“Affiliates” as used in the Plan means parent or subsidiary corporations of the
Company and of Indigo Ltd., a Bermuda company (“Indigo Ltd.”), including parents
or subsidiaries which become such after adoption of the Plan.

2.             Administration of the Plan

 

a.                                                                The Plan shall
be administered by the Supervisory Board of the Company (the “Board”).  The
Board may delegate the responsibility for administering the Plan to a committee,
under such terms and conditions as the Board shall determine (the “Committee”). 
The Committee shall include representatives of a Managing Director of the
Company and an officer or director of Indigo Ltd.. Members of the Committee
shall serve at the pleasure of the Board.  The Committee shall select one of its
members as chairman, and shall hold meetings at such times and places as it may
determine.  A majority of the Committee shall constitute a quorum and acts of
the Committee at which a quorum is present, or acts reduced to or approved in
writing by all the members of the Committee, shall be the valid acts of the
Committee.  If the Board does not delegate administration of the Plan to the
Committee, then each reference in this Plan to “the

 

 

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Committee” shall be construed to refer to the Board.  No member of the Board or
the Committee shall be liable to any person for any action, determination or
inaction with respect to the Plan which is taken or made in good faith.

b.                                                               In the event
that the Company becomes subject to the requirements of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (“Rule 16b-3”), then,
notwithstanding the provisions of Section 2(a) hereof, (i) the Committee shall
consist of two or more members of the Board or such lesser number of members of
the Board as permitted by Rule 16b-3 and (ii) none of the members of the
Committee shall receive, while serving on the Committee, or during the one-year
period preceding appointment to the Committee, a grant or award of equity
securities under (a) the Plan or (b) any other plan of the Company or its
Affiliates under which the participants are entitled to acquire Stock (including
restricted Stock), stock options, stock bonuses, related rights or stock
appreciation rights of the Company or any of its Affiliates, other than pursuant
to transactions in any such other plan which do not disqualify a director from
being a disinterested person under Rule 16b-3.  The limitations set forth in
this Section 2(b) shall automatically incorporate any additional requirements
that may in the future be necessary for the Plan to comply with Rule 16b-3.

c.                                                                The Committee
shall determine which eligible individuals (as defined in paragraph 4, below)
shall be granted options under the Plan, the timing of such grants, the terms
thereof (including any restrictions on the Stock), and the number of shares
subject to such options.

d.                                                               The Committee
may amend the terms of any outstanding option granted under this Plan, but any
amendment which would adversely affect the optionee’s rights under an
outstanding option shall not be made without the optionee’s written consent. 
The Committee may, with the optionee’s written consent, cancel any outstanding
stock option or accept any outstanding stock option in exchange for a new
option.

e.                                                                The Committee
shall also determine which eligible individuals (as defined in paragraph 4,
below) shall be issued Stock or SARs under the Plan, the timing of such grants,
the terms thereof (including any restrictions), and, the number of shares or
SARs to be granted.  The Stock shall be issued for such consideration (if any)
as the Committee deems appropriate. Stock issued subject to restrictions shall
be evidenced by a written agreement (the “Restricted Stock Purchase Agreement”
or the “Restricted Stock Bonus Agreement”).  The Committee may amend any
Restricted Stock Purchase Agreement, but any amendment which would adversely
affect the individual’s rights to the Stock shall not be made without his or her
written consent.

 

 

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f.                                                                  The
Committee shall have the sole authority, in its absolute discretion to adopt,
amend, and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan, to construe and interpret the Plan,
the rules and the regulations, and the instruments evidencing options or Stock
granted under the Plan, and to make all other determinations deemed necessary or
advisable for the administration of the Plan.  All decisions, determinations,
and interpretations of the Committee shall be binding on all participants.

g.                                                               Delegation of
Authority for the Day-to-Day Administration of the Plan.  Except to the extent
prohibited by applicable law or applicable rules of a stock exchange, the Board
or any of its committees as shall be administering the Plan may delegate to one
or more individuals the day-to-day administration of the Plan and any of the
functions assigned to it in this Plan. The delegation may be revoked at any
time.

3.                             Stock Subject to the Plan.

 

a.                                                               An aggregate of
not more than 19,315 (386,300 after a proposed 20-to-1 stock split) shares of
Stock shall be available for the grant of Stock Options or the issuance of Stock
or SARs under the Plan, of which not more than 10,315 (206,300 after a proposed
20-to-1 stock split) may be for Service Options and Stock and stock appreciation
rights granted on the basis of past or present service and not more than 9,000
(180,000 after a proposed 20-to-1 stock split) may be for Performance Options
and Stock and stock appreciation rights granted on the basis of performance.  If
an option is surrendered (except surrender for shares of Stock) or for any other
reason ceases to be exercisable in whole or in part, the shares which were
subject to such option but as to which the option had not been exercised shall
continue to be available under the Plan.

b.                                                              If there is any
change in the Stock subject to the Plan, the Stock subject to a Restricted Stock
Purchase Agreement or Restricted Stock Bonus Agreement or an SAR Agreement, or
the Stock subject to any option granted under the Plan, through merger,
consolidation, reorganization, recapitalization, reincorporation, stock split,
stock dividend (in excess of two percent), or other change in the corporate
structure of the Company, appropriate adjustments shall be made by the Committee
in order to preserve but not to increase the benefits to the individual,
including adjustments to the aggregate number and kind of shares subject to the
Plan, or to a Restricted Stock Purchase Agreement, Restricted Stock Bonus
Agreement, or a SAR Agreement, and the number and kind of shares and the price
per share subject to outstanding options.

4.             Eligible Individuals

 

Individuals who shall be eligible to have granted to them the options or Stock
provided for by the Plan shall be such employees, including officers and
directors who are employees of the Company or an Affiliate, as the Committee, in
its discretion, shall designate from time to time.

 

 

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5.             The Option Price.

 

The exercise price of the Stock covered by each stock option shall be as
determined by the Committee, provided that in no case shall the joint exercise
price of any paired Company option and Indigo Ltd. option be less than 80% of
the Common Stock Value at the time of issuance of such paired options (“Date of
Grant”).  The “Common Stock Value” at any time shall be equal to the then
current fair market value of the Company Common Stock and the Indigo Ltd. Common
Stock, as determined by the Committee and agreed to by the Investor
Representative, if any, appointed under section 3(g) of the Stock Purchase
Agreement (the “Stock Purchase Agreement”) by and among Spectrum Sciences B.V.,
Spectrum Sciences Ltd. and S-C Indigo CV and dated as of February 25, 1993 (the
“Investor Representative”).  If the Committee and the Investor Representative
are unable to agree on the fair market value, then the fair market value shall
be determined by an independent valuation expert satisfactory to the Committee
and the Investor Representative.  The fair market value as determined by such
independent valuation expert shall be conclusive.  The exercise price of an
option shall be subject to adjustment to the extent provided in paragraph 3(b)
above.

 

6.             Terms and Conditions of Options.

 

a.                                                                Each option
granted pursuant to the Plan will be evidenced by a written Stock Option
Agreement executed by the Company and the person to whom such option is granted,
the terms of which shall be determined by the Committee subject to the terms of
the Plan.

b.                                                               The Committee
shall determine the term of each option granted under the Plan; provided,
however, that the term of an option shall not be for more than 10 years.

c.                                                                Upon
termination of employment (regardless of whether or not termination is by the
employee or employer or for cause), all unvested options shall lapse.  Upon
termination of employment (regardless of whether or not termination is by the
employee or employer or for cause) and at the option of the Company, (i) vested
options may be repurchased by the Company if permitted by, and pursuant to the
terms of, an applicable Stock Option Agreement and (ii) prior to the IPO, Stock
may be purchased (in whole or in part) by the Company at a purchase price equal
to the then fair market value (as determined by the Committee) of the Stock.

d.                                                               The Service
Options will vest over a four-year period. Individuals who were employees of the
Company prior to January 1, 1993, will be vested in a percentage of Service
Options as of the Date of Grant based upon the

 

 

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number of full years of employment prior to the Date of Grant based upon the
following schedule:

Number of Full Years

 

Percentage Vested on
Date of Grant

 

Less than 5

 

25

%

5 to 9

 

40

%

10 to 14

 

50

%

15+

 

55

%

 

Service Options not vested on the Date of Grant will vest in equal amounts on
the first three annual anniversaries of the Date of Grant for employees hired
before January 1, 1993.  For employees hired on or after January 1, 1993, 25 %
of Service  Options will vest in the first four annual anniversaries of the Date
of Grant.  Notwithstanding the foregoing, the Committee may determine different
vesting schedules in special circumstances.

 

Performance Options will vest over a period of years in relation to the
achievement by the Company and its Affiliates of earnings targets to be
determined by the Board, with partial vesting on a sliding scale as determined
by the Board.  Notwithstanding the foregoing, all non-vested Performance Options
shall vest eight years and eleven months following the Date of Grant.

 

e.                                                               The Stock
Option Agreement may contain such other terms., provisions, and conditions as
may be determined by the Committee (not inconsistent with this Plan).

7.             Terms and Conditions of Stock Purchase and Bonus

 

a.                                                                Each sale or
grant of stock pursuant to the Plan will be evidenced by either a written
Restricted Stock Purchase Agreement executed by the Company and the person to
whom such stock is sold or a written Restricted Stock Bonus Agreement executed
by the Company and the person to whom such stock is granted.

b.                                                               The Restricted
Stock Purchase Agreement or Restricted Stock Bonus Agreement may contain such
other terms, provisions, and conditions as may be determined by the Committee
(not inconsistent with this Plan), including not by way of limitation,
restrictions on transfer, forfeiture provisions, repurchase provisions, and
vesting provisions.

 

 

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8.                                      Terms and Conditions of SARs.

 

The Committee may, under such terms and conditions as it deems appropriate,
authorize the issuance of SARs evidenced by a written SAR agreement (which, in
the case of tandem options, may be part of the option agreement to which the SAR
relates) executed by the Company and the person to whom such SAR is granted. 
The SAR agreement may contain such terms, provisions and conditions as may be
determined by the Committee and which are not inconsistent with this Plan.

 

9.             Use of Proceeds.

 

Cash proceeds realized from the sale of Stock under the Plan or pursuant to
options granted under the Plan shall constitute general funds of the Company.

 

10.          Amendment, Suspension, or Termination of the Plan.

 

a.                                                               The Board may
at any time amend, suspend or terminate the Plan as it deems advisable; provided
that such amendment, suspension or termination complies with all applicable
legal requirements, including any applicable requirement that the Plan or an
amendment to the Plan be approved by the shareholders, and provided further
that, except as provided in paragraph 3(b), above, the Board shall in no event
amend the Plan in the following respects without the consent of stockholders
then sufficient to approve the Plan in the first instance:

(i.)                                  To increase the maximum number of shares
subject to stock options issued under the Plan; or

(ii.)                               To change the designation or class of
persons eligible to receive stock options under the Plan.

b.                                                               No option may
be granted under the Plan during any suspension or after the termination of the
Plan, and no amendment, suspension, or termination of the Plan shall, without
the affected individual’s consent, alter or impair any rights or obligations
under any option previously granted under the Plan.  The Plan shall terminate
with respect to the grant of stock options on September 6, 2003, unless
previously terminated by the Board pursuant to this paragraph 10.

 

11.          Assignability.

 

Each option granted pursuant to this Plan shall, during optionee’s lifetime, be
exercisable only by him or her, and neither the option nor any right hereunder
shall be transferable by optionee, by operation of law or otherwise, other than
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will or the laws of descent and distribution.  Stock subject to a Restricted
Stock Purchase Agreement or a Restricted Stock Bonus Agreement shall be
transferable only as provided in such Agreement.

 

12.          Buyout Provisions.

 

At any time, the Committee may, but shall not be required to, authorize the
Company to offer to buy out for a payment in cash or Stock an option previously
granted based on such terms and conditions as the Committee shall establish and
communicate to the optionee in connection with such offer.

 

***

 

9/12/02                                  Section 12 added and plan restated by
the HR & Compensation Committee

11/21/02                            Section 2.g. added and plan restated by the
HR & Compensation Committee

 

 

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