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Exhibit 10.1
 
 
TapImmune Inc.
 
2014 OMNIBUS STOCK OWNERSHIP PLAN
 
 
THE PLAN
 
TapImmune Inc., a Nevada corporation (the “Company”), established the
Corporation’s 2014 Omnibus Stock Ownership Plan. The Plan was adopted by the
Company’s Board of Directors on March 19, 2014 and became effective as of that
date, and it permits the grant of stock options, stock bonuses, dividend
equivalents, restricted stock units and other stock-based awards. The Plan
replaces the Company’s 2009 Stock Incentive Plan, and applies to all Awards (as
hereinafter defined) granted on or after March 19, 2014, subject to variations
as required to comply with local laws and regulations applicable outside the
United States.
 
1.           Purpose
 
The purpose of this Plan is to advance the interest of the Company by
encouraging and enabling the acquisition of a larger personal financial interest
in the Company by those Employees and non-Employee directors upon whose judgment
and efforts the Company is largely dependent for the successful conduct of its
operations. It is anticipated that the acquisition of such financial interest
and Stock ownership will stimulate the efforts of such Employees and directors
on behalf of the Company, strengthen their desire to continue in the service of
the Company, and encourage shareholder and entrepreneurial perspectives through
Stock ownership. It is also anticipated that the opportunity to obtain such
financial interest and Stock ownership will prove attractive to promising new
Employees and will assist the Company in attracting such Employees.
 
2.           Definitions
 
As used in this Plan, the terms set forth below shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
 
(a)“Award” means any stock options, restricted stock units, stock bonuses,
dividend equivalents and other stock-based awards granted under this Plan. In
addition, for purposes of Section 3(d) only, “Award” means any award granted
under any Prior Plan.
(b)“Award Agreement” has the meaning specified in Section 4(c)(iv). (c)“Board”
means the Board of Directors of the Company.
 
(d)“Business Combination” has the meaning specified in Section 2(g)(iii).
 
(e)“Business Day” means any day on which the principal securities exchange on
which the shares of the Company's common stock are then listed or admitted to
trading is open.
 
(f)“Cause” means the Grantee's commission of any act or acts involving
dishonesty, fraud, illegality or moral turpitude.
 
(g)“Change in Control” means the happening of any of the following events:
 
(i)the acquisition by any Person of “beneficial ownership” (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of either (A) the
then-outstanding shares of Stock (“Outstanding Company Common Stock”) or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that, for purposes of this
Section 2(g)(i), the following acquisitions shall not constitute a Change in
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any Employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled by the Company
or (4) any acquisition by any entity pursuant to a transaction that complies
with Sections 2(g)(iii)(A), (B) and (C); or

 
 

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(ii)individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
 
(iii)consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company and/or any
entity controlled by the Company, or a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any entity controlled by the Company
(each, a “Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 40% or more of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and (C) at least
a majority of the members of the board of directors of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
 
(iv)approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
 
(h)“Code” means the U.S. Internal Revenue Code of 1986, as amended, and
regulations and rulings thereunder. References to a particular section of, or
rule under, the Code shall include references to successor provisions.
 
(i)“Committee” has the meaning specified in Section 4(a). (j)“Company” has the
meaning specified in the first paragraph.
 
(k)“Disability” as it regards Employees, shall mean a mental or physical
condition which, with or without reasonable accommodations, renders an Employee
permanently unable or incompetent to carry out the job responsibilities he held
or tasks to which he was assigned at the time the condition was incurred, with
such determination to be made by the Committee on the basis of such medical and
other competent evidence as the Committee in its sole discretion shall deem
relevant.
 
“Disability” as it regards non-Employee directors and senior directors means a
physical or mental condition that prevents the director from performing his or
her duties as a member of the Board or a senior director, as applicable, and
that is expected to be permanent or for an indefinite duration exceeding one
year.
 
(l)“Dividend equivalent” means an Award made pursuant to Section 6(d).

 
 

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(m)“Employee” means any individual designated as an employee of the Company, its
Affiliate, and/or its Subsidiaries who is on the current payroll records
thereof; an Employee shall not include any individual during any period he or
she is classified or treated by the Company, Affiliate, and/or Subsidiary as an
independent contractor, a consultant, or any employee of an employment,
consulting, or temporary agency or any other entity other than the Company,
Affiliate, and/or Subsidiary, without regard to whether such individual is
subsequently determined to have been, or is subsequently retroactively
reclassified as a common-law employee of the Company, Affiliate, and/or
Subsidiary during such period. “Employment”shall have the correlative meaning.
The Committee in its discretion may, in the applicable Award Agreement, adopt a
different definition of “Employee” and “Employment” for Awards granted to
Grantees working outside the United States.
 
(n)“Effective Date” means March 19, 2014.
 
(o)“Fair Market Value” of any security of the Company means, as of any
applicable date, the closing price of the security at the close of normal
trading hours on the New York Stock Exchange, or, if no such sale of the
security shall have occurred on such date, on the next preceding date on which
there was such a sale.
 
(p)“Foreign Equity Incentive Plan” has the meaning specified in Section 14.
 
(q)“Grant Date” has the meaning specified in Section 6(a)(i).
 
(r)“Grantee” means an individual who has been granted an Award.
 
(s)“including” or “includes” means “including, without limitation,” or
“includes, without limitation.”
 
(t)“Incumbent Board” has the meaning specified in Section 2(g)(ii).
 
(u)“Minimum Consideration” means $.01 per share or such larger amount determined
pursuant to resolution of the Board to be “capital”.
 
(v)“Minimum Vesting Requirement” means that Awards subject to the Minimum
Vesting Requirement shall not become nonforfeitable prior to the first
anniversary of the Grant Date, subject to Sections 12, 13 and 21.
 
(w)“1934 Act” means the Securities Exchange Act of 1934, as amended, and
regulations and rulings thereunder. References to a particular section of, or
rule under, the 1934 Act shall include references to successor provisions.
 
(x)“non-Employee director” means a member of the Board who is not an Employee of
the Company. (y)“Option Price” means the per-share purchase price of Stock
subject to a stock option. (z)“other stock-based award” means an Award made
pursuant to Section 6(f).
(aa)“Outstanding Company Common Stock” has the meaning specified in Section
2(g)(i). (bb)“Outstanding Company Voting Securities” has the meaning specified
in Section 2(g)(i).
 
(cc)“Person” means any “individual,” “entity” or “group,” within the meaning of
Section 13(d)(3) or 14(d)(2) of the 1934 Act.
 
(dd)“Prior Plan” means the Company’s 2009 Stock Incentive Plan.
 
(ee)“Qualified Performance-Based Award” means any Award that is intended to
qualify for the Section 162(m) Exemption, as provided in Section 23.

 
 

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(ff)“Qualified Performance Goal” means a performance goal established by the
Committee in connection with the grant of a Qualified Performance-Based Award,
which (i) is based on the attainment of specified levels of one ormore Specified
Performance Goals, and (ii) is set by the Committee within the time period
prescribed by Section 162(m) of the Code; provided, that in the case of a stock
option or stock appreciation right, the Qualified Performance Goal shall be
considered to have been established without special action by the Committee, by
virtue of the fact that the Stock subject to such Award must increase in value
over its Fair Market Value on the Grant Date (or over a higher value) in order
for the Grantee to realize any compensation from exercising the stock option or
stock appreciation right.
 
(gg)“Restricted Stock Unit” or “RSU” means an Award made pursuant to Section
6(e).
 
(hh)“Section 16 Grantee” means an individual subject to potential liability
under Section 16(b) of the 1934 Act with respect to transactions involving
equity securities of the Company.
 
(ii)“Section 162(m) Exemption” means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.
 
(jj)“Service-Vesting Award” means an Award, the vesting of which is contingent
solely on the continued service of the Grantee as an Employee of the Company and
its Subsidiaries or as a non-Employee director of the Company.
 
(kk)“Specified Performance Goal” means any of the following measures as applied
to the Company as a whole or to any Subsidiary, division or other unit of the
Company: revenue; operating income; net income; basic or diluted earnings per
share; return on revenue; return on assets; return on equity; return on total
capital; total shareholder return; or any other measure of financial performance
that can be determined pursuant to U.S. generally accepted accounting
principles.
 
(ll)“Stock” means the common stock of the Company, par value $.01 per share.
 
(mm)“Subsidiary” means any entity in which the Company directly or through
intervening subsidiaries owns 50% or more of the total combined voting power or
value of all classes of stock, or, in the case of an unincorporated entity, a
50% or more interest in the capital and profits.
 
(nn)“Termination of Directorship” means the first date upon which a non-Employee
director is not a member of the Board.
 
(oo) “Termination of Employment” of a Grantee means the termination of the
Grantee's Employment with the Company and the Subsidiaries, as determined by the
Company.
 
3.      Scope of this Plan
 
(a)As of March 18, 2014, no shares were available for future grant under Prior
Plans. If this Plan is approved, those shares, an additional 2 million shares,
and any shares returned to the Prior Plans as described in (d) below, will
become available for future grants under this Plan, up to a total number of
shares of Stock delivered to Grantees pursuant to this Plan of Two million,
subject to the other provisions of this Section 3 and to adjustment as provided
in Section 22. Such shares may be treasury shares or newly-issued shares or
both, as may be determined from time to time by the Board or by the Committee
appointed pursuant to Section 4.
 
(b)Subject to adjustment as provided in Section 22, the maximum number of shares
of Stock for which stock options and stock appreciation rights may be granted to
any Grantee in any one-year period shall be at the discretion of the Board of
Directors, and the maximum number of shares of Stock that may be granted to any
Grantee in any one-year period in the form of restricted stock, and other
stock-based awards, in each case that are Qualified Performance-based Awards,
shall be at the discretion of the Board of Directors. Subject to the other
provisions of this Section 3 and subject to adjustment as provided in Section
22, not more than 15% of the total outstanding shares of the Company may be
granted as Bonus Shares under this Plan.

 
 

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(c)If and to the extent an Award granted under this Plan shall, after the
Effective Date, expire or terminate for any reason without having been exercised
in full, or shall be forfeited or settled for cash, the shares of Stock
(including restricted stock) associated with the expired, terminated or
forfeited portion of such Award shall become available for other Awards. In no
event shall the number of shares of Stock considered to be delivered pursuant to
the exercise of a stock appreciation right include the shares that represent the
grant or exercise price thereof, which shares are not delivered to the Grantee
upon exercise.
 
(d)If and to the extent an Award granted under a Prior Plan shall, after the
Effective Date, expire or terminate for any reason without having been exercised
in full, or shall be forfeited or settled for cash, the shares of Stock
(including restricted stock) associated with the expired, terminated or
forfeited portion of such Award shall become available for Awards under this
Plan. If, after the Effective Date, a Grantee uses shares of Stock owned by the
Grantee (by either actual delivery or by attestation) to pay the Option Price of
any stock option granted under this Plan or a Prior Plan or to satisfy any
tax-withholding obligation with respect to an Award granted under this Plan or a
Prior Plan, the number of shares of Stock delivered or attested to shall be
added to the number of shares of Stock available for delivery under this Plan.
To the extent any shares of Stock subject to a stock option granted under this
Plan are withheld, after the Effective Date, to satisfy the Option Price of that
stock option, or any shares of Stock subject to an Award granted under this Plan
are withheld to satisfy any tax-withholding obligation, such shares shall not be
deemed to have been delivered for purposes of determining the maximum number of
shares of Stock available for delivery under this Plan. To the extent any shares
of Stock subject to an Award granted under a Prior Plan are withheld, after the
Effective Date, to satisfy any tax-withholding obligation, such shares shall be
added to the maximum number of shares of Stock available for delivery under this
Plan. Notwithstanding the foregoing, no shares of Stock that become available
for Awards granted under this Plan pursuant to the foregoing provisions of this
Section 3(d) shall be available for grants of incentive stock options pursuant
to Section 6(f).
 
4. Administration
 
(a)Subject to Section 4(b), this Plan shall be administered by a committee
appointed by the Board (the “Committee”). All members of the Committee shall be
“outside directors” (as defined or interpreted for purposes of the Section
162(m) Exemption). The composition of the Committee also shall be subject to
such limitations as the Board deems appropriate to permit transactions in Stock
pursuant to this Plan to be exempt from liability under Rule 16b-3 under the
1934 Act and to satisfy the “independence” requirements of any national
securities exchange on which the Stock is listed.
 
(b)The Board may, in its discretion, reserve to itself any or all of the
authority and responsibility of the Committee. To the extent that the Board has
reserved to itself the authority and responsibility of the Committee or that the
Board has not appointed a Commitee, all references to the Committee in this Plan
shall be deemed to refer to the Board.
 
(c)The Committee shall have full and final authority, in its discretion, but
subject to the express provisions of this Plan (including without limitation
Section 23(e)), as follows:
 
(i)to grant Awards,
 
(ii)to determine (A) when Awards may be granted, and (B) whether or not specific
Awards shall be identified with other specific Awards, and, if so, whether they
shall be exercisable cumulatively with or alternatively to such other specific
Awards,
 
(iii)to interpret this Plan,
 
(iv)to determine all terms and provisions of all Awards, including without
limitation any restrictions or conditions (including specifying such performance
criteria as the Committee deems appropriate, and imposing restrictions with
respect to Stock acquired upon exercise of a stock option, which restrictions
may continue beyond the Grantee's Termination of Employment or Termination of
Directorship, as applicable), which shall be set forth in a written (including
in an electronic form) agreement for each Award (the “Award Agreements”), which
need not be identical, and, with the consent of the Grantee, to modify any such
Award Agreement at any time,
 

 
 

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(v)to adopt or to authorize foreign Subsidiaries to adopt Foreign Equity
Incentive Plans as provided in
 
Section 14,
 
(vi)to delegate any or all of its duties and responsibilities under this Plan to
any individual or group of individuals it deems appropriate, except its duties
and responsibilities with respect to Section 16 Grantees and with respect to
Qualified Performance-Based Awards, and (A) the acts of such delegates shall be
treated hereunder as acts of the Committee and (B) such delegates shall report
to the Committee regarding the delegated duties and responsibilities,
 
(vii)to accelerate the exercisability of, and to accelerate or waive any or all
of the restrictions and conditions applicable to, any Award or any group of
Awards, other than the Minimum Vesting Requirement, for any reason, solely to
the extent that any such acceleration or waiver would not cause any tax to
become due under Section 409A of the Code,
 
(viii)subject to Section 6(a)(ii), to extend the time during which any Award or
group of Awards may be exercised or earned, solely to the extent that any such
extension would not cause any tax to become due under Section 409A of the Code,
 
(ix)to make such adjustments or modifications to Awards granted to or held by
Grantees working outside the United States as are necessary and advisable to
fulfill the purposes of this Plan or to accommodate the specific requirements of
local laws, procedures or practices,
 
(x)to impose such additional conditions, restrictions and limitations upon the
grant, exercise or retention of Awards as the Committee may, before or
concurrently with the grant thereof, deem appropriate, including requiring
simultaneous exercise of related identified Awards and limiting the percentage
of Awards that may from time to time be exercised by a Grantee,
 
(xi)notwithstanding Section 8, to prescribe rules and regulations concerning the
transferability of any
 
Awards, and
 
(xii)to make all other decisions and determinations that may be required
pursuant to the Plan or as the Committee deems necessary or advisable to
administer the Plan.
 
(d)The determination of the Committee on all matters relating to this Plan or
any Award Agreement shall be made in its sole discretion, and shall be
conclusive and final. No member of the Committee shall be liable for any action
or determination made in good faith with respect to this Plan or any Award.
 
5.
Eligibility

 
Awards may be granted to any Employee (including any officer) of the Company or
any of its domestic Subsidiaries, any Employee, officer or director of any of
the Company's foreign Subsidiaries and to any non-Employee director of the
Company. In selecting the individuals to whom Awards may be granted, as well as
in determining the number of shares of Stock subject to, and the other terms and
conditions applicable to, each Award, the Committee shall take into
consideration such factors as it deems relevant in promoting the purposes of
this Plan.
6.
Conditions to Grants (a)General conditions.

 
(i)The “Grant Date” of an Award shall be the date on which the Committee grants
the Award or such later date as specified in advance by the Committee.
(ii)The term of each Award shall be a period not longer than 10 years from the
Grant Date. (iii)A Grantee may, if otherwise eligible, be granted additional
Awards in any combination.

 
 

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(b)Grant of Stock Options and Option Price. A stock option represents the right
to purchase a share of Stock at a predetermined Option Price. No later than the
Grant Date of any stock option, the Committee shall establish the Option Price
of such stock option. The per-share Option Price of a stock option shall not be
less than 100% of the Fair Market Value of a share of the Stock on the Grant
Date. Such Option Price shall be subject to adjustment as provided in Section
22. The applicable Award Agreement may provide that the stock option shall be
exercisable for restricted stock. The Committee shall not without the approval
of the Company's shareholders, other than pursuant to Section 22, (i) reduce the
per-share Option Price of a stock option after it is granted, (ii) cancel a
stock option when the per-share Option Price exceeds the Fair Market Value of a
share of the Stock in exchange for cash or another Award (other than in
connection with a Change in Control), or (iii) take any other action with
respect to a stock option that would be treated as a repricing under the rules
and regulations of the New York Stock Exchange.
 
(c)Grant of Stock Bonuses. The Committee may, in its discretion, grant shares of
Stock to any Employee eligible under Section 5 to receive Awards, other than
executive officers of the Company.
 
(d)Grant of Dividend Equivalents. The Committee may, in its discretion, grant
dividend equivalents, which represent the right to receive cash payments or
shares of Stock measured by the dividends payable with respect to specific
shares of Stock or a specified number of shares of Stock. Dividend equivalents
may be granted as part of another type of Award, and shall be subject to such
terms and conditions as the Committee shall determine; provided, that the
Committee shall not provide for payment of dividend equivalents in a manner that
would cause any tax to become due under Section 409A of the Code.
 
(e)Grant of Restricted Stock Units (“RSUs”). The Committee may, in its
discretion, grant RSUs, which Awards are denominated in, payable in, and valued,
in whole or in part, by reference to, shares of Stock. An RSU shall represent
the right to receive a payment, in cash, shares of Stock or both (as determined
by the Committee), and shall be subject to such terms and conditions as the
Committee shall determine.
 
(f)Grant of Other Stock-Based Awards. The Committee may, in its discretion,
grant other stock-based awards. These are Awards, other than stock options (not
including incentive stock options), stock bonuses, dividend equivalents and
restricted stock units that are denominated in, valued, in whole or in part, by
reference to, or otherwise based on or related to, Stock. The purchase,
exercise, exchange or conversion of other stock-based awards granted under this
Section 6(f) shall be on such terms and conditions and by such methods as shall
be specified by the Committee. If the value of any other stock-based award is
based on the difference between the excess of the Fair Market Value, on the date
such Fair Market Value is determined, over such Award's exercise or grant price,
the exercise or grant price for such an Award will not be less than 100% of the
Fair Market Value on the Grant Date. If the value of such an Award is based on
the full value of a share of Stock, and the Award is a Service-Vesting Award,
then such Award shall be subject to the Minimum Vesting Requirement. The
Committee shall not without the approval of the Company's shareholders, other
than pursuant to Section 22, (i) lower the exercise price of a stock
appreciation right after it is granted, (ii) cancel a stock appreciation right
when the exercise price exceeds the Fair Market Value of a share of the Stock in
exchange for cash or another Award (other than in connection with a Change in
Control), or (iii) take any other action with respect to a stock appreciation
right that would be treated as a repricing under the rules and regulations of
the rules of any national market or quotation system on which the Company’s
shares of common stock are listed or quoted.
 
7.           Grantee's Agreement to Serve
 
The Committee may, in its discretion, require each Grantee who is granted an
Award to, execute such Grantee's Award Agreement, and to agree that such Grantee
will remain in the employ of the Company or any of its Subsidiaries or remain as
a non-Employee director, as applicable, for at least one year after the Grant
Date. No obligation of the Company or any of its Subsidiaries as to the length
of any Grantee's employment or service as a non-Employee director shall be
implied by the terms of this Plan, any grant of an Award hereunder or any Award
Agreement. The Company and its Subsidiaries reserve the same rights to terminate
employment of any Grantee as existed before the Effective Date.

 
 

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8.           Non-Transferability
 
No Award granted hereunder shall be assigned, encumbered, pledged, sold,
transferred, or otherwise disposed of other than by will or the laws of descent
and distribution; provided however, that unless otherwise determined by the
Committee, a Grantee may designate in writing a beneficiary to exercise or hold,
as applicable, his or her Award after such Grantee's death. In the case of a
holder after the Grantee's death, an Award shall be transferable solely by will
or by the laws of descent and distribution.
 
9.           Exercise
 
(a)Exercise of Stock Options. Subject to Sections 4(c)(vii), 12, 13 and 21 and
such terms and conditions as the Committee may impose, each stock option shall
be exercisable as and when determined by the Committee; provided that, unless
the Committee determines otherwise, each stock option shall be exercisable in
one or more installments commencing not earlier than the first anniversary of
the Grant Date of such stock option.
 
Each stock option shall be exercised by delivery of notice of intent to purchase
a specific number of shares of Stock subject to such stock option. Such notice
shall be in a manner specified by and satisfactory to the Company. The Option
Price of any shares of Stock as to which a stock option shall be exercised shall
be paid in full at the time of the exercise. Payment may, at the election of the
Grantee, be made in any one or any combination of the following:
 
(i)cash,
 
(ii)unless otherwise determined by the Committee, Stock owned by the Grantee,
valued at its Fair Market Value at the time of exercise,
 
(iii)with the approval of the Committee, shares of restricted stock held by the
Grantee, each valued at the Fair Market Value of a share of Stock at the time of
exercise, or
 
(iv)unless otherwise determined by the Committee, through simultaneous sale
through a broker of shares acquired on exercise, as permitted under Regulation T
of the Board of Governors of the Federal Reserve System.
 
If shares of Stock are used to pay the Option Price, such shares of Stock must
have been held by the Grantee for more than six months prior to exercise of the
stock option, unless otherwise determined by the Committee. Such payment may be
made by actual delivery or attestation.
 
(b)Time of Exercise/Expiration. Notwithstanding anything to the contrary herein,
in the event that the final date on which any stock option would otherwise be
exercisable in accordance with the provisions of this Plan (including without
limitation Section 12 hereof) is not a Business Day, the last day on which such
stock option may be exercised is the last Business Day immediately preceding
such date.
 
10.           Notification under Section 83(b)
 
The Committee may, on the Grant Date or any later date, prohibit a Grantee from
making the election described below. If the Committee has not prohibited such
Grantee from making such election, and the Grantee shall, in connection with the
exercise of any stock option, or the grant of any share of restricted stock,
make the election permitted under Section 83(b) of the Code (i.e., an election
to include in such Grantee's gross income in the year of transfer the amounts
specified in Section 83(b) of the Code), such Grantee shall notify the Company
of such election within 10 days of filing notice of the election with the U.S.
Internal Revenue Service, in addition to complying with any filing and
notification required pursuant to regulations issued under the authority of
Section 83(b) of the Code.

 
 

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11.           Withholding Taxes
 
(a)Whenever, under this Plan, cash or Stock is to be delivered upon exercise or
payment of an Award, or any other event occurs that results in taxation of a
Grantee with respect to an Award, the Company shall be entitled to require (i)
that the Grantee remit an amount sufficient to satisfy all U.S. federal, state
and local withholding tax requirements related thereto, (ii) the withholding of
such sums from compensation otherwise due to the Grantee or from any shares of
Stock due to the Grantee under this Plan, (iii) any other method prescribed by
the Committee from time to time or (iv) any combination of the foregoing.
 
(b)If any disqualifying disposition (as defined in Section 421(b) of the Code)
is made with respect to shares of Stock acquired under an incentive stock option
granted pursuant to this Plan or any election described in Section 10 is made,
then the individual making such disqualifying disposition or election shall
remit to the Company an amount sufficient to satisfy all U.S. federal, state and
local withholding taxes thereby incurred; provided, that in lieu of or in
addition to the foregoing, the Company shall have the right to withhold such
sums from compensation otherwise due to the Grantee or from any shares of Stock
due to the Grantee under this Plan.
 
(c)Notwithstanding the foregoing, in no event shall the amount withheld or
remitted in the form of shares of Stock due to a Grantee under this Plan exceed
the minimum required by applicable law, except in the case of amounts due to a
Grantee working outside the United States where the amount withheld may exceed
such minimum, provided that it is not in excess of the actual amount required to
be withheld with respect to the Grantee under applicable tax law or regulations.
 
(d)Although the Company may endeavor to qualify an Award for favorable tax
treatment under the laws of the United States or jurisdictions outside of the
United States or to avoid adverse tax treatment, the Company makes no
representation to that effect and expressly disavows any covenant to maintain
favorable or avoid unfavorable tax treatment, notwithstanding anything contrary
in this Plan and the Company will have no liability to a Grantee or any other
party if a payment under an Award does not receive or maintain such favorable
treatment or does not avoid such unfavorable treatment. The Company shall be
unconstrained in its corporate activities without regard to the potential tax
impact on Grantees.
 
12.           Termination of Employment
 
(a)The applicable Award Agreement shall specify the treatment of such Award upon
the Grantee's Termination of Employment. Unless otherwise provided in the
applicable Award Agreement, all unvested Awards shall forfeit upon the Grantee's
Termination of Employment, and vested stock options shall remain exercisable
until the 90th day following Termination of Employment.
 
(b)Committee Discretion. Notwithstanding the foregoing, the Committee may
determine that the consequences of a Termination of Employment for a particular
Award will differ from those in the applicable Grant Agreement after it is
granted if the change is favorable to the Grantee, unless otherwise required to
comply with applicable laws; provided, that the Committee shall have no
authority (i) after the Grant Date, to extend the time to exercise unexercised
stock options or stock appreciation rights to any date later than the 10th
anniversary of the Grant Date (or, if earlier, the original expiration date of
the Award) or (ii) otherwise to provide for terms of an Award that would cause
any tax to become due under Section 409A of the Code.
 
13.           Termination of Directorship
 
(a)The applicable Award Agreement shall specify the treatment of such Award upon
the Director's Termination of Directorship with the Company. Unless otherwise
provided in the applicable Award Agreement, all unvested Awards shall forfeit
upon the Director's Termination of Directorship.

 
 

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(b)Committee Discretion. Notwithstanding the foregoing, the Committee may
determine that the consequences of Termination of Directorship for a particular
Award will differ from those in the Applicable Award Agreement after the Award
is granted, if the change is favorable to the Grantee; provided, that the
Committee shall have no authority (i) after the Grant Date, to extend the time
to exercise unexercised stock options or stock appreciation rights to any date
later than the 10th anniversary of the Grant Date (or, if earlier, the original
expiration date of the Award) or (ii) otherwise to provide for terms of an Award
that would cause any tax to become due under Section 409A of the Code.
 
14.           Equity Incentive Plans of Foreign Subsidiaries
 
The Committee may adopt or authorize any foreign Subsidiary to adopt a plan for
granting Awards (a “Foreign Equity Incentive Plan”). All awards granted under
such Foreign Equity Incentive Plans shall be treated as grants under this Plan.
Such Foreign Equity Incentive Plans shall have such terms and provisions as the
Committee permits not inconsistent with the provisions of this Plan.
 
15.           Securities Law Matters
 
(a)If the Committee deems it necessary to comply with the Securities Act of
1933, as amended, and the regulations and rulings thereunder, the Committee may
require a written investment intent representation by the Grantee and may
require that a restrictive legend be affixed to certificates for shares of
Stock.
 
(b)If, based upon the opinion of counsel for the Company, the Committee
determines that the exercise or nonforfeitability of, or delivery of benefits
pursuant to, any Award would violate any applicable provision of (i) U.S.
federal, state, foreign or local securities law or (ii) the listing requirements
of any national securities exchange on which are listed any of the Company's
equity securities (together, referred to herein as “Securities Law
Requirements”), then the Committee may (A) postpone any such exercise,
nonforfeitability or delivery, as the case may be, for not more than 30 days
after the date on which such exercise, nonforfeitability or delivery would no
longer violate such law or requirements, or (B) amend or cancel some or all of
the Awards affected by such Securities Law Requirements, with or without
consideration to the relevant Grantees.
 
16.           Funding
 
Benefits payable under this Plan to any person shall be paid directly by the
Company. The Company shall not be required to fund, or otherwise segregate
assets to be used for payment of, benefits under this Plan.
 
17.           No Employment Rights
 
Neither the establishment of this Plan, nor the granting of any Award, shall be
construed to (a) give any Grantee the right to remain employed by the Company or
any of its Subsidiaries or to any benefits not specifically provided by this
Plan or (b) in any manner modify the right of the Company or any of its
Subsidiaries to modify, amend, or terminate any of its employee benefit plans.
 
18.           Rights as a Stockholder
 
A Grantee shall not, by reason of any Award (other than restricted stock), have
any right as a stockholder of the Company with respect to the shares of Stock
that may be deliverable upon exercise or payment of such Award until such shares
have been delivered to him or her.
 
19.           Nature of Payments
 
Any and all grants, payments of cash, or deliveries of shares of Stock hereunder
shall constitute special incentive payments to the Grantee, and shall not be
taken into account in computing the amount of salary or compensation of the
Grantee for the purposes of determining any pension, retirement, death or other
benefits under (a) any pension, retirement, profit-sharing, bonus, life
insurance or other employee benefit plan of the Company or any of its
Subsidiaries or (b) any agreement between the Company or any Subsidiary, on the
one hand, and the Grantee, on the other hand, except as such plan or agreement
shall otherwise expressly provide.

 
 

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20.           Non-Uniform Determinations
 
Neither the Committee's nor the Board's determinations under this Plan need be
uniform, and may be made by the Committee or the Board selectively among
individuals who receive, or are eligible to receive, Awards (whether or not such
individuals are similarly situated). Without limiting the generality of the
foregoing, the Committee shall be entitled, among other things, to make
non-uniform and selective determinations, to enter into non-uniform and
selective Award Agreements as to (a) the identity of the Grantees, (b) the terms
and provisions of Awards, and (c) the treatment, under Section 12, of
Terminations of Employment.
 
21.           Change in Control Provisions
 
Notwithstanding any other provision of this Plan to the contrary, the provisions
of this Section 21 shall apply in the event of a Change in Control, unless
otherwise determined by the Committee in connection with the grant of an Award
(as reflected in the applicable Award Agreement).
 
(a)Upon a Change in Control, each then-outstanding stock option and stock
appreciation right, and each other then-outstanding Award that is a
Service-Vesting Award (each, a “Replaced Award”), shall be replaced with another
Award meeting the requirements of Section 21(b) (a “Replacement Award”);
provided that (i) if a Replacement Award meeting the requirements of Section
21(b) cannot be issued (because, for example, there are no publicly traded
equity securities available, such that the requirement described in clause (iii)
of the first sentence of Section 21(b) cannot be met), or (ii) the Committee so
determines at any time prior to the Change in Control, upon a Change in Control
each Replaced Award shall instead become fully vested, exercisable and free of
restrictions. The treatment of any Awards which are not Replaced Awards (i.e.,
Awards other than stock options and stock appreciation rights, which are not
Service-Vesting Awards) shall be as determined by the Committee in connection
with the grant thereof, as reflected in the applicable Award Agreement.
 
(b)An Award shall meet the conditions of this Section 21(b) (and hence qualify
as a Replacement Award) if: (i) it is of the same type as the Replaced Award;
(ii) it has a value at least equal to the value of the Replaced Award; (iii) it
relates to publicly traded equity securities of the Company or its successor in
the Change in Control or another entity that is affiliated with the Company or
its successor following the Change in Control; (iv) its terms and conditions
comply with Section 21(c) below; and (v) its other terms and conditions are not
less favorable to the Grantee than the terms and conditions of the Replaced
Award (including the provisions that would apply in the event of a subsequent
Change in Control). Without limiting the generality of the foregoing, the
Replacement Award may take the form of a continuation of the Replaced Award if
the requirements of the preceding sentence are satisfied. The determination of
whether the conditions of this Section 21(b) are satisfied shall be made by the
Committee, as constituted immediately before the Change in Control, in its sole
discretion. Without limiting the generality of the foregoing, the Committee may
determine the value of Awards and Replacement Awards that are stock options by
reference to either their intrinsic value or their fair value.
 
(c)Upon a Termination of Employment or Termination of Directorship of a Grantee
occurring in connection with or during the period of two years after such Change
in Control, other than for Cause, (i) all Replacement Awards held by the Grantee
shall become fully vested and (if applicable) exercisable and free of
restrictions, and (ii) all stock options and stock appreciation rights held by
the Grantee immediately before the Termination of Employment or Termination of
Directorship that the Grantee held as of the date of the Change in Control or
that constitute Replacement Awards shall remain exercisable for not less than
two years following such termination or until the expiration of the stated term
of such stock option, whichever period is shorter (provided, that if the
applicable Award Agreement provides for a longer period of exercisability, that
provision shall control). The treatment described in the preceding sentence
shall not apply if the Termination of Employment is initiated by the Employee.

 
 

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22. Adjustments Upon Certain Changes
 
The following shall be subject to any action by the shareholders of the Company
required by law, applicable tax rules or the rules of any exchange on which
shares of Stock of the Company are listed for trading:
 
(a)Shares Available for Grants. In the event of any change in the number of
shares of Stock of the Company outstanding by reason of any stock dividend or
split, recapitalization, merger, consolidation, combination or exchange of
shares or similar corporate change, the maximum aggregate number of shares of
Stock with respect to which the Committee may grant Awards and the maximum
aggregate number of shares of Stock with respect to which the Committee may
grant Awards to any individual Grantee in any year shall be appropriately
adjusted by the Committee. In the event of any change in the number of shares of
Stock of the Company outstanding by reason of any other event or transaction,
the Committee may, to the extent deemed appropriate by the Committee, make such
adjustments in the number and class of shares of Stock with respect to which
Awards may be granted.
 
(b)Increase or Decrease in Issued Shares Without Consideration. In the event of
any increase or decrease in the number of issued shares of Stock of the Company
resulting from a subdivision or consolidation of shares of Stock of the Company
or the payment of a stock dividend (but only on the shares of Stock of the
Company), or any other increase or decrease in the number of such shares
effected without receipt or payment of consideration by the Company, the
Committee may, to the extent deemed appropriate by the Committee, adjust the
number of shares of Stock subject to each outstanding Award and the exercise
price per share of Stock of each such Award.
 
(c)Certain Mergers. In the event of any merger, consolidation or similar
transaction as a result of which the holders of shares of Stock receive
consideration consisting exclusively of securities of the surviving corporation
in such transaction, the Committee may, to the extent deemed appropriate by the
Committee, adjust each Award outstanding on the date of such merger or
consolidation so that it pertains and applies to the securities which a holder
of the number of shares of Stock subject to such Award would have received in
such merger or consolidation.
 
(d)Certain Other Transactions. In the event of (i) a dissolution or liquidation
of the Company, (ii) a sale of all or substantially all of the Company's assets
(on a consolidated basis), or (iii) a merger, consolidation or similar
transaction involving the Company in which the holders of shares of Stock
receive securities and/or other property, including cash, other than shares of
the surviving corporation in such transaction, the Committee shall, in its sole
discretion, have the power to:
 
(i)cancel, effective immediately prior to the occurrence of such event, each
Award (whether or not then exercisable or vested), and, in full consideration of
such cancellation, pay to the Grantee to whom such Award was granted an amount
in cash, for each share of Stock subject to such Award, equal to the value, as
determined by the Committee, of such Award, provided that with respect to any
outstanding stock option such value shall be equal to the excess of (A) the
value, as determined by the Committee, of the property (including cash) received
by the holder of a share of Stock as a result of such event over (B) the
exercise price of such stock option; or
 
(ii)provide for the exchange of each Award (whether or not then exercisable or
vested) for an Award with respect to some or all of the property which a holder
of the number of shares of Stock subject to such Award would have received in
such transaction and, incident thereto, make an equitable adjustment as
determined by the Committee in the exercise price of the Award, or the number of
shares or amount of property subject to the Award or provide for a payment (in
cash or other property) to the Grantee to whom such Award was granted in partial
consideration for the exchange of the Award.
 
(e)Other Changes. In the event of any change in the capitalization of the
Company or corporate change other than those specifically referred to in
paragraphs 22(b), (c) or (d), the Committee may make such adjustments in the
number and class of shares subject to Awards outstanding on the date on which
such change occurs and in such other terms of such Awards as the Committee may
consider appropriate, provided that if any such Award is intended to be a
Qualified Performance-Based Award such adjustment is consistent with the
requirements of Section 162(m) Exemption.

 
 

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(f)No Other Rights. Except as expressly provided in the Plan, no Grantee shall
have any rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation, merger
or consolidation of the Company or any other corporation. Except as expressly
provided in the Plan, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares or amount of other property subject to, or the terms related
to, any Award.
 
(g)Savings Clause. No provision of this Section 22 shall be given effect to the
extent that such provision would cause any tax to become due under Section 409A
of the Code.
 
23.      Qualified Performance-Based Awards
 
(a)The provisions of this Plan are intended to ensure that all stock options and
stock appreciation rights granted hereunder to any Grantee who is or may be a
“covered employee” (within the meaning of Section 162(m)(3) of the Code) at the
time of exercise qualify for the Section 162(m) Exemption, and all such Awards
shall therefore be considered Qualified Performance-Based Awards and this Plan
shall be interpreted and operated consistent with that intention. The provisions
referred to in the preceding sentence include without limitation the limitation
on the total amount of such Awards to any Grantee set forth in Section 3(b); the
requirement of Section 4(a) that the Committee satisfy the requirements for
being “outside directors” for purposes of the Section 162(m) Exemption; the
limitations on the discretion of the Committee with respect to Qualified
Performance-Based Awards; and the requirements of Sections 6(b) that the Option
Price of stock options be not less than the Fair Market Value of the Stock on
the Grant Date (which requirement constitutes the Qualified Performance Goal).
The base price for determining the value of stock appreciation rights shall not
be less than the Fair Market Value of the Stock on the Grant Date (which
requirement constitutes the Qualified Performance Goal).
 
(b)The Committee may designate any Award (other than a stock option or stock
appreciation right) as a Qualified Performance-Based Award upon grant, in each
case based upon a determination that (i) the Grantee is or may be a “covered
employee” (within the meaning of Section 162(m)(3) of the Code) with respect to
such Award, and (ii) the Committee wishes such Award to qualify for the Section
162(m) Exemption. The provisions of this Section 23 shall apply to all such
Qualified Performance-Based Awards, notwithstanding any other provision of this
Plan, other than Section 21.
 
(c)Each Qualified Performance-Based Award (other than a stock option or stock
appreciation right) shall be earned, vested and payable (as applicable) only
upon the achievement of one or more Qualified Performance Goals, together with
the satisfaction of any other conditions, such as continued employment, as the
Committee may determine to be appropriate; provided that (i) the Committee may
provide, either in connection with the grant thereof or by amendment thereafter,
that achievement of such Performance Goals will be waived upon the death or
Disability of the Grantee, and (ii) the provisions of Section 21 shall apply
notwithstanding this sentence.
 
(d)Qualified Performance Goals may take the form of absolute goals or goals
relative to the performance of one or more other companies comparable to the
Company or of an index covering multiple companies. In establishing Qualified
Performance Goals, the Committee may specify that there shall be excluded the
effect of restructuring charges, discontinued operations, extraordinary items,
cumulative effects of accounting changes, and other unusual or nonrecurring
items, and asset impairment and the effect of foreign currency fluctuations, in
each case as those terms are defined under generally accepted accounting
principles and provided in each case that such excluded items are objectively
determinable by reference to the Company's financial statements, notes to the
Company's financial statements and/or management's discussion and analysis in
the Company's financial statements.
 
(e)Except as specifically provided in Section 23(d), no Qualified
Performance-Based Award may be amended, nor may the Committee exercise any
discretionary authority it may otherwise have under this Plan with respect to a
Qualified Performance-Based Award under this Plan, in any manner to waive the
achievement of the applicable Qualified Performance Goals or to increase the
amount payable pursuant thereto or the value thereof, or otherwise in a manner
that would cause the Qualified Performance-Based Award to cease to qualify for
the Section 162(m) Exemption.

 
 

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24.      Amendment of this Plan
 
The Board or the Committee may from time to time in its discretion amend this
Plan or Awards, without the approval of the shareholders of the Company, except
(i) to the extent required under the listing requirements of any national
securities exchange on which are listed any of the Company's equity securities
and (ii) to the extent the amendment would result in (A) the reduction of the
Option Price of any stock option, (B) cancellation of a stock option when the
Option Price exceeds the Fair Market Value of a share of Stock in exchange for
cash or another Award (other than in connection with a Change in Control), or
(C) any other action with respect to a stock option that would be treated as a
repricing under the rules and regulations of the New York Stock Exchange. No
such amendment shall adversely affect any previously-granted Award without the
consent of the Grantee, except for (x) amendments made to comply with applicable
law, stock exchange rules or accounting rules, and (y) amendments that do not
materially decrease the value of such Awards. In addition, no such amendment may
be made that would cause a Qualified Performance Based Award to cease to qualify
for the Section 162(m) Exemption.
 
25.      Termination of this Plan
 
This Plan shall terminate on the 10th anniversary of the Effective Date or at
such earlier time as the Board may determine. Any termination, whether in whole
or in part, shall not affect any Award then outstanding under this Plan.
 
26.      No Illegal Transactions
 
This Plan and all Awards granted pursuant to it are subject to all laws and
regulations of any governmental authority that may be applicable thereto; and,
notwithstanding any provision of this Plan or any Award, Grantees shall not be
entitled to exercise Awards or receive the benefits thereof and the Company
shall not be obligated to deliver any Stock or pay any benefits to a Grantee if
such exercise, delivery, receipt or payment of benefits would constitute a
violation by the Grantee or the Company of any provision of any such law or
regulation. Such circumstances or the inability or impracticability of the
Company to obtain or maintain authority from any regulatory body (which
authority is deemed by the Company to be necessary for the lawful issuance
and/or sale of Stock hereunder) shall relieve the Company of any liability for
the failure to issue and/or sell such Stock and shall constitute circumstances
in which the Committee may determine to amend or cancel Awards pertaining to
such Stock, with or without consideration to the affected Grantees.
 
27.      Controlling Law
 
The law of the State of Illinois, except its law with respect to choice of law,
shall be controlling in all matters relating to this Plan.
 
28.      Severability
 
If all or any part of this Plan is declared by any court or governmental
authority to be unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidate any portion of this Plan not declared to be unlawful or
invalid. Any Section or part of a Section so declared to be unlawful or invalid
shall, if possible, be construed in a manner that will give effect to the terms
of such Section or part of a Section to the fullest extent possible while
remaining lawful and valid.
 
29.      Section 409A
 
No provision of this Plan shall be given effect to the extent that such
provision would cause any tax to become due under Section 409A of the Code. No
action, or failure to act, pursuant to this Section 29 or to any other provision
of the Plan that references Section 409A of the Code shall subject the
Committee, the Board or the Company to any claim, liability or expense, and
neither the Committee, the Board nor the Company shall have any obligation to
indemnify or otherwise protect any Grantee from the obligation to pay any taxes
pursuant to Section 409A of the Code.

 
 

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