Exhibit 10.1


 


HEMACARE CORPORATION


1996
STOCK INCENTIVE PLAN


(As Amended and Restated
Through May 24, 2005)

(As Further Amended as of January 26, 2006)


 


SECTION 1.
Purposes.


 


The purposes of the HemaCare Corporation 1996 Stock Incentive Plan (the
“Plan”) are to (i) enable HemaCare Corporation (the “Company”) and Related
Companies (as defined below) to attract, motivate and retain top-quality
directors, officers, employees, consultants, advisers and independent
contractors (including without limitation dealers, distributors and other
business entities or persons providing services on behalf of the Company or a
Related Company), (ii) provide substantial incentives for such directors,
officers, employees, consultants, advisers and independent contractors of the
Company or a Related Company (“Participants”) to act in the best interests of
the shareholders of the Company and (iii) reward extraordinary effort by
Participants on behalf of the Company or a Related Company. For purposes of the
Plan, a “Related Company” means any corporation, partnership, joint venture or
other entity in which the Company owns, directly or indirectly, at least a
twenty percent (20%) beneficial ownership interest.


 


SECTION 2.
Types of Awards. Awards under the Plan may be in the form of (i) Stock
Options or (ii) Restricted Stock.


 


SECTION 3.
Administration.


 


3.1           Except
as otherwise provided herein, the Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the “Board”)
or such other committee of directors as the Board shall designate, which
committee in either such case shall consist solely of not less than two “non-employee
directors” (as such term is defined in Rule 16b-3 under the Securities
Exchange Act of 1934 (the “Exchange Act”) or any successor rule (“Rule 16b-3”))
who shall serve at the pleasure of the Board, each of whom shall also be an “outside
director” within the meaning of Section 162(m) of the Internal Revenue
Code and Section 1.162-27 of the Treasury Regulations or any successor provision(s)
thereto (“Section 162(m)”); provided, however, that if there are not two
persons on the Board who meet the foregoing qualifications, any such committee
may be comprised of two or more directors of the Company, none of which is an
officer (other than a non-employee Chairman of the Board of the Company) or an
employee of the Company or a Related Company. If no such committee has been
appointed by the Board, the Plan shall be administered by the Board, and the
Plan shall be administered by the Board to the extent provided in the last
sentence of this Section. Such committee as shall be designated to administer
the Plan, if any, or the Board is referred to herein as the “Committee.”  Notwithstanding any other provision of the
Plan to the contrary, if such a committee has been designated to administer the
Plan, all actions with respect to the administration of the Plan in respect of
the members of such committee shall be taken by the Board.


 


3.2           The
Committee shall have the following authority with respect to awards under the
Plan to Participants:  to grant awards to
eligible Participants under the Plan; to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
deem advisable; to interpret the terms and provisions of the Plan and any award
granted under the Plan; and to otherwise supervise the administration of the
Plan. In particular, and without limiting its authority and powers, the
Committee shall have the authority:


 


(a)           to determine whether
and to what extent any award or combination of awards will be granted
hereunder;


 


(b)           to select the
Participants to whom awards will be granted;


 


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(c)           to determine the number
of shares of the common stock of the Company (the “Stock”) to be covered by
each award granted hereunder, provided that no Participant will be granted
Stock Options on or with respect to more than 250,000 shares of Stock in any
calendar year;


 


(d)           to determine the terms
and conditions of any award granted hereunder, including, but not limited to,
any vesting or other restrictions based on performance and such other factors
as the Committee may determine, and to determine whether the terms and
conditions of the award are satisfied;


 


(e)           to determine the
treatment of awards upon a Participant’s retirement, disability, death,
termination for cause or other termination of employment or other qualifying
relationship with the Company or a Related Company;


 


(f)            to determine that
amounts equal to the amount of any dividends declared with respect to the
number of shares covered by an award (i) will be paid to the Participant
currently or (ii) will be deferred and deemed to be reinvested or (iii) will
otherwise be credited to the Participant, or that the Participant has no rights
with respect to such dividends;


 


(g)           to determine whether,
to what extent, and under what circumstances Stock and other amounts payable
with respect to an award will be deferred either automatically or at the
election of a Participant, including providing for and determining the amount
(if any) of deemed earnings on any deferred amount during any deferral period;


 


(h)           to provide that the
shares of Stock received as a result of an award shall be subject to a right of
first refusal, pursuant to which the Participant shall be required to offer to
the Company any shares that the Participant wishes to sell, subject to such
terms and conditions as the Committee may specify;


 


(i)            to amend the terms of
any award, prospectively or retroactively; provided, however, that no amendment
shall impair the rights of the award holder without his or her consent; and


 


(j)            to substitute new
Stock Options for previously granted Stock Options, or for options granted
under other plans, in each case including previously granted options having
higher option prices.


 


3.3           All
determinations made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and all
Participants.


 


3.4           The
Committee may from time to time delegate to one or more officers of the Company
any or all of its authorities granted hereunder except with respect to awards
granted to persons subject to Section 16 of the Exchange Act. The
Committee shall specify the maximum number of shares that the officer or
officers to whom such authority is delegated may award, and the Committee may
in its discretion specify any other limitations or restrictions on the
authority delegated to such officer or officers.


 


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SECTION 4.
Stock Subject to Plan.


 


4.1           The
total number of shares of Stock reserved and available for distribution under
the Plan shall be 2,500,000 (subject to adjustment as provided in Section 4.3);
provided, however, that no award of a Stock Option or Restricted Stock may be
made at any time if, after giving effect to such award, the total number of
shares of Stock issuable upon exercise of all outstanding options and warrants
of the Company (whether or not under the Plan) plus the total number of shares
of Stock called for under any stock bonus or similar plan of the Company
(including shares of Stock underlying awards of Stock Options or Restricted
Stock under the Plan) would exceed thirty percent (30%) of the total
number of shares of Stock outstanding at the time of such award. For purposes
of the foregoing:  (i) those shares
issuable upon exercise of rights, options or warrants, or under a stock
purchase plan, meeting the requirements for exclusion set forth at any time and
from time to time in Rule 260.140.45 of the California Commissioner of
Corporations shall not be counted against the thirty percent (30%)
limitation; (ii) any outstanding preferred or senior common shares of the
Company convertible into Stock shall be deemed converted in determining the
total number of outstanding shares of Stock at any time; and (iii) any
shares of Stock subject to promotional waivers under Rule 260.141 of the
California Commissioner of Corporations shall not be deemed to be outstanding. Shares
of Stock issuable in connection with any award under the Plan may consist of
authorized but unissued shares or treasury shares.


 


4.2           To
the extent a Stock Option terminates without having been exercised, or shares
awarded are forfeited, the shares subject to such award shall again be
available for distribution in connection with future awards under the Plan,
subject to the limitations set forth in Section 4.1, unless the forfeiting
Participant received any benefits of ownership such as dividends from the
forfeited award.


 


4.3           In
the event of any merger, reorganization, consolidation, sale of substantially
all assets, recapitalization, Stock dividend, Stock split, spin-off, split-up,
split-off, distribution of assets or other change in corporate structure
affecting the Stock, a substitution or adjustment, as may be determined to be
proportionate by the Committee in its sole discretion, shall be made in the
aggregate number of shares reserved for issuance under the Plan, the number of
shares subject to outstanding awards and the amounts to be paid by award holder
or the Company, as the case may be, with respect to outstanding awards;
provided, however, that no such adjustment shall increase the aggregate value
of any outstanding award. In the event any change described in this Section 4.3
occurs and an adjustment is made in the outstanding Stock Options, a similar
adjustment shall be made in the maximum number of shares covered by Stock
Options that may be granted to any employee pursuant to Section 3.2(c).


 


SECTION 5.
Eligibility.


 


Participants
under the Plan shall be selected from time to time by the Committee, in its
sole discretion, from among those eligible.


 


SECTION 6.
Stock Options.


 


6.1           The
Stock Options awarded to officers and employees under the Plan may be of two
types:  (i) Incentive Stock Options
within the meaning of Section 422 of the Internal Revenue Code or any
successor provision thereto (“Section 422”); and (ii) Non-Qualified
Stock Options. If any Stock Option does not qualify as an Incentive Stock Option,
or the Committee at the time of grant determines that any Stock Option shall be
a Non-Qualified Stock Option, it shall constitute a Non-Qualified Stock Option.
Stock Options awarded to any Participant who is not an officer or employee of
the Company or a Related Company shall be Non-Qualified Stock Options.


 


6.2           Subject
to the following provisions, Stock Options awarded to Participants under the
Plan shall be in such form and shall have such terms and conditions as the
Committee may determine:


 


(a)           Option Price.
The option price per share of Stock purchasable under a Stock Option shall be
determined by the Committee; provided, however, that the option price per


 


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share of Stock
shall be not less than one hundred percent (100%) of the “Fair Market Value”
(as defined below) of the Stock on the date of grant of the Stock Option; and
provided, further, that if at the time of grant the Participant owns, or would
be considered to own by reason of Section 424(d) of the Internal
Revenue Code or any successor provision thereto, more than ten
percent (10%) of the total combined voting power of all classes of stock
of the Company or any parent or subsidiary of the Company, the option price per
share of Stock shall be not less than one hundred ten percent (110%) of
the Fair Market Value of the Stock on the date of grant of the Stock Option. For
purposes of the Plan, “Fair Market Value” in relation to a share of the Stock
means, if the Stock is publicly traded, the closing per share bona fide bid
price of the Stock on such date. In any situation not covered above, the Fair
Market Value shall be determined by the Committee in accordance with one of the
valuation methods described in Section 20.2031-2 of the Federal Estate Tax
Regulations or any successor provision thereto.


 


(b)           Option Term.
The term of each Stock Option shall be fixed by the Committee, but in no event
longer than one hundred twenty (120) months after the date of grant of
such Stock Option.


 


(c)           Exercisability. Stock
Options shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee; provided, however, that
in the case of Stock Options awarded to Participants other than directors,
officers, consultants or independent contractors, Stock Options under any award
shall become exercisable at the rate of at least twenty percent (20%) per
year over five (5) years from the date the Stock Option is granted. If
the Committee provides that any Stock Option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time in whole or in part.


 


(d)           Method of Exercise.
Stock Options may be exercised in whole or in part at any time during the
option period by giving written notice of exercise to the Company specifying
the number of shares to be purchased, accompanied by payment of the purchase
price. Payment of the purchase price shall be made in such manner as the
Committee may provide in the award, which may include cash (including cash
equivalents), delivery of shares of Stock already owned by the optionee or
subject to awards hereunder, any other manner permitted by law as determined by
the Committee, or any combination of the foregoing. The Committee may provide that
all or part of the shares received upon the exercise of a Stock Option which
are paid for using Restricted Stock shall be restricted in accordance with the
original terms of the award in question.


 


(e)           No Shareholder Rights.
An optionee shall have no rights to dividends or other rights of a shareholder
with respect to shares subject to a Stock Option until the optionee has given
written notice of exercise and has paid for such shares.


 


(f)            Surrender Rights.
The Committee may provide that Stock Options may be surrendered for cash upon
any terms and conditions set by the Committee.


 


(g)           Non-Transferability;
Limited Transferability. A Stock Option Agreement may permit an optionee to
transfer the Stock Option to his or her children, grandchildren or spouse (“Immediate
Family”), to one or more trusts for the benefit of such Immediate Family
members, or to one or more partnerships in which such Immediate Family members
are the only partners if (i) the agreement setting forth such Stock Option
expressly provides that such Stock Option may be transferred only with the
express written consent of the Committee, and (ii) the optionee does not
receive any consideration in any form whatsoever for such transfer. Any Stock Option
so transferred shall continue to be subject to the same terms and conditions as
were applicable to such Stock Option immediately prior to the transfer thereof.
Any Stock


 


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Option not
(x) granted pursuant to any agreement expressly allowing the transfer of
such Stock Option or (y) amended expressly to permit its transfer shall
not be transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and such Stock Option shall be exercisable during the
optionee’s lifetime only by the optionee.


 


(h)           Termination of Relationship.
If an optionee’s employment or other qualifying relationship with the Company
or a Related Company terminates by reason of death, disability, retirement,
voluntary or involuntary termination or otherwise, the Stock Option shall be
exercisable to the extent determined by the Committee; provided, however, that
unless employment or such other qualifying relationship is terminated for cause
(as may be defined by the Committee in connection with the grant of any Stock
Option), the Stock Option shall remain exercisable (to the extent that it was
otherwise exercisable on the date of termination) for (A) at least
six (6) months from the date of termination if termination was caused
by death or disability or (B) at least ninety (90) days from the date
of termination if termination was caused by other than death or disability. The
Committee may provide that, notwithstanding the option term fixed pursuant to Section 6.2(b),
a Stock Option which is outstanding on the date of an optionee’s death shall
remain outstanding for an additional period after the date of such death. For
the purposes of this Plan, “termination for cause” shall mean any fraudulent or
dishonest act or gross abuse of authority with respect to the Company that
likely will result in material harm to the Company or any illegal act or drug,
alcohol or substance abuse.


 


(i)            Option Grants to Participants Subject to Section 16.
If for any reason any Stock Option granted to a Participant subject to Section 16
of the Exchange Act is not approved in the manner provided for in
clause (d)(1) or (d)(2) of Rule 16b-3, neither the Stock
Option (except upon its exercise) nor the Stock underlying the Stock Option may
be disposed of by the Participant until six months have elapsed following the
date of grant of the Stock Option, unless the Committee otherwise specifically
permits such disposition.


 


6.3           Notwithstanding
the provisions of Section 6.2, no Incentive Stock Option shall (i) have
an option price which is less than one hundred percent (100%) of the Fair
Market Value of the Stock on the date of the award of the Stock Option (or less
than one hundred ten percent (110%) of the Fair Market Value of the Stock
on the date of award of the Stock Option if the Participant owns, or would be
considered to own by reason of Section 424(d) of the Internal Revenue
Code or any successor provision thereto, more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
parent or subsidiary of the Company at the time of the grant of the Stock
Option), (ii) be exercisable more than ten (10) years after the
date such Incentive Stock Option is awarded (five (5) years after the
date of award if the Participant owns, or would be considered to own by reason
of Section 424(d) of the Internal Revenue Code or any successor
provision thereto, more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
of the Company at the time of the grant of the Stock Option), (iii) be
awarded more than ten (10) years after the effective date of the Plan
(or the latest restatement of the Plan) or (iv) be transferable other than
by will or by the laws of descent and distribution. In addition, the aggregate
Fair Market Value (determined as of the time a Stock Option is granted) of
Stock with respect to which Incentive Stock Options granted after December 31,
1986 are exercisable for the first time by a Participant in any calendar year
(under the Plan and any other plans of the Company or any subsidiary or parent
corporation) shall not exceed $100,000.


 


SECTION 7.
Restricted Stock.


 


Subject to the
following provisions, all awards of Restricted Stock to Participants shall be
in such form and shall have such terms and conditions as the Committee may
determine:


 


(a)           The Restricted Stock
award shall specify the number of shares of Restricted Stock to be awarded, the
price, if any, to be paid by the recipient of the Restricted Stock and


 


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the date or
dates on which, or the conditions upon the satisfaction of which, the
Restricted Stock will vest. The vesting of Restricted Stock may be conditioned
upon the completion of a specified period of service with the Company or a
Related Company, upon the attainment of specified performance goals or upon
such other criteria as the Committee may determine.


 


(b)           Stock certificates
representing the Restricted Stock awarded to an employee shall be registered in
the Participant’s name, but the Committee may direct that such certificates be
held by the Company on behalf of the Participant. Except as may be permitted by
the Committee, no share of Restricted Stock may be sold, transferred, assigned,
pledged or otherwise encumbered by the Participant until such share has vested
in accordance with the terms of the Restricted Stock award. At the time
Restricted Stock vests, a certificate for such vested shares shall be delivered
to the Participant (or his or her designated beneficiary in the event of
death), free of all restrictions.


 


(c)           The Committee may
provide that the Participant shall have the right to vote or receive dividends,
or both, on Restricted Stock. The Committee may provide that Stock received as
a dividend on, or in connection with a stock split of, Restricted Stock shall
be subject to the same restrictions as the Restricted Stock.


 


(d)           Except as may be
provided by the Committee, in the event of a Participant’s termination of
employment or other qualifying relationship with the Company or a Related
Company before all of his or her Restricted Stock has vested, or in the event
any conditions to the vesting of Restricted Stock have not been satisfied prior
to any deadline for the satisfaction of such conditions set forth in the award,
the shares of Restricted Stock which have not vested shall be forfeited, and
the Committee may provide that the lower of (i) any purchase price paid by
the Participant and (ii) the Restricted Stock’s aggregate Fair Market
Value on the date of forfeiture shall be paid in cash to the Participant.


 


(e)           The Committee may
waive, in whole or in part, any or all of the conditions to receipt of, or
restrictions with respect to, any or all of the Participant’s Restricted Stock.


 


(f)            If for any reason any
Restricted Stock awarded to a Participant subject to Section 16 of the
Exchange Act is not approved in the manner provided for in clause (d)(1) or
(d)(2) of Rule 16b-3, the Restricted Stock may not be disposed of by
the Participant until six months have elapsed following the date of award of
the Restricted Stock, unless the Committee otherwise specifically permits such
disposition.


 


SECTION 8.
Substitute Options in Business Combinations.


 


If the Company at any time should succeed to the business of another
corporation through a merger or consolidation, or through the acquisition of
stock or assets of such corporation or its related companies who, in connection
with such succession, become employees of the Company or a Related Company in
substitution for options to purchase stock of such acquired corporation held by
them at the time of such succession. The Committee, in its sole discretion,
shall determine the extent to which such substitute Stock Options shall be
granted (if at all), the persons to receive such substitute Stock Options (who
need not be all optionees of such corporation) the proportionate
number and type of Stock Options to be received by each such person, the
exercise price of such Stock Options (which may be determined without regard to
Section 6) and the terms and conditions of such substitute Stock Options;
provided, however, that the exercise price of each substitute Stock Option
shall be an amount that, in the sole judgment of the Committee (and if the
Stock Options to be granted are intended to be Incentive Stock Options, in
compliance with Section 424(a) of the Code), the economic benefit
provided by such Stock Option is not greater than the


 


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economic benefit represented by the stock option of the acquired
corporation as of the date of the Company’s acquisition of such corporation. Any
substitute Stock Option granted under this Section 8 shall expire upon the
expiration date of such other stock option or, if earlier, ten (10) years
after the date of grant of the substitute Stock Option, and, notwithstanding Section 6
shall be exercisable during the period(s) in which the other stock option would
have been exercisable and in no event shall it
have an exercise period more than 120 months from the date the substitute Stock
Option is granted. Any provision of this Section 8 to the
contrary notwithstanding, no Stock Option shall be granted, nor any action
taken, permitted or omitted, which would have the effect of causing the Plan or
any awards hereunder to fail to qualify for exemption Rule 16b-3, without
the express approval of the Board.


 


SECTION 9.
Election to Defer Awards.


 


The Committee
may permit a Participant to elect to defer receipt of an award for a specified
period or until a specified event, upon such terms as are determined by the
Committee.


 


SECTION 10.
Tax Withholding.


 


10.1         Each
Participant shall, no later than the date as of which the value of an award
first becomes includible in such person’s gross income for applicable tax
purposes, pay to the Company, or make arrangements satisfactory to the
Committee (which may include delivery of shares of Stock already owned by the
optionee or subject to awards hereunder) regarding payment of, any federal,
state, local or other taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company (and, where
applicable, any Related Company), shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due
to the Participant.


 


10.2         To
the extent permitted by the Committee, and subject to such terms and conditions
as the Committee may provide, a Participant may elect to have the withholding
tax obligation, or any additional tax obligation with respect to any awards
hereunder, satisfied by (i) having the Company withhold shares of Stock
otherwise deliverable to such person with respect to the award or (ii) delivering
to the Company shares of unrestricted Stock.


 


SECTION 11.
Amendments and Termination.


 


No awards may
be granted under the Plan more than ten (10) years after the date of
approval of the Plan by the shareholders of the Company. The Board may
discontinue the Plan at any earlier time and may amend it from time to time. No
amendment or discontinuation of the Plan shall adversely affect any award
previously granted without the award holder’s written consent. Amendments may
be made without shareholder approval except (i) if and to the extent
necessary to satisfy any applicable mandatory legal or regulatory requirements
(including the requirements of any stock exchange or over-the-counter market on
which the Stock is listed or qualified for trading and any requirements imposed
under any state securities laws or regulations as a condition to the
registration of securities distributable under the Plan or otherwise), or (ii) as
required for the Plan to satisfy the requirements of Section 162(m), Section 422
or any other non-mandatory legal or regulatory requirements if the Board of
Directors deems it desirable for the Plan to satisfy any such requirements.


 


SECTION 12.
Change of Control.


 


12.1         In
the event of a Change of Control, unless otherwise determined by the Committee
at the time of grant or by amendment (with the holder’s consent) of such grant:


 


(a)           all outstanding Stock
Options awarded under the Plan shall become fully exercisable and vested; and


 


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(b)           the restrictions
applicable to any outstanding Restricted Stock awards under the Plan shall
lapse and such shares and awards shall be deemed fully vested.


 


12.2         A
“Change of Control” shall be deemed to occur if:


 


(a)           individuals who, as of July 19,
1996, constitute the entire Board of Directors of the Company (“Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
such date whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the then
Incumbent Directors (other than an election or nomination of an individual
whose assumption of office is the result of an actual or threatened election
contest relating to the election of directors of the Company, as such terms are
used in Rule 14a-11 under the Exchange Act), also shall be an Incumbent
Director;


 


(b)           the shareholders of the
Company shall approve (i) any merger, consolidation or recapitalization of
the Company (or, if the capital stock of the Company is affected, any
subsidiary of the Company) or any sale, lease, or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party
as a single plan) of all or substantially all of the assets of the Company
(each of the foregoing being an “Acquisition Transaction”) where (1) the
shareholders of the Company immediately prior to such Acquisition Transaction
would not immediately after such Acquisition Transaction beneficially own,
directly or indirectly, shares representing in the aggregate more than fifty
percent (50%) of (A) the then outstanding common stock of the
corporation surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may be
(the “Surviving Corporation”), (or of its ultimate parent corporation, if any)
and (B) the Combined Voting Power (as defined below) of the then
outstanding Voting Securities (as defined below) of the Surviving Corporation
(or of its ultimate parent corporation, if any) or (2) the Incumbent
Directors at the time of the initial approval of such Acquisition Transaction
would not immediately after such Acquisition Transaction constitute a majority
of the Board of Directors of the Surviving Corporation (or of its ultimate
parent corporation, if any) or (ii) any plan or proposal for the
liquidation or dissolution of the Company; or


 


(c)           any Person (as defined
below) shall become the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of securities of the
Company representing in the aggregate forty percent (40%) or more of
either (i) the then outstanding shares of Company Common Stock or (ii) the
Combined Voting Power of all then outstanding Voting Securities of the Company;
provided, however, that notwithstanding the foregoing, a Change of Control of
the Company shall not be deemed to have occurred for purposes of this clause (c) solely
as the result of:


 


(1)           an acquisition of
securities by the Company which, by reducing the number of shares of Company
Common Stock or other Voting Securities outstanding, increases (i) the
proportionate number of shares of Company Common Stock beneficially owned by
any Person to forty percent (40%) or more of the shares of Company Common
Stock then outstanding or (ii) the proportionate voting power represented
by the Voting Securities beneficially owned by any Person to forty
percent (40%) or more of the Combined Voting Power of all then outstanding
Voting Securities; or


 


(2)           an acquisition of
securities directly from the Company except that this paragraph (2) shall
not apply to:


 


(A)          any conversion of a
security that was not acquired directly from the Company; or


 


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(B)           any acquisition of
securities if the Incumbent Directors at the time of the initial approval of
such acquisition would not immediately after (or otherwise as a result of) such
acquisition constitute a majority of the Board of the Company;


 


provided,
however, that if any Person referred to in clauses (1) or (2) of
this clause (c) shall thereafter become the beneficial owner of any
additional shares of Company Common Stock or other Voting Securities of the
Company (other than pursuant to a stock split, stock dividend or similar
transaction or an acquisition exempt under such clause (2)), then a Change
of Control shall be deemed to have occurred for purposes of this
clause (c).


 


For purposes
of this Section 12.2:


 


(i)            “Person” shall mean
any individual, entity (including, without limitation, any corporation,
partnership, trust, joint venture, association or governmental body) or group
(as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act
and the rules and regulations thereunder); provided, however, that “Person”
shall not include the Company, any of its subsidiaries, any employee benefit
plan of the Company or any of its majority-owned subsidiaries or any entity
organized, appointed or established by the Company or such subsidiary for or
pursuant to the terms of any such plan.


 


(ii)           “Voting Securities”
shall mean all securities of a corporation having the right under ordinary
circumstances to vote in an election of the Board of Directors of such
corporation.


 


(iii)          “Combined Voting Power”
shall mean the aggregate votes entitled to be cast generally in the election of
directors of a corporation by holders of then outstanding Voting Securities of
such corporation.


 


SECTION 13.
General Provisions.


 


13.1         If
the granting of any award under the Plan or the issuance, purchase or delivery
of Stock thereunder shall require, in the determination of the Committee from
time to time and at any time, (i) the listing, registration or
qualification of the Stock subject or related thereto upon any securities
exchange or over-the-counter market or under any federal or state law or (ii) the
consent or approval of any government regulatory body, then any such award
shall not be granted or exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions, if any, as shall be acceptable to the Committee. In
addition, in connection with the granting or exercising of any award under the
Plan, the Committee may require the recipient to agree not to dispose of any
Stock issuable in connection with such award, except upon the satisfaction of
specified conditions, if the Committee determines such agreement is necessary
or desirable in connection with any requirement or interpretation of any
federal or state securities law, rule or regulation.


 


13.2         Nothing
set forth in this Plan shall prevent the Board from adopting other or
additional compensation arrangements. Neither the adoption of the Plan nor any
award hereunder shall confer upon any employee of the Company, or of a Related
Company, any right to continued employment, and no award under the Plan shall
confer upon any director any right to continued service as a director.


 


13.3         Determinations
by the Committee under the Plan relating to the form, amount, and terms and
conditions of awards need not be uniform, and may be made selectively among
persons who receive or are eligible to receive awards under the Plan, whether
or not such persons are similarly situated.


 


13.4         No
member of the Board or the Committee, nor any officer or employee of the
Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination or


 


 


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interpretation taken or made
with respect to the Plan, and all members of the Board or the Committee and all
officers or employees of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by the Company in
respect of any such action, determination or interpretation.


 


SECTION 14.
Provision of Financial Information.


 


Each
Participant then holding unexercised Stock Options or shares of Restricted
Stock the restrictions on which have not then lapsed shall be furnished with
financial statements of the Company at least annually not later than the time
such financial statements are delivered to shareholders of the Company.


 


SECTION 15.
Effective Date of Plan.


 


The Plan shall
be effective upon the later of (i) the approval of the Plan by the
shareholders of the Company by a majority of the votes cast at a duly held
meeting of shareholders at which a quorum representing at least a majority of
the outstanding shares is, either in person or by proxy, present and voting on
the Plan, (ii) August 15, 1996 and (iii) the date upon which the
Company becomes subject to the version of Rule 16b-3 adopted by the
Securities and Exchange Commission in Release No. 34-37260 promulgated
under the Exchange Act.


 


The Plan was
duly approved by the shareholders of the Company on July 19, 1996. The
Plan, as amended and restated, was most recently adopted by the Board of
Directors on September 17, 1996. The Plan became effective on September 17,
1996, upon the election by the Board on that date for the Company to become
subject to the version of Rule 16b-3 adopted by the Securities and
Exchange Commission in Release No. 34-37260 promulgated under the Exchange
Act.


 


 


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