EXHIBIT 10.1


 


1995 Stock Option Plan (as amended to date)


 


REPUBLIC BANCORP, INC.


1995 STOCK OPTION PLAN


 


(as amended as of April 10, 2003)


(all share amounts have been adjusted for stock splits and stock
dividends through March 19, 2004)


 


Section 1 — PURPOSE.


 


The purpose of the 1995 Stock Option Plan (the “Plan”)
is to promote the interests of Republic Bancorp, Inc. (the “Company”), and its
shareholders by providing a means to attract, retrain and motivate employees of
the Company and its subsidiaries, and to encourage stock ownership in the
Company by such employees and provide them with a means to acquire a
proprietary interest in the Company.


 


The stock options provided under the Plan will enable
the Company to respond to changes in compensation practices, tax laws,
accounting regulations, and the size and diversity of its business.


 


Section 2 — DEFINITIONS


 


For purposes of the Plan, the following terms shall
have the meanings below unless the context clearly indicates otherwise:


 


2.1           “Bank”
shall mean Republic Bank & Trust Company.


 


2.2           “Board
of Directors” shall mean the Board of Directors of the Company.


 


2.3           “Change
of Control” of the Company shall mean (i) an event or series of events which
have the effect of any “person” as such term is used in Section 13(d) and 14(d)
of the Exchange Act, becoming the “beneficial owner” as defined in Rule 13d-3
under the Exchange Act, directly or indirectly, of securities of the Company or
the Bank representing a greater percentage of the combined voting power of the
Company’s or Bank’s then outstanding stock, than the Trager Family Members as a
group; (ii) an event or series of events which have the effect of decreasing
the Trager Family Members’ percentage ownership of the combined voting power of
the Company’s or Bank’s then outstanding stock to less than 25%; or (iii) the
business of the Company or Bank is disposed of pursuant to a partial or
complete liquidation, sale of assets, or otherwise.  A Change in Control shall also be deemed to
occur if (i) the Company or Bank enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control, (ii) any person
(including the Company) publicly announces an intention to take or to consider
taking actions which have consummated would constitute a Change in Control,
(iii) the Board adopts a resolution to the effect that a potential Change in
Control for purposes of this Plan has occurred. 
For purposes of this paragraph, “Trager Family Member” shall mean
Bernard M. Trager, Jean S. Trager and any of their lineal descendants, and any
corporation, partnership, limited liability company or trust the majority
owners or beneficiaries of which are directly or indirectly through another
entity, Bernard M. Trager, Jean S. Trager, or one or more of their lineal
descendants.


 


2.4           “Code”
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time.


 


2.5           “Committee”
shall mean the Compensation/Human Resources Committee appointed by the Board of
Directors.


 


2.6           “Company”
shall mean Republic Bancorp, Inc.


 


2.7           “Disability”
shall mean permanent disability within the meaning of Section 22(e)(3) of the
Code.  The determination of the Committee
or any question involving disability shall be conclusive and binding.


 


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2.8           “Employee”
shall mean an employee of the Company or any of its Subsidiaries who has been
designated by the Chairman of the Board of Directors and approved by the
Committee, under the criteria in Section 5, as eligible to participate in the
Plan.


 


2.9           “Fair
Market Value” shall have the meaning specified in Section 6.2.


 


2.10         “Incentive
Stock Option” shall mean an option to purchase Stock granted under Section 6.2
of the Plan which is designated as an Incentive Stock Option and is intended to
meet the requirements of Section 422 of the Code.


 


2.11         “Nonqualified
Stock Option” shall mean an option to purchase Stock granted under Section 6.2
of the Plan which is not intended to be an Incentive Stock Option.


 


2.12         “Option”
shall mean an Incentive Stock Option or a nonqualified Stock Option.


 


2.13         “Option
Period” shall mean the period from the date of the grant of an Option to the
date when the Option expires as stated in the terms of the Stock Option
Agreement.


 


2.14         “Optionee”
shall mean an Employee who has been granted an option to purchase shares of
Stock under the provisions of the Plan.


 


2.15         “Plan”
shall mean this Republic Bancorp, Inc. 1995 Stock Option Plan.


 


2.16         “Stock”
shall mean the Company’s voting common stock of no par value.


 


2.17         “Stock
Option Agreement” shall mean an agreement between an Optionee and the Company
covering the specific terms and conditions of an Option.


 


2.18         “Subsidiary”
or “Subsidiaries” shall mean any corporation which at the time qualifies as a
subsidiary of the Company under the definition of “subsidiary
corporation” in Section 424(f) of the Code.


 


2.19         “Termination
of Employment” shall be deemed to have occurred at the close of business on the
last day on which an employee is carried as an active employee on the records
of the Company or any of its Subsidiaries. 
The Committee shall determine whether an authorized leave of absence, or
other absence on military or government service, constitutes severance of the
employment relationship between the Company or a Subsidiary and the Employee.


 


Section 3 — STOCK SUBJECT
TO PLAN


 


3.1           AUTHORIZED STOCK.  Subject to adjustment as provided in this
Section, the aggregate number of shares of Stock subject to an Option under the
Plan shall not exceed 3,570,000 shares of Class A Common Stock and 210,000
Shares of Class B Common Stock.  Stock
delivered under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares.  Upon
approval by the Board of Directors, the Company may from time to time acquire
shares of Stock on the open market upon such terms as it deems appropriate for
reserve in connection with exercises hereunder.


 


3.2           EFFECT
OF EXPIRATIONS.  If any Option granted
under the Plan expires or terminates without exercise, the Stock no longer
subject to such Option shall be available to be re-awarded under the Plan.


 


3.3           ADJUSTMENTS
IN AUTHORIZED SHARES.  In the event of
any merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, share combination, or other change in
the corporate structure of the Company affecting the number of shares of Stock
or the kind of shares or securities an appropriate and proportionate adjustment
shall be made in the number and kind of shares which may be delivered under the
Plan, and in the number and kind of or price of share subject to outstanding
Options; provided that the number of shares subject to any Option shall always
be a whole number.  Any adjustment of an
Incentive Stock Option under this Section shall be made in such a manner so as
not to constitute a “modification” within the meaning


 


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of Section 424(h) of the Code.  If the Company shall at any time merge or
consolidate with or into another corporation or association, each Optionee will
thereafter receive, upon the exercise of an Option, the securities or property
to which a holder of the number of shares of Stock then deliverable upon the
exercise of such Option would have been entitled upon such merger or
consolidation, and the Company shall take such steps in connection with such
merger or consolidation as may be necessary to assure that the provisions of
this Plan shall thereafter be applicable, as nearly as is reasonably possible,
in relation to any securities or property thereafter deliverable upon the
exercise of such Option.  A sale of all
or substantially all the assets of the Company for a consideration (apart from
the assumption of obligations) consisting primarily of securities shall be
deemed a merger or consolidation for the foregoing purposes.


 


Section 4 — ADMINISTRATION


 


4.1           THE
COMMITTEE.  The Plan shall be
administered by the Committee.


 


4.2           AUTHORITY
OF THE COMMITTEE.  Subject to the
provisions of the Plan and upon the submission or request of the Chairman of
the Board of Directors, the Committee shall have sole power to (i) construe and
interpret the Plan; (ii) to establish, amend or waive rules and for its
administration; (iii) to determine and accelerate exercisability of any
Option;  (iv) to correct inconsistencies
in the Plan or in any Stock Option Agreement, or any other instrument relating
to an Option; and (v) subject to the provisions of Section 8 to amend the terms
and conditions of any outstanding Option, to the extent such terms and
conditions are within the discretion of the Committee as provided in the
Plan.  Notwithstanding the foregoing, no
action of the Committee may, without the consent of the person or persons
entitled to exercise any outstanding Option, adversely affect the rights of
such person or persons.  Nothing in this
Section 4.2 shall be construed to give the Committee member the authority to
select any Committee as a person to whom stock may be allocated pursuant to
this Plan, or to determine the number or maximum number of shares of Stock
which may be allocated to any Committee member.


 


4.3           SELECTION
OF EMPLOYEE PARTICIPANTS.  The Chairman
of the Board of Directors shall recommend the Employees to whom Options should
be granted and the number of such Options, and the Committee shall have the
authority to approve such grants.


 


4.4           DECISIONS
BINDING.  All determinations and
decisions made by the Committee pursuant to the provisions of the Plan shall be
final, conclusive and binding on all persons, including the Company, its
shareholders, Optionees and their estates and beneficiaries.


 


4.5           DELEGATION
OF CERTAIN RESPONSIBILITIES.  The
Committee may, in its sole discretion, delegate to appropriate officers of the
Company the administration of the Plan under this Section 4; provided, however,
that no such delegation by the Committee shall be made with respect to the
administration of the Plan as its affects officers or directors of the Company
and provided further that the Committee may not delegate its authority to
correct inconsistencies in the Plan.  The
Committee may delegate to the Chairman of the Company its authority under this
Section 4 to grant Options to Employees who are not officers or directors of
the Company.  All authority delegated by
the Committee under this Section 4.5 shall be exercised in accordance with the
provisions of the Plan and any guidelines for the exercise of such authority
that may from time to time be established by the Committee.


 


4.6           PROCEDURES
OF THE COMMITTEE.  All determinations of
the Committee shall be made by not less than a majority of its members present
at a meeting (in person or otherwise) at which a quorum is present, or by
unanimous written consent.  A majority of
the entire Committee shall constitute a quorum for the transaction of
business.  To the fullest extent
permitted by law, no member of the Committee shall be liable, and the Company
shall indemnify each Committee member, for any act or omission with respect to
his services on the Committee.  Service
on the Committee shall constitute service as a director of the Company so that
members of the Committee shall be entitled to indemnification and reimbursement
for services on the Committee to the same extent as for services as directors
of the Company.


 


4.7           STOCK
OPTION AGREEMENTS.  Each Option under the
Plan shall be evidenced by a Stock Option Agreement which shall be signed by
the Chairman of the Board and by the Optionee, and shall contain such terms and
conditions as may be approved by the Committee, which need not be the same in
all cases.  Any Stock Option Agreement
may be supplemented or amended in writing from time to time as approved by the
Committee, provided that the terms of such Agreements as amended or
supplemented, as well as the terms of the original Stock


 


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Option Agreement, are not inconsistent with the
provisions of the Plan.  An Employee who
receives an Option under the Plan shall not, with respect to the Option, be
deemed to have become an Optionee, or to have any rights with respect to the
Option, unless and until the Employee has executed a Stock Option Agreement or
other instrument evidencing the Option and shall have delivered an executed
copy thereof to the Company, and has otherwise complied with the applicable
terms and conditions of the Option.


 


4.8           STOCK
AWARDS.  Awards of Stock may be made to
Employees (“Stock Awards”) with or without other payments therefor as
additional compensation for services to the Company.  Stock Awards shall be subject to such terms
and conditions as the Committee determines appropriate.  The Committee may issue restricted or
unrestricted Stock Awards to employees in its sole discretion.  The Committee will specify in a stock grant
agreement the manner in which a restricted Stock Award will vest and become
nonforfeitable, as well as any conditions, restrictions and contingencies to
which the Stock may be subject.  A
recipient of a Stock Award will have immediate right of ownership in the shares
of Stock, including the right to vote the shares and the right to receive
dividends with respect to the shares.


 


Section 5 — ELIGIBILITY


 


Employees of the Company and its Subsidiaries who are
expected to contribute substantially to the growth and profitability of the
Company and its Subsidiaries are eligible to receive Options.


 


Section 6 — GRANT OF
OPTIONS


 


6.1           GENERAL.
Any Option granted to an Employee may be made either alone or in conjunction
with any other type of Option which may be granted under the Plan.


 


6.2           OPTION
PRICE.  The purchase price per share of
Stock covered by an option shall be determined by the Committee but shall not
be less than 100% of the fair market value (the “Fair Market Value”) of such
Stock on the date the Option is granted. 
The Fair Market Value shall be determined by the Committee in its sole
discretion, provided that, if the Company’s Stock is publicly traded on an
established securities market, the Fair Market Value shall be the closing
market price of the Company’s Stock as reported on the date of grant, or, if no
trades were reported on that date, the closing price on the most recent trading
day immediately preceding the date of the grant.  An Incentive Stock Option granted to any
person who, at the time the Option is granted, owns (within the meaning of
Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of its parent
or any Subsidiary, shall have an exercise price which is at least 110% of the
Fair Market Value of the Stock subject to the Option.


 


6.3           OPTION
PERIOD.  The Option Period shall be
determined by the Committee, but no Option shall be exercisable later than ten
years from the date of grant. 
Notwithstanding the foregoing, in the case of an Optionee owning (within
the meaning of Section 424(d) of the Code), at the time an Incentive Stock
Option is granted, more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary, such Incentive Stock Option
shall not be exercisable later than five years from the date of grant.  No Option may be exercised at any time unless
such Option is valid and outstanding as provided in this Plan.


 


6.4           LIMITATION
ON AMOUNT OF INCENTIVE STOCK OPTIONS. 
The aggregate Fair Market Value (determined as of the time the Option is
granted) of the Stock with respect to which an Optionee’s Incentive Stock
Options are exercisable for the first time during any calendar year (under this
and all other stock option plans of the Company, any Subsidiary or any parent
corporation) shall not exceed $100,000. 
Options or portions of Options exercisable as a result of acceleration
under Section 10.8 in excess of the $100,000 limit described herein shall be
treated as a Nonqualified Stock Option for tax purposes.


 


6.5           NONTRANSFERABILITY
OF OPTIONS.  No Option shall be
transferable by the Optionee otherwise than by will or by the laws of descent
and distribution, and such option shall be exercisable, during the Optionee’s
lifetime, only by the Optionee.


 


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Section 7 — EXERCISE OF
OPTIONS


 


7.1           EXERCISABILTY.  An Option may be exercised, so long as it is
valid and outstanding, from time to time in part or as a whole, subject to any
limitations with respect to the number of shares for which the Option may be
exercised at a particular time and to such other conditions (e.g., exercise
could be conditioned on performance) as the Committee in its discretion may
specify upon granting the Option or as otherwise provided in Section 7.


 


7.2           METHOD
OF EXERCISE.  To exercise an Option, the
Optionee or the other person(s) entitled to exercise the Option shall give
written notice of exercise to the Committee, specifying the number of full
shares to be purchased.  Such notice
shall be accompanied either by payment in full in cash for the Stock being
purchased plus, in the case of Nonqualified Stock Options, any required
withholding tax as provided in Section 11. 
If permitted by the Committee, in its sole discretion, payment in full
or in part may by made in the form of Stock owned by the Optionee for at least
6 months (based on the Fair Market Value of the Stock on the date the Option is
exercised) evidenced by negotiable Stock certificates registered either in the
sole name of the Optionee or the names of the Optionee and spouse, or by any
combination of cash or shares.  No shares
of Stock shall be issued unless the Optionee has fully complied with the
provisions of this Section 7.2.


 


7.3           TERMINATION
OF EMPLOYMENT BY EMPLOYEE.  After an
Employee’s Termination of Employment, an Option may not be exercised, except as
may be specifically allowed in the applicable Stock Option Agreement upon death
or Disability but in no event after the expiration date of the Option as
specified in the applicable Stock Option Agreement.  Except to the extent shorter periods are
provided in the Stock Option Agreement by the Committee, an Employee’s right to
exercise an Incentive Stock Option shall terminate (i) at the expiration of one
year in the event of Disability of the Employee, or (ii) at the expiration of
one year after the Employee’s death, if the Employee’s Termination of
Employment occurs by reason of death or Disability; any Option exercised after
death may be exercised in full by the legal representative of the estate of the
Employee or by the person or persons who acquire the right to exercise such
Option by bequest or inheritance.


 


Section 8 - AMENDMENTS
AND TERMINATION


 


8.1           AMENDMENTS
AND TERMINATION.  The Board of Directors
may terminate, suspend, amend or alter the Plan, but no action of directors
may:


 


(a)  Impair or
adversely affect the rights of an Optionee under an Option theretofore granted,
without the Optionee’s consent; or,


 


(b)  Without the
approval of the shareholders:


 


(i)      Increase the total amount of Stock which
may be delivered under the Plan except as is provided in Section 3 of the Plan;


 


(ii)     Decrease the option price of any Option to
less than the option price on the date the Option was granted;


 


(iii)    Extend the maximum Option Period, or


 


(iv)    Extend the period during which Options may
be granted, as specified in Section 13.


 


8.2           CONDITIONS
ON OPTIONS.  In granting an Option, the
Committee may establish any conditions that it determines are consistent with
the purposes and provisions of the Plan, including, without limitation, a
condition that the granting of an Option is subject to the surrender for
cancellation of any or all outstanding Options held by the Optionee.  Any new Option made under this section may
contain such terms and conditions as the Committee may determine, including an
exercise price that is lower than that of any surrendered Option.


 


8.3           SELECTIVE
AMENDMENTS.  Any amendment or alteration
of the Plan may be limited to, or may exclude from its effect, particular classes
of Optionees.


 


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Section 9 - RESTRICTION
ON TRANSFER


 


9.1           RESTRICTION
ON TRANSFER.  No Optionee shall sell,
assign, transfer or otherwise dispose of any of his Option Stock for (i) at
least 12 months following exercise of the Option, or (ii) before his death or
Disability if such event occur sooner, and thereafter not until (a) he has
received a bona fide written offer to buy the Option Stock and has delivered to
the Company an irrevocable written offer to sell any such shares of Option
Stock at any time within 60 days after delivery of the offer and at a price per
share equal to the bona fide offer, and (b) the Company shall have failed to
accept such offer within the 60-day period. 
To accept the offer, the Company shall deliver notice of its acceptance
of its offer with 60 days after delivery of offer. Payment for the Option Stock
shall be made as provided in Section 9.4. 
The restrictions imposed by this Section 9.1 shall not apply to the
transfer by operation of law to a deceased Optionee’s personal representative
or to persons who acquire the Option Stock by bequest or inheritance (the “Heir”),
but shall apply to the Option Stock further transferred by that personal
representative or Heir.


 


9.2           DEATH
OR DISABILITY.  With respect to any
Option Stock acquired by exercise of an Option after the Optionee’s death or
Disability, the personal representative or Heir shall sell his Option Stock and
the Company shall purchase his Option Stock at a price per share equal to Book
Value divided by the total number of shares of Stock outstanding as of the date
Book Value is determined.  Payment for
the Option Stock shall be made as provided in Section 9.4. For purposes of this
paragraph, “Book Value” shall be determined as of the end of the month
preceding the date of sale as determined on the regular books of account of the
Company.


 


9.3           EFFECT
OF A CHANGE IN CONTROL.  If a Change in
Control occurs as a result of the sale of securities of the Company or Bank for
cash, the purchase price in Section 9.2 shall be the greater of Fair Market
Value, or the case sale price per share of stock involved in the Change in
Control transaction.  If the Option Stock
is converted into the stock of another entity, or otherwise becomes readily
tradable on a public securities market, the Optionee shall not be bound to sell
his Option Stock under these stock restrictions and the right of first refusal
and restriction on transfer in Section 9.1 shall no longer apply and neither
the Optionee nor the Company shall be bound thereby.


 


9.4           PAYMENT
FOR OPTION STOCK.  The Company hall make
payment in cash for any Option Stock that it purchases pursuant to this Section
9 within 30 days after the date when the Company delivers notice of its acceptance
of the offer made pursuant to Section 9.1, or six months after the death or
Disability that triggers purchases pursuant to Section 9.2.  The Optionee or personal representative shall
surrender certificates representing the offered Option Stock at the time the
Company makes such payment.


 


9.5           RESTRICTION
ON PLEDGE.  No Optionee shall, without
the prior written consent of the Company, pledge, mortgage or otherwise
encumber any of his Option Stock.


 


Section 10 - GENERAL
PROVISIONS


 


10.1         UNFUNDED
STATUS OF PLAN.  The Plan is intended to
constitute an “unfunded” plan for incentive compensation, and the Plan is not
intended to constitute a plan subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended, and shall not extend, with
respect to any payments not yet made to an Optionee, any rights that are
greater than those of a general creditor of the Company.


 


10.2         TRANSFERS,
LEAVES OF ABSENCE AND OTHER CHANGES IN EMPLOYMENT STATUS.  For purposes of the Plan (i) a transfer of an
Employee from the Company to a Subsidiary, or vice versa, or from one
Subsidiary to another; or (ii) a leave of absence, duly authorized in writing
by the Company or a Subsidiary, for military service or sickness, or for any
other purpose approved by the Company or a Subsidiary if the period of such
leave does not exceed 90 days; or (iii) any leave of absence in excess of 90
days approved by the Company, shall not be deemed a Termination of
Employment.  The Committee, in its sole
discretion subject to the terms of the Stock Option Agreement, shall determine
the disposition of all Options made under the Plan in all cases involving any
substantial change in employment status other than as specified herein.


 


10.3         DISTRIBUTION
OF STOCK -SECURITIES RESTRICTIONS.  The
Committee may require Optionees receiving Stock pursuant to any Option under
the Plan to represent to and agree with the Company in writing that the
Optionee is acquiring the shares for investment without a view to distribution
thereof.  No shares


 


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shall be issued or transferred pursuant to an Option
unless such issuance or transfer complies with all relevant provisions of law,
including but not limited to, the (i) limitations, if any, imposed in the state
of issuance or transfer, (ii) restrictions, if any, imposed by the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, and (iii) requirements of any
stock exchange upon which the Company’s shares may then be listed.  The certificates for such shares may include
any legend which the Committee deems appropriate to reflect any restrictions on
transfer.


 


10.4         ASSIGNMENT
PROHIBITED.  Subject to the provisions of
the Plan and the Stock Option Agreement, no Option shall be assigned,
transferred, pledged or otherwise encumbered by the Optionee otherwise than by
will or by the laws of descent and distribution, and such Options shall be
exercisable, during the Optionee’s lifetime, only by the Optionee.  Options shall not be pledged or hypothecated
in any way, and shall not be subject to any execution, attachment, or similar
process.  Any attempted transfer,
assignment, pledge, hypothecation or other disposition of an Option or Option
Stock contrary to the provisions of the Plan, or the levy of any process upon
an Option or Option Stock, shall be null, void and without effect.


 


10.5         OTHER
COMPENSATION PLANS.  Nothing contained in
the Plan shall prevent the Company or the Bank from adopting other compensation
arrangements, subject to stockholder approval if such approval is required.


 


10.6         AUTHORITY
LIMITED TO COMMITTEE.  No person shall at
any time have any right to receive an Option hereunder and no person shall have
authority to enter into an agreement on behalf of the Company for the granting
of an Option or to make any representation or warranty with respect thereto,
except as granted by the Committee. 
Optionees shall have no rights in respect to any Option except as set
forth in the Plan and the applicable Stock Option Agreement.


 


10.7         NO
RIGHT TO EMPLOYMENT.  Neither the action
of the Company in establishing the Plan, nor any action taken by it or by the
Board of Directors or the Committee under the Plan or any Stock Option Agreement,
or any provision of the Plan, shall be construed as giving to any person the
right to be retained in the employ of the Company or any Subsidiary.


 


10.8         CHANGE
OF CONTROL.  In the event of a Change of
Control, Options granted under the Plan shall become exercisable in full
whether or not otherwise exercisable at such time, and any such Option shall
remain exercisable in full thereafter until it expires pursuant to its terms.


 


10.9         OPTION
PERIOD.  No Option granted under the Plan
shall be exercisable or payable more than 10 years from the date of grant.


 


10.10       NOT A
SHAREHOLDER.  The person or persons
entitled to exercise, or who have exercised, an Option shall not be entitled to
any rights as a shareholder of the Company with respect to any shares subject
to the Option until such person or persons shall have become the holder of
record of such shares.


 


Section 11 - TAXES


 


11.1         TAX
WITHHOLDING.  All Optionees shall make
arrangements satisfactory to the Committee to pay to the Company, at the time
of exercise in the case of a Nonqualified Stock Option, any federal, state or
local taxes required to be withheld with respect to such shares.  If such Optionee shall fail to make such tax
payments as are required, the Company and its Subsidiaries 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 Optionee.


 


11.2         SHARE
WITHHOLDING.  If permitted by the
Committee, the withholding obligation may be satisfied by the Company retaining
shares of Stock with a fair market value equal to the amount required to be
withheld.


 


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Section 12 - EFFECTIVE
DATE OF PLAN


 


The Plan shall be effective on the date (the “Effective
Date”) when the Board of Directors adopts the Plan, subject to approval of the
Plan by a majority of the total votes eligible to be cast at a meeting of
shareholders following adoption of the Plan by the Board of Directors, which
vote shall be taken within 12 months of the Effective Date; provided, however,
that Options may be granted before obtaining shareholder approval of the Plan,
but any such Options shall be contingent upon such shareholder approval being
obtained and may not be exercised before such approval.


 


Section 13 - TERM OF PLAN


 


Unless terminated earlier by the Board of Directors,
no Option shall be granted under the Plan more than ten years after the
Effective Date as defined in Section 12.


 


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