EX-10.1






Exhibit 10.1




SYNOVIS LIFE TECHNOLOGIES, INC.

2006 STOCK INCENTIVE PLAN

(as amended and restated as of December 11, 2008)



1. Purpose of Plan.




     The purpose of the Synovis Life Technologies, Inc. 2006 Stock Incentive Plan (the “Plan”) is
to advance the interests of Synovis Life Technologies, Inc. (the “Company”) and its shareholders by
enabling the Company and its Subsidiaries to attract and retain qualified individuals through
opportunities for equity participation in the Company, and to reward those individuals who
contribute to the achievement of the Company’ economic objectives.


2. Definitions.




     The following terms will have the meanings set forth below, unless the context clearly
otherwise requires:



     2.1 “Board” means the Board of Directors of the Company.



     2.2 “Broker Exercise Notice” means a written notice pursuant to which a Participant,
upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of
shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the
Option and/or any related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such exercise directly to such
broker or dealer or their nominee.



     2.3 “Cause” means (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate
injury or attempted injury, in each case related to the Company or any Subsidiary, (ii) conviction
of a gross misdemeanor or felony, or any other offense that, in the opinion of the Committee, is
likely to have a material adverse effect upon the Company or its reputation, (iii) any intentional
and deliberate breach of a duty or duties that, individually or in the aggregate, are material in
relation to the Participant’s overall duties, or (iv) any breach of any confidentiality,
non-compete or non-solicitation agreement entered into with the Company or any Subsidiary.



     2.4 “Change in Control” means an event described in Section 13.1 of the Plan;
provided, however, if distribution of an Incentive Award subject to Section 409A of the Code is
triggered by a Change in Control, the term Change in Control will mean a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion of the assets of the
Company, as such term is defined in Section 409A of the Code and the regulations and rulings issued
thereunder.



     2.5 “Code” means the Internal Revenue Code of 1986, as amended.



     2.6 “Committee” means the group of individuals administering the Plan, as provided in
Section 3 of the Plan.



 









 





     2.7 “Common Stock” means the common stock of the Company, par value $0.01 per share,
or the number and kind of shares of stock or other securities into which such Common Stock may be
changed in accordance with Section 4.3 of the Plan.



     2.8 “Disability” means the disability of the Participant such as would entitle the
Participant to receive disability income benefits pursuant to the long-term disability plan of the
Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to
the Participant, the permanent and total disability of the Participant within the meaning of
Section 22(e)(3) of the Code; provided, however, if distribution of an Incentive Award subject to
Section 409A of the Code is triggered by an Eligible Recipient’s Disability, such term will mean
that the Eligible Recipient is disabled as defined by Section 409A of the Code and the regulations
and rulings issued thereunder.



     2.9 “Eligible Recipients” means all employees (including, without limitation, officers
and directors who are also employees) of the Company or any Subsidiary, and any non-employee
directors, consultants, advisors and independent contractors of the Company or any Subsidiary.



     2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     2.11 “Fair Market Value” means, with respect to the Common Stock, as of any date: (i)
the closing sale price of the Common Stock as reported on the Nasdaq Global Market System or on any
national exchange (or, if no shares were traded on such date, as of the next preceding date on
which there was such a trade); or (ii) if the Common Stock is not so listed, admitted to unlisted
trading privileges, or reported on any national exchange or on the Nasdaq Global Market System, the
closing sale price as of such date at the end of the regular trading session, as reported by the
Nasdaq SmallCap Market, OTC Bulletin Board, the Bulletin Board Exchange (BBX) or the Pink Sheets,
LLC, or other comparable service (or, if no shares were traded or quoted on such date, as of the
next preceding date on which there was such a trade or quote); or (iii) if the Common Stock is not
so listed or reported, such price as the Committee determines in good faith by the reasonable
application of a reasonable valuation method, taking into account all available information
material to the value of the Common Stock, and consistent with the definition of “fair market
value” under Section 409A of the Code.



     2.12 “Good Reason,” unless otherwise defined in an agreement evidencing an Incentive
Award, means the occurrence of any of the following in connection with a Change in Control: (i) a
substantial diminution in the Participant’s authority, duties or responsibilities as in effect
prior to the Change in Control, (ii) a reduction by the Company in the Participant’s base salary,
or an adverse change in the form or timing of the payment thereof, as in effect immediately prior
to the Change in Control or as thereafter increased, or (iii) the Company’s requiring the
Participant to be based at any office or location that is more than fifty (50) miles further from
the office or location thereof immediately preceding the Change in Control; provided, however, Good
Reason shall not include any of the circumstances or events described above unless (A) the
Participant has first provided written notice of such circumstance or event to the Company or its
successor and the Company or such successor has not corrected such circumstance or event within
thirty (30) days thereafter; and (B) the Participant has not otherwise consented to the occurrence
in writing.



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     2.13 “Incentive Award” means an Option, Stock Appreciation Right, Restricted Stock
Award, Stock Unit Award or Performance Award granted to an Eligible Recipient pursuant to the Plan.



     2.14 “Incentive Stock Option” means a right to purchase Common Stock granted to an
Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option”
within the meaning of Section 422 of the Code.



     2.15 “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an
Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock
Option.



     2.16 “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.



     2.17 “Participant” means an Eligible Recipient who receives one or more Incentive
Awards under the Plan.



     2.18 “Performance Award” means a right granted to an Eligible Recipient pursuant to
Section 10 of the Plan to receive an amount of cash, a number of shares of Common Stock, or a
combination of both, contingent upon achievement of specified objectives during a specified period.



     2.19 “Previously Acquired Shares” means shares of Common Stock that are already owned
by the Participant, or with respect to any Incentive Award, that are to be issued to the
Participant upon the grant, exercise or vesting of such Incentive Award.



     2.20 “Restricted Stock Award” means an award of shares of Common Stock granted to an
Eligible Recipient pursuant to Section 8 of the Plan that are subject to restrictions on
transferability and/or a risk of forfeiture.



     2.21 “Retirement” means termination of employment or service at age 55 or older and
completion of at least ten years of continuous service.



     2.22 “Securities Act” means the Securities Act of 1933, as amended.



     2.23 “Stock Appreciation Right” means a right granted to an Eligible Recipient
pursuant to Section 7 of the Plan to receive a payment from the Company, in the form of shares of
Common Stock, cash or a combination of both, equal to the difference between the Fair Market Value
of one or more shares of Common Stock and a specified exercise price of such shares.



     2.24 “Stock Unit Award” means a right granted to an Eligible Recipient pursuant to
Section 9 of the Plan to receive the Fair Market Value of one or more shares of Common Stock,
payable in cash, shares of Common Stock, or a combination of both, the payment, issuance, retention
and /or vesting of which is subject to the satisfaction of specified conditions, which may include
achievement of specified objectives.



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     2.25 “Subsidiary” means any entity that is directly or indirectly controlled by the
Company or any entity in which the Company has a significant equity interest, as determined by the
Committee.



     2.26 “Tax Date” means the date any withholding tax obligation arises under the Code
for a Participant with respect to an Incentive Award.


3. Plan Administration.




     3.1 The Committee. The Plan will be administered by the Board or by a committee of
the Board. So long as the Company has a class of its equity securities registered under Section 12
of the Exchange Act, any committee administering the Plan will consist solely of two or more
members of the Board who are “non-employee directors” within the meaning of Rule 16b-3 under the
Exchange Act and who are “independent” as required by the listing standards of the Nasdaq Stock
Market (or other applicable market or exchange on which the Company’s Common Stock may be quoted or
traded. Such a committee, if established, will act by majority approval of the members (unanimous
approval with respect to action by written consent), and a majority of the members of such a
committee will constitute a quorum. As used in the Plan, “Committee” will refer to the Board or
to such a committee, if established. To the extent consistent with applicable corporate law of the
Company’s jurisdiction of incorporation, the Committee may delegate to any officers of the Company
the duties, power and authority of the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however, that only the Committee may exercise
such duties, power and authority with respect to Eligible Recipients who are subject to Section 16
of the Exchange Act. The Committee may exercise its duties, power and authority under the Plan in
its sole and absolute discretion without the consent of any Participant or other party, unless the
Plan specifically provides otherwise. Each determination, interpretation or other action made or
taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for
all purposes and on all persons, and no member of the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any Incentive Award granted under the
Plan.



     3.2 Authority of the Committee.




     (a) In accordance with and subject to the provisions of the Plan, the Committee will
have the authority to determine all provisions of Incentive Awards as the Committee may deem
necessary or desirable and as consistent with the terms of the Plan, including, without
limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii)
the nature and extent of the Incentive Awards to be made to each Participant (including the
number of shares of Common Stock to be subject to each Incentive Award, any exercise price,
the manner in which Incentive Awards will vest or become exercisable and whether Incentive
Awards will be granted in tandem with other Incentive Awards) and the form of written
agreement, if any, evidencing such Incentive Award; (iii) the time or times when Incentive
Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions
and other conditions to which the payment or vesting of Incentive Awards may be subject. In
addition, the Committee will have the



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authority under the Plan in its sole discretion to pay the economic value of any
Incentive Award in the form of cash, Common Stock or any combination of both.




     (b) Subject to Section 3.2(d), below, the Committee will have the authority under the
Plan to amend or modify the terms of any outstanding Incentive Award in any manner,
including, without limitation, the authority to modify the number of shares or other terms
and conditions of an Incentive Award, extend the term of an Incentive Award, accelerate the
exercisability or vesting or otherwise terminate any restrictions relating to an Incentive
Award, accept the surrender of any outstanding Incentive Award or, to the extent not
previously exercised or vested, authorize the grant of new Incentive Awards in substitution
for surrendered Incentive Awards; provided, however that the amended or modified terms are
permitted by the Plan as then in effect and that any Participant adversely affected by such
amended or modified terms has consented to such amendment or modification.




     (c) In the event of (i) any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split, combination of shares, rights
offering, extraordinary dividend or divestiture (including a spin-off) or any other change
in corporate structure or shares; (ii) any purchase, acquisition, sale, disposition or
write-down of a significant amount of assets or a significant business; (iii) any change in
accounting principles or practices, tax laws or other such laws or provisions affecting
reported results; (iv) any uninsured catastrophic losses or extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 or in management’s
discussion and analysis of financial performance appearing in the Company’s annual report to
shareholders for the applicable year; or (v) any other similar change, in each case with
respect to the Company or any other entity whose performance is relevant to the grant or
vesting of an Incentive Award, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving corporation)
may, without the consent of any affected Participant, amend or modify the vesting criteria
of any outstanding Incentive Award that is based in whole or in part on the financial
performance of the Company (or any Subsidiary or division or other subunit thereof) or such
other entity so as equitably to reflect such event, with the desired result that the
criteria for evaluating such financial performance of the Company or such other entity will
be substantially the same (in the sole discretion of the Committee or the board of directors
of the surviving corporation) following such event as prior to such event; provided,
however, that the amended or modified terms are permitted by the Plan as then in effect.




     (d) Notwithstanding any other provision of this Plan other than Section 4.3, the
Committee may not, without prior approval of the Company’s shareholders, seek to effect any
re-pricing of any previously granted, “underwater” Option or Stock Appreciation Right by:
(i) amending or modifying the terms of the Option or Stock Appreciation Right to lower the
exercise price; (ii) canceling the underwater Option or Stock Appreciation Right and
granting either (A) replacement Options or Stock Appreciation Rights having a lower exercise
price; (B) Restricted Stock Awards; or (C) Stock Unit Awards or Performance Awards in
exchange; or (iii) repurchasing the



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underwater Options or Stock Appreciation Rights and granting new Incentive Awards under
this Plan. For purposes of this Section 3.2(d), Options and Stock Appreciation Rights will
be deemed to be “underwater” at any time when the Fair Market Value of the Common Stock is
less than the exercise price of the Option or Stock Appreciation Right.




     (e) In addition to the authority of the Committee under Section 3.2(b) and
notwithstanding any other provision of the Plan, the Committee may, in its sole discretion,
amend the terms of the Plan or Incentive Awards with respect to Participants resident
outside of the United States or employed by a non-U.S. Subsidiary in order to comply with
local legal requirements, to otherwise protect the Company’s or Subsidiary’s interests, or
to meet objectives of the Plan, and may, where appropriate, establish one or more sub-plans
(including the adoption of any required rules and regulations) for the purposes of
qualifying for preferred tax treatment under foreign tax laws. The Committee shall have no
authority, however, to take action pursuant to this Section 3.2(e): (i) to reserve shares or
grant Incentive Awards in excess of the limitations provided in Section 4.1; (ii) to effect
any re-pricing in violation of Section 3.2(d); (iii) to grant Options or Stock Appreciation
Rights having an exercise price in violation of Section 6.2 or 7.2, as the case may be; or
(iv) for which shareholder approval would then be required pursuant to Section 422 of the
Code or the rules of the Nasdaq Stock Market (or other applicable market or exchange on
which the Company’s Common Stock may be quoted or traded).




     (f) Notwithstanding anything in this Plan to the contrary, the Committee will determine
whether an Incentive Award is subject to the requirements of Section 409A of the Code and,
if determined to be subject to Section 409A of the Code, the Committee will make such
Incentive Award subject to such written terms and conditions determined necessary or
desirable to cause such Incentive Award to comply in form with the requirements of Section
409A of the Code. Further, the Plan, as it relates to Incentive Awards that are subject to
Section 409A of the Code, will be administered in a manner that is intended to comply with
the requirements of Section 409A of the Code and any regulations or rulings issued
thereunder.


4. Shares Available for Issuance.




     4.1 Maximum Number of Shares Available; Certain Restrictions on Awards. Subject to
adjustment as provided in Section 4.3 of the Plan, the maximum number of shares of Common Stock
that will be available for issuance under the Plan will be the sum of:




     (a) 1,500,000;




     (b) the number of shares subject to outstanding awards under the Company’s 1995 Stock
Incentive Plan as of the expiration of such plan on December 18, 2005 which are not
thereafter issued or which have been issued but are subsequently forfeited and which would
otherwise have been available for further issuance under such plan, assuming, however, that
the provisions of Section 4.2 of the Plan applied thereto;



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     (c) the number of shares issued or Incentive Awards granted under the Plan in
connection with the settlement, assumption or substitution of outstanding awards or
obligations to grant future awards as a condition of the Company and/or any Subsidiary(ies)
acquiring, merging or consolidating with another entity; and




     (d) the number of shares that are unallocated and available for grant under a stock
plan assumed by the Company or any Subsidiary(ies) in connection with the merger,
consolidation, or acquisition of another entity by the Company and/or any of its
Subsidiaries, based on the applicable exchange ratio and other transaction terms, but only
to the extent that such shares may be utilized by the Company or its Subsidiaries following
the transaction pursuant to the rules and regulations of the Nasdaq Stock Market (or other
applicable market or exchange on which the Company’s Common Stock may be quoted or traded).


Notwithstanding any other provisions of the Plan to the contrary, (i) no Participant in the Plan
may be granted Options and Stock Appreciation Rights relating to more than 50,000 shares of Common
Stock in the aggregate during any calendar year; (ii) no Participant in the Plan may be granted
Restricted Stock Awards, Stock Unit Awards and Performance Awards relating to more than 25,000
shares of Common Stock in the aggregate during any calendar year; and (iii) no more than 1,500,000
shares of Common Stock may be issued pursuant to the exercise of Incentive Stock Options granted
under the Plan; provided, however, that the limits in clauses (i) and (ii), above, will be 150,000
shares and 75,000 shares, respectively, as to a Participant who, during the calendar year, is first
appointed or elected as an officer, hired as an employee, elected as a director or retained as a
consultant by the Company or who receives a promotion that results in an increase in
responsibilities or duties. All of the foregoing share limits are subject, in each case, to
adjustment as provided in Section 4.3 of the Plan. The limits in clauses (i) and (ii) will not
apply, however, to the extent Incentive Awards are granted as a result of the Company’s assumption
or substitution of like awards issued by any acquired, merged or consolidated entity pursuant to
the applicable transaction terms, nor will any Incentive Stock Options issued in any such
assumption or substitution pursuant to applicable provisions of the Code count towards the limit in
clause (iii).




     4.2 Accounting for Incentive Awards. Shares of Common Stock that are issued under the
Plan or that are potentially issuable pursuant to outstanding Incentive Awards will be applied to
reduce the maximum number of shares of Common Stock remaining available for issuance under the
Plan; provided, however, that the total number of shares that may be issued under the Plan shall be
reduced by one additional share for each share issued pursuant to an Incentive Award other than an
Option or a Stock Appreciation Right, or potentially issuable pursuant to an outstanding Incentive
Award other than an Option or a Stock Appreciation Right. All shares so subtracted from the amount
available under the Plan with respect to an Incentive Award that lapses, expires, is forfeited
(including issued shares forfeited under a Restricted Stock Award) or for any reason is terminated
unexercised or unvested or is settled or paid in cash or any form other than shares of Common Stock
will automatically again become available for issuance under the Plan; provided, however, that (i)
any shares which would have been issued upon any exercise of an Option but for the fact that the
exercise price was paid by a “net exercise” pursuant to Section 6.4(b) or the tender or attestation
as to ownership of Previously Acquired



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Shares will not again become available for issuance under the Plan; and (ii) shares covered by
a Stock Appreciation Right, to the extent exercised, will not again become available for issuance
under the Plan.




     4.3 Adjustments to Shares and Incentive Awards. In the event of any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, divestiture or extraordinary dividend (including a
spin-off) or any other change in the corporate structure or shares of the Company, the Committee
(or, if the Company is not the surviving corporation in any such transaction, the board of
directors of the surviving corporation) will make appropriate adjustment (which determination will
be conclusive) as to the number and kind of securities or other property (including cash) available
for issuance or payment under the Plan and, in order to prevent dilution or enlargement of the
rights of Participants, (a) the number and kind of securities or other property (including cash)
subject to outstanding Incentive Awards, and (b) the exercise price of outstanding Options and
Stock Appreciation Rights.


5. Participation. 




     Participants in the Plan will be those Eligible Recipients who, in the judgment of the
Committee, have contributed, are contributing or are expected to contribute to the achievement of
economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from
time to time one or more Incentive Awards, singly or in combination or in tandem with other
Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards
will be deemed to be granted as of the date specified in the grant resolution of the Committee,
which date will be the date of any related agreement with the Participant.


6. Options.




     6.1 Grant. An Eligible Recipient may be granted one or more Options under the Plan,
and such Options will be subject to such terms and conditions, consistent with the other provisions
of the Plan, as may be determined by the Committee in its sole discretion. The Committee may
designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock
Option. To the extent that any Incentive Stock Option granted under the Plan ceases for any reason
to qualify as an “incentive stock option” for purposes of Section 422 of the Code, such Incentive
Stock Option will continue to be outstanding for purposes of the Plan but will thereafter be deemed
to be a Non-Statutory Stock Option.



     6.2 Exercise Price. The per share price to be paid by a Participant upon exercise of
an Option will be determined by the Committee in its discretion at the time of the Option grant,
provided that such price will not be less than 100% of the Fair Market Value of one share of Common
Stock on the date of grant (or 110% of the Fair Market Value of one share of Common Stock on the
date of grant of an Incentive Stock Option if, at the time the Incentive Stock Option is granted,
the Participant owns, directly or indirectly, more than 10% of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary corporation of the Company).
Notwithstanding the foregoing, to the extent that Options are granted under the Plan as a result of
the Company’s assumption or substitution of options issued by any acquired,



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merged or consolidated entity, the exercise price for such Options shall be the price
determined by the Committee pursuant to the conversion terms applicable to the transaction.




     6.3 Exercisability and Duration. An Option will become exercisable at such times and
in such installments and upon such terms and conditions as may be determined by the Committee in
its sole discretion at the time of grant (including without limitation (i) the achievement of one
or more specified objectives; and/or that (ii) the Participant remain in the continuous employ or
service of the Company or a Subsidiary for a certain period; provided, however, that no Option may
be exercisable after seven (7) years from its date of grant (five years from its date of grant in
the case of an Incentive Option if, at the time the Incentive Stock Option is granted, the
Participant owns, directly or indirectly, more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary corporation of the Company).



     6.4 Payment of Exercise Price.




     (a) The total purchase price of the shares to be purchased upon exercise of an Option
will be paid entirely in cash (including check, bank draft or money order); provided,
however, that the Committee, in its sole discretion and upon terms and conditions
established by the Committee, may allow such payments to be made, in whole or in part, by
(i) tender of a Broker Exercise Notice; (ii) by tender, or attestation as to ownership, of
Previously Acquired Shares that have been held for the period of time necessary to avoid a
charge to the Company’s earnings for financial reporting purposes and that are otherwise
acceptable to the Committee; (iii) by a “net exercise” of the Option (as further described
in paragraph (b), below); or (iv) by a combination of such methods.




     (b) In the case of a “net exercise” of an Option, the Company will not require a
payment of the exercise price of the Option from the Participant but will reduce the number
of shares of Common Stock issued upon the exercise by the largest number of whole shares
that has a Fair Market Value on the exercise date that does not exceed the aggregate
exercise price for the shares exercised under this method. Shares of Common Stock will no
longer be outstanding under an Option (and will therefore not thereafter be exercisable)
following the exercise of such Option to the extent of (i) shares used to pay the exercise
price of an Option under the “net exercise,” (ii) shares actually delivered to the
Participant as a result of such exercise and (iii) any shares withheld for purposes of tax
withholding pursuant to Section 12.1.




     (c) Previously Acquired Shares tendered or covered by an attestation as payment of an
Option exercise price will be valued at their Fair Market Value on the exercise date.



     6.5 Manner of Exercise. An Option may be exercised by a Participant in whole or in
part from time to time, subject to the conditions contained in the Plan and in the agreement
evidencing such Option, by delivery in person, by facsimile or electronic transmission or through
the mail of written notice of exercise to the Company at its principal executive office in St.
Paul,



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Minnesota and by paying in full the total exercise price for the shares of Common Stock to be
purchased in accordance with Section 6.4 of the Plan.



7. Stock Appreciation Rights.




     7.1 Grant. An Eligible Recipient may be granted one or more Stock Appreciation Rights
under the Plan, and such Stock Appreciation Rights will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the Committee in its sole
discretion. The Committee will have the sole discretion to determine the form in which payment of
the economic value of Stock Appreciation Rights will be made to a Participant (i.e., cash, Common
Stock or any combination thereof) or to consent to or disapprove the election by a Participant of
the form of such payment.



     7.2 Exercise Price. The exercise price of a Stock Appreciation Right will be
determined by the Committee, in its discretion, at the date of grant but may not be less than 100%
of the Fair Market Value of one share of Common Stock on the date of grant, except as provided in
Section 7.4, below. Notwithstanding the foregoing, to the extent that Stock Appreciation Rights
are granted under the Plan as a result of the Company’s assumption or substitution of stock
appreciation rights issued by any acquired, merged or consolidated entity, the exercise price for
such Stock Appreciation Rights shall be the price determined by the Committee pursuant to the
conversion terms applicable to the transaction.



     7.3 Exercisability and Duration. A Stock Appreciation Right will become exercisable
at such time and in such installments as may be determined by the Committee in its sole discretion
at the time of grant; provided, however, that no Stock Appreciation Right may be exercisable after
seven (7) years from its date of grant. A Stock Appreciation Right will be exercised by giving
notice in the same manner as for Options, as set forth in Section 6.5 of the Plan.



     7.4 Grants in Tandem with Options. Stock Appreciation Rights may be granted alone or
in addition to other Incentive Awards, or in tandem with an Option, either at the time of grant of
the Option or at any time thereafter during the term of the Option. A Stock Appreciation Right
granted in tandem with an Option shall cover the same number of shares of Common Stock as covered
by the Option (or such lesser number as the Committee may determine), shall be exercisable at such
time or times and only to the extent that the related Option is exercisable, have the same term as
the Option and shall have an exercise price equal to the exercise price for the Option. Upon the
exercise of a Stock Appreciation Right granted in tandem with an Option, the Option shall be
canceled automatically to the extent of the number of shares covered by such exercise; conversely,
upon exercise of an Option having a related Stock Appreciation Right, the Stock Appreciation Right
shall be canceled automatically to the extent of the number of shares covered by the Option
exercise.



8. Restricted Stock Awards.



     8.1 Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards
under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the



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Committee in its sole discretion. The Committee may impose such restrictions or conditions,
not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards as
it deems appropriate, including, without limitation, (i) the achievement of one or more specified
objectives; and/or that (ii) the Participant remain in the continuous employ or service of the
Company or a Subsidiary for a certain period.




     8.2 Rights as a Shareholder; Transferability. Except as provided in Sections 8.1,
8.3, 8.4 and 14.3 of the Plan, a Participant will have all voting, dividend, liquidation and other
rights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award
under this Section 8 upon the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.



     8.3 Dividends and Distributions. Unless the Committee determines otherwise in its
sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant
or at any time after the grant of the Restricted Stock Award), any dividends or distributions
(including regular quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the
shares to which such dividends or distributions relate. The Committee will determine in its sole
discretion whether any interest will be paid on such dividends or distributions.



     8.4 Enforcement of Restrictions. To enforce the restrictions referred to in this
Section 8, the Committee may place a legend on the stock certificates referring to such
restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock
certificates, together with duly endorsed stock powers, in the custody of the Company or its
transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock
powers, in a certificateless book-entry stock account with the Company’s transfer agent.


9. Stock Unit Awards.




     An Eligible Recipient may be granted one or more Stock Unit Awards under the Plan, and such
Stock Unit Awards will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole discretion. The
Committee may impose such restrictions or conditions, not inconsistent with the provisions of the
Plan, to the payment, issuance, retention and/or vesting of such Stock Unit Awards as it deems
appropriate, including, without limitation, (i) the achievement of one or more specified
objectives; and/or that (ii) the Participant remain in the continuous employ or service of the
Company or a Subsidiary for a certain period; provided, however, that in all cases payment of a
Stock Unit Award will be made within two and one-half months following the end of the Eligible
Recipient’s tax year during which receipt of the Stock Unit Award is no longer subject to a
“substantial risk of forfeiture” within the meaning of Section 409A of the Code, unless otherwise
determined by the Committee pursuant to Section 3.2(f), above.


10. Performance Awards.




     An Eligible Recipient may be granted one or more Performance Awards under the Plan, and such
Performance Awards will be subject to such terms and conditions, if any, consistent



11









 




with the other provisions of the Plan, as may be determined by the Committee in its sole
discretion, including, but not limited to, the achievement of one or more specified objectives;
provided, however, that in all cases payment of the Performance Award will be made within two and
one-half months following the end of the Eligible Recipient’s tax year during which receipt of the
Performance Award is no longer subject to a “substantial risk of forfeiture” within the meaning of
Section 409A of the Code, unless otherwise determined by the Committee pursuant to Section 3.2(f),
above.



11. Effect of Termination of Employment or Other Service. The following provisions shall
apply upon termination of a Participant’s employment or other service with the Company and all
Subsidiaries, except to the extent that the Committee provides otherwise in an agreement evidencing
an Incentive Award at the time of grant or determines pursuant to Section 11.3.




     11.1 Termination of Employment Due to Death, Disability or Retirement. In the event a
Participant’s employment or other service with the Company and all Subsidiaries is terminated by
reason of death, Disability or Retirement:




     (a) All outstanding Options and Stock Appreciation Rights then held by the Participant
will, to the extent exercisable as of such termination, remain exercisable in full for a
period of twelve months after such termination (but in no event after the expiration date of
any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not
exercisable as of such termination will be forfeited and terminate.




     (b) All Restricted Stock Awards then held by the Participant that have not vested as of
such termination will be terminated and forfeited; and




     (c) All outstanding but unpaid Stock Unit Awards and Performance Awards then held by
the Participant will be terminated and forfeited.



     11.2 Termination of Employment for Reasons Other than Death, Disability or Retirement.
Subject to Section 11.4 of the Plan, in the event a Participant’s employment or other service is
terminated with the Company and all Subsidiaries for any reason other than death, Disability or
Retirement, or a Participant is in the employ or service of a Subsidiary and the Subsidiary ceases
to be a Subsidiary of the Company (unless the Participant continues in the employ or service of the
Company or another Subsidiary):




     (a) All outstanding Options and Stock Appreciation Rights then held by the Participant
will, to the extent exercisable as of such termination, remain exercisable in full for a
period of three months after such termination (but in no event after the expiration date of
any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not
exercisable as of such termination will be forfeited and terminate;




     (b) All Restricted Stock Awards then held by the Participant that have not vested as of
such termination will be terminated and forfeited; and



12









 






     (c) All outstanding but unpaid Stock Unit Awards and Performance Awards then held by
the Participant will be terminated and forfeited.



     11.3 Modification of Rights Upon Termination. Notwithstanding the other provisions of
this Section 11, upon a Participant’s termination of employment or other service with the Company
and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time
on or after the date of grant, including following such termination), except as provided in clause
(ii), below, cause Options or Stock Appreciation Rights (or any part thereof) then held by such
Participant to terminate, become or continue to become exercisable and/or remain exercisable
following such termination of employment or service, and Restricted Stock Awards, Stock Unit Awards
or Performance Awards then held by such Participant to terminate, vest and/or continue to vest or
become free of restrictions and conditions to payment, as the case may be, following such
termination of employment or service, in each case in the manner determined by the Committee;
provided, however, that (i) no Incentive Award may remain exercisable or continue to vest for more
than two years beyond the date such Incentive Award would have terminated if not for the provisions
of this Section 11.3 but in no event beyond its expiration date; and (ii) any such action adversely
affecting any outstanding Incentive Award will not be effective without the consent of the affected
Participant (subject to the right of the Committee to take whatever action it deems appropriate
under Sections 3.2(c), 4.3 and 13 of the Plan).



     11.4 Effects of Actions Constituting Cause. Notwithstanding anything in the Plan to
the contrary, in the event that a Participant is determined by the Committee, acting in its sole
discretion, to have committed any action which would constitute Cause as defined in Section 2.3,
irrespective of whether such action or the Committee’s determination occurs before or after
termination of such Participant’s employment with the Company or any Subsidiary, all rights of the
Participant under the Plan and any agreements evidencing an Incentive Award then held by the
Participant shall terminate and be forfeited without notice of any kind. The Company may defer the
exercise of any Option, the vesting of any Restricted Stock Award or the payment of any Stock Unit
Award or Performance Award for a period of up to forty-five (45) days in order for the Committee to
make any determination as to the existence of Cause.



     11.5 Determination of Termination of Employment or Other Service.




     (a) The change in a Participant’s status from that of an employee of the Company or any
Subsidiary to that of a non-employee consultant, director or advisor of the Company or any
Subsidiary will, for purposes of the Plan, be deemed to result in a termination of such
Participant’s employment with the Company and its Subsidiaries, unless the Committee
otherwise determines in its sole discretion.




     (b) The change in a Participant’s status from that of a non-employee consultant,
director or advisor of the Company or any Subsidiary to that of an employee of the Company
or any Subsidiary will not, for purposes of the Plan, be deemed to result in a termination
of such Participant’s service as a non-employee consultant, director or advisor with the
Company and its Subsidiaries, and such Participant will thereafter be
deemed to be an employee of the Company or its Subsidiaries until such Participant’s
employment is terminated, in which event such Participant will be governed by the



13









 







provisions of this Plan relating to termination of employment or service (subject to
paragraph (a), above).




     (c) Unless the Committee otherwise determines in its sole discretion, a Participant’s
employment or other service will, for purposes of the Plan, be deemed to have terminated on
the date recorded on the personnel or other records of the Company or the Subsidiary for
which the Participant provides employment or other service, as determined by the Committee
in its sole discretion based upon such records; provided, however, if distribution of an
Incentive Award subject to Section 409A of the Code is triggered by a termination of a
Participant’s employment or other service, such termination must also constitute a
“separation from service” within the meaning of Section 409A of the Code.



     11.6 Breach of Confidentiality, Non-Compete or Non-Solicitation Agreements.
Notwithstanding anything in the Plan to the contrary and in addition to the rights of the Committee
under Section 11.4, in the event that a Participant breaches the terms of any confidentiality,
non-compete or non-solicitation agreement entered into with the Company or any Subsidiary
(including a confidentiality, non-compete or non-solicitation agreement made in connection with the
grant of an Incentive Award), whether such breach occurs before or after termination of such
Participant’s employment or other service with the Company or any Subsidiary, the Committee in its
sole discretion may require the Participant to surrender shares of Common Stock received, and to
disgorge any profits (however defined by the Committee), made or realized by the Participant in
connection with any Incentive Awards or any shares issued upon the exercise or vesting of any
Incentive Awards.


12. Payment of Withholding Taxes.




     12.1 General Rules. The Company is entitled to (a) withhold and deduct from future
wages of the Participant (or from other amounts that may be due and owing to the Participant from
the Company or a Subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, foreign, state and local withholding and
employment-related tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an
Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive
Stock Option; (b) withhold cash paid or payable or shares of Common Stock from the shares issued or
otherwise issuable to the Participant in connection with an Incentive Award; or (c) require the
Participant promptly to remit the amount of such withholding to the Company before taking any
action, including issuing any shares of Common Stock, with respect to an Incentive Award.



     12.2 Special Rules. The Committee may, in its sole discretion and upon terms and
conditions established by the Committee, permit or require a Participant to satisfy, in whole or in
part, any withholding or employment-related tax obligation described in Section 12.1 of the Plan by
electing to tender, or by attestation as to ownership of, Previously Acquired Shares that have been
held for the period of time necessary to avoid a charge to the Company’s earnings for financial
reporting purposes and that are otherwise acceptable to the Committee, by delivery of a Broker
Exercise Notice or a combination of such methods. For purposes of satisfying a



14









 




Participant’s withholding or employment-related tax obligation, Previously Acquired Shares
tendered or covered by an attestation will be valued at their Fair Market Value.




13. Change in Control.




     13.1 A “Change in Control” shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:




     (a) the sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a series of related
transactions) to a person or entity that is not controlled by the Company;




     (b) the approval by the shareholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company;




     (c) a merger or consolidation to which the Company is a party if the shareholders of
the Company immediately prior to effective date of such merger or consolidation have
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), immediately
following the effective date of such merger or consolidation, of securities of the surviving
corporation representing (A) more than 50%, but not more than 80%, of the combined voting
power of the surviving corporation’s then outstanding securities ordinarily having the right
to vote at elections of directors, unless such merger or consolidation has been approved in
advance by the Incumbent Directors (as defined below), or (B) 50% or less of the combined
voting power of the surviving corporation’s then outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any approval by the Incumbent
Directors);




     (d) any person becomes after the effective date of the Plan the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of (A) 20% or more,
but not 50% or more, of the combined voting power of the Company’s outstanding securities
ordinarily having the right to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by the Incumbent Directors, or (B)
50% or more of the combined voting power of the Company’s outstanding securities ordinarily
having the right to vote at elections of directors (regardless of any approval by the
Incumbent Directors);




     (e) the Incumbent Directors cease for any reason to constitute at least a majority of
the Board; or




     (f) any other change in control of the Company of a nature that would be required to be
reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or not the Company is
then subject to such reporting requirements.



     For purposes of this Section 13, “Incumbent Directors” of the Company will mean any
individuals who are members of the Board on the Effective Date and any individual who subsequently
becomes a member of the Board whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the Incumbent



15









 




Directors (either by specific vote or by approval of the Company’s proxy statement in which
such individual is named as a nominee for director without objection to such nomination).




     13.2 Acceleration of Vesting. Without limiting the authority of the Committee under
Sections 3.2 and 4.3 of the Plan, if a Change in Control of the Company occurs, then, if approved
by the Committee in its sole discretion either in an agreement evidencing an Incentive Award at the
time of grant or at any time after the grant of an Incentive Award: (a) all Options and Stock
Appreciation Rights will become immediately exercisable in full and will remain exercisable in
accordance with their terms; (b) all Restricted Stock Awards will become immediately fully vested
and non-forfeitable; and (c) any conditions to the payment of Stock Unit Awards and Performance
Awards will lapse. The Committee may make any such acceleration subject to further conditions,
including, but not limited to, conditions relating to (i) the failure of any successor to assume
the Incentive Awards in connection with a Change in Control, or (ii) the Participant’s involuntary
termination, other than for Cause, or voluntary termination for Good Reason, in each case within a
specified period of time following a Change in Control.



     13.3 Cash Payment. If a Change in Control of the Company occurs, then the Committee,
if approved by the Committee in its sole discretion either in an agreement evidencing an Incentive
Award at the time of grant or at any time after the grant of an Incentive Award, and without the
consent of any Participant affected thereby, may determine that: (i) some or all Participants
holding outstanding Options will receive, with respect to some or all of the shares of Common Stock
subject to such Options, as of the effective date of any such Change in Control of the Company,
cash in an amount equal to the excess of the Fair Market Value of such shares immediately prior to
the effective date of such Change in Control of the Company over the exercise price per share of
such Options (or, in the event that there is no excess, that such Options will be terminated); and
(ii) some or all Participants holding Performance Awards will receive, with respect to some or all
of the shares of Common Stock subject to such Performance Awards, as of the effective date of any
such Change in Control of the Company, cash in an amount equal the Fair Market Value of such shares
immediately prior to the effective date of such Change in Control.



     13.4 Limitation on Change in Control Payments. Notwithstanding anything in Section
13.2 or 13.3 of the Plan to the contrary, if, with respect to a Participant, the acceleration of
the vesting of an Incentive Award as provided in Section 13.2 or the payment of cash in exchange
for all or part of an Incentive Award as provided in Section 13.3 (which acceleration or payment
could be deemed a “payment” within the meaning of Section 280G(b)(2) of the Code), together with
any other “payments” that such Participant has the right to receive from the Company or any
corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a
“parachute payment” (as defined in Section 280G(b)(2) of the Code), then the “payments” to such
Participant pursuant to Section 13.2 or 13.3 of the Plan will be reduced to the largest amount as
will result in no portion of such “payments” being subject to the excise tax imposed by Section
4999 of the Code; provided, that such reduction shall be made only if the aggregate amount of the
payments after such reduction exceeds the difference between (A) the amount of such payments absent
such reduction minus (B) the aggregate amount of the excise tax imposed under Section 4999 of the
Code attributable



16









 




to any such excess parachute payments. Notwithstanding the foregoing sentence, if a Participant is subject to a separate agreement
with the Company or a Subsidiary that expressly addresses the potential application of Sections
280G or 4999 of the Code (including, without limitation, that “payments” under such agreement or
otherwise will be reduced, that the Participant will have the discretion to determine which
“payments” will be reduced, that such “payments” will not be reduced or that such “payments” will
be “grossed up” for tax purposes), then this Section 13.4 will not apply, and any “payments” to a
Participant pursuant to Section 13.2 or 13.3 of the Plan will be treated as “payments” arising
under such separate agreement.



14. Rights of Eligible Recipients and Participants; Transferability.




     14.1 Employment or Service. Nothing in the Plan will interfere with or limit in any
way the right of the Company or any Subsidiary to terminate the employment or service of any
Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or
Participant any right to continue in the employ or service of the Company or any Subsidiary.



     14.2 Rights as a Shareholder; Dividends. As a holder of Incentive Awards (other than
Restricted Stock Awards), a Participant will have no rights as a shareholder unless and until such
Incentive Awards are exercised for, or paid in the form of, shares of Common Stock and the
Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan
or otherwise provided by the Committee, no adjustment will be made in the amount of cash payable or
in the number of shares of Common Stock issuable under Incentive Awards denominated in or based on
the value of shares of Common Stock as a result of cash dividends or distributions paid to holders
of Common Stock prior to the payment of, or issuance of shares of Common Stock under, such
Incentive Awards.



     14.3 Restrictions on Transfer.




     (a) Except pursuant to testamentary will or the laws of descent and distribution or as
otherwise expressly permitted by subsections (b) and (c) below, no right or interest of any
Participant in an Incentive Award prior to the exercise (in the case of Options) or vesting
or issuance (in the case of Restricted Stock Awards and Performance Awards) of such
Incentive Award will be assignable or transferable, or subjected to any lien, during the
lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise.




     (b) A Participant will be entitled to designate a beneficiary to receive an Incentive
Award upon such Participant’s death, and in the event of such Participant’s death, payment
of any amounts due under the Plan will be made to, and exercise of any Options or Stock
Appreciation Rights (to the extent permitted pursuant to Section 11 of the Plan) may be made
by, such beneficiary. If a deceased Participant has failed to designate a beneficiary, or
if a beneficiary designated by the Participant fails to survive the Participant, payment of
any amounts due under the Plan will be made to, and exercise of any Options or Stock
Appreciation Rights (to the extent permitted pursuant to Section 11 of the Plan) may be made
by, the Participant’s legal representatives, heirs and legatees. If a deceased Participant
has designated a beneficiary and such beneficiary survives the
Participant but dies before complete payment of all amounts due under the



17









 







Plan or
exercise of all exercisable Options or Stock Appreciation Rights, then such payments will be
made to, and the exercise of such Options or Stock Appreciation Rights may be made by, the
legal representatives, heirs and legatees of the beneficiary.




     (c) Upon a Participant’s request, the Committee may, in its sole discretion, permit a
transfer of all or a portion of a Non-Statutory Stock Option, other than for value, to such
Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, any person sharing such Participant’s household (other
than a tenant or employee), a trust in which any of the foregoing have more than fifty
percent of the beneficial interests, a foundation in which any of the foregoing (or the
Participant) control the management of assets, and any other entity in which these persons
(or the Participant) own more than fifty percent of the voting interests. Any permitted
transferee will remain subject to all the terms and conditions applicable to the Participant
prior to the transfer. A permitted transfer may be conditioned upon such requirements as
the Committee may, in its sole discretion, determine, including, but not limited to
execution and/or delivery of appropriate acknowledgements, opinion of counsel, or other
documents by the transferee.



     14.4 Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to modify
or rescind any previously approved compensation plans or programs of the Company or create any
limitations on the power or authority of the Board to adopt such additional or other compensation
arrangements as the Board may deem necessary or desirable.


15. Securities Law and Other Restrictions.




     Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the
Plan, the Company will not be required to issue any shares of Common Stock under this Plan, and a
Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued
pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable securities laws of
a state or foreign jurisdiction or an exemption from such registration under the Securities Act and
applicable state or foreign securities laws, and (b) there has been obtained any other consent,
approval or permit from any other U.S. or foreign regulatory body which the Committee, in its sole
discretion, deems necessary or advisable. The Company may condition such issuance, sale or
transfer upon the receipt of any representations or agreements from the parties involved, and the
placement of any legends on certificates representing shares of Common Stock, as may be deemed
necessary or advisable by the Company in order to comply with such securities law or other
restrictions.


16. Compliance with Section 409A.




     It is intended that the Plan and all Incentive Awards hereunder be administered in a manner
that will comply with Section 409A of the Code, including proposed, temporary or final regulations
or any other guidance issued by the Secretary of the Treasury and the Internal
Revenue Service with respect thereto. The Committee is authorized to adopt rules or
regulations deemed necessary or appropriate to qualify for an exception from or to comply with the



18









 





requirements of Section 409A of
the Code (including any transition or grandfather rules relating thereto). Notwithstanding
anything in this Section 16 to the contrary, with respect to any Incentive Award subject to Section
409A of the Code, no amendment to or payment under such Incentive Award will be made unless
permitted under Section 409A and the regulations or rulings issued thereunder.





17. Plan Amendment, Modification and Termination.




     The Board may suspend or terminate the Plan or any portion thereof at any time. In addition
to the authority of the Committee to amend the Plan under Section 3.2(e), the Board may amend the
Plan from time to time in such respects as the Board may deem advisable in order that Incentive
Awards under the Plan will conform to any change in applicable laws or regulations or in any other
respect the Board may deem to be in the best interests of the Company; provided, however, that no
such amendments to the Plan will be effective without approval of the Company’s shareholders if:
(i) shareholder approval of the amendment is then required pursuant to Section 422 of the Code or
the rules of the Nasdaq Stock Market (or other applicable market or exchange on which the Company’s
Common Stock may be quoted or traded); or (ii) such amendment seeks to increase the number of
shares authorized for issuance hereunder (other than by virtue of an adjustment under Section 4.3)
or to modify Section 3.2(d) hereof. No termination, suspension or amendment of the Plan may
adversely affect any outstanding Incentive Award without the consent of the affected Participant;
provided, however, that this sentence will not impair the right of the Committee to take whatever
action it deems appropriate under Sections 3.2(c), 4.3 and 13 of the Plan.


18. Effective Date and Duration of the Plan.




     The Plan will be effective as of February 28, 2006, the date on which the Plan was initially
approved by the Company’s shareholders. The Plan will terminate at midnight on the tenth (10th)
anniversary of such effective date, and may be terminated prior to such time by Board action. No
Incentive Award will be granted after termination of the Plan. Incentive Awards outstanding upon
termination of the Plan may continue to be exercised, earned or become free of restrictions,
according to their terms.


19. Miscellaneous.




     19.1 Governing Law. The validity, construction, interpretation, administration and
effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by
and construed exclusively in accordance with the laws of the State of Minnesota, notwithstanding
the conflicts of laws principles of any jurisdictions.



     19.2 Successors and Assigns. The Plan will be binding upon and inure to the benefit
of the successors and permitted assigns of the Company and the Participants.




19