Document:

exh_1016.htm

Exhibit 10.16

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

 

CONFIDENTIAL INFORMATION, INVENTIONS ASSIGNMENT, NONCOMPETITION AND NON-SOLICITATION AGREEMENT

 

This Agreement (together with Attachment A hereto, this “Agreement”) is entered into on this 18th day of November, 2011, and is made by and between NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION, a Delaware corporation, on behalf of itself, its subsidiaries and affiliates (collectively, the “Company”), with its principal place of business at 4201 Woodland Road, Circle Pines, MN 55014, and MATTHEW C. WOLSFELD, (the “Executive”) (hereafter collectively referred to as the “Parties”).

 

RECITALS

 

WHEREAS, the Company is in the business of developing, producing and commercializing environmentally beneficial products and services in over fifty-five (55) countries either directly or through a network of joint ventures, independent distributors and agents.

 

WHEREAS, the Company has expended considerable time, effort and resources in the development of its trade secrets, confidential information, and customer goodwill, and in the recruitment and training of its workforce.  The success of the Company is dependent in large measure on the preservation of its trade secrets, confidential information, customer goodwill and workforce, and in the prevention of unfair competition.

 

WHEREAS, the Executive will be performing services for the Company in a confidential capacity and will be entrusted by the Company with its valuable assets including proprietary information, trade secrets, customer goodwill and its workforce.  The Executive recognizes the importance of protecting these Company assets.

 

WHEREAS, the Company requires the Executive to agree and the Executive hereby does agree, in exchange for the promise of continued at-will employment with the Company and benefits provided to the Executive under his Executive Employment Agreement, dated November 18, 2011, to reasonable restrictions on the Executive’s activities during and for a reasonable period of time after the Executive’s termination of employment, for the purpose of ensuring the preservation and protection of the Company’s assets, including its intellectual property, confidential information, trade secrets, physical assets, customer goodwill and its highly trained workforce.

 

WHEREAS, the Executive acknowledges and understands that this is an enforceable contract that the Executive must read and sign as a condition of employment with the Company.  The Executive understands that this Agreement applies regardless of whether there are any changes in the Executive’s job duties, job title, and location of work or division assignment.

 

NOW THEREFORE, in consideration of the Executive’s continued at-will employment with the Company and benefits provided to the Executive under his Executive Employment Agreement, dated November 18, 2011, the sufficiency of which is hereby acknowledged, the Executive and the Company agrees as follows.

 

1. DEFINITIONS.

 

The following definitions apply to this Agreement:

 

(a) “Company Product” means any product, product under development, product line, service, technology or product concept that the Company has investigated, studied, conceived, designed, developed (or is under development), manufactured, marketed, sold, or regarding which the Company has conducted or acquired research and development prior to or during the term of the Executive’s employment with the Company.

 

  

 

  

(b) “Conflicting Product” means any product, product line, technology, product concept or service that is the same or similar, competes with, may be substituted for, replaces, resembles, performs any of the same or similar functions, is used or intended to be used for any of the same purposes as a Company Product.

 

(c) “Conflicting Organization” means any person (including the Executive) or entity, and any parent, subsidiary, partner, or affiliate of any such person or entity, who or that engages in or is planning within one (1) year to become engaged in, the creation, development, design, production, manufacture, promotion, sale, marketing, support or service of a Conflicting Product anywhere in the world where the Company sells, markets or has implemented a plan to sell or market any of its products or services.

 

(d) “Invention” means any invention, discovery, improvement, technology, process, idea, design, concept, patent application, prototype, software code, documentation or work of authorship, whether or not in writing or reduced to practice and whether or not patentable or copyrightable, made, authored or conceived by the Executive whether by the Executive’s individual efforts or in connection with the efforts of others, and that (i) relates in any way to the Company’s business, products or processes, past, present, anticipated or under development, or (ii) results in any way from the Executive’s employment by the Company, or (iii) uses the Company’s equipment, supplies, facilities, trade secrets, or confidential information.

 

(e) “Trade Secret” means information that the Company uses in its business and that is the subject of reasonable efforts by the Company to maintain its secrecy, including without limitation, any formula, pattern, compilation, program, device, method, technique, process, concept, design, or idea that derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

(f) “Confidential Information” means any proprietary, confidential or competitively sensitive information and materials that are the property of or relate to the Company and which derives independent economic value from not being generally known or ascertainable by proper means but which does not constitute one or more Trade Secrets as described above, including without limitation:

 

(i) inventions, designs, discoveries, works of authorship, improvements or ideas whether or not patentable or copyrightable, methods, processes, techniques, shop practices, formulae, compounds, or compositions developed or otherwise possessed by Company;

 

(ii) the subject matter of Company’s patents, design patents, copyrights, operating instructions and other industrial property to the extent that such information is unavailable to the public and/or is in incomplete stages of design or research and development;

 

(iii) the identity of the Company’s past, present and prospective customers, suppliers or business contacts, and all documents, information and materials that concern or relate to such customers, suppliers or business contacts;

 

(iv) organizational and operational information such as marketing information, sales information, advertising information, techniques, strategies, business plans, product development information, delivery schedules, market research, forecasts, personnel and salary data, methods of operation, financial data, statements and projections, pricing information, costs, sales, budgets, profits and merger, acquisition, expansion or  divestiture information;

 

(v) technical information including that relating to manufacturing processes, product preparation, presentation, packaging, delivery methods, quality control measures and processes, product specifications, improvements, discoveries, developments, designs, inventions, and other proprietary processes;

 

(vi) information disclosed to the Executive as part of any training process; and

 

  

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(vii) any document marked “Confidential,” or any information which the Executive has been told is confidential or which the Executive might reasonably expect Company would regard as confidential, or any information which has been given Company in confidence by customers, suppliers or other persons.

 

2. COMPLIANCE WITH PRIOR AGREEMENTS AND DUTIES.

 

The Executive represents and warrants to the Company that the Executive is not currently subject to a non-competition, confidentiality or other such agreement with a former employer which prohibits or restricts the Executive from working for the Company, or performing the services which the Company would like the Executive to perform.  Further, the Executive represents and warrants to the Company that the Executive has not brought and will not bring to the Company any proprietary information, customer lists, trade secrets, confidential information, or any other property which belongs to any of the Executive’s former employers.  The Executive agrees and understands that the Company does not want the Executive to utilize any such confidential or proprietary information, trade secrets, or property on the Company’s behalf.  The Executive further agrees and understands that any misrepresentation, including, but not limited to a misrepresentation that the Executive is not subject to a non-competition, confidentiality or other such agreement with a former employer which prohibits or restricting the Executive from working for the Company, may result in the termination of the Executive’s employment with the Company, regardless of when the Company discovers such misrepresentation.

 

3. PROTECTION OF TRADE SECRETS AND CONFIDENTIAL INFORMATION.

 

The Executive agrees to hold the Company’s Trade Secrets and Confidential Information in the strictest confidence during the Executive’s employment with the Company and to the fullest extent permitted by law after the Executive’s employment relationship with the Company is voluntarily or involuntarily terminated. To this end:

 

(a) the Executive will not make or permit copies to be made of Trade Secrets and Confidential Information, except as necessary to carry out the Executive’s duties for the Company;

 

(b) the Executive will not disclose any Trade Secret or Confidential Information to any person except other Company employees with a need to know the information;

 

(c) the Executive will take all reasonable precautions to prevent the inadvertent disclosure of Trade Secrets and Confidential Information to any unauthorized person; and

 

(d) the Executive will acknowledge that the Company is the owner of the Company’s Trade Secrets and Confidential Information and agrees not to contest any such ownership rights of the Company, either during or after the Executive’s employment with the Company.

 

4. ASSIGNMENT OF INVENTIONS.

 

(a) During the period of employment and for the six (6) months thereafter, the Executive will promptly and fully disclose to the Company, and will hold in trust for the Company’s sole right and benefit, any Invention that the Executive makes, conceives or reduces to practice, or causes to made, conceived or reduced to practice, either alone or in conjunction with others, whether made during the working hours of the Company or on the Executive’s own time. The Executive will: (i) assign and hereby does assigns to the Company all of the Executive’s right, title and interest in and to all such Inventions, any applications for patents, copyrights or any other registration of intellectual property in any country covering or relating to any such Invention, and any patents, copyrights or other intellectual property registration granted to the Executive or the Company; and (ii) acknowledge and deliver promptly to the Company any written instruments, and perform any other acts necessary in the Company’s opinion to preserve property rights in any Invention against forfeiture, abandonment or loss, to obtain and maintain letters patent and/or copyrights or other registration of any intellectual property rights on any such Invention, and to vest the entire right and title to the Invention and related intellectual property in the Company. The Executive agrees to perform promptly (without charge to the Company but at the expense of the Company) all such acts as may be necessary in the Company’s opinion to preserve all patents and/or copyrights or other intellectual property covering the Inventions and to enable the Company to obtain the sole right, title and interest in all such Inventions, including without limitation the execution of assignments or patent prosecution documentation and appearing as a witness in any action brought in connection with this Agreement.

 

  

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(b) The Parties agree that this Section 4 does not apply to any Invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on the Executive’s own time, and that does not: (i) relate directly to the Company’s business or to the Company’s actual or demonstrably anticipated research or development, or (ii) result from any work the Executive performed for the Company. All inventions that the Executive has already conceived or reduced to practice that the Executive claims to be excluded from the scope of this Agreement are listed on Attachment A (if none, write “none”).  The Executive represents that, except as disclosed on Attachment A to this Agreement, as of the date of this Agreement, the Executive has no rights under and will make no claims against the Company with respect to any inventions, discoveries, improvements, ideas or works of authorship which would be Inventions if made, conceived, authored or acquired by the Executive during the term of this Agreement.

 

(c) The Executive acknowledges that any documents, drawings, computer software or other work of authorship prepared by the Executive within the scope of the Executive’s employment is a “work made for hire” under U.S. copyright laws (17 U.S.C. § 101 (1976)), and that, accordingly, the Company exclusively owns all copyright rights in such works of authorship. For purposes of this Agreement, “scope of employment” means the work of authorship (i) relates to any subject matter pertaining to the Executive’s employment; (ii) relates to or is directly or indirectly connected with the existing or reasonably foreseeable business, products, projects or Trade Secrets or Confidential Information of the Company; or (iii) involves the use of any time, material or facility of the Company.

 

Note.  Pursuant to Minnesota Statute § 181.78, this Section 4 does not apply to an Invention for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on the Executive’s own time, and (i) which does not relate (I) directly to the business of the Company or (II) to the Company’s actual or demonstrably anticipated research or development, or (ii) which does not result from any work performed by the Executive for the Company.

 

(d) In the event of any dispute, arbitration or litigation concerning whether an invention, improvement or discovery made or conceived by the Executive is the property of the Company, such invention, improvement or discovery will be presumed the property of the Company and the Executive will bear the burden of establishing otherwise.

 

5. NO CONFLICTING EMPLOYMENT OR CUSTOMER SOLICITATION.

 

During the Executive’s employment with the Company and for a period of two (2) years after that employment ends, regardless of reason, whether voluntary by the Executive or involuntary:

 

(a) the Executive will not work for, consult with, lend assistance to or otherwise render services to a Conflicting Organization in any capacity, directly or indirectly, alone or with another person or entity, whether as an the Executive, advisor, consultant, independent contractor, principal, agent, partner, officer, director, shareholder, or otherwise;

 

(b) the Executive will not, directly or indirectly, alone or with another person or entity, solicit business from or have any business-related contact with any customer of the Company or any potential Company customer with whom or with which the Executive personally had contact during the last twenty-four (24) months of the Executive’s employment with the Company; and

 

(c) the Executive will not interfere with or impair the Company’s relationship with any of its employees, customers, vendors or suppliers.

 

The restrictions contained in this Section 5 will not prevent the Executive from becoming employed with or providing consulting services to a large diversified organization with separate and distinct divisions that do not compete, directly or indirectly, with the Company, but only if: (i)  the Company first receives written assurances from the prospective employer and from the Executive, satisfactory to the Company in its reasonable discretion, confirming that the Executive will render no services, directly or indirectly, to any divisions or business units that independently would qualify as a Conflicting Organization and (ii) the Chair of the Company’s Board of Directors gives written approval for the Executive to provide the proposed employment or consulting services.  By signing this Agreement, the Executive acknowledges and agrees that should his employment with the Company end, the restrictions on the Executive’s activities referenced in this Agreement will not prevent the Executive from earning a living outside of a Conflicting Organization.

 

  

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6. NON-INTERFERENCE WITH COMPANY EMPLOYEES.

 

The Executive will not, either during the Executive’s employment with the Company or for a period of two (2) years after that employment with the Company ends, directly or indirectly, solicit, induce, recruit, or cause another person in the employ of the Company (on the date the Executive’s employment with the Company ends) to terminate employment with the Company.  If during this two (2) year period the Executive is approached by one of the Company’s employees or former employees regarding potential employment at a new employer, the Executive will inform the employee or former employee of the non-solicitation obligation described above and refrain from engaging in any communication with the employee or former employee regarding potential employment, consultation or contract opportunities.

 

7. E-MAIL MESSAGES/INTERNET USAGE.

 

The Executive acknowledges that all e-mail messages that the Executive produces, sends or receives while at Company facilities or using Company equipment are the property of the Company. The Executive also understands that the Company may monitor and inspect all such messages and may also monitor and control the communications that the Executive initiates or receives through the Internet while at Company facilities and while using Company equipment in any location. The Executive acknowledges that the Executive has no right to or expectation of privacy in such communications. The Executive agrees to cooperate with the Company in its implementation of such security and control measures as it may implement from time to time with respect to e-mail and Internet communications and shall take all reasonable precautions to ensure that the confidentiality of any such communications containing Trade Secret and Confidential Information is maintained. The Executive also agrees that the Internet may not be used for the transmission or intentional reception of obscene, scandalous, offensive or otherwise inappropriate materials, and that the Executive will comply with Company policies regarding appropriate use of the Internet and e-mail.

 

8. REMEDIES.

 

The Executive understand that in the event of a violation of any provision of this Agreement, the Company has the right to seek injunctive relief, in addition to any other remedies provided by law including actual, incidental and consequential damages, without the requirement of posting bond.  The Executive also agrees that the Company will be entitled to an accounting, and to the repayment of all profits, compensation, commissions, fees, royalties, or other financial rewards which the Executive or any other entity or person may realize as a result of the Executive’s violations of this Agreement.  The Executive will reimburse the Company for all costs, expenses or damages that it incurs as a result of any violation by the Executive of any provision of this Agreement, including court costs, litigation expenses, and reasonable attorneys’ fees.

 

9. MISCELLANEOUS.

 

(a) Successors and Assigns.  The promises in this Agreement benefit the Company and also its subsidiaries and affiliates and any successor or assignee of the Company’s business or operations.

 

(b) Governing Law and Venue.  This Agreement will be governed by the laws of the State of Minnesota.  The Executive hereby agrees to submit to personal jurisdiction in the State of Minnesota and agrees that any action relating to this Agreement or otherwise to the Executive’s employment with the Company must be venued exclusively in Anoka County District Court or the United States District Court for the District of Minnesota.

 

  

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(c) Severability.  If any portion of this Agreement is adjudicated to be invalid or unenforceable, the remaining provisions shall not be affected thereby, and a court of competent jurisdiction shall have the power to blue-line (amend, modify or delete) that portion thus adjudicated to be invalid or unenforceable.

 

(d) Survival.  The Executive’s obligations under Sections 3, 4, 5 and 6 will survive the termination of this Agreement.

 

(e) Entire Agreement.  This is the entire agreement of the Parties relating to its subject matter and supersedes all previous and contemporaneous discussions, agreements, writings and understandings concerning the matters referenced in this Agreement.  This Agreement may be modified only by a document manually signed both by the Executive and the Chair of the Company’s Board of Directors.

 

(f) Acknowledgments.  The Executive acknowledges that the Company has advised the Executive to seek counsel regarding this Agreement, that the Executive is an employee “at will” (meaning that either the Executive or the Company may terminate the Executive’s employment, at any time and for any reason not prohibited by law), that the Executive has not executed this Agreement in reliance upon any representation or promise except those contained in this Agreement and the Executive Employment Agreement, and that the Executive has read and understands this Agreement and agrees to all its terms and conditions.

 

  

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first above written.

 

	
NORTHERN TECHNOLOGIES

INTERNATIONAL CORPORATION

	
 

EXECUTIVE

	  	  
	  	  
	
By: /s/ Richard J. Nigon

	
/s/ Matthew C Wolsfeld

	  	
Matthew C. Wolsfeld

	  	  
	
Name: Richard J. Nigon                                                                

	
Date: November 18, 2011                                                                    

	  	  
	
Title: Chairman of Audit and Compensation Committee

	  
	  	  
	
Date: November 18, 2011exhibit_4-2.htm

Exhibit 4.2

 

ANDAIN EMPLOYEE STOCK OPTION PLAN (ESOP)

 

	
1.

	
PURPOSE

 

The purpose of this Stock Option Plan (the "Plan") is to attract and retain key employees of Andain Inc. (the "Company") and its subsidiaries if any, by the grant of options and stock appreciation rights.

 

"Subsidiaries" as used herein shall mean corporations (other than Andain Inc.) or partnerships in an unbroken chain of corporations and/or partnerships beginning with Andain Inc. if, at the time of the granting of the option or stock appreciation right, each of the corporations and partnerships other than the last corporation or partnership in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in a corporation in such chain or at least a 50% partnership interest in such chain.

 

The term "fair market value" of a share of common stock as of any date shall be the mean between the highest and lowest sales price of a share of common stock on the date in question as reported on the composite tape for issues listed on the Company Trading relevant Stock Exchange. If no transaction was reported on the composite tape in the common stock on such date, the prices used shall be the prices reported on the nearest day preceding the date in question. If the common stock is not then quoted on the composite tape, "fair market value" shall be the closing sales price or the mean between the closing bid and asked prices on the date in question, as applicable, as furnished by any member firm of the relevant Stock Exchange selected from time to time for that purpose by the Compensation Committee.

 

The term "incentive stock option" shall mean an option described in US GAAP Section 422(b) of the Internal Revenue Code of 1986, as  amended.

 

	
2.

	
ADMINISTRATION OF THE PLAN

 

The Plan shall be administered by a committee as appointed from time to time by the Board of Directors of the Company, which committee shall consist of not less than two (2) members of such Board of Directors, all of whom shall be "non-employee directors" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934. Said committee shall be called the "Compensation Committee."

 

In administering the Plan, the Compensation Committee may adopt rules and regulations for carrying out the Plan. The interpretation and decision with regard to any question arising under the Plan made by the Committee shall, unless overruled or modified by the Board of Directors of the Company, be final and conclusive on all employees of the Company and its subsidiaries participating or eligible to participate in the Plan.

 

  

  

  

 

	
3.

	
STOCK

 

The stock which may be issued and sold pursuant to the exercise of options or stock appreciation rights granted under the Plan may be authorized and unissued common stock or shares of common stock reacquired by the Company and held in treasury of a total number not exceeding 3,000,000 shares.

 

The shares deliverable under the Plan shall be fully paid and non-assessable shares. Any shares, in respect of which an option is granted under the Plan, which shall have for any reason expired or terminated, may be again allotted under the Plan. Any shares covered by options which have been canceled by reason of the exercise of related stock appreciation rights as provided in the immediately following paragraph or which are used to exercise other options or to satisfy tax withholding obligations shall not be available for other options under the Plan.

 

The exercise of options with respect to which stock appreciation rights shall have been granted shall cause a corresponding cancellation of such stock appreciation rights, and the exercise of stock appreciation rights issued in respect of options shall cause a corresponding cancellation of such options.

 

Each option and stock appreciation right granted under the Plan shall be subject to the requirement and condition that if the Board of Directors shall determine that the listing, registration or qualification upon any securities exchange or under any state or federal law, or the approval or consent of any governmental body is necessary or desirable as a condition of granting such option or stock appreciation right, or the issue or purchase of any shares thereunder, then no such option or stock appreciation right may be exercised in whole or in part unless or until such listing, registration, qualification, approval or consent has been obtained, free of any conditions which are not acceptable to the Board of Directors of the Company.

 

	
4.

	
ELIGIBILITY

 

Options and stock appreciation rights will be granted only to persons who are employees of the Company and its subsidiaries (including officers and directors except for persons acting as directors only). The Compensation and Corporate Governance Committee of the Board of Directors of the Company shall determine in its sole discretion the employees to be granted options, the number of shares subject to each option, the employees to be granted stock appreciation rights and the options with respect to which such stock appreciation rights shall be granted. Subject to the provisions of Section 13 of the Plan, the maximum number of shares with respect to which options or stock appreciation rights, or a combination thereof, may be granted under the Plan to any person in any calendar year is maximum 500,000 shares.

 

  

  

  

 

	
5.

	
PRICE

 

The purchase price under each option shall be determined by the Compensation Committee subject to approval by the Board of Directors of the Company, but such price shall not be less than one hundred percent (100%) of the fair market value of the common stock at the time such option is granted.

 

	
6.

	
THE PERIOD OF THE OPTION AND THE EXERCISE OF THE SAME

 

Each option granted under the Plan shall expire (i) no later than two (2) years from the date such option is granted or (ii) in the event the Company Initial Public Offering, but the Compensation Committee may prescribe a shorter period for any individual option or options.

 

The shares subject to the option may be purchased from time to time during the option period, subject to any waiting period or vesting schedule the Compensation Committee may specify for any individual option or options.

 

In order to exercise the option or any part thereof, the employee shall give notice in writing to the Company of his or her intention to purchase all or part of the shares subject to the option, and in said notice the employee shall set forth the number of shares as to which he or she desires to exercise such option, and shall pay for such shares at the time of exercise of such option. Such payment may be made in such manner as the Compensation Committee may specify, which may include cash, delivery to the Company of shares of common stock of the Company, delivery of proceeds of the sale of the option shares by the Company's designated broker on behalf of the employee, and any other manner permitted by law specified by the Committee. At the time of granting an option, the Committee may impose conditions on the right to exercise an option.

 

Except as specified in Sections 10 and 11 below, no option may be exercised except by the Optionee personally while the Optionee is at that time an employ of the Company or its subsidiaries.

 

No Optionee or his or her legal representative, legatees or distributees, as the case may be, shall be or have any of the rights and privileges of a shareholder of the Company by reason of such option unless and until the shares are issued to him or her under the terms of the Plan.

 

	
7.

	
MERGER; REORGANIZATION; ACCELERATION

 

In the event that the Company is a party to a merger or other reorganization, outstanding Options shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Options by the surviving corporation, or a parent or subsidiary of such corporation ("Successor Corporation"), for their continuation by the Company (if the Company is a surviving corporation), for accelerated vesting or for their cancellation with or without consideration, in all cases without the consent of the Optionee.

 

  

  

  

 

Upon a Change in Control, all Options granted under the Plan and held by Optionees whose employment with the Company has not terminated shall vest and become exercisable as to all Shares subject to such Option in accordance with the following provisions:

 

(i)   If any of the Optionee's outstanding Options are assumed or an equivalent option is substituted by a Successor Corporation, or if any of the Optionee's outstanding Options are continued by the Company (if the Company is a surviving corporation), then the entire unvested portion of any Option shall remain subject to the vesting schedule in effect for such Option immediately prior to the Change in Control; UNLESS, within one year of the Change in Control, (A) the Optionee is terminated without cause (as provided in Section 10), or (B) the Optionee Resigns for Good Reason, in which case, the entire unvested portion of any Option shall be deemed to have vested and become fully exercisable immediately prior to any such termination or resignation.

 

(ii)  If any of the Optionee's outstanding options are not assumed or an equivalent option is not substituted by the Successor Corporation, and if any of the Optionee's outstanding Options are not continued by the Company (if the Company is a surviving corporation), all of the then unvested portion of the Option shall be deemed to have vested immediately prior to the Change in Control.

 

Change in Control" means the occurrence of any of the following:

 

(i)   The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than 51% of the combined voting power of the continuing or surviving entity's securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization;

 

(ii)  The sale, transfer or other disposition of all or substantially all of the Company's assets;

 

(iii) A change in the composition of the Board of Directors of the Company, as a result of which fewer that one-half of the incumbent directors are directors who either (i) had been directors of the Company on the date 24 months prior to the date of the event that may constitute a Change in Control (the "original directors") or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved; or

 

  

  

  

 

(iv) Any transaction as a result of which any person is the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company representing at least 20% of the total voting power represented by the Company's then outstanding voting securities. For purposes of this subparagraph, the term "person" shall have the same meaning as when used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934 but shall exclude:

 

(A)  trustee or other fiduciary holding securities under an employee benefit plan of the Company or a subsidiary of the Company; and

 

(B)   corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the common stock of the Company. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transactions.

 

"Resignation for Good Reason" means the Optionee's resignation due to (i) a material diminution of Optionee's duties without Optionee's consent, (ii) a diminution of Optionee's base salary in effect immediately prior to a Change in Control, or (iii) a requirement that Optionee's commute distance increase by more than fifty (50) miles without Optionee's consent. Notwithstanding the above provisions of this Section 7, if any agreement between the Optionee and the Company provides greater rights to the Optionee than does this Section 7 upon the occurrence of one or more of the events described in this Section 7, the provisions of such other agreement shall govern and shall supersede this Section 7.

 

	
8.

	
PROVISIONS REGARDING STOCK APPRECIATION RIGHTS

 

A stock appreciation right granted under the Plan shall entitle the holder thereof to receive from the Company, upon surrender of the related option, payment of an amount, in cash, shares of common stock or a combination thereof, as determined by the Compensation Committee, equal in value to (A) the excess of the fair market value of a share of common stock on the date the stock appreciation right is exercised over the option price provided for in the related option, multiplied by (B) the number of shares with respect to which the stock appreciation right was exercised. A stock appreciation right shall be exercisable during the period commencing on a date specified by the Compensation Committee and ending on the date on which the related option expires or is earlier canceled or terminated. Notwithstanding the preceding sentence, the Compensation Committee may provide for the grant of a stock appreciation right which may be exercised only within a sixty-day period following certain events specified by the Compensation Committee in the grant of such stock appreciation right. Moreover, the Compensation Committee may provide that such stock appreciation right shall be payable only in cash and that, in addition to payment of the amount otherwise due upon exercise of such stock appreciation right, the holder thereof shall receive (unless such stock appreciation right is in tandem with an incentive stock option), an amount equal to the excess of the highest price paid for a share of common stock in the open market or otherwise over the sixty-day period prior to exercise over the fair market value of a share of common stock on the date the stock appreciation right is exercised.

 

In order to exercise the stock appreciation right or any part thereof, the employee shall give notice in writing to the Company of his or her intention to exercise such right, and in said notice the employee shall set forth the number of shares as to which such employee desires to exercise the stock appreciation right, provided that such right may not be exercised with respect to a number of shares in excess of the number for which the related option could then be exercised. Any limitations on the right to exercise the related option shall also apply to the stock appreciation right.

 

  

  

  

 

No holder of a stock appreciation right or such holder's legal representatives, legatees or distributees, as the case may be, shall be or have any of the rights and privileges of a shareholder of the Company by reason of such stock appreciation right unless and until the shares are issued to such holder under the terms of the Plan.

 

	
9.

	
NON-TRANSFERABILITY OF OPTION AND STOCK APPRECIATION RIGHT

 

No option or stock appreciation right granted under the Plan to an employee shall be transferred by him or her otherwise than by will or by the laws of descent and distribution, and such option or stock appreciation right shall be exercisable during the employee's lifetime only by him or her.

 

	
10.

	
WRITTEN AGREEMENT

 

Within a reasonable time after the date of grant of an option, an option and stock appreciation right, or a stock appreciation right related to a previously granted option, a written agreement in a form approved by the Compensation Committee shall be duly executed and delivered to the Optionee.

 

	
11.

	
ADJUSTMENT BY REASON OF RECAPITALIZATION, STOCK SPLITS, STOCK DIVIDENDS, ETC.

 

If, after the effective date of this Plan, there shall be any changes in the common stock structure of the Company by reason of the declaration of stock dividends, recapitalization resulting in stock split-ups, or combinations or exchanges of shares by reason of merger or consolidation between the Company and one or more of its subsidiaries, or by any other means except of merger with another company or an investment in the Company, then the number of shares available under the Plan, the shares subject to any outstanding options, and the maximum number of shares with respect to which options may be granted to any person shall be equitably and appropriately adjusted by the Board of Directors of the Company as in its sole and uncontrolled discretion shall seem just and reasonable in the light of all the circumstances pertaining thereto.

 

	
12.

	
RIGHT TO TERMINATE EMPLOYMENT

 

The Plan shall not confer upon any employee any right with respect to being continued in the employ of the Company and its subsidiaries or interfere in any way with the right of the Company and its subsidiaries to terminate his or her employment at any time, nor shall it interfere in any way with the employee's right to terminate his or her employment.

 

  

  

  

 

	
13.

	
WITHHOLDING AND OTHER TAXES

 

The Company or one of its subsidiaries shall have the right to withhold from salary or otherwise or to cause an Optionee (or the executor or administrator of the Optionee's estate or his legatees or distributees) to make payment of any Federal, State, or other (to the extent permitted by applicable law, rule or regulation) taxes required to be withheld with respect to any exercise of a stock option or a stock appreciation right. An Optionee may elect to have the withholding tax obligation or, if the Compensation Committee so determines, any additional tax obligation with respect to any exercise of a stock option or stock appreciation right satisfied by (a) having the Company or one of its subsidiaries withhold shares otherwise deliverable to the Optionee with respect to such exercise, or (b) delivering shares of common stock to the Company.

 

	
14.

	
AMENDMENT TO THE PLAN

 

The Board of Directors shall have the right to amend, suspend or terminate the Plan at any time; provided, however, that no such action shall affect or in any way impair the rights of the holder of any option or stock appreciation right theretofore granted under the Plan; and provided further, that unless first duly approved by the common shareholders of the Company entitled to vote thereon at a meeting (which may be the annual meeting) duly called and held for such purpose, no amendment or change shall be made in the Plan (a) increasing the total number of shares which may be purchased or transferred upon exercise of options or stock appreciation rights under the Plan by all employees; (b) changing the minimum purchase price hereinbefore specified for the optioned shares; (c) changing the maximum option period; (d) increasing the amount that may be received upon exercise of a stock appreciation right; or (e) allowing a stock appreciation right to be exercised after the expiration date of the related option.

 

	
15.

	
EFFECTIVE DATE OF THE PLAN

 

The Plan shall be effective as of January 15,  2011.

 

	
16.

	
SAVINGS CLAUSE

 

Each option and stock appreciation right shall be governed by the terms of the Plan as in effect on the date of its grant unless the option or stock appreciation right is expressly amended to include one or more Plan provisions adopted after the date of grant. The Compensation Committee shall have authority to amend outstanding options to include any provisions permitted by the Plan as in effect at the time of such amendment.

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