Document:

Exhibit 10.1

 

THE
MEDICINES COMPANY

 

2007
EQUITY INDUCEMENT PLAN

 

1.             Purpose

 

The purpose of this 2007 Equity Inducement Plan (the “Plan”) of The
Medicines Company, a Delaware  corporation
(the “Company”), is to advance the interests of the Company’s stockholders by
enhancing the Company’s ability to attract, retain and motivate persons who are
expected to make important contributions to the Company and by providing such
persons with equity ownership opportunities and performance-based incentives
that are intended to better align their interests with those of the Company’s
stockholders.  Except where the context
otherwise requires, the term “Company” shall include any of the Company’s
present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”) and any other
business venture (including, without limitation, joint venture or limited
liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “Board”).

 

2.             Eligibility

 

Options, restricted stock awards, stock appreciation rights or other
stock-based awards (each, an “Award”) may be granted under the Plan to any
person who (a) was not previously an employee or director of the Company
or (b) is commencing employment with the Company following a bona fide
period of non-employment by the Company, as an inducement material to the
individual’s entering into employment with the Company. Each person who has
been granted an Award under the Plan shall be deemed a “Participant”.

 

3.             Administration

 

(a)         Administration by the Compensation
Committee of the Board of Directors. 
The Plan will be administered by the Compensation Committee of the Board
(the “Committee”).  The Administrator shall have authority to
grant Awards and to adopt, amend and repeal such administrative rules,
guidelines and practices relating to the Plan as it shall deem advisable.  The Administrator may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final judge of such expediency.  All decisions by the Administrator shall be
made in the Administrator’s sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award.  No director shall be liable for any action or
determination relating to or under the Plan made in good faith.

 

(b)           Board Award
Granting Authority.  To the extent permitted by
applicable law and Nasdaq regulations, if the Committee is unable to grant an
Award under the Plan for any reason, the Board, with a vote of the majority of “independent
directors” of the Board (as defined under Nasdaq regulations), shall have the
authority to grant such Award.  All references
in the Plan to the “Administrator” shall mean the Committee or, when applicable pursuant to
this Section 3(b), a majority of independent directors of the Board.

 

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4.             Stock Available for Awards

 

(a)         Number of Shares.  Subject to adjustment under Section 9,
Awards may be made under the Plan for up to 1,700,000 shares of common stock,
$.001 par value per share, of the Company (the “Common Stock”).  If any Award expires or is terminated, surrendered
or canceled without having been fully exercised or is forfeited in whole or in
part (including as the result of shares of Common Stock subject to such Award
being repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan.  Shares
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.

 

5.             Stock Options

 

(a)         General.  The Administrator may grant options to
purchase Common Stock (each, an “Option”) and determine the number of shares of
Common Stock to be covered by each Option, the exercise price of each Option
and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws,
as it considers necessary or advisable. 
All Options granted under the Plan shall be Nonstatutory Stock Options
(as hereinafter defined).  A “Nonstatutory
Stock Option” is an Option which is not intended to be an Incentive Stock
Option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

 

(b)         Exercise Price.  The Administrator shall establish the exercise
price at the time each Option is granted and specify it in the applicable
option agreement; provided, however, that the exercise price shall be not less
than 100% of the fair market value as determined by (or in a manner approved
by) the Administrator at the time the Option is granted.

 

(c)         Duration of Options.  Each Option shall be exercisable at such
times and subject to such terms and conditions as the Administrator may specify
in the applicable option agreement; provided, however, that no Option will be
granted for a term in excess of 10 years.

 

(d)         Exercise of Option.  Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the
Administrator together with payment in full as specified in Section 5(e) for
the number of shares for which the Option is exercised.

 

(e)         Payment Upon Exercise.  Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:

 

(1)           in
cash or by check, payable to the order of the Company;

 

(2)           except
as the Administrator may otherwise provide in an option agreement, by (i) delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price and
any required tax withholding or (ii) delivery by the Participant to the
Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to promptly pay to the Company the exercise price and any
required tax withholding;

 

 

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(3)           when
the Common Stock is registered under the Exchange Act, by delivery of shares of
Common Stock owned by the Participant valued at their fair market value as
determined by (or in a manner approved by) the Administrator, provided (i) such
method of payment is then permitted under applicable law, (ii) such Common
Stock, if acquired directly from the Company, was owned by the Participant at
least six months prior to such delivery and (iii) such Common Stock is not
subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements;

 

(4)           to
the extent permitted by applicable law and by the Administrator, by (i) delivery
of a promissory note of the Participant to the Company on terms determined by
the Administrator, or (ii) payment of such other lawful consideration as
the Administrator may determine; or

 

(5)           by
any combination of the above permitted forms of payment.

 

(f)          Substitute Options.  In connection with a merger or consolidation
of an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Administrator may grant Options in substitution for any
options or other stock or stock-based awards granted by such entity or an
affiliate thereof prior to such merger, consolidation or acquisition.  Substitute Options may be granted on such
terms as the Administrator deems appropriate in the circumstances,
notwithstanding any limitations on Options contained in the other sections of
this Section 5 or in Section 2.

 

(g)         No Repricing.  Without prior stockholder approval, the
Company may not engage in any repricing with respect to any Option or Options
which requires stockholder approval under the rules of the Nasdaq National
Market or the principal market on which the Company’s Common Stock is then
traded.

 

(h)         No Reload Rights.  No Option granted under the Plan shall
contain any provision entitling the optionee to the automatic grant of
additional Options in connection with any exercise of the original Option.

 

6.             Stock Appreciation Rights

 

(a)         Nature of Stock
Appreciation Rights. A Stock Appreciation Right is an Award
entitling the holder on exercise to receive an amount in cash or Common Stock
or a combination thereof (such form to be determined by the Administrator)
determined in whole or in part by reference to appreciation, from and after the
date of grant, in the fair market value of a share of Common Stock (an “SAR
Award”).  A Stock Appreciation Right may
be based solely on appreciation in the fair market value of Common Stock or on
a comparison of such appreciation with some other measure of market growth such
as (but not limited to) appreciation in a recognized market index.  The date as of which such appreciation or
other measure is determined shall be the exercise date unless another date is
specified by the Administrator in the SAR Award.

 

(b)         Grants.  Stock
Appreciation Rights may be granted in tandem with, or independently of, Options
granted under the Plan.

 

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(1)           Rules Applicable to Tandem Awards. 
When Stock Appreciation Rights are expressly granted in tandem with
Options, the Stock Appreciation Right will be exercisable only at such time or
times, and on such conditions, as the Administrator may specify in the SAR
Award or the related Options.

 

(2)           Exercise of Independent Stock Appreciation Rights.  A
Stock Appreciation Right not expressly granted in tandem with an Option will
become exercisable at such time or times, and on such conditions, as the
Administrator may specify in the SAR Award.

 

(c)         Exercise.  Any exercise of a Stock Appreciation Right
must be in writing, signed by the proper person and delivered or mailed to the
Company, accompanied by any other documents required by the Administrator.

 

7.             Restricted Stock.

 

(a)         Grants.  The Administrator may grant Awards entitling
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their issue price or other
stated or formula price (or to require forfeiture of such shares if issued at
no cost) from the recipient in the event that conditions specified by the
Administrator in the applicable Award are not satisfied prior to the end of the
applicable restriction period or periods established by the Administrator for
such Award (each, a “Restricted Stock Award”).

 

(b)         Terms and Conditions.  The Administrator shall determine the terms
and conditions of a Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.

 

(c)         Limitation on Vesting.   Restricted Stock Awards shall not vest
earlier than the first anniversary of the date of grant.  Notwithstanding any other provision of this
Plan, the Administrator may, in its discretion, either at the time a Restricted
Stock Award is made or at any time thereafter, waive its right to repurchase
shares of Common Stock (or waive the forfeiture thereof) or remove or modify
any part or all of the restrictions applicable to the Restricted Stock Award,
provided that the Administrator may only exercise such rights in extraordinary
circumstances which shall include, without limitation, death or disability of
the Participant; a merger, consolidation, sale, reorganization,
recapitalization, or change in control of the Company; or any other
nonrecurring significant event affecting the Company, a Participant or the
Plan.

 

(d)         Stock Certificates.  Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Administrator, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee).  At the expiration of the
applicable restriction periods, the Company (or such designee) shall deliver
the certificates no longer subject to such restrictions to the Participant or
if the Participant has died, to the beneficiary designated, in a manner
determined by the Administrator, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant’s death (the
“Designated Beneficiary”).  In the 

 

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absence of an
effective designation by a Participant, “Designated Beneficiary” shall mean the
Participant’s estate.

 

8.             Other Stock-Based Awards.

 

Other Awards of shares of Common Stock, and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, shares
of Common Stock or other property, may be granted hereunder to Participants (“Other
Stock Unit Awards”), including, without limitation, Awards entitling recipients
to receive shares of Common Stock to be delivered in the future.  Such Other Stock Unit Awards shall also be
available as a form of payment in the settlement of other Awards granted under
the Plan or as payment in lieu of compensation to which a Participant is otherwise
entitled.  Other Stock Unit Awards may be
paid in shares of Common Stock or cash, as the Administrator shall
determine.  Subject to the provisions of
the Plan, the Administrator shall determine the conditions of each Other Stock
Unit Awards, including any purchase price applicable thereto.  At the time any Award is granted, the
Administrator may provide that, at the time Common Stock would otherwise be
delivered pursuant to the Award, the Participant will instead receive an
instrument evidencing the Participant’s right to future delivery of the Common
Stock.

 

9.             Adjustments for Changes in Common Stock
and Certain Other Events.

 

(a)         Changes in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than an ordinary
cash dividend, (i) the number and class of securities available under this
Plan, (ii) the limits on Awards set forth in Section 4(a), (iii) the
number and class of securities and exercise price per share subject to each
outstanding Option, (iv) the repurchase price per share subject to each
outstanding Restricted Stock Award and (v) the share- and
per-share-related provisions of each outstanding Stock Appreciation Right and
Other Stock Unit Award shall be appropriately adjusted by the Company (or
substituted Awards may be made, if applicable) to the extent determined by the
Administrator.

 

(b)           Reorganization and Change in
Control Events

 

(1)           Definitions

 

(a)                                  A “Reorganization Event” shall mean:

 

(i)                                     any merger or consolidation of the
Company with or into another entity as a result of which all of the Common
Stock of the Company is converted into or exchanged for the right to receive
cash, securities or other property;

 

(ii)                                  any exchange of all of the Common Stock
of the Company for cash, securities or other property pursuant to a share
exchange transaction; or

 

(iii)                               any liquidation or dissolution of the
Company.

 

 

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(b)                                 A “Change in Control Event” shall mean:

 

(i)                                     any sale or transfer of all or
substantially all of the assets of the Company to another corporation or
entity, any merger, consolidation or reorganization of the Company into or with
another corporation or entity, with the result that, upon conclusion of the
transaction, the voting securities of the Company immediately prior thereto do
not represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the continuing or surviving entity of such
consolidation, merger or reorganization; or

 

(ii)                                  a disclosure that any person (as the term
“person” is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act), other than (A) the Company or (B) any corporation
owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the Company,
becomes the beneficial owner as the term “beneficial owner” is defined under Rule 13d-3
or any successor rule or regulation thereto under the Exchange Act) of
securities representing 30% or more of the combined voting power of the then
outstanding voting securities of the Company; or

 

(iii)                               such time as individuals who as of the
date of the initial adoption of this Plan constitute the Board of Directors of
the Company, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect any transaction
described in clause (i) or (ii) of this section) whose election
by the Board or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were either directors at the beginning of the period or whose election or
whose nomination for election was previously so approved, cease for any reason
to constitute a majority of the Board of Directors; or

 

(iv)                              the liquidation or dissolution of the
Company.

 

(c)           “Cause” shall mean (i) conviction
of any felony or any crime involving moral turpitude or dishonesty; (ii) participation
in a fraud or act of dishonesty against the Company (or, if applicable, a
successor corporation to the Company); (iii) willful and material breach
of the Company’s policies (or, if applicable, a successor corporation to the 

 

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Company); (iv) intentional
and material damage to the Company’s property (or, if applicable, a successor
corporation to the Company); or (v) material breach of the Participant’s
confidentiality obligations or duties under the Participant’s non-disclosure,
non-competition or other similar agreement with the Company (or, if applicable,
a successor corporation to the Company).

 

(d)           “Termination Event” shall mean the
termination of the Participant’s employment (i) by the Company or the
acquiring or succeeding corporation without Cause; (ii) as a result of
Participant’s death or disability (within the meaning of Section 22(4)(3) of
the Code); or (iii) by the Participant upon written notice given promptly
after the Company’s or the acquiring or succeeding corporation’s taking of any
of the following actions, which actions shall not have been cured within a
30-day period following such notice: (A) the principal place of the
performance of the Participant’s responsibilities (the “Principal Location”) is
changed to a location outside of a 30 mile radius from the Principal Location
immediately prior to the Reorganization Event; (B) there is a material
reduction in the Participant’s responsibilities without Cause; (C) there
is a material reduction in the Participant’s salary; or (D) there is a
significant diminution in the scope of the Participant’s responsibilities
without the Participant’s agreement (excluding increases in responsibility and
sideways moves to jobs with similar descriptions).

 

(2)           Effect on Options

 

(a)                                  Reorganization Event. 
Upon the occurrence of a Reorganization Event (regardless of whether
such event also constitutes a Change in Control Event), or the execution by the
Company of any agreement with respect to a Reorganization Event (regardless of
whether such event will result in a Change in Control Event), the Board shall
provide that all outstanding Options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof); provided that if such Reorganization Event also constitutes
a Change in Control Event, except to the extent specifically provided to the
contrary in the instrument evidencing any Option or any other agreement between
a Participant and the Company, such assumed or substituted options shall become
immediately exercisable in full if, on or prior to the first anniversary of the
date of the consummation of the Change in Control Event, a Termination Event
occurs.  For purposes hereof, an Option
shall be considered to be assumed if, following consummation of the Reorganization
Event, the Option confers the right to purchase, for each share of Common Stock
subject to the Option immediately prior to the consummation of the
Reorganization Event, the consideration (whether cash, securities or other
property) received as a result of the Reorganization Event 

 

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by holders of
Common Stock for each share of Common Stock held immediately prior to the
consummation of the Reorganization Event (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Reorganization Event includes but
does not solely consist of common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the consent of the
acquiring or succeeding corporation, provide for the consideration to be
received upon the exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in
fair market value to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the Reorganization Event.

 

Notwithstanding
the foregoing, (i) if the acquiring or succeeding corporation (or an
affiliate thereof) does not agree to assume, or substitute for, such Options,
or in the event of a liquidation or dissolution of the Company, the
Administrator shall, upon written notice to the Participants, provide that all
then unexercised Options will become exercisable in full as of a specified time
prior to the Reorganization Event and will terminate immediately prior to the
consummation of such Reorganization Event, except to the extent exercised by
the Participants before the consummation of such Reorganization Event, and (ii) in
the event of a Reorganization Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of
Common Stock surrendered pursuant to such Reorganization Event (the “Acquisition
Price”), the Administrator shall either (A) upon written notice to the
Participants, provide that all then unexercised Options will become exercisable
in full as of a specified time prior to the Reorganization Event and will
terminate immediately prior to the consummation of such Reorganization Event,
except to the extent exercised by the Participants before the consummation of
such Reorganization Event or (B) provide that all outstanding Options
shall terminate upon consummation of such Reorganization Event and that each
Participant shall receive, in exchange therefor, a cash payment equal to the
amount (if any) by which (x) the Acquisition Price multiplied by the
number of shares of Common Stock subject to such outstanding Options (whether
or not then exercisable), exceeds (y) the aggregate exercise price of such
Options.

 

(b)                                 Change in Control Event that is not a
Reorganization Event.  Upon the occurrence of a Change in Control
Event that does not also constitute a Reorganization Event, except to the
extent specifically 

 

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provided to the
contrary in the instrument evidencing any Option or any other agreement between
a Participant and the Company, each such Option shall become immediately
exercisable in full if, on or prior to the first anniversary of the date of the
consummation of the Change in Control Event, a Termination Event occurs.

 

(3)           Effect on Restricted Stock Awards

 

(a)                                  Reorganization Event that is not a Change
in Control Event.
Upon the occurrence of a Reorganization Event that is not a Change in Control
Event, the repurchase and other rights of the Company under each outstanding
Restricted Stock Award shall inure to the benefit of the Company’s successor
and shall apply to the cash, securities or other property which the Common
Stock was converted into or exchanged for pursuant to such Reorganization Event
in the same manner and to the same extent as they applied to the Common Stock
subject to such Restricted Stock Award.

 

(b)                                 Change in Control Event. 
Upon the occurrence of a Change in Control Event (regardless of whether
such event also constitutes a Reorganization Event), except to the extent
specifically provided to the contrary in the instrument evidencing any
Restricted Stock Award or any other agreement between a Participant and the
Company, each such Restricted Stock Award shall immediately become free from
all conditions or restrictions if, on or prior to the first anniversary of the
date of the consummation of the Change in Control Event, a Termination Event
occurs.

 

(4)           Effect on Stock Appreciation
Rights and Other Stock Unit Awards

 

The Administrator may
specify in an Award at the time of the grant the effect of a Reorganization
Event and Change in Control Event on any SAR Award and Other Stock Unit Award.

 

10.           General Provisions Applicable to Awards

 

(a)         Transferability of Awards.  Except as the Administrator may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution or pursuant to a qualified domestic relations
order, and, during the life of the Participant, shall be exercisable only by
the Participant.  References to a
Participant, to the extent relevant in the context, shall include references to
authorized transferees.   Notwithstanding
the foregoing, a Participant may transfer any Award by means of a gift to a
family member (as such term is defined in General Instruction A to Form S-8,
as may be amended from time to time) of such Participant, provided that prior
written notice of such gift is provided to the Company.

 

 

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(b)         Documentation.  Each Award shall be evidenced in such form
(written, electronic or otherwise) as the Administrator shall determine.  Each Award may contain terms and conditions
in addition to those set forth in the Plan.

 

(c)         Administrator Discretion.  Except as otherwise provided by the Plan,
each Award may be made alone or in addition or in relation to any other
Award.  The terms of each Award need not
be identical, and the Administrator need not treat Participants uniformly.

 

(d)         Termination of Status.  The Administrator shall determine the effect
on an Award of the disability, death, retirement, authorized leave of absence
or other change in the employment or other status of a Participant and the
extent to which, and the period during which, the Participant, or the
Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.

 

(e)         Withholding.  Each Participant shall pay to the Company, or
make provision satisfactory to the Company for payment of, any taxes required
by law to be withheld in connection with Awards to such Participant pursuant to
such rules and procedures as the Company may adopt.  Except as the Administrator may otherwise
provide in an Award, when the Common Stock is registered under the Exchange
Act, Participants may satisfy such tax obligations in whole or in part by
delivery of shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their fair market value as determined by
(or in a manner approved by) the Administrator; provided, however, that the
total tax withholding where stock is being used to satisfy such tax obligations
cannot exceed the Company’s minimum statutory withholding obligations (based on
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income).  Shares surrendered to satisfy
tax withholding requirements cannot be subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.  The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to a Participant.

 

(f)          Amendment of Award.  Except as prohibited by Section 5(g),
the Administrator may amend, modify or terminate any outstanding Award,
including but not limited to, substituting therefor another Award of the same
or a different type and changing the date of exercise or realization, provided
that the Participant’s consent to such action shall be required unless the
Administrator determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

 

(g)         Conditions on Delivery of Stock.  The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares previously delivered under the Plan until (i) all conditions of the
Award have been met or removed to the satisfaction of the Company, (ii) in
the opinion of the Company’s counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied, including
any applicable securities laws and any applicable stock exchange or stock
market rules and regulations, and (iii) the Participant has executed
and delivered to the Company such representations or agreements as the Company
may consider appropriate to satisfy the requirements of any applicable laws, rules or
regulations.

 

 

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(h)         Acceleration.  The Administrator may at any time provide
that any Award shall become immediately exercisable in full or in part, free of
some or all restrictions or conditions, or otherwise realizable in full or in
part, as the case may be.

 

(i)          Deferrals.  The Administrator may permit Participants to
defer receipt of any Common Stock issuable upon exercise of an Option or upon
the lapse of any restriction applicable to any Restricted Stock Award, subject
to such rules and procedures as it may establish.

 

11.           Miscellaneous

 

(a)         No Right To Employment or Other
Status.  No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any
other relationship with the Company.  The
Company expressly reserves the right at any time to dismiss or otherwise
terminate its relationship with a Participant free from any liability or claim
under the Plan, except as expressly provided in the applicable Award.

 

(b)         No Rights As Stockholder.  Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.  Notwithstanding the foregoing, in the event
the Company effects a split of the Common Stock by means of a stock dividend
and the exercise price of and the number of shares subject to such Option are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall
be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

 

(c)         Effective Date and Term of Plan.  The Plan shall become effective on the date
on which it is adopted by the Board.  No
Awards shall be granted under the Plan after the date of the Company’s 2008
Annual Meeting of Stockholders, provided that Awards granted prior to that date
may extend beyond such date.

 

(d)         Amendment of Plan.  With the approval of the Board, at any time
and from time to time, the Administrator may amend, suspend or terminate the
Plan or any portion thereof at any time; provided that, to the extent
determined by the Administrator, no amendment requiring stockholder approval
under any applicable legal, regulatory or listing requirement shall become
effective until such stockholder approval is obtained.  No Award shall be made that is conditioned
upon stockholder approval of any amendment to the Plan.

 

(e)         Provisions for Foreign Participants.  The Administrator may, without amending the
Plan, modify Awards or Options granted to Participants who are foreign
nationals or employed outside the United States or establish subplans under the
Plan to recognize differences in laws, rules, regulations or customs of such
foreign jurisdictions with respect to tax, securities, currency, employee
benefit or other matters.

 

 

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(f)          Governing Law.  The provisions of the Plan and all Awards
made hereunder shall be governed by and interpreted in accordance with the laws
of the State of Delaware, without regard to any applicable conflicts of law.

 

(g)         Stockholder Approval Not Required.  It is expressly intended that approval of the
Company’s stockholders not be required as a condition of the effectiveness of
the Plan, and the Plan’s provisions shall be interpreted in a manner consistent
with such intent for all purposes and with NASD Rule 4350(i)(1)(A)(iv).

 

12Exhibit 10.1

 

Titan
Machinery Inc. Fiscal 2009 Non-Employee Director Compensation Plan

 

Each non-employee
director of Titan Machinery Inc. shall receive:

 

·      an annual retainer of
$20,000, payable quarterly (the chair of the audit committee shall receive an
additional $5,000 retainer);

 

·      an annual grant of shares of
restricted common stock equal to $20,000(1), based upon the fair market value
of the Company’s common stock on the last day of the prior fiscal year(2),
granted on the first day of the fiscal year for the prior fiscal year’s service;

 

·      a $1,000 cash fee per board
or committee meeting attended ($500 for teleconferences); and

 

·      reimbursement of reasonable
expenses incurred in connection with their services as directors.

 

(1) The restricted
stock grants shall have a one-year vesting period and each director shall be
required to hold such shares of restricted stock until such director is no
longer serving as a director of Titan Machinery Inc.

 

(2) The fair market
value of the Company’s common stock shall be equal to the closing price of the
Company’s common stock on the Nasdaq stock market on the date of determination,
or if such date is not a trading date on the Nasdaq stock market, the nearest
preceding trading date.

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