Document:

Amendment to the Rights Agreement

 

Exhibit 4.1

AMENDMENT NO. 1

TO THE

RIGHTS AGREEMENT

BETWEEN

ISCO INTERNATIONAL INC.

(FORMERLY ILLINOIS SUPERCONDUCTOR CORPORATION)

AND

LA SALLE BANK NATIONAL ASSOCIATION

(FORMERLY KNOWN AS LA SALLE NATIONAL TRUST COMPANY)

DATED AS OF FEBRUARY 9, 1996

     THIS AMENDMENT NO. 1, dated February 13, 2002, to the RIGHTS AGREEMENT
between ISCO INTERNATIONAL INC. (FORMERLY ILLINOIS SUPERCONDUCTOR CORPORATION)
and LA SALLE BANK NATIONAL ASSOCIATION (FORMERLY LA SALLE NATIONAL TRUST
COMPANY) dated as of FEBRUARY 9, 1996.

     WHEREAS, ISCO INTERNATIONAL INC. (FORMERLY ILLINOIS SUPERCONDUCTOR
CORPORATION) (“ISCO”) and
LA SALLE BANK NATIONAL ASSOCIATION (FORMERLY LA SALLE
NATIONAL TRUST COMPANY) (“LBNA”) entered into a Rights Agreement, dated as of
February 9, 1996 (the “Plan”) dealing with, among other things, certain rights
of the holders of ISCO Common Stock; and

     WHEREAS, ISCO has entered into an understanding with Elliott Associates,
L.P., Elliott International, L.P. and Alexander Finance, LP (collectively,
“Investors”) (the “Understanding”) under which the Company, in exchange for
other consideration, has agreed to permit the Investors not to become an
“Acquiring Person”, as defined under the Plan, subject to the terms and
conditions of the Plan and the Understanding; and

     WHEREAS, to implement this Understanding, ISCO and LBNA, pursuant to
Section 27 of the Plan, have agreed to amend the Plan as set forth herein.

     NOW THEREFORE, the parties intending to be legally bound, agree as
follows:

     1.     Representations and Warranties. The Company represents and warrants to
the Rights Agent that:

	 	 	 
	    (a)	
the Company does not believe that any of the
Investors has heretofore become an Acquiring Person
under
Section 1(a) of the Plan;
	    (b)	
none of the Series B Rights (as defined in the
Plan) have been issued; and

 

	 	 	 
	    (c)	
this Amendment has been duly authorized by the
Company pursuant to the requirements of Section 27 of
the
Plan, and has been approved by the Company’s Board of
Directors.

     2.     Amendment of Section 1(a). The definition of “Acquiring Person” set
forth in Section 1, paragraph (a) of the Plan, is amended by substituting the
following:

	 	 	 
	    (a)	
“Acquiring Person” shall mean any person(as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the
Common Shares of the Company then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee
benefit plan of the Company or any Subsidiary of the Company,
or (iv) any entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
“Acquiring Person” as the result of (a) an acquisition of
Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of
the Common Shares of the Company then outstanding or (b) the
acquisition by such Person of newly issued Common Shares
directly from the Company (it being understood that a
purchase from an underwriter or other intermediary is not
directly from the Company); provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by reason
of share purchases by the Company or the receipt of
newly-issued Common Shares directly from the Company and
shall, after such share purchase or direct issuance by the
Company, become the Beneficial Owner of any additional Common
Shares of the Company other than in a transaction permitted
in this Section, then such Person shall be deemed to be an
“Acquiring Person”; but provided further, however, that none
of Elliott Associates, L.P., a Delaware limited partnership,
and Elliott International, L.P., a Cayman Islands limited
partnership, each of which are joint filers of a Schedule 13D
(and collectively referred to herein as “Elliott” and with
their Affiliates, the “Elliott Entities”) and Alexander
Finance, LP, an Illinois limited partnership (referred to
herein as “Alexander”) shall be an Acquiring Person by reason
of the foregoing even if it acquires Beneficial Ownership of
additional common shares, provided that (i) each acquisition
of additional common shares is effected solely by a direct
purchase from the Company and has been approved in advance by
its Board of Directors, or (ii) it and/or its Affiliates
acquire Beneficial Ownership of additional shares in any
manner other than a direct purchase from the Company approved in

 

	 	 	 
	    	
advance by its Board of Directors so long as the
acquisition of these additional shares, in the aggregate,
does not exceed one (1%) percent of the total issued and
outstanding common shares of the Company as of the date
hereof. In addition, none of the Elliot Entities nor
Alexander will be an Acquiring Person by reason of direct
transfers between any of the Elliott Entities or from
Alexander to any of its Affiliates of common shares over
which it or they had Beneficial Ownership or additional
common shares over which it or they acquire Beneficial
Ownership to the extent permitted in the preceding sentence.
Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would
otherwise be an “Acquiring Person”, as defined pursuant to
the foregoing provisions of this paragraph (a), has become
such inadvertently; and such Person divests as promptly as
practicable a sufficient number of Common Shares so that each
Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an “Acquiring
Person” for any purposes of this Understanding.

     3.     No Other Changes. Except as specifically amended by this Amendment,
all other provisions of the Plan shall remain in full force and effect. This
Amendment shall not constitute or operate as a waiver of, or estoppel with
respect to, any provisions of the Plan by any party hereto. Capitalized terms
used and not otherwise defined herein will have the meanings ascribed thereto
in the Plan.

     4.     Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same understanding of amendment.

     IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
duly executed, all as of the date first written above.

	 	 	 
	ATTEST:	 	
ISCO INTERNATIONAL, INC. (FORMERLY ILLINOIS
SUPERCONDUCTOR CORPORATION)
	 
	By: /s/ Frank Cesario	 	
By: /s/ Charles F. Willes
	 
	ATTEST:	 	
LA SALLE BANK NATIONAL ASSOCIATION

(FORMERLY LA SALLE NATIONAL TRUST COMPANY)
	 
	By: /s/ Greg Malatia	 	
By: /s/ Mark F. Rimkus<PAGE>
                                                                    EXHIBIT 10.1

                                  U.S. BANCORP
                            2001 STOCK INCENTIVE PLAN

SECTION 1. PURPOSE; ADOPTION.

         (a) Purpose. The purpose of the U.S. Bancorp 2001 Stock Incentive Plan
(the "Plan") is to aid in attracting and retaining employees, management
personnel and other personnel and members of the Board of Directors who are not
also employees ("Non-Employee Directors") of U.S. Bancorp (the "Company")
capable of assuring the future success of the Company, to offer such personnel
and Non-Employee Directors incentives to put forth maximum efforts for the
success of the Company's business and to afford such personnel and Non-Employee
Directors an opportunity to acquire a proprietary interest in the Company.

         (b) Adoption. The Company hereby adopts the Plan, subject to approval
by the stockholders of the Company. As so established and approved, the Plan
shall be known as the 2001 Stock Incentive Plan.

SECTION 2. DEFINITIONS.

         As used in the Plan, the following terms shall have the meanings set
forth below:

                  (a) "Affiliate" shall mean (i) any entity that, directly or
         indirectly through one or more intermediaries, is controlled by the
         Company and (ii) any entity in which the Company has a significant
         equity interest, as determined by the Committee.

                  (b) "Award" shall mean any Option, Stock Appreciation Right,
         Restricted Stock, Restricted Stock Unit, Performance Award or other
         Stock-Based Award granted under the Plan.

                  (c) "Award Agreement" shall mean any written agreement,
         contract or other instrument or document evidencing any Award granted
         under the Plan.

                  (d) "Change in Control" shall have the meaning ascribed to
         such term in any Award Agreement, and shall include phrases of similar
         meaning such as, by way of example but not limitation, "Full Change in
         Control" and "Partial Change in Control."

                  (e) "Code" shall mean the Internal Revenue Code of 1986, as
         amended from time to time, and any regulations promulgated thereunder.

                  (f) "Committee" shall mean a committee of the Board of
         Directors of the Company designated by such Board to administer the
         Plan and composed of not less than two directors.

                  (g) "Eligible Person" shall mean any employee, officer,
         director (including any Non-Employee Director), consultant (including,
         without limitation, any member of a regional advisory board of the
         Company or any Affiliate) or independent contractor providing services
         to the Company or any Affiliate who the Committee determines to be an
         Eligible Person.

                                       1
<PAGE>

                  (h) "Fair Market Value" shall mean, with respect to any
         property (including, without limitation, any Shares or other
         securities), the fair market value of such property determined by such
         methods or procedures as shall be established from time to time by the
         Committee.

                  Notwithstanding the foregoing, for purposes of the Plan, the
         Fair Market Value of Shares on a given date shall be, if the Shares
         are then traded on the New York Stock Exchange, the closing price of
         the Shares as reported on the New York Stock Exchange on such date or,
         if the New York Stock Exchange is not open for trading on that date, on
         the most recent preceding date when the New York Stock Exchange was
         open for trading.

                  (i) "Incentive Stock Option" shall mean an option granted
         under Section 6(a) of the Plan that is intended to meet the
         requirements of Section 422 of the Code or any successor provision.

                  (j) "Non-Qualified Stock Option" shall mean an option granted
         under Section 6(a) of the Plan that is not an incentive stock option.

                  (k) "Option" shall mean an Incentive Stock Option or a
         Non-Qualified Stock Option.

                  (l) "Other Stock-Based Award" shall mean any right granted
         under Section 6(e) of the Plan.

                  (m) "Participant" shall mean an Eligible Person designated to
         be granted an Award under the Plan.

                  (n) "Performance Award" shall mean any right granted under
         Section 6(d) of the Plan.

                  (o) "Person" shall mean any individual, corporation,
         partnership, association or trust.

                  (p) "Qualifying Termination" shall mean a termination of
         employment under circumstances that, in the judgment of the Committee,
         warrant acceleration of the exercisability of Options or the lapse of
         restrictions relating to Restricted Stock or Restricted Stock Units.
         Without limiting the generality of the foregoing, a Qualifying
         Termination may apply to large-scale terminations of employment
         relating to the disposition or divestiture of businesses or legal
         entities or similar circumstances.

                  (q) "Restricted Stock" shall mean any Share granted under
         Section 6(c) of the Plan.

                  (r) "Restricted Stock Unit" shall mean any unit granted under
         Section 6(c) of the Plan evidencing the right to receive a Share (or a
         cash payment equal to the Fair Market Value of a Share) at some future
         date.

                                       2
<PAGE>

                  (s) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
         Securities and Exchange Commission under the Securities Exchange Act of
         1934.

                  (t) "Shares" shall mean shares of Common Stock, $.01 par
         value, of the Company or such other securities or property as may
         become subject to Awards pursuant to an adjustment made under Section
         7(c) of the Plan.

                  (u) "Stock Appreciation Right" shall mean any right granted
         under Section 6(b) of the Plan.

SECTION 3. ADMINISTRATION.

         (a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the terms of the Plan and applicable
law, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to each
Participant under the Plan; (iii) determine the number of Shares to be covered
by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options or
the lapse of restrictions relating to Restricted Stock or Restricted Stock
Units; provided, however, that any such acceleration of exercisability or lapse
of restrictions shall be limited to accelerations relating to a Change in
Control, a Qualifying Termination, death or disability; (vi) determine whether,
to what extent and under what circumstances Awards may be exercised in cash,
Shares, other securities, other Awards or other property, or canceled, forfeited
or suspended; (vii) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards, other property and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or the Committee;
(viii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (ix) establish, amend, suspend or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (x) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon any Participant, any holder or beneficiary of
any Award and any employee of the Company or any Affiliate.

         (b) Delegation. The Committee may delegate to one or more officers of
the Company or any Affiliate or a committee of such officers, but only to the
extent such officer or officers are also members of the Board of Directors of
the Company, the authority, subject to such terms and limitations as the
Committee shall determine, to grant Awards to Eligible Persons who are not
officers or directors of the Company for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended. The Committee shall not delegate
its powers and duties under the Plan in any manner that would cause the Plan not
to comply with the requirements of Section 162(m) of the Code.

                                       3
<PAGE>

SECTION 4. SHARES AVAILABLE FOR AWARDS.

         (a) Shares Available. Subject to adjustment as provided in Section
7(c), the total number of Shares available for granting Awards under the Plan
shall be 100,000,000. Not more than 10,000,000 of such Shares, subject to
adjustment as provided in Section 7 (c) of the Plan, will be available for
granting any types of Awards other than Awards of Options or Stock Appreciation
Rights; provided, however, that any Shares covered by an Award that is not an
Option or Stock Appreciation Rights that are forfeited shall again be available
for purposes of the foregoing limitation. If any Shares covered by an Award or
to which an Award relates are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Shares, then the number of Shares
counted against the aggregate number of Shares available under the Plan with
respect to such Award, to the extent of any such forfeiture or termination,
shall again be available for granting Awards under the Plan. In addition, if any
Shares are used by a Participant as full or partial payment to the Company of
the purchase price relating to an Award, whether by actual delivery or
attestation, or in connection with satisfaction of tax obligations relating to
an Award, whether by actual delivery, attestation or having shares withheld from
the Award, only the number of Shares issued net of the Shares tendered or
withheld shall be deemed delivered for purposes of determining the maximum
number of Shares available for granting of Awards under the Plan.

         (b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the number of Shares
covered by such Award or to which such Award relates shall be counted on the
date of grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan. Such Shares may again become available for
granting Awards under the Plan pursuant to the provisions of Section 4(a) of the
Plan, subject to the limitations set forth in Section 4(c) of the Plan.

         (c) Incentive Stock Options. Notwithstanding the foregoing, the number
of Shares available for granting Incentive Stock Options under the Plan shall
not exceed 100,000,000, subject to adjustment as provided in Section 7(c) of the
Plan and Section 422 or 424 of the Code or any successor provisions.

         (d) Award Limitations Under the Plan. No Eligible Person may be granted
any Award or Awards, the value of which Awards are based solely on an increase
in the value of the Shares after the date of grant of such Awards, for more than
5,000,000 Shares (subject to adjustment as provided in Section 7(c) of the
Plan), in the aggregate, in any calendar year beginning with the year commencing
January 1, 2001. The foregoing limitation specifically includes the grant of any
"qualified performance-based" Awards within the meaning of Section 162(m) of the
Code.

SECTION 5. ELIGIBILITY.

         Any Eligible Person, including any Eligible Person who is an officer or
director of the Company or any Affiliate, shall be eligible to be designated a
Participant; provided, however, that an Incentive Stock Option may be granted
only to full-time or part-time employees (which term as used herein includes,
without limitation, officers and directors who are also employees), and an
Incentive Stock Option shall not be granted to an employee of an Affiliate
unless the

                                       4
<PAGE>

Affiliate is also a "subsidiary corporation" of the Company within the meaning
of Section 424(f) of the Code or any successor provision.

SECTION 6. AWARDS.

         (a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

                  (i) Exercise Price. The purchase price per Share purchasable
         under an Option shall be determined by the Committee; provided,
         however, that such purchase price shall not be less than 100% of the
         Fair Market Value of a Share on the date of grant of such Option.

                  (ii) Option Term. The term of each Option shall be fixed by
         the Committee at the time of grant but in no event shall any Option
         have a term of more than 10 years.

                  (iii) Time and Method of Exercise. The Committee shall
         determine the time or times at which an Option may be exercised in
         whole or in part and the method or methods by which, and the form or
         forms (including, without limitation, cash, Shares previously owned by
         the Participant, other securities, other Awards or other property, or
         any combination thereof, having a Fair Market Value on the exercise
         date equal to the relevant exercise price) in which, payment of the
         exercise price with respect thereto may be made or deemed to have been
         made.

                  (iv) Reload Options. The Committee may grant "reload" Options,
         separately or together with another Option, pursuant to which, subject
         to the terms and conditions established by the Committee and any
         applicable requirements of Rule 16b-3 or any other applicable law, the
         Participant would be granted a new Option when the payment of the
         exercise price of a previously granted Option is made by the delivery
         of shares of the Company's Common Stock owned by the Participant
         pursuant to Section 6(a)(iii) hereof or the relevant provisions of
         another plan of the Company, and/or when shares of the Company's Common
         Stock are tendered or forfeited as payment of the amount to be withheld
         under applicable tax laws in connection with the exercise of an option,
         which new Option would be an option to purchase the number of Shares
         not exceeding the sum of (A) the number of shares of the Company's
         Common Stock provided as consideration upon the exercise of the
         previously granted Option to which such "reload" Option relates and (B)
         the number of shares of the Company's Common Stock tendered or
         forfeited as payment of the amount to be withheld under applicable tax
         laws in connection with the exercise of the Option to which such
         "reload" Option relates. "Reload" Options may be granted with respect
         to Options granted under this Plan or any other stock option plan of
         the Company or any of its Affiliates (which shall explicitly include
         plans assumed by the Company in connection with mergers, combinations
         and similar transactions). Such "reload" Options shall have a term that
         shall not extend beyond the term of the previously granted Option to
         which the "reload" Option relates and shall have a per share exercise
         price equal to the Fair Market Value as of the date of grant of the new
         Option. Any such

                                       5
<PAGE>

         "reload" Options shall be subject to the availability of sufficient
         shares for grant under the Plan.

                  (v) Elective Deferral. The Committee may from time to time
         establish procedures pursuant to which a Participant may elect to
         defer, until a time or times later than the exercise of an Option,
         receipt of all or a portion of the Shares subject to such Option, all
         on such terms and conditions as the Committee shall determine. If any
         such deferrals are permitted, then a Participant who elects such
         deferral shall not have any rights as a stockholder with respect to
         such deferred Shares unless and until Shares actually are delivered to
         the Participant with respect thereto, except to the extent otherwise
         determined by the Committee.

         (b) Stock Appreciation Rights. The Committee is hereby authorized to
grant Stock Appreciation Rights to Participants subject to the terms of the Plan
and any applicable Award Agreement. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise thereof
the excess of (i) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall so determine, at any time during a specified period
before or after the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, which price shall not be less
than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right. Subject to the terms of the Plan and any applicable
Award Agreement, the grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.

         (c) Restricted Stock and Restricted Stock Units. The Committee is
hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units
to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

                  (i) Restrictions. Shares of Restricted Stock and Restricted
         Stock Units shall be subject to such restrictions as the Committee may
         impose (including, without limitation, any limitation on the right to
         vote a Share of Restricted Stock or the right to receive any dividend
         or other right or property with respect thereto), which restrictions
         may lapse separately or in combination at such time or times, in such
         installments or otherwise as the Committee may deem appropriate. Except
         as otherwise provided herein, Awards of Restricted Stock and Restricted
         Stock Units shall contain restrictions that lapse no sooner than three
         years following the date of grant or, in the case of Awards with
         performance-based vesting provisions, no sooner than one year following
         the date of grant; provided, however, that restrictions may lapse
         sooner than such dates as to portions of such Awards so long as
         restrictions as to the total number of Shares covered by such Awards do
         not lapse sooner than such dates; and provided, further, that such
         limitations shall not apply to Awards granted to new employees as part
         of initial terms of employment or Awards granted to new or existing
         employees in connection with the acquisition of businesses or assets by
         the Company.

                                       6
<PAGE>

                  (ii) Forfeiture; Delivery of Shares. Except as otherwise
         determined by the Committee, upon termination of employment (as
         determined under criteria established by the Committee) during the
         applicable restriction period, all Shares of Restricted Stock and all
         Restricted Stock Units at such time subject to restriction shall be
         forfeited and reacquired by the Company; provided, however, that the
         Committee may, when it finds that a waiver would be in the best
         interest of the Company, including, without limitation, in connection
         with Changes in Control, Qualifying Terminations, death or disability,
         waive in whole or in part any or all remaining restrictions with
         respect to Shares of Restricted Stock or Restricted Stock Units. In the
         case of Restricted Stock, Shares shall be issued at the time such
         Awards are granted and may be certificated or uncertificated. Shares
         representing Restricted Stock that is no longer subject to restrictions
         shall be delivered to the holder thereof promptly after the applicable
         restrictions lapse or are waived. In the case of Restricted Stock
         Units, no Shares shall be issued at the time such Awards are granted.
         Upon the lapse or waiver of restrictions and the restricted period
         relating to Restricted Stock Units evidencing the right to receive
         Shares, such Shares shall be issued and delivered to the holders of the
         Restricted Stock Units.

         (d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted and the amount of any payment or transfer to be made
pursuant to any Performance Award shall be determined by the Committee.

         (e) Other Stock-Based Awards. The Committee is hereby authorized to
grant to Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
Shares (including, without limitation, securities convertible into Shares), as
are deemed by the Committee to be consistent with the purpose of the Plan;
provided, however, that such grants must comply with applicable law. Subject to
the terms of the Plan and any applicable Award Agreement, the Committee shall
determine the terms and conditions of such Awards. Shares or other securities
delivered pursuant to a purchase right granted under this Section 6(e) shall be
purchased for such consideration, which may be paid by such method or methods
and in such form or forms (including without limitation, cash, Shares, other
securities, other Awards or other property or any combination thereof), as the
Committee shall determine, the value of which consideration, as established by
the Committee, shall not be less than 100% of the Fair Market Value of such
Shares or other securities as of the date such purchase right is granted.

         (f) General.

                  (i) Consideration for Awards. Awards may be granted for no
         cash consideration or for any cash or other consideration as may be
         determined by the Committee or required by applicable law.

                                       7
<PAGE>

                  (ii) Awards May Be Granted Separately or Together. Awards may,
         in the discretion of the Committee, be granted either alone or in
         addition to, in tandem with or in substitution for any other Award or
         any award granted under any plan of the Company or any Affiliate other
         than the Plan. Awards granted in addition to or in tandem with other
         Awards or in addition to or in tandem with awards granted under any
         such other plan of the Company or any Affiliate may be granted either
         at the same time as or at a different time from the grant of such other
         Awards or awards.

                  (iii) Forms of Payment Under Awards. Subject to the terms of
         the Plan and of any applicable Award Agreement, payments or transfers
         to be made by the Company or an Affiliate upon the grant, exercise or
         payment of an Award may be made in such form or forms as the Committee
         shall determine (including, without limitation, cash, Shares, other
         securities, other Awards or other property or any combination thereof),
         and may be made in a single payment or transfer, in installments or on
         a deferred basis, in each case in accordance with rules and procedures
         established by the Committee. Such rules and procedures may include,
         without limitation, provisions for the payment or crediting of
         reasonable interest on installment or deferred payments.

                  (iv) Limits on Transfer of Awards. No Award and no right under
         any such Award shall be transferable by a Participant otherwise than by
         will or by the laws of descent and distribution; provided, however,
         that, if so determined by the Committee, a Participant may, in the
         manner established by the Committee, designate a beneficiary or
         beneficiaries to exercise the rights of the Participant and receive any
         property distributable with respect to any Award upon the death of the
         Participant; and provided, further, that except in the case of an
         Incentive Stock Option, Awards may be transferable as specifically
         provided in any applicable Award Agreement or amendment thereto
         pursuant to terms determined by the Committee. Except as otherwise
         provided in any applicable Award Agreement or amendment thereto (other
         than an Award Agreement relating to an Incentive Stock Option),
         pursuant to terms determined by the Committee, each Award or right
         under any Award shall be exercisable during the Participant's lifetime
         only by the Participant or, if permissible under applicable law, by the
         Participant's guardian or legal representative. Except as otherwise
         provided in any applicable Award Agreement or amendment thereto (other
         than an Award Agreement relating to an Incentive Stock Option), no
         Award or right under any such Award may be pledged, alienated, attached
         or otherwise encumbered, and any purported pledge, alienation,
         attachment or encumbrance thereof shall be void and unenforceable
         against the Company or any Affiliate.

                  (v) Term of Awards. The term of each Award shall be for such
         period as may be determined by the Committee at the time of grant but
         in no event shall any Award have a term of more than 10 years.

                  (vi) Restrictions; Securities Exchange Listing. All
         certificates for Shares or other securities delivered under the Plan
         pursuant to any Award or the exercise thereof shall be subject to such
         stop transfer orders and other restrictions as the Committee may deem
         advisable under the Plan or the rules, regulations and other
         requirements of the Securities and Exchange Commission and any
         applicable federal or state securities laws,

                                       8
<PAGE>

         and the Committee may cause a legend or legends to be placed on any
         such certificates to make appropriate reference to such restrictions.
         If the Shares or other securities are traded on a securities exchange,
         the Company shall not be required to deliver any Shares or other
         securities covered by an Award unless and until such Shares or other
         securities have been admitted for trading on such securities exchange.

SECTION 7. AMENDMENT AND TERMINATION; ADJUSTMENTS.

         Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

                  (a) Amendments to the Plan. The Board of Directors of the
         Company may amend, alter, suspend, discontinue or terminate the Plan at
         any time and from time to time; provided, however, that,
         notwithstanding any other provision of the Plan or any Award Agreement,
         without the approval of the stockholders of the Company, no such
         amendment, alteration, suspension, discontinuation or termination shall
         be made that, absent such approval, would violate any rules or
         regulations of the New York Stock Exchange, any other securities
         exchange or the National Association of Securities Dealers, Inc. that
         are applicable to the Company.

                  (b) Amendments to Awards. Except as otherwise explicitly
         provided herein, the Committee may waive any conditions of or rights of
         the Company under any outstanding Award, prospectively or
         retroactively. The Committee may not amend, alter, suspend, discontinue
         or terminate any outstanding Award, prospectively or retroactively,
         without the consent of the Participant or holder or beneficiary
         thereof, except as otherwise herein provided. Except as provided in
         Section 7(c) hereof, no Option may be amended to reduce its initial
         exercise price and no Option shall be canceled and replaced with an
         Option or Options having a lower exercise price without the approval of
         the stockholders of the Company.

                  (c) Adjustments. In the event that any dividend or other
         distribution (whether in the form of cash, Shares, other securities or
         other property), recapitalization, stock split, reverse stock split,
         reorganization, merger, consolidation, split-up, spin-off, combination,
         repurchase or exchange of Shares or other securities of the Company or
         other similar corporate transaction or event affecting the Shares would
         be reasonably likely to result in the diminution or enlargement of any
         of the benefits or potential benefits intended to be made available
         under the Plan or under an Award (including, without limitation, the
         benefits or potential benefits of provisions relating to the term,
         vesting or exercisability of any Option, the availability of any Tandem
         Stock Appreciation rights or "reload" Option rights, if any, contained
         in any Option Award, and any Change in Control or similar provisions of
         any Award), the Committee shall, in such manner as it shall deem
         equitable or appropriate in order to prevent such diminution or
         enlargement of any such benefits or potential benefits, adjust any or
         all of (i) the number and type of Shares (or other securities or other
         property) which thereafter may be made the subject of Awards, (ii) the
         number and type of Shares (or other securities or other property)
         subject to outstanding Awards and (iii) the purchase or exercise price
         with

                                       9
<PAGE>

         respect to any Award; provided, however, that the number of Shares
         covered by any Award or to which such Award relates shall always be a
         whole number.

                  (d) Correction of Defects, Omissions and Inconsistencies. The
         Committee 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 desirable to carry the Plan into effect.

SECTION 8. INCOME TAX WITHHOLDING.

         In order to comply with all applicable federal, state or local income
tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state or local payroll,
withholding, income or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all federal and state
taxes to be withheld or collected upon exercise or receipt of (or the lapse of
restrictions relating to) an Award, the Committee, in its discretion and subject
to such additional terms and conditions as it may adopt, may permit the
Participant to satisfy such tax obligation by (i) electing to have the Company
withhold a portion of the Shares otherwise to be delivered upon exercise or
receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes (but only to the extent of the
minimum amount required to be withheld under applicable laws or regulations) or
(ii) delivering to the Company Shares other than Shares issuable upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes (but only to the extent of the
minimum amount required to be withheld under applicable laws or regulations).
The election, if any, must be made on or before the date that the amount of tax
to be withheld is determined.

SECTION 9. GENERAL PROVISIONS.

         (a) No Rights to Awards. No Eligible Person, Participant or other
Person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to different Participants.

         (b) Award Agreements. No Participant will have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company.

         (c) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or continuing
in effect other or additional compensation arrangements, and such arrangements
may be either generally applicable or applicable only in specific cases.

         (d) No Right to Employment, etc. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ, or as
giving a Non-Employee Director the right to continue as a director, of the
Company or any Affiliate. In addition, the Company or an Affiliate may at any
time dismiss a Participant from employment, or terminate the term of a

                                       10
<PAGE>

Non-Employee Director, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.

         (e) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Minnesota.

         (f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.

         (g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

         (h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash shall be paid in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

         (i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

         (j) Section 16 Compliance. The Plan is intended to comply in all
respects with Rule 16b-3 or any successor provision, as in effect from time to
time, and in all events the Plan shall be construed in accordance with the
requirements of Rule 16b-3. If any Plan provision does not comply with Rule
16b-3 as hereafter amended or interpreted, the provision shall be deemed
inoperative. The Board of Directors, in its absolute discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the
Plan with respect to persons who are officers or directors subject to Section 16
of the Securities and Exchange Act of 1934, as amended, without so restricting,
limiting or conditioning the Plan with respect to other Participants.

SECTION 10. EFFECTIVE DATE OF THE PLAN.

         The Plan shall be effective as of the date of approval by the
stockholders of the Company in accordance with applicable law.

                                       11
<PAGE>

SECTION 11. TERM OF THE PLAN.

         New Awards shall be granted under the Plan only during a 10-year period
beginning on the effective date of the Plan. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award theretofore
granted may extend beyond the end of such 10-year period, and the authority of
the Committee provided for hereunder with respect to the Plan and any Awards,
and the authority of the Board of Directors of the Company to amend the Plan,
shall extend beyond the end of such period.

                                       12

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