Document:

exv10w1

 

	 	 	 
	Exhibit 10.1

	 	Bone Care International, Inc. 2003 Stock Incentive Plan, as amended as of November 23, 2004.

BONE CARE INTERNATIONAL, INC.

2003 STOCK INCENTIVE PLAN

AS AMENDED AS OF

November 23, 2004

INTRODUCTION

     
1.1. Purposes.

     
The purposes of the Bone Care International, Inc.
2003 Stock Incentive Plan (the “Plan”) of Bone Care
International, Inc., a Wisconsin corporation (the
“Company”), are (i) to align the interests of the
Company’s stockholders and the recipients of awards under
this Plan by increasing the proprietary interest of such
recipients in the Company’s growth and success,
(ii) to advance the interests of the Company by attracting
and retaining directors, officers and other employees and
(iii) to motivate such persons to act in the long-term best
interests of the Company and its stockholders.

     
1.2. Certain Definitions.

     
“Agreement”
shall mean the written agreement
evidencing an award hereunder between the Company and the
recipient of such award.

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

     
“Cause”
shall mean (i) the willful
failure to perform the duties assigned by the Company (other
than a failure resulting from the holder’s Disability),
(ii) the willful engaging in conduct which is demonstrably
injurious to the Company or any Subsidiary, monetarily or
otherwise, including conduct that, in the reasonable judgment of
the Company, constitutes gross negligence or no longer conforms
to the standard of the Company’s executives or employees or
(iii) any act of fraud, embezzlement, theft or other act of
dishonesty, admission or conviction of a felony or of any crime
involving moral turpitude, fraud, embezzlement, theft or
misrepresentation, or the violation of any statutory or common
law duty of loyalty to the Company or any Subsidiary.

     
“Change in Control”
shall have the meaning set forth in
Section 6.8(b).

     
“Code”
shall mean the Internal Revenue Code
of 1986, as amended.

     
“Committee”
shall mean the committee designated by
the Board, consisting of two or more members of the Board, each
of whom may be (i) a “Non-Employee Director”
within the meaning of Rule 16b-3 under the Exchange Act and
(ii) an “outside director” within the meaning of
Section 162(m) of the Code.

     
“Common Stock”
shall mean the common stock, without
par value, of the Company, together with associated preferred
stock purchase rights.

     
“Company”
shall have the meaning set forth in
Section 1.1.

     
“Corporate Transaction”
shall have the meaning set forth in
Section 6.8(b)(3).

     
“Director Commencement Date”
shall have the meaning set forth in
Section 3.2.

     
“Disability”
shall mean the inability of the holder
of an award to perform substantially such holder’s duties
and responsibilities for at least 180 consecutive days as a
result of the holder’s physical or mental illness, as
determined solely by the Committee.

     
“Exchange Act”
shall mean the Securities Exchange Act
of 1934, as amended.

     
“Fair Market Value”
shall mean the closing transaction
price of a share of Common Stock as reported in the Nasdaq Stock
Market on the date as of which such value is being determined
or, if the Common Stock is not listed on Nasdaq, the closing
transaction price of a share of Common Stock on the principal
national stock exchange on which the Common Stock is traded on
the date as of which such value is being determined, or if there
shall be no reported transaction for such date, on the next
preceding date for which a transaction was reported; provided,
however, that if Fair Market Value for any date cannot be so
determined, Fair Market Value shall be determined by the
Committee by whatever means or method as the Committee, in the
good faith exercise of its discretion, shall at such time deem
appropriate.

     
“Free-Standing SAR”
shall mean an SAR which is not granted
in tandem with, or by reference to, an option, which entitles
the holder thereof to receive, upon exercise, shares of Common
Stock (which may be

 

 

Restricted Stock), cash or a combination thereof
with an aggregate value equal to the excess of the Fair Market
Value of one share of Common Stock on the date of exercise over
the base price of such SAR, multiplied by the number of such
SARs which are exercised.

     
“Incentive Stock Option”
shall mean an option to purchase
shares of Common Stock that meets the requirements of
Section 422 of the Code, or any successor provision, which
is intended by the Committee to constitute an Incentive Stock
Option.

     
“Incumbent Board”
shall have the meaning set forth in
Section 6.8(b)(2).

     
“Mature Shares”
shall mean previously-acquired shares
of Common Stock for which the holder thereof has good title,
free and clear of all liens and encumbrances, and which such
holder either (i) has held for at least six months or
(ii) has purchased on the open market.

     
“Non-Employee
Director” shall mean any director
of the Company who is not an officer or employee of the Company
or any Subsidiary.

     
“Non-Qualified Stock Option”
shall mean an option to purchase
shares of Common Stock which is not an Incentive Stock Option.

     
“Outstanding Common Stock”
shall have the meaning set forth in
Section 6.8(b)(1).

     
“Outstanding Voting Securities”
shall have the meaning set forth in
Section 6.8(b)(1).

     
“Performance Measures”
shall mean the criteria and
objectives, established by the Committee, which shall be
satisfied or met (i) as a condition to the grant or
exercisability of all or a portion of an option or SAR,
(ii) as a condition to the grant of a Stock Award or
(iii) during the applicable Restriction Period or
Performance Period as a condition to the holder’s receipt,
in the case of a Restricted Stock Award, of the shares of Common
Stock subject to such award, or, in the case of a Performance
Share Award, of the shares of Common Stock subject to such award
and/or of payment with respect to such award. Such criteria and
objectives may include one or more of the following: the
attainment by a share of Common Stock of a specified Fair Market
Value for a specified period of time, earnings per share, return
to stockholders (including dividends), return on assets, return
on equity, earnings of the Company, revenues, market share, cash
flow or cost reduction goals, or any combination of the
foregoing.

     
“Performance Period”
shall mean any period designated by
the Committee during which the Performance Measures applicable
to a Performance Share Award shall be measured.

     
“Performance Share”
shall mean a right, contingent upon
the attainment of specified Performance Measures within a
specified Performance Period, to receive one share of Common
Stock, which may be Restricted Stock, or in lieu of all or a
portion thereof, the Fair Market Value of such share of Common
Stock in cash.

     
“Performance Share Award”
shall mean an award of Performance
Shares under this Plan.

     
“Permanent and Total Disability”
shall have the meaning set forth in
Section 22(e)(3) of the Code or any successor thereto.

     
“Person”
shall have the meaning set forth in
Section 6.8(b)(1).

     
“Plan”
shall have the meaning set forth in
Section 1.1.

     
“Post-Termination Exercise Period”
shall mean the period specified in or
pursuant to Section 2.3(a), Section 2.3(b),
Section 2.3(d) or Section 2.3(e) following termination
of employment with or service to the Company during which an
option or SAR may be exercised.

     
“Restricted Stock”
shall mean shares of Common Stock
which are subject to a Restriction Period.

     
“Restricted Stock Award”
shall mean an award of Restricted
Stock or Restricted Stock Units under this Plan.

     
“Restricted Stock Unit”
shall mean a right, which is subject
to a Restriction Period, to receive one share of Common Stock.

     
“Restriction Period”
shall mean any period designated by
the Committee during which the Common Stock subject to a
Restricted Stock Award may not be sold, transferred, assigned,
pledged, hypothecated or otherwise encumbered or disposed of,
except as provided in this Plan or the Agreement relating to
such award.

 

 

     
“Retirement”
shall mean termination of employment
with or service to the Company by reason of retirement on or
after age 60.

     
“SAR”
shall mean a stock appreciation right
which may be a Free-Standing SAR or a Tandem SAR.

     
“Stock Award”
shall mean a Restricted Stock Award or
an Unrestricted Stock Award.

     
“Subsidiary”
and “Subsidiaries”
shall have the meanings set forth in Section 1.4.

     
“Tandem SAR”
shall mean an SAR which is granted in
tandem with, or by reference to, an option (including a
Non-Qualified Stock Option granted prior to the date of grant of
the SAR), which entitles the holder thereof to receive, upon
exercise of such SAR and surrender for cancellation of all or a
portion of such option, shares of Common Stock (which may be
Restricted Stock), cash or a combination thereof with an
aggregate value equal to the excess of the Fair Market Value of
one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of shares of Common
Stock subject to such option, or portion thereof, which is
surrendered.

     
“Tax Date”
shall have the meaning set forth in
Section 4.5.

     
“Ten Percent Holder”
shall have the meaning set forth in
Section 2.1(a).

     
“Unrestricted Stock”
shall mean shares of Common Stock
which are not subject to a Restriction Period or Performance
Measures.

     
“Unrestricted Stock Award”
shall mean an award of Unrestricted
Stock under this Plan.

     
1.3. Administration.

     
This Plan shall be administered by the Committee.
Any one or a combination of the following awards may be made
under this Plan to eligible persons: (i) options to
purchase shares of Common Stock in the form of Incentive Stock
Options or Non-Qualified Stock Options, (ii) SARs in the
form of Tandem SARs or Free-Standing SARs, (iii) Stock
Awards in the form of Restricted Stock, Restricted Stock Units
or Unrestricted Stock and (iv) Performance Shares. The
Committee shall, subject to the terms of this Plan, select
eligible persons for participation in this Plan and determine
the form, amount and timing of each award to such persons and,
if applicable, the number of shares of Common Stock, the number
of SARs, the number of Restricted Stock Units and the number of
Performance Shares subject to such an award, the exercise price
or base price associated with the award, the time and conditions
of exercise or settlement of the award and all other terms and
conditions of the award, including, without limitation, the form
of the Agreement evidencing the award. The Committee may, in its
sole discretion and for any reason at any time, subject to the
requirements of Section 162(m) of the Code and regulations
thereunder in the case of an award intended to be qualified
performance-based compensation, take action such that
(i) any or all outstanding options and SARs shall become
exercisable in part or in full, (ii) all or a portion of
the Restriction Period applicable to any outstanding Restricted
Stock Award shall lapse, (iii) all or a portion of the
Performance Period applicable to any outstanding Performance
Share Award shall lapse and (iv) the Performance Measures
applicable to any outstanding award (if any) shall be deemed to
be satisfied at the maximum or any other level. The Committee
shall, subject to the terms of this Plan, interpret this Plan
and the application thereof, establish rules and regulations it
deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an award, conditions
with respect to the award, such as limiting competitive
employment or other activities. All such interpretations, rules,
regulations and conditions shall be final, binding and
conclusive.

     
The Committee may delegate some or all of its
power and authority hereunder to the Board or the Chief
Executive Officer or other executive officer of the Company as
the Committee deems appropriate; provided,
however, that (i) the Committee may not delegate its
power and authority to the Board or the Chief Executive Officer
or other executive officer of the Company with regard to the
grant of an award to any person who is a “covered
employee” within the meaning of Section 162(m) of the
Code or who, in the Committee’s judgment, is likely to be a
covered employee at any time during the period an award
hereunder to such employee would be outstanding and
(ii) the Committee may not delegate its power and authority
to the Chief Executive Officer or other executive officer of the
Company with regard to the selection for participation in this
Plan of an officer or other person subject to Section 16 of
the Exchange Act or decisions concerning the timing, pricing or
amount of an award to such an officer or other person.

 

 

     
No member of the Board or Committee, and neither
the Chief Executive Officer nor any other executive officer to
whom the Committee delegates any of its power and authority
hereunder, shall be liable for any act, omission,
interpretation, construction or determination made in connection
with this Plan in good faith, and the members of the Board and
the Committee and the Chief Executive Officer or other executive
officer shall be entitled to indemnification and reimbursement
by the Company in respect of any claim, loss, damage or expense
(including attorneys’ fees) arising therefrom to the full
extent permitted by law, except as otherwise may be provided in
the Company’s Articles of Incorporation and/or By-laws, and
under any directors’ and officers’ liability insurance
that may be in effect from time to time.

     
A majority of the Committee shall constitute a
quorum. The acts of the Committee shall be either (i) acts
of a majority of the members of the Committee present at any
meeting at which a quorum is present or (ii) acts approved
in writing by all of the members of the Committee without a
meeting.

     
1.4. Eligibility.

     
Participants in this Plan shall consist of such
officers, other employees and directors (including Non-Employee
Directors) and persons expected to become officers, other
employees and directors of the Company and its subsidiaries from
time to time (individually a “Subsidiary” and
collectively the “Subsidiaries”) as the
Committee in its sole discretion may select from time to time.
For purposes of this Plan, references to employment by the
Company shall also mean employment by a Subsidiary. The
Committee’s selection of a person to participate in this
Plan at any time shall not require the Committee to select such
person to participate in this Plan at any other time.
Non-Employee Directors shall be eligible to participate in this
Plan in accordance with Article V.

     
1.5. Shares Available.

     
Subject to adjustment as provided in
Section 6.7, 1,400,000 shares of Common Stock shall be
available for awards under this Plan, reduced by the sum of the
aggregate number of shares of Common Stock which become subject
to outstanding options, including Non-Qualified Stock Options
granted to Non-Employee Directors pursuant to Article V,
outstanding Free-Standing SARs, outstanding Stock Awards and
outstanding Performance Share Awards. To the extent that shares
of Common Stock subject to an outstanding option (except to the
extent shares of Common Stock are issued or delivered by the
Company in connection with the exercise of a Tandem SAR),
Free-Standing SAR, Stock Award or Performance Share Award are
not issued or delivered by reason of the expiration,
termination, cancellation or forfeiture of such award or by
reason of the delivery or withholding of shares of Common Stock
to pay all or a portion of the exercise price of an award, if
any, or to satisfy all or a portion of the tax withholding
obligations relating to an award, then such shares of Common
Stock shall again be available under this Plan. Subject to
adjustment as provided in Section 6.7, the maximum number
of shares of Common Stock available for Stock Awards and
Performance Share Awards granted on or after November 23,
2004, shall be 400,000 in the aggregate.

     
Shares of Common Stock shall be made available
from authorized and unissued shares of Common Stock, or
authorized and issued shares of Common Stock reacquired and held
as treasury shares or otherwise or a combination thereof.

     
To the extent necessary for an award to be
qualified performance-based compensation under
Section 162(m) of the Code and the regulations thereunder,
(i) the maximum number of shares of Common Stock with
respect to which options or SARs or a combination thereof may be
granted during any calendar year to any person shall be 200,000,
subject to adjustment as provided in Section 6.7,
(ii) the maximum number of shares of Common Stock with
respect to which Stock Awards subject to Performance Measures
may be granted during any calendar year to any person shall be
200,000, subject to adjustment as provided in Section 6.7
and (iii) the maximum number of shares of Common Stock with
respect to which Performance Share Awards may be granted during
any calendar year to any person shall be 200,000, subject to
adjustment as provided in Section 6.7.

II.     STOCK OPTIONS
AND STOCK APPRECIATION RIGHTS

     
2.1. Stock Options.

     
The Committee may, in its discretion, grant
options to purchase shares of Common Stock to such eligible
persons as may be selected by the Committee. Each option, or
portion thereof, that is not an Incentive Stock Option shall be
a Non-Qualified Stock Option. An Incentive Stock Option may not
be granted to any person

 

 

who is not an employee of the Company or any
parent or subsidiary (as defined in Section 424 of the
Code). Each Incentive Stock Option shall be granted within ten
years of the date this Plan is adopted by the Board. To the
extent that the aggregate Fair Market Value (determined as of
the date of grant) of shares of Common Stock with respect to
which options designated as Incentive Stock Options are
exercisable for the first time by a participant during any
calendar year (under this Plan or any other plan of the Company,
or any parent or subsidiary as defined in Section 424 of
the Code) exceeds the amount (currently $100,000) established by
the Code, such options shall constitute Non-Qualified Stock
Options.

     
Options shall be subject to the following terms
and conditions and shall be subject to such additional terms and
conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable:

     
(a) Number of Shares and Purchase
Price. The number of shares of Common Stock subject to an
option and the purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by
the Committee; provided, however, that the purchase price
per share of Common Stock purchasable upon exercise of an option
shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the date of grant of such option; provided
further, that if an Incentive Stock Option shall be granted
to any person who, at the time such option is granted, owns
capital stock possessing more than ten percent of the total
combined voting power of all classes of capital stock of the
Company (or of any parent or subsidiary as defined in
Section 424 of the Code) (a “Ten Percent
Holder”), the purchase price per share of Common Stock
shall not be less than the price (currently 110% of Fair Market
Value) required by the Code in order for the option to
constitute an Incentive Stock Option.

     
(b) Exercise Period and
Exercisability. The period during which an option may be
exercised shall be determined by the Committee; provided,
however, that no Incentive Stock Option shall be exercised
later than ten years after its date of grant; provided
further, that if an Incentive Stock Option shall be granted
to a Ten Percent Holder, such option shall not be exercised
later than five years after its date of grant. The Committee
may, in its discretion, establish Performance Measures which
shall be satisfied or met as a condition to the grant of an
option or to the exercisability of all or a portion of an
option. The Committee shall determine whether an option shall
become exercisable in cumulative or non-cumulative installments
and in part or in full at any time. An exercisable option, or
portion thereof, may be exercised only with respect to whole
shares of Common Stock.

     
(c) Method of Exercise. An option may
be exercised (i) by giving written notice to the Company
specifying the number of whole shares of Common Stock to be
purchased and by accompanying such notice with payment therefor
in full (or by arranging for such payment to the Company’s
satisfaction) either (A) in cash, (B) by delivery
(either actual delivery or by attestation procedures established
by the Company) of Mature Shares having an aggregate Fair Market
Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise,
(C) in cash by a broker-dealer acceptable to the Company to
whom the optionee has submitted an irrevocable notice of
exercise or (D) a combination of (A) and (B), in each
case to the extent set forth in the Agreement relating to the
option, (ii) if applicable, by surrendering to the Company
any Tandem SARs which are cancelled by reason of the exercise of
the option and (iii) by executing such documents as the
Company may reasonably request. Any fraction of a share of
Common Stock which would be required to pay such purchase price
shall be disregarded and the remaining amount due shall be paid
in cash by the optionee. No certificate representing Common
Stock shall be delivered until the full purchase price therefor
and any withholding taxes thereon, as described in
Section 6.5, have been paid (or arrangement made for such
payment to the Company’s satisfaction).

     
2.2. Stock Appreciation
Rights. The Committee may, in its
discretion, grant SARs to such eligible persons as may be
selected by the Committee. The Agreement relating to an SAR
shall specify whether the SAR is a Tandem SAR or a Free-Standing
SAR.

     
SARs shall be subject to the following terms and
conditions and shall be subject to such additional terms and
conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable:

     
(a) Number of SARs and Base Price.
The number of SARs subject to an award shall be determined by
the Committee. Any Tandem SAR related to an Incentive Stock
Option shall be granted at the same time that such Incentive
Stock Option is granted. The base price of a Tandem SAR shall be
the purchase price per share of Common Stock of the related
option. The base price of a Free-Standing SAR shall be
determined by

 

 

the Committee; provided, however, that
such base price shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant of such
SAR.

     
(b) Exercise Period and
Exercisability. The Agreement relating to an award of SARs
shall specify whether such award may be settled in shares of
Common Stock (including shares of Restricted Stock) or cash or a
combination thereof. The period for the exercise of an SAR shall
be determined by the Committee; provided, however, that
no Tandem SAR shall be exercised later than the expiration,
cancellation, forfeiture or other termination of the related
option. The Committee may, in its discretion, establish
Performance Measures which shall be satisfied or met as a
condition to the grant of an SAR or to the exercisability of all
or a portion of an SAR. The Committee shall determine whether an
SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable
SAR, or portion thereof, may be exercised, in the case of a
Tandem SAR, only with respect to whole shares of Common Stock
and, in the case of a Free-Standing SAR, only with respect to a
whole number of SARs. If an SAR is exercised for shares of
Restricted Stock, a certificate or certificates representing
such Restricted Stock shall be issued in accordance with
Section 3.2(c) and the holder of such Restricted Stock
shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). Prior to the
exercise of an SAR for shares of Common Stock, including
Restricted Stock, the holder of such SAR shall have no rights as
a stockholder of the Company with respect to the shares of
Common Stock subject to such SAR.

     
(c) Method of Exercise. A Tandem SAR
may be exercised (i) by giving written notice to the
Company specifying the number of whole SARs which are being
exercised, (ii) by surrendering to the Company any options
which are canceled by reason of the exercise of the Tandem SAR
and (iii) by executing such documents as the Company may
reasonably request. A Free-Standing SAR may be exercised
(i) by giving written notice to the Company specifying the
whole number of SARs which are being exercised and (ii) by
executing such documents as the Company may reasonably request.

     
2.3. Termination of Employment or
Service.

     
(a) Disability. Subject to
paragraph (e) below and unless otherwise specified in
the Agreement relating to an option or SAR, as the case may be,
if the employment with or service to the Company of the holder
of an option or SAR terminates by reason of Disability, each
option and SAR held by such holder shall be fully exercisable
and may thereafter be exercised by such holder (or such
holder’s legal representative or similar person) until and
including the earlier to occur of (i) the date which is one
year (or such other period as set forth in the Agreement
relating to such option or SAR) after the effective date of such
holder’s termination of employment or service and
(ii) the expiration date of the term of such option or SAR.

     
(b) Retirement. Subject to
paragraph (e) below and unless otherwise specified in
the Agreement relating to an option or SAR, as the case may be,
if the employment with or service to the Company of the holder
of an option or SAR terminates by reason of Retirement, each
option and SAR held by such holder shall be exercisable only to
the extent that such option or SAR is exercisable on the
effective date of such holder’s termination of employment
or service and may thereafter be exercised by such holder (or
such holder’s legal representative or similar person) until
and including the earlier to occur of (i) the date which is
two years (or such other period as set forth in the Agreement
relating to such option or SAR) after the effective date of such
holder’s termination of employment or service and
(ii) the expiration date of the term of such option or SAR.

     
(c) Death. Subject to
paragraph (e) below and unless otherwise specified in
the Agreement relating to an option or SAR, as the case may be,
if the employment with or service to the Company of the holder
of an option or SAR terminates by reason of death, each option
and SAR held by such holder shall be fully exercisable and may
thereafter be exercised by such holder’s executor,
administrator, legal representative, beneficiary or similar
person until and including the earlier to occur of (i) the
date which is one year (or such other period as set forth in the
Agreement relating to such option or SAR) after the date of
death and (ii) the expiration date of the term of such
option or SAR.

     
(d) Other Termination. Subject to
paragraph (e) below and unless otherwise specified in
the Agreement relating to an option or SAR, as the case may be,
if the employment with or service to the Company of the holder
of an option or SAR terminates for any reason other than
Disability, Retirement or death or for Cause, each option and
SAR held by such holder shall be exercisable only to the extent
that such

 

 

option or SAR is exercisable on the effective
date of such holder’s termination of employment or service
and may thereafter be exercised by such holder (or such
holder’s legal representative or similar person) until and
including the earlier to occur of (i) the date which is
three months (or such other period as set forth in the Agreement
relating to such option or SAR) after the effective date of such
holder’s termination of employment or service and
(ii) the expiration date of the term of such option or SAR.

     
(e) Termination of Employment or
Service — Incentive Stock Options. If the
employment with the Company of a holder of an Incentive Stock
Option terminates by reason of Permanent and Total Disability,
each Incentive Stock Option held by such optionee shall be fully
exercisable (unless otherwise specified in the Agreement
relating to the option), and may thereafter be exercised by such
optionee (or such optionee’s legal representative or
similar person) until and including the earlier to occur of
(i) the date which is one year (or such shorter period as
set forth in the Agreement relating to such option) after the
effective date of such optionee’s termination of employment
and (ii) the expiration date of the term of such option.

     
If the employment with the Company of a holder of
an Incentive Stock Option terminates by reason of death, each
Incentive Stock Option held by such optionee shall be fully
exercisable (unless otherwise specified in the Agreement
relating to the option), and may thereafter be exercised by such
optionee’s executor, administrator, legal representative,
beneficiary or similar person until and including the earlier to
occur of (i) the date which is one year (or such other
period as set forth in the Agreement relating to such option)
after the date of death and (ii) the expiration date of the
term of such option.

     
If the employment with the Company of a holder of
an Incentive Stock Option terminates for any reason other than
Permanent and Total Disability or death or for Cause, each
Incentive Stock Option held by such optionee shall be
exercisable to the extent set forth in Section 2.3(a),
Section 2.3(b) or 2.3(d), as applicable (unless otherwise
specified in the Agreement relating to the option), and may
thereafter be exercised by such holder (or such holder’s
legal representative or similar person) until and including the
earlier to occur of (i) the date which is three months
after the effective date of such optionee’s termination of
employment and (ii) the expiration date of the term of such
option.

     
(f) Death Following Termination of
Employment or Service. Unless otherwise specified in the
Agreement relating to an option or SAR, as the case may be, if
the holder of an option or SAR dies during the applicable
Post-Termination Exercise Period, each option and SAR held by
such holder shall be exercisable only to the extent that such
option or SAR, as the case may be, is exercisable on the date of
such holder’s death and may thereafter be exercised by the
holder’s executor, administrator, legal representative,
beneficiary or similar person until and including the earlier to
occur of (i) the date which is one year (or such other
period as set forth in the Agreement relating to such option or
SAR) after the date of death and (ii) the expiration date
of the term of such option or SAR.

     
(g) Cause. Notwithstanding anything
to the contrary in this Plan or in any Agreement relating to an
option or SAR, as the case may be, if the employment with or
service to the Company of the holder of an option or SAR is
terminated by the Company for Cause, each option and SAR held by
such holder automatically shall be canceled on the effective
date of such holder’s termination of employment or service.

III.     STOCK
AWARDS

     
3.1. Stock
Awards. The Committee may, in its
discretion, grant Stock Awards to such eligible persons as may
be selected by the Committee. The Agreement relating to a Stock
Award shall specify whether the Stock Award is a Restricted
Stock Award (and whether the Restricted Stock Award consists of
Restricted Stock or Restricted Stock Units) or an Unrestricted
Stock Award.

     
3.2. Terms of Stock
Awards. Stock Awards shall be subject
to the following terms and conditions and shall be subject to
such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable.

     
(a) Number of Shares and Other Terms.
The number of shares of Common Stock subject to a Restricted
Stock Award or Unrestricted Stock Award and the Performance
Measures (if any) and Restriction Period applicable to a
Restricted Stock Award shall be determined by the Committee.
Unrestricted Stock Awards shall not be subject to any
Performance Measures or Restriction Periods.

     
(b) Vesting and Forfeiture. The
Agreement relating to a Restricted Stock Award shall provide, in
the manner determined by the Committee, in its discretion, and
subject to the provisions of this Plan, for the

 

 

vesting of the shares of Common Stock or
Restricted Stock Units subject to such award (i) if
specified Performance Measures are satisfied or met during the
specified Restriction Period or (ii) if the holder of such
award remains continuously in the employment of or service to
the Company during the specified Restriction Period and for the
forfeiture of all or a portion of the shares of Common Stock or
Restricted Stock Units subject to such award (x) if
specified Performance Measures are not satisfied or met during
the specified Restriction Period or (y) if the holder of
such award does not remain continuously in the employment of or
service to the Company during the specified Restriction Period.

     
(c) Share Certificates. During the
Restriction Period, a certificate or certificates representing
an award of Restricted Stock may be registered in the
holder’s name or a nominee name at the discretion of the
Company and may bear a legend, in addition to any legend which
may be required pursuant to Section 6.6, indicating that
the ownership of the shares of Common Stock represented by such
certificate is subject to the restrictions, terms and conditions
of this Plan and the Agreement relating to the award of
Restricted Stock. All certificates registered in the
holder’s name shall be deposited with the Company, together
with stock powers or other instruments of assignment (including
a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by the Company,
which would permit transfer to the Company of all or a portion
of the shares of Common Stock subject to the award of Restricted
Stock in the event such award is forfeited in whole or in part.
Upon termination of any applicable Restriction Period for an
award of Restricted Stock or Restricted Stock Units (and the
satisfaction or attainment of applicable Performance Measures),
or upon the grant of an Unrestricted Stock Award, in each case
subject to the Company’s right to require payment of any
taxes in accordance with Section 6.5, a certificate or
certificates evidencing ownership of the requisite number of
shares of Common Stock shall be delivered to the holder of such
award.

     
(d) Rights with Respect to Restricted
Stock Awards. Unless otherwise set forth in the Agreement
relating to an award of Restricted Stock, and subject to the
terms and conditions of an award of Restricted Stock, the holder
of such award shall have all rights as a stockholder of the
Company, including, but not limited to, voting rights, the right
to receive dividends and the right to participate in any capital
adjustment applicable to all holders of Common Stock; provided,
however, that a distribution with respect to shares of Common
Stock, other than a regular cash dividend, shall be deposited
with the Company and shall be subject to the same restrictions
as the shares of Common Stock with respect to which such
distribution was made. A holder of Restricted Stock Units shall
have no rights of a holder of Common Stock.

     
3.3.     Termination
of Employment or Service. All of the
terms relating to the satisfaction of Performance Measures and
the termination of the Restriction Period relating to a
Restricted Stock Award, or any forfeiture and cancellation of
such award upon a termination of employment with or service to
the Company of the holder of such award, whether by reason of
Disability, Retirement, death or any other reason, shall be
determined by the Committee.

IV.     PERFORMANCE
SHARE AWARDS

     
4.1.     Performance
Share Awards. The Committee may, in
its discretion, grant Performance Share Awards to such eligible
persons as may be selected by the Committee.

     
4.2.     Terms of
Performance Share Awards. Performance
Share Awards shall be subject to the following terms and
conditions and shall be subject to such additional terms and
conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.

     
(a) Number of Performance Shares and
Performance Measures. The number of Performance Shares
subject to a Performance Share Award and the Performance
Measures and Performance Period applicable to such award shall
be determined by the Committee.

     
(b) Vesting and Forfeiture. The
Agreement relating to a Performance Share Award shall provide,
in the manner determined by the Committee, in its discretion,
and subject to the provisions of this Plan, for the vesting of
such award, if specified Performance Measures are satisfied or
met during the specified Performance Period, and for the
forfeiture of all or a portion of such award, if specified
Performance Measures are not satisfied or met during the
specified Performance Period.

     
(c) Settlement of Vested Performance
Share Awards. The Agreement relating to a Performance Share
Award (i) shall specify whether such award may be settled
in shares of Common Stock (including shares of

 

 

Restricted Stock) or cash or a combination
thereof and (ii) may specify whether the holder thereof
shall be entitled to receive, on a current or deferred basis,
dividend equivalents, and, if determined by the Committee,
interest on or the deemed reinvestment of any deferred dividend
equivalents, with respect to the number of shares of Common
Stock subject to such award. If a Performance Share Award is
settled in shares of Restricted Stock, a certificate or
certificates representing such Restricted Stock shall be issued
in accordance with Section 3.2(c) and the holder of such
Restricted Stock shall have such rights of a stockholder of the
Company as determined pursuant to Section 3.2(d). Prior to
the settlement of a Performance Share Award in shares of Common
Stock, including Restricted Stock, the holder of such award
shall have no rights as a stockholder of the Company with
respect to the shares of Common Stock subject to such award.

     
4.3.     Termination
of Employment or Service. All of the
terms relating to the satisfaction of Performance Measures and
the termination of the Performance Period relating to a
Performance Share Award, or any forfeiture and cancellation of
such award upon a termination of employment with or service to
the Company of the holder of such award, whether by reason of
Disability, Retirement, death or any other reason, shall be
determined by the Committee.

V.     PROVISIONS
RELATING TO NON-EMPLOYEE DIRECTORS

     
5.1.     Eligibility.

     
Each Non-Employee Director shall be granted
options to purchase shares of Common Stock in accordance with
this Article V. All options granted under this
Article III shall be Non-Qualified Stock Options.

     
5.2.     Automatic
Grants of Stock Options.

     
Each Non-Employee Director shall be granted
Non-Qualified Stock Options as follows:

		
	 	     
    (a) Time of Grant. (i) On the
    date that each person first becomes a Non-Employee Director (a
    “Director Commencement Date”), such person
    shall be granted an option to purchase 20,000 shares
    of Common Stock, at a purchase price per share equal to 100% of
    the Fair Market Value of a share of Common Stock on the date of
    grant of such option.
    
	 
	 	     
    (ii) On the date that is 90 days after
    a Non-Employee Director’s Director Commencement Date, such
    Non-Employee Director shall be granted an option to purchase a
    number of shares of Common Stock (not to exceed 30,000) equal to
    the number of shares of Common Stock purchased by such
    Non-Employee Director during the 90 day period beginning on
    such Director Commencement Date, at a purchase price per share
    equal to 100% of the Fair Market Value of a share of Common
    Stock on the date of grant of such option.
    
	 
	 	     
    (iii) On the date of each annual meeting of
    shareholders of the Company, each person who is a Non-Employee
    Director on such date shall be granted an option to
    purchase 20,000 shares of Common Stock at a purchase
    price per share equal to 100% of the Fair Market Value of a
    share of Common Stock on the date of grant of such option.
    
	 
	 	     
    (iv) If a Non-Employee Director’s
    Director Commencement Date is not on the date of an annual
    meeting of shareholders of the Company, then on such Director
    Commencement Date, such Non-Employee Director shall be granted
    an option to purchase a number of shares of Common Stock equal
    to 20,000 multiplied by a fraction, the numerator of which is
    the number of days from and including such Director Commencement
    Date until the date of the next following annual meeting of
    shareholders of the Company, at a purchase price per share equal
    to 100% of the Fair Market Value of a Share of Common Stock on
    the date of grant of such option.
    
	 
	 	     
    (b) Exercise Period and
    Exercisability. Each option granted under
    Section 5.2(a)(i) or Section 5.2 (a)(ii) shall
    become fully exercisable in equal annual installments over the
    initial term as a director of the Non-Employee Director to whom
    such option is granted, each option granted under
    Section 5.2(a)(iii) or Section 5.2(a)(iv) shall become
    fully exercisable on the date of the annual meeting of
    shareholders of the Company next following the date of grant.
    Each option granted under this Section 5.2 shall expire ten
    years after its date of grant. An exercisable option, or portion
    thereof, may be exercised in whole or in part only with respect
    to whole shares of Common Stock. Options granted under this
    Section 5.2 shall be exercisable in accordance with
    Section 2.1(c).
    

 

 

     
5.3.     Termination
of Directorship.

     
(a) Disability. If the holder of an
option granted under Section 5.2 ceases to be a director of
the Company by reason of Disability, each such option held by
such holder shall be fully exercisable and may thereafter be
exercised by such holder (or such holder’s legal
representative or similar person) until and including the
earlier to occur of (i) the date which is one year after
the effective date of such holder’s ceasing to be a
director and (ii) the expiration date of the term of such
option.

     
(b) Retirement. If the holder of an
option granted under Section 5.2 ceases to be a director of
the Company on or after age 60, each such option held by
such holder shall be exercisable only to the extent that such
option is exercisable on the effective date of such
holder’s ceasing to be a director and may thereafter be
exercised by such holder (or such holder’s legal
representative or similar person) until and including the
earlier to occur of (i) the date which is two years after
the effective date of such holder’s ceasing to be a
director and (ii) the expiration date of the term of such
option.

     
(c) Death. If the holder of an option
granted under Section 5.2 ceases to be a director of the
Company by reason of death, each such option held by such holder
shall be fully exercisable and may thereafter be exercised by
such holder’s executor, administrator, legal
representative, beneficiary or similar person until and
including the earlier to occur of (i) the date which is one
year after the date of death and (ii) the expiration date
of the term of such option.

     
(d) Other Termination. If the holder
of an option granted under Section 5.2 ceases to be a
director of the Company for any reason other than Disability,
ceasing to be a director on or after age 60 or death, each
such option held by such holder shall be exercisable only to the
extent such option is exercisable on the effective date of such
holder’s ceasing to be a director and may thereafter be
exercised by such holder (or such holder’s legal
representative or similar person) until and including the
earlier to occur of (i) the date which is three months
after the effective date of such holder’s ceasing to be a
director and (ii) the expiration date of the term of such
option.

     
(e) Death Following Termination of
Directorship. If the holder of an option granted under
Section 5.2 dies during the period set forth in
Section 5.3(a) following such holder’s ceasing to be a
director of the Company by reason of Disability, during the
period set forth in Section 5.3(b) following such
holder’s ceasing to be a director of the Company on or
after age 60, or during the period set forth in
Section 5.3(d) following such holder’s ceasing to be a
director for any reason other than by reason of Disability or
ceasing to be a director on or after age 60, each such
option held by such holder shall be exercisable only to the
extent that such option is exercisable on the date of the
holder’s death and may thereafter be exercised by such
holder’s executor, administrator, legal representative,
beneficiary or similar person until and including the earlier to
occur of (i) the date which is one year after the date of
death and (ii) the expiration date of the term of such
option.

VI.     GENERAL

     
6.1.     Effective
Date and Term of Plan.

     
This Plan shall be submitted to the stockholders
of the Company for approval at the 2003 annual meeting of
stockholders and, if approved by the affirmative vote of a
majority of the shares of Common Stock present in person or
represented by proxy at such meeting, shall become effective on
the date of such approval. This Plan shall terminate ten years
after its effective date, unless terminated earlier by the
Board. Termination of this Plan shall not affect the terms or
conditions of any award granted prior to termination. In the
event that this Plan is not approved by the stockholders of the
Company, this Plan and any awards granted hereunder shall be
null and void.

     
6.2.     Amendments.

     
The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval
required by applicable law, rule or regulation, including
Section 162(m) and Section 422 of the Code;
provided, however, that no amendment shall be made
without stockholder approval if such amendment would
(a) increase the maximum number of shares of Common Stock
available under this Plan (subject to Section 6.7),
(b) effect any change inconsistent with Section 422 of
the Code or (c) extend the term of this Plan. No amendment
may impair the rights of a holder of an outstanding award
without the consent of such holder.

 

 

     
6.3.     Agreement.

     
No award shall be valid until an Agreement is
executed by the Company and the recipient of such award and,
upon execution by each party and delivery of the executed
Agreement to the Company, such award shall be effective as of
the effective date set forth in the Agreement.

     
6.4.     Non-Transferability
of Awards.

     
Unless otherwise specified in the Agreement
relating to an award, no award shall be transferable other than
by will, the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company.
Except to the extent permitted by the foregoing sentence or the
Agreement relating to an award, each award may be exercised or
settled during the holder’s lifetime only by the holder or
the holder’s legal representative or similar person. Except
to the extent permitted by the second preceding sentence or the
Agreement relating to an award, no award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise)
or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate,
encumber or otherwise dispose of any such award, such award and
all rights thereunder shall immediately become null and void.

     
6.5.     Tax
Withholding.

     
The Company shall have the right to require,
prior to the issuance or delivery of any shares of Common Stock
or the payment of any cash pursuant to an award made hereunder,
payment by the holder of such award of any Federal, state, local
or other taxes which may be required to be withheld or paid in
connection with such award. An Agreement may provide that
(i) the Company shall withhold whole shares of Common Stock
which would otherwise be delivered to a holder, having an
aggregate Fair Market Value determined as of the date the
obligation to withhold or pay taxes arises in connection with an
award (the “Tax Date”) or withhold an amount of cash
which would otherwise be payable to a holder, in the amount
necessary to satisfy any such obligation or (ii) the holder
may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company, (B) delivery
(either actual delivery or by attestation procedures established
by the Company) to the Company of Mature Shares having an
aggregate Fair Market Value, determined as of the Tax Date,
equal to the amount necessary to satisfy any such obligation,
(C) authorizing the Company to withhold whole shares of
Common Stock which would otherwise be delivered having an
aggregate Fair Market Value, determined as of the Tax Date, or
withhold an amount of cash which would otherwise be payable to a
holder, equal to the amount necessary to satisfy any such
obligation, (D) in the case of the exercise of an option, a
cash payment by a broker-dealer acceptable to the Company to
whom the optionee has submitted an irrevocable notice of
exercise or (E) any combination of (A), (B) and (C),
in each case to the extent set forth in the Agreement relating
to the award. Shares of Common Stock to be delivered or withheld
may not have an aggregate Fair Market Value in excess of the
amount determined by applying the minimum statutory withholding
rate. Any fraction of a share of Common Stock which would be
required to satisfy such an obligation shall be disregarded and
the remaining amount due shall be paid in cash by the holder.

     
6.6.     Restrictions
on Shares.

     
Each award made hereunder shall be subject to the
requirement that if at any time the Company determines that the
listing, registration or qualification of the shares of Common
Stock subject to such award upon any securities exchange or
automated quotation system or under any law, or the consent or
approval of any governmental body, or the taking of any other
action is necessary or desirable as a condition of, or in
connection with, the exercise or settlement of such award or the
delivery of shares thereunder, such award shall not be exercised
or settled and such shares shall not be delivered unless such
listing, registration, qualification, consent, approval or other
action shall have been effected or obtained, free of any
conditions not acceptable to the Company. The Company may
require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend
indicating that the sale, transfer or other disposition thereof
by the holder is prohibited except in compliance with the
Securities Act of 1933, as amended, and the rules and
regulations thereunder.

			
	 	6.7. 	
    Adjustment.

     
In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any

 

 

distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities
available under this Plan, the maximum number of securities
available for Stock Awards and Performance Share Awards, the
number and class of securities subject to each outstanding
option and the purchase price per security, the number and class
of securities subject to each option to be granted to
Non-Employee Directors pursuant to Article V, the maximum
number of securities with respect to which options or SARs or a
combination thereof, or Stock Awards or Performance Share
Awards, may be granted during any calendar year to any person
the terms of each outstanding SAR, the number and class of
securities subject to each outstanding Stock Award or
Performance Share Award, and the terms of each outstanding
Restricted Stock Award or Performance Share Award shall be
appropriately adjusted by the Committee, such adjustments to be
made in the case of outstanding options and SARs without an
increase in the aggregate purchase price or base price. The
decision of the Committee regarding any such adjustment shall be
final, binding and conclusive. If any such adjustment would
result in a fractional security being (a) available under
this Plan, such fractional security shall be disregarded, or
(b) subject to an award under this Plan, the Company shall
pay the holder of such award, in connection with the first
vesting, exercise or settlement of such award in whole or in
part occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security
(rounded to the nearest hundredth) by (ii) the excess, if
any, of (A) the Fair Market Value on the vesting, exercise
or settlement date over (B) the exercise price or base
price, if any, of such award.

			
	 	6.8. 	
    Change in Control.

     
(a) (1) Notwithstanding any provision
in this Plan or any Agreement, in the event of a Change in
Control pursuant to Section (b)(3) or (4) below in
connection with which the holders of Common Stock receive shares
of common stock that are registered under Section 12 of the
Exchange Act, (i) all outstanding options and SARs shall
immediately become exercisable in full, (ii) the
Restriction Period applicable to any outstanding Restricted
Stock Award shall lapse, (iii) the Performance Period
applicable to any outstanding Performance Share shall lapse,
(iv) the Performance Measures applicable to any outstanding
award shall be deemed to be satisfied at the maximum level and
(v) there shall be substituted for each share of Common Stock
available under this Plan, whether or not then subject to an
outstanding award, the number and class of shares into which
each outstanding share of Common Stock shall be converted
pursuant to such Change in Control. In the event of any such
substitution, the purchase price per share in the case of an
option and the base price in the case of an SAR shall be
appropriately adjusted by the Committee (whose determination
shall be final, binding and conclusive), such adjustments to be
made in the case of outstanding options and SARs without an
increase in the aggregate purchase price or base price.

     
(2) Notwithstanding any provision in this
Plan or any Agreement, in the event of a Change in Control
pursuant to Section (b)(1) or (2) below, or in the
event of a Change in Control pursuant to Section (b)(3) or
(4) below in connection with which the holders of Common
Stock receive consideration other than shares of common stock
that are registered under Section 12 of the Exchange Act,
each outstanding award shall be surrendered to the Company by
the holder thereof, and each such award shall immediately be
canceled by the Company, and the holder shall receive, within
ten days of the occurrence of a Change in Control, a cash
payment from the Company in an amount equal to (i) in the
case of an option, the number of shares of Common Stock then
subject to such option, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to
stockholders of the Company in any transaction whereby the
Change in Control takes place or (B) the Fair Market Value
of a share of Common Stock on the date of occurrence of the
Change in Control, over the purchase price per share of Common
Stock subject to the option, (ii) in the case of a
Free-Standing SAR, the number of shares of Common Stock then
subject to such SAR, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to
stockholders of the Company in any transaction whereby the
Change in Control takes place or (B) the Fair Market Value
of a share of Common Stock on the date of occurrence of the
Change in Control, over the base price of the SAR, (iii) in
the case of a Restricted Stock Award or Performance Share Award,
the number of shares of Common Stock or the number of
Performance Shares, as the case may be, then subject to such
award, multiplied by the greater of (A) the highest per
share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place or
(B) the Fair Market Value of a share of Common Stock on the
date of occurrence of

 

 

the Change in Control. In the event of a Change
in Control, each Tandem SAR shall be surrendered by the holder
thereof and shall be canceled simultaneously with the
cancellation of the related option.

     
(b) “Change in Control”
shall mean:

		
	 	     
    (1) the acquisition by any individual,
    entity or group (a “Person”), including any
    “person” within the meaning of Section 13(d)(3)
    or 14(d)(2) of the Exchange Act, of beneficial ownership within
    the meaning of Rule 13d-3 promulgated under the Exchange
    Act, of 50% or more of either (i) the then outstanding
    shares of common stock of the Company (the “Outstanding
    Common Stock”) or (ii) the combined voting power
    of the then outstanding securities of the Company entitled to
    vote generally in the election of directors (the
    “Outstanding Voting Securities”); excluding,
    however, the following: (A) any acquisition directly from
    the Company (excluding any acquisition resulting from the
    exercise of an exercise, conversion or exchange privilege unless
    the security being so exercised, converted or exchanged was
    acquired directly from the Company), (B) any acquisition by
    the Company, (C) any acquisition by an employee benefit
    plan (or related trust) sponsored or maintained by the Company
    or any corporation controlled by the Company or (D) any
    acquisition by any corporation pursuant to a transaction which
    complies with clauses (i), (ii) and (iii) of
    subsection (3) of this Section 6.8(b); provided
    further, that for purposes of clause (B), if any Person
    (other than the Company or any employee benefit plan (or related
    trust) sponsored or maintained by the Company or any corporation
    controlled by the Company) shall become the beneficial owner of
    50% or more of the Outstanding Common Stock or 50% or more of
    the Outstanding Voting Securities by reason of an acquisition by
    the Company, and such Person shall, after such acquisition by
    the Company, become the beneficial owner of any additional
    shares of the Outstanding Common Stock or any additional
    Outstanding Voting Securities and such beneficial ownership is
    publicly announced, such additional beneficial ownership shall
    constitute a Change in Control;
    
	 
	 	     
    (2) individuals who, as of the date hereof,
    constitute the Board (the “Incumbent Board”)
    cease for any reason to constitute at least a majority of such
    Board; provided that any individual who becomes a director of
    the Company subsequent to the date hereof whose election, or
    nomination for election by the Company’s stockholders, was
    approved by the vote of at least a majority of the directors
    then comprising the Incumbent Board shall be deemed a member of
    the Incumbent Board; and provided further, that any individual
    who was initially elected as a director of the Company as a
    result of an actual or threatened solicitation by a Person other
    than the Board for the purpose of opposing a solicitation by any
    other Person with respect to the election or removal of
    directors, or any other actual or threatened solicitation of
    proxies or consents by or on behalf of any Person other than the
    Board shall not be deemed a member of the Incumbent Board;
    
	 
	 	     
    (3) the consummation of a reorganization,
    merger or consolidation or sale or other disposition of all or
    substantially all of the assets of the Company (a
    “Corporate Transaction”); excluding, however, a
    Corporate Transaction pursuant to which (i) all or
    substantially all of the individuals or entities who are the
    beneficial owners, respectively, of the Outstanding Common Stock
    and the Outstanding Voting Securities immediately prior to such
    Corporate Transaction will beneficially own, directly or
    indirectly, more than 50% of, respectively, the outstanding
    shares of common stock, and the combined voting power of the
    outstanding securities entitled to vote generally in the
    election of directors, as the case may be, of the corporation
    resulting from such Corporate Transaction (including, without
    limitation, a corporation which as a result of such transaction
    owns the Company or all or substantially all of the
    Company’s assets either directly or indirectly) in
    substantially the same proportions relative to each other as
    their ownership, immediately prior to such Corporate
    Transaction, of the Outstanding Common Stock and the Outstanding
    Voting Securities, as the case may be, (ii) no Person
    (other than: the Company; any employee benefit plan (or related
    trust) sponsored or maintained by the Company or any corporation
    controlled by the Company; the corporation resulting from such
    Corporate Transaction; and any Person which beneficially owned,
    immediately prior to such Corporate Transaction, directly or
    indirectly, 50% or more of the Outstanding Common Stock or the
    Outstanding Voting Securities, as the case may be) will
    beneficially own, directly or indirectly, 50% or more of,
    respectively, the outstanding shares of common stock of the
    corporation resulting from such Corporate Transaction or the
    combined voting power of the outstanding securities of such
    corporation entitled to vote generally in the election of
    directors and
    

 

 

		
	 	
    (iii) individuals who were members of the
    Incumbent Board will constitute at least a majority of the
    members of the board of directors of the corporation resulting
    from such Corporate Transaction; or
    
	 
	 	     
    (4) the consummation of a plan of complete
    liquidation or dissolution of the Company.
    

			
	 	6.9. 	
    No Right of Participation or
    Employment.

     
Except as provided in Article V, no person
shall have any right to participate in this Plan. Neither this
Plan nor any award made hereunder shall confer upon any person
any right to continued employment by the Company, any Subsidiary
or any affiliate of the Company or affect in any manner the
right of the Company, any Subsidiary or any affiliate of the
Company to terminate the employment of any person at any time
without liability hereunder.

			
	 	6.10. 	
    Rights as Stockholder.

     
No person shall have any right as a stockholder
of the Company with respect to any shares of Common Stock or
other equity security of the Company which is subject to an
award hereunder unless and until such person becomes a
stockholder of record with respect to such shares of Common
Stock or equity security.

			
	 	6.11. 	
    Designation of Beneficiary.

     
If permitted by the Company, a holder of an award
may file with the Committee a written designation of one or more
persons as such holder’s beneficiary or beneficiaries (both
primary and contingent) in the event of the holder’s death.
To the extent an outstanding option or SAR granted hereunder is
exercisable, such beneficiary or beneficiaries shall be entitled
to exercise such option or SAR.

     
Each beneficiary designation shall become
effective only when filed in writing with the Committee during
the holder’s lifetime on a form prescribed by the
Committee. The spouse of a married holder domiciled in a
community property jurisdiction shall join in any designation of
a beneficiary other than such spouse. The filing with the
Committee of a new beneficiary designation shall cancel all
previously filed beneficiary designations.

     
If a holder fails to designate a beneficiary, or
if all designated beneficiaries of a holder predecease the
holder, then each outstanding option and SAR hereunder held by
such holder, to the extent exercisable, may be exercised by such
holder’s executor, administrator, legal representative or
similar person.

			
	 	6.12. 	
    Governing Law.

     
This Plan, each award hereunder and the related
Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the
Code or the laws of the United States, shall be governed by the
laws of the State of Wisconsin and construed in accordance
therewith without giving effect to principles of conflicts of
laws.

			
	 	6.13. 	
    Foreign Employees.

     
Without amending this Plan, the Committee may
grant awards to eligible persons who are subject to the laws of
foreign countries or jurisdictions on such terms and conditions
different from those specified in this Plan as may in the
judgment of the Committee be necessary or desirable to foster
and promote achievement of the purposes of this Plan and, in
furtherance of such purposes the Committee may make such
modifications, amendments, procedures, subplans and the like as
may be necessary or advisable to comply with provisions of laws
of other countries or jurisdictions in which the Company or its
Subsidiaries operate or have employees.

			
	 	6.14. 	
    No Repricing of Awards.

     
Notwithstanding anything in this Plan to the
contrary and subject to Section 6.7, the exercise price or
base price, as the case may be, of any award granted hereunder
shall not be reduced after the date of grant of such award, and
no award granted hereunder shall be canceled for the purpose of
regranting a new award at a lower exercise price or base price,
as the case may be, without the affirmative vote of a majority
of the voting power of the shares of capital stock of the
Company represented at a meeting in which the reduction of such
exercise price or base price, or the cancellation and regranting
of an award, as the case may be, is considered for approval.exv10w2

 

	 	 	 
	Exhibit 10.2

	 	Form of Agreement and Plan of Merger by and between Bone Care
International, Inc., a Wisconsin corporation, and Bone Care International,
Inc., a Delaware corporation.

AGREEMENT AND PLAN OF MERGER

BONE CARE INTERNATIONAL, INC.

A WISCONSIN CORPORATION

AND

BONE CARE INTERNATIONAL, INC.

A DELAWARE CORPORATION

     
This Agreement and Plan of Merger (this
“Agreement”) is dated as
of                     by
and between Bone Care International, Inc., a Wisconsin
corporation (“Bone Care Wisconsin”), and Bone Care
International, Inc., a Delaware corporation (“Bone Care
Delaware”). Bone Care Wisconsin and Bone Care Delaware are
sometimes referred to as the “Constituent
Corporations.”

RECITALS

     
A. Bone Care Wisconsin is a corporation duly
organized and existing under the laws of the State of Wisconsin
and has an authorized capital of 30,000,000 shares,
28,000,000 of which are designated Common Stock and 2,000,000 of
which are designated “Preferred Stock.” On the date
hereof,                      shares
of Common Stock are issued and outstanding, and no shares of
Preferred Stock are issued or outstanding.

     
B. Bone Care Delaware is a corporation duly
organized and existing under the laws of the State of Delaware
and has an authorized capital of 85,000,000 shares,
75,000,000 of which are designated Common Stock and 10,000,000
of which are designated “Preferred Stock.”. On the
date hereof, 100 shares of Common Stock are issued and
outstanding, all of which are held by Bone Care Wisconsin and no
shares of Preferred Stock are issued or outstanding.

     
C. The respective Boards of Directors of
each Constituent Corporation have determined that it is
advisable and in the best interests of such Constituent
Corporation to merge Bone Care Wisconsin with and into Bone Care
Delaware upon the terms and conditions herein provided and have
approved this Agreement and directed that this Agreement be
submitted to a vote of their respective shareholders and, if so
approved, executed by the undersigned officers; and

     
D. The Constituent Corporations intend that
the merger described herein qualify as a
“reorganization” under the provisions of
Section 368 of the Internal Revenue Code of 1986, as
amended.

     
NOW, THEREFORE, in
consideration of the mutual agreements and covenants set forth
herein, Bone Care Wisconsin and Bone Care Delaware hereby agree
as follows:

I.     Merger

     
1.1. Merger.
Upon the terms and subject to the conditions of this Agreement,
and in accordance with the Delaware General Corporation Law and
the Wisconsin Business Corporation Law, Bone Care Wisconsin
shall be merged with and into Bone Care Delaware (the
“Merger”) at the Effective Time (as defined in
Section 1.2). Following the Merger, the separate existence
of Bone Care Wisconsin shall cease and Bone Care Delaware shall
continue as the corporation surviving the Merger (the
“Surviving Corporation”).

     
1.2. Filing and
Effectiveness. The Merger shall become
effective when a Certificate of Merger, executed in accordance
with the requirements of the Delaware General Corporation Law,
is filed with the Secretary of State of the State of Delaware.
Such filing shall be made at such time as determined by the
respective Boards of Directors of the Constituent Corporations
which shall be after:

		
	 	     
    (a) The approval of this Agreement by the
    shareholders of each Constituent Corporation in accordance with
    the requirements of the Delaware General Corporation Law and the
    Wisconsin Business Corporation Law, including the approval of a
    plan of merger in accordance with Section 180.1103 of the
    Wisconsin Business Corporation Law;
    
	 
	 	     
    (b) The filing with the Wisconsin Department
    of Financial Institutions of Articles of Merger, executed in
    accordance with the requirements of the Wisconsin Business
    Corporation Law.
    

     
The date and time when the Merger becomes
effective is the “Effective Time.”

 

 

     
1.3. Effects of the
Merger. At the Effective Time, the
separate existence of Bone Care Wisconsin shall cease and the
Merger shall have the effects set forth in this Agreement and
the applicable provisions of the Delaware General Corporation
Law and the Wisconsin Business Corporation Law. Bone Care
Delaware, as the Surviving Corporation, shall possess all the
rights, privileges, powers and franchises as well of a public as
of a private nature, and be subject to all the restrictions,
disabilities and duties of each of the Constituent Corporations;
and the rights, privileges, powers and franchises of each of the
Constituent Corporations and all property, real, personal and
mixed, and all debts due to each of the Constituent Corporations
on whatever account, as well for stock subscriptions as all
other things in action or belonging to each of the Constituent
Corporations shall be vested in Bone Care Delaware as the
Surviving Corporation; and all property, rights, privileges,
powers and franchises, and all and every other interest shall be
thereafter as effectually the property of Bone Care Delaware as
the Surviving Corporation as they were of each of the
Constituent Corporations, but all rights of creditors and all
liens upon any property of any of the Constituent Corporations
shall be preserved unimpaired, and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation and may be enforced against it to
the same extent as if said debts, liabilities and duties had
been incurred or contracted by it.

II.     Charter and
By-laws; Directors and Officers

     
2.1. Certificate of Incorporation;
By-laws. The Certificate of
Incorporation of Bone Care Delaware in effect immediately prior
to the Effective Time will continue in full force and effect as
the Certificate of Incorporation of the Surviving Corporation
until duly amended. The By-laws of Bone Care Delaware in effect
immediately prior to the Effective Time will continue in full
force and effect as the By-laws of the Surviving Corporation
until duly amended.

     
2.2. Directors and
Officers. The directors and officers
of Bone Care Wisconsin at the Effective Time will be the
directors and officers of the Surviving Corporation until their
successors are duly elected and qualified or until their earlier
resignation or removal.

III.     Conversion
of Securities

     
3.1. Bone Care Wisconsin Common
Shares. As of the Effective Time, by
virtue of the Merger and without any action on the part of
either of the Constituent Corporations or the holders of any
securities of either Constituent Corporation, each share of Bone
Care Wisconsin Common Stock issued and outstanding immediately
prior thereto will be converted into and become one fully paid
and nonassessable share of Common Stock of the Surviving
Corporation. The registered owner of any outstanding certificate
for shares of Bone Care Wisconsin will thereafter and until such
certificate is surrendered for transfer or otherwise accounted
for to the Surviving Corporation, have and be entitled to
exercise any voting and other rights with respect to and to
receive dividends and other distributions upon the shares of
Common Stock of the Surviving Corporation represented by such
outstanding certificate as provided above.

     
3.2. Bone Care Wisconsin Options and
Rights. As of the Effective Time, by
virtue of the Merger and without any action on the part of
either of the Constituent Corporations or the holders of any
securities of either Constituent Corporation, the Surviving
Corporation will assume and continue the stock option plans and
all other employee benefit plans of Bone Care Wisconsin. Each
outstanding option or right to purchase or otherwise acquire
shares or other securities of Bone Care Wisconsin will become,
without any action on the part of either of the Constituent
Corporations or the holders of any securities of either of the
Constituent Corporations, an option or right to purchase or
otherwise acquire shares or other securities of the Surviving
Corporation, on the same terms and conditions and at an exercise
or purchase or other price per share or security equal to the
exercise or purchase or other price per share or security
applicable to any such Bone Care Wisconsin option or right to
purchase or otherwise acquire at the Effective Time.

     
A number of shares of the Surviving Corporation
will be reserved for issuance upon the exercise of options, or
rights to purchase or otherwise acquire equal to the number of
shares or other securities of Bone Care Wisconsin so reserved
immediately prior to the Effective Time.

     
3.3. Bone Care Delaware Common
Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of
either of the Constituent Corporations or the holders of any
securities of either Constituent Corporation, each share of Bone
Care Delaware Common Stock issued and outstanding immediately
prior thereto will be cancelled and returned to the status of
authorized but unissued shares.

 

 

IV.     General

     
4.1. Covenants of Bone Care
Delaware. Bone Care Delaware agrees
that it will, on or before the Effective Time take all actions
as may be required by the Wisconsin Business Corporation Law to
effect the Merger and to qualify Bone Care Delaware to do
business in Wisconsin following the Merger.

     
4.2. Further
Assurances. When required Bone Care
Delaware or by its successors or assigns, Bone Care Wisconsin
shall execute and deliver any deeds and other instruments and
take such other actions as may be appropriate or necessary to
vest or perfect or conform of record the title and possession of
all the property, interest, assets, rights, privileges,
immunities, powers, franchises and authority of Bone Care
Wisconsin and otherwise to carry out the purposes of this
Agreement. The officers and directors of Bone Care Delaware are
fully authorized in the name and on behalf of Bone Care
Wisconsin or otherwise to take any and all such action and to
execute and deliver any and all such deeds and other instruments.

     
4.3. Abandonment.
At any time before the Effective Time, this Agreement may be
terminated and the Merger may be abandoned for any reason
whatsoever by the Board of Directors of either Bone Care
Wisconsin or of Bone Care Delaware, or of both, notwithstanding
the approval of this Agreement by the shareholders of Bone Care
Wisconsin or by the sole stockholder of Bone Care Delaware, or
by both.

     
4.4. Amendment.
The Board of Directors of the Constituent Corporations may amend
this Agreement at any time prior to the filing of this Agreement
or certificate in lieu thereof with the Secretary of State of
the State of Delaware, provided that an amendment made
subsequent to the adoption of this Agreement by the shareholders
of either Constituent Corporation may not: (1) alter or
change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of
all or any of the shares of any class or series thereof of such
Constituent Corporation, (2) alter or change any term of
the Certificate of Incorporation of the Surviving Corporation to
be effected by the Merger, or (3) alter or change any of
the terms and conditions of this Agreement if such alteration or
change would materially and adversely affect the holders of any
class or series of capital stock of either Constituent
Corporation.

     
4.5. Registered
Office. The registered office of the
Surviving Corporation in the State of Delaware is located at
1209 Orange Street, City of Wilmington, County of Newcastle,
Delaware, 19801 and The Corporation Trust Company is the
registered agent of the Surviving Corporation at such address.

     
4.6. Agreement.
Executed copies of this Agreement will be on file at the
principal place of business of the Surviving Corporation at 1600
Aspen Commons, Middleton, Wisconsin 53562, and copies thereof
will be furnished to any shareholder of either Constituent
Corporation, upon request and without cost.

     
4.7. Governing
Law. This Agreement shall in all
respects be construed, interpreted and enforced in accordance
with the governed by the laws of the State of Delaware and, so
far as applicable, the merger provisions of the Wisconsin
Business Corporation Law.

     
4.8. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which
together constitute one and the same instrument.

 

 

     
IN WITNESS WHEREOF,
this Agreement having first been
approved by the resolutions of the Board of Directors of Bone
Care Delaware and Bone Care Wisconsin, is hereby executed on
behalf of each of such two corporations and attested by their
duly authorized officers.

		
	 	
    BONE CARE INTERNATIONAL, INC.,
    
	 	
    A DELAWARE CORPORATION
    

			
	 	By: 	

		
	 	
    

	 	
    Name:        

			
	 	Title:	

ATTEST:

Name:        

		
	Title:	

		
	 	
    BONE CARE INTERNATIONAL, INC.,
    
	 	
    A DELAWARE CORPORATION
    

			
	 	By: 	

		
	 	
    

	 	
    Name:        

			
	 	Title:	

ATTEST:

Name:        

		
	Title:

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