Document:

March 04 Exhibit 10.16 to RC2 Form 10-K

                                                                                                                                  EXHIBIT 10.16

 

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT is made as of March 4, 2003, by and between Racing Champions Ertl Corporation, a Delaware corporation and its subsidiaries (the "Company"), and John Walter Lee II (the "Employee"). Certain capitalized terms used herein are defined in section 10 below. 

RECITALS 

A.   The Company and the Employee desire to terminate any and all prior agreements, whether oral or written, between the parties and between the Employee and Company relating to the Employee’s employment. 

B.   The Company desires to employ the Employee and the Employee is willing to make his services available to the Company on the terms and conditions set forth below. 

AGREEMENTS 

In consideration of the premises and the mutual agreements which follow, the parties agree as follows: 

1.   Employment. The Company hereby employs the Employee and the Employee hereby accepts employment with the Company on the terms and subject to the conditions set forth in this Agreement. 

2.   Term. The term of the Employee’s employment hereunder shall commence on the date hereof and shall continue until terminated as provided in section 6 below. 

3.   Duties. The Employee shall serve as the President of Learning Curve International, Inc. ("LCI") a wholly owned subsidiary of the Company and as an Executive Vice President of Racing Champions Ertl Corporation and will, under the direction of the Company’s Chief Executive Officer and President, faithfully and to the best of his ability, perform the duties of such position. The Employee shall be one of the principal executive officers and Senior Management of the Company and shall, subject to the control of the Company’s Board of Directors, have the normal duties, responsibilities and authority associated with such position. The Employee shall also perform such additional duties and responsibilities which may from time to time be reasonably assigned or delegated by the Chief Executive Officer and/or President and/or the Board of Directors of the Company. The Employee agrees to devote his entire business time, effort, skill and attention to the proper discharge of such duties while employed by the Company; provided that the Employee may serve on corporate, civic or charitable boards or committees, fill speaking engagements, manage personal investments or engage in other business activities from time to time on the condition that such activities do not individually or in the aggregate significantly interfere with the performance of the Employee’s duties under this Agreement, subject in each case to the prior approval of the Company, such approval not to be unreasonably withheld or delayed. 

	 
	 		 
	

	
 

4.   Compensation. Effective March 1, 2003, the Employee shall receive a base salary of $300,000 per year, payable in regular and equal monthly installments (the "Base Salary"). 

5.   Fringe Benefits. 

(a)   Vacation. The Employee shall be entitled to four weeks of paid vacation annually. The Employee and the Company shall mutually determine the time and intervals of such vacation. 

(b)   Medical, Health, Dental, Disability and Life Coverage. The Employee shall be eligible to participate in any medical, health, dental, disability and life insurance policy in effect for the Senior Management of the Company. 

(c)   Incentive Bonus and Stock Ownership Plans. The Employee shall be entitled to participate in any incentive bonus plan, incentive stock option or other stock ownership plan or other incentive compensation plan developed generally for the Senior Management of the Company, on a basis consistent with his position and level of compensation with the Company. Without limiting the foregoing, Employee shall be entitled to participate in (i) the annual Management Incentive Bonus Plan on a basis consistent with past practice and his position and level of compensation with the Company, and (ii) the Additional Senior Management Incentive Bonus Plan described on Exhibit A. With respect to Employee's participation in the annual Management Incentive Bonus Plan, Employee shall have a target bonus amount of $200,000 based on an agreed formula consistent with the bonus formula applicable to the Company's Chief Executive Officer and President. In addition, Employee shall be entitled to participate in the Racing Champions Ertl Corporation Stock Incentive Plan, as amended as of May 10, 2002 (the "Option Plan"), with discretionary grants targeted at a number of Options with a value equal to $300,000. The Options shall be valued using the Black-Scholes model of option valuation as used by the Company to value option grants to other Senior Management. 

(d)   Automobile. The Company agrees to reimburse the Employee up to $600.00 per month, as such amount may be increased from time to time consistent with the Company’s reimbursement policy for the Senior Management of the Company to cover Employee’s expenses in connection with his leasing or use of an automobile. Additionally, the Company will pay for the gas used for business purposes. All maintenance and insurance expense for the automobile is the responsibility of the Employee. 

(e)   Reimbursement for Reasonable Business Expenses. The Company shall pay or reimburse the Employee for reasonable expenses incurred by him in connection with the performance of his duties pursuant to this Agreement including, but not limited to, travel expenses, expenses in connection with seminars, professional conventions or similar professional functions and other reasonable business expenses. 

(f)   Key Man Insurance. The parties agree that the Company has the option to purchase one or more key man life insurance policies upon the life of the Employee. The Company shall own and shall have the absolute right to name the beneficiary or beneficiaries of said policy. The Employee agrees to cooperate fully with the Company in securing said policy, including, but not limited to submitting himself to any physical examination which may be required at such reasonable times and places as Company shall specify. 

	 
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(g)   Term Life Insurance Policy. During the Employment Period, the Company shall provide a term life insurance policy with a principal amount equal to the lesser of (i) two million dollars ($2,000,000) and (ii) the maximum amount that may be purchased with a premium of $20,000 per year, to be owned by any one or more members of Employee’s immediate family or by a trust for the primary benefit of Employee’s immediate family. The owner of the policy shall have the power to designate the beneficiary and to assign any rights under the policy. The Company shall pay the premiums required under the policy up to a maximum of $20,000 per year. 

6.   Termination. 

(a)   Termination of the Employment Period. The Employment Period shall continue until the earlier of: (i) April 30, 2006 unless the parties mutually agree in writing to extend the term of this Agreement (such date hereof or such extended date being referred to herein as the "Expected Completion Date"), (ii) the date of the Employee’s death or Disability, (iii) the date the Employee resigns or (iv) the date that the Board of Directors determines that termination of Employee’s employment is in the best interests of the Company (the "Employment Period"). The last day of the Employment Period shall be referred to herein as the "Termination Date." 

(b)   Definitions. 

(i)   For purposes of this Agreement, "Disability" shall mean a physical or mental sickness or any injury which renders the Employee incapable of performing the services required of him as an employee of the Company and which does or may be expected to continue for more than six months during any 12-month period. In the event Employee shall be able to perform his usual and customary duties on behalf of the Company following a period of Disability, and does so perform such duties or such other duties as are prescribed by the Board of Directors for a period of three continuous months, any subsequent period of Disability shall be regarded as a new period of Disability for purposes of this Agreement. The Company and the Employee shall determine the existence of a Disability and the date upon which it occurred. In the event of a dispute regarding whether or when a Disability occurred, the matter shall be referred to a medical doctor selected by the Company and the Employee. In the event of their failure to agree upon such a medical doctor, the Company and the Employee shall each select a medical doctor who together shall select a third medical doctor who shall make the determination. Such determination shall be conclusive and binding upon the parties hereto. 

	 
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(ii)   For purposes of this Agreement, "Cause" shall be deemed to exist if the Employee shall have (1) engaged in a material breach of the terms of section 7 or section 8 of this Agreement; (2) refused to perform a lawful written directive of the Board of Directors of the Company or the Company’s Chief Executive Officer that is consistent with Employee’s duties and responsibilities; (3) been convicted of, or plead guilty to, or plead nolo contendere to a felony or a crime involving moral turpitude; (4) committed an act of fraud, embezzlement or material misappropriation against the Company, including, but not limited to, the offer, payment, solicitation or acceptance of any unlawful bribe or kickback with respect to the Company’s business; (5) habitually neglected his duties (other than resulting from Employee’s incapacity due to physical or mental illness); (6) failed to perform the duties incident to his employment with the Company on a regular basis, including but not limited to by reason of chronic absence from work (excluding a failure resulting from the Employees’ Disability, vacations, illnesses or leaves of absence approved by the Board); (7) made a knowing material misrepresentation to the stockholders or directors of the Company; or (8) engaged in willful and intentional material misconduct in the performance of his duties or gross negligence of his duties under this Agreement or a material violation of his fiduciary obligations to the Company; 

provided, that for purposes of clause (2) and only the first act or omission with respect to section 8 of this Agreement for clause (1), any act or omission that is curable shall not constitute Cause unless the Company gives Employee written notice of such act or omission, that specifies the act or omission in reasonable detail, and that specifically refers to this section and, within 15 days after such notice is received by Employee, Employee fails to cure such act or omission (except that the Company shall not be required to provide such notice more than once in cases of repeated acts or omissions). 

(iii)   For purposes of this Agreement, "Good Reason" shall mean (1) the material diminution of the Employee’s duties set forth in section 3 above or any material adverse change in title, status, responsibilities, authorities or material perquisites of Employee; (2) the relocation of the offices at which the Employee is principally employed to a location which is more than 50 miles from the offices at which the Employee is principally employed as of the date hereof; provided, that travel necessary for the performance of the Employee’s duties set forth in section 3 above shall not determine the location where the Employee is "principally employed;" (3) assignment to Employee of duties materially inconsistent with his position and duties described in this Agreement; (4) any material reduction in or failure to pay Employee’s Base Salary as provided herein; or (5) any breach of Section 5 of this Agreement by the Company regarding Employee's eligibility to participate in incentive option or other incentive compensation. 

(c)   Termination for Disability or Death. In the event of termination for Disability or death, payments of the greater of (i) the Employee’s Base Salary or (ii) $300,000 shall be made to the Employee, his designated beneficiary or his estate for a period of six months after the Termination Date in accordance with the normal payroll practices of the Company. During this period, the Company shall also reimburse the Employee for amounts paid, if any, to continue medical, dental and health coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act. During this period, the Company will also continue Employee’s life insurance and disability coverage, to the extent permitted under applicable policies, and will pay to the Employee the fringe benefits pursuant to section 5 which have accrued prior to the Termination Date. 

	 
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(d)   Termination by the Company without Cause or by the Employee for Good Reason. If (i) the Employment Period is terminated by the Company for any reason other than for Cause, Disability or death, (ii) the Employment Period is terminated by the Company for what the Company believes is Cause or Disability, and it is ultimately determined that the Employment Period was terminated without Cause or Disability or (iii) the Employee resigns for Good Reason, the Employee shall be entitled to receive, as damages for such a termination, the greater of (i) his Base Salary from the Termination Date to the second anniversary of the Termination Date or (ii) $600,000, provided, however, that if such termination or resignation occurs at any time after the occurrence of or in contemplation of a Change of Control, then Employee shall be entitled to receive the greater of (i) his Base Salary from the Termination Date to the third anniversary of the Termination Date or (iii) $900,000. Such payment shall be made in accordance with the normal payroll practices of the Company. During this period, the Company shall also reimburse the Employee for amounts paid, if any, to continue medical, dental and health coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act. During this period, the Company will also continue Employee’s life insurance and disability coverage and will pay to the Employee the fringe benefits pursuant to section 5 which have accrued prior to the date of termination. 

(e)   Termination by the Company for Cause or by the Employee Without Good Reason. If the Employment Period is terminated by the Company with Cause or as a result of the Employee’s resignation without Good Reason, the Employee shall not be entitled to receive his Base Salary or any fringe benefits or bonuses for periods after the Termination Date. 

(f)   Effect of Termination. The termination of the Employment Period pursuant to section 6(a) shall not affect the Employee’s obligations as described in sections 7 and 8. 

7.   Noncompetition and Nonsolicitation. The Employee acknowledges and agrees that the contacts and relationships of the Company and its Subsidiaries with its customers, suppliers, licensors and other business relations are, and have been, established and maintained at great expense and provide the Company and its Subsidiaries with a substantial competitive advantage in conducting their business. The Employee acknowledges and agrees that by virtue of the Employee’s employment with the Company, the Employee will have unique and extensive exposure to and personal contact with the Company’s customers and licensors, and that he will be able to establish a unique relationship with those Persons that will enable him, both during and after employment, to unfairly compete with the Company and its Subsidiaries. Furthermore, the parties agree that the terms and conditions of the following restrictive covenants are reasonable and necessary for the protection of the business, trade secrets and Confidential Information (as defined in section 8 below) of the Company and its Subsidiaries and to prevent great damage or loss to the Company and its Subsidiaries as a result of action taken by the Employee. The Employee acknowledges and agrees that the noncompete restrictions and nondisclosure of Confidential Information restrictions contained in this Agreement are reasonable and the consideration provided for herein is sufficient to fully and adequately compensate the Employee for agreeing to such restrictions. The Employee acknowledges that he could continue to actively pursue his career and earn sufficient compensation in the same or similar business without breaching any of the restrictions contained in this Agreement. 

	 
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(a)   Noncompetition. The Employee hereby covenants and agrees that during the Employment Period and for two years thereafter (the "Noncompete Period"), he shall not, directly or indirectly, either individually or as an employee, principal, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant, representative or in any other capacity, participate in, become associated with, provide assistance to, engage in or have a financial or other interest in any business, activity or enterprise which is competitive with the business of the Company or any of the Company’s Subsidiaries. The ownership of less than three percent interest in a corporation whose shares are traded in a recognized stock exchange or traded in the over-the-counter market, even though that corporation may be a competitor of the Company, shall not be deemed financial participation in a competitor. If the final judgment of a court of competent jurisdiction declares that any term or provision of this section is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. The term "indirectly" as used in this section and section 8 below is intended to include any acts authorized or directed by or on behalf of the Employee or any Affiliate of the Employee. 

(b)   Nonsolicitation. The Employee hereby covenants and agrees that during the Noncompete Period, he shall not, directly or indirectly, either individually or as an employee, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant or in any other capacity: 

(i)   canvass, solicit or accept from any Person who is a customer or licensor of the Company or any of its Subsidiaries (any such Person is hereinafter referred to individually as a "Customer," and collectively as the "Customers") any business which is in competition with the business of the Company or any of its Subsidiaries (as the Company's or its Subsidiaries’ business existed during the Employment Period) including, without limitation, the canvassing, soliciting or accepting of business competitive with the Company’s or its Subsidiaries business (as the Company's or its Subsidiaries’ business existed during the Employment Period) from any Person which is or was a Customer of the Company or any of its Subsidiaries within two years preceding the date of this Agreement, or during the Employment Period; 

(ii)   advise, request, induce or attempt to induce any of the Customers, suppliers, or other business contacts of the Company or any of its Subsidiaries who currently have or have had business relationships with the Company or any of its Subsidiaries within two years preceding the date of this Agreement, during the Employment Period, to withdraw, curtail or cancel any of its business or relations with the Company or any of its Subsidiaries; 

	 
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(iii)   induce or attempt to induce any employee, sales representative, consultant or other agent of the Company or any of its Subsidiaries to terminate his relationship or breach any agreement with the Company or any of its Subsidiaries other than Larry Bernicky, Barry Gersowsky, John Lee, and Richard E. Rothkopf; or 

(iv)   hire any person who within six months prior to the date of hiring was an employee, sales representative, consultant or other agent of the Company or any of its Subsidiaries at any time during the Noncompete Period other than (1) Larry Bernicky, Barry Gersowsky, John Lee, and Richard E. Rothkopf or (2) a person whose relationship with the LCI or its Subsidiaries has been terminated by the LCI, its Subsidiaries, or their respective successors and assigns. 

8.   Confidential Information. The Employee acknowledges and agrees that the customers, business connections, customer lists, procedures, operations, techniques, and other aspects of and information about the business of the Company and its Subsidiaries (the "Confidential Information") are established at great expense and protected as confidential information and provides the Company and its Subsidiaries with a substantial competitive advantage in conducting their business. The Employee further acknowledges and agrees that by virtue of his past employment with the Company, and by virtue of his employment with the Company, he has had access to and will have access to, and has been entrusted with and will be entrusted with, Confidential Information, and that the Company would suffer great loss and injury if the Employee would disclose this information or use in a manner not specifically authorized by the Company. Therefore, the Employee agrees that during the Employment Period and for five years thereafter, he will not, directly or indirectly, either individually or as an employee, agent, partner, shareholder, owner trustee, beneficiary, co-venturer distributor, consultant or in any other capacity, use or disclose or cause to be used or disclosed any Confidential Information, unless and to the extent that any such information (a) becomes generally known to and available for use by the public other than as a result of the Employee’s acts or omissions or (b)  is legally required to be disclosed (by oral questions, deposition, interrogatory, request for information or documents, subpoena, civil investigative demand or similar process); provided, that to the extent practicable the Employee shall provide the Company with prompt written notice of such legal requirement so that the Company may seek a protective order or other appropriate remedy and, in the event that such protective order or other remedy is not obtained, the Employee shall furnish only that portion of the Confidential Information which is legally required to be disclosed and will cooperate with the Company to obtain assurances that confidential treatment will be accorded such Confidential Information. At the Company’s request, the Employee shall deliver to the Company at the termination of the Employment Period, or at any other time the Company may reasonably request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies thereof) relating to the Confidential Information, Work Product (as defined below) or the business of the Company or any of its Subsidiaries which he may then possess or have under his control. The Employee acknowledges and agrees that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to the Company’s or any of its Affiliate’ actual or anticipated business research and development or existing or future products or services and which are conceived, developed or made by the Employee while employed by the Company and its Subsidiaries ("Work Product") belong to the Company or such Affiliate, as the case may be. 

	 
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9.          Common Law of Torts and Trade Secrets. The parties agree that nothing in this Agreement shall be construed to limit or negate the common law of torts or trade secrets where it provides the Company and its Affiliates with broader protection than that provided herein. 

10.        Definitions. 

"Affiliate" means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person and any partner of a Person which is a partnership. 

"Change of Control" means: 

(a)   The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of Company (the "Outstanding Common Stock") or (ii) the combined voting power of the then outstanding voting securities of Company entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Company, (ii) any acquisition by Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this definition; or 

(b)   Individuals who, as of the date hereof, constitute the Board of Directors of Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of Company; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of Company; or 

(c)   Approval by the stockholders of Company of a reorganization, merger or consolidation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Company through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and 

	 
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Outstanding Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the approval of the initial agreement, or of the action of the Board of Directors of Company, providing for such Business Combination; or 

(d)   Approval by the stockholders of Company of (i) a complete liquidation or dissolution of Company or (ii) the sale or other disposition of all or substantially all of the assets of Company, other than to a corporation, with respect to which following such sale or other disposition, [a] more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, [b] less than 20% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by any Person (excluding any employee benefit plan (or related trust) of Company or such corporation), except to the extent that such Person owned 20% or more of the Outstanding Common Stock or Outstanding Voting Securities prior to the sale or disposition, and [c] at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the approval of the initial agreement, or of the action of the Board of Directors of Company, providing for such sale or other disposition of assets of Company or were elected, appointed or nominated by the Board of Directors of Company. 

"Person" means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any governmental entity or any department, agency or political subdivision thereof. 

"Senior Management" at any time means the senior executive officers of the Company which will include, without limitation, the Chief Executive Officer, President, Chief Operating Officer, Executive Vice Presidents, Chief Financial Officer and such other officers of the Company as the Board of Directors shall determine from time to time. 

	 
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"Subsidiary" means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such partnership, association or other business entity. 

11.   Specific Performance. The Employee acknowledges and agrees that irreparable injury to the Company may result in the event the Employee breaches any covenant or agreement contained in sections 7 and 8 and that the remedy at law for the breach of any such covenant will be inadequate. Therefore, if the Employee engages in any act in violation of the provisions of sections 7 and 8, the Employee agrees that the Company shall be entitled, in addition to such other remedies and damages as may be available to it by law or under this Agreement, to injunctive relief to enforce the provisions of sections 7 and 8. 

12.   Waiver. The failure of either party to insist in any one or more instances, upon performance of the terms or conditions of this Agreement shall not be construed as a waiver or a relinquishment of any right granted hereunder or of the future performance of any such term, covenant or condition. 

13.   Notices. Any notice to be given hereunder shall be deemed sufficient if addressed in writing and delivered by registered or certified mail or delivered personally, in the case of the Company, to its principal business office, and in the case of the Employee, to his address appearing on the records of the Company, or to such other address as he may designate in writing to the Company. 

14.   Severability. In the event that any provision shall be held to be invalid or unenforceable for any reason whatsoever, it is agreed such invalidity or unenforceability shall not affect any other provision of this Agreement and the remaining covenants, restrictions and provisions hereof shall remain in full force and effect and any court of competent jurisdiction may so modify the objectionable provision as to make it valid, reasonable and enforceable. Furthermore, the parties specifically acknowledge the above covenant not to compete and covenant not to disclose confidential information are separate and independent agreements. 

	 
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15.   Complete Agreement. Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. Without limiting the generality of the foregoing, this Agreement supersedes the Employment Agreement, dated as of October 25, 2002, between LCI and the Employee (together with all amendments thereto, the "Prior Agreement"). The Prior Agreement is hereby terminated and shall cease to be of any further force or effect. 

16.   Amendment. This Agreement may only be amended by an agreement in writing signed by each of the parties hereto. 

17.   Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the laws of the State of Illinois, regardless of choice of law requirements. 

18.   Benefit. This Agreement shall be binding upon and inure to the benefit of and shall be enforceable by and against the Company, its successors and assigns and the Employee, his heirs, beneficiaries and legal representatives. It is agreed that the rights and obligations of the Employee and the Company may not be delegated or assigned. 

[remainder of page intentionally left blank; signature page follows] 

	 
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[signature page to Employment Agreement] 

IN WITNESS WHEREOF, the parties have executed or caused this Employment Agreement to be executed as of the date first above written. 

 

RACING CHAMPIONS ERTL CORPORATION - 

COMPENSATION COMMITTEE 

_/s/ John S. Bakalar______________________ 

John S. Bakalar, Director and Compensation

Committee Chairman 

 

_/s/ John J. Vosicky______________________ 

John J. Vosicky, Director and Compensation

Committee Member 

 

_/s/ Robert E. Dods______________________ 

Robert E. Dods, Chairman of the Board 

 

_/s/ John Walter Lee II____________________ 

John Walter Lee IIQuickLinks
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Exhibit 10.3  

 
 

1994 LONG-TERM PERFORMANCE INCENTIVE PLAN OF
  NAPRO BIOTHERAPEUTICS, INC.
  (as amended and restated effective January 1, 2001,
  and as further amended on June 21, 2001 and March 4, 2002)

    

        1.     Introduction and Purpose. NaPro BioTherapeutics, Inc., a Delaware corporation (the "Company") previously adopted
the 1994 Long-Term Performance Incentive Plan of NaPro BioTherapeutics, Inc. (the "Plan"). The Plan was amended and restated effective May 28, 1998 and again effective
January 1, 2001. The purpose of the Plan is to advance the interests of the Company and its stockholders by providing incentives to certain employees of the Company and to certain other key
individuals who perform services for the Company, including those who contribute significantly to the strategic and long-term performance objectives and growth of the Company. In the case
of options granted to the Company's non-employee directors, the Plan is intended to more closely align the interests of such directors with the Company's stockholders. 

        2.     Administration. The Plan shall be administered solely by the Board of Directors (the "Board") of the Company or, if the
Board shall so designate, by a committee of the Board that shall be comprised of not fewer the two directors (the "Committee"); provided that if at any time Rule 16b-3 or any
successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 162(m) of the Internal Revenue Code of 1986, as amended,
or any successor statutory provision thereto (the "Code"), and any implementing regulations (and any successor provisions thereof), so permit without adversely affecting the ability of the Plan to
comply with the conditions for exemption from Section 16 of the Exchange Act (or any successor provision) provided by Rule 16b-3 and the exemption from the limitations on the
deductibility of certain executive compensation provided by Section 162(m), the Committee may delegate the administration of the Plan in whole or in part, on such terms and conditions, to such
other person or persons as it may determine in its discretion. References to the Committee hereunder shall include the Board where appropriate. The membership of the Committee or such successor
committee shall be constituted so as to comply at all times with the applicable requirements of Rule 16b-3 and Section 162(m). No member of the Committee shall have within
one year prior to his appointment received awards under the Plan ("Awards") or under any other plan, program or arrangement of the Company or any of its affiliates if such receipt would cause such
member to cease to be a "disinterested person" under Rule 16b-3; provided that if at any time Rule 16b-3 so permits without adversely affecting the ability of the
Plan to comply with the conditions for exemption from Section 16 of the Exchange Act (or any successor provision) provided by Rule 16b-3, one or more members of the Committee
may cease to be a "disinterested person." 

        The
Committee has all the powers vested in it by the terms of the Plan set forth herein, such powers to include exclusive authority (except as may be delegated as permitted herein)
(i) to select the employees and other key individuals to be granted Awards under the Plan, (ii) to determine the type, size and terms of the Award to be made to each individual selected,
subject to the limitations set forth in Paragraph 4(b), (iii) to modify the terms of any Award that has been granted, (iv) to determine the time when Awards will be granted,
(v) to establish performance objectives, (vi) to make any adjustments necessary or desirable as a result of the granting of Awards to eligible individuals located outside the United
States and (vii) to prescribe the form of the instruments embodying Awards made under the Plan, except as otherwise provided in Paragraph 9(a) with respect to automatic grants of
Stock Options to Eligible Directors. The Committee is authorized (A) to interpret the Plan and the Awards granted under the Plan, (B) to establish, amend and rescind any rules and
regulations relating to the Plan, and (C) to make any other determinations which it deems necessary or desirable for the administration of the Plan. The Committee (or its delegate as permitted
herein) may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee (or its delegate as permitted herein) in the interpretation and administration of the Plan, as

 
described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. The Committee may act only by a majority of its members in
office, except that the members thereof may authorize any one or more of their members or any officer of the Company to execute and deliver documents or to take any other ministerial action on behalf
of the Committee with respect to Awards made or to be made to Plan participants. No member of the Committee and no officer of the Company shall be liable for anything done or omitted to be done by
him, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for his own willful misconduct or as expressly provided
by statute. Determinations to be made by the Committee under the Plan may be made by its delegates as permitted herein. 

        3.     Eligibility. Consistent with the purposes of the Plan, the Committee shall have exclusive power (except as may be
delegated as permitted herein) to select the key employees and other key individuals performing services for the Company and any of its subsidiaries who may participate in the Plan and be granted
Awards under the Plan. Eligible individuals may be selected individually or by groups or categories, as determined by the Committee in its discretion. No non-employee director of the
Company shall be eligible to receive an Award under the Plan, except pursuant to Paragraph 9. 

        4.     Awards under the Plan.

        (a)   Types of Awards. Awards under the Plan may include, but need not be limited to, one or more of the following types,
either alone or in any combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights," (iii) "Restricted Stock," (iv) "Performance Grants" and (v) any
other type of Award deemed by the Committee in its discretion to be consistent with the purposes of the Plan (including, but not limited to, Awards of or options or similar rights granted with respect
to unbundled stock units or components thereof, and Awards to be made to participants who are foreign nationals or are employed or performing services outside the United States). Stock Options, which
include "Nonqualified Stock Options" (which may be awarded to participants or sold at a price determined by the Committee ("Purchased Options")) and "Incentive Stock Options" or combinations thereof,
are rights to purchase common shares of the Company having a par value of $.0075 per share and stock of any other class into which such shares may thereafter be changed (the "Common Shares").
Nonqualified Stock Options and Incentive Stock Options are subject to the terms, conditions and restrictions specified in Paragraph 5. Stock Appreciation Rights are rights to receive (without
payment to the Company) cash, Common Shares, other Company securities (which may include, but need not be limited to, unbundled stock units or components thereof, debentures, preferred stock,
warrants, securities convertible into Common Shares or other property ("Other Company Securities")) or property, or other forms of payment, or any combination thereof, as determined by the Committee,
based on the increase in the value of the number of Common Shares specified in the Stock Appreciation Right. Stock Appreciation Rights are subject to the terms, conditions and restrictions specified
in Paragraph 6. Shares of Restricted Stock are Common Shares which are issued subject to certain restrictions pursuant to Paragraph 7. Performance Grants are contingent awards subject to
the terms, conditions and restrictions described in Paragraph 8, pursuant to which the participant may become entitled to receive cash, Common Shares, Other Company Securities or property, or
other forms of payment, or any combination thereof, as determined by the Committee. 

        (b)   Maximum Number of Shares that May be Issued. There may be issued under the Plan (as Restricted Stock, in payment
of Performance Grants, pursuant to the exercise of Stock Options or Stock Appreciation Rights, or in payment of or pursuant to the exercise of such other Awards as the Committee, in its discretion,
may determine) an aggregate of not more than 6,600,000 Common Shares, subject to adjustment as provided in Paragraph 15. The maximum number of underlying Common Shares which any participant may
be granted under Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Grants or any other Award in any one taxable

 
year of the Company shall not exceed 400,000 Common Shares. Common Shares issued pursuant to the Plan may be either authorized but unissued shares, treasury shares, reacquired shares, or any
combination thereof. If any Common Shares issued as Restricted Stock or otherwise subject to repurchase or forfeiture rights are reacquired by the Company pursuant to such rights, or if any Award is
canceled, terminates or expires unexercised, any Common Shares that would otherwise have been issuable pursuant thereto will be available for issuance under new Awards. 

        (c)   Rights with respect to Common Shares and Other Securities.

        (i)    Unless
otherwise determined by the Committee in its discretion, a participant to whom an Award of Restricted Stock has been made (and any person succeeding to such a
participant's rights pursuant to the Plan) shall have, after issuance of a certificate for the number of Common Shares awarded and prior to the expiration of the Restricted Period (as hereinafter
defined), ownership of such Common Shares, including the right to vote the same and to receive dividends or other distributions made or paid with respect to such Common Shares (provided that such
Common Shares, and any new, additional or different shares, or Other Company Securities or property, or other forms of consideration which the participant may be entitled to receive with respect to
such Common Shares as a result of a stock split, stock dividend or any other change in the corporation or capital structure of the Company, shall be subject to the restrictions hereinafter described
as determined by the Committee in its discretion), subject, however, to the options, restrictions and limitations imposed thereon pursuant to the Plan. Notwithstanding the foregoing, a participant
with whom an Award agreement is made to issue Common Shares in the future, shall have no rights as a stockholder with respect to Common Shares related to such agreement until issuance of a certificate
to him. 

        (ii)   Unless
otherwise determined by the Committee in its discretion, a participant to whom a grant of Stock Options, Stock Appreciation Rights, Performance Grants or any
other Award is made (and any person succeeding to such a participant's rights pursuant to the Plan) shall have no rights as a stockholder with respect to any Common Shares or as a holder with respect
to other securities, if any, issuable pursuant to any such Award until the date of the issuance of a stock certificate to him for such Common Shares or other instrument of ownership, if any. Except as
provided in Paragraph 15, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities, other property or other
forms of consideration, or any combination thereof) for which the record date is prior to the date such stock certificate or other instrument of ownership, if any, is issued. 

        5.     Stock Options. The Committee may grant or sell Stock Options either alone, or in conjunction with Stock Appreciation
Rights, Performance Grants or other Awards, either at the time of grant or by amendment thereafter, provided that an Incentive Stock Option may be granted only to an eligible employee of the Company
or any parent or subsidiary corporation. No Incentive Stock Option shall be granted under the Plan unless the Plan is approved by the Company's stockholders within twelve months after the date
of the Plan's adoption. Each Stock Option (referred to herein as an "Option") granted or sold under the Plan shall be evidenced by an instrument in such form as the Committee shall prescribe from time
to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions, including, but not limited to, restrictions upon the Option or
the Common Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish: 

        (a)   Notwithstanding
anything in the Plan to the contrary, effective December 16, 2000, unless approved by the holders of a majority of the shares present and entitled
to vote at a duly convened meeting of the Company's shareholders, neither the Company nor the Committee shall grant an

 
Option with an option price that is less than 100% of the fair market value of the Common Shares subject to such Option at the time the Option is granted, as determined by the Committee, nor reduce
the exercise price of any Option granted under the Plan; provided, however, that in the case of an Incentive Stock Option granted to an employee who owns stock representing more than ten percent of
the voting power of all classes of stock of the Company or any parent or subsidiary (a "Ten Percent Employee"), such option price shall not be less than 110% of such fair market value at the time the
Option is granted. 

        (b)   Subject
to the per participant limitation set forth in Paragraph 4(b) and the provisions of Paragraph 9(a) with respect to automatic grants of Stock
Options to Eligible Directors, the Committee shall determine the number of Common Shares to be subject to each Option. The number of Common Shares subject to an outstanding Option may be reduced on a
share-for-share or other appropriate basis, as determined by the Committee, to the extent that Common Shares under such Option are used to calculate the cash, Common Shares,
Other Company Securities or property, or other forms of payment, or any combination thereof, received pursuant to exercise of a Stock Appreciation Right attached to such Option, or to the extent that
any other Award granted in conjunction with such Option is paid. 

        (c)   The
Option may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, and shall be
exercisable during the grantee's lifetime only by him. Unless the Committee determines otherwise, the Option shall not be exercisable for at least six months after the date of grant, unless the
grantee ceases employment or performance of services before the expiration of such six-month period by reason of his disability as defined in Paragraph 13 or his death. 

        (d)   The
Option shall not be exercisable: 

        (i)    in
the case of any Incentive Stock Option granted to a Ten Percent Employee, after the expiration of five years from the date it is granted, and, in the case of
any other Option, after the expiration of ten years from the date it is granted. Subject to the provisions of Paragraph 9(a) with respect to automatic grants of Stock Options to
Eligible Directors, any Option may be exercised during such period only at such time or times and in such installments as the Committee may establish; 

        (ii)   unless
payment in full is made for the shares being acquired thereunder at the time of exercise; such payment shall be made in such form (including, but not limited to,
cash, Common Shares, or the surrender of another outstanding Award under the Plan, or any combination thereof) as the Committee may determine in its discretion; and 

        (iii)  unless
the person exercising the Option has been, at all times during the period beginning with the date of the grant of the Option and ending on the date of such
exercise, employed by or otherwise performing services for the Company, or a corporation, or a parent or subsidiary of a corporation, substituting or assuming the Option in a transaction to which
Section 424(a) of the Code is applicable, except that 

        (A)  if
an employee of the Company or a person performing services for the Company other than as a director shall cease such employment or performance of services (other than
by a termination or removal for cause) while holding an Option which has not expired and has not been fully exercised, such person, at any time within 90 days (or such period determined by the
Committee) after the date he ceased such employment or performance of services (but in no event after the Option has expired), may exercise the Option with respect to any shares as to which he could
have exercised the Option on the date he ceased such employment or performance of services, or with respect to such greater number of shares as determined by the Committee; provided that,

 
effective for Options granted on or after January 1, 2001, if an employee of the Company ceases such employment while holding an Option which has not expired and has not been fully exercised,
and shortly thereafter begins to perform services for the Company other than as an employee, the Committee may, in its sole discretion, permit such person to exercise his or her unexpired Options in
accordance with the same vesting schedule that applied to such Options during his or her employment as if the person's employment with the Company had not ceased until such time as the person ceases
to perform services for the Company, after which time the preceding provisions of this subparagraph 5(d)(iii)(A) shall apply; or 

        (B)  if
a non-employee director of the Company shall resign or shall otherwise be removed (other than a removal for cause) while holding an Option which has not
expired and has not
been fully exercised, such non-employee director, at any time within three years (or such period determined by the Committee) after the date he ceased to be a director (but in no
event after the Option has expired), may exercise the Option with respect to any shares as to which he could have exercised the Option on the date he ceased to be a director, or with respect to such
greater number of shares as determined by the Committee; or 

        (C)  if
such person shall cease such employment or performance of services by reason of his disability as defined in Paragraph 13 or early, normal or deferred
retirement under an approved retirement program of the Company (or such other plan or arrangement as may be approved by the Committee, in its discretion, for this purpose) while holding an Option
which has not expired and has not been fully exercised, such person, at any time within three years (or such period determined by the Committee) after the date he ceased such employment or
performance of services (but in no event after the Option has expired), may exercise the Option with respect to any shares as to which he could have exercised the Option on the date he ceased such
employment or performance of services, or with respect to such greater number of shares as determined by the Committee; in the event that such a disabled person, within three years following
termination of employment, resumes his employment or performance of services for the Company: (i) such person may exercise such Option with respect to all shares underlying such Option as
originally granted; provided that, to the extent that any of such shares were not exercisable at the time of such person's termination of employment or performance of services by reason of disability,
such person may exercise such Option with respect to such unexercisable shares only in accordance with a revised vesting schedule as determined by the Committee and (ii) the expiration date of
such Option shall be automatically extended by a period of time equal to the period commencing on the date that such person's employment or performance of services for the Company was terminated by
reason of disability and ending on the date such person resumed employment or performance of services for the Company; provided that, notwithstanding the foregoing, the expiration date of any
Incentive Stock Option shall not in any case be so extended; or 

        (D)  if
any person to whom an Option has been granted shall die holding an Option which has not expired and has not been fully exercised, his executors, administrators,
heirs, or distributees, as the case may be, may, at any time within one year (or such other period determined by the Committee) after the date of death (but in no event after the Option has expired),
exercise the Option with respect to any shares as to which the decedent could have exercised the Option at the time of his death, or with respect to such greater number of shares as determined by the
Committee. 

        (e)   In
the case of an Incentive Stock Option, the amount of the aggregate fair market value of Common Shares (determined at the time of grant of the Option pursuant to

 
subparagraph 5(a) of the Plan) with respect to which incentive stock options are exercisable for the first time by an employee during any calendar year (under all such plans of his employer
corporation and its parent and subsidiary corporations) shall not exceed $100,000. 

        (f)    It
is the intent of the Company that Nonqualified Stock Options granted under the Plan not be classified as Incentive Stock Options, that the Incentive Stock Options
granted under the Plan be consistent with and contain or be deemed to contain all provisions required under Section 422 and the other appropriate provisions of the Code and any implementing
regulations (and any successor provisions thereof), and that any ambiguities in construction shall be interpreted in order to effectuate such intent. 

        (g)   A
Purchased Option may contain such additional terms not inconsistent with this Plan, including but not limited to the circumstances under which the purchase price of
such Purchased Option may be returned to the optionee, as the Committee may determine in its sole discretion. 

        6.     Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights either alone, or in conjunction with Stock
Options, Performance Grants or other Awards, either at the time of grant or by amendment thereafter. Each Award of Stock Appreciation Rights granted under the Plan shall be evidenced by an instrument
in such form as the Committee shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions,
including, but not limited to, restrictions upon the Award of Stock Appreciation Rights or the Common Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish: 

        (a)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the number of Common Shares to be subject to each Award of
Stock Appreciation Rights. The number of Common Shares subject to an outstanding Award of Stock Appreciation Rights may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares under such Award of Stock Appreciation Rights are used to calculate the cash, Common Shares, Other Company Securities or
property, or other forms of payment, or any combination thereof, received pursuant to exercise of an Option attached to such Award of Stock Appreciation Rights, or to the extent that any other Award
granted in conjunction with such Award of Stock Appreciation Rights is paid. 

        (b)   The
Award of Stock Appreciation Rights may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution, and shall be exercisable during the grantee's lifetime only by him. Unless the Committee determines otherwise, the Award of Stock Appreciation Rights shall not be exercisable for at
least six months after the date of grant, unless the grantee ceases employment or performance of services before the expiration of such six-month period by reason of his disability
as defined in Paragraph 13 or his death. 

        (c)   The
Award of Stock Appreciation Rights shall not be exercisable: 

        (i)    in
the case of any Award of Stock Appreciation Rights which is attached to an Incentive Stock Option granted to a Ten Percent Employee, after the expiration of
five years from the date it is granted, and, in the case of any other Award of Stock Appreciation Rights, after the expiration of ten years from
the date it is granted. Any Award of Stock Appreciation Rights may be exercised during such period only at such time or times and in such installments as the Committee may establish; 

        (ii)   unless
the Option or other Award to which the Award of Stock Appreciation Rights is attached is at the time exercisable; and 

  

        (iii)  unless
the person exercising the Award of Stock Appreciation Rights has been, at all times during the period beginning with the date of the grant thereof and ending on
the date of such exercise, employed by or otherwise performing services for the Company, except that 

        (A)  if
an employee of the Company or a person performing services for the Company shall cease such employment or performance of services (other than by a termination or
removal for cause) while holding an Award of Stock Appreciation Rights which has not expired and has not been fully exercised, such person, at any time within 90 days (or such period determined
by the Committee) after the date he ceased such employment or performance of services (but in no event after the Award of Stock Appreciation Rights has expired), may exercise the Award of Stock
Appreciation Rights with respect to any shares as to which he could have exercised the Award of Stock Appreciation Rights on the date he ceased such employment or performance of services, or with
respect to such greater number of shares as determined by the Committee; or 

        (B)  if
such person shall cease such employment or performance of services by reason of his disability as defined in Paragraph 13 or early, normal or deferred
retirement under an approved retirement program of the Company (or such other plan or arrangement as may be approved by the Committee, in its discretion, for this purpose) while holding an Award of
Stock Appreciation Rights which has not expired and has not been fully exercised, such person may, at any time within three years (or such other period determined by the Committee) after the
date he ceased such employment or performance of service (but in no event after the Award of Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation Rights with respect to any
shares as to which he could have exercised the Award of Stock Appreciation Rights on the date he ceased such employment or performance of services, or with respect to such greater number of shares as
determined by the Committee; or 

        (C)  if
any person to whom an Award of Stock Appreciation Rights has been granted shall die holding an Award of Stock Appreciation Rights which has not expired and has not
been fully exercised, his executors, administrators, heirs or distributees, as the case may be, may at any time within one year (or such other period determined by the Committee) after the date of
death (but in no event after the Award of Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation Rights with respect to any shares as to which the decedent could have
exercised the Award of Stock Appreciation Rights at the time of his death, or with respect to such greater number of shares as determined by the Committee. 

        (d)   An
Award of Stock Appreciation Rights shall entitle the holder (or any person entitled to act under the provisions of subparagraph 6(c)(iii)(C) hereof) to exercise such
Award or to surrender unexercised the Option (or other Award) to which the Stock Appreciation Right is attached (or any portion of such Option or other Award) to the Company and to receive from the
Company in exchange thereof, without payment to the Company, that number of Common Shares having an aggregate value equal to (or, in the discretion of the Committee, less than) the excess of the fair
market value of one share, at the time of such exercise, over the exercise price (or Option Price, as the case may be), times the number of shares subject to the Award or the Option (or other Award),
or portion thereof, which is so exercised or surrendered, as the case may be. The Committee shall be entitled in its discretion to elect to settle the obligation arising out of the exercise of a Stock
Appreciation Right by the payment of cash or Other Company Securities or property, or other forms of payment, or any combination thereof, as determined by the Committee, equal to the aggregate value
of the Common Shares it would otherwise be obligated to deliver. Any such election by the Committee shall be made as soon as practicable after the receipt by the Committee of written notice of the
exercise of the Stock Appreciation Right. The value of a

 
Common Share, Other Company Securities or property, or other forms of payment determined by the Committee for this purpose shall be the fair market value thereof on the last business day next
preceding the date of the election to exercise the Stock Appreciation Right, unless the Committee, in its discretion, determines otherwise. 

        (e)   A
Stock Appreciation Right may provide that it shall be deemed to have been exercised at the close of business on the business day preceding the expiration date of the
Stock Appreciation Right or of the related Option (or other Award), or such other date as specified by the Committee, if at such time such Stock Appreciation Right has a positive value. Such deemed
exercise shall be settled or paid in the same manner as a regular exercise thereof as provided in subparagraph 6(d) hereof. 

        (f)    No
fractional shares may be delivered under this Paragraph 6, but in lieu thereof a cash or other adjustment shall be made as determined by the Committee in its
discretion. 

        7.     Restricted Stock. Each Award of Restricted Stock under the Plan shall be evidenced by an instrument in such form as the
Committee shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions as the Committee, in its
discretion, shall establish: 

        (a)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the number of Common Shares to be issued to a participant
pursuant to the Award, and the extent, if any, to which they shall be issued in exchange for cash, other consideration, or both. 

        (b)   Restricted
Stock awarded to a participant in accordance with the Award shall be subject to the following restrictions until the expiration of such period as the
Committee shall determine, from the date on which the Award is granted (the "Restricted Period"): (i) a participant to whom an award of Restricted Stock is made shall be issued, but shall not
be entitled to, the delivery of a stock certificate, (ii) the Restricted Stock shall not be transferable prior to the end of the Restricted Period, (iii) the Restricted Stock shall be
forfeited and the stock certificate shall be returned to the Company and all rights of the holder of such Restricted Stock to such shares and as a shareholder shall terminate without further
obligation on the part of the Company if the participant's continuous employment or performance of services for the Company shall terminate for any reason prior to the end of the Restricted Period,
except as otherwise provided in subparagraph 7(c), and (iv) such other restrictions as determined by the Committee in its discretion. 

        (c)   If
a participant who has been in continuous employment or performance of services for the Company since the date on which a Restricted Stock Award was granted to him
shall, while in such employment or performance of services, die, or terminate such employment or performance of services by reason of disability as defined in Paragraph 13 or by reason of
early, normal or deferred retirement under an approved retirement program of the Company (or such other plan or arrangement as may be approved by the Committee in its discretion, for this purpose) and
any of such events shall occur after the date on which the Award was granted to him and prior to the end of the Restricted Period of such Award, the Committee may determine to cancel any and all
restrictions on any or all of the Common Shares subject to such Award. 

        8.     Performance Grants. The Award of the Performance Grant ("Performance Grant") to a participant will entitle him to receive
a specified amount determined by the Committee (the "Actual Value"), if the terms and conditions specified herein and in the Award are satisfied. Each Award of a Performance Grant shall be subject to
the following terms and conditions, and to such other terms and conditions, including but not limited to, restrictions upon any cash, Common Shares, Other Company Securities or property, or other
forms of payment, or any combination thereof, issued in respect of the

 
Performance Grant, as the Committee, in its discretion, shall establish, and shall be embodied in an instrument in such form and substance as is determined by the Committee: 

        (a)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the value or range of values of a Performance Grant to be
awarded to each participant selected for an Award and whether or not such a Performance Grant is granted in conjunction with an Award of Options, Stock Appreciation Rights, Restricted Stock or other
Award, or any combination thereof, under the Plan (which may include, but need not be limited to, deferred Awards) concurrently or subsequently granted to the participant (the "Associated Award"). As
determined by the Committee, the maximum value of each Performance Grant (the "Maximum Value") shall be: (i) an amount fixed by the Committee at the time the Award is made or amended
thereafter, (ii) an amount which varies from time to time based in whole or in part on the then current value of the Common Shares, Other Company Securities or property, or other securities or
property, or any combination thereof or (iii) an amount that is determinable from criteria specified by the Committee. Performance Grants may be issued in difference classes or series having
different names, terms and conditions. In the case of a
Performance Grant awarded in conjunction with an Associated Award, the Performance Grant may be reduced on an appropriate basis to the extent that the Associated Award has been exercised, paid to or
otherwise received by the participant, as determined by the Committee. 

        (b)   The
award period ("Award Period") related to any Performance Grant shall be a period determined by the Committee. At the time each Award is made, the Committee shall
establish performance objectives to be attained within the Award Period as the means of determining the Actual Value of such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be limited to, the performance of the participant, the Company, one or more of its subsidiaries or one or more of their divisions or
units, or any combination of the foregoing, as the Committee shall determine, and may be applied on an absolute basis or be relative to industry or other indices, or any combination thereof. The
Actual Value of a Performance Grant shall be equal to its Maximum Value only if the performance objectives are attained in full, but the Committee shall specify the manner in which the Actual Value of
Performance Grants shall be determined if the performance objectives are met in part. Such performance measures, the Actual Value or the Maximum Value, or any combination thereof, may be adjusted in
any manner by the Committee in its discretion at any time and from time to time during or as soon as practicable after the Award Period, if it determines that such performance measures, the Actual
Value or the Maximum Value, or any combination thereof, are not appropriate under the circumstances. 

        (c)   The
rights of a participant in Performance Grants awarded to him shall be provisional and may be canceled or paid in whole or in part, all as determined by the
Committee, if the participant's continuous employment or performance of services for the Company shall terminate for any reason prior to the end of the Award Period. 

        (d)   The
Committee shall determine whether the conditions of subparagraph 8(b) or 8(c) hereof have been met and, if so, shall ascertain the Actual Value of the
Performance Grants. If the Performance Grants have no Actual Value, the Award and such Performance Grants shall be deemed to have been canceled and the Associated Award, if any, may be canceled or
permitted to continue in effect in accordance with its terms. If the Performance Grants have any Actual Value and: 

        (i)    were
not awarded in conjunction with an Associated Award, the Committee shall cause an amount equal to the Actual Value of the Performance Grants earned by the
participant to be paid to him or his beneficiary as provided below; or

 

        (ii)   were
awarded in conjunction with an Associated Award, the Committee shall determine, in accordance with criteria specified by the Committee (A) to cancel the
Performance Grants, in which event no amount in respect thereof shall be paid to the participant or his beneficiary, and the Associated Award may be permitted to continue in effect in accordance with
its terms, (B) to pay the
Actual Value of the Performance Grants to the participant or his beneficiary as provided below, in which event the Associated Award may be canceled or (C) to pay to the participant or his
beneficiary as provided below, the Actual Value of only a portion of the Performance Grants, in which event all or a portion of the Associated Award may be permitted to continue in effect in
accordance with its terms or be canceled, as determined by the Committee. 

        Such
determination by the Committee shall be made as promptly as practicable following the end of the Award Period or upon the earlier termination of employment or performance of
services, or at such other time or times as the Committee shall determine, and shall be made pursuant to criteria specified by the Committee. 

        Payment
of any amount in respect of the Performance Grants which the Committee determines to pay as provided above shall be made by the Company as promptly as practicable after the end
of the Award Period or at such other time or times as the Committee shall determine, and may be made in cash, Common Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such manner, as determined by the Committee in its discretion. Notwithstanding anything in this Paragraph 8 to the contrary, the Committee may, in its discretion,
determine and pay out the Actual Value of the Performance Grants at any time during the Award Period. 

        9.     Automatic and Discretionary Stock Options for Non-Employee Directors.

        (a)   Automatic Stock Options. 

        (i)    Nonqualified
Stock Options covering 10,000 Common Shares shall be automatically granted to each person who is not an employee of the Company or any of its subsidiaries
and who (A) is elected or reelected as a director of the Company at an annual meeting of the Company's stockholders, (B) continues service as a director of the Company after an annual
meeting of the Company's stockholders at which the director is not subject to reelection, or (C) is appointed as a director of the Company in accordance with its Bylaws following an annual
meeting (each, an "Eligible Director"), on the next business day following each such annual meeting or appointment. 

        (ii)   In
addition, Nonqualified Stock Options covering 10,000 Common Shares shall be automatically granted to each Eligible Director who is appointed or reappointed as the
chairman of the Audit, Compensation or Strategic Planning Committee of the Board of Directors (or any additional permanent committee of the Board of Directors), on the next business day following each
such appointment or reappointment, as the case may be. 

        (iii)  In
addition, Nonqualified Stock Options covering 7,500 Common Shares shall be automatically granted to each Eligible Director who is appointed to the Research and
Development Committee of
the Board of Directors, on the next business day following such appointment. Thereafter, Nonqualified Stock Options covering 3,000 Common Shares shall automatically be granted to each Eligible
Director who continues service as a member of the Research and Development Committee of the Board of Directors after an annual meeting of the Company's stockholders, on the next business day following
such Eligible Director's continuation of such service. 

        Each
Nonqualified Stock Option automatically granted to an Eligible Director pursuant to this Paragraph 9(a) shall (i) have an option price equal to the fair market
value of the Common Shares on

 
the date of grant, (ii) become exercisable in full on the first anniversary following the date of grant; provided, however, that a Nonqualified Stock Option granted to an Eligible Director who
is appointed to the Board will become exercisable in full on the next business day following the later of (A) the Company's annual meeting of stockholders next following the grant date or
(B) six months following the date of grant and (iii) have a term of ten years from the date of grant. As used herein, the term "subsidiary" means any corporation more than
50% of whose voting stock is owned, directly or indirectly, by the Company. 

        (b)   Discretionary Stock Options. In addition to the automatic grant of Nonqualified Stock Options to Eligible Directors set
forth in Paragraph 9(a), the Committee shall have the authority to grant Eligible Directors Nonqualified Stock Options at such times and on such terms as it may determine in its sole
discretion, subject however, to the per participant limitation set forth in Paragraph 4(b) and the applicable provisions of Paragraph 5. 

        10.   Deferral of Compensation. The Committee shall determine whether or not an Award shall be made in conjunction with
deferral of the participant's salary, bonus or other compensation, or any combination thereof, and whether or not such deferred amounts may be 

        (i)    forfeited
to the Company or to other participants or any combination thereof, under certain circumstances (which may include, but need not be limited to, certain types
of termination of employment or performance of services for the Company), 

        (ii)   subject
to increase or decrease in value based upon the attainment of or failure to attain, respectively, certain performance measures and/or 

        (iii)  credited
with income equivalents (which may include, but need not be limited to, interest, dividends or other rates of return) until the date or dates of payment of
the Award, if any. 

        11.   Deferred Payment of Awards. The Committee may specify that the payment of all or any portion of cash, Common Shares,
Other Company Securities or property, or any other form of payment, or any combination thereof, under an Award shall be deferred until a later date. Deferrals shall be for such periods or until the
occurrence of such events, and upon such terms, as the Committee shall determine in its discretion. Deferred payments of Awards may be made by undertaking to make payment in the future based upon the
performance of certain investment equivalents (which may include, but need not be limited to, government securities, Common Shares, other securities, property or consideration, or any combination
thereof), together with such additional amounts of income equivalents (which may be compounded and may include, but need not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment, such investment equivalents and such additional amounts of income equivalents to be determined by the Committee in its
discretion. 

        12.   Amendment or Substitution of Awards under the Plan. The terms of any outstanding Award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems appropriate (including, but not limited to, acceleration of the date of exercise of any Award and/or payments thereunder);
provided that no such amendment shall adversely affect in a material manner any right of a participant under the Award without his written consent, unless the Committee determines in its discretion
that there have occurred or are about to occur significant changes in the participant's position, duties or responsibilities, or significant changes in economic, legislative, regulatory, tax,
accounting or cost/benefit conditions which are determined by the Committee in its discretion to have or to be expected to have a substantial effect on the performance of the Company, or any
subsidiary, affiliate, division or department thereof, on the Plan or on any Award under the Plan. The Committee may, in its discretion, permit holders of Awards under the Plan to surrender
outstanding Awards in order to exercise or realize rights under other Awards, or in exchange for the grant of new Awards, or require holders of Awards to surrender outstanding Awards

 
as a condition precedent to the grant of new Awards under the Plan. This Paragraph 12 shall not apply to automatic grants of Nonqualified Stock Options to Eligible Directors pursuant to
Paragraph 9(a). 

        13.   Disability. For the purposes of this Plan, a participant shall be deemed to have terminated his employment or performance
of services for the Company and any of its subsidiaries by reason of disability, if the Committee shall determine that the physical or mental condition of the participant by reason of which such
employment or performance of services terminated was such at that time as would entitle him to payment of monthly disability benefits under any Company disability plan. If the participant is not
eligible for benefits under any disability plan of the Company, he shall be deemed to have terminated such employment or performance of services by reason of disability if the Committee shall
determine that his physical or mental condition would entitle him to benefits under any Company disability plan if he were eligible therefor. 

        14.   Termination of a Participant. For all purposes under the Plan, the Committee shall determine whether a participant has
terminated employment with, or the performance of services for, the Company. 

        15.   Dilution and Other Adjustments. In the event of any change in the outstanding Common Shares of the Company by reason of
any stock split, dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination or exchange of
shares, a sale by the Company of all of its assets, any distribution to stockholders other than a normal cash dividend, or other extraordinary or unusual event, if the Committee shall determine, in
its discretion, that such change equitably requires an adjustment in the terms of any Award or the number of Common Shares available for Awards, such adjustment may be made by the Committee and shall
be final, conclusive and binding for all purposes of the Plan. In the event of the proposed dissolution or liquidation of the Company, all outstanding Awards shall terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Committee. 

        16.   Change in Control Provisions.

        (a)   Impact of Event. In the event of a "Change in Control" as defined in Paragraph 16(b) hereof the following
acceleration and valuation provisions shall apply: 

        (i)    Any
Stock Appreciation Rights and any Stock Options awarded under the Plan not previously exercisable shall become fully exercisable. 

        (ii)   The
restrictions and deferral limitations applicable to any Restricted Stock and other Awards payable in the form of Common Shares, shall lapse and such shares and
awards shall be deemed fully vested. 

        (iii)  Any
outstanding Performance Grants shall be vested and paid out based on the prorated target results for the Award Periods in question, unless the Committee provides
prior to any Change in Control for a different payment. 

        (iv)  The
value of all outstanding Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Grants and any other type of Award payable in the form of Common
Shares, in each case to the extent vested, shall, unless otherwise determined by the Committee in its sole discretion at or after grant but prior to any Change in Control, be cashed out on the basis
of the "Change in Control Price" as defined in Paragraph 16(c) hereof as of the date such Change in Control is determined to have occurred or such other date as the Committee may
determine prior to the Change of Control.

 

        (b)   Definition of "Change in Control". For purposes of Paragraph 16(a), a "Change in Control" means the happening of
any of the following: 

        (i)    When
any "person" as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) of the Exchange Act but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any
subsidiary (including any trustee of such plan acting as trustee), directly or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as
amended from time to time), of securities of the Company representing twenty-five percent or more of the combined voting power of the Company's then outstanding securities; 

        (ii)   When,
during any period of 12 consecutive months during the existence of the Plan, the individuals who, at the beginning of such period, constitute the Board
(the "Incumbent Directors") cease for any reason other than death to constitute at least a majority thereof, provided, however, that a director who was not a director at the beginning of such
12-month period shall be deemed to have satisfied such 12-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 12-month
period) or by prior operation of this Paragraph 16(b)(ii); or 

        (iii)  The
approval by the stockholders of the Company of a transaction involving the acquisition of the Company by an entity other than the Company or any subsidiary through
purchase of assets, by merger, or otherwise. 

        (c)   Change in Control Price. For purposes of this Paragraph 16, "Change in Control Price" means the highest price per
share paid in any transaction reported on any national securities exchange on which the Company's Common Shares are listed, or paid or offered in any bona fide transaction related to a Change in
Control of the Company at any time during the sixty-day period immediately preceding the occurrence of the Change in Control, in each case as determined by the Committee except that, in
the case of Incentive Stock Options and Stock Appreciation Rights relating to Incentive Stock Options, such price shall be based only on transactions reported for the date on which the optionee
exercises such Stock Appreciation Rights or, where applicable, the date on which a cashout occurs under Paragraph 16(a)(iv). 

        17.   Designation of Beneficiary by Participant. A participant may name a beneficiary to receive any payment to which he may be
entitled in respect of any Award under the Plan in the event of his death, on a written form to be provided by and filed with the Committee, and in a manner determined by the Committee in its
discretion. The Committee reserves the right to review and approve beneficiary designations. A participant may change his beneficiary from time to time in the same manner, unless such participant has
made an irrevocable designation. Any designation of beneficiary under the Plan (to the extent it is valid and enforceable under applicable law) shall be controlling over any other disposition,
testamentary or otherwise, as determined by the Committee in its discretion. If no designated beneficiary survives the participant and is living on the date on which any amount becomes payable to such
a participant's beneficiary, such payment will be made to the legal representatives of the participant's estate, and the term "beneficiary" as used in the Plan shall be deemed to include such person
or persons. If there are any questions as to the legal right of any beneficiary to receive a distribution under the Plan, the Committee in its discretion may determine that the amount in question be
paid to the legal representatives of the estate of the participant, in which event the Company, the Board and the Committee and the members thereof, will have no further liability to anyone with
respect to such amount.

 

        18.   Financial Assistance. If the Committee determines that such action is advisable, the Company may assist any person to
whom an Award has been granted in obtaining financing from the Company (or under any program of the Company approved pursuant to applicable law), or from a bank or other third party, on such terms as
are determined by the Committee, and in such amount as is required to accomplish the purposes of the Plan, including, but not limited to, to permit the exercise of an Award, the participation therein,
and/or the payment of any taxes in respect thereof. Such assistance may take any form that the Committee deems appropriate, including, but not limited to, a direct loan from the Company, a guarantee
of the obligation by the Company, or the maintenance by the Company of deposits with such bank or third party. 

        19.   Miscellaneous Provisions.

        (a)   No
employee or other person shall have any claim or right to be granted an Award under the Plan. Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among eligible individuals under the Plan, whether or not such eligible individuals are similarly situated. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee or other person any right to continue to be employed by or perform services for the Company, and the right to terminate the employment of or performance of services by
any participants at any time and for any reason is specifically reserved. 

        (b)   No
participant or other person shall have any right with respect to the Plan, the Common Shares reserved for issuance under the Plan or in any Award, contingent or
otherwise, until written evidence of the Award shall have been delivered to the recipient and all the terms, conditions and provisions of
the Plan and the Award applicable to such recipient (and each person claiming under or through him) have been met. 

        (c)   Except
as may be approved by the Committee where such approval does not adversely affect compliance of the Plan with Rule 16b-3 under the Exchange
Act, a participant's rights and interest under the Plan may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise (except
in the event of a participant's death) including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner; provided, however, that any Option
or similar right (including, but not limited to, a Stock Appreciation Right) offered pursuant to the Plan shall not be transferable other than by will or the laws of descent and distribution and shall
be exercisable during the participant's lifetime only by him. 

        (d)   No
Common Shares, Other Company Securities or property, other securities or property, or other forms of payment shall be issued hereunder with respect to any Award
unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state, local and foreign legal, securities exchange and other applicable
requirements. 

        (e)   It
is the intent of the Company that the Plan comply in all respects with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code,
that any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention and that if any provision of the Plan is found not to be in compliance with
Rule 16b-3 or Section 162(m), such provision shall be deemed null and void to the extent required to permit the Plan to comply with Rule 16b-3 or
Section 162(m), as the case may be. 

        (f)    The
Company shall have the right to deduct from any payment made under the Plan any federal, state, local or foreign income or other taxes required by law to be withheld
with respect to such payment. It shall be a condition to the obligation of the Company to issue Common Shares, Other Company Securities or property, other securities or property, or other forms of
payment, or any combination thereof, upon exercise, settlement or payment of any Award under the Plan, that the participant (or any beneficiary or person entitled to act) pay to the Company, upon its

 
demand, such amount as may be required by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not
paid, the Company may refuse to issue Common Shares, Other Company Securities or property, other securities or property, or other forms of payment, or any combination thereof. Notwithstanding anything
in the Plan to the contrary, the Committee may, in its discretion, permit an eligible participant (or any beneficiary or person entitled to act) to elect to pay a portion or all of the amount
requested by the Company for such taxes with respect to such Award, at such time and in such manner as the Committee shall deem to be appropriate (including, but not limited to, by authorizing the
Company to withhold, or agreeing to surrender to the Company on or about the date such tax liability is determinable, Common Shares, Other Company Securities or property, other securities or property,
or other forms of payment, or any combination thereof, owned by such person or a portion of such forms of payment that would otherwise be distributed, or have been distributed, as the case may be,
pursuant to such Award to such person, having a fair market value equal to the amount of such taxes). 

        (g)   The
expense of the Plan shall be borne by the Company. 

        (h)   The
Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment
of any Award under the Plan, and rights to the payment of Awards shall be no greater than the rights of the Company's general creditors. 

        (i)    By
accepting any Award or other benefit under the Plan, each participant and each person claiming under or through him shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. 

        (j)    Fair
market value in relation to Common Shares, Other Company Securities or property, other securities or property or other forms of payment of Awards under the Plan, or
any combination thereof, as of any specific time shall mean such value as determined by the Committee in accordance with applicable law. 

        (k)   The
masculine pronoun includes the feminine and the singular includes the plural wherever appropriate. 

        (l)    The
appropriate officers of the Company shall cause to be filed any reports, returns or other information regarding Awards hereunder of any Common Shares issued pursuant
hereto as may be required by Section 13 or 15(d) of the Exchange Act (or any successor provision) or any other applicable statute, rule or regulation. 

        (m)  The
validity, construction, interpretation, administration and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to Awards
granted under the Plan, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware. 

        20.   Plan Amendment or Suspension. The Plan may be amended or suspended in whole or in part at any time from time to time by
the Board, but no amendment shall be effective unless and until the same is approved by stockholders of the Company where the failure to obtain such approval would adversely affect the compliance of
the Plan with Rule 16b-3 under the Exchange Act and with other applicable law. No amendment of the Plan shall adversely affect in a material manner any right of any participant with
respect to any Award theretofore granted without such participant's written consent, except as permitted under Paragraph 12. 

        21.   Plan Termination. This Plan shall terminate upon the earlier of the following dates or events to occur: 

        (a)   upon
the adoption of a resolution of the Board terminating the Plan; or

 

        (b)   ten years
from the date the Plan is initially approved and adopted by the stockholders of the Company; provided, however, that the Board may, prior to the
expiration of such ten-year period, extend the term of the Plan for an additional period of up to five years for the grant of Awards other than Incentive Stock Options. No
termination of the Plan shall materially alter or impair any of the rights or obligations of any person, without his consent, under any Award theretofore granted under the Plan, except that subsequent
to termination of the Plan, the Committee may make amendments permitted under Paragraph 12. 

        IN
WITNESS WHEREOF, the Company has executed this Plan effective January 1, 2001. 

	

 	
 	

NAPRO BIOTHERAPEUTICS, INC.
	

Attest:	
 	

 	
 	

 
	

/s/  JOHN VAUGHAN      
	
 	

By:	
 	

/s/  KAI P. LARSON      

	 	 	Title:	 	Vice President, General Counsel

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1994 LONG-TERM PERFORMANCE INCENTIVE PLAN OF NAPRO BIOTHERAPEUTICS, INC. (as amended and restated effective January 1, 2001, and as further amended on June 21, 2001 and March 4, 2002)

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