Document:

exhibit_10q.htm

Exhibit 10(q)

 

 

 

AMENDED AND RESTATED

 

ALLETE AND AFFILIATED COMPANIES

 

CHANGE IN CONTROL SEVERANCE PLAN

 

ALLETE’s Board of Directors has determined that it is in the best interest of ALLETE and its shareholders to foster the continued dedication and objectivity of certain key members of the Company's management notwithstanding the possibility or occurrence of an acquisition by another company or other change in control of the Company.  Accordingly, ALLETE adopted the Change in Control Severance Plan effective as of February 13, 2008.

 

Effective as of the “Effective Date,” The Board has adopted this Amended and Restated Change in Control Severance Pay Plan designed, among other changes, to eliminate the excise tax gross-up feature, to eliminate certain benefit continuation payments and to establish a modified severance payment cap, all as provided herein.

 

Section 1.           Definitions. For purposes of the Plan, the following terms shall have the meanings indicated below:

 

“Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

“Affiliate” means any entity directly or indirectly controlled by, controlling or under common control with, ALLETE.

 

“ALLETE” means ALLETE, Inc., a Minnesota Corporation.

 

“Base Salary” shall mean, as to any Participant, the highest amount a Participant is entitled to receive annually as base salary at any time during the Protection Period, without reduction for any pre-tax contributions to benefit plans.

 

“Benefit Continuation Payment” means the payment described in Section 2.1.2. “Board” means the Board of Directors of ALLETE.

 

“Bonus Amount” shall mean, as to any Participant, an amount equal to the Participant's annual bonus which would have been payable under the Bonus Plan in which he or she participates (x) as of immediately prior to the Change in Control had he or she continued in employment until the end of the fiscal year of the Employer in which the Change in Control occurs and had bonuses been payable at "target" levels for  such year or (y) if greater, as of the Termination Date had he or she continued in employment until the end of the fiscal year of the Employer in which the Termination Date occurs and had bonuses been payable at "target" levels for such year.

 

“Bonus Plan” shall mean the ALLETE Executive Annual Incentive Plan and any similar or successor annual bonus plan, excluding plans intended to qualify under Section 401(a) of the Code.

 

“Cause” means:

 

(a)           the Participant’s willful and continued failure to perform the duties and responsibilities of his or her position (other than as a result of the Participant’s disability or anticipated failure after the Participant gives notice of Termination for Good Reason by the Participant) after there has been delivered to the Participant a written demand for performance which describes the basis for the belief that the Participant has not substantially performed his or her duties and after the Participant fails to take full corrective action within twenty (20) days of receipt of such notice; or

 

(b)           any material act of personal dishonesty taken by the Participant in connection with his or her responsibilities as an employee of the Company which is demonstrably and materially injurious to the Company; or

 

(c)           the Participant’s conviction of, or plea of nolo contendere to, a felony that the Company (or in the case of the Chief Executive Officer, the Board) reasonably believes has had or will have a material detrimental effect on the Company’s business or reputation.

 

“Change in Control” means the earliest of:

 

(a) the date any one Person, or more than one Person acting as a group (as the term “group” is used in Treasury Regulation section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of ALLETE that, together with stock previously held by the acquiror, constitutes more than fifty (50%) percent of the total fair market value or total voting power of ALLETE stock.  If any one Person, or more than one Person acting as a group, is considered to own more than fifty (50%) percent of the total fair market value or total voting power of ALLETE stock, the acquisition of additional stock by the same Person or Persons acting as a group does not cause a Change in Control.  An increase in the percentage of stock owned by any one Person, or Persons acting as a group, as a result of a transaction in which ALLETE acquires its stock in exchange for property, is treated as an acquisition of stock;

 

(b) the date any one Person, or more than one Person acting as a group (as the term “group” is used in Treasury Regulation section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by that Person or Persons) ownership of a ALLETE stock possessing at least thirty (30%) percent of the total voting power of ALLETE stock;

 

(c) the date a majority of the members of the ALLETE board of directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors prior to the date of appointment or election; or

 

(d) the date any one Person, or more than one Person acting as a group (as the term “group” is used in Treasury Regulation section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by that Person or Persons) assets from ALLETE that have a total gross fair market value equal to at least forty (40%) percent of the total gross fair market value of all ALLETE’s assets immediately prior to the acquisition or acquisitions.  For this purpose, “gross fair market value” means the value of the corporation’s assets, or the value of the assets being disposed of, without regard to any liabilities associated with these assets.

 

In determining whether a Change in Control occurs, the attribution rules of Code Section 318 apply to determine stock ownership.  The stock underlying a vested option is treated as owned by the individual who holds the vested option, and the stock underlying an unvested option is not treated as owned by the individual who holds the unvested option.

 

“Change in Control Severance Payment” means the Severance Payment and Benefit Continuation Payment.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Committee” means the committee responsible for administering the Plan, as described in Section 5.

 

“Company” means ALLETE and its Affiliates and except for purposes of determining whether a Change in Control has occurred, shall include any successor in interest to its business or assets which assumes the obligations of the Plan as required in Section 6.1 or which becomes bound by the terms of the Plan by operation of law.

 

“Effective Date” means January 19, 2011.

 

“Good Reason” means the occurrence of any of the following without the Participant’s consent, which will permit the Participant to terminate employment within ninety (90) days after the end of the Cure Period (defined below):

 

(a)           a material diminution of the Participant’s authority, duties, or responsibilities relative to the authority, duties or responsibilities of the Participant prior to such reduction; or

 

(b)           a material diminution by the Company in the Participant’s total compensation, including base pay, aggregate incentive compensation opportunities (but excluding any reduction in incentive compensation awards as the result of the performance of the Participant or the Company) and aggregate benefits, as in effect immediately prior to such reduction; or

 

(c)           the relocation of the Participant to a location or facility more than fifty (50) miles from the Participant's location immediately prior to change; or

 

(d)           a material diminution by the Company of the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report relative to the authority, duties or responsibilities of the supervisor prior to such reduction, including a requirement that the Participant report to a corporate officer or employee instead of reporting directly to the Board; or

 

(e)           a material diminution in the budget over which the Participant retains authority relative to the budget prior to such reduction; or

 

(f)           any other action or inaction that constitutes a material breach by the Company of an agreement under which a Participant provides services.

 

Notwithstanding the foregoing, the Participant may not resign for Good Reason without first providing the Employer with written notice (except in the case of  ALLETE’s Chief Executive Officer who shall provide such notice to the Board) of the condition that could constitute a “Good Reason” event within ninety (90) days of the initial existence of the condition and then only if such condition has not been remedied by the Employer within thirty (30) days of such written notice (the “Cure Period”).

 

“Employer” shall mean, as applicable to any Participant, ALLETE or an Affiliate that employs the Participant.

 

“Involuntary Separation” means, with respect to a Participant, an involuntary termination of employment by the Employer without Cause, or a voluntary termination by the Participant with Good Reason.

 

“Participant” means an individual who the Committee has selected to participate in the Plan and who has received written notification of both the eligibility to participate and status as either a “Group A Participant” or a “Group B Participant.”

 

“Person” means any individual, corporation (including any non-profit corporation), general, limited or limited liability partnership, limited liability company, joint venture, estate, trust, firm, association, organization or other entity or any governmental or quasi-governmental authority, organization, agency or body.

 

“Plan” means this Amended and Restated ALLETE and Affiliated Companies Change in Control Severance Plan.

 

“Protection Period” means the period beginning on the date that is six (6) months prior to a Change in Control and ending on the date that is twenty four (24) months after a Change in Control.

 

“Severance Duration Multiplier” means with respect to any Group A Participant, 2.5; and, with respect to any Group B Participant, 1.5.

 

“Severance Payment” means the payment described in Section 2.1.1.

 

“Termination Date” shall mean, with respect to a Participant, the date of the Participant’s Involuntary Separation.

 

Section 2.           Change in Control Severance Benefits.

 

2.1           Involuntary Separation in Connection with Change in Control. If a Participant has an Involuntary Separation on any date during the Protection Period, Participant will receive the following severance benefits from the Employer:

 

2.1.1           Severance Payment.  Participant will receive a lump sum cash payment in an amount equal to the product of (a) the applicable Severance Duration Multiplier and (b) the sum of (i) the Participant’s Base Salary and (ii) the Participant’s Bonus Amount.

 

2.1.2           Benefit Continuation Payment.  Participant will receive an additional lump sum cash payment in an amount equal to the applicable Severance Duration Multiplier times the sum of: (i) the annual premium for medical and dental benefits in effect on the Termination Date as determined for individuals who are entitled to elect continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); (ii) the annual premium the Employer would have paid to maintain core life insurance on behalf of the Participant had the Participant remained an employee of the Employer; and (iii) an amount the Employer would have allocated to the Participant annually under the Minnesota Power and Affiliated Companies Flexible Compensation Plan, determined with reference to the Participant’s Base Salary.

 

Participants will be responsible for electing benefit continuation coverage, if such coverage is desired, pursuant to COBRA, within the time period prescribed pursuant to COBRA, and for paying all COBRA premiums for any continuation coverage so elected.

 

2.1.3           Outplacement Services.  The Company will pay up to an aggregate of $25,000 for outplacement services obtained by Participant on or before the end of the second year following the year including the Termination Date, provided that the services commence not later than three (3) months following the later of the Change in Control or the Termination Date, and all amounts must be paid by the end of the third year following the year including the Termination Date.  Outplacement services will be provided only in kind; the Company will pay the outplacement service provider(s) directly for services rendered to the Participant in accordance with this Section.  No cash will be paid in lieu of outplacement services, nor will cash compensation to the Participant be increased if the Participant declines or does not use outplacement services.

 

2.2           Timing of Severance Payments.  Subject to Sections 2.5 and 3.1, the Company will pay any Change in Control Severance Payment to which a Participant is entitled within 30 days after the later of the Termination Date or the effective date of the Separation Agreement and Release, but in no event more than seventy-four (74) calendar days after the later of the date of the Change of Control or the Termination Date.

 

2.3           Voluntary Resignation; Termination for Cause.  If Participant’s employment with the Company terminates for any reason other than Involuntary Separation, Participant will not receive any payments under this Plan.

 

2.4           Coordination with other Payments.  The payments and benefits under this Plan to a Participant are intended to constitute the exclusive payments in the nature of severance or termination pay that shall be due to a Participant upon termination of his or her employment without Cause or for Good Reason in connection with a Change in Control and shall be in lieu of any such other payments under any agreement, plan, practice or policy of the Company, except as otherwise expressly provided in a written agreement between the Company and the Participant that such severance payments or benefits are to be paid in addition to any payment or benefit described herein. Accordingly, if a Participant is a party to an employment, severance, termination, salary continuation or other similar agreement with the Company or any of its Affiliates, or is a participant in any other severance plan, practice or policy of the Company or any of its Affiliates that does not expressly provide that such severance payments or benefits are to be paid in addition to any payment or benefit described herein, the severance pay to which the Participant is entitled under this Plan shall be reduced (but not below zero) by the amount of severance pay to which he or she is entitled under such other agreement, plan, practice or policy; provided that the reduction set forth in this sentence shall not apply as to any other such agreement, plan, practice or policy that contains a reduction provision substantially similar to this Section 2.4 so long as the reduction provision of such other agreement, plan, practice or policy is applied.

 

2.5           Code Section 409A.  To the extent that any payment under this Plan is deemed to be deferred compensation subject to the requirements of Section 409A of the Code, or any final regulations or guidance promulgated thereunder (“Section 409A”), the plan will be operated in compliance with Section 409A with respect to the subject payment.   Notwithstanding anything in this Plan to the contrary, if Participant is a Specified Employee, the payment of any amount under this Plan that is Nonqualified Deferred Compensation, and that becomes payable on account of a Separation from Service, will be delayed and paid in a lump sum, with interest from the date on which it would otherwise have been paid in accordance with Section 2.2 at the short-term applicable federal rate, on the first date on which any such amount may be paid without triggering a tax under Section 409A, but in no event before the date that is six (6) months and one (1) day following the Participant’s Separation from Service.  The Plan is intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  The Company may amend or modify the plan, at any time, to comply with Section 409A.  The terms “Specified Employee,” “Nonqualified Deferred Compensation,” and “Separation from Service” shall have the meaning provided by Section 409A and the applicable Treasury Regulations.

 

Section 3.           Conditions to Receipt of Benefits; No Mitigation.

 

3.1           Separation Agreement and Release of Claims. No Change in Control Severance Payment shall be provided to a Participant unless, within sixty (60) days following the later of the Change in Control or Participant’s Termination Date, the Participant delivers to the Company a Separation Agreement and Release, that has been properly executed on or after the Participant’s Termination Date and has become irrevocable as provided therein.  The initial form of the Separation Agreement and Release, including non-solicitation, non-competition and non-disparagement provisions, is attached to this Plan as Appendix A.  Prior to the occurrence of a Change in Control, the Company may revise the Separation Agreement and Release.  The Company may in any event modify the Separation Agreement and Release to conform it to the laws of the local jurisdiction applicable to a Participant or a change in applicable federal law so long as such modification does not increase the obligations of the Participant thereunder.

 

3.2           No Duty to Mitigate.  Participant will not be required to mitigate the amount of any payment or benefit contemplated by this Plan, nor will any earnings that Participant may receive from any other source reduce any such payment or benefits.

 

Section 4.           Limitation on Payments.

 

If it is determined that any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Participant, whether paid or payable pursuant to this Plan or otherwise (a “Payment”) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the aggregate present value of the Payments under the Plan shall be reduced (but not below zero) to the Reduced Amount (defined below), provided that the Payments shall be reduced only if the Accounting Firm (described below) determines that the reduction will provide the Executive with a greater net after-tax benefit than would no reduction.  The “Reduced Amount” shall be an amount expressed in the present value which maximizes the aggregate present value of Payments under this Plan without causing any Payment under this Plan to be subject to the excise tax imposed under Code Section 4999, determined in accordance with Code Section 280G(d)(4).  Payments under this Plan shall be reduced on a nondiscretionary basis in such a way as to minimize the reduction in the economic value deliverable to the Participant.  Any such reduction shall be implemented in a manner consistent with the requirements of Code Section 409A, and if more than one payment has the same value for this purpose and they are payable at different times, they will be reduced on a pro rata basis.  The determination of whether any Payments constitute an “excess parachute payment” within the meaning of Code Section 280G and, if so, the amount to be delivered to the Participant pursuant to this Section of the Plan shall be determined by an independent accounting firm (the “Accounting Firm”) selected by the Participant and the Company.  The Accounting Firm shall be a nationally recognized United States public accounting firm.  If the Participant and the Company cannot agree on the Accounting Firm, the Participant and the Company shall each designate one (1) accounting firm and those two firms shall jointly select the accounting firm to serve as the Accounting Firm.  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  Any determination by the Accounting Firm shall be binding upon the Company and the Participant.

 

Section 5.           Plan Administration.

 

5.1           The Plan shall be interpreted, administered and operated by the Executive Compensation Committee of the Board (“Committee”).  Subject to the express terms of the Plan, the Committee shall have complete authority, in its sole discretion, to determine who shall be a Participant, to interpret the Plan, to prescribe, amend and rescind rules relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. Notwithstanding the foregoing, the Committee may delegate any of its duties hereunder to such Person or Persons from time to time as it may designate.

 

5.2           All expenses and liabilities that members of the Committee incur in connection with the administration of the Plan shall be borne by the Company. The Committee may employ attorneys, consultants, accountants, appraisers, brokers, or other Persons, and the Committee, the Company and the Company's officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such Persons. No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully protected by the Company in respect of any such action, determination or interpretation.

 

Section 6.           Successors.

6.1           The Company’s Successors.  This Plan shall bind any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, in the same manner and to the same extent that the Company would be obligated under this Plan if no succession had taken place.  In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Plan, the Company shall require such successor expressly and unconditionally to assume and agree to perform the obligations of the Company and each Employer under this Plan, in the same manner and to the same extent that the Company and each Employer would be required to perform if no such succession had taken place.

 

6.2           Participant’s Successors. All rights of the Participant under this Plan will inure to the benefit of, and be enforceable by, the Participant's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees or other beneficiaries. If a Participant dies while any amount is payable to such Participant hereunder (other than amounts which, by their terms, terminate upon the death of the Participant) if such Participant had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the executors, personal representatives or administrators of such Participant's estate.

 

Section 7.           Notices.

 

7.1           General.  Notices and all other communications provided for in the Plan shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested and postage prepaid.  In the case of a Participant, mailed notices will be sent to his or her home address most recently communicated to the Company in writing.  In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its Vice President, Human Resources.

 

7.2           Notice of Termination.  Any termination of a Participant’s employment by the Company for Cause or by a Participant for Good Reason will be communicated by a notice of termination to the other party given in accordance with Section 7.1 of the Plan.

 

Section 8.           Miscellaneous.

 

8.1           No Waiver. No waiver by the Company or any Participant, as the case may be, at any time of any lack of compliance with any condition or provision of this Plan to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same, or at any prior or subsequent time. All other plans, policies and arrangements of the Company in which the Participant participates during the term of this Plan shall be interpreted so as to avoid the duplication of benefits paid hereunder.

 

8.2           No Right to Employment. Nothing contained in this Plan or any documents relating to the Plan shall: (a) confer on a Participant any right to continue in the employ of the Company or a subsidiary, (b) constitute any contract or agreement of employment, or (c) interfere in any way with the right of the Company to terminate the Participant's employment at any time, with or without Cause.

 

8.3           Legal Fees and Expenses.  If a Participant commences a legal action to enforce any of the obligations of the Company under this Plan and Participant prevails on the merits of the substantive issues in dispute in such proceeding, the Company shall pay the Participant the amount necessary to reimburse the Participant in full for all actual reasonable expenses (including reasonable attorneys' fees and legal expenses) incurred by the Participant with respect to such action.

8.4           Plan Termination; Amendment of Plan.  Prior to a Change in Control, the Plan may be amended or modified in any respect, and may be terminated, in any such case by resolution adopted by the Executive Compensation Committee of the Board; provided, however, that no such amendment, modification or termination that would adversely affect the benefits or protections hereunder of any individual who is a Participant as of the date such amendment, modification or termination is adopted shall be effective as it relates to such individual unless no Change in Control occurs within one year after such adoption, any such attempted amendment, modification or termination adopted within one year prior to a Change in Control being null and void ab initio as it relates to all such individuals who were Participants prior to such adoption (it being understood, however, that the hiring, termination of employment, promotion or demotion of any employee of the Company prior to a Change in Control shall not be construed to be an amendment, modification or termination of the Plan); provided, further, however, that the Plan may not be amended, modified or terminated, (i) at the request of a third party who has indicated an intention or taken steps to effect a Change in Control and who effectuates a Change in Control or (ii) otherwise in connection with, or in anticipation of, a Change in Control which actually occurs, any such attempted amendment, modification or termination being null and void ab initio.  Any action taken to amend, modify or terminate the Plan which is taken after the execution of an agreement providing for a transaction or transactions which, if consummated, would constitute a Change in Control shall conclusively be presumed to have been taken in connection with a Change in Control.  From and after the occurrence of a Change in Control, the Plan may not be amended or modified in any manner that would in any way adversely affect the benefits or protections provided hereunder to any individual who is a Participant in the Plan on the date the Change in Control occurs.  From and after the occurrence of a Change in Control, except to the extent specifically permitted by the last sentence of Section 3.1, the revision of the Separation Agreement and Release, attached hereto as Appendix A, shall be deemed to be a modification of the Plan for purposes of this Section 8.4.  If a Change in Control occurs, this Plan shall continue in full force and effect and shall not terminate or expire until after all Participants who have become entitled to Change in Control Severance Payments hereunder shall have received such payments in full.

 

8.5           Benefits not Assignable. Except as otherwise provided herein or by law, no right or interest of a Participant under the Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including without limitation by execution, levy, garnishment, attachment, pledge or in any manner; no attempted assignment or transfer thereof shall be effective; and no right or interest of a Participant under the Plan shall be liable for, or subject to, any obligation or liability of such Participant. When a payment is due pursuant this Plan to a Participant who is unable to care for his or her affairs, payment may be made directly to his or her legal guardian or personal representative.

 

8.6           Tax Withholding. All amounts payable hereunder shall be subject to withholding of applicable federal, state and local taxes.

 

8.7           Minnesota Law. This Plan will be construed and interpreted, and the rights of the Company and Participants will be determined in accordance with, the laws of the State of Minnesota (without regard to the conflicts of laws principles thereof), to the extent not preempted by federal law, which shall otherwise control.

 

8.8           Validity. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect. If this Plan shall for any reason be or become unenforceable by either party, this Plan shall thereupon terminate and become unenforceable by the other party as well.

 

  

  

  

 

Now, therefore, ALLETE has adopted this Amended and Restated Change in Control Severance Plan effective as of the Effective Date.

 

ALLETE, Inc.

 

By:  ____________________________________

 

                     Name:  __________________________________

 

 

Attest:

 

By  ___________________________________

 

Its  ___________________________________

 

  

  

  

Appendix A

Form of

SEPARATION AGREEMENT AND RELEASE

WHEREAS << [full name] >> (“Executive”) is a Participant of the Amended and Restated ALLETE and Affiliated Companies Change in Control Severance Plan (“the Plan”), and whereas Executive’s employment with <<ALLETE, Inc. or applicable Affiliate >> (together with all affiliates of ALLETE, Inc., the “Company”) terminated effective <<Termination Date>> (“<<”Termination Date” / “Retirement Date”>>)under circumstances that make Executive eligible to receive certain compensation and other benefits under the Plan, and whereas Executive enters into this Separation Agreement and Release (“Agreement”) of <<  [his / her]  >> own free will and deed; therefore, as of the date written below the Company  and Executive agree as follows:

1.  Separation Benefit.  Executive will receive from the Company the payment and other benefits provided by the Plan and delivered in accordance with the Plan provided that this Agreement becomes effective and Executive has not rescinded the Agreement within the Reconsideration Period (defined below).

2.  Non-Solicitation.  From the <<Termination Date” / “Retirement Date>> and for a period continuing through the date that twenty four (24) months following the later of the <<Termination Date” / “Retirement Date>>  or a Change in Control (as defined in the Plan) Executive will not solicit, or assist any Person (as defined in the Plan) in the solicitation of, any director, officer or employee of the Company for employment other than with the Company, or otherwise interfere with or disrupt any employment relationship (contractual or otherwise) of the Company.

3.  Non-Competition.  For a period of twelve (12) months following the later of the <<Termination Date” / “Retirement Date>> or a Change in Control (as defined in the Plan) Executive will not, without the written express consent of the Company, directly or indirectly, alone or as a partner, owner, officer, director, employee, or consultant of any other firm, business or entity, engage in any activity in competition with the Company.  This prohibition will apply only to activities in which the Company is engaged at any time during the Executive’s employment with the Company and only with respect to those geographic regions in which the Company is engaged in such business activities or reasonably anticipates engaging in such business activities. << Provide specific areas or examples as appropriate >>.  Notwithstanding the foregoing, nothing herein shall prohibit Executive from owning stock of any corporation, if such stock is traded on a recognized national securities exchange.

 

        4.  Nondisparagement.  For a period of twelve (12) months following the later of the <<Termination Date” / “Retirement Date>> or a Change in Control (as defined in the Plan) Executive will not, directly or indirectly, knowingly and materially disparage, criticize, or otherwise make derogatory statements regarding the Company or any aspect of management policies, operations, practices, or personnel of the Company.  Notwithstanding the foregoing, nothing contained herein will be deemed to restrict the Participant from providing information to any governmental or regulatory agency (or in any way limit the content of such information) to the extent the Participant is required to provide such information pursuant to applicable law or regulation; nor will the foregoing restrict the Participant from enforcing his or her rights under this Agreement or the Plan. The Company promises that its officers will not disparage Executive, and will do nothing intentionally calculated  to harm the Executive’s reputation.

5.  Non Disclosure.   Executive agrees to keep confidential all information and trade secrets to which Executive has had access during and in the course of Executive’s employment by the Company, (whether written, prepared or made by him or others), including but not limited to the terms of this Agreement, the business practices, strategies, and opportunities of the Company, and any other non-public information relating to the Company’s business.  Notwithstanding the foregoing, Executive may reveal the existence of this Agreement, its terms and conditions, and the facts and circumstances leading up to this Agreement with Executive’s spouse, attorneys, accountants, tax consultants, and to state and federal tax authorities or as may be required by law.

6.  Waiver and Release.  Except with respect to Executive’s rights under this Agreement and the Plan, Executive on behalf of himself and his heirs, executors, administrators, representatives, successors and assigns, agrees to release and forever discharge ALLETE, Inc., and its affiliates, subsidiaries, predecessors, successors, related entities, insurers and the current and former officers, directors, shareholders, employees, attorneys, agents and trustees or administrators of any benefit plan of each of the foregoing (any and all of which are referred to as “Releasees”) generally from any and all charges, complaints, claims, promises, agreements, causes of actions, damages, and debts of any nature whatsoever, known or unknown (collectively “Claims”), which Executive has, claims to have, ever had, or ever claimed to have had against Releasees up through the date of execution of this Agreement, including but not limited to any Claims under the common law or any statute.  This waiver and release includes but is not limited to any rights, remedies, claims, and causes of action under the Minnesota Human Rights Act, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, the Employee Retirement Income Securities Act of 1974, as amended, (but only as to claims arising thereunder prior to the date hereof) the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Family Medical Leave Act, state unemployment compensation benefits, and any other federal, state or local discrimination or civil rights statute or any federal, state or local ordinance of any kind, any tort theory, any contract theory and any equitable theory, and all claims for back pay, front pay, vacation pay, or sick pay, excepting only:

      (a)   rights of the Executive under this Separation Agreement and Release and the Plan;

      (b)   rights of the Executive relating to equity awards held by the Executive as of his or her Termination Date (as defined in the Plan);

      (c)   the right of the Executive to receive COBRA continuation coverage in accordance with applicable law;

      (d)   rights to indemnification the Executive may have (i) under applicable corporate law, (ii) under the by-laws or certificate of incorporation of any Releasee or (iii) as an insured under any director's and officer's liability insurance policy now or previously in force;

      (e)   claims (i) for benefits under any health, disability, retirement, deferred compensation, life insurance or other, similar Executive benefit plan or arrangement of the Company and (ii) for earned but unused vacation pay through the Termination Date in accordance with applicable Company policy; and

      (f)   claims for the reimbursement of unreimbursed business expenses incurred prior to the Termination Date pursuant to applicable Company policy.

Executive has been provided a period of twenty-one (21) days to consider this Agreement before executing it.  Executive has had an opportunity to discuss this agreement with Executive’s attorney or other adviser <<  [he / she]  >> had determined to be appropriate.  Executive may rescind this waiver and release of claims within fifteen (15) days of the date of this Agreement, (the “Reconsideration Period”) in which event the Company shall have no obligation to pay the benefits described in paragraph 1 above or otherwise provided under the Plan.

 

7.  Severability.  Should any provision of this agreement be held invalid or illegal, such illegality shall not invalidate the whole of this agreement, but, rather, the agreement shall be construed as if it did not contain the illegal part, and the rights and obligations of the parties shall be construed and enforced accordingly.

8.  Voluntary Agreement.  This Agreement is entered into on a completely voluntary basis by both Executive and Minnesota Power, and represents the complete agreement between the parties, superseding any previous agreements.

The date of this Agreement shall be dated << ______________________>>.

EXECUTIVE:

By:  ______________________________________

Name:  ____________________________________

ALLETE, Inc. << or applicable affiliate employer>>

By:  ______________________________________

Name:  ____________________________________WebFilings | EDGAR view

 

 
EXHIBIT 10.38 
 
 
AVALON MICROELECTRONICS INC.
Amended and Restated Stock Option Plan
December 10, 2010
WHEREAS the Corporation created and implemented a Stock Option Plan dated August 28, 2006 which was amended and restated in October 2010 (collectively, the “Old Plan”);
AND WHEREAS the purpose of this Amended and Restated Stock Option Plan is to give effect to an exchange of each unvested option held by a Participant to acquire Class C or Class D shares of the Corporation under the Old Plan ("Old Option") whereby, immediately upon the completion of the transactions contemplated by that certain agreement under which all of the issued and outstanding shares in the capital of the Corporation were sold to Altera Canada, an indirect wholly-owned subsidiary of Altera  (the “Purchase Agreement”), each Old Option of such Participant is exchanged for an Option (as defined below) and no other consideration; 
AND WHEREAS, for each such Participant, the fair market value of the Shares subject to an Option, less the Exercise Price for such Option, is intended to be equal to the fair market value of the Class C shares of the Corporation subject to the Old Option, less the exercise price for such shares under the Old Option; 
 
NOW THEREFORE, the Old Plan is hereby amended as follows, with effect immediately after the completion of the transactions contemplated by the Purchase Agreement.
 
 
 
		
	1    
	Table of Contents

 
2    Definitions
3    Establishment of this Plan    
3.1    Purpose    
3.2    No Employment Rights    
3.3    No Other Rights    
4    Grant of Option    
4.1    Grant    
4.2    Limitations on Grant    

 

 

4.3    Exercise Price    
4.4    No Payment on Grant    
4.5    Options Record    
4.6    Changes in Shares    
5    Exercise of Options    
6    Vesting of Options    
7    Death or Long-Term Disability of Participant    
8    Termination of Employment other than For Cause    
9    Termination of Employment for Cause    
10    Order of Exercise    
11    Termination of Option    
11.1    Expiration of Exercise Period    
11.2    Bankrupt Participant    
12    General    
12.1    Delivery of Shares    
12.2    Consents    
12.3    Option Not Transferable    
12.4    Administration    
12.5    Incapacity    
12.6    Amendment and Termination    
12.7    Approvals    
12.8    No Fractional Shares    
12.9    Withholding    
 
		
	2    
	Definitions

1.In this Plan, unless the context otherwise requires, the following terms have the meanings indicated:
“Affiliate” means, with respect to any Person, any other Person who directly or indirectly controls, is controlled by, or is under direct or indirect common control with, such Person, and includes any Person in like relation to an Affiliate.  A Person shall be deemed to “control” another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; and the term “controlled” shall have a similar meaning.
“Altera” means Altera Corporation, its successors and assigns. 
“Altera Canada” means Altera Canada Co., an indirect wholly owned subsidiary of Altera.
“Articles” means the Articles of Incorporation of the Corporation as amended from time to time.
“Board” means the board of directors of the Corporation.

 

 

“Cause” shall include but not be limited to the following acts, which, in the reasonable judgment of Altera, an Employee has been found to have engaged in: (i) the Employee committed a fraud, theft, embezzlement or another similar act against the Corporation or any of its Affiliates; (ii) the Employee breached a material term of their employment agreement with the Corporation, if applicable; (iii) the Employee was prosecuted for having committed a serious indictable offence or engaged in other conduct that is materially detrimental or embarrassing to the Corporation or any of its Affiliates; (iv) the Employee compromised any trade secret or violated his or her confidentiality obligations to the Corporation or any of its Affiliates; (v) the Employee breached any non-competition or non-solicitation agreement with the Corporation or any of its Affiliates; or (vi) the Employee engaged in any grossly  negligent act or willful misconduct in the scope of his or her duties for the Corporation or any of its Affiliates.
“Corporation” means Avalon Microelectronics Inc., its successors and assigns, and any reference in this Plan to action by the Corporation means action by or under the authority of the Board or any person or committee that has been designated for that purpose by the Corporation, subject to the overriding rights of Altera Canada under any unanimous shareholder declaration pursuant to which it assumes the responsibilities of the Board.
“Date of Grant” means the date a Participant is granted an Option to purchase Shares as set out in the Options Record.
“Employee” means a person in the full-time or part-time employment of the Corporation and Employees means more than one Employee.
“Exchange” means the NASDAQ Stock Exchange or any other stock exchange upon which the Shares may be listed and posted for trading.
“Exercise Price” means the price per Share payable on the exercise of an Option as set out in the Options Record for such Option.
“Option” means a right to subscribe for one or more Shares pursuant to this Plan.
“Options Record” means the record of Options granted under this Plan, including the number, vesting terms and strike prices thereof, attached hereto as Schedule “A”.
“Options Record Excerpt” means the Options Record excerpted to only contain details of the Options held by a particular Participant.
“Original Grant Date” means the original date of grant under the Old Plan set out in the Options Record for options exercisable into shares in the capital of the Corporation granted to such Participant, such options having been disposed of in connection with the completion of the transactions contemplated in the Purchase Agreement in exchange for Options under this Plan. 
“Outstanding Issue” means Shares that are available to be, but have not yet been, issued by Altera pursuant to Options granted by the Corporation.
“Participant” means an Employee who has been granted an Option.
“Person” is to be broadly interpreted and includes an individual, a corporation, a partnership, a trust, an unincorporated organization, a governmental authority, and the executors, administrators or other legal representatives of an individual in such capacity.

 

 

“Plan” means this stock option plan, including the Options Record, as amended and restated from time to time.
“Prescribed Period” means the prescribed period set out in the notice provided for in Section 5.5 of this Plan, which shall not be Less than 15 days from the date of such notice.
“Shares” means common shares in the capital of Altera, and includes any shares of Altera into which such shares may be converted, reclassified, redesignated, subdivided, consolidated or otherwise changed.
“Vesting Period” means the period(s) referred to in the Options Record that determines when the Participant may exercise Options to subscribe for and purchase Shares. 
 
		
	3    
	Establishment of this Plan

1.Purpose
The purpose of this Plan is to advance the interests of the Corporation by providing Participants with (a) a financial incentive for the continued improvement of the performance of the Corporation and its Affiliates and (b) encouragement to continue employment with the Corporation or its Affiliates.
2.No Employment Rights
Participation in this Plan does not give any Participant the right to continue as an Employee, or any right or interest in Options or Shares, except to Options or Shares as specifically provided in this Plan as reflected in the Options Record. Nothing in this Plan or in any Option shall be deemed, interpreted or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or any of its Affiliates, to extend the employment of any Participant beyond the time at which such Participant would normally be required to retire in accordance with any applicable employment agreement or retirement plan or policy of the Corporation or any of its Affiliates then in effect.
3.No Other Rights
No Participant shall have any of the rights of a shareholder of Altera with respect to any Shares subject to an Option until such Shares have been issued to him or her upon the due exercise of the Option in accordance with the terms of this Plan, including those of the Options Record, and full payment therefor has been made by him or her to Altera.
		
	4    
	Grant of Option

1.Grant
Subject to the provisions of this Plan, the Corporation may, from time to time in its discretion, determine those Employees to whom Options are to be granted, the number and type of Shares which may be purchased pursuant to such Options, the time or times when such Options shall vest and become exercisable, as well as, if applicable, the conditions that must be met for such vesting to take place, the duration of the exercise period and conditions applicable with respect to the exercise of such Options. A Participant may be granted additional Options under this Plan if the Corporation shall so determine in its absolute discretion.
2.Limitations on Grant
For so long as the Shares are listed and posted for trading on the Exchange, and unless otherwise approved by holders of the majority of voting shares of Altera, the following limitations on 

 

 

the number of Shares for issuance apply:
the number of Shares that may be reserved for issuance at any one time under this Plan shall not exceed ten percent (10%) of the Outstanding Issue at any point in time;
no Option shall be granted which could, under the terms of this Plan and any other share option, share option plan or share purchase plan of the Corporation or any of its Affiliates, result in a Participant acquiring under such plans more than 5% of the issued and outstanding Shares.
3.Exercise Price
At the time the Corporation grants an Option, the Corporation shall fix the Exercise Price of such Option at the time of such grant at the Corporation's sole and absolute discretion.
4.No Payment on Grant
No payment to the Corporation shall be required or made on the grant of an Option.
5.Options Record
The grant of an Option shall be evidenced by the delivery by the Corporation to the Participant, within 30 days of the Date of Grant, of an Options Record Excerpt setting out the terms of such granted Option. 
6.Changes in Shares
If the Shares are subdivided, consolidated, converted or reclassified or the number of Shares varies as a result of a stock dividend or of an increase or reduction of the share capital of Altera, the Corporation may adjust one or more of:
		
	1.    
	the number or class or series of Shares that may be subject to Options at any particular time;

		
	2.    
	the number or class or series of Shares that are subject to outstanding Options; and

		
	3.    
	the Exercise Price of outstanding Options, in such manner as the Corporation considers appropriate and proportionate in the circumstances.

Upon notice to a Participant of an adjustment made in accordance with this Section 4.6, the Corporation shall deliver to the Participant an updated Options Record Excerpt reflecting such adjustment.
		
	5    
	Exercise of Options

1.Subject to any policies adopted by Altera or any of its Affiliates, including the Corporation, regarding trading by insiders or employees of Altera or any of its Affiliates, including the Corporation, as the case may be, a Participant may exercise an Option in whole or in part at any time after the Option vests in accordance with this Plan including the vesting terms set out in the Options Record.
2.Subject to Section 5.1 and the Option terms set out in the Options Record, an Option may be exercised by a Participant, or as provided for in Section 12.3 hereof in the case of death of a Participant or during any period in which a Participant lacks capacity, by such Participant's heirs, executors, administrators or personal representatives, at the applicable times and in the applicable amounts by delivering to the Corporation written notice of exercise of such Option in the form attached hereto as Schedule B, together with payment in full of the Exercise Price for all Shares in respect of which the Option is being exercised.
3.Upon any such exercise of an Option, Altera shall cause the registrar and transfer agent of 

 

 

Altera to deliver to the Participant exercising such Option, or his or her personal representative in the case of the death of such Participant as contemplated in Section 12.3 (or as such Participant or his or her personal representative may otherwise direct in the written notice of exercise), evidence of the registration of the Shares in respect of which such Option was duly exercised as required hereunder (including payment in full of the applicable Exercise Price) in the name of the Participant or his or her personal representative (or as otherwise directed in the written notice of exercise), representing in the aggregate such number of Shares as such Participant or his or her personal representative shall have then paid for.
4.The Option shall be deemed to have been exercised upon actual receipt by the Corporation of the written notice of exercise, and payment in full of the Exercise Price for such Shares to Altera. Upon exercise, an Option shall be cancelled unless it is only exercised in part.
5.Notwithstanding any other provision of this Plan, the Corporation may at any time, by notice in writing to a Participant, in connection with:
		
	(a)    
	any proposed sale or conveyance of all or substantially all of the property and assets of the Corporation or any of its Affiliates, including but not limited to a sale of the shares in the Corporation or any of its Affiliates or dissolution, liquidation or winding-up of the Corporation or any of its Affiliates;

		
	(b)    
	any proposed merger, amalgamation or other form of corporate reorganization of the Corporation or any of its Affiliates; or

		
	(c)    
	any transaction or arrangement entered into by the Corporation or any of its Affiliates which would have a similar effect as the transactions referred to in (a) or(b) above.

(in each case, a “Proposed Transaction”) require the Participant to accept termination in accordance with Section 5.6 within a prescribed period (the “Prescribed Period”) set out in said notice.
6.Upon receipt of notice in writing from the Corporation under Section 5.5 and unless limited by Section 5.7, the Participant shall, within the Prescribed Period, elect by notice in writing to the Corporation to accept termination of the Option by either:
		
	(a)    
	subscribing and paying for all of the Shares then remaining unsubscribed for under an Option that has vested or would otherwise then be exercisable for all the Shares subject to the Option; or

		
	(b)    
	effect a “cashless exercise”, by applying a portion of the Participant's proceeds from the closing of the Proposed Transaction to the Exercise Price payable by that Participant for the exercise of his or her vested Options, and as applicable, issuing the balance of the shares or paying the balance of the proceeds to the Participant; and

exchange unvested Options or any portion of them for options to purchase shares in the capital of the acquirer or any corporation that results from amalgamation, merger, or similar transaction involving the Corporation or any of its Affiliates (vested or unvested) made in connection with the Proposed Transaction on an 'in the money basis' attributable to such unvested Options at the then prevailing subscription price of the shares or adjusted if and to the extent that the Corporation considers it to be equitable and appropriate.
7.In any notice of election given by the Corporation under Section 5.5, the Corporation shall have the right to provide, among other things, that:
		
	(a)    
	Altera shall only complete the issuance of any Shares subscribed for by the Participant;

		
	(b)    
	the Participant shall be required to exercise a “cashless exercise” by applying a portion of the Participant's proceeds from the closing of the Proposed Transaction, if any, to the Exercise Price payable by that Participant for the exercise of his or her vested Options and issue the balance of the proceeds attributable to said vested Options to the Participant immediately prior to or contemporaneously with the completion of the 

 

 

Proposed Transaction;
		
	(c)    
	the Corporation may at its absolute discretion agree to compensate Participants from the proceeds of a Proposed Transaction for any unvested Options or any portion thereof by exchanging options to purchase shares in the capital of the acquirer or any corporation (vested or unvested) made in connection with the Proposed Transaction on an 'in the money basis' at the then prevailing subscription price of the shares or adjusted if and to the extent that the Corporation considers it to be equitable and appropriate or by such other means as the Corporation considers equitable and appropriate; and

		
	(d)    
	in the event that the Corporation in good faith determines that the Proposed Transaction will not be completed, the notice of election of the Participant given under Section 5.6 be terminated, and in such event (i) any cash paid by the Participant to Altera will be returned to the Participant or (ii) any cash paid by the Corporation or any of its Affiliates to the Participant will be immediately returned to the Corporation or such Affiliate thereof and in either case the Option shall thereafter continue to be exercisable by the Participant in accordance with its terms.

8.in the event the Participant has not elected within the Prescribed Period to subscribe for Shares pursuant to Section 5.6(a) or receive a payment of shares or cash pursuant to Section 5.6(b) under the Option, or has not paid for Shares he or she has elected to subscribe for or if the Corporation has not exercised its right to proceed under Section 5.7(b) herein, the Participant will be deemed to have elected to receive such payment for its Option pursuant to Section 5.6(b).
9.If the Participant has elected or is deemed to have elected to receive payment in cash, and if no cash payment would be made pursuant to Section 5.6(b) because the relevant value or trading price determined under Section 5.6(b) is less than the applicable Exercise Price, then the Option will be deemed to have terminated at the end of the Prescribed Period, and the Corporation shall have no further obligations to the Participant with respect thereto.
10.For the purposes of this entire Section 5, the term “date of completion” means the date on which the sale, conveyance, corporate reorganization, acquisition or redemption contemplated by this entire Section 5 takes effect.
11.The provisions of Section 5.6 requiring the Participant to make an election to exercise the Option shall only be invoked with respect to all Participants generally and not with respect to one or more of the Participants and not other Participants. Upon the subscription and payment for Shares by the Participant or the payment of cash to the Participant by the Corporation or any of its Affiliates or the deemed termination of the Option under Section 5.9, all rights of the Participant under the Option will terminate.
12.Subject to Section 5.5 and 5.6, if Altera enters into, and is continued or survives as a result of any arrangement, amalgamation, merger or other similar transaction with one or more other companies or corporations, then and in each such case and to the extent that the Corporation considers it to be equitable and appropriate in its sole and absolute discretion, each Option granted hereunder may extend to cover the number, class and kind of shares or other obligations to which the Participant would have been entitled had the Option been fully exercised immediately prior to the date such amalgamation or merger becomes effective (whether or not such Option would otherwise have been fully exercisable) and the then prevailing subscription price of the shares or other obligations so covered shall be correspondingly adjusted if and to the extent that the Corporation considers it to be equitable and appropriate.
		
	6    
	Vesting of Options

1.The vesting conditions of Options granted under this Plan are set out in the Options Record.
2.Notwithstanding the vesting period(s) set forth in the Options Record, in the event Altera, any of its Affiliates and/or their respective shareholders, as the case may be, receive or accept an offer 

 

 

to acquire the shares or substantially all of the assets of Altera or such Affiliate thereof, whether effected through an acquisition for cash or securities, and whether structured as a purchase, amalgamation, merger, or otherwise, the Corporation may, in its sole discretion, deal with the vesting of Options granted under this Plan in the manner that is equitable and appropriate in light of the circumstances of the such transaction.
		
	7    
	Death or Long-Term Disability of Participant

If the employment of a Participant ends by death, or if such Participant is permanently disabled and receiving long-term disability benefits then:
1.    Any vested Option held by the Participant at the time of such event is exercisable for 180 days after such event; 
2    Any unvested Option held by the Participant at the time of such event is cancelled; and
3.    The Corporation may permit, at its sole and absolute discretion, the exercise of an Option even though the Option had not vested at the time of the event under this Section 7 of this Plan.
		
	8    
	Termination of Employment other than For Cause

If the employment of a Participant terminates for any reason other than for death, disability or Cause then:
1.    Any vested Option held by the Participant at the time of such termination is exercisable for 30 days after such event; and
2.    Any unvested Option held by the Participant at the time of the event is cancelled; and
3.    The Corporation may permit, at its sole and absolute discretion, the exercise of an Option even though the Option had not vested at the time of termination under this Section 8 of this Plan
		
	9    
	Termination of Employment for Cause

Any vested or unvested Option held by the Participant at the time of termination for Cause are immediately forfeited and cancelled, without any further act on the part of the Corporation and without any consideration thereof to the Participant.
		
	10    
	Order of Exercise

A Participant may exercise vested Options in any order in which they are received, regardless of the Date of Grant of the Options.
		
	11    
	Termination of Option

1.Expiration of Exercise Period
Options shall expire on the date specified in the Options Record or on the date specified in Sections 7, 8, 9 or 11.2 as applicable and, in any event, the term of an Option shall not exceed six (6) years from the Original Grant Date as set out in the Options Record unless otherwise extended by the Corporation.
2.Bankrupt Participant
If a Participant becomes insolvent or bankrupt within the meaning of the Bankruptcy and Insolvency Act (Canada) or any other applicable bankruptcy or insolvency legislation, any unexercised Option and any unvested Option held by such Participant shall immediately terminate and cease to be exercisable, without any further act on the part of the Corporation 

 

 

and without any consideration thereof to the Participant or its bankrupt estate.
		
	12    
	General

1.Delivery of Shares
Any Shares to be issued to a Participant pursuant to the exercise of an Option shall be issued not later than 30 days after the date of exercise of the Option provided payment in full is received by Altera.
2.Consents
Any issue of Shares under this Plan shall be subject to applicable law and prior receipt of all necessary or appropriate consents, if any, of any governmental or regulatory authorities or agencies.
3.Option Not Transferable
		
	1.    
	No Option shall be assignable or transferable by a Participant and any purported assignment or transfer of an Option shall be void and shall render the Option void, provided that in the event of death of a Participant, such Participant's legal personal representative may exercise the Participant's Option in accordance with Section 12.3(2)

		
	2.    
	In the event that a Participant should die at any time during the term of such Participant's Option, the Option may then be exercised by his or her legal personal representative, to the same extent as if the Participant was alive subject to the terms of such Options set out in the Options Record and Section 7 hereof.

		
	3.    
	Except as specifically provided in the foregoing sentence, no Option and none of the rights and privileges thereby conferred shall be transferred, assigned, pledged, hypothecated in any way or made the subject of any security of any kind whatever (whether by operation of law or otherwise), and no Option and none of the rights and privileges thereby conferred shall be subject to execution, attachment or similar process. Upon any attempt by a Participant to so transfer, assign, pledge, hypothecate, make subject to a security or otherwise dispose of an Option or any of the rights and privileges thereby conferred contrary to the provisions hereof, or upon the levy of any execution, attachment or similar process upon an Option or any of the rights and privileges thereby conferred, the Option and such rights and privileges shall immediately, be void, terminate without any consideration thereof to the Participant and cease to be exercisable.

4.Administration
This Plan shall be administered by the Corporation, which may prescribe rules and regulations respecting this Plan. Unless otherwise specified. the Corporation has the exclusive authority to interpret and construe this Plan and to determine all questions respecting this Plan or any Option. Any such interpretation, construction or determination shall be final, binding and conclusive for all purposes in respect of all persons affected thereby. The Corporation may take such other actions as it considers necessary or desirable in respect of this Plan.
5.Incapacity
If a person to whom Shares are to be delivered or a payment made under this Plan is a minor or is physically or mentally incapable of giving a valid receipt, delivery or payment may instead be made to a person having the legal care or custody of the person to whom delivery or payment is to be made and any such delivery or payment constitutes a complete discharge of the obligation to make such delivery or payment. Any delivery or payment so made shall be deemed to be a delivery or payment made to the person entitled to such delivery or payment. 

 

 

Once such delivery or payment is made, no further claim may be made in respect of such delivery or payment by any person whatsoever against: (a) Altera; (b)  any of Altera's Affiliates including the Corporation; (c) Altera's or any of its Affiliates' directors, officers, employees or agents, or (d) this Plan.
6.Amendment and Termination
Subject to the rules and policies of the Exchange, the Corporation may at any time by resolution amend, suspend or terminate this Plan in any manner whatsoever, except that no such amendment, suspension or termination shall adversely affect the terms of any Option previously granted and not yet exercised or expired, without the written consent of the affected Participants.
7.Approvals
This Plan and any amendments hereto shall be subject to the approval of the Corporation and any other approvals required by applicable law, regulation or the Exchange. Any Option granted prior to receipt of any such approval shall be conditional upon such approval being given and no Option may be exercised until such approval is given. Notwithstanding any other term of this Plan, neither Altera, nor any of its Affiliates including the Corporation, is obliged to take any action or to refrain from taking any action if such action (or refraining there from) would result in a breach of any applicable law, regulation, judgment, directive, rule, consent, approval, authorization, guideline, order or policy of any governmental or other regulatory authority.
8.No Fractional Shares
Under no circumstances shall Altera be obliged to issue any fractional Shares upon the exercise of an Option. To the extent that a Participant would otherwise have been entitled to receive, on the exercise or partial exercise of an Option, a fraction of a Share in any year, the Option shall be cancelled with respect to such fraction with no consideration thereof to the Participant.
9.Withholding
Whenever Altera proposes or is required to issue or transfer Shares pursuant to an Option, Altera shall have the right to cause the Corporation to withhold from salary payments or to require the recipient of such Shares to remit to the Corporation, an amount sufficient to satisfy any federal, provincial, state and/or local withholding tax requirements prior to the issuance of the Shares. Whenever under this Plan payments are to be made in cash, such payments shall be net of an amount sufficient to satisfy any federal, provincial, state and/or local withholding tax requirements.

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