Document:

amendednonempldirectorplan.htm

    
      

       

      
        
          

        

      

      EMERITUS
CORPORATION

       

      AMENDED
AND RESTATED STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS

       

      SECTION
1    PURPOSES

       

      The
purpose of the Emeritus Corporation Stock Option Plan for Nonemployee Directors
(this "Plan") is to attract and retain the services of experienced and
knowledgeable nonemployee directors for Emeritus Corporation (the "Company") and
to provide added incentive to such directors by providing an opportunity for
stock ownership in the Company.

       

      SECTION
2    ADMINISTRATION

       

      The
administrator of this Plan (the "Plan Administrator") shall be the Board of
Directors of the Company (the "Board").  Subject to the terms of this
Plan, the Plan Administrator shall have the power to construe the provisions of
this Plan, to determine all questions arising thereunder and to adopt and amend
such rules and regulations for the administration of this Plan as it may deem
desirable.  No member of the Plan Administrator shall participate in
any vote by the Plan Administrator on any matter materially affecting the rights
of any such member under this Plan.

       

      SECTION
3    SHARES SUBJECT TO THE PLAN

       

      Subject
to adjustment in accordance with Section 6 hereof, the total number of
shares of the Company's common stock (the "Common Stock") for which options may
be granted under this Plan is 350,000 as such Common Stock was constituted on
the effective date of this Plan (the "Shares").  The Shares shall be
shares currently authorized but unissued or subsequently acquired by the Company
and shall include shares representing the unexercised portion of any option
granted under this Plan which expires or terminates without being exercised in
full.

       

      SECTION
4    ELIGIBILITY

       

      Each
member of the Board elected or appointed who is not otherwise an employee of the
Company or any parent or subsidiary corporation (an "Eligible
Director").

       

      
        	
                 
      

              	
                4.1

              	
                New
      Director Grants

              

      

       

      Each
member of the Board who is an Eligible Director shall automatically receive a
nonqualified stock option to purchase 2,500 Shares immediately
following

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      his or
her initial election or appointment to the Board (each a "New Director
Grant").  New Director Grants shall be fully vested on the date of
grant.

       

      
        	
                 
      

              	
                4.2

              	
                Annual
      Grants

              

      

       

      Commencing
with the 1997 annual meeting of shareholders, each Eligible Director shall
automatically receive a nonqualified stock option to purchase 7,500 Shares
immediately following each year's annual meeting of shareholders (each an
"Annual Grant").  Annual Grants shall fully vest on the day
immediately prior to the next succeeding annual meeting of
shareholders.

       

      SECTION
5    TERMS AND CONDITIONS OF OPTIONS

       

      Each
option granted to an Eligible Director under this Plan and the issuance of
Shares thereunder shall be subject to the follow­ing terms:

       

      
        	
                 
      

              	
                5.1

              	
                Option
      Agreement

              

      

       

      Each
option shall be evidenced by an option agreement (an "Agreement") duly executed
on behalf of the Company.  Each Agreement shall comply with and be
subject to the terms and conditions of this Plan.  Any Agreement may
contain such other terms, provisions and conditions not inconsistent with this
Plan as may be determined by the Plan Administrator.

       

      
        	
                 
      

              	
                5.2

              	
                Option
      Exercise Price

              

      

       

      The
option exercise price for an option shall be the closing price, or if there is
no closing price, the mean between the high and the low sale price of shares of
Common Stock on the American Stock Exchange on the day the option is granted or,
if no Common Stock was traded on such date, on the next succeeding day on which
Common Stock is so traded.

       

      
        	
                 
      

              	
                5.3

              	
                Vesting
      and Exercisability

              

      

       

      Each
Initial Grant and New Director Grant shall be fully vested on the date of grant
and each Annual Grant shall fully vest on the day immediately prior to the first
annual shareholders meeting occurring after such Annual Grant; provided,
however, that the Plan Administrator shall have the authority, at any time
following the date of an Annual Grant, to allow such Annual Grant to vest at an
earlier date or to waive the vesting requirement of such Annual Grant
entirely.

      
        
           

        

        
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      5.4           Time
and Manner of Exercise of Option

       

      Each
option may be exercised in whole or in part at any time and from time to time,
subject to shareholder approval of this Plan; provided, however, that no
fewer than 100 of the Shares purchasable under the option (or the remaining
Shares then purchasable under the option, if less than 100) may be purchased
upon any exercise of any option hereunder and that only whole Shares will be
issued pursuant to the exercise of any option.

       

      Any
option may be exercised by giving written notice, signed by the person
exercising the option, to the Company stating the number of Shares with respect
to which the option is being exercised, accompanied by payment in full for such
Shares, which payment may be in whole or in part (a) in cash or by check,
(b) in shares of Common Stock already owned for at least six months by the
person exercising the option, valued at fair market value at the time of such
exercise, or (c) to the extent permitted by law, by delivery of a properly
executed exercise notice, together with irrevocable instructions to a broker, to
properly deliver to the Company the amount of sale proceeds to pay the exercise
price, all in accordance with the regulations of the Federal Reserve
Board.

       

      
        	
                 
      

              	
                5.5

              	
                Term
      of Options

              

      

       

      Each
option shall expire ten years from the date of the granting thereof, but shall
be subject to earlier termination as follows:

       

      (a)           In
the event that an Optionee ceases to be a director of the Company for any reason
other than the death of the Optionee, the Optionee's vested options may be
exercised by him or her only within three months after the date such Optionee
ceases to be a director of the Company.

       

      (b)           In
the event of the death of an Optionee, whether during the Optionee's service as
a director or during the three-month period referred to in Section 5.5(a),
the Optionee's vested options shall be exercisable, and such options shall
expire unless exercised within twelve months after the date of the Optionee's
death, by the legal representatives or the estate of such Optionee, by any
person or persons whom the Optionee shall have designated in writing on forms
prescribed by and filed with the Company or, if no such designation has been
made, by the person or persons to whom the Optionee's rights have passed by will
or the laws of descent and distribution.

       

      
        	
                 
      

              	
                5.6

              	
                Transferability

              

      

       

      During an Optionee's lifetime, an option may be exercised only by the
Optionee.  Options granted under this Plan and the rights and
privileges conferred

      
        
           

        

        
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      thereby
shall not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution except that, to the extent permitted by applicable law
and Rule 16b-3 promulgated under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Plan Administrator
may permit an Optionee to designate in writing during the Optionee's lifetime a
beneficiary to receive and exercise options in the event of the Optionee's death
(as provided in Section 5.5(b)).  Any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any option under this Plan
or of any right or privilege conferred thereby, contrary to the provisions of
this Plan, or the sale or levy or any attachment or similar process upon the
rights and privileges conferred hereby, shall be null and void.

       

      
        	
                 
      

              	
                5.7

              	
                Participant's
      or Successor's Rights as
Shareholder

              

      

       

      Neither
an Optionee nor the Optionee's successor in interest shall have any rights as a
shareholder of the Company with respect to any Shares subject to an option
granted to such person until such person becomes a holder of record of such
Shares.

       

      
        	
                 
      

              	
                5.8

              	
                Limitation
      as to Directorship

              

      

       

      Neither
this Plan, nor the granting of an option, nor any other action taken pursuant to
this Plan shall constitute or be evidence of any agreement or understanding,
express or implied, that an Optionee has a right to continue as a director for
any period of time or at any particular rate of compensation.

       

      
        	
                 
      

              	
                5.9

              	
                Regulatory
      Approval and Compliance

              

      

       

      The
Company shall not be required to issue any certificate or certificates for
Shares upon the exercise of an option granted under this Plan, or record as a
holder of record of Shares the name of the individual exercising an option under
this Plan, without obtaining to the complete satisfaction of the Plan
Administrator the approval of all regulatory bodies deemed necessary by the Plan
Administrator, and without complying, to the Plan Administrator's complete
satisfaction, with all rules and regulations under federal, state or local law
deemed applicable by the Plan Administrator.

       

      SECTION
6    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

       

      
        	
                 
      

              	
                6.1

              	
                Recapitalization

              

      

       

      The
aggregate number and class of shares for which options may be granted under this
Plan, the number and class of shares covered by each outstanding
option

      
        
           

        

        
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      and the
exercise price per share thereof (but not the total price), and each such
option, shall all be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock of the Company resulting from a
split or consolidation of shares or any like capital adjustment, or the payment
of any stock dividend.

       

      
        	
                 
      

              	
                6.2

              	
                Effect
      of Liquidation, Reorganization or Change in
  Control

              

      

       

      
        	
                 
      

              	
                6.2.1

              	
                Cash,
      Stock or Other Property for Stock

              

      

       

      Except as
provided in subsection 6.2.2, upon a merger (other than a merger of the
Company in which the holders of shares of Common Stock immediately prior to the
merger have the same proportionate ownership of shares of Common Stock in the
surviving corporation immediately after the merger), consolidation, acquisition
of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company) or liquidation of the
Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for or in connection with their shares of
Common Stock, each option shall terminate, but the Optionee shall have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, reorganization or liquidation to exercise such option in whole or in part
whether or not the vesting requirements set forth in the option agreement have
been satisfied.

       

      
        	
                 
      

              	
                6.2.2

              	
                Conversion
      of Options on Stock for Stock
Exchange

              

      

       

      If the
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger, consolidation, acquisition of property or stock,
or reorganization, all options shall be converted into options to purchase
shares of Exchange Stock unless the Company and the corporation issuing the
Exchange Stock, in their sole discretion, determine that any or all such options
shall not be converted into options to purchase shares of Exchange Stock but
instead shall terminate in accordance with the provisions of
subsection 6.2.1.  The amount and price of converted options
shall be determined by adjusting the amount and price of the options granted
hereunder in the same proportion as used for determining the number of shares of
Exchange Stock the holders of shares of the Common Stock receive in such merger,
consolidation, acquisition of property or stock, or reorganization.

       

      
        	
                 
      

              	
                6.3

              	
                Fractional
      Shares

              

      

       

      In the
event of any adjustment in the number of shares covered by any option, any
fractional shares resulting from such adjustment shall be disregarded and each
such option shall cover only the number of full shares resulting from such
adjustment.

      
        
           

        

        
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      SECTION
7    EXPENSES

       

      All costs
and expenses of the adoption and administration of this Plan shall be borne by
the Company; none of such expenses shall be charged to any
Optionee.

       

      SECTION
8    COMPLIANCE WITH RULE 16b-3

       

      It is the
intention of the Company that this Plan comply in all respects with
Rule 16b-3 promulgated under Section 16(b) of the Exchange Act and
that Plan participants remain disinterested persons ("Disinterested Persons")
for purposes of administering other employee benefit plans of the Company and
having such other plans be exempt from Section 16(b) of the Exchange
Act.  Therefore, if any Plan provision is later found not to be in
compliance with Rule 16b-3 or if any Plan provision would disqualify Plan
participants from remaining Disinterested Persons, that provision shall be
deemed null and void, and in all events this Plan shall be construed in favor of
its meeting the requirements of Rule 16b-3.

       

      SECTION
9    AMENDMENT AND TERMINATION

       

      The Board
may amend, terminate or suspend this Plan at any time, in its sole and absolute
discretion; provided, however, that if
required to qualify this Plan under Rule 16b-3 under Section 16(b) of
the Exchange Act, no amendment may be made more than once every six months that
would change the amount, price, timing or vesting of the options, other than to
comply with changes in the Internal Revenue Code of 1986, as amended, or the
rules and regulations thereunder; provided further that if
required to qualify this Plan under Rule 16b-3, no amendment that
would

       

      (a) materially
increase the number of Shares that may be issued under this Plan,

      

      (b) materially
modify the requirements as to eligibility for participation in this
Plan,

      

      (c) materially
increase the benefits accru­ing to participants under this Plan,
or

      

      (d) otherwise
require shareholder approval under any applicable law or regulation

       

      shall be
made without the approval of the Company's shareholders.

      
        
           

        

        
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      SECTION
10    EFFECTIVE DATE AND DURATION

       

      This Plan
shall be effective on November 20, 1995, the effective date of the
Company’s registration statement filed by the Company under the Securities Act
of 1933, as amended, in connection with the Company’s initial underwritten
public offering.  This Plan shall continue in effect until it is
terminated by action of the Board or the Company's shareholders, but such
termination shall not affect the then-outstanding terms of any
options.

       

      Amended
and restated as of December 7, 2005.

      
        
           

        

        
          7amenedespp.htm

    
      
        

      

     

    EMERITUS
CORPORATION

     

    AMENDED
1998 EMPLOYEE STOCK PURCHASE PLAN

     

    (as
amended and restated as of March 26, 2008)

     

    SECTION 1.  PURPOSE

     

    The
purposes of the Emeritus Corporation 1998 Employee Stock Purchase Plan (the
"Plan") are to (a) assist qualified employees of Emeritus Corporation, a
Washington corporation (the "Company"), and its designated subsidiary
corporations in acquiring a stock ownership interest in the Company pursuant to
a plan that is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), and
(b) help employees provide for their future security and encourage them to
remain in the employ of the Company and its subsidiary
corporations.  Stock purchased under the Plan may be paid for by
regular payroll deductions.  Only employees of the Company and its
designated subsidiary corporations are eligible to participate in the Plan, and
participation is voluntary.

     

    SECTION 2.  DEFINITIONS

     

    For
purposes of the Plan, the following terms shall be defined as set forth
below.

     

    "Board"
means the Board of Directors of the Company.

     

    "Code"
means the Internal Revenue Code of 1986, as amended.

     

    "Committee"
means the Company's Compensation Committee or another committee appointed by the
Board and given authority by the Board to administer the Plan.

     

    "Company"
means Emeritus Corporation, a Washington corporation.

     

    "Designated
Subsidiary" includes all domestic Subsidiary Corporations and such other
Subsidiary Corporations as may be designated from time to time by the Board or
the Committee as eligible to participate in the Plan.

     

    "Eligible
Compensation" means all regular cash compensation, including overtime, cash
bonuses and commissions.  Regular cash compensation does not include
severance pay, hiring and relocation bonuses, pay in lieu of vacation or sick
leave, or any other special payments, or any gain from stock option
exercises.

    
      
         

      

      
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    "Eligible
Employee" means any employee of the Company or any Designated Subsidiary who is
in the employ of the Company or a Designated Subsidiary on one or more Offering
Dates and who meets the following criteria:

     

    (a)           the
employee does not, immediately after the Option is granted, own stock (as
defined by the Code) possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company or of its Parent or Subsidiary
Corporations;

     

    (b)           the
employee has been employed for at least six months; provided, however, that the
Plan Administrator, in its sole discretion, may reduce or increase (to up to two
years) this minimum requirement for future Offering Periods;

     

    (c)           the
employee's customary employment is for more than 20 hours per week; provided,
however, that the Plan Administrator, in its sole discretion, may reduce this
minimum hourly requirement for future Offering Periods; and

     

    (d)           the
employee's customary employment is for more than five months in any calendar
year; provided, however, that the Plan Administrator, in its sole discretion,
may reduce this minimum requirement for future Offering Periods.

     

    If the
Company permits any employee of a Designated Subsidiary to participate in the
Plan, then all employees of that Designated Subsidiary who meet the requirements
of this paragraph shall also be considered Eligible Employees.

     

    "Enrollment
Period" has the meaning set forth in Section 6.1.

     

    "ESPP
Broker" has the meaning set forth in Section 10.

     

    "Offering"
has the meaning set forth in Section 5.1.

     

    "Offering
Date" means the first day of an Offering.

     

    "Offering
Period" has the meaning set forth in Section 5.1.

     

    "Option"
means an option granted under the Plan to an Eligible Employee to purchase
shares of Stock.

     

    "Parent
Corporation" means any corporation, other than the Company, in an unbroken chain
of corporations ending with the Company if, at the time of the granting of the
Option, each of the corporations, other than the Company, owns
stock

    
      
         

      

      
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    possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

     

    "Participant"
means any Eligible Employee who has elected to participate in an Offering in
accordance with the procedures set forth in Section 6.1 and who has not
withdrawn from the Plan or whose participation in the Plan is not
terminated.

     

    "Plan"
means the Emeritus Corporation 1998 Employee Stock Purchase Plan, as it may be
amended from time to time.

     

    "Plan
Administrator" has the meaning set forth in Section 3.1.

     

    "Purchase
Date" means the last day of each Purchase Period.

     

    "Purchase
Period" has the meaning set forth in Section 5.2.

     

    "Purchase
Price" has the meaning set forth in Section 8.

     

    "Stock"
means the Common Stock, $.0001 par value per share, of the Company.

     

    "Subscription"
has the meaning set forth in Section 6.1.

     

    "Subsidiary
Corporation" means any corporation, other than the Company, in an unbroken chain
of corporations beginning with the Company if, at the time of the granting of
the Option, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.

     

    SECTION 3.  ADMINISTRATION

     

    
      	
              3.1

            	
              Plan
      Administrator

            

    

     

    The Plan
shall be administered by the Company's Office of Compensation and Benefits or
any other Company group or executive officer designated by the Board or the
Committee, except for those items expressly reserved to the Board or the
Committee under the Plan.  Any decisions made by the Board, the
Committee or the Plan Administrator shall be applicable equally to all Eligible
Employees.

     

    
      	
              3.2

            	
              Administration
      and Interpretation by the Plan
Administrator

            

    

     

    Subject
to the provisions of the Plan, the Plan Administrator shall have the authority,
in its sole discretion, to determine all matters relating to Options granted
under the Plan, including all terms, conditions, restrictions and limitations of
Options;

    
      
         

      

      
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    provided,
however, that all Participants granted Options pursuant to the Plan shall have
the same rights and privileges within the meaning of Code Section
423.  The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration.  The
Plan Administrator's interpretation of the Plan and its rules and regulations,
and all actions taken and determinations made by the Plan Administrator pursuant
to the Plan, unless reserved to the Board or the Committee, shall be conclusive
and binding on all parties involved or affected.  The Plan
Administrator may delegate administrative duties to such of the Company's other
officers or employees as the Plan Administrator so determines.

     

    SECTION 4.  STOCK
SUBJECT TO PLAN

     

    Subject
to adjustment from time to time as provided in Section 19, a maximum of 400,000
shares of Stock may be sold under the Plan.  Shares sold under the
Plan shall be drawn from authorized and unissued shares or shall be shares
acquired by the Company.  Any shares of Stock subject to an Option
that cease to be subject to the Option (other than by reason of exercise of the
Option), including, without limitation, in connection with the cancellation or
termination of the Option, shall again be available for sale in connection with
future grants of Options under the Plan.

     

    SECTION 5.  OFFERING
DATES

     

    
      	
              5.1

            	
              Offering
      Periods

            

    

     

    (a)           The
Plan shall be implemented by a series of offerings (each, an
"Offering").  Except as otherwise set forth below, Offerings shall
commence on July 1, October 1, January 1 and April 1 of each
year and end on the next September 30, December 31, March 31 and
June 30, respectively, occurring thereafter.

     

    (b)           Notwithstanding
the foregoing, the Board or the Committee may establish (i) a different
term for one or more future Offerings and (ii) different commencing and
ending dates for such Offerings; provided, however, that an Offering Period may
not exceed five years; and provided, further, that if the Purchase Price may be
less than 85% of the fair market value of the Stock on the Purchase Date, the
Offering Period may not exceed 27 months.

     

    (c)           In
the event the first or the last day of an Offering Period is not a regular
business day, then the first day of the Offering Period shall be deemed to be
the next regular business day and the last day of the Offering Period shall be
deemed to be the last preceding regular business day.

    
      
         

      

      
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    (d)           An
employee who becomes eligible to participate in the Plan after an Offering
Period has commenced shall not be eligible to participate in such Offering but
may participate in any subsequent Offering, provided that such Eligible Employee
is still an Eligible Employee as of the commencement of any such subsequent
Offering.  Eligible Employees may not participate in more than one
Offering at a time.

     

    
      	
              5.2

            	
              Purchase
      Periods

            

    

     

    (a)           Each
Offering Period shall consist of one or more consecutive purchase periods (each,
a "Purchase Period").  Except as otherwise set forth below, Purchase
Periods shall continue for three calendar months and shall be coterminous with
an Offering Period.  Purchase Periods shall commence on July 1,
October 1, January 1 and April 1 of each year and end on the next
September 30, December 31, March 31 and June 30, respectively,
occurring thereafter.  The last day of each Purchase Period shall be
the Purchase Date for such Purchase Period.

     

    (b)           Notwithstanding
the foregoing, the Board or the Committee may establish for any future Offering
(a) different terms for one or more Purchase Periods within the Offering Period
and (b) different commencing dates and Purchase Dates for any such Purchase
Periods.

     

    (c)           In
the event the first or last day of a Purchase Period is not a regular business
day, then the first day of the Purchase Period shall be deemed to be the next
regular business day and the last day of the Purchase Period shall be deemed to
be the last preceding regular business day.

     

    SECTION 6.  PARTICIPATION
IN THE PLAN

     

    
      	
              6.1

            	
              Initial
      Participation

            

    

     

    An
Eligible Employee shall become a Participant on the first Offering Date after
satisfying the eligibility requirements and delivering to the Plan Administrator
during the enrollment period established by the Plan Administrator (the
"Enrollment Period") a subscription (the "Subscription"):

     

    (a)           indicating
the Eligible Employee's election to participate in the Plan;

     

    (b)           authorizing
payroll deductions and stating the amount to be deducted regularly from the
Participant's pay; and

    
      
         

      

      
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    (c)           authorizing
the purchase of Stock for the Participant in each Purchase Period.

     

    An
Eligible Employee who does not deliver a Subscription to the Plan Administrator
during the Enrollment Period shall not participate in the Plan for that Offering
Period or any subsequent Offering Period unless such Eligible Employee
subsequently enrolls in the Plan by delivering a Subscription to the Plan
Administrator during the Enrollment Period for such subsequent Offering
Period.  The Plan Administrator may, from time to time, change the
Enrollment Period for any future Offering as deemed advisable by the Plan
Administrator in its sole discretion for the proper administration of the
Plan.

     

    
      	
              6.2

            	
              Continued
      Participation

            

    

     

    Unless
the Plan Administrator determines otherwise for any future Offering, a
Participant shall automatically participate in the next Offering Period until
such time as the Participant withdraws from the Plan pursuant to Section 11.2 or
terminates employment as provided in Section 12.

     

    SECTION 7.  LIMITATIONS
ON RIGHT TO PURCHASE SHARES

     

    
      	
              7.1

            	
              $25,000
      Limitation

            

    

     

    On each
Offering Date, a Participant shall be deemed to have been granted an Option to
purchase a maximum number of shares of the Stock of the Company equal to an
amount determined as follows:  an amount equal to $25,000 divided by
the fair market value of the Stock of the Company on the applicable Offering
Date; provided, however, no Participant shall be entitled to purchase Stock
under the Plan (or any other employee stock purchase plan that is intended to
meet the requirements of Code Section 423 sponsored by the Company, any Parent
Corporation or any Subsidiary Corporation) at a rate that exceeds $25,000 in
fair market value, determined as of the Offering Date for each Offering Period
(or such other limit as may be imposed by the Code), for each calendar year in
which a Participant participates in the Plan (or any other employee stock
purchase plan described in this Section 7.1).

     

    
      	
              7.2

            	
              Pro
      Rata Allocation

            

    

     

    In the
event the number of shares of Stock that might be purchased by all Participants
in the Plan exceeds the number of shares of Stock available in the Plan, the
Plan Administrator shall make a pro rata allocation of the remaining shares
of

    
      
         

      

      
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    Stock in
as uniform a manner as shall be practicable and as the Plan Administrator shall
determine to be equitable.  Fractional shares may be issued under the
Plan unless the Board or the Committee determines otherwise.

     

    SECTION 8.  PURCHASE
PRICE

     

    (a)            The
purchase price (the "Purchase Price") at which Stock may be acquired in an
Offering pursuant to the exercise of all or any portion of an Option granted
under the Plan shall be 85% of the lesser of (i) the fair market value of
the Stock on the Offering Date of such Offering and (ii) the fair market
value of the Stock on the Purchase Date.  Notwithstanding the
foregoing, the Board or the Committee may establish a different Purchase Price
for any future Offering, which shall not be less than the Purchase Price
previously stated.

     

    (b)            The
fair market value of the Stock on the Offering Date or on the Purchase Date
shall be the closing price for the Stock as reported for such day by the
American Stock Exchange.  If no sales of the Stock were made on the
American Stock Exchange on the transaction date, fair market value shall mean
the closing price for the Stock as reported for the next preceding day on which
sales of the Stock were made on the American Stock Exchange.

     

    (c)            Notwithstanding
the foregoing, if an increase in the number of shares authorized for issuance
under the Plan is approved and all or a portion of such additional shares are to
be issued during one or more Offerings that are underway at the time of
shareholder approval of such increase (the "Additional Shares"), then, if as of
the date of such shareholder approval, the fair market value of a share of Stock
is higher than the fair market value on the Offering Date for any such Offering,
the Purchase Price for the Additional Shares shall be 85% of the lesser of
(i) the Stock's fair market value on the date of such shareholder approval
and (ii) the fair market value of the Stock on the Purchase
Date.

     

    SECTION 9.  PAYMENT
OF PURCHASE PRICE

     

    
      	
              9.1

            	
              General
      Rules

            

    

     

    Subject
to Section 9.12, Stock that is acquired pursuant to the exercise of all or any
portion of an Option may be paid for only by means of payroll deductions from
the Participant's Eligible Compensation.  Except as set forth in this
Section 9, the amount of compensation to be withheld from a Participant's
Eligible Compensation during each pay period shall be determined by the
Participant's Subscription.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    9.2           Change
Notices

     

    (a)           Except
as set forth in Section 11.1 and unless the Plan Administrator determines
otherwise for an Offering, a Participant may not elect during an Offering Period
to increase or decrease the amount withheld from his or her compensation for
future pay periods within such Offering Period.  Unless otherwise
determined by the Plan Administrator for a future Offering, a Participant may
elect to increase or decrease the amount to be withheld from his or her
compensation for future Offerings; provided, however, that notice of such
election must be delivered to the Plan Administrator in such form and in
accordance with such terms as the Plan Administrator may establish for an
Offering.

     

    (b)           Notwithstanding
the foregoing, to the extent necessary to comply with Code Section 423 and
Section 7.1, a Participant’s payroll deductions may be decreased during any
Purchase Period scheduled to end during the current calendar year to 0% at such
time that the aggregate of all payroll deductions accumulated with respect to
the Offering to which such Purchase Period applies and any other Offering ending
within the same calendar year exceed $21,250.  Payroll deductions
shall re-commence at the rate provided in such Participant’s Subscription at the
beginning of the first Purchase Period that is scheduled to end in the following
calendar year, unless the Participant terminates participation in the Plan as
provided in Section 11.1 or Section 11.2 below.

     

    
      	
              9.3

            	
              Percent
      Withheld

            

    

     

    The
amount of payroll withholding with respect to the Plan for any Participant
during any pay period shall be at least $5, but not more than 15%, of the
Participant's Eligible Compensation for such pay period, but in no event shall
the amount of a Participant's payroll withholding exceed the limits of
Section 7.1.  Amounts shall be withheld in whole dollar or
percentage amounts only.

     

    
      	
              9.4

            	
              Payroll
      Deductions

            

    

     

    Payroll
deductions shall commence on the first payday following the Offering Date and
shall continue through the last payday of the Offering Period unless sooner
altered or terminated as provided in the Plan.

     

    
      	
              9.5

            	
              Memorandum
      Accounts

            

    

     

    Individual
accounts shall be maintained for each Participant for memorandum purposes
only.  All payroll deductions from a Participant's compensation shall
be

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    credited
to such account but shall be deposited with the general funds of the
Company.  All payroll deductions received or held by the Company may
be used by the Company for any corporate purpose.

     

    
      	
              9.6

            	
              No
      Interest

            

    

     

    No
interest shall be paid on payroll deductions received or held by the
Company.

     

    
      	
              9.7

            	
              Acquisition
      of Stock

            

    

     

    On each
Purchase Date of an Offering Period, each Participant shall automatically
acquire, pursuant to the exercise of the Participant's Option, the number of
shares of Stock arrived at by dividing the total amount of the Participant's
accumulated payroll deductions for the Purchase Period by the Purchase Price;
provided, however, that the number of shares of Stock purchased by the
Participant shall not exceed the number of whole shares of Stock so determined,
if the Board or the Committee has determined for any future Offering that
fractional shares may not be issued under the Plan; and provided, further, that
the number of shares of Stock purchased by the Participant shall not exceed the
number of shares for which Options have been granted to the Participant pursuant
to Section 7.1.

     

    
      	
              9.8

            	
              Carryover
      of Account

            

    

     

    Any cash
balance remaining in the Participant's account at the termination of each
Offering shall be refunded to the Participant as soon as practical after the
Purchase Date without the payment of any interest; provided, however, that if
the Participant participates in the next Offering, any cash balance remaining in
the Participant's account shall be applied to the purchase of Stock in the new
Offering, provided such purchase complies with Section 7.1.

     

    
      	
              9.9

            	
              Withholding
      Obligations

            

    

     

    At the
time the Option is exercised, in whole or in part, or at the time some or all of
the Stock is disposed of, the Participant shall make adequate provision for
federal and state withholding obligations of the Company, if any, that arise
upon exercise of the Option or upon disposition of the Stock.  The
Company may withhold from the Participant's compensation the amount necessary to
meet such withholding obligations.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    9.10                      Termination
of Participation

     

    No Stock
shall be purchased on behalf of a Participant on a Purchase Date if his or her
participation in the Plan has terminated prior to such Purchase
Date.

     

    
      	
              9.11

            	
              Procedural
      Matters

            

    

     

    The Plan
Administrator may, from time to time, establish (a) limitations on the
frequency and/or number of any permitted changes in the amount withheld during
an Offering, (b) an exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, (c) payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, and
(d) such other limitations or procedures as deemed advisable by the Plan
Administrator, in its sole discretion, that are consistent with the Plan and in
accordance with the requirements of Code Section 423.

     

    
      	
              9.12

            	
              Leaves
      of Absence

            

    

     

    During
leaves of absence approved by the Company and meeting the requirements of the
applicable Treasury Regulations promulgated under the Code, a Participant may
continue participation in the Plan by delivering cash payments to the Plan
Administrator on the Participant's normal paydays equal to the amount of his or
her payroll deduction under the Plan had the Participant not taken a leave of
absence.

     

    SECTION 10.  STOCK
PURCHASED UNDER THE PLAN

     

    
      	
              10.1

            	
              ESPP
      Broker

            

    

     

    If the
Plan Administrator designates or approves a stock brokerage or other financial
services firm (the "ESPP Broker") to hold shares purchased under the Plan for
the accounts of Participants, the following procedures shall
apply.  Promptly following each Purchase Date, the number of shares of
Stock purchased by each Participant shall be deposited into an account
established in the Participant's name with the ESPP Broker.  A
Participant shall be free to undertake a disposition of the shares of Stock in
his or her account at any time, but, in the absence of such a disposition, the
shares of Stock must remain in the Participant's account at the ESPP Broker
until the holding period set forth in Code Section 423 has been
satisfied.  With respect to shares of Stock for which the Code
Section 423 holding periods have been satisfied, the Participant may move
those shares of Stock to another brokerage account of the Participant' s
choosing or request that a stock certificate be issued and

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    delivered
to him or her.  A Participant who is not subject to payment of U.S.
income taxes may move his or her shares of Stock to another brokerage account of
his or her choosing or request that a stock certificate be delivered to him or
her at any time, without regard to the Code Section 423 holding
period.

     

    
      	
              10.2

            	
              Notice
      of Disposition

            

    

     

    By
entering the Plan, each Participant agrees to promptly give the Company notice
of any Stock disposed of within the later of one year from the Purchase Date and
two years from the Offering Date for such Stock, showing the number of such
shares disposed of and the Purchase Date and Offering Date for such
Stock.  This notice shall not be required if and so long as the
Company has a designated ESPP Broker.

     

    SECTION 11.  VOLUNTARY
WITHDRAWAL

     

    
      	
              11.1

            	
              Withdrawal
      From an Offering

            

    

     

    A
Participant may withdraw from an Offering by delivering to the Plan
Administrator a notice of withdrawal in the form required by the Plan
Administrator for such purpose.  Such withdrawal must be elected at
least ten days prior to the end of the Purchase Period for which such withdrawal
is to be effective or by any other date specified by the Plan Administrator for
any future Offering.  If a Participant withdraws after the Purchase
Date for a Purchase Period of an Offering, the withdrawal shall not affect Stock
acquired by the Participant in that Purchase Period and any earlier Purchase
Periods.  Unless the Plan Administrator establishes a different rule
for any future Offering, withdrawal from an Offering shall not result in
withdrawal from the Plan and any succeeding Offering therein.  A
Participant is prohibited from again participating in the same Offering at any
time upon withdrawal from such Offering.

     

    
      	
              11.2

            	
              Withdrawal
      From the Plan

            

    

     

    A
Participant may withdraw from the Plan by delivering to the Plan Administrator a
notice of withdrawal in the form required by the Plan Administrator for such
purpose.  Such notice must be delivered at least ten days prior to the
end of the Purchase Period for which such withdrawal is to be effective or by
any other date specified by the Plan Administrator for any future
Offering.  If a Participant withdraws after the Purchase Date for a
Purchase Period of an Offering, the withdrawal shall not affect Stock acquired
by the Participant in that Purchase Period and any earlier Purchase
Periods.  In the event a Participant voluntarily elects to withdraw
from the Plan, the withdrawing Participant may not resume participation
in

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    the Plan
during the same Offering Period but may participate in any subsequent Offering
under the Plan by again satisfying the definition of a Participant.

     

    
      	
              11.3

            	
              Return
      of Payroll Deductions

            

    

     

    Upon
withdrawal from an Offering pursuant to Section 11.1 or withdrawal from the Plan
pursuant to Section 11.2, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Stock shall be returned
as soon as practical after the withdrawal, without the payment of any interest
to the Participant and the Participant's interest in the Offering shall
terminate.  Such accumulated payroll deductions may not be applied to
any other Offering under the Plan.

     

    SECTION 12.  TERMINATION
OF EMPLOYMENT

     

    Termination
of a Participant's employment with the Company for any reason, including
retirement, disability or death, or the failure of a Participant to remain an
Eligible Employee, shall immediately terminate the Participant's participation
in the Plan.  The payroll deductions credited to the Participant's
account since the last Purchase Date shall, as soon as practical, be returned to
the Participant or, in the case of a Participant's death, to the Participant's
legal representative, and all the Participant's rights under the Plan shall
terminate.  Interest shall not be paid on sums returned to a
Participant pursuant to this Section 12.

     

    SECTION 13.  RESTRICTIONS
UPON ASSIGNMENT

     

    An Option
granted under the Plan shall not be transferable otherwise than by will or by
the applicable laws of descent and distribution and shall be exercisable during
the Participant's lifetime only by the Participant.  The Plan
Administrator will not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant, other than by will or by
the applicable laws of descent and distribution, of the Participant's interest
in the Plan, of his or her Option, or of any rights under his or her
Option.

     

    SECTION 14.  NO RIGHTS
OF SHAREHOLDER UNTIL SHARES ISSUED

     

    With
respect to shares of Stock subject to an Option, a Participant shall not be
deemed to be a shareholder of the Company, and he or she shall not have any of
the rights or privileges of a shareholder.  A Participant shall have
the rights and privileges of a shareholder of the Company when, but not until,
the shares have been issued following exercise of the Participant's
Option.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    SECTION 15.  AMENDMENT
OF THE PLAN

     

    The Board
or the Committee may amend the Plan in such respects as it shall deem advisable;
provided, however, that, to the extent required for compliance with Code
Section 423 or any applicable law or regulation, shareholder approval will
be required for any amendment that will (a) increase the total number of
shares as to which Options may be granted under the Plan, (b) modify the
class of employees eligible to receive Options, or (c) otherwise require
shareholder approval under any applicable law or regulation.

     

    SECTION 16.  TERMINATION
OF THE PLAN

     

    (a)           The
Board may suspend or terminate the Plan at any time.  Unless the Plan
shall theretofore have been terminated by the Board, the Plan shall terminate
on, and no Options shall be granted after, May 20, 2013.  Except as
provided in Section 19, no such termination may affect any Options granted prior
thereto.  No Options shall be granted during any period of suspension
of the Plan.

     

    (b)           Notwithstanding
the foregoing, the Plan or an Offering may be terminated by the Board on a
Purchase Date or by the Board's setting a new Purchase Date with respect to an
Offering and a Purchase Period then in progress if the Board determines that
termination of the Plan and/or the Offering is in the best interests of the
Company and the shareholders or if continuation of the Plan and/or the Offering
would cause the Company to incur adverse accounting charges as a result of a
change after the effective date of the Plan in the generally accepted accounting
rules applicable to the Plan.

     

    SECTION 17.  NO
RIGHTS AS AN EMPLOYEE

     

    Nothing
in the Plan shall be construed to give any person (including any Eligible
Employee or Participant) the right to remain in the employ of the Company or a
Subsidiary Corporation or to affect the right of the Company and a Subsidiary
Corporation to terminate the employment of any person (including any Eligible
Employee or Participant) at any time with or without cause.

     

    SECTION 18.  EFFECT
UPON OTHER PLANS

     

    The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary Corporation.  Nothing in
the Plan shall be construed to limit the right of the Company or any Subsidiary
Corporation to (a) establish any other forms of incentives or compensation
for employees of the

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    Company
or any Subsidiary Corporation or (b) grant or assume options otherwise than
under the Plan in connection with any proper corporate purpose, including, but
not by way of limitation, the grant or assumption of options in connection with
the acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

     

    SECTION 19.  ADJUSTMENTS

     

    
      	
              19.1

            	
              Adjustment
      of Shares

            

    

     

    In the
event that, at any time or from time to time, a stock dividend, stock split,
spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to shareholders other than a normal cash dividend,
or other change in the Company's corporate or capital structure results in
(a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Stock, then (subject to any required action by the
Company's shareholders), the Board or the Committee, in its sole discretion,
shall make such equitable adjustments as it shall deem appropriate in the
circumstances in (i) the maximum number and kind of securities subject to the
Plan as set forth in Section 4 and (ii) the number and kind of securities that
are subject to any outstanding Option and the per share price of such
securities.  The determination by the Board or the Committee as to the
terms of any of the foregoing adjustments shall be conclusive and
binding.

     

    
      	
              19.2

            	
              Merger,
      Acquisition or Liquidation of the
Company

            

    

     

    In the
event of the merger or consolidation of the Company into another corporation,
the acquisition by another corporation of all or substantially all of the
Company's assets, or the liquidation or dissolution of the Company, the Purchase
Date with respect to outstanding Options shall be the business day immediately
preceding the effective date of such merger, consolidation, acquisition,
liquidation or dissolution unless the Board or the Committee shall, in its sole
discretion, provide for the assumption or substitution of such Options in a
manner complying with Code Section 424(a).

     

    
      	
              19.3

            	
              Limitations

            

    

     

    The grant
of Options will in no way affect the Company's right to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to
merge,

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

     

    SECTION 20.  REGISTRATION

     

    The
Company shall be under no obligation to any Participant to register for offering
or resale under the Securities Act of 1933, as amended, or register or qualify
under state securities laws, any shares of Stock.  The Company may
issue certificates for shares with such legends and subject to such restrictions
on transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws.

     

    SECTION 21.  EFFECTIVE
DATE

     

    The
Plan's effective date is the date on which it is approved by the Company's
shareholders.

    
      
         

      

      
        15

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