Document:

ex10_1.htm

    
      

    

    Exhibit
10.1

    

    

    ATRION
CORPORATION

    

    2006
EQUITY INCENTIVE PLAN

    

    (As
last amended on May 9, 2008)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Table of
Contents

    

     

    
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      
	 	 	 
	
              ARTICLE
      1.

            	
              DEFINITIONS

            	
              3

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      2.

            	
              COMMON
      STOCK SUBJECT TO PLAN

            	
              6

            
	
              2.1

            	
              Common
      Stock Subject to Plan

            	
              6

            
	
              2.2

            	
              Add-back
      of Grants

            	
              6

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      3.

            	
              ELIGIBILITY;
      GRANTS; AWARD AGREEMENTS

            	
              7

            
	
              3.1

            	
              Eligibility

            	
              7

            
	
              3.2

            	
              Awards

            	
              7

            
	
              3.3

            	
              Provisions
      Applicable to Key Employees

            	
              7

            
	
              3.4

            	
              Award
      Agreement

            	
              7

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      4.

            	
              OPTIONS

            	
              8

            
	
              4.1

            	
              Award
      Agreement for Option Grant

            	
              8

            
	
              4.2

            	
              Option
      Price

            	
              8

            
	
              4.3

            	
              Qualification
      of Incentive Stock Options

            	
              8

            
	
              4.4

            	
              Change
      in incentive Stock Option Grant

            	
              8

            
	
              4.5

            	
              Option
      Term

            	
              9

            
	
              4.6

            	
              Option
      Exercisability and Vesting

            	
              9

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      5.

            	
              EXERCISE
      OF OPTIONS

            	
              9

            
	
              5.1

            	
              Exercise

            	
              9

            
	
              5.2

            	
              Manner
      of Exercise

            	
              10

            
	
              5.3

            	
              Conditions
      to issuance of Common Stock

            	
              10

            
	
              5.4

            	
              Rights
      as Stockholders

            	
              11

            
	
              5.5

            	
              ownership
      and transfer restrictions

            	
              11

            
	
              5.6

            	
              limitations
      of Exercise of Options

            	
              11

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      6.

            	
              STOCK
      AWARDS

            	
              11

            
	
              6.1

            	
              Award
      Agreement

            	
              11

            
	
              6.2

            	
              Awards
      of Restricted Common Stock, Restricted Stock Units and Deferred
      Stock Units

            	

              12

            
	
              6.3

            	
              Rights
      as Stockholders

            	
              12

            
	
              6.4

            	
              Restriction

            	
              13

            
	
              6.5

            	
              Lapse
      of Restrictions

            	
              13

            
	
              6.6

            	
              Repurchase
      of Restricted Common Stock

            	
              13

            
	
              6.7

            	
              Escrow

            	
              13

            

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

     

    
      Table of
Contents

    

    (continued)

    

    
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      
	 	 	 
	
              6.8

            	
              Legend

            	
              13

            
	
              6.9

            	
              Conversion

            	
              13

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      7.

            	
              STOCK
      APPRECIATION RIGHTS

            	
              14

            
	
              7.1

            	
              Award
      Agreement for SARs

            	
              14

            
	
              7.2

            	
              General
      Requirements

            	
              14

            
	
              7.3

            	
              Base
      Amount

            	
              14

            
	
              7.4

            	
              Tandem
      SARS

            	
              14

            
	
              7.5

            	
              SAR
      Exercisability

            	
              14

            
	
              7.6

            	
              Value
      of SARS

            	
              15

            
	
              7.7

            	
              Form
      of Payment

            	
              15

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      8.

            	
              PERFORMANCE
      UNITS

            	
              15

            
	
              8.1

            	
              Award
      Agreement for Performance Units

            	
              15

            
	
              8.2

            	
              General
      Requirements

            	
              15

            
	
              8.3

            	
              Performance
      Period and performance Goals

            	
              15

            
	
              8.4

            	
              Payment
      With Respect to Performance Units

            	
              15

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      9.

            	
              ADMINISTRATION

            	
              16

            
	
              9.1

            	
              COMMITTEE

            	
              16

            
	
              9.2

            	
              Duties
      and Powers of Committee

            	
              16

            
	
              9.3

            	
              Compensation;
      Professional Assistance; Good Faith Actions

            	
              16

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ARTICLE
      10.

            	
              MISCELLANEOUS
      PROVISIONS

            	
              16

            
	
              10.1

            	
              Transferability

            	
              16

            
	
              10.2

            	
              Amendment,
      Suspension of Termination of this Plan

            	
              17

            
	
              10.3

            	
              Changes
      in Common Stock or Assets of the Company, Acquisition Or Liquidation of
      the Company and Other Corporate Events

            	
              17

            
	
              10.4

            	
              Continued
      Employment

            	
              19

            
	
              10.5

            	
              Tax
      Withholding

            	
              19

            
	
              10.6

            	
              Forfeiture
      Provisions

            	
              20

            
	
              10.7

            	
              Limitations
      Applicable to Section 16 Persons and Performance- Based
      Compensation

            	
              20

            
	
              10.8

            	
              Effect
      of Plan Upon Option and Compensation Plans

            	
              20

            
	
              10.9

            	
              Compliance
      with laws

            	
              20

            
	
              10.10

            	
              Effective
      Date

            	
              21

            
	
              10.11

            	
              Titles

            	
              21

            
	
              10.12

            	
              Governing
      Law

            	
              21

            

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    ATRION
CORPORATION

    

    2006
EQUITY INCENTIVE PLAN

    

    Atrion
Corporation, a Delaware corporation (the "Company"), has established the Atrion
Corporation 2006 Equity Incentive Plan (the "Plan") for the benefit of employees
and consultants of the Company.

    

    The
purposes of this Plan are (a) to recognize and compensate selected employees and
consultants who contribute to the success of the Company and its Subsidiaries,
(b) to attract and retain employees and consultants, and (c) to provide
incentive compensation to employees and consultants based upon the performance
of the Company and its Subsidiaries.

    

    ARTICLE
1. DEFINITIONS

    

    Whenever
the following initially capitalized terms are used in the Plan, they shall have
the meanings specified below, unless the context clearly indicates
otherwise.

    

    "Award"
shall mean the grant or award of Options, Restricted Common Stock, Restricted
Stock Units, Deferred Stock Units, SARs or Performance Units under this
Plan.

    

    "Award
Agreement" shall mean the agreement granting or awarding Options, Restricted
Common Stock, Restricted Stock Units, Deferred Stock Units, SARs or Performance
Units.

    

    "Board"
shall mean the Board of Directors of the Company, as comprised from time to
time.

    

    "Change
of Control" shall mean the occurrence of any of the following events: (a) any
person, entity or affiliated group, excluding the Company or any employee
benefit plan of the Company, acquiring more than twenty-five percent (25%) of
the then outstanding shares of voting stock of the Company, (b) the consummation
of any merger or consolidation of the Company into another company, such that
the holders of the shares of the voting stock of the Company immediately before
such merger or consolidation own less than fifty percent (50%) of the voting
power of the securities of the surviving company or the parent of the surviving
company, (c) the adoption of a plan for complete liquidation of the Company or
the sale or disposition of all or substantially all of the Company's assets of
the Company, such that after the transaction, the holders of the shares of the
voting stock of the Company immediately prior to the transaction own less than
fifty percent (50%) of the voting securities of the acquiror or the parent of
the acquiror, or (d) during any period of two (2) consecutive years, individuals
who at the beginning of such period constituted the Board (including for this
purpose any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least a majority of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the
Board.

    

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

    

    "Committee"
shall mean the Compensation Committee of the Board.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    "Common
Stock " shall mean the common stock, par value ten cents ($0.10) per share, of
the Company.

    

    "Company"
shall mean Atrion Corporation, a Delaware corporation, or any business
organization which succeeds to all or substantially all of its business, whether
by virtue of a purchase, merger, consolidation, or otherwise. For purposes of
this Plan, the term Company shall include, where applicable, a Subsidiary that
employs the Key Employee or engages the Consultant.

    

    "Consultant"
shall mean a professional or technical expert, consultant or independent
contractor who provides services to the Company or a Subsidiary, and who may be
selected to participate in the Plan.

    

    "Deferred
Stock Unit" shall mean a right to receive Common Stock awarded under Article 6
of this Plan.

    

    "Employment
Agreement" shall mean the employment, consulting or similar contractual
agreement entered into by the Key Employee or the Consultant, as the case may
be, and the Company governing the terms of the Key Employee's or Consultant's
employment or engagement with the Company, if any.

    

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

    

    "Fair
Market Value" of a share of Common Stock, as of a given date, means (i) with
respect to an Award of an Incentive Stock Option and an Award which is intended
to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code, the average of the high and low sales price of shares
of Common Stock on such date as reported by (1) any national securities exchange
on which the shares of Common Stock are traded or (2) The Nasdaq Stock Market
or, if no shares of Common Stock are traded on such exchange or system on such
date, then on the next preceding date on which any shares of Common Stock were
traded on such exchange or system; and (ii) with respect to all other Awards,
the closing sales price of a share of Common Stock on such date as reported by
(1) any national securities exchange on which the shares of Common Stock are
traded or (2) The Nasdaq Stock Market or, if no shares of Common Stock are
traded on such exchange or system on such date, then on the next preceding date
on which any shares of Common Stock were traded on such exchange or
system.

    

    "Incentive
Stock Option" shall mean an option which conforms to the applicable provisions
of Section 422 of the Code and which is designated as an Incentive Stock Option
by the Committee.

    

    "Key
Employee" shall mean any employee (as defined in accordance with the regulations
and revenue rulings then applicable under Section 3401(c) of the Code) of the
Company or a Subsidiary of the Company, whether such employee was so employed at
the time this Plan was initially adopted or becomes so employed subsequent to
the adoption of this Plan, who is designated as a key employee by the
Committee.

    

    "Non-Qualified
Stock Option" shall mean an Option which the Committee does not designate as an
Incentive Stock Option.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    "Option"
shall mean an option to purchase shares of Common Stock that is granted under
Article 4 of this Plan. An option granted under this Plan shall, as determined
by the Committee, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that Options granted to consultants shall be
Non-Qualified Stock Options.

    

    "Participant"
shall mean an Key Employee or Consultant who has been granted an
Award.

    

    "Performance
Units" shall mean performance units granted under Article 8 of this
Plan.

    

    "Permanent
Disability" or "Permanently Disabled" shall mean the inability of a Participant,
due to a physical or mental impairment, to perform the material services of the
Participant's position with the Company for a period of six (6) months, whether
or not consecutive, during any 365-day period.  A determination of
Permanent Disability shall be made by a physician satisfactory to both the
Participant and the Committee, provided that if the Participant and the
Committee do not agree on a physician, each of them shall select a physician and
those two physicians together shall select a third physician, whose
determination as to Permanent Disability shall be binding on all
parties.

    

    "Plan"
shall mean the Atrion Corporation 2006 Equity Incentive Plan, as embodied herein
and as amended from time to time.

    

    "Plan
Year" shall mean the fiscal year of the Company.

    

    "Restricted
Common Stock" shall mean Common Stock awarded under Article 6 of this
Plan.

    

    "Restricted
Stock Unit" shall mean a right to receive Common Stock awarded under Article 6
of this Plan.

    

    "Rule
16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as such rule
may be amended from time to time.

    

    "SAR"
shall mean stock appreciation rights awarded under Article 7 of this
Plan.

    

    "Stock
Award" shall mean an Award of Restricted Common Stock, Restricted Stock Units or
Deferred Stock Units under Article 6 of this Plan.

    

    "Stock
Award Account" shall mean the bookkeeping account reflecting Awards of
Restricted Stock Units and Deferred Stock Units under Article 6 of this
Plan.

    

    "Subsidiary"
shall mean an entity in an unbroken chain beginning with the Company if each of
the entities other than the last entity in the unbroken chain owns fifty percent
(50%) or more of the total combined voting power of all classes of equity in one
of the other entities in such chain.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    "Termination
of Employment" shall mean the date on which the employee-employer, consulting,
contractual or similar relationship between a Participant and the Company is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination of employment by resignation, discharge, death,
Permanent Disability or Retirement, but excluding (i) termination of employment
where there is a simultaneous reemployment or continuing employment of a
Participant by the Company, and (ii) at the discretion of the Committee,
termination of employment which results in a temporary severance of the
employee-employer relationship. The Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to a Termination of
Employment (subject to the provisions of any Employment Agreement between a
Participant and the Company), including, but not limited to all questions of
whether particular leaves of absence constitute a Termination of Employment;
provided, however, that, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change the employee-employer, consulting,
contractual or similar relationship shall constitute a Termination of Employment
if, and to the extent that, such leave of absence, change in status or other
change interrupts employment for the purposes of Section 422(a)(2) of the Code
and the then applicable regulations and revenue rulings under said
Section.

    

    ARTICLE
2. COMMON STOCK SUBJECT TO PLAN

    

    2.1           Common
Stock Subject to Plan.

    

    2.1.1         The
Common Stock subject to an Award shall be shares of the Company's authorized but
unissued, reacquired, or treasury Common Stock. Subject to adjustment as
described in Section 10.3.1, the aggregate number of shares of Common Stock that
may be issued under the Plan as Restricted Common Stock, Restricted Stock Units,
Deferred Stock Units or pursuant to the exercise of Options is one hundred
thousand (100,000) shares.  The Company, during the term of the Plan,
will at all times reserve and keep available such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of the
Plan.

    

    2.1.1         The
maximum number of shares of Common Stock which may be awarded to any individual
in any calendar year shall not exceed thirty-five thousand (35,000) shares,
effective as of August 1, 2006.

    

    2.2           Add-back of
Grants.  If any Option or SAR expires or is canceled without
having been fully exercised, is exercised in whole or in part for cash as
permitted by this Plan, or is exercised prior to becoming vested as permitted
under Section 4.6.3 and is forfeited prior to becoming vested, the number of
shares of Common Stock subject to such Option or SAR but as to which such
Option, SAR or other right was not exercised or vested prior to its expiration,
cancellation or exercise may again be optioned, granted or awarded
hereunder.  Shares of Common Stock which are delivered by the
Participant or withheld by the Company upon the exercise of any Option or other
Award under this Plan, in payment of the exercise price thereof, may again be
optioned, granted or awarded hereunder.  If any shares of Common Stock
awarded as Restricted Common Stock, Restricted Stock Units or other Award
hereunder or as payment for Performance Units are forfeited by the Participant,
such shares may again be optioned, granted or awarded
hereunder.  Notwithstanding the provisions of this Section 2.2, no
shares of Common Stock may again be optioned, granted or awarded pursuant to an
Incentive Stock Option if such action would cause such Option to fail to qualify
as an Incentive Stock Option under Section 422 of the Code.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    ARTICLE
3. ELIGIBILITY; GRANTS; AWARD AGREEMENTS

    

    3.1           Eligibility.  Any
Key Employee or Consultant selected to participate pursuant to Section 3.2 shall
be eligible to participate in the Plan.

    

    3.2           Awards. The Committee shall
determine which Key Employees and Consultants shall receive Awards, whether the
Key Employee or Consultant will receive Options, Restricted Common Stock,
Restricted Stock Units, Deferred Stock Units, SARs or Performance Units, whether
an Option grant shall be of Incentive Stock Options or Non-Qualified Stock
Options, and the number of shares of Common Stock subject to such
Award.  Notwithstanding the foregoing, the terms and conditions of an
Award intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall include, but not be limited to, such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code.

    

    3.3           Provisions
Applicable to Section 162(m).

    

    3.3.1         Notwithstanding
anything in the Plan to the contrary, the Committee may grant Options,
Restricted Common Stock, Restricted Stock Units, SARs or Performance Units to a
Key Employee that vest upon the attainment of performance targets for the
Company which are related to one or more of the following performance
goals:  (i) pre-tax income, (ii) operating income, (iii) cash
flow,  (iv) earnings per share, (v) return on equity, (vi) return on
invested capital or assets, (vii) cost reductions or savings, (viii) earnings
from continuing operations, (ix) total stockholder return, or (x) such other
identifiable and measurable performance objectives, as determined by the
Committee.

    

    3.3.2         To
the extent necessary to comply with the performance-based
compensation  requirements of Section 162(m)(4)(C) of the Code, no
later than ninety (90) days following the commencement of any fiscal year in
question or any other designated fiscal period (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (i) select the performance goal or goals applicable to the fiscal year
or other designated fiscal period, (ii) establish the various targets and bonus
amounts which may be earned for such fiscal year or other designated fiscal
period, (iii) specify the relationship between performance goals and targets and
the amounts to be earned by each Key Employee for such fiscal year or other
designated fiscal period and (iv) take such other action as the Committee may
deem appropriate to comply with the performance-based compensation requirements
of Section 162(m)(4)(C) of the Code. Following the completion of each fiscal
year or other designated fiscal period, the Committee shall certify in writing
whether the applicable performance targets have been achieved for such fiscal
year or other designated fiscal period. In determining the amount earned by such
Key Employee, the Committee shall have the right to reduce (but not to increase)
the amount payable at a given level of performance to take into account
additional factors that the Committee may deem relevant to the assessment of
individual or corporate performance for the fiscal year or other designated
fiscal period.

    

    3.4           Award
Agreement.  Upon the selection of a Key Employee or Consultant
to receive an Award, the Committee shall cause a written Award Agreement to be
issued to such individual encompassing the terms and conditions of such Award,
as determined by the Committee in its sole discretion; provided, however, that,
if applicable, the terms of such Award Agreement shall comply with the terms of
such Key Employee’s or Consultant’s Employment Agreement, if any. Such Award
Agreement shall provide for the exercise price for Options and SARs; the
purchase price for Restricted Common Stock, Restricted Stock Units and Deferred
Stock Units; the performance criteria for Performance Units; and the
exercisability and vesting schedule, payment terms and such other terms and
conditions of such Award, as determined by the Committee in its sole
discretion.  Each Award Agreement shall be executed by the Participant
and an officer of the Company authorized to sign such Award Agreement and shall
contain such terms and conditions that are consistent with the Plan, including
but not limited to the exercisability and vesting schedule, if any, as the
Committee in its sole discretion shall determine. All Awards shall be made
conditional upon the Participant's acknowledgment, in writing in the Award
Agreement or otherwise by acceptance of the Award, that all decisions and
determinations of the Committee shall be final and binding on the Participant,
his beneficiaries and any other person having or claiming an interest under such
Award.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ARTICLE
4. OPTIONS

    

    4.1           Award Agreement for Option
Grant.  Option grants shall be evidenced by an Award Agreement,
pursuant to Section 3.4.  All Award Agreements evidencing Options
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code. All
Award Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section 422
of the Code.

    

    4.2           Option Price.  The
price per share of the Common Stock subject to each Option shall be set by the
Committee; provided, however, that (i) such price shall not be less than the par
value of a share of Common Stock and shall not be less than one hundred percent
(100%) of the Fair Market Value of a share of Common Stock on the date the
Option is granted, (ii) in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code), such price shall not be less than one
hundred and ten percent (110%) of the Fair Market Value of a share of Common
Stock on the date the Option is granted.

    

    4.3           Qualification for Incentive Stock
Options.  The Committee may grant an Incentive Stock Option to
an individual only if such person is an employee of the Company or is an
employee of a Subsidiary as permitted under Section 422(a)(2) of the
Code.

    

    4.4           Change in Incentive Stock Option
Grant.  Any Incentive Stock Option granted under this Plan may
be modified by the Committee to disqualify such Option from treatment as an
Incentive Stock Option under Section 422 of the Code. To the extent that the
aggregate Fair Market Value of shares of Common Stock with respect to which
Incentive Stock Options (within the meaning of Section 422 of the Code, but
without regard to Section 422(d) of the Code) are exercisable for the first time
by a Participant during any calendar year (under the Plan and all other
Incentive Stock Option plans of the Company) exceeds one hundred thousand
dollars ($100,000), such Options shall be treated as Non-Qualified Stock Options
to the extent required or permitted by Section 422 of the Code. The rule set
forth in the preceding sentence shall be applied by taking Options into account
in the order in which they were granted. For purposes of this Section 4.4, the
Fair Market Value of shares of Common Stock shall be determined as of the time
the Option with respect to such shares of Common Stock is granted, pursuant to
Section 4.7.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    4.5           Option Term.  The
term of an Option shall be set by the Committee in its discretion; provided,
however, in the case of Incentive Stock Options, the term shall not be more than
ten (10) years from the date the Incentive Stock Option is granted, or five (5)
years from such date if the Incentive Stock Option is granted to an Employee
then owning (within the meaning of Section 424(d) of the Code) more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code). Such Incentive Stock Options shall be subject to
Section 5.6, except as limited by the requirements of Section 422 of the Code
and regulations and rulings thereunder applicable to Incentive Stock
Options.

    

    4.6           Option
Exercisability and Vesting.

    

    4.6.1         The
period during which Options in whole or in part become exercisable and vest in
the Participant shall be set by the Committee and shall be as provided for in
the Award Agreement. At any time after the grant of an Option, the Committee
may, in its sole and absolute discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option becomes
exercisable and vests.

    

    4.6.2         Each
Award Agreement shall set forth the extent to which, if any, the Participant
shall have the right to exercise the Options after the Participant's Termination
of Employment.  Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among the Options granted and
may  differentiate between the reasons for the Participants’
Termination of Employment.

    

    4.6.3         At
any time on or after the grant of an Option, the Committee may provide in an
Award Agreement that the Participant may elect to exercise part or all of an
Option before it otherwise has become exercisable. Any shares of Common Stock so
purchased shall be restricted Common Stock and shall be subject to a repurchase
right in favor of the Company during a specified restriction period, with the
repurchase price equal to the lesser of (i) the price per share paid by the
Participant for the Common Stock, or (ii) the Fair Market Value of such Common
Stock at the time of repurchase, or such other restrictions as the Committee
deems appropriate. The Participant shall have, unless otherwise provided by the
Committee in the Award Agreement, all the rights of an owner of Common Stock,
subject to the restrictions and provisions of his Award Agreement, including the
right to vote such Common Stock and to receive all dividends and other
distributions paid or made with respect to Common Stock.

    

    4.6.4         Any
Options which are not exercisable and vested immediately prior to a Change of
Control, including shares of restricted Common Stock received upon the exercise
of an Option as described in Section 4.6.3 above, shall, upon a Change of
Control, become one hundred percent (100%) exercisable, if not previously
exercised, and one hundred percent (100%) vested, unless the Award Agreement or
the Participant's Employment Agreement provides otherwise.

    

    ARTICLE
5.  EXERCISE OF OPTIONS

    

    5.1           Exercise.  At any
time and from time to time prior to the time when any exercisable Option or
portion thereof becomes unexercisable under the Plan or the Award Agreement,
such Option or portion thereof may be exercised in whole or in part; provided,
however, that the Company shall not be required to issue fractional shares of
Common Stock and the Committee may, by the terms of the Option, require any
partial exercise to be with respect to a minimum number of shares of Common
Stock.

    
      
         

      

      
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    5.2           Manner of
Exercise.  An exercisable Option, or any exercisable portion
thereof, may be exercised solely by delivery to the Company of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the Award Agreement:

    

    5.2.1         A
written notice signed by the Participant or other person then entitled to
exercise such Option or portion thereof, stating that such Option or portion is
being exercised, provided such notice complies with all applicable rules
established by the Committee from time to time.

    

    5.2.2         Such
representations and documents as the Committee, in its absolute discretion,
deems necessary or advisable to effect compliance with all applicable provisions
of the Securities Act of 1933, as amended, and any other federal or state
securities laws or regulations. The Committee may, in its absolute discretion,
also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, causing legends to be placed on
certificates for shares of Common Stock and issuing stop-transfer notices to
agents and registrars.

    

    5.2.3         In
the event that the Option shall be exercised pursuant to Section 10.1 by any
person or persons other than the Participant, appropriate proof of the right of
such person or persons to exercise the Option or portion thereof.

    

    5.2.4         Full
payment (in cash or by check) for the shares of Common Stock with respect to
which the Option or portion thereof is exercised, including the amount of any
withholding tax due, unless with the prior written consent of the
Committee:

    

    5.2.4.1                      payment,
in whole or in part, is made through the delivery of shares of Common Stock
owned by the Participant, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof, provided, that shares of Common Stock
used to exercise the Option have been held by the Participant for the requisite
period of time to avoid adverse accounting consequences to the Company with
respect to the Option;

    

    5.2.4.2                      payment,
in whole or in part, is made through the surrender of shares of Common Stock
then issuable upon exercise of the Option having a Fair Market Value on the date
of Option exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; or

    

    5.2.4.3                      payment
is made through any combination of the consideration provided for in this
Section 5.2.4 or such other method approved by the Committee consistent with
applicable law.

    

    5.3           Conditions to Issuance of Common
Stock.  The Company shall not be required to issue or deliver
any certificate or other indicia evidencing ownership of shares of Common Stock
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

    
      
         

      

      
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    5.3.1         The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee shall, in its sole discretion, determine
to be necessary or advisable.

    

    5.3.2         The
lapse of such reasonable period of time following the exercise of the Option as
the Committee may establish from time to time for reasons of administrative
convenience.

    

    5.3.3         The
receipt by the Company of full payment for such Common Stock, including payment
of any applicable withholding tax.

    

    5.3.4         The
Participant agreeing to the terms and conditions of the Plan and the Award
Agreement.

    

    5.4           Rights as
Stockholders.  The holders of Options shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares of Common Stock purchasable upon the exercise of any part of an
Option unless and until certificates or other indicia representing such shares
of Common Stock have been issued by the Company to such holders.

    

    5.5           Ownership and Transfer
Restrictions.  The Committee, in its absolute discretion, may
impose at the time of grant such restrictions on the ownership and
transferability of the shares of  Common Stock purchasable upon the
exercise of an Option as it deems appropriate. Any such restriction shall be set
forth in the Award Agreement and may be referred to on the certificates or other
indicia evidencing such shares of Common Stock.

    

    5.6           Limitations
on Exercise of Options.

    

    5.6.1         Vested
Incentive Stock Options may not be exercised after the earlier of (i)
their  expiration date, (ii) twelve (12) months from the date of the
Participant's Termination of Employment by reason of his death, (iii) twelve
(12) months from the date of the Participant's Termination of Employment by
reason of his Permanent Disability, or (iv) the expiration of three (3) months
from the date of the Participant's Termination of Employment for any reason
other than such Participant's death or Permanent Disability, unless the
Participant dies within said three (3) month period and the Award Agreement or
the Committee permits later exercise.  Leaves of absence for less than
ninety (90) days shall not cause a Termination of Employment for purposes of
Incentive Stock Options.

    

    5.6.2         Non-Qualified
Stock Options may be exercised up until their expiration date, unless the
Committee provides otherwise in the Award Agreement.

    

    ARTICLE
6.  STOCK AWARDS

    

    6.1           Award
Agreement.  Awards of Restricted Common Stock, Restricted Stock
Units and Deferred Stock Units shall be evidenced by an Award Agreement,
pursuant to Section 3.4.  All Award Agreements evidencing Restricted
Common Stock, Restricted Stock Units and Deferred Stock Units intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall contain such terms and conditions as may be necessary to meet
the applicable provisions of Section 162(m) of the Code.

    
      
         

      

      
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    6.2           Awards
of Restricted Common Stock, Restricted Stock Units and Deferred Stock
Units.

    

    6.2.1         The
Committee may from time to time, in its absolute discretion, consistent with
this Plan:

    

    6.2.1.1                      determine
which Key Employees and Consultants shall receive Stock Awards; determine
the aggregate number of shares of Common Stock to be awarded as Stock Awards to
Key Employees and Consultants;

    

    6.2.1.2                      determine
the terms and conditions applicable to such Stock Awards; and

    

    6.2.1.4                      determine
when the restrictions, if any, lapse.

    

    6.2.2         The
Committee may establish the purchase price, if any, and form of payment for a
Stock Award.  If the Committee establishes a purchase price, the
purchase price shall be no less than the par value of the Common Stock to be
purchased, unless otherwise permitted by applicable state law.

    

    6.2.3         Upon
the selection of a Key Employee or Consultant to be awarded Restricted Common
Stock, the Committee shall instruct the Secretary of the Company to issue such
Restricted Common Stock and may impose such conditions on the issuance of such
Restricted Common Stock as it deems appropriate, subject to the provisions of
Article 9.

    

    6.2.4         Upon
the selection of a Key Employee or Consultant to be awarded Restricted Stock
Units or Deferred Stock Units, the Committee shall instruct the Secretary of the
Company to establish a Stock Award Account on behalf of each such
Participant.  The Committee may impose such conditions on the issuance
of such Restricted Stock Units or Deferred Stock Units as it deems
appropriate.

    

    6.2.5         Awards
of Restricted Common Stock and Restricted Stock Units shall vest pursuant to the
Award Agreement.

    

    6.2.6         Upon
the occurrence of a Change of Control, all Restricted Common Stock and
Restricted Stock Units shall become one hundred percent (100%) vested, unless
the Participant’s Award Agreement or the Participant’s Employment Agreement
provides otherwise.

    

    6.2.7         A
Participant shall be one hundred percent (100%) vested in the number of Deferred
Stock Units held in his or her Stock Award Account at all times.  The
term for which the Deferred Stock Units shall be deferred shall be provided for
in the Award Agreement.

    

    6.3           Rights
as Stockholders.

    

    6.3.1         Upon
delivery of the shares of Restricted Common Stock to the Participant or the
escrow holder pursuant to Section 6.7, the Participant shall have, unless
otherwise provided by the Committee in the Award Agreement, all the rights of an
owner of Common Stock, subject to the restrictions and provisions of his Award
Agreement; provided, however, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Stock shall be subject to
the restrictions set forth in Section 6.4.

    
      
         

      

      
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    6.3.2         Nothing
in this Plan shall be construed as giving a Participant who receives an Award of
Restricted Stock Units or Deferred Stock Units any of the rights of an owner of
Common Stock unless and until shares of Common Stock are issued and transferred
to the Participant in accordance with the terms of the Plan and the Award
Agreement.  Notwithstanding the foregoing, in the event that any
dividend is paid by the Company with respect to the Common Stock (whether in the
form of cash, Common Stock or other property), then the Committee shall, in the
manner it deems equitable or appropriate, adjust the number of Restricted Stock
Units or Deferred Stock Units allocated to each Participant's Stock Award
Account to reflect such dividend.

    

    6.4           Restriction.  All
shares of Restricted Common Stock issued under this Plan (including any Common
Stock received as a result of stock dividends, stock splits or any other form of
recapitalization, if any) shall at the time of the Award, in the terms of each
individual Award Agreement, be subject to such restrictions as the Committee
shall, in its sole discretion, determine, which restrictions may include,
without limitation, restrictions concerning voting rights, transferability,
vesting, Company performance and individual performance; provided, however, that
by action taken subsequent to the time shares of Restricted Common Stock are
issued, the Committee may, on such terms and conditions as it may determine to
be appropriate, remove any or all of the restrictions imposed by the terms of
the Award Agreement. Restricted Common Stock may not be sold or encumbered until
all restrictions are terminated or expire.

    

    6.5           Lapse of
Restrictions.  The restrictions on Awards of Restricted Common
Stock and Restricted Stock Units shall lapse in accordance with the terms of the
Award Agreement. Each Award Agreement shall set forth whether shares of
Restricted Common Stock or Restricted Stock Units then subject to restrictions
are forfeited or if the restrictions shall lapse upon the Participant's
Termination of Employment. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among the Awards of Restricted
Common Stock or Restricted Stock Units and may differentiate between the reasons
for the Participant's Termination of Employment.

    

    6.6           Repurchase of Restricted Common
Stock.  The Committee may provide in the terms of the Award
Agreement awarding Restricted Common Stock that the Company shall have call
rights, a right of first offer or a right of refusal regarding shares of
Restricted Common Stock then subject to restrictions.

    

    6.7           Escrow.  The Company
may appoint an escrow holder to retain physical custody of each certificate or
control of each other indicia representing shares of Restricted Common Stock
until all of the restrictions imposed under the Award Agreement with respect to
the shares of Common Stock evidenced by such certificate expire or shall have
been removed.

    

    6.8           Legend.  In order to
enforce the restrictions imposed upon shares of Restricted Common Stock
hereunder, the Committee shall cause a legend or restrictions to be placed on
certificates of Restricted Common Stock that are still subject to restrictions
under Award Agreements, which legend or restrictions shall make appropriate
reference to the conditions imposed thereby.

    

    6.9           Conversion.  Upon
vesting in the case of Restricted Stock Units, and upon the lapse of the
deferral period in the case of Deferred Stock Units, such Restricted Stock Units
or Deferred Stock Units shall be converted into an equivalent number of shares
of Common Stock that will be distributed to the Participant, or in the case of
the Participant's death, to the Participant's legal
representative.  Such distribution shall be evidenced by a stock
certificate, appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company, or other appropriate means as
determined by the Company.  All distributions shall be made no later
than March 15th of the
calendar year following the year, with respect to the Restricted Stock Units, in
which such Restricted Stock Units vest or, with respect to Deferred Stock Units,
in which the deferral period lapses.

    
      
         

      

      
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    ARTICLE
7.  STOCK APPRECIATION RIGHTS

    

    7.1           Award Agreement for
SARs.  Awards of SARs shall be evidenced by an Award Agreement,
pursuant to Section 3.4.  All Award Agreements evidencing SARs
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the
Code.

    

    7.2           General
Requirements.  The Committee may grant SARs separately or in
tandem with any Option (for all or a portion of the applicable Option). The
Committee shall determine which Key Employees and Consultants shall receive
Awards of SARs and the amount of such Awards.

    

    7.3           Base Amount.  The
Committee shall establish the base amount of the SAR at the time the SAR is
granted.  The base amount of each SAR shall be equal to the price per
share of the related Option or, if there is no related Option, the Fair Market
Value of a share of Common Stock as of the date of grant of the SAR, unless the
Committee determines a higher base amount.

    

    7.4           Tandem SARs.  Tandem
SARs may be granted either at the time the Option is granted or at any time
thereafter while the Option remains outstanding; provided, however, that, in the
case of an Incentive Stock Option, SARs may be granted only at the time of grant
of the Incentive Stock Option. In the case of tandem SARs, the number of SARs
granted to a Key Employee or Consultant that shall be exercisable during a
specified period shall not exceed the number of shares of Common Stock that the
Key Employee or Consultant may purchase upon the exercise of the related Option
during such period. Upon the exercise of an Option, the SARs relating to the
Common Stock covered by such Option shall terminate. Upon the exercise of the
SARs, the related Option shall terminate to the extent of an equal number of
shares of Common Stock.

    

    7.5           SAR
Exercisability.

    

    7.5.1                      The
period during which SARs in whole or in part become exercisable shall be set by
the Committee and shall be as provided for in the Award Agreement. At any time
after the grant of an SAR, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions its selects, accelerate
the period during which the SAR becomes exercisable.

    
      
         

      

      
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    7.5.2                      In
each Award Agreement, the Committee shall indicate whether the portion of the
SAR, if any, that remains non-exercisable upon the Participant’s Termination of
Employment with the Company is forfeited. In so specifying, the Committee may
differentiate between the reason for the Participant’s Termination of
Employment.

    

    7.6           Value of SARs.  When
a Participant exercises an SAR, the Participant shall receive in settlement of
such SAR an amount equal to the value of the stock appreciation for the number
of SARs exercised payable in cash, Common Stock or a combination thereof. The
stock appreciation for an SAR is the amount by which the Fair Market Value of
the underlying Common Stock on the date of exercise of the SAR exceeds the base
amount of the SAR.

    

    7.7           Form of
Payment.  The Committee shall determine whether the
appreciation in an SAR shall be paid in the form of cash, Common Stock or a
combination of the two, in such proportion as the Committee deems appropriate.
For purposes of calculating the number of shares of Common Stock to be received,
shares of Common Stock shall be valued at their Fair Market Value on the date of
exercise of the SAR. If shares of Common Stock are received upon exercise of a
SAR, cash shall be delivered in lieu of any fractional shares of Common
Stock.

    

    ARTICLE
8  PERFORMANCE UNITS

    

    8.1           Award Agreement for Performance
Units.  Awards of Performance Units shall be evidenced by an
Award Agreement, pursuant to Section 3.4.  All Award Agreements
evidencing Performance Units intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code.

    

    8.2           General
Requirements.  Each Performance Unit shall represent the right
of the Participant to receive an amount based on the value of the Performance
Unit, if performance goals established by the Committee are met. A Performance
Unit shall be based on the Fair Market Value of a share of Common Stock or such
other measurement base as the Committee deems appropriate. The Committee shall
determine and set forth in the Award Agreement the number of Performance Units
to be granted and the requirements applicable to such Performance Units. The
Committee shall determine which Key Employees and Consultants shall receive
Awards of a Performance Unit and the amount of such Awards.

    

    8.3           Performance Period and Performance
Goals. When Performance Units are granted, the Committee shall establish
the performance period during which performance shall be measured (the
"Performance Period"), performance goals applicable to the Performance Units
("Performance Goals") and such other conditions of the Award as the Committee
deems appropriate. Performance Goals may relate to the financial performance of
the Company or its Subsidiaries, the performance of Common Stock, individual
performance or such other criteria as the Committee deems
appropriate.

    

    8.4           Payment With Respect to Performance
Units.  At the end of each Performance Period, the Committee
shall determine to what extent the Performance Goals and other conditions of the
Performance Units are met, the value of the Performance Units (if applicable),
and the amount, if any, to be paid with respect to the Performance Units.
Payments with respect to Performance Units shall be made in cash, in Common
Stock or in a combination of the two, as determined by the
Committee.  All payments shall be made no later than March 15 of the
calendar year following the year in which the Performance Period
ends."

    
      
         

      

      
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    ARTICLE
9.  ADMINISTRATION

    

    9.1           Committee.  The Plan
shall be administered by the Compensation Committee of the Board. The Board may
remove members, add members, and fill vacancies on the Committee from time to
time, all in accordance with the Company's Certificate of Incorporation, Bylaws,
and with applicable law. The majority vote of the Committee, or for acts taken
in writing without a meeting by the unanimous written consent of the members of
the Committee, shall be valid acts of the Committee.  Committee
members may resign at any time by delivering written notice to the
Board.

    

    9.2           Duties and Powers of
Committee.  It shall be the duty of the Committee to conduct
the general administration of this Plan in accordance with its provisions. The
Committee shall have the power to designate the Key Employees and consultants
who shall participate in the Plan and to construe and interpret this Plan and
the agreements pursuant to which Options, Restricted Common Stock, Restricted
Stock Units, Deferred Stock Units, SARs and Performance Units are granted or
awarded, and to adopt such rules for the administration, interpretation, and
application of this Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such Award under this Plan need not be the same with
respect to each Participant. Any such interpretations and rules with respect to
Incentive Stock Options shall be consistent with the provisions of Section 422
of the Code.  All determinations and decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive and
binding.

    

    9.3           Compensation; Professional
Assistance; Good Faith Actions.  Unless otherwise determined by
the Board, members of the Committee shall receive no compensation for their
services pursuant to this Plan. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. 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.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Participants, the Company and all other interested persons.  No
members of the Committee or Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to this Plan or
any Awards made hereunder, and all members of the Committee and the Board shall
be fully protected by the Company in respect of any such action, determination
or interpretation.

    

    ARTICLE
10. MISCELLANEOUS PROVISIONS

    

    10.1         Transferability.

    

    10.1.1       No
Option, Restricted Common Stock, Restricted Stock Unit, Deferred Stock Unit,
SAR, Performance Unit, or any right therein or part thereof shall be liable for
the debts, contracts or engagements of the Participant or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means, whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 10.1.1
shall prevent transfers by will or by the applicable laws of descent and
distribution or as permitted in Section 10.1.2 below. The Committee shall not be
required to accelerate the exercisabilty of an Award or otherwise take any
action pursuant to a divorce or similar proceeding in the event Participant's
spouse is determined to have acquired a community property interest in all or
any portion of an Award. Except as provided below, during the lifetime of the
Participant, only he may exercise an Award (or any portion thereof) granted to
him under the Plan. After the death of the Participant, any exercisable portion
of an Award, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Award Agreement or other agreement, may be exercised by
his personal representative or by any person empowered to do so under the
deceased Participant's will or under the then applicable laws of descent and
distribution.

    
      
         

      

      
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    10.1.2       Notwithstanding
the foregoing, the Committee may provide in an Award Agreement, or amend an
otherwise outstanding Award Agreement to provide, that a Participant may
transfer Non-Qualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
applicable securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of a Non-Qualified Stock Option and the transferred Non-Qualified Stock
Option shall continue to be subject to the same terms and conditions as were
applicable to the Non-Qualified Stock Option immediately before the transfer and
shall be exercisable by the transferee according to the same terms as applied to
the Participant.

    

    10.2         Amendment,
Suspension or Termination of this Plan.

    

    10.2.1       Except
as otherwise provided in this Section 10.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board; provided, however, no action of the Board may be taken
that would otherwise require stockholder approval as a matter of applicable law,
regulation or rule, without the consent of the stockholders. The Board and the
Committee cannot reprice, replace or regrant through cancellation or by lowering
the price per share of a previously granted Option unless the stockholders of
the Company provide prior approval.  No amendment, suspension or
termination of this Plan shall impair any rights or obligations under any Award
theretofore made to a Participant, unless such right has been reserved in the
Plan or the Award Agreement, without the consent of the Participant holding such
Award. No Award may be made during any period of suspension or after termination
of this Plan. In no event may any Award be made under this Plan after May 22,
2016.

    

    10.2.2       Notwithstanding
the foregoing, the Board or the Committee may take any action necessary to
comply with a change in applicable law, irrespective of the status of any Award
as vested or unvested, exercisable or unexercisable, at the time of such change
in applicable law.

    

    10.3         Changes
in Common Stock or Assets of the Company, Acquisition or Liquidation of the
Company and Other Corporate Events.

    

    10.3.1       In
the event that the Committee determines, in its sole discretion, that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), on account of a recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
event, affects the Common Stock such that an adjustment is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee may, in such
manner as it may deem equitable, adjust any or all of the
following:

    
      
         

      

      
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              10.3.1.1

            	
              the
      maximum number of shares of Common Stock available for
    Awards;

            

    

    

    
      	
              10.3.1.2

            	
              the
      maximum number of shares of Common Stock subject to the
    Plan;

            

    

    

    
      	
              10.3.1.3

            	
              the
      number and kind of Company stock with respect to which an Award may be
      made under the Plan;

            

    

    

    
      	
              10.3.1.4

            	
              the
      number and kind of Company stock subject to an outstanding Award;
      and

            

    

    

    
      	
              10.3.1.5

            	
              the
      exercise price or purchase price with respect to any
  Award.

            

    

    

    10.3.2       In
the event of any transaction or event described in Section 10.3.1 or any unusual
or nonrecurring transactions or events affecting the Company, or the financial
statements of the Company, or of changes in applicable laws, regulations, or
accounting principles, the Committee in its discretion is hereby authorized to
take any one or more of the following actions whenever the Committee determines,
in its sole discretion, that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award or right under this
Plan, to facilitate such transactions or events or to give effect to such
changes in laws, regulations or principles:

    

    10.3.2.1               the
Committee may provide, by the terms of the Award Agreement or by action taken
prior to the occurrence of such transaction or event and either automatically or
upon the Participant's request, for (i) the purchase of any such Award for the
payment of an amount of cash equal to the amount that could have been attained
upon the exercise of such Award or realization of the Participant's rights had
such Award been currently exercisable, payable, fully vested or the restrictions
lapsed, or (ii) the replacement of such Award with other rights or property
selected by the Committee;

    

    10.3.2.2               the
Committee may provide, by the terms of such Award Agreement or by action taken
prior to the occurrence of such transaction or event, that the Award cannot be
exercised after such event;

    

    10.3.2.3               the
Committee may provide, by the terms of such Award or by action taken prior to
the occurrence of such transaction or event, that for a specified period of time
prior to such  transaction or event such Award shall be exercisable,
notwithstanding anything to the contrary in Section 4.6 or the provisions of
such Award;

    

    10.3.2.4               the
Committee may provide, by the terms of such Award or by action taken prior to
the occurrence of such transaction or event, that upon such event, such Award be
assumed by the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar Awards covering the stock of the
successor or survivor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and
prices;

    
      
         

      

      
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    10.3.2.5               the
Committee may make adjustments in the number, type and kind of shares of Common
Stock subject to outstanding Options, Restricted Common Stock, Restricted Stock
Units, Deferred Stock Units, SARs and Performance Units and in the terms and
conditions of (including the grant or exercise price), and the criteria included
in, outstanding Awards, and rights and awards which may be granted in the
future; and

    

    10.3.2.6               the
Committee may provide, by the terms of an Award of Restricted Common Stock or
Restricted Stock Units or by action taken prior to the occurrence of such event,
that for a specified period of time prior to such event, the restrictions
imposed under an Award Agreement upon some or all shares of the Restricted
Common Stock or the Restricted Stock Units may be terminated, and some or all
shares of such Restricted Common Stock or some or all of such Restricted Stock
Units may cease to be subject to forfeiture under Section 6.5 or repurchase
under Section 6.6 after such event.

    

    10.3.3       Subject
to Section 10.7, the Committee may, in its sole discretion, at the time of
grant, include such further provisions and limitations in any Award Agreement or
certificate, as it may deem appropriate and in the best interests of the
Company; provided, however, that no such provisions or limitations shall be
contrary to the terms of the Participant's Employment Agreement or the terms of
this Plan.

    

    10.3.4       Notwithstanding
the foregoing, in the event of a transaction or event described in Sections
10.3.1 or any unusual or nonrecurring transactions or events affecting the
Company, no action pursuant to this Section 10.3 shall be taken that is
specifically prohibited under applicable law, the rules and regulations of any
governing governmental agency or national securities exchange, or the terms of
the Participant's Employment Agreement.

     

    10.4         Continued
Employment.  Nothing in this Plan or in any Award Agreement
hereunder shall confer upon any Participant any right to continue his
employment, consulting or similar relationship with the Company, whether as an
employee or consultant or otherwise, or shall interfere with or restrict in any
way the rights of the Company, which are hereby expressly reserved, to discharge
or terminate the relationship with any Participant at any time for any reason
whatsoever, subject to the terms of any Employment Agreement entered into by the
Participant and the Company.

    

    10.5         Tax
Withholding.  The Company shall be entitled to require payment
in cash or deduction from other compensation payable to each Participant of any
sums required by federal, state or local tax law to be withheld with respect to
the issuance, vesting, exercise or lapse of any restriction of any Option,
Restricted Common Stock, Restricted Stock Unit, Deferred Stock Unit, SAR or
Performance Unit.  The Committee shall be authorized to establish
procedures for election by Participants to satisfy such obligation for the
payment of such taxes (i) by delivery of, or transfer of, shares of Common Stock
to the Company or (ii) by directing the Company to retain shares of Common Stock
otherwise deliverable under an Award; provided, however, that the total tax
withholding where shares of Common Stock are being used to satisfy such
obligation shall not exceed the minimum amount required to be
withheld.  Shares of Common Stock withheld or delivered in accordance
with this Section 10.5 shall be valued at Fair Market Value as of such date as
may be specified in procedures established by the Committee.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    10.6         Forfeiture
Provisions.  Pursuant to its general authority to determine the
terms and conditions applicable to Awards, the Committee shall have the right to
provide, in the terms of such Award, or to require the Participant to agree by
separate written instrument, that the Award shall terminate and any unexercised
portion of such Award (whether or not vested) shall be forfeited if (i) a
Termination of Employment occurs prior to a specified date, or within a
specified time period following receipt or exercise of the Award, (ii) the
Participant at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Committee or
as specified in the Participant's Employment Agreement, or (iii) the Company
terminates the Participant with or without cause.

    

    10.7         Limitations Applicable to Section 16
Persons and Performance-Based Compensation.  Notwithstanding
any other provision of this Plan, any Option, Restricted Common Stock,
Restricted Stock Unit, Deferred Stock Unit, SARs, or Performance Units granted
or awarded to any individual who is then subject to Section 16 of the Exchange
Act shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act). To the extent permitted by applicable law,
Options granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule. Furthermore,
notwithstanding any other provision of this Plan to the contrary, any Award that
is intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.

    

    10.8         Effect of Plan Upon Option and
Compensation Plans.  The adoption of this Plan shall not affect
any other compensation or incentive plans in effect for the Company. Nothing in
this Plan shall be construed to limit the right of the Company (i) to establish
any other forms of incentives or compensation for employees or consultants, or
(ii) to grant or assume options or other rights otherwise than under this 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, partnership, limited liability
company, firm or association.

    

    10.9         Compliance with
Laws.  This Plan, the granting and vesting of Awards under this
Plan and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Awards awarded hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.  No Award
under this Plan (or modification thereof) shall provide for the deferral of
compensation that does not comply with Section 409A of the Code, unless the
Committee, at the time of grant, specifically provides that the Award is not
intended to comply with Section 409A of the Code.  Notwithstanding any
provision of this Plan to the contrary, if one or more of the payments or
benefits received or to be received by a Participant pursuant to an Award would
cause the Participant to incur any additional tax or interest under Section 409A
of the Code, the Committee may reform such provision to maintain to the maximum
extent practicable the original intent of the applicable provision without
violating the provisions of Section 409A of the Code.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    10.10       Effective
Date.  This Plan shall be effective on the date it is approved
by the stockholders of the Company.

    

    10.11       Titles.  Titles are
provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Plan.

    

    10.12       Governing Law.  This
Plan and any agreements hereunder shall be administered, interpreted and
enforced under the laws of the State of Texas, without regard to that state’s
conflicts of laws rules.

     

     

    21ex10_1.htm

    
      

    

    
      Exhibit
10.1

      

      Orthofix
International N.V.

      AMENDED
AND RESTATED

      STOCK
PURCHASE PLAN

      

      _____________________________________________________________________________________

      

      

      The
Orthofix Inc. Employee Stock Purchase Plan is hereby amended, restated and
renamed the “Orthofix International N.V. Amended and Restated Stock Purchase
Plan,” and adopted by the Company, effective as of the Effective
Date.

      

      
        	
                 
      

              	
                1.

              	
                Purpose

              

      

       

      The
purpose of the Plan is to encourage eligible employees and directors to become
owners of common stock of Orthofix International N.V., thereby giving them a
greater interest in the growth and success of its business.

      

      
        	
                 
      

              	
                2.

              	
                Definitions

              

      

       

      The
following definitions are used throughout the Plan:

      

      (a)           “Board of Directors”
means the Board of Directors of the Company.

       

      (b)            “Code” means the
Internal Revenue Code of 1986, as amended.

       

      (c)            “Committee” means the
Compensation Committee of the Board of Directors. If, at any time, there is no
acting Compensation Committee of the Board of Directors, the term “Committee”
shall mean the Board of Directors.

       

      (d)            “Company” means
Orthofix International N.V., or any successor to substantially all of its
business.

       

      (e)           “Director” means a
member of the Board of Directors who is not also an employee of the Company or
of a Subsidiary and is not an Employee for purposes of this Plan.

       

      (f)           “Effective Date” means
the date determined in accordance with Section 11.

       

      (g)           “Employee” means a
full-time or part-time employee of the Company or of a Subsidiary that has been
designated as a participating employer under the
Plan.  Notwithstanding the foregoing, unless otherwise prohibited by
the laws of the local jurisdiction, “Employee” shall not mean a temporary
employee.

       

      (h)           “Fair Market Value”
means, as of any date that requires the determination of the Fair Market Value
of Orthofix Stock under this Plan, the value of a share of Orthofix Stock on
such date of determination, calculated as follows:

       

      (i)           If
shares of Orthofix Stock are then listed or admitted to trading on a Nasdaq
market system or a stock exchange which reports closing sale prices, the Fair
Market Value shall be the closing sale price on such date on such Nasdaq market
system or principal stock exchange on which the share is then listed or admitted
to trading, or, if no closing sale price is quoted on such day, then the Fair
Market Value shall be the closing sale price of the share on such Nasdaq market
system or such exchange on the next preceding day on which a closing sale price
is reported;

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (ii)          If
shares of Orthofix Stock are not then listed or admitted to trading on a Nasdaq
market system or a stock exchange which reports closing sale prices, the Fair
Market Value shall be the average of the closing bid and asked prices of the
share in the over-the-counter market on such date, or, if no closing bid and
asked prices are reported on such day, then the Fair Market Value shall be the
average of the closing bid and asked prices of the share in the over-the-counter
market on the next preceding day on which closing bid and asked prices are
reported; or

       

      (iii)        
If neither (i) nor (ii) is applicable as of such date, then the Fair Market
Value shall be determined by the Committee in good faith using any reasonable
method of evaluation, which determination shall be conclusive and binding on all
interested parties.

       

      (i)           “Orthofix Stock” means
the Common Stock of the Company, $.10 par value.  Unless the context
indicates otherwise, the terms “share” or “shares” shall refer to a share or
shares of Orthofix Stock.

       

      (j)           “Participant” means an
Employee or Director who elects to participate in the Plan.

       

      (k)           “Plan” means the
Orthofix International N.V. Amended and Restated Stock Purchase Plan, as further
amended from time to time.

       

      (l)           “Plan Year” means the
12-month period beginning on January 1 and ending on December 31.

       

      (m)           “Subsidiary” means (i)
a domestic or foreign corporation, limited liability company, partnership or
other entity with respect to which the Company, directly or indirectly, has the
power, whether through the ownership of voting securities, by contract or
otherwise, to elect at least a majority of the members of such entity’s board of
directors or analogous governing body or (ii) any other domestic or foreign
corporation, limited liability company, partnership or other entity in which the
Company, directly or indirectly, has an equity or similar interest and which the
Committee designates as a Subsidiary for purposes of the Plan.

       

      
        	
                 
      

              	
                3.

              	
                Shares Subject to the
      Plan

              

      

       

      (a)           The
total number of shares of Orthofix Stock reserved and available for issuance
pursuant to the Plan shall not exceed 950,000 shares.  The shares of
Orthofix Stock purchasable pursuant to the Plan may be authorized but previously
unissued shares of Orthofix Stock or shares of Orthofix Stock held in treasury
or purchased in the open market or in privately negotiated transactions. The
Company shall bear all costs in connection with issuance or transfer of any
shares and all commissions, fees and other charges incurred in purchasing shares
for distribution pursuant to the Plan.

       

      (b)           A
Participant shall have no rights as a shareholder with respect to shares of
Orthofix Stock purchasable pursuant to the Plan until the date the Participant
or his nominee becomes the holder of record of such shares. No adjustment shall
be made for dividends or other rights for which the record date is prior to such
date.

       

      (c)           If
the Committee determines that the total number of shares of Orthofix Stock to be
purchased pursuant to the Plan on any particular date exceeds the number of
shares then available for issuance under the Plan, the Committee shall make a
pro rata allocation of the available shares on a uniform and non-discriminatory
basis, and the payroll and other deductions of each Participant, to the extent
in excess of the aggregate purchase price payable for the Orthofix Stock
pro-rated to such individual, shall be refunded pursuant to Section
6.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                4.

              	
                Eligibility

              

      

       

      Each
Employee and Director (subject to Section 5(b) hereof) shall be eligible to
participate in the Plan on the first day of any Plan Year, provided that he or
she is actively employed or is a Director of the Company on such
day.

      

      
        	
                 
      

              	
                5.

              	
                Participation

              

      

       

      (a)           An
eligible Employee shall become a Participant for any Plan Year by electing to
contribute to the Plan, through payroll deductions, either a fixed amount or a
percentage of his or her compensation for the Plan Year; provided, however, that
such fixed amount or percentage shall not be less than 1% nor more than 25% (or
such other percentage as the Committee may determine) of his or her compensation
for the Plan Year.  For purposes of the Plan, an Employee’s
compensation shall mean (i) for non-commissioned employees, his or her regular
salary or straight-time wages, overtime, bonuses, and all other forms of
compensation, excluding any car allowance or relocation expense reimbursements;
and (ii) for commissioned employees, his or her commissions, guaranteed
payments, overtime, bonuses, and all other forms of compensation, excluding any
car allowance or relocation expense reimbursements.  An Employee’s
election to participate in the Plan for any Plan Year shall be made prior to the
beginning of such Plan Year on an authorized form and shall be made in
accordance with procedures established by the Committee from time to
time.

       

      (b)           An
eligible Director shall become a Participant for any Plan Year by electing to
contribute to the Plan, through a deduction of his or her annual director or
other compensation paid in cash, either a fixed amount or a percentage
of  such director compensation for the Plan Year.  A
Director’s election to participate in the Plan for any Plan Year shall be made
prior to the beginning of such Plan Year or, if later, within 30 days after the
date on which such individual first becomes an eligible Director, on an
authorized form and shall be made in accordance with procedures established by
the Committee from time to time.  Notwithstanding the foregoing, a
Director’s election to participate in the Plan for the Plan Year in which he or
she first becomes eligible to participate may be made within 30 days after the
date on which such individual first becomes eligible to participate; provided,
however, such election shall apply only to an amount of his or her annual or
other director compensation paid in cash for such Plan Year equal to the total
amount of the Director’s annual or other compensation paid in cash for such Plan
Year multiplied by the ratio of the number of days remaining in the Plan Year
after such election is made over the total number of days in the Plan Year for
which such Director receives annual director or other compensation.

       

      (c)           A
Participant must complete a new election with respect to each Plan Year in order
to participate in the Plan for such Plan Year.

       

      (d)           Participant
contributions (i) in the case of Employees, shall be deposited as soon as
practicable following each payday, and (ii) in the case of Directors, shall be
deposited as soon as practicable following the Company’s deduction of all or a
portion of the Director’s annual or other compensation, each in one or more
separate interest-bearing accounts at a bank or other financial
institution.  Each such account shall be maintained in the name of the
Plan for the benefit of Participants, and the balance of each such account shall
remain the property of the Participants until transferred to the Company
pursuant to Section 6.  After the close of each Plan Year, the balance
of the account will be transferred to the Company to purchase Orthofix Stock for
distribution to Participants and to pay cash in lieu of fractional shares as
provided in Section 6.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (e)           A
Participant may elect to withdraw from the Plan by providing notice to the
Committee before the last day of the Plan Year.  Upon withdrawal from
the Plan, all payroll and other deductions under the Plan shall immediately
cease, and a Participant shall receive, in lieu of any other benefits under the
Plan, the following: (i) a refund of his or her contributions as soon as
practicable following the date of withdrawal from the Plan, and in any event no
later than the date that is two and one-half months following the last day of
the Plan Year in which such Participant withdrew from the Plan, and (ii) a
refund of the interest accrued through the date of payment at the rate in effect
at the bank or other financial institution holding Participant contributions,
which refund of accrued interest shall be paid immediately following the end of
the Plan Year in which such Participant withdrew from the Plan, and in any event
no later than the date that is two and one-half months following the last day of
such Plan Year.

       

      (f)           An
Employee’s participation in the Plan shall terminate upon his or her termination
of employment.  An Employee’s participation in the Plan shall, unless
otherwise required by applicable law, terminate upon his or her leave of absence
or absence from active employment for any other reason only if such Employee
does not continue to make contributions to the Plan during such leave in
accordance with procedures established by the Committee.  An Employee
whose participation in the Plan has terminated pursuant to this Section 5(f)
shall be deemed to have withdrawn from the Plan for purposes of this Section
5.

       

      (g)           A
Director’s participation in the Plan shall terminate if, during any Plan Year,
such Director ceases to be a member of the Board of Directors for any
reason.  A Director whose participation in the Plan has terminated
pursuant to this Section 5(g) shall be deemed to have withdrawn from the Plan
for purposes of this Section 5.

       

      (h)           A
Participant who withdraws his or her contributions or otherwise ceases
participation before the last day of the Plan Year may again participate in the
Plan for any subsequent Plan Year, provided he or she satisfies the eligibility
requirements of Section 4 and makes a timely election to contribute for such
Plan Year.

       

      (i)           If
any law, rule, or regulation applicable to an eligible Employee or Director
prohibits the use of payroll or other deductions for purposes of the Plan, or if
such deductions impair or hinder the operation of the Plan or affect the
composition of the Board of Directors or any committee thereof, an alternative
method of payment approved by the Committee may be substituted for such eligible
Employee or Director, as applicable; provided, however, that if any law, rule or
regulation relating to a Director participating in the Plan, in the sole
discretion of the Board of Directors, would affect the composition of the Board
of Directors or any committee thereof, the Board of Directors may terminate such
Director’s participation in the Plan.

       

      
        	
                 
      

              	
                6.

              	
                Distribution of Common
      Stock

              

      

       

      (a)           As
soon as practicable following the last day of each Plan Year, but in any event
no later than the date that is two and one-half months following the last day of
such Plan Year, the Committee shall distribute to each Employee and Director who
was a Participant for the entire Plan Year (or, in the event of the death of an
Employee or Director prior to such distribution, to the Employee’s or Director’s
beneficiary, as applicable) a certificate or certificates representing the
number of whole shares of Orthofix Stock determined by dividing (i) the amount
of the Participant’s contributions for the Plan Year plus interest on such
contributions through the end of the Plan Year by (ii) 85% of the Fair Market
Value of the Orthofix Stock on the first day of the Plan Year or, if lower, on
the last day of the Plan Year. Cash in the amount of any fractional share shall
be paid to the Participant by check as soon as practicable following the last
day of each Plan Year, but in any event, no later than the date that is two and
one-half months following the last day of such Plan Year.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)           The
Committee may, in its discretion, require a Participant to pay to the Company or
its Subsidiary, as appropriate, prior to the distribution of the Orthofix Stock,
the amount that the Committee deems necessary to satisfy the Company’s
obligation to withhold applicable taxes, at the minimum statutory rate, that the
Participant incurs as a result of the Participant’s participation in the Plan.
To satisfy the minimum statutory tax withholding requirements, a Participant may
(i) deliver to the Company or its Subsidiary, as appropriate, sufficient shares
of Orthofix Stock (based upon the Fair Market Value of the Orthofix Stock at the
date of withholding) to satisfy the Company’s tax withholding obligations, (ii)
deliver sufficient cash to the Company or its Subsidiary, as appropriate, to
satisfy tax withholding obligations, or (iii) irrevocably elect for the Company
or its Subsidiary, as appropriate, to withhold from the shares of Orthofix Stock
to be distributed to the Participant the number of shares necessary (based upon
the Fair Market Value of the Orthofix Stock at the date of withholding) to
satisfy the Company’s tax withholding obligations.  In the event the
Committee subsequently determines that the aggregate Fair Market Value (on the
date of withholding) of shares of Orthofix Stock withheld as payment of any tax
withholding obligation is insufficient to discharge that tax withholding
obligation, then the Participant shall pay to the Company, or its Subsidiary, as
appropriate, immediately upon the Committee’s request, the amount of that
deficiency.  The Company or its Subsidiary, as appropriate, shall also
have the right to deduct from all cash payments made to a Participant (whether
or not such payment is made in connection with the Plan) any applicable taxes
required to be withheld with respect to such payments.

       

      
        	
                 
      

              	
                7.

              	
                Administration of the
      Plan

              

      

       

      (a)           The
Committee shall administer the Plan and shall keep a written record of its
actions and proceedings regarding the Plan and all dates, records and documents
relating to its administration of the Plan. The Committee is authorized to
interpret the Plan, to make, amend and rescind such rules as it deems necessary
for the proper administration of the Plan, to make all other determinations
necessary or advisable for the administration of the Plan and to correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent that the Committee deems desirable to carry the Plan
into effect. The powers and duties of the Committee shall include, without
limitation, the following:

       

      (i)           Determining
the amount of benefits payable to Participants and authorizing and directing the
Company with respect to the payment of benefits under the Plan;

       

      (ii)          Construing
and interpreting the Plan in its sole discretion whenever necessary to carry out
its intention and purpose and making and publishing such rules for the
regulation of the Plan as are not inconsistent with the terms of the
Plan;

       

      (iii)         Compiling
and maintaining all records it determines to be necessary, appropriate or
convenient in connection with the administration of the Plan; and

       

      (iv)         Administering
the Plan as necessary to take account of tax, securities law and other
regulatory requirements of foreign jurisdictions.

       

      (b)           Any
action taken or determination made by the Committee shall, except as otherwise
provided in Section 8 below, be conclusive on all parties. No member of the
Committee shall vote on any matter relating specifically to such member. In the
event that a majority of the members of the Committee would be specifically
affected by any action proposed to be taken (as opposed to being affected in the
same manner as each other Participant in the Plan), such action shall be taken
by the Board of Directors.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           The
Committee may designate one or more of its members or the Chief Executive
Officer or the Chief Financial Officer to carry out its responsibilities under
such conditions or limitations as it may set, except that the Committee may not
delegate its authority with regard to participation in the Plan by eligible
Directors or by eligible Employees who are officers for purposes of Section
16(b) of the Securities Exchange Act of 1934, as amended.

       

      (d)           No
member of the Board of Directors or the Committee, the Chief Executive Officer,
the Chief Financial Officer, or any other officer or employee of the Company or
any of its Subsidiaries to whom any duties or responsibilities are delegated
hereunder shall be liable for any action or determination made in connection
with the operation, administration or interpretation of the Plan, and the
Company shall indemnify, defend and hold harmless each such person from any
liability arising from or in connection with the Plan, except where such
liability results directly from such person’s fraud, willful misconduct or
failure to act in good faith. In the performance of its responsibilities with
respect to the Plan, the Committee shall be entitled to rely upon information
and advice furnished by the Company’s officers, the Company’s accountants, the
Company’s counsel and any other person the Committee deems necessary, and no
member of the Committee shall be liable for any action taken or not taken in
reliance upon any such advice.

       

      (e)           Anything
in the Plan to the contrary notwithstanding, any authority or responsibility
that, under the terms of the Plan, may be exercised by the Committee may
alternatively be exercised by the Board of Directors.

       

      
        	
                 
      

              	
                8.

              	
                Claims
      Procedure

              

      

       

      (a)           If
a Participant does not receive the timely payment of the benefits which the
Participant believes are due under the Plan, the Participant may make a claim
for benefits in the manner hereinafter provided.

       

      All
claims for benefits under the Plan shall be made in writing and shall be signed
by the Participant. Claims shall be submitted to the Committee, or to a
representative designated by the Committee. If the Participant does not furnish
sufficient information with the claim for the Committee to determine the
validity of the claim the Committee shall indicate to the Participant any
additional information which is necessary for the Committee to determine the
validity of the claim.

      

      Each
claim hereunder shall be acted on and approved or disapproved by the Committee
within 90 days following the receipt by the Committee of the information
necessary to process the claim.

      

      In the
event the Committee denies a claim for benefits in whole or in part, the
Committee shall notify the Participant in writing of the denial of the claim and
notify the Participant of his or her right to a review of the Committee’s
decision. Such notice by the Committee shall also set forth, in a manner
calculated to be understood by the Participant, the specific reason for such
denial, the specific provisions of the Plan on which the denial is based and a
description of any additional material or information necessary to perfect the
claim with an explanation of the Plan’s appeals procedure as set forth in this
Section.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      If no
action is taken by the Committee on a Participant’s claim within 90 days after
receipt by the Committee, such claim shall be deemed to be denied for purposes
of the following appeals procedure.

      

      (b)           Any
Participant whose claim for benefits is denied in whole or in part may appeal
for a review of the decision by the full Committee. Such appeal must be made
within three months after the Participant has received actual or constructive
notice of the denial as provided above.  An appeal must be submitted
in writing within such period and must:

       

      (i)           request
a review by the full Committee of the claim for benefits under the
Plan;

       

      (ii)          set
forth all of the grounds upon which the Participant’s request for review is
based and any facts in support thereof; and

       

      (iii)         set
forth any issues or comments which the Participant deems pertinent to the
appeal.

       

      The
Committee shall regularly review appeals by Participants. The Committee shall
act upon each appeal within 60 days after receipt thereof unless special
circumstances require an extension of the time for processing, in which case a
decision shall be rendered by the Committee as soon as possible but not later
than 120 days after the appeal is received by the Committee.

      

      The
Committee shall make a full and fair review of each appeal and any written
materials submitted by the Participant in connection therewith. The Committee
may require the Participant to submit such additional facts, documents or other
evidence as the Committee in its discretion deems necessary or advisable in
making its review. The Participant shall be given the opportunity to review
pertinent documents or materials upon submission of a written request to the
Committee, provided the Committee finds the requested documents or materials are
pertinent to the appeal.

      

      On the
basis of its review, the Committee shall make an independent determination of
the Participant’s eligibility for benefits under the Plan.  The
decision of the Committee on any claim for benefits shall be final and
conclusive upon all parties thereto.

      

      In the
event the Committee denies an appeal in whole or in part, the Committee shall
give written notice of the decision to the Participant, which notice shall set
forth, in a manner calculated to be understood by the Participant, the specific
reasons for such denial and which shall make specific reference to the pertinent
provisions of the Plan on which the Committee’s decision is based.

      

      
        	
                 
      

              	
                9.

              	
                Amendment and
      Termination

              

      

       

      (a)           The
Plan may be amended or terminated by the Board of Directors at any time,
provided that no such action shall have the effect of decreasing a Participant’s
accrued benefits as of the effective date of such action. Upon termination of
the Plan, each Participant shall receive a refund of his or her contributions
for the Plan Year plus interest accrued through the date of
termination.

       

      (b)           Without
shareholder consent and without regard to whether any Participant rights may be
considered to have been “decreased,” the Committee shall be entitled to
establish the exchange ratio applicable to payroll and other deductions, in a
currency other than United States Dollars, permit payroll and other deductions
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 payroll and
other deduction elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of shares of Orthofix Stock for each Participant properly
correspond with amounts deducted from the Participant’s compensation, and
establish such other limitations or procedures as the Committee determines in
its sole discretion advisable which are consistent with the Plan.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                10.

              	
                Beneficiary
      Designation

              

      

       

      A
Participant may file a written designation of a beneficiary who is to receive
any Orthofix Stock or cash under the Plan in the event of such Participant’s
death prior to delivery to such Participant of such Orthofix Stock or
cash.   If a Participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective to the extent required by applicable
law.  Such beneficiary designation may be changed by the Participant
at any time by written notice to the Committee.  All beneficiary
designations shall be made in such form and manner as the Committee may
prescribe from time to time.

      

      
        	
                 
      

              	
                11.

              	
                Effective
      Date

              

      

       

      The Plan,
as amended and restated herein, shall become effective on the first day of the
Plan Year following the date it is approved by the shareholders of the Company;
provided, however, that the shares available for issuance in Section 3(a) hereof
shall be available for issuance on and after the date the Plan, as amended and
restated herein, is approved by the shareholders of the
Company.  Notwithstanding the foregoing, if the Plan is not approved
by the shareholders upon submission to them for approval, the Plan shall be void
ab initio and of no further force and effect.

      

      
        	
                 
      

              	
                12.

              	
                Participants in
      Non-U.S. Jurisdictions

              

      

       

      (a)           To
the extent that Participants are domiciled or resident outside of the U.S. or
are domiciled or resident in the U.S. but are subject to the tax laws of a
jurisdiction outside of the U.S., the Committee shall have the authority and
discretion to adopt such modifications and procedures as it shall deem necessary
or desirable to comply with the provisions of the laws of such non-U.S.
jurisdictions in order to assure the viability of the benefits paid to such
Participants.  The authority granted under the previous sentence shall
include the discretion for the Committee to adopt, on behalf of the Company, one
or more sub-plans applicable to separate classes of eligible Employees and
Directors who are subject to the laws of jurisdictions outside of the
U.S.

       

      (b)           Notwithstanding
any other provision of the Plan to the contrary, to the extent the Company is
required to comply with the EU Prospectus Directive in any jurisdiction with
respect to awards made to eligible Employees or Directors in such jurisdiction,
the Committee may suspend the right of all eligible Employees and Directors in
such jurisdiction to participate in the Plan.

       

      
        	
                 
      

              	
                13.

              	
                Miscellaneous

              

      

       

      (a)           Nothing
in the Plan shall confer upon a Participant the right to continue in the employ
or continue to be a Director of the Company or a Subsidiary or shall limit or
restrict the right of the Company or a Subsidiary to terminate the employment of
a Participant at any time with or without cause.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)           No
right or benefit under the Plan shall be subject to anticipation, alienation,
sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge such right or benefit shall
be void.  No such right or benefit shall in any manner be liable for
or subject to the debts, liabilities or torts of a Participant.

       

      (c)            Neither
the Company nor any Subsidiary shall be under any obligation to issue or deliver
certificates for shares of Orthofix Stock pursuant to the Plan if such issuance
or delivery would, in the opinion of the Committee, cause the Company to violate
any provision of applicable law.  The Company and its subsidiaries
will use their best efforts to comply with applicable laws but will not be
liable for any failure to comply.

       

      (d)           If
any provision in the Plan is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remaining provisions shall nevertheless
continue in full force and effect without being impaired or invalidated in any
way.

       

      (e)           The
Plan shall be construed and governed in accordance with the law of the State of
New York and without giving effect to principles of conflicts of
laws.

       

      (f)           All
notices or other communications by a Participant to the Committee, the Company,
or any Subsidiary under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Committee at the
location, or by the person, designated by the Committee for the receipt
thereof.

       

      (g)           Notwithstanding
anything to the contrary contained in the Plan, notices and other elections
under this Plan may be delivered or made electronically, in the discretion of
the Committee. In addition, in the discretion of the Committee, shares otherwise
deliverable under the Plan may be delivered or otherwise evidenced through book
entry or other electronic format without the need to deliver an actual share
certificate; provided, however, an actual share certificate shall be delivered
if requested by the Participant.

       

      (h)           The
Board of Directors or the Committee may extend or terminate the benefits of the
Plan to any Subsidiary at any time without the approval of the shareholders of
the Company.

       

      (i)            The
proceeds received by the Company from the sale of Orthofix Stock pursuant to the
Plan shall be used for general corporate purposes.

       

      (j)      
     No shares of Orthofix Stock may be issued under
this Plan unless the issuance of such shares has been registered under the
Securities Act of 1933, as amended, and qualified under applicable state “blue
sky” laws and any applicable non-U.S. securities laws, or the Company has
determined that an exemption from registration and from qualification under such
state “blue sky” laws and applicable non-U.S. securities laws is available. The
Committee may require each Participant purchasing shares under the Plan to
represent to and agree with the Company in writing that such eligible Employee
or Director, as applicable, is acquiring the shares for investment purposes and
not with a view to the distribution thereof. All certificates for shares
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any exchange upon which the shares are then listed, and any applicable
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such
restrictions.

       

      
        	
                 
      

              	
                14.

              	
                Compliance with Code
      Section 409A

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      The Plan
and any options granted hereunder are intended to meet the short term deferral
exemption from Code Section 409A and shall be interpreted and construed
consistent with this intent.  Notwithstanding any provision of the
Plan to the contrary, in the event that the Board of Directors determines that
the Plan or any option granted hereunder may be subject to Code Section 409A,
the Board of Directors may, without the consent of Participants, including the
affected Participant, adopt such amendments to the Plan or adopt other policies
and procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Board of Directors determines are
necessary or appropriate to (i) exempt the Plan or any option granted hereunder
from Code Section 409A or (ii) comply with the requirements of Code Section 409A
and Department of Treasury regulations and other interpretive guidance issued
thereunder.  Notwithstanding the foregoing, the Company shall not be
required to assume any increased economic burden in connection
therewith.

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