1
EXHIBIT 10.11
________________________________________________________________________________
1996 STOCK OPTION PLAN
OF
COHR INC.
________________________________________________________________________________
2
-----------------------
TABLE OF CONTENTS
-----------------------
Page
----
ARTICLE I.
DEFINITIONS
Section 1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II.
SHARES SUBJECT TO PLAN
Section 2.1 Shares Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2 Unexercised Options and Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3 Effect of Certain Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1 Key Employee Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Nonemployee Director Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1 Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.2 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.3 Option Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.4 Option Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1 Exercise Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.2 Partial Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.3 Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.4 Transfer of Shares to an Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.5 Certain Timing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.6 Conditions to Issuance of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.7 Rights as Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-i-
3
ARTICLE VI.
ADMINISTRATION
Section 6.1 Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6.2 Duties and Powers of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6.3 Majority Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.4 Compensation; Professional Assistance; Good Faith Actions . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.5 No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1 Not Transferable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7.2 Amendment, Suspension or Termination of this Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.3 Changes in Common Stock or Assets of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.4 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.5 Approval of Plan by Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.6 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.7 Limitations Applicable to Section 16 Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.8 Release of Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.9 Effect of Plan Upon Options and Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.11 Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-ii-
4
1996 STOCK OPTION PLAN OF
COHR INC.
COHR Inc., a Delaware corporation (the "Company"), has adopted this
1996 Stock Option Plan of COHR Inc. (the "Plan") for the benefit of eligible
key managerial employees ("Key Employees") and nonemployee members of the
Company's Board of Directors ("Nonemployee Directors").
The purposes of this Plan are as follows:
(a) To provide an additional incentive for Key Employees
and Nonemployee Directors to further the growth, development and
financial success of the Company by personally benefitting through the
ownership of Company stock and/or rights which recognize such growth,
development and financial success.
(b) To enable the Company to obtain and retain the
services of Key Employees and Nonemployee Directors considered
essential to the long-range success of the Company by offering them an
opportunity to own stock in the Company and/or rights which will
reflect the growth, development and financial success of the Company.
ARTICLE I.
DEFINITIONS
Section 1.1 General. Wherever the following terms are used in this
Plan they shall have the meaning specified below, unless the context clearly
indicates otherwise.
"Affiliate" shall have the same meaning as in Rule 12b-2 of the
Exchange Act.
"Beneficiary" shall mean the person or persons properly designated by
the Optionee, including the Optionee's spouse or heirs at law, to exercise such
Optionee's rights under this Plan in the event of the Optionee's death, or if
the Optionee has not designated such person or persons, or such person or
persons shall all have predeceased the Optionee, the executor or administrator
of the Optionee's estate. Designation, revocation and redesignation of
Beneficiaries must be made in writing in accordance with rules established by
the Committee and shall be effective upon delivery to the Committee.
"Board" shall mean the Board of Directors of the Company.
"Bylaws" shall mean the Bylaws of the Company, as amended from time to
time.
"Change of Control" shall be defined at Section 7.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of the Board,
appointed as provided in Section 6.1 and the Bylaws of the Company.
"Common Stock" shall mean the common stock of the Company.
"Company" shall mean COHR Inc., a Delaware corporation, and any
successor corporation thereto, whether by reorganization, merger, consolidation
or otherwise.
"Director" shall mean a member of the Board.
5
"Effective Date" shall mean_____________________________________.
"Employee" shall mean any employee (as defined in accordance with
Section 3401(c) of the Code) of the Company.
"Expiration Date" shall mean the last day of the term of an Option as
established in Section 4.3.
"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
shall be the average of the daily market price for the ten (10) consecutive
trading days immediately preceding the valuation date. The market price for
each such trading day shall be: (i) if the shares of Common Stock are listed
or admitted to trading on any securities exchange or the NASDAQ-National Market
System, the closing price, regular way, on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices on such day,
(ii) if the shares of Common Stock are not listed or admitted to trading on any
securities exchange or the NASDAQ-National Market System, the last reported
sale price on such day or, if no sale takes place on such day, the average of
the closing bid and asked prices on such day, as reported by a reliable
quotation source designated by the Company, or (iii) if the shares of Common
Stock are not listed or admitted to trading on any securities exchange or the
NASDAQ-National Market System and no such last reported sale price or closing
bid and asked prices are available, the average of the reported high bid and
low asked prices on such day, as reported by a reliable quotation source
designated by the Company, or if there shall be no bid and asked prices on such
day, the average of the high bid and low asked prices, as so reported, on the
most recent day (not more than ten (10) days prior to the date in question) for
which prices have been so reported; provided that if there are no bid and asked
prices reported during the ten (10) days prior to the date in question, the
Fair Market Value of the shares of Common Stock shall be determined by the
Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"Key Employee" shall mean any officer or other managerial Employee, as
designated from time to time by the Committee.
"Nonemployee Director" shall mean a member of the Board who is not an
Employee of the Company.
"Option" shall mean a stock option granted pursuant to this Plan.
"Optionee" shall mean a Participant.
"Participant" shall mean a person who has been granted an Option
pursuant to this Plan.
"Plan" shall mean this 1996 Stock Option Plan of COHR Inc.
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, permanent and total disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee by the Company and (ii) at
the discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship that do not exceed one (1)
year. The Committee, in its absolute discretion, shall determine the effect of
all other matters and questions relating to Termination of Employment.
Notwithstanding any other provision of this Plan, the Company has an absolute
and unrestricted right to terminate an Employee's employment at any time for
any reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
-2-
6
ARTICLE II.
SHARES SUBJECT TO PLAN
Section 2.1 Shares Subject to Plan. The shares subject to Options
shall be Common Stock, initially shares of the Company's common stock, no par
value per share, as presently constituted, and the aggregate number of such
shares which may be issued upon exercise of such options or rights or upon any
such awards shall not exceed 300,000 shares. Such total number of shares shall
be adjusted in accordance with the provisions of Section 7.3. The shares of
Common Stock issuable upon exercise or grant of an Option may be either
previously authorized but unissued shares or issued shares which have been
repurchased by the Company.
Section 2.2 Unexercised Options and Other Rights. If any Option
expires or is cancelled without having been fully exercised, the number of
shares subject to such Option but as to which such Option was not exercised
prior to its expiration or cancellation shall not be charged against the
maximum number of shares of Common Stock that may be issued under this Plan nor
shall they be counted against the maximum number of shares that may be awarded
to Key Employees or Nonemployee Directors under the Plan.
Section 2.3 Effect of Certain Exercises. If any shares of Common
Stock issuable pursuant to any Option are surrendered to the Company as payment
for the exercise price of said Option, the number of shares of Common Stock
issuable but so surrendered shall be charged against the maximum number of
shares of Common Stock that may be issued under this Plan. In the event the
Company withholds shares of Common Stock for tax withholding purposes pursuant
to Section 7.6 hereof, the number of shares that would have been issuable but
that are withheld pursuant to the provisions of Section 7.6 shall be charged
against the maximum number of shares of Common Stock that may be issued under
this Plan.
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1 Key Employee Eligibility.
(a) Key Employees selected by the Committee, in its
absolute discretion, shall be eligible to be granted one or more
Options under the Plan. The Committee shall from time to time, in its
absolute discretion:
(i) Determine which Employees are Key Employees
and, from the Key Employees, which Key Employees shall be
granted Options under the Plan.
(ii) Determine the number of shares to be subject
to each such Option granted to eligible Key Employees; and
(iii) Determine the terms and conditions of each
such Option, consistent with this Plan.
(b) Following the determination of the award to be
granted to an eligible Key Employee, the Committee shall instruct the
Secretary of the Company to issue the Option to such Key Employee and
may impose such conditions on the grant of the Option as it deems
appropriate.
-3-
7
Section 3.2 Nonemployee Director Eligibility.
(a) Nonemployee Directors selected by the Committee, in
its absolute discretion, shall be eligible to be granted one or more
Options under the Plan. The Committee shall, from time to time, in
its absolute discretion:
(i) Determine which Nonemployee Directors,
including Nonemployee Directors serving on the Board on the
date this Plan is adopted and Nonemployee Directors thereafter
elected to the Board, shall be granted Options under the Plan;
(ii) Determine the number of shares to be subject
to each such Option granted to eligible Nonemployee Directors;
and
(iii) Determine the terms and conditions of each
such Option, consistent with this Plan.
(b) Following the determination of the award to be
granted to an eligible Nonemployee Director, the Committee shall
instruct the Secretary of the Company to issue the Option to such
Nonemployee Director and may impose such conditions on the grant of
the Option as it deems appropriate.
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1 Option Agreement. Each Option shall be evidenced by a
written stock option agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain the Option exercise
price, the terms for payment of the exercise price, the duration of the Option,
the number of shares of Common Stock to which the Option pertains, the terms of
the vesting schedule by which the Participant's rights under the Option become
nonforfeitable and such other terms and conditions as the Committee determines
appropriate, consistent with this Plan.
Section 4.2 Option Price.
(a) Except as provided at Subsection (b), the price per
share of the shares subject to each Option shall be set by the
Committee; provided, however, that such price shall be no less than
the stated par value of a share of Common Stock, if any, and shall in
all cases be no less than the Fair Market Value of a share of Common
Stock as of the date the Option is granted.
(b) The price per share of the shares subject to each
Option granted to Nonemployee Directors pursuant to Section 3.2(a)
shall in each case be equal to the fair market value of a share of
Common Stock as of the date the Option is granted.
Section 4.3 Option Term. Subject to earlier termination as provided
herein, the term of an Option shall be ten (10) years from the date the Option
is granted. The last day of the term of the Option shall be the Option's
Expiration Date.
Section 4.4 Option Vesting.
(a) For each Optionee who is a Nonemployee Director, the
Optionee's right to exercise an Option shall at all times be 100%
vested.
-4-
8
(b) For each Optionee who is a Key Employee, the
Optionee's right to exercise an Option shall be immediately and
automatically 25% vested upon the grant of the Option and thereafter
shall become vested in accordance with the following schedule:
Anniversary of
Date Option Granted Percentage Vested
------------------- -----------------
First Anniversary 50%
Second Anniversary 75%
Third Anniversary 100%
An Optionee may not exercise any part of an Option which is not
vested. At any time after the grant of an Option, the Committee may,
in its sole discretion and subject to whatever terms and conditions it
determines appropriate, accelerate the period during which an Option
vests hereunder.
(c) Notwithstanding Subsection (b), in the event of a
Change in Control, an Optionee shall automatically become 100% vested
in the Option awarded to such Optionee even if the Change of Control
shall occur prior to the third anniversary of the date an Option is
granted to the Optionee.
(d) No portion of an Option which is unexercisable at
Termination of Employment shall thereafter become exercisable;
provided, however, that provision may be made that such Option shall
become exercisable, with the consent of the Committee, in the event of
a Termination of Employment because of the Optionee's normal
retirement or permanent and total disability (each as determined by
the Committee in accordance with Company policies), death or early
retirement.
(e) Anything in this Section 4.4 to the contrary
notwithstanding, no Option shall be exercisable by any Optionee who is
then subject to Section 16 of the Exchange Act within the period
ending six (6) months after the date the Option is granted. This
Subsection (e) shall not apply to the exercise of any Option by an
Optionee if the grant of such Option to the Optionee was approved in
advance by the Board or, if the Committee is then composed solely of
two or more Nonemployee Directors, by the Committee, or was approved
in advance or subsequently ratified not later than the date of the
next annual meeting of the Company's stockholders, by the
stockholders.
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1 Exercise Rights.
(a) Subject to the restrictions on exercise of any part
of an Option which is nonvested, as provided for at Section 4.4, for
those Participants who are Key Employees, an Option shall be
exercisable by an Optionee while the Optionee is an Employee.
Following an Optionee's Termination of Employment, an Option may be
exercised only in accordance with the following:
(i) If the Optionee dies while an Option is
exercisable under the terms of this Plan, the Optionee's
Beneficiary may exercise such rights, to the extent the
Optionee could have done so immediately preceding his death.
Any such Option must be exercised within twelve (12) months
after the Optionee's death.
-5-
9
(ii) If the Optionee's employment is terminated
due to his permanent and total disability, as determined by
the Committee, the Optionee may exercise his Option, to the
extent exercisable as of his Termination of Employment, within
twelve (12) months after termination, but no later than the
Option's Expiration Date.
(iii) If the Optionee's employment is terminated
for any reason other than those set forth in Paragraph (i) or
(ii) above, the Optionee may exercise his Option, to the
extent exercisable as of his Termination of Employment, within
three (3) months after Termination of Employment, but not
later than the Option's Expiration Date.
(b) For those Participants who are Nonemployee Directors,
an Option shall be exercisable by an Optionee while the Optionee is
serving as a member of the Board. If the Optionee's service as a
member of the Board terminates, then unless such termination is due to
the Optionee's resignation as a member of the Board, the Optionee may
exercise his Option within ninety (90) days following the date the
Optionee ceases to be a member of the Board, but not later than the
Option's Expiration Date.
Section 5.2 Partial Exercise. Any exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares.
Section 5.3 Manner of Exercise. All or a portion of any exercisable
Option shall be deemed exercised upon:
(a) Delivery of all of the following to the Secretary of
the Company or his office:
(i) A written notice complying with the
applicable rules established by the Committee or the Company
stating that the Option, or a portion thereof, is exercised.
The notice shall be signed by the Optionee or other person
then entitled to exercise the Option;
(ii) 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, placing legends on
share certificates and issuing stop-transfer notices to
agents and registrars; and
(iii) In the event that the Option shall be
exercised pursuant to Section 5.1(a)(i) by any person or
persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the Option; and
(b) Full cash payment to the Secretary of the Company for
the exercise price of the shares being purchased under the Option.
However, at the discretion of the Committee, the terms of the Option
may (i) allow a delay in payment up to thirty (30) days from the date
the Option, or portion thereof, is exercised, (ii) allow payment, in
whole or in part, through the delivery of shares of Common Stock owned
by the Optionees, (iii) allow payment, in whole or in part, through
the surrender of shares of Common Stock then issuable upon exercise of
the Option: or (iv) allow payment, in whole or in part, through the
delivery of property of any kind which constitutes good and valuable
consideration.
Section 5.4 Transfer of Shares to an Employee. As soon as
practicable after receipt by the Company, pursuant to Section 5.3(b), of full
cash payment for the shares with respect to which an Option, or portion
thereof, is exercised by an Optionee, with respect to each such exercise, the
Company shall transfer to the Optionee the number of shares equal to the result
of dividing:
-6-
10
(a) The amount of the payment made by the Optionee to the
Company pursuant to Section 5.3(b), by
(b) The price per share of the shares subject to the
Option as determined pursuant to Section 4.2.
Section 5.5 Certain Timing Requirements. At the discretion of the
Committee, shares of Common Stock issuable to the Optionee upon exercise of the
Option may be used to satisfy the Option exercise price or the tax withholding
consequences of such exercise only (i) during such periods in which trading of
the Company Common Stock is permitted for Employees of the Company under
Company policy as in effect from time to time or (ii) pursuant to an
irrevocable written election by the Optionee to use shares of Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes made at least six (6) months prior to the
payment of such Option price or withholding taxes.
Section 5.6 Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or to deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law, or under
the rulings or regulations of the Securities and Exchange Commission
or any other governmental regulatory body which the Committee shall,
in its absolute discretion, deem necessary or advisable;
(c) Obtaining any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable;
(d) 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; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.
Section 5.7 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 purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
ARTICLE VI.
ADMINISTRATION
Section 6.1 Compensation Committee. The Compensation Committee shall
consist of two or more Directors appointed by and holding office at the
pleasure of the Board. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be
filled by the Board.
Section 6.2 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 interpret this
Plan, the Options, and the agreements pursuant to which the Options are granted
or awarded, and
-7-
11
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 grant or award under this Plan need not be the same with
respect to each Optionee. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under this Plan.
Section 6.3 Majority Rule. The Committee shall act by a majority of
its members in attendance at a meeting, or to the extent permitted by law and
the Bylaws, by telephonic meeting, at which a quorum is present or by a
memorandum or other written instrument signed by all members of the Committee.
Section 6.4 Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. 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 in good faith shall be
final and binding upon all Optionees, the Company and all other interested
persons. No members of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to this
Plan, or any award made hereunder, and all members of the Committee shall be
fully protected by the Company in respect of any such action, determination or
interpretation.
Section 6.5 No Liability. No member of the Board or the Committee,
or Director, officer or employee of the Company shall be liable, responsible or
accountable in damages or otherwise for any determination made or other action
taken or any failure to act by such person so long as such person is not
determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.
Section 6.6 Indemnification. To the fullest extent permitted by law,
each of the members of the Board and the Committee and each of the Directors,
officers and employees of the Company shall be held harmless and be indemnified
by the Company for any liability, loss (including amounts paid in settlement),
damages or expenses (including reasonable attorneys' fees) suffered by virtue
of any determinations, acts or failures to act, or alleged acts or failures to
act, in connection with the administration of this Plan so long as such person
is not determined by a final adjudication to be guilty of willful misconduct
with respect to such determination, action or failure to act.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1 Not Transferable. Options under this Plan may not be
sold, pledged, assigned or transferred in any manner other than by will or the
laws of descent and distribution; provided, however, that an Optionee may
designate a Beneficiary to exercise his Option under this Plan after the
Optionee's death. No Option or interest or right therein shall be liable for
the debts, contracts or engagements of the Optionee or the Optionee's
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 7.1 shall prevent transfers by will or by the applicable laws of
descent and distribution. An Option shall be exercised during the Optionee's
lifetime only by the Optionee or his guardian or legal representative.
-8-
12
Section 7.2 Amendment, Suspension or Termination of this Plan. 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. However, without
approval of the Company's stockholders given within twelve (12) months before
or after the action by the Board or the Committee, no action of the Committee
or Board may, except as provided in Section 7.3, increase the limits imposed in
Section 2.1 on the maximum number of shares which may be issued under this
Plan, and no action of the Committee or Board may be taken that would otherwise
require stockholder approval as a matter of applicable law, regulation or rule.
No amendment, suspension or termination of this Plan shall, without the consent
of the holder of an Option, alter or impair any rights or obligations under any
Option theretofore granted or awarded. No Option may be granted or awarded
during any period of suspension nor after termination of this Plan.
Section 7.3 Changes in Common Stock or Assets of the Company.
(a) In the event that the outstanding shares of Common
Stock are hereafter changed into or exchanged for cash or a different
number or kind of shares or other securities of the Company, or of
another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up,
stock dividend or combination of shares, appropriate adjustments shall
be made by the Committee in the number and kind of shares for the
purchase of which Options may be granted, including adjustments of the
limitation in Section 2.1 on the maximum number and kind of shares
which may be issued.
(b) In the event of such a change or exchange, other than
for shares or securities of another corporation or by reason of
reorganization, the Committee shall also make an appropriate and
equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be
exercisable. Such adjustment shall be made with the intent that after
the change or exchange of shares, each Optionee's proportionate
interest shall be maintained as before the occurrence of such event.
Such adjustment in an outstanding Option may include a necessary or
appropriate corresponding adjustment in the Option exercise price, but
shall be made without change in the total price applicable to the
Option, or the unexercised portion thereof (except for any change in
the aggregate price resulting from rounding off of share quantities or
prices).
(c) In the event of a "spin-off" or other substantial
distribution of assets of the Company which has a material diminutive
effect upon the Fair Market Value of the Company's Common Stock, the
Committee may in its discretion make an appropriate and equitable
adjustment to the Option exercise price to reflect such diminution.
Section 7.4 Change in Control. In the event of a Change in Control
or the liquidation or dissolution of the Company, the terms of an Option shall
provide that all granted or awarded Options will immediately vest in the
Optionee, and for a specified period of time prior to such event, such Option
shall be exercisable as to all shares covered thereby, notwithstanding anything
to the contrary in (i) Section 4.4 or (ii) the provisions of such Option. For
purposes of this Section 7.4 and this Plan in general, the term "Change in
Control" shall mean the merger or consolidation of the Company with or into
another corporation, where the Company is not the surviving corporation, the
exchange of all or substantially all of the assets of the Company for the
securities of another corporation, the acquisition by another corporation or
person of all or substantially all of the Company's assets or 80% or more of
the Company's then outstanding voting stock.
Section 7.5 Approval of Plan by Stockholders. This Plan shall be
submitted for the approval of the Company's stockholders within twelve (12)
months after the date of the Board's initial adoption of this Plan. Options
may be granted prior to such stockholder approval, provided that such Options
shall not be exercisable prior to the time when this Plan is approved by the
stockholders, and provided further that if such approval has not been obtained
at the end of said 12-month period, all Options previously granted under this
Plan shall thereupon be cancelled and become null and void. The Company shall
take such actions with respect to the Plan as may be necessary to satisfy the
requirements of Rule 16b-3.
-9-
13
Section 7.6 Tax Withholding. The Company shall be entitled to
require payment or deduction from other compensation payable to each Optionee
of any sums required by federal, state or local tax law to be withheld with
respect to any Option. The Committee may in its discretion allow such Optionee
to elect to have the Company withhold shares of Common Stock (or allow the
return of shares of Common Stock) having a Fair Market Value equal to the sums
required to be withheld. If the Optionee elects to advance such sums directly,
written notice of that election shall be delivered on or prior to such exercise
and, whether pursuant to such election or pursuant to a requirement imposed by
the Company payment in cash or by check of such sums for taxes shall be
delivered within two (2) days after the date of exercise. If, as allowed by
the Committee, the Optionee elects to have the Company withhold Shares of
Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld, the value of the shares
of Common Stock to be withheld (or returned as the case may be) will be equal
to the Fair Market Value of such shares as of the date that the amount of tax
to be withheld is to be determined (the "Tax Date"). Elections by such persons
to have shares of Common Stock withheld for this purpose will be subject to the
following restrictions: (a) the election must be made on or prior to the Tax
Date, (b) the election must be irrevocable, (c) the election shall be subject
to the disapproval of the Committee, and (d) if the person is an officer of the
Company within the meaning of Section 6 of the Exchange Act, the election shall
be subject to such additional restrictions as the Committee may impose in an
effort to secure the benefits of any regulations thereunder. The Committee
shall not be obligated to issue shares and/or distribute cash to any person
upon exercise of any right until such payment has been received or shares have
been so withheld, unless withholding (or offset against a cash payment) as of
or prior to the date of such exercise is sufficient to cover all such sums due
or which may be due with respect to such exercise.
Section 7.7 Limitations Applicable to Section 16 Persons.
(a) Notwithstanding any other provision of this Plan, any
Option granted to a Key Employee who is then subject to Section 16 of
the Exchange Act is subject to the following additional limitations:
(i) The Option agreement may provide for the
issuance of shares of Common Stock as a stock bonus for no
consideration other than services rendered; and
(ii) In the event of an Option agreement under
which shares of Common Stock are or in the future may be
issued for any type of consideration other than services
rendered, the amount of such consideration shall be equal to
the minimum amount (such as the par value of such shares)
required to be received by the Company to comply with
applicable state law.
(b) Notwithstanding any other provision of this Plan,
this Plan and any Option granted to a Key Employee 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) that are requirements for the application of such
exemptive rule. Any such additional limitation shall be set forth in
an annex to this Plan, such annex to be incorporated herein by this
reference and made part of this Plan.
(c) With respect to persons subject to Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee.
Moreover, in the event the Plan does not include a provision required
by Rule 16b-3 to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of
awards) shall be deemed automatically to be incorporated by reference
into the Plan insofar as participants subject to Section 16 are
concerned.
-10-
14
Section 7.8 Release of Restrictions. Any or all of the foregoing
limitations in Sections 7.7(a) on Options granted to Key Employees shall be
suspended if, to the extent, as to such persons, and for so long as the
Securities and Exchange Commission by regulation or official staff
interpretation or a no-action letter issued to the Company determines that such
limitation is not necessary to secure the benefits otherwise available with
respect to a "plan" or particular award, as the case may be, under any
applicable exemptive rule under Section 16 of the Exchange Act.
Section 7.9 Effect of Plan Upon Options 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 (a) to establish any other forms of incentives
or compensation for employees of the Company or (b) to grant or assume options
or other rights otherwise than under this Plan in connection with any proper
corporate or partnership 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, firm or association or the performance of
services for the benefit of the Company.
Section 7.10 Compliance with Laws. This Plan is 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 and Options granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
Section 7.11 Titles. Titles are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of this
Plan.
Section 7.12 Governing Law. This Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of Delaware.
Section 7.13 Severability. If any portion of this Plan is declared
by a court of competent jurisdiction to be invalid or unenforceable after all
appeals have either been exhausted or the time for any appeals to be taken has
expired, the remainder of the terms, provisions, covenants and restrictions of
this Plan shall remain in full force and effect and in no way be affected,
impaired or invalidated.
IN WITNESS WHEREOF, COHR Inc. has caused this instrument to be
executed by its duly authorized officers on this __________ day of
________________________________, 1996.
COHR INC.
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
-11-
