Exhibit 10.1
AMENDED 1997 STOCK OPTION AND INCENTIVE PLAN
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HURCO COMPANIES, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to
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promote the long-term interests of the Company and its
shareholders by providing a means for attracting and retaining officers,
directors and key employees of the Company and its Affiliates.
2. Definitions. The following definitions are
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applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Company as such terms are defined in Code sections 424(e)
and (f), respectively.
"Affiliated SAR" -- means a SAR that is granted in connection
with a related Option, and which automatically will be deemed to be exercised at
the same time that the related Option is exercised. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.
"Award" -- means the grant by the Committee of Incentive Stock
Options, Non-Qualified Stock Options, SARs, Restricted Shares, Performance
Shares or any combination thereof, as provided in the Plan.
"Award Agreement" -- means the written agreement setting forth
the terms and provisions applicable to each Award granted under the Plan.
"Base Price" -- means the amount over which the appreciation
in value of a Share will be measured upon exercise of an SAR.
"Board" -- means the Board of Directors of the Company.
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"Change in Control" -- means each of the events specified in
the following clauses (i) through (iii): (i) any third person, including a
"group" as defined in Section 13(d)(3) of the Exchange Act after the date of the
adoption of the Plan by the Board, first becomes the beneficial owner of shares
of the Company with respect to which 25% or more of the total number of votes
for the election of the Board of Directors of the Company may be cast, (ii) as a
result of, or in connection with, any cash tender offer, exchange offer, merger
or other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the Company
shall cease to constitute a majority of the Board of Directors of the Company or
(iii) the shareholders of the Company shall approve an agreement providing
either for a transaction in which the Company will cease to be an independent
publicly owned entity or for a sale or other disposition of all or substantially
all the assets of the Company; provided, however, that the occurrence of any of
such events shall not be deemed a Change in Control if, prior to such
occurrence, a resolution specifically approving such occurrence shall have been
adopted by at least a majority of the Board of Directors of the Company.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee appointed by the Board
pursuant to Section 3 of the Plan.
"Company" -- means Hurco Companies, Inc., an Indiana
corporation.
"Continuous Service" -- means, in the case of an Employee, the
absence of any interruption or termination of service as an Employee of the
Company or an Affiliate; and in the case of an individual who is not an
Employee, the absence of any interruption or termination of the service
relationship between the individual and the Company or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or in the case of any
transfer between the Company and an Affiliate or any successor to the Company.
"Director" -- means any individual who is a member of the
Board.
"Disability" -- means total and permanent disability as
determined by the Committee pursuant to Code section 22(e)(3).
"Employee" -- means any person, including an officer or
Director, who is employed by the Company or any Affiliate.
"Exchange Act" -- means the Securities Exchange Act of 1934,
as amended.
"Exercise Price" -- means the price per Share at which the
Shares subject to an Option may be purchased upon exercise of the Option.
"Freestanding SAR" -- means a SAR that is granted
independently of any Option.
"Incentive Stock Option" -- means an option to purchase Shares
granted by the Committee pursuant to the terms of the Plan which is intended to
qualify under Code section 422.
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"Market Value" -- means the last reported sale price on the
date in question (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) of one Share on the
principal exchange on which the Shares are listed for trading, or if the Shares
are not listed for trading on any exchange, the average trading price of one
share on the date in question as reported on the Nasdaq National Market or any
similar system then in use, or, if the Shares are not listed on the Nasdaq
National Market, the mean between the closing high bid and low asked quotations
of one Share on the date in question as reported by Nasdaq or any similar system
then in use, or, if no such quotations are available, the fair market value on
such date of one Share as the Committee shall determine.
"Non-Qualified Stock Option" -- means an option to purchase
Shares granted by the Committee pursuant to the terms of the Plan, which option
is not intended to qualify under Code section 422.
"Option" -- means an Incentive Stock Option or a Non-Qualified
Stock Option.
"Participant" -- means any individual who is selected by the
Committee to receive an Award.
"Performance Cycle" -- means the period of time, designated
by the Committee, over which Performance Shares may be earned.
"Performance Shares" -- means Shares awarded pursuant to
Section 12 of the Plan.
"Plan" -- means the Hurco Companies, Inc., 1997 Stock Option
and Incentive Plan.
"Reorganization" -- means the liquidation or dissolution of
the Company or any merger, consolidation or combination of the Company (other
than a merger, consolidation or combination in which the Company is the
continuing entity and which does not result in the outstanding Shares being
converted into or exchanged for different securities, cash or other property or
any combination thereof).
"Restricted Period" -- means the period of time selected by
the Committee for the purpose of determining when restrictions are in effect
under Section 10 of the Plan with respect to Restricted Shares.
"Restricted Shares" -- means Shares which have been
contingently awarded to a Participant by the Committee subject to the
restrictions referred to in Section 10 of the Plan, so long as such restrictions
are in effect.
"Retirement" -- means, with respect to an Employee, cessation
of Continuous Service on or after age 65 or such other age as set forth in the
Company's retirement policy as in effect from time to time and, with respect to
a Director who is not an Employee, cessation of Continuous Service on the Board.
"Stock Appreciation Right" or "SAR" -- means an Award, granted
alone or in connection with a related Option, pursuant to Section 11 of the
Plan.
"Securities Act" -- means the Securities Act of 1933, as
amended.
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"Shares" -- means the shares of common stock, no par value, of
the Company.
"Tandem SAR" -- means a SAR that is granted in connection with
a related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).
3. Administration. The Plan shall be administered by the
Committee, which shall consist of two or more members of the Board, each of whom
shall be a "non-employee director" as provided under Rule 16b-3 of the Exchange
Act, and an "outside director" as provided under Code section 162(m). The
members of the Committee shall be appointed by the Board. Except as limited by
the express provisions of the Plan, the Committee shall have sole and complete
authority and discretion to (a) select Participants and grant Awards; (b)
determine the number of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (c) determine the terms and
conditions upon which Awards shall be granted under the Plan; (d) prescribe the
form and terms of Award Agreements; (e) establish procedures and regulations for
the administration of the Plan; (f) interpret the Plan; and (g) make all
determinations deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all members of the Committee without a
meeting, shall be acts of the Committee. All determinations and decisions made
by the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum deference
permitted by law.
4. Participants. The Committee may select from time
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to time Participants in the Plan from those officers,
Directors and key Employees of the Company or its Affiliates who, in the opinion
of the Committee, have the capacity for contributing
in a substantial measure to the successful performance of the Company or its
Affiliates.
5. Shares Subject to Plan, Limitations on Grants and
Exercise Price.
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Subject to adjustment by the operation
of Section 13 hereof:
(a) The maximum number of Shares which may be issued
with respect to Awards made under the Plan is 750,000 Shares.
The Shares with respect to which Awards may be made under the
Plan may either be authorized and unissued shares or unissued
shares heretofore or hereafter reacquired and held as treasury
shares. Any Award which expires, terminates or is surrendered
for cancellation or with respect to Restricted Shares which is
forfeited (so long as any cash dividends paid on such Shares
are also forfeited), may be subject to new Awards under the
Plan with respect to the number of Shares as to which a
termination or forfeiture has occurred.
(b) The number of Shares which may be granted under
the Plan to any Participant during the term of the Plan under
all forms of Awards shall not exceed 200,000 Shares.
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(c) Notwithstanding any other provision under the
Plan, the Exercise Price for any Incentive Stock Option and
the Base Price for any Tandem or Affiliated SAR granted in
connection with an Incentive Stock Option awarded under the
Plan may not be less than the Market Value of the Shares on
the date of grant.
6. General Terms and Conditions of Options. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and to prescribe the terms and conditions
(which need not be identical among Participants) of the Options. Each Option
shall be evidenced by an Award Agreement that shall specify: (a) the Exercise
Price, (b) the number of Shares subject to the Option, (c) the expiration date
of the Option, (d) the manner, time and rate (cumulative or otherwise) of
exercise of the Option, (e) the restrictions, if any, to be placed upon the
Option or upon Shares which may be issued upon exercise of the Option, (f) the
conditions, if any, under which a Participant may transfer or assign Options,
and (g) any other terms and conditions as the Committee, in its sole discretion,
shall determine. The Committee may, as a condition of granting any Option,
require that a Participant agree to surrender for cancellation one or more
Options previously granted to such Participant.
7. Exercise of Options.
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(a) Except as provided in Section 16, an Option
granted under the Plan shall be exercisable during the
lifetime of the Participant to whom such Option was granted
only by such Participant, and except as provided in Section 8
of the Plan, no Option may be exercised unless at the time the
Participant exercises the Option, the Participant has
maintained Continuous Service since the date of the grant of
the Option.
(b) To exercise an Option under the Plan, the Participant must give
written notice to the Company specifying the number of
Shares with respect to which the Participant elects to exercise
the Option together with full payment of the Exercise Price. The
date of exercise shall be the date on which the notice is received
by the Company. Payment may be made either (i) in cash (including
check, bank draft or money order), (ii) by
tendering Shares already owned by the Participant and having a
Market Value on the date of exercise equal to the Exercise Price,
(iii) by requesting that the Company withhold Shares issuable upon
exercise of the Option having a Market Value equal to the Exercise
Price, or (iv) by any other means determined by the
Committee in its sole discretion.
8. Termination of Options. Unless otherwise
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specifically provided by the Committee in the Award Agreement or
any amendment thereto, Options shall terminate as provided in this Section.
(a) Unless sooner terminated under the provisions of
this Section, Options shall expire on the earlier of the date
specified in the Award Agreement or the expiration of ten (10)
years from the date of grant.
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(b) If the Continuous Service of a Participant is
terminated for cause, or voluntarily by the Participant for
any reason other than death, Disability or Retirement, all
rights under any Options granted to the Participant shall
terminate immediately upon the Participant's cessation of
Continuous Service.
(c) If the Continuous Service of a Participant is
terminated by reason of Retirement or terminated by the
Company without cause, the Participant may exercise
outstanding Options to the extent that the Participant was
entitled to exercise the Options at the date of cessation of
Continuous Service, but only within the period of three (3)
months immediately succeeding the Participant's cessation of
Continuous Service, and in no event after the applicable
expiration dates of the Options.
(d) In the event of the Participant's death or
Disability, the Participant or the Participant's beneficiary,
as the case may be, may exercise outstanding Options to the
extent that the Participant was entitled to exercise the
Options at the date of cessation of Continuous Service, but
only within the one-year period immediately succeeding the
Participant's cessation of Continuous Service by reason of
death or Disability, and in no event after the applicable
expiration date of the Options.
9. Incentive Stock Options. Incentive Stock Options may be
granted only to Participants who are Employees. Any provisions of the Plan to
the contrary notwithstanding, (a) no Incentive Stock Option shall be granted
more than ten years from the earlier of the date the Plan is adopted by the
Board of Directors of the Company or approved by the Company's Shareholders, (b)
no Incentive Stock Option shall be exercisable more than ten years from the date
the Incentive Stock Option is granted, (c) the Exercise Price of any Incentive
Stock Option shall not be less than the Market Value per Share on the date such
Incentive Stock Option is granted, (d) any Incentive Stock Option shall not be
transferable by the Participant to whom such Incentive Stock Option is granted
other than by will or the laws of descent and distribution and shall be
exercisable during such Participant's lifetime only by such Participant, (e) no
Incentive Stock Option shall be granted which would permit a Participant to
acquire, through the exercise of Incentive Stock Options in any calendar year,
under all plans of the Company and its Affiliate, Shares having an aggregate
Market Value (determined as of the time any Incentive Stock Option is granted)
in excess of $100,000 (determined by assuming that the Participant will exercise
each Incentive Stock Option on the date that such Option first becomes
exercisable), and (f) no Incentive Stock Option may be exercised more than three
(3) months after the Participant's cessation of Continuous Service (one (1) year
in the case of Disability) for any reason other than death. Notwithstanding the
foregoing, in the case of any Participant who, at the date of grant, owns shares
possessing more than 10% of the total combined voting power of all classes of
capital stock of the Company or any Affiliate, the Exercise Price of any
Incentive Stock Option shall not be less than 110% of the Market Value per Share
on the date such Incentive Stock Option is granted and such Incentive Stock
Option shall not be exercisable more than five years from the date such
Incentive Stock Option is granted.
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10. Terms and Conditions of Restricted Shares. The Committee
shall have full and complete authority, subject to the limitations of the Plan,
to grant Awards of Restricted Shares and to prescribe the terms and conditions
(which need not be identical among Participants) in respect of the Awards.
Unless the Committee otherwise specifically provides in the Award Agreement, an
Award of Restricted Shares shall be subject to the following provisions:
(a) At the time of an Award of Restricted Shares, the
Committee shall establish for each Participant a Restricted
Period during which, or at the expiration of which, the
Restricted Shares shall vest. Subject to paragraph (e) of this
Section, the Participant shall have all the rights of a
shareholder with respect to the Restricted Shares, including
but not limited to, the right to receive all dividends paid on
the Restricted Shares and the right to vote the Restricted
Shares. The Committee shall have the authority, in its
discretion, to accelerate the time at which any or all of the
restrictions shall lapse with respect to any Restricted Shares
prior to the expiration of the Restricted Period, or to remove
any or all restrictions, whenever it may determine that such
action is appropriate by reason of changes in applicable tax
or other laws or other changes in circumstances occurring
after the commencement of the Restricted Period.
(b) If a Participant ceases Continuous Service for
any reason, including death, before the Restricted Shares have
vested, a Participant's rights with respect to the unvested
portion of the Restricted Shares shall terminate and be
returned to the Company.
(c) Each certificate issued in respect to Restricted
Shares shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power
endorsed in blank, with the Company and shall bear the
following (or a similar) legend:
"The transferability of this certificate and the
shares represented hereby are subject to the terms and
conditions (including forfeiture) contained in the 1997 Stock
Option and Incentive Plan of Hurco Companies, Inc., and an
Award Agreement entered into between the registered owner and
Hurco Companies, Inc. Copies of the Plan and Award Agreement
are on file in the office of the Secretary of the Company."
(d) At the time of an Award of Restricted Shares, the
Participant shall enter into an Award Agreement with the
Company in a form specified by the Committee agreeing to the
terms and conditions of the Award.
(e) At the time of an Award of Restricted Shares, the
Committee may, in its discretion, determine that the payment
to the Participant of dividends declared or paid on the
Restricted Shares by the Company, or a specified portion
thereof, shall be deferred until the earlier to occur of (i)
the lapsing of the restrictions imposed with respect to the
Restricted Shares, or (ii) the forfeiture of such Restricted
Shares under paragraph (b) of this Section, and shall be held
by the Company for the account of the Participant until such
time. In the event of deferral, there shall be credited at the
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end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per
annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with accrued interest,
shall be made upon the earlier to occur of the events
specified in (i) and (ii) of this paragraph.
(f) At the expiration of the restrictions imposed by
this Section, the Company shall redeliver to the Participant
the certificate(s) and stock power deposited with the Company
pursuant to paragraph (c) of this Section and the Shares
represented by the certificate(s) shall be free of all
restrictions.
(g) No Award of Restricted Shares may be
assigned, transferred or encumbered.
11. Grant of SARs. Subject to the terms and conditions of the
Plan, a SAR Award may be made to Participants at any time and from time to time
as shall be determined by the Committee, in its sole discretion. The Committee
may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination
thereof as follows:
(a) The Committee, subject to the limitations of the
Plan, shall have complete discretion to determine the Exercise
Price and other terms and conditions of SARs granted under the
Plan. Each SAR Award shall be evidenced by an Award Agreement
specifying the terms and conditions of the Award, including
its term, the Base Price and the conditions of exercise.
(b) The Base Price of Shares with respect to a Tandem
or Affiliated SAR Award shall equal the Exercise Price of the
Shares under the related Option.
(c) Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related
Option. A Tandem SAR may be exercised only with respect to the
Shares for which its related Option is then exercisable. With
respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (i) the Tandem SAR shall expire no
later than the expiration of the underlying Incentive Stock
Option; (ii) the value of the payout with respect to the
Tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Exercise Price of the
underlying Incentive Stock Option and the Market Value of the
Shares subject to the underlying Incentive Stock Option at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR
shall be exercisable only when the Market Value of the Shares
subject to the Incentive Stock Option exceeds the Exercise
Price of the Incentive Stock Option.
(d) Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount
determined by multiplying:
(i) The difference between the Market
Value of a Share on the date of
exercise over the Base Price; times
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(ii) The number of Shares with respect to
which the SAR Award is exercised.
At the discretion of the Committee, payment for a SAR
may be in cash, Shares or a combination thereof.
12. Performance Shares. The Committee, in its sole discretion,
may from time to time authorize the grant of Performance Shares upon the
achievement of performance goals (which may be cumulative and/or alternative) as
may be established, in writing, by the Committee based on any one or any
combination of the following business criteria: (a) earnings per Share; (b)
return on equity; (c) return on assets; (d) operating income; or (e) Market
Value per Share. At the time as it is certified, in writing, by the Committee
that the performance goals established by the Committee have been attained or
otherwise satisfied within the Performance Cycle, the Committee shall authorize
the payment of cash in lieu of Performance Shares or the issuance of Performance
Shares registered in the name of the Participant, or a combination of cash and
Shares. The grant of an Award of Performance Shares shall be evidenced by an
Award Agreement containing the terms and conditions of the Award as determined
by the Committee. To the extent required under Code Section 162(m), the business
criteria under which performance goals are determined by the Committee shall be
resubmitted to shareholders for reapproval no later than the first shareholder
meeting that occurs in the fifth year following the year in which shareholders
previously approved the Plan.
If the Participant ceases Continuous Service before the end of
a Performance Cycle for any reason other than Retirement, Disability, or death,
the Participant shall forfeit all rights with respect to any Performance Shares
that were being earned during the Performance Cycle. The Committee, in its sole
discretion, may establish guidelines providing that if a Participant ceases
Continuous Service before the end of a Performance Cycle by reason of
Retirement, Disability, or death, the Participant shall be entitled to a
prorated payment with respect to any Performance Shares that were being earned
during the Performance Cycle.
13. Adjustments Upon Changes in Capitalization. In the event
of any change in the outstanding Shares subsequent to the effective date of the
Plan by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any change
in the corporate structure or Shares of the Company, the maximum aggregate
number and class of shares as to which Awards may be granted under the Plan and
the number and class of shares with respect to which Awards theretofore have
been granted under the Plan shall be appropriately adjusted by the Committee to
prevent the dilution or diminution of Awards. The Committee's determination with
respect to any adjustments shall be conclusive. Any shares or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Shares shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing the shares or
other securities shall be legended and deposited with the Company in the manner
provided in Section 10 of this Agreement.
14. Effect of Reorganization. Unless otherwise
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provided by the Committee in the Award Agreement, Awards will
be affected by a Reorganization as follows:
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(a) If the Reorganization is a dissolution or
liquidation of the Company then (i) the restrictions on
Restricted Shares shall lapse and (ii) each outstanding Option
or SAR Award shall terminate, but each Participant to whom the
Option or SAR was granted shall have the right, immediately
prior to the dissolution or liquidation to exercise the Option
or SAR in full, notwithstanding the provisions of Section 9,
and the Company shall notify each Participant of such right
within a reasonable period of time prior to any dissolution or
liquidation.
(b) If the Reorganization is a merger or
consolidation, other than a Change in Control subject to
Section 15 of this Plan, upon the effective date of the
Reorganization (i) each Participant shall be entitled, upon
exercise of an Option in accordance with all of the terms and
conditions of the Plan, to receive in lieu of Shares, shares
or other securities or consideration as the holders of Shares
shall be entitled to receive pursuant to the terms of the
Reorganization; and (ii) each holder of Restricted Shares
shall receive shares or other securities as the holders of
Shares received which shall be subject to the restrictions set
forth in Section 10 unless the Committee accelerates the lapse
of such restrictions and the certificate(s) or other
instruments representing or evidencing the shares or other
securities shall be legended and deposited with the Company in
the manner provided in Section 10 of this Plan.
The adjustments contained in this Section and the manner of
application of such provisions shall be determined solely by the Committee.
15. Effect of Change of Control. If the Continuous Service of
any Participant of the Company or any Affiliate is involuntarily terminated, for
whatever reason, at any time within twelve months after a Change in Control,
unless the Committee shall have otherwise provided in the Award Agreement, (a)
any Restricted Period with respect to an Award of Restricted Shares shall lapse
upon the Participant's termination of Continuous Service and all Shares of
Restricted Shares shall become fully vested in the Participant to whom the award
was made; and (b) with respect to Performance Shares, the Participant shall be
entitled to receive a prorata payment of Shares to the same extent as if the
Participant ceases Continuous Service by reason of Retirement under Section 12
of the Plan. If a tender offer or exchange offer for Shares (other than such an
offer by the Company) is commenced, or if the event specified in clause (iii) of
the definition of a Change in Control contained in Section 2 shall occur, unless
the Committee shall have otherwise provided in the Award Agreement, all Option
and SAR Awards theretofore granted and not fully exercisable shall become
exercisable in full upon the happening of such event and shall remain
exercisable in accordance with their terms; provided, however, that no Option or
SAR shall be exercisable by a director or officer of the Company within six
months of the date of grant of the Option or SAR and no Option or SAR which has
previously been exercised or otherwise terminated shall become exercisable.
16. Assignments and Transfers. Except as otherwise expressly
authorized by the Committee in the Award Agreement or any amendment thereto
during the lifetime of a Participant no Award nor any right or interest of a
Participant in any Award under the Plan may be assigned, encumbered or
transferred otherwise than by will or the laws of descent and distribution.
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17. Employee Rights Under the Plan. No officer, Employee or
other person shall have a right to be selected as a Participant nor, having been
so selected, to be selected again as a Participant and no officer, Employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Company or any Affiliate.
Neither the Plan nor any action taken under the Plan shall be construed as
giving any Employee any right to be retained in the employ of the Company or any
Affiliate.
18. Delivery and Registration of Shares. The Company's
obligation to deliver Shares with respect to an Award shall, if the Committee
requests, be conditioned upon the receipt of a representation as to the
investment intention of the Participant to whom such Shares are to be delivered,
in such form as the Committee shall determine to be necessary or advisable to
comply with the provisions of the Securities Act or any other applicable federal
or state securities laws. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of the representation under the Securities Act or
other state securities laws. The Company shall not be required to deliver any
Shares under the Plan prior to (i) the admission of such Shares to listing on
any stock exchange or system on which Shares may then be listed, and (ii) the
completion of any registration or other qualification of the Shares under any
state or federal law, rule or regulation, as the Company shall determine to be
necessary or advisable.
19. Withholding Tax. Prior to the delivery of any Shares or
cash pursuant to an Award, the Company shall have the right and power to deduct
or withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy all applicable tax withholding requirements. The
Committee, in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit or require a Participant to satisfy all or
part of the tax withholding obligations in connection with an Award by (a)
having the Company withhold otherwise deliverable Shares, or (b) delivering to
the Company Shares already owned having a Market Value equal to the amount
required to be withheld. The amount of the withholding requirement shall be
deemed to include any amount which the Committee determines, not to exceed the
amount determined by using the maximum federal, state or local marginal income
tax rates applicable to the Participant with respect to the Award on the date
that the amount of tax to be withheld is to be determined for these purposes.
For these purposes, the value of the Shares to be withheld or delivered shall be
equal to the Market Value as of the date that the taxes are required to be
withheld.
20. Termination, Amendment and Modification of Plan. The Board
may at any time terminate, and may at any time and from time to time and in any
respect amend or modify, the Plan; provided however, that to the extent
necessary and desirable to comply with Rule 16b-3 under the Exchange Act or Code
section 422 (or any other applicable law or regulation, including requirements
of any stock exchange or quotation system on which the Company's common stock is
listed or quoted) shareholder approval of any Plan amendment shall be obtained
in the manner and to the degree as is required by the applicable law or
regulation; and provided further, that no termination, amendment or modification
of the Plan shall in any manner affect any Award theretofore granted pursuant to
the Plan without the consent of the Participant to whom the Award was granted or
transferee of the Award.
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21. Effective Date and Term of Plan. The Plan shall become
effective upon its adoption by the Board of Directors, subject to ratification
by the shareholders of the Company at the next annual meeting, and shall
continue in effect for a term of ten years from the date of adoption by the
Board of Directors unless sooner terminated under Section 20 of the Plan.
22. Governing Law. The Plan and Award Agreements
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shall be construed in accordance with and governed by the
laws of the State of Indiana.
23. Awards to Foreign Nationals and Employees Outside the
United States. To the extent the Committee deems it necessary, appropriate or
desirable to comply with foreign law or practice and to further the purpose of
this Plan, the Committee may, without amending this Plan, (a) establish special
rules applicable to Awards granted to Participants who are foreign nationals,
are employed outside the United States, or both, including rules that differ
from those set forth in this Plan, and (b) grant Awards to such Participants in
accordance with those rules.
Adopted by the Board of Directors of Hurco Companies, Inc.
as of March 6, 1997
Adopted by the Shareholders of Hurco Companies, Inc.
as of May 29, 1997
Approved as Amended by the Board of Directors of
Hurco Companies, Inc. as of December 7, 1999
Approved as Amended by the Shareholders of Hurco
Companies, Inc. as of May 23, 2000
