<PAGE>
SICOR INC.
AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN
1. INTRODUCTION AND PURPOSE OF THE PLAN. The Plan was adopted by the
Board on November 12, 1996, and approved by the Company's stockholders February
26, 1997. The Plan is effective as of February 26, 1997. The Plan replaces the
Amended and Restated 1990 Stock Plan of Gensia, Inc. (the "1990 Stock Plan").
The Plan was amended by the Board on June 20, 1997, April 17, 1998, February 10,
1999 and on February 28, 2000.
The purpose of the Plan is to promote the interests of SICOR
Inc., and its shareholders by encouraging officers and Key Employees to acquire
stock or increase their proprietary interest in the Company. By thus providing
the opportunity to acquire Company stock and receive incentive payments, the
Company seeks to attract and retain such Key Employees upon whose judgment,
initiative, and leadership the success of the Company largely depends.
The Plan shall be governed by, and construed in accordance
with, the laws of the State of California.
2. DEFINITIONS. Whenever the following terms are used in this Plan,
they will have the meanings specified below unless the context clearly indicates
the contrary.
(a) "Board of Directors" or "Board" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Change-in-Control" occurs in the following instances (1) a tender
or exchange for all or part of Company Common Stock (except an offer by the
Company itself); (2) Company shareholder approval of a merger in which the
Company does not survive as an independent and publicly owned corporation
(except a merger which leaves Company shareholders with substantially the same
ownership in the new corporation); (3) Company shareholder approval of a
consolidation or sale, exchange or other disposition of all, or substantially
all, of the Company's assets; (4) change in the composition of the Board over a
two consecutive year period so that individuals who were directors at the
beginning of that period no longer constitute a majority of the Board (unless
the election or nomination of each new director was approved by at least
two-thirds of the directors who had been directors at the beginning of the
period and who were still in office at the time of the election or nomination);
or (5) the acquisition of sufficient Common Shares such that a person who
previously did not own at least 30% of Company Common Shares, thereafter owns at
least 30% (except an acquisition by the Company itself, by a subsidiary of the
Company or a benefit plan maintained by the Company).
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee appointed to administer the Plan
pursuant to Section 4.
<PAGE>
(e) "Company" means SICOR Inc., a Delaware corporation.
(f) "Common Shares" or "Common Stock" means the common shares of SICOR
Inc., and any class of common shares into which such common shares may hereafter
be converted.
(g) "Dividend Equivalent" means the additional amount of Common Stock
issued in connection with an Option, as described in Section 14.
(h) "Eligible Person" means a Key Employee eligible to receive an
Incentive Award.
(i) "Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means the market price of Common Shares,
determined by the Committee as follows:
(i) If the Common Shares were traded over-the-counter on the
date in question but were not traded on the Nasdaq system or the Nasdaq
National Market System, then the Fair Market Value shall be equal to
the mean between the last reported representative bid and asked prices
quoted for such date by the principal automated inter-dealer quotation
system on which the Common Shares are quoted or, if the Common Shares
are not quoted on any such system, by the "Pink Sheets" published by
the National Quotation Bureau, Inc.;
(ii) If the Common Shares were traded over-the-counter on the
date in question and were traded on the Nasdaq system or the Nasdaq
National Market System, then the Fair Market Value shall be equal to
the last-transaction price quoted for such date by the Nasdaq system or
the Nasdaq National Market System;
(iii) If the Common Shares were traded on a stock exchange on
the date in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite transactions report
for such date; and
(iv) If none of the foregoing provisions is applicable, then
the Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
In all cases, the determination of Fair Market Value by the
Committee shall be conclusive and binding on all persons.
(k) "Holder" means a person, estate, trust or entity holding an
Incentive Award.
(l) "Incentive Award" means any Nonqualified Stock Option, Incentive
Stock Option, Common Stock, Restricted Stock, Stock Appreciation Right, Dividend
Equivalent, Stock Payment or Performance Award granted under the Plan.
-2-
<PAGE>
(m) "Incentive Stock Option" means an Option as defined under Section
422 of the Code, including an Incentive Stock Option granted pursuant to Section
8 of the Plan.
(n) "Key Employee" shall mean (i) any individual who is a common-law
employee of the Company or of a Subsidiary, (ii) a member of the Board of
Directors, including (without limitation) an Outside Director, or an affiliate
of a member of the Board of Directors, (iii) a member of the board of directors
of a Subsidiary and (iv) an independent contractor who performs services for the
Company or a Subsidiary. Service as a member of the Board of Directors, a member
of the board of directors of a Subsidiary or as an independent contractor shall
be considered employment for all purposes of the Plan, except as provided in
Sections 5(b) and 6.
(o) "Nonqualified Stock Option" means an Option other than an Incentive
Stock Option granted pursuant to Section 8 of the Plan.
(p) "Option" means either a Nonqualified Stock Option or Incentive
Stock Option.
(q) "Outside Director" shall mean a member of the Board of Directors
who is not a common-law employee of the Company or a Subsidiary.
(r) "Performance Award" means an award whose value may be linked to
stock value, book value, or other specific performance criteria which may be set
by the Board of Directors, but which is paid in cash, stock, or a combination of
both.
(s) "Plan" means the 1997 Long-Term Incentive Plan, which may be
amended from time to time.
(t) "Restricted Stock" means Company stock sold or granted to an
Eligible Person, which is nontransferable and subject to substantial risk of
forfeiture until restrictions lapse.
(u) "Stock Appreciation Right" or "Right" means a right granted
pursuant to Section 11 of the Plan to receive a number of shares of Common Stock
or, in the discretion of the Committee, an amount of cash or a combination of
shares and cash, based on the increase in the Fair Market Value or book value of
the shares subject to the right.
(v) "Stock Payment" means a payment in shares of the Common Stock to
replace all or any portion of the compensation (other than base salary) that
would otherwise become payable to an employee in cash.
(w) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
(x) "Total and Permanent Disability" means that the Holder is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental
-3-
<PAGE>
impairment which can be expected to result in death or which has lasted, or can
be expected to last, for a continuous period of not less than one year.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Sections 3(c) and 15 of the Plan, the
aggregate number of shares of Common Stock that may be issued or transferred
pursuant to Incentive Awards or covered by Stock Appreciation Rights unrelated
to Options under the Plan shall not exceed 6,200,000, and the number of shares
that may be issued or transferred during any 12-month period to any Eligible
Person pursuant to an Incentive Award or a Stock Appreciation Right unrelated to
an Option shall not exceed 250,000 (or 350,000 in the event of an Option
repricing during that 12-month period). Additionally, the number of shares of
Common Stock available under the Company's 1990 Stock Plan (whether by
forfeiture, termination or nongrant) shall also become available under this
Plan.
(b) The shares to be delivered under the Plan will be made available,
at the discretion of the Board of Directors or the Committee, either from
authorized but unissued shares of Common Stock or from previously issued shares
of Common Stock reacquired by the Company, including shares purchased on the
open market.
(c) If Incentive Awards are forfeited or if Incentive Awards terminate
for any other reason before being exercised, then such Incentive Awards shall
again become available for award under the Plan. If Stock Appreciation Rights
are exercised, then only the number of Common Shares (if any) actually issued in
settlement of such Stock Appreciation Rights shall reduce the number of Common
Shares available under Section 3(a) and the balance shall again become available
for award under the Plan. If Restricted Stock is forfeited, then such Restricted
Stock shall again become available for award under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee. The Committee
shall consist exclusively of directors of the Company, who shall be appointed by
the Board. In addition, the composition of the Committee shall satisfy:
(1) Such requirements, if any, as the Securities and Exchange
Commission may establish for administrators acting under plans intended
to qualify for exemption under Rule 16b-3 (or its successor) under the
Exchange Act; and
(2) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify
for exemption under Section 162(m) of the Code.
The Board shall act on its own behalf with respect to the grant or amendment of
Incentive Awards to Outside Directors and may also appoint separate committees
of the Board, each composed of one or more officers of the Company who need not
be directors of the Company, to administer the Plan with respect to Key
Employees who are not "covered employees" under Section 162(m) of the Code and
who are not required to report pursuant to Section 16(a) of the Exchange Act.
-4-
<PAGE>
(b) The Committee has and may exercise such powers and authority as may
be necessary or appropriate for the Committee to carry out its functions as
described in the Plan. The Committee has authority in its discretion to
determine the Eligible Persons to whom, and the time or times at which,
Incentive Awards may be granted and the number of shares or Rights subject to
each award. Subject to the express provisions of the Plan, the Committee also
has authority to interpret the Plan, and to determine the terms and provisions
of the respective Incentive Award agreements (which need not be identical) and
to make all other determinations necessary or advisable for Plan administration.
The Committee has authority to prescribe, amend, and rescind rules and
regulations relating to the Plan. All interpretations, determinations, and
actions by the Committee will be final, conclusive, and binding upon all
parties.
(c) No member of the Board of Directors or the Committee will be liable
for any action or determination made in good faith by the Committee with respect
to the Plan or any Incentive and Performance Award under it.
5. ELIGIBILITY AND DATE OF GRANT.
The date of grant of an Incentive Award will be the date the Committee
takes the necessary action to approve the grant; provided, however, that if the
minutes or appropriate resolutions of the Committee provide that an Incentive
Award is to be granted as of a date in the future, the date of grant will be
such future date.
6. OUTSIDE DIRECTOR PARTICIPATION. Outside Directors shall
receive Option grants under the Plan as described below:
(a) Upon the conclusion of each regular annual meeting of the Company's
shareholders, each incumbent Outside Director who will continue serving as a
member of the Board thereafter may receive a grant of a Nonstatutory Option for
such number of Common Shares (subject to adjustment under Section 15 and
prorated for partial year service) as the Board shall determine in its sole
discretion.
(b) New Outside Directors shall receive a one-time grant of a
Nonstatutory Option for a number of Common Shares as determined in the sole
discretion of the Board; provided, however, that such grant shall not be made in
any calendar year in which the same individual receives an Option under (a)
above. Such Option, if any, shall be granted on the date when such Outside
Director first joins the Board of Directors of the Company or the board of
directors of a Subsidiary.
(c) Total grants under this Section 6 (less forfeitures) shall not
exceed 15% of the maximum number of Common Shares available for grant under
Section 3(a) of the Plan (subject to adjustment under Section 15).
7. NONQUALIFIED STOCK OPTIONS.
The Committee may approve the grant of Nonqualified Stock Options to
Eligible Persons, subject to the following terms and conditions:
-5-
<PAGE>
(a) The purchase price of Common Stock under each Nonqualified
Stock Option may not be less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock on the date the Nonqualified Stock
Option is granted.
(b) No Nonqualified Stock Option may be exercised after ten
(10) years from the date of grant.
(c) No fractional shares will be issued pursuant to the
exercise of a Nonqualified Stock Option nor will any cash payment be
made in lieu of fractional shares.
8. INCENTIVE STOCK OPTIONS. The Committee may approve the grant of
Incentive Stock Options to Eligible Persons, subject to the following terms and
conditions:
(a) The purchase price of each share of Common Stock under an
Incentive Stock Option will be at least equal to the Fair Market Value
of a share of the Common Stock on the date of grant; provided, however,
that if an employee, at the time an Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company (as
defined in Section 424 of the Code), then the Exercise Price of each
share of Common Stock subject to such Incentive Stock Option shall be
at least one hundred and ten percent (110%) of the Fair Market Value of
such share of Common Stock, as determined in the manner stated above.
(b) No Incentive Stock Option may be exercised after ten (10)
years from the date of grant; provided, however, that if any employee,
at the time an Incentive Stock Option is granted to him, owns stock
representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company (as defined in Section 424
of the Code), the Incentive Stock Option granted shall not be
exercisable after the expiration of five (5) years from the date of
grant.
(c) No fractional shares will be issued pursuant to the
exercise of an Incentive Stock Option nor will any cash payment be made
in lieu of fractional shares.
9. OPTION RULES. The purchase price under each Option may be paid in
cash, cash equivalents or notes acceptable to the Committee, by arrangement with
a broker which is acceptable to the Committee where payment of the Option price
is made pursuant to an irrevocable direction to the broker to deliver all or
part of the proceeds from the sale of the Option shares to the Company, by the
surrender of shares of Common Stock owned by the Holder exercising the Option
and having a Fair Market Value on the date of exercise equal to the purchase
price or in any combination of the foregoing. Each Option granted to an Eligible
Person shall be exercisable in such manner and at such times as the Committee
shall determine. The Committee may modify, accelerate the exercisability of,
extend or assume outstanding Options or may accept the cancellation of
outstanding Options (whether granted by the Company or by another issuer) in
return for the grant of new Options for the same or a different number of shares
and at the same or a different purchase price. The foregoing notwith-
-6-
<PAGE>
standing, no modification of an Option shall, without the consent of the Holder,
alter or impair his or her rights or obligations under such Option.
10. RESTRICTED STOCK. The Committee may approve the grant of Restricted
Stock related or unrelated to Nonqualified Stock Options or Stock Appreciation
Rights to Eligible Persons, subject to the following terms and conditions:
(a) The Committee in its discretion will determine the purchase price.
(b) All shares of Restricted Stock sold or granted pursuant to the Plan
(including any shares of Restricted Stock received by the Holder as a result of
stock dividends, stock splits, or any other forms of capitalization) will be
subject to the following restrictions:
(i) The shares may not be sold, transferred, or otherwise
alienated or hypothecated until the restrictions are removed or expire.
(ii) The Committee may require the Holder to enter into an
escrow agreement providing that the certificates representing
Restricted Stock sold or granted pursuant to the Plan will remain in
the physical custody of an escrow holder until all restrictions are
removed or expire.
(iii) Each certificate representing Restricted Stock sold or
granted pursuant to the Plan will bear a legend making appropriate
reference to the restrictions imposed on the Restricted Stock.
(iv) The Committee may impose restrictions on any shares sold
pursuant to the Plan as it may deem advisable, including, without
limitation, restrictions designed to facilitate exemption from or
compliance with the Securities Exchange Act of 1934, as amended, with
requirements of any stock exchange upon which such shares or shares of
the same class are then listed and with any blue sky or other
securities laws applicable to such shares.
(c) The restrictions imposed under subparagraph (b) above upon
Restricted Stock will lapse in accordance with a schedule or other conditions as
determined by the Committee, subject to the provisions of Section 17,
subparagraph (d).
(d) Subject to the provisions of subparagraph (b) above and Section 17,
subparagraph (d), the Holder will have all rights of a shareholder with respect
to the Restricted Stock granted or sold, including the right to vote the shares
and receive all dividends and other distributions paid or made with respect
thereto.
(e) Notwithstanding the provisions of subparagraph (b) above and
Section 17, subparagraph (d), Restricted Stock granted or sold may be held by
the trustee of a revocable inter vivos trust (or other trust if such transfer
associated therewith does not cause income to be recognized pursuant to Code ss.
83 and if the trust takes subject to the forfeiture provisions of the Restricted
Stock), approved by the Company, established in whole or in part by the Holder
and/or the Holder's spouse. So long as the Holder is still an employee, transfer
to such trust
-7-
<PAGE>
shall not violate the provisions of subparagraph (b) above and ownership by
such trust shall not invoke any right or obligation of the Company under
Section 17, subparagraph (d).
11. STOCK APPRECIATION RIGHTS. The Committee may approve the grant of
Rights related or unrelated to Options to Eligible Persons, subject to the
following terms and conditions:
(a) A Stock Appreciation Right may be granted
(i) at any time if unrelated to an Option;
(ii) either at the time of grant, or at any time thereafter
during the Option term if related to a Nonqualified Stock Option; or
(iii) only at the time of grant if related to an Incentive
Stock Option.
(b) A Stock Appreciation Right granted in connection with an Option
will entitle the Holder of the related Option, upon exercise of the Stock
Appreciation Right, to surrender such Option, or any portion thereof to the
extent unexercised, with respect to the number of shares as to which such Stock
Appreciation Right is exercised, and to receive payment of an amount computed
pursuant to Section 11(d). Such Option will, to the extent surrendered, then
cease to be exercisable.
(c) Subject to Section 11(g), a Stock Appreciation Right granted in
connection with an Option hereunder will be exercisable at such time or times as
the Committee in its discretion may determine, and only to the extent that a
related Option is exercisable, and will not be transferable except to the extent
that such related Option is exercisable.
(d) Upon the exercise of a Stock Appreciation Right related to an
Option, the Holder will be entitled to receive payment of an amount determined
by multiplying:
(i) The difference obtained by subtracting the purchase price
of a share of Common Stock specified in the related Option from the
Fair Market Value of a share of Common Stock on the date of exercise of
such Stock Appreciation Right, by
(ii) The number of shares as to which such Stock Appreciation
Right has been exercised.
(e) The Committee may grant Stock Appreciation Rights unrelated to
Options to Eligible Persons which will be exercisable at such times as the
Committee shall determine. Section 11(d) shall be used to determine the amount
payable at exercise under such Stock Appreciation Right if Fair Market Value is
used, except that Fair Market Value shall not be used if the Committee specifies
in the grant of the Right that book value or other measure as deemed appropriate
by the Committee is to be used, and the initial share value specified in the
award shall be used in lieu of "price of a share of Common Stock specified in
the related Option," as provided in Section 11(d).
-8-
<PAGE>
(f) Payment of the amount determined under Section 11(d) or (e) may be
made solely in whole shares of Common Stock in a number determined at their Fair
Market Value on the date of exercise of the Stock Appreciation Right or
alternatively, at the sole discretion of the Committee, solely in cash or in a
combination of cash and shares as the Committee deems advisable. If the
Committee decides to make full payment in shares of Common Stock, and the amount
payable results in a fractional share, payment for the fractional share will be
made in cash.
(g) The Committee shall, at the time a Stock Appreciation Right is
granted, impose such conditions on the exercise of the Stock Appreciation Right
as may be required to satisfy the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934 (or any other comparable provisions in effect at
the time or times in question). In addition, a Stock Appreciation Right granted
under the Plan may provide that it will be exercisable only in the event of a
Change-in-Control.
12. PERFORMANCE AWARDS. The Committee may approve Performance Awards to
Eligible Persons. Such awards may be based on Common Stock performance over a
period determined in advance by the Committee or any other measures as
determined appropriate by the Committee. Payment will be in cash unless replaced
by a Stock Payment in full or in part as determined by the Committee.
13. STOCK PAYMENT. The Committee may approve Stock Payments of Common
Stock to Eligible Persons for all or any portion of the compensation (other than
base salary) that would otherwise become payable to an employee in cash.
14. DIVIDEND EQUIVALENTS. A Holder may also be granted at no additional
cost "Dividend Equivalents" based on the dividends declared on the Common Stock
on record dates during the period between the date an Option is granted and the
date such Option is exercised, or such other equivalent period, as determined by
the Committee. Such Dividend Equivalents shall be converted to additional shares
or cash by such formula as may be determined by the Committee.
Dividend Equivalents shall be computed, as of each dividend record
date, both with respect to the number of shares under the Option and with
respect to the number of Dividend Equivalent shares previously earned by the
Holder (or his successor in interest) and not issued during the period prior to
the dividend record date.
15. ADJUSTMENT PROVISIONS.
(a) Subject to Section 15(b), if the outstanding shares of Common Stock
are increased, decreased, or exchanged for a different number or kind of shares
or other securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all of
the property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment shall be made in (i) the maximum number and kind of
shares provided in Section 3
-9-
<PAGE>
of the Plan, (ii) the number and kind of shares or other securities subject to
the then outstanding Incentive Awards, and (iii) the price for each share or
other unit of any other securities subject to then outstanding Incentive Awards
without change in the aggregate purchase price or value as to which Incentive
Awards remain exercisable or subject to restrictions.
(b) In addition, upon a Change-in-Control, all Options, Stock
Appreciation Rights, and Performance Awards then outstanding under the Plan will
be fully vested and exercisable and all restrictions on Restricted Stock will
immediately cease. The Committee or any agreement of merger or reorganization
may offer the Holder the right to exchange such vested Incentive Awards for
fully vested and equivalent value awards under a successor plan.
16. GENERAL PROVISIONS.
(a) With respect to any shares of Common Stock issued or transferred
under any provision of the Plan, such shares may be issued or transferred
subject to such conditions, in addition to those specifically provided in the
Plan, as the Committee may direct.
(b) Nothing in the Plan or in any instrument executed pursuant to the
Plan will confer upon any Holder any right to continue in the employ of the
Company or any of its Subsidiaries or affect the right of the Company to
terminate the employment of any Holder at any time and for any reason.
(c) No shares of Common Stock will be issued or transferred pursuant to
an Incentive Award unless and until all then applicable requirements imposed by
federal and state securities and other laws, rules, and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon which
the Common Stock may be listed, have been fully met. As a condition precedent to
the issue of shares pursuant to the grant or exercise of an Incentive Award, the
Company may require the Holder to take any reasonable action to meet such
requirements.
(d) No Holder (individually or as a member of a group) and no
beneficiary or other person claiming under or through such Holder will have any
right, title, or interest in or to any shares of Common Stock allocated or
reserved under the Plan or subject to any Incentive Award except as to such
shares of Common Stock, if any, that have been issued or transferred to such
Holder.
(e) The Company may make such provisions as it deems appropriate to
withhold any taxes which it determines it is required to withhold in connection
with any Incentive or Performance Award.
(f) No Incentive Award and no right under the Plan, contingent or
otherwise, will be assignable or subject to any encumbrance, pledge (other than
a pledge to secure a loan from the Company), or charge of any nature except
that, under such rules and regulations as the Company may establish pursuant to
the terms of the Plan, a beneficiary may be designated with respect to an
Incentive Award in the event of death of a Holder of such Incentive Award. If
such beneficiary is the executor or administrator of the estate of the Holder of
such Incentive Award, any rights with respect to such Incentive Award may be
transferred to the person or persons or entity (including a trust) entitled
thereto under the will of the Holder of such
-10-
<PAGE>
Incentive Award, or, in the case of intestacy, under the laws relating to
intestacy. Except as determined by the Committee, no Incentive Award shall be
transferable by any Eligible Person other than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order. In
considering transferability of an Incentive Award, the Committee may also
consider the registration limitation of SEC Form S-8 and on that basis may in
its discretion determine whether to prohibit transferability, permit alternative
registration of the Incentive Award, treat the Incentive Award as SEC Rule 144
"restricted stock," or take such other measures as the Committee deems
appropriate.
(g) The Committee may permit a Holder to satisfy all or part of his or
her withholding or income tax obligations by having the Company withhold all or
a portion of any Common Stock that otherwise would be issued to him or her or by
surrendering all or a portion of any Common Stock that he or she previously
acquired. Such Common Stock shall be valued at its Fair Market Value on the date
when taxes otherwise would be withheld in cash. Any payment of taxes by
assigning Common Stock to the Company may be subject to restrictions, including
any restrictions required by rules of the Securities and Exchange Commission.
(h) All Incentive Awards shall become 100% vested in the event of death
or total and permanent disability.
17. AMENDMENT AND TERMINATION.
(a) The Board of Directors may, in its discretion, amend, suspend, or
terminate the Plan at any time. An amendment of the Plan shall be subject to the
approval of the Company's shareholders to the extent it affects the application
of the accelerated vesting provisions herein, Section 15, or to the extent
required by applicable laws, regulations and or rules.
(b) The Committee may, with the consent of a Holder, make such
modifications in the terms and conditions of the Incentive Award as it deems
advisable or cancel the Incentive Award (with or without consideration) with the
consent of the Holder.
(c) No amendment, suspension, or termination of the Plan will, without
the consent of the Holder, alter, terminate, impair, or adversely affect any
right or obligation under any Incentive Award previously granted under the Plan.
(d) In the event a Holder of Restricted Stock ceases to be an employee,
all such Holder's Restricted Stock which remains subject to substantial risk of
forfeiture at the time his or her employment terminates will be repurchased by
the Company at the original price at which such Restricted Stock had been
purchased unless the Committee determines otherwise.
(e) In the event a Holder of a Performance Award ceases to be an
employee, all such Holder's Performance Awards will terminate except in the case
of retirement, death, or Total and Permanent Disability. The Committee, in its
discretion, may authorize full or partial payment of Performance Awards in all
cases involving retirement, death, or permanent and total disability.
(f) The Committee may in its sole discretion determine, with respect to
an Incentive Award, that any Holder who is on unpaid leave of absence for any
reason will be considered as
-11-
<PAGE>
still in the employ of the Company, provided that rights to such Incentive Award
during an unpaid leave of absence will be limited to the extent to which such
right was earned or vested at the commencement of such leave of absence.
18. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN. This Plan will become
effective upon approval by the shareholders of the Company within twelve (12)
months following the date of its adoption by the Board of Directors. Unless
previously terminated by the Board of Directors, the Plan will terminate ten
(10) years after its approval by the shareholders of the Company.
-12-
