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EXHIBIT 10(c)
PERRIGO COMPANY NON-QUALIFIED STOCK OPTION PLAN
FOR DIRECTORS
AS ADOPTED IN JULY, 1989
AS AMENDED AND RESTATED EFFECTIVE AS OF AUGUST, 1997
AS AMENDED AUGUST 25, 2000
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PERRIGO COMPANY NON-QUALIFIED STOCK OPTION PLAN FOR DIRECTORS
1. Name and Purpose.
This plan shall be known as the Perrigo Company Non-Qualified Stock
Option Plan for Directors (hereinafter called the "Plan"). The Plan is intended
to attract and retain the services of experienced and knowledgeable non-employee
directors (hereinafter called "Participant" or "Participants") to serve on the
Board of Directors of Perrigo Company (hereinafter called the "Company") and to
provide additional incentive for such Participants to work for the best interest
of the Company and its shareholders through ownership of its common stock.
2. Stock.
All stock subject to options under the Plan shall be authorized but
unissued or reacquired common stock, without par value, of the Company
(hereinafter called "Common Stock"). The aggregate number of shares of Common
Stock which may be issued to all Participants under options granted under this
Plan shall not exceed 525,000 shares.(*) In the event that any outstanding
option under the Plan expires for any reason, including failure to satisfy any
vesting requirement imposed pursuant to subsection 6(b) of the Plan, the shares
of Common Stock allocable to the unexercised portion of such option may again be
subjected by the Company to an option under the Plan.
3. Administration.
The Plan shall be administered by the Board of Directors of the Company
or by a committee of the Board of Directors hereafter designated to administer
the Plan by the Board of Directors of the Company. Any committee of the Board of
Directors designated to administer the Plan shall consist of not less than three
directors of the Company. To the extent required to comply with Rule 16b-3 under
the Securities Exchange Act of 1934 (the "Exchange Act"), each member of any
such committee shall qualify as a "non-employee director," as defined therein.
As used herein, "Board" shall mean and include the Board of Directors of the
Company and any committee designated by the Board to administer the Plan.
With respect to the granting of options pursuant to the Plan, the Board
shall hold meetings at such times and places as it may determine, and all action
with respect to the Plan shall be taken by a majority of its members. The Board
shall have the full right and responsibility to determine from time to time
which outside Directors of the Company shall be granted options under the Plan,
the time or times at which options shall be granted, the number of shares of
Common Stock to be covered by each option and the terms and conditions of each
option granted.
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* Adjusted for the three and one-half-for-one common stock split, effective
November, 1991 and the two-for-one common stock split, effective August,
1993. Amended August, 1997, and August, 2000 to increase the shares of
Common Stock which may be issued under the Plan.
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The interpretation and construction by the Board of any provisions of
the Plan or of any option granted under the Plan shall be final. No member of
the Board or officer of the Company shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it. All actions taken by the Board with respect to any option granted
pursuant to the Plan shall be conclusively binding on the Company and the
Participant.
4. Eligibility.
The Participants eligible to receive options shall be those Directors
of the Company who are not employed by the Company at the time of granting of
any option under this Plan to such Director.
5. Option Price.
Each option shall state the option price, which shall not be less than
one hundred percent (100%) of the fair market value of the shares of Common
Stock of the Company on the date of the granting of the option. For purposes of
the Plan, "fair market value" shall be the average of the highest price and the
lowest price at which the Common Stock is traded on the date of determination or
on the most recent date on which the Common Stock is traded prior to that date,
as reported on the NASDAQ National Market. Subject to the foregoing, the Board
shall have full authority and discretion in fixing the option price, and shall
be fully protected in so doing.
6. Terms and Conditions of Options.
All options granted pursuant to the Plan shall be authorized by the
Board and shall be issued in the form appended hereto or in such other form as
the Board may from time to time prescribe; provided, however, that any such
options granted shall contain the following terms and conditions:
(a) Number of Shares and Option Price. Each option shall state the
number of shares of Common Stock to which it pertains and the option price per
share.
(b) Term and Vesting. Each option shall vest and may only be exercised,
if at all, between the original exercise date and the expiration date determined
by the Board and specified in the option. Each Participant shall agree to
continue, if elected by the shareholders, as a Director of the Company and to
render to the Company his or her services as a Director for such time period,
not to exceed six (6) years, as may be determined by the Board at the time of
granting the option, and such option shall not vest or be exercisable during
said time period; provided, however, that the Board may, at its discretion,
provide for staggered vesting, in which event the option for those shares of
Common Stock for which the required vesting period has been met shall vest and
may be exercised thereafter even though the option as to other shares of stock
in the same grant or any subsequent grant has not then vested.
(c) Early Vesting of Options. Notwithstanding the vesting period
specified in any option granted under the Plan, each such option shall
immediately vest and may be exercised in
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whole or in part at any time after the date on which (i) any Person (as that
term is defined in Section 2(2) of the Securities Act of 1933 and Section
13(d)(3) of the Exchange Act, as hereafter amended from time to time) who is not
a shareholder of the Company on the date of adoption of the Plan, acquires or
otherwise becomes the owner of voting stock of the Company, which, together with
all other voting stock of the Company then owned by such Person, represents
fifty percent (50%) or more of the then issued and outstanding voting stock of
the Company or (ii) the composition of the Company's Board of Directors is
changed such that a majority of the members of the Board of Directors is
comprised of individuals who are neither incumbent members on the date of
adoption of the Plan nor nominated or appointed by a majority of such incumbent
members or their nominees or (iii) the Participant's service as a Director of
the Company is terminated by his or her death or disability (as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"))
prior to the date on which the right to exercise the option expires or
terminates as determined by the Board and specified in the option.
(d) Nontransferability of Options. During the lifetime of the
Participant, the option shall be exercisable only by him or her while he or she
is a Director of the Company or within the time period specified in subsection
(e) or (f) below, as the case may be, and not be assignable or transferable by
him or her and no other person shall acquire any rights therein. On the death of
the Participant, his or her option may only be transferred or assigned by his or
her will or by the laws of descent and distribution and, in such event, may only
be exercised within the time period and in the manner specified in subsection
(f) below.
(e) Termination of Service Other than by Death or Disability. At the
time an option is granted, the Board shall determine the time period during
which the Participant may exercise the option following the termination of his
or her membership on the Board of Directors, and such post-termination exercise
period may vary based on the reason for such termination of Board membership.
Subject to subsections (f) and (g) below, the Participant shall have the right
to exercise the option at any time within this specified period after the
termination of his or her membership on the Board of Directors to the extent
that the Participant's right to exercise such option had vested (including,
without limitation, by reason of subsection (c) above) and had not previously
been exercised prior to the Participant's termination of Board membership.
If the Participant's service as a Director of the Company is terminated
prior to the earliest date on which the Participant's option may be exercised
pursuant to its terms or, if such service is terminated after such date, and the
option is not exercised prior to the expiration date specified by the Board at
the time the option is granted, the option shall lapse.
(f) Termination of Service by Death or Disability. Except as provided
in the following paragraph and in subsection (g) below, if a Participant dies or
becomes disabled (as defined in Code Section 22(e)(3)), his or her option may be
exercised in whole or in part by the duly appointed fiduciary of the estate of
the deceased Participant or the person or persons succeeding to his or her
interest under the laws of descent and distribution or by bequest under his or
her will, or, in the case of disability, by the disabled Participant or the
conservator of his or her estate, as the case may be, at any time within the
applicable post-termination exercise period specified by the Board, to the
extent that the Participant's right to exercise such option had vested and had
not previously been exercised prior to the date of his or her death or
disability.
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If the Participant dies or becomes disabled and the option is not
exercised in the manner provided in the preceding paragraph of this subsection
(f) prior to the expiration date specified by the Board at the time the option
is granted, the option shall lapse.
(g) Board Discretion. Notwithstanding the provisions of subsections
(e) and (f) above, the Board, in its discretion, may extend the time that an
optionee has to exercise any outstanding option, but not beyond the specified
expiration date of the option.
7. Other Option Provisions.
Any option granted under the Plan may contain such provisions,
including, without limitation, restrictions upon the exercise of the option and
subsequent transfer of the underlying stock, as the Board shall deem advisable.
8. Term of Plan.
The Plan shall continue indefinitely, provided that the Board of
Directors may revise or discontinue the Plan at any time in accordance with
Section 12.
9. Exercise of Option and Payment of Option Price.
Subject to Section 6 above, each option granted under the Plan may be
exercised in whole or in part, over the term of the option, by delivery to the
President, Secretary, Assistant Secretary or chief financial officer of the
Company of a duly executed notice of exercise in the form attached to the
option. The exercise price of an option shall be paid in full at the time of
exercise (i) in cash, (ii) through the surrender of previously-acquired shares
of Common Stock having a fair market value equal to the exercise price of the
option, (iii) through the withholding by the Company (upon such exercise) of
Common Stock having a fair market value equal to the exercise price or (iv) by a
combination of (i), (ii), and (iii). Upon exercise of the option, the Company
may withhold, or allow a Participant to remit to the Company any applicable
Federal, state or local income tax liability. In order to satisfy all or any
portion of such income tax liability, an option holder may elect to surrender
Common Stock previously acquired by the holder or to have the Company withhold
Common Stock that would otherwise have been issued to the holder pursuant to the
exercise of the option.
10. Adjustment Provisions.
In the event of changes in the outstanding Common Stock of the Company
by reason of stock dividends, split-ups, recapitalization, combination of
shares, exchange of shares, mergers, consolidations, separations,
reorganizations, liquidations, or otherwise, the number and class of shares
available for options under the Plan and the shares subject to any outstanding
options and the option price thereof shall be equitably adjusted by the Board.
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11. Mergers or Consolidations.
In the event of the merger or consolidation of the Company into or with
another corporation in which the Company ceases to exist, the option shall be
transferred into options of the surviving corporation to purchase the same
comparable number of shares of the surviving corporation and on the same terms
and conditions as provided for and contained in the options granted under the
Plan, and the Company shall require, as a condition to such merger or
consolidation, that the surviving corporation adopt the Plan as its plan and
issue comparable options to purchase shares of its stock.
12. Amendment or Termination of Plan.
The Board of Directors may amend, suspend or terminate this Plan at any
time and from time to time. No amendment of the Plan shall adversely affect
rights or obligations under the Plan with respect to options granted prior to
such amendment.
13. General Provisions.
(a) Nothing in the Plan nor in any instrument executed pursuant hereto
shall confer upon any outside Director any right to continue as a Director of
the Company or shall affect the right of the shareholders of the Company to vote
against the reelection of an outside Director or of the Board of Directors to
remove an outside Director in the manner permitted by the Bylaws of the Company.
(b) No shares of Common Stock shall be issued or transferred pursuant
to an option granted under the Plan unless and until all legal requirements
applicable to the issuance or transfer of such shares have, in the opinion of
counsel to the Company, been met.
(c) No outside Director and no beneficiary or other person claiming
under or through him or her shall have any right, title or interest in or to any
shares of Common Stock allocated or reserved for the purposes of the Plan or
subject to any option except as to such shares of Common Stock, if any, as shall
have been issued pursuant to the exercise of such option.
(d) The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan may be used for any general corporate
purposes.
14. Effective Date.
The Plan was originally adopted by the Board of Directors of the
Company in July, 1989. The Plan was amended and restated effective as of August,
1997, and amended on August 25, 2000.
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