<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
FSI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1223238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
322 LAKE HAZELTINE DRIVE 55318
CHASKA, MINNESOTA (Zip Code)
(Address of principal executive offices)
FSI INTERNATIONAL, INC.
1994 OMNIBUS STOCK PLAN
(Full title of the plan)
JOEL A. ELFTMANN
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
FSI INTERNATIONAL, INC.
322 LAKE HAZELTINE DRIVE
CHASKA, MINNESOTA 55318
(Name and address of agent for service)
(612) 448-5440
(Telephone number, including area code, of agent for service)
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum
Title of Amount Maximum Aggregate Amount of
Securities to to be Offering Price Offering Registration
be Registered Registered(1) Per Share(1)(2) Price(1)(2) Fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 500,000
without par value Shares $14.6875 $7,343,750.00 $2,225.38
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement relates to an additional 500,000 shares of
Common Stock to be offered pursuant to the registrant's 1994 Omnibus Stock
Plan, for which 1,000,000 shares of Common Stock have previously been
registered pursuant to the registrant's Registration Statement
No. 33-77854.
(2) Estimated solely for the purpose of the registration fee pursuant to Rules
457(c) and (h)(1) under the Securities Act of 1933, as amended, and based
on the average of the high and low sale prices per share of the
registrant's Common Stock on January 7, 1997, as reported on the
Nasdaq National Market System.
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- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED BY GENERAL INSTRUCTION E OF
FORM S-8 REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are incorporated in this Registration Statement by reference the
contents of the registrant's Registration Statement No. 33-77854.
ITEM 8. EXHIBITS (REQUIRED OPINIONS AND CONSENTS).
EXHIBIT DESCRIPTION
------- -----------
5 Opinion of Faegre & Benson LLP.
23.1 Consent of Faegre & Benson LLP (included in Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
99 FSI International, Inc. 1994 Omnibus Stock Plan, as amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chaska, State of Minnesota, on December 31, 1996.
FSI INTERNATIONAL, INC.
By /s/ Benno G. Sand
------------------------------------
Its Executive Vice President,
Chief Financial Officer
---------------------------------
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Joel A. Elftmann Chairman, President, Chief Executive December 31, 1996
- ------------------------------ Officer, and Director
Joel A. Elftmann (Principal Executive Officer)
/s/ Benno G. Sand Executive Vice President, Chief Financial December 31, 1996
- ------------------------------ Officer, and Secretary
Benno G. Sand (Principal Financial and Accounting Officer)
/s/ James A. Bernards Director December 31, 1996
- ------------------------------
James A. Bernards
/s/ Neil R. Bonke Director December 31, 1996
- ------------------------------
Neil R. Bonke
/s/ Terence W. Glarner Director December 31, 1996
- ------------------------------
Terence W. Glarner
/s/ Joanna T. Lau Director December 31, 1996
- ------------------------------
Joanna T. Lau
/s/ Robert E. Lorenzini Director December 31, 1996
- ------------------------------
Robert E. Lorenzini
/s/ William M. Marcy Director December 31, 1996
- ------------------------------
William M. Marcy
/s/ Charles R. Wofford Director December 31, 1996
- ------------------------------
Charles R. Wofford
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C> <C>
5 Opinion of Faegre & Benson LLP............................. Filed Electronically
23.1 Consent of Faegre & Benson LLP (included in Exhibit 5)..... Filed Electronically
23.2 Consent of KPMG Peat Marwick LLP........................... Filed Electronically
99 FSI International, Inc. 1994 Omnibus Stock Plan, as
amended.................................................... Filed Electronically
</TABLE>
<PAGE>
Exhibit 5
January 9, 1997
FSI International, Inc.
322 Lake Hazeltine Drive
Chaska, Minnesota 55318
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Registration Statement"), relating
to the offering of up to an additional 500,000 shares of Common Stock,
without par value (the "Shares"), of FSI International, Inc., a Minnesota
corporation (the "Company"), pursuant to the Company's 1994 Omnibus Stock
Plan, as amended (the "Plan"), we have examined such corporate records and
other documents, including the Registration Statement, and have reviewed such
matters of law as we have deemed relevant hereto, and, based upon such
examination and review, it is our opinion that all necessary corporate action
on the part of the Company has been taken to authorize the issuance and sale
of the Shares and that, when issued and sold as contemplated by the Plan and
the Registration Statement, the Shares will be legally issued, fully paid and
nonassessable under the current laws of the State of Minnesota.
We are admitted to the practice of law in the State of Minnesota and the
foregoing opinions are limited to the laws of that state and the federal laws of
the United States of America.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ FAEGRE & BENSON LLP
FAEGRE & BENSON LLP
<PAGE>
Exhibit 23.2
Independent Auditors' Consent
The Board of Directors
FSI International, Inc.:
We consent to the use of our reports incorporated herein by reference.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 10, 1997
<PAGE>
Exhibit 99
FSI INTERNATIONAL, INC.
1994 OMNIBUS STOCK PLAN
(as amended and restated)
1. PURPOSE. The purpose of the FSI International, Inc. 1994 Omnibus
Stock Plan (the "Plan") is to motivate key personnel to produce a superior
return to the shareholders of FSI International, Inc. by offering such personnel
an opportunity to realize Stock appreciation, by facilitating Stock ownership
and by rewarding them for achieving a high level of corporate financial
performance. The Plan is also intended to facilitate recruiting and retaining
key personnel of outstanding ability by providing an attractive capital
accumulation opportunity.
2. DEFINITIONS.
2.1 The terms defined in this section are used (and capitalized)
elsewhere in the Plan.
(a) "Affiliate" means any corporation that is a "parent
corporation" or "subsidiary corporation" of the Company, as those
terms are defined in Code Section 424(e) and (f), or any successor
provisions.
(b) "Agreement" means a written contract entered into between
the Company or an Affiliate and a Participant containing the terms and
conditions of an Award in such form and not inconsistent with this
Plan as the Committee shall approve from time to time, together with
all amendments thereto, which amendments may be unilaterally made by
the Company (with the approval of the Committee) unless such
amendments are deemed by the Committee to be materially adverse to the
Participant and not required as a matter of law.
(c) "Award" or "Awards" means a grant made under this Plan in
the form of Restricted Stock, Options, Stock Appreciation Rights,
Performance Units, Stock or any other stock based award.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time or any successor statute.
(f) "Committee" means the Disinterested Persons designated by
the Board to administer the Plan under Plan Section 3.1 and
constituted so as to permit the Plan to comply with Exchange Act Rule
16b-3.
(g) "Company" means FSI International, Inc., a Minnesota
corporation, or the successor to all or substantially all of its
businesses by merger, consolidation, purchase of assets or otherwise.
(h) "Disinterested Person" means a member of the Board who is
considered a disinterested person within the meaning of Exchange Act
Rule 16b-3.
(i) "Effective Date" means the date specified in Plan Section
12.1.
(j) "Employee" means an employee (including an officer or
director who is also an employee) of the Company or an Affiliate.
(k) "Event" means any of the following:
<PAGE>
(1) The acquisition by any individual, entity or group
(within the meaning of Exchange Act Sections 13(d)(3) or
14(d)(2)) of beneficial ownership (within the meaning of Exchange
Act Rule 13d-3) of 30% or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of the Board (the "Outstanding Company
Voting Securities"); provided, however, that the following
acquisitions shall not constitute an Event:
(A) any acquisition of common stock or voting
securities of the Company directly from the Company,
(B) any acquisition of common stock or voting
securities of the Company by the Company or any of its
wholly-owned Subsidiaries,
(C) any acquisition of common stock or voting
securities of the Company by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
of its Subsidiaries, or
(D) any acquisition by any corporation with respect to
which, immediately following such acquisition, more than 70%
of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of
the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such acquisition in
substantially the same proportions as was their ownership,
immediately prior to such acquisition, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities, as the case may be;
(2) Individuals who, as of the Effective Date, constitute
the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however,
that any individual becoming a director of the Board subsequent
to the Effective Date whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board
shall be considered a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest which was (or, if threatened, would
have been) subject to Exchange Act Rule 14a-11 or its successor
provision;
(3) Approval by the shareholders of the Company of a
reorganization, merger, consolidation or statutory exchange of
Outstanding Company Voting Securities, unless immediately
following such reorganization, merger, consolidation or exchange,
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger, consolidation
or exchange beneficially own, directly or indirectly, more than
70% of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such reorganization, merger,
2
<PAGE>
consolidation or exchange in substantially the same proportions
as was their ownership, immediately prior to such reorganization,
merger, consolidation or exchange, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the
case may be; or
(4) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation with respect
to which, immediately following such sale or other disposition,
more than 70% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of
the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as was their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be.
Notwithstanding the above, an Event shall not be deemed to occur with
respect to a recipient of an Award if the acquisition of the 30% or greater
interest referred to in paragraph (1) is by a group, acting in concert, that
includes that recipient or if at least 30% of the then outstanding common stock
or combined voting power of the then outstanding voting securities (or voting
equity interests) of the surviving corporation or of any corporation (or other
entity) acquiring all or substantially all of the assets of the Company shall be
beneficially owned, directly or indirectly, immediately after a reorganization,
merger, consolidation, statutory share exchange or disposition of assets
referred to in paragraphs (3) or (4) by a group, acting in concert, that
includes that recipient.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.
(m) "Exchange Act Rule 16b-3" means Rule 16b-3 promulgated by
the Securities and Exchange Commission under the Exchange Act as now
in force and in effect from time to time or any successor regulation.
(n) "Fair Market Value" as of any date means, unless otherwise
expressly provided in the Plan:
(i) the closing price of a Share on the date
immediately preceding that date or, if no sale of Shares shall
have occurred on that date, on the next preceding day on which a
sale of Shares occurred
(A) on the composite tape for New York Stock Exchange
listed shares, or
(B) if the Shares are not quoted on the composite tape
for New York Stock Exchange listed shares, on the principal
United States Securities Exchange registered under the
Exchange Act on which the Shares are listed, or
(C) if the Shares are not listed on any such exchange,
on the National Association of Securities Dealers, Inc.
Automated Quotations National Market System, or
3
<PAGE>
(ii) if clause (i) is inapplicable, the mean between
the closing "bid" and the closing "asked" quotation of a Share on
the date immediately preceding that date, or, if no closing bid
or asked quotation is made on that date, on the next preceding
day on which a closing bid and asked quotation is made, on the
National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or
(iii) if clauses (i) and (ii) are inapplicable, what the
Committee determines in good faith to be 100% of the fair market
value of a Share on that date, using such criteria as it shall
determine, in its sole discretion, to be appropriate for such
valuation.
However, if the applicable securities exchange or system has closed
for the day at the time the event occurs that triggers a determination of Fair
Market Value, whether the grant of an Award, the exercise of an Option or Stock
Appreciation Right or otherwise, all references in this paragraph to the "date
immediately preceding that date" shall be deemed to be references to "that
date". In the case of an Incentive Stock Option, if such determination of Fair
Market Value is not consistent with the then current regulations of the
Secretary of the Treasury, Fair Market Value shall be determined in accordance
with said regulations. The determination of Fair Market Value shall be subject
to adjustment as provided in Plan Section 16.
(o) "Fundamental Change" shall mean a dissolution or liquidation
of the Company, a sale of substantially all of the assets of the
Company, a merger or consolidation of the Company with or into any
other corporation, regardless of whether the Company is the surviving
corporation, or a statutory share exchange involving capital stock of
the Company.
(p) "Incentive Stock Option" means any Option designated as such
and granted in accordance with the requirements of Code Section 422 or
any successor provision.
(q) "Insider" as of a particular date means any person who, as
of such date is an officer of the Company as defined under Exchange
Act Rule 16a-1(f) or it successor provision.
(r) "Non-Statutory Stock Option" means an Option other than an
Incentive Stock Option.
(s) "Option" means a right to purchase Stock, including both
Non-Statutory Stock Options and Incentive Stock Options.
(t) "Participant" means an Employee to whom an Award is or has
been made or a person or entity not an Employee to whom an Award of
Non-Statutory Stock Options has been made as provided in Plan
Section 5.
(u) "Performance Cycle" means the period of time as specified in
an Agreement over which Performance Units are to be earned.
(v) "Performance Units" means an Award made pursuant to Plan
Section 11.
(w) "Plan" means this FSI International, Inc. 1994 Omnibus Stock
Plan, as amended and in effect from time to time.
(x) "Restricted Stock" means Stock granted under Plan Section 7
so long as such Stock remains subject to one or more restrictions.
4
<PAGE>
(y) "Section 16" or "Section 16(b)" means Section 16 or Section
16(b), respectively, of the Exchange Act or any successor statute and
the rules and regulations promulgated thereunder as in effect and as
amended from time to time.
(z) "Share" means a share of Stock.
(aa) "Stock" means the common stock, no designated par
value, of the Company.
(bb) "Stock Appreciation Right" means a right, the value of
which is determined relative to appreciation in value of Shares
pursuant to an Award granted under Plan Section 10.
(cc) "Subsidiary" means a "subsidiary corporation", as that
term is defined in Code Section 424(f), or any successor
provision.
(dd) "Successor" with respect to a Participant means the
legal representative of an incompetent Participant, and if the
Participant is deceased the estate of the Participant or the
person or persons who may, by bequest or inheritance, or pursuant
to the terms of an Award, acquire the right to exercise an Option
or Stock Appreciation Right or to receive cash and/or Shares
issuable in satisfaction of an Award in the event of the
Participant's death.
(ee) "Term" means the period during which an Option or Stock
Appreciation Right may be exercised or the period during which
the restrictions placed on Restricted Stock or any other Award
are in effect.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the
context, reference to the masculine gender shall include, when used, the
feminine gender and any term used in the singular shall also include the plural.
3. ADMINISTRATION AND INDEMNIFICATION.
3.1 ADMINISTRATION.
(a) The Committee shall administer the Plan. The Committee
shall have exclusive power to make Awards, to determine when and to
whom Awards will be granted, the form of each Award, the amount of
each Award, and any other terms or conditions of each Award consistent
with the Plan. The Committee may determine whether, to what extent
and under what circumstances, Awards may be settled, paid or exercised
in cash, Shares or other Awards, or other property or canceled,
forfeited or suspended. Each Award shall be subject to an Agreement
authorized by the Committee.
(b) Solely for purposes of determining and administering Awards
to Employees who are not Insiders, the Committee may delegate all or
any portion of their authority under the Plan to one or more persons
who are not Disinterested Persons.
(c) To the extent within its discretion and subject to Plan
Sections 15-16, other than price, the Committee may amend the terms
and conditions of any outstanding Award.
(d) It is the intent that the Plan and all Awards granted
pursuant to it shall be administered by the Committee so as to permit
the Plan and Awards to comply with Exchange
5
<PAGE>
Act Rule 16b-3. If any provision of the Plan or of any Award would
otherwise frustrate or conflict with the intent expressed in this
Section 3.1(d), that provision to the extent possible shall be
interpreted and deemed amended in the manner determined by the
Committee so as to avoid such conflict. To the extent of any
remaining irreconcilable conflict with such intent, the provision
shall be deemed void as applicable to Insiders to the extent permitted
by law and in the manner deemed advisable by the Committee.
(e) The Committee's interpretation of the Plan and of any Award
or Agreement made under the Plan and all related decisions or
resolutions of the Board or Committee shall be final and binding on
all parties with an interest therein. Consistent with its terms, the
Committee shall have the power to establish, amend or waive
regulations to administer the Plan. In carrying out any of its
responsibilities, the Committee shall have discretionary authority to
construe the terms of the Plan and any Award or Agreement made under
the Plan.
3.2 INDEMNIFICATION. Each person who is or shall have been a member
of the Committee, or of the Board, and any other person to whom the Committee
delegates authority under the Plan, shall be indemnified and held harmless by
the Company, to the extent permitted by law, against and from any loss, cost,
liability or expense that may be imposed upon or reasonably incurred by such
person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be a party or in which such person may be
involved by reason of any action taken or failure to act, made in good faith,
under the Plan and against and from any and all amounts paid by such person in
settlement thereof, with the Company's approval, or paid by such person in
satisfaction of any judgment in any such action, suit or proceeding against such
person, provided such person shall give the Company an opportunity, at the
Company's expense, to handle and defend the same before such person undertakes
to handle and defend it on such person's own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such person or persons may be entitled under the Company's Articles of
Incorporation or By-laws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
4. SHARES AVAILABLE UNDER THE PLAN.
(a) The number of Shares available for distribution under this
Plan shall not exceed 1,500,000 (subject to adjustment pursuant to
Plan Section 16 hereof).
(b) Any Shares subject to the terms and conditions of an Award
under this Plan which are not used because the terms and conditions of
the Award are not met may again be used for an Award under the Plan.
However, Shares with respect to which a Stock Appreciation Right has
been exercised whether paid in cash and/or in Shares may not again be
awarded under this Plan.
(c) Any unexercised or undistributed portion of any terminated,
expired, exchanged, or forfeited Award, or any Award settled in cash
in lieu of Shares (except as provided in Plan Section 4(b)) shall be
available for further Awards.
(d) For the purposes of computing the total number of Shares
granted under the Plan, the following rules shall apply to Awards
payable in Shares where appropriate:
(i) except as provided in (v) below, each Option shall be
deemed to be the equivalent of the maximum number of Shares that
may be issued upon exercise of the particular Option;
6
<PAGE>
(ii) except as provided in (v) below, an Award (other
than an Option) payable in some other security shall be deemed to
be equal to the number of Shares to which it relates;
(iii) except as provided in (v) below, where the number
of Shares available under the Award is variable on the date it is
granted, the number of Shares shall be deemed to be the maximum
number of Shares that could be received under that particular
Award;
(iv) where two or more types of Awards (all of which
are payable in Shares) are granted to a Participant in tandem
with each other, such that the exercise of one type of Award with
respect to a number of Shares cancels at least an equal number of
Shares of the other, each such joint Award shall be deemed to be
the equivalent of the maximum number of Shares available under
the largest Award; and
(v) each Share awarded or deemed to be awarded under
the preceding paragraphs (i)-(iv) shall be treated as a Share,
even if the Award is for a security other than Stock.
Additional rules for determining the number of Shares granted under
the Plan may be made by the Committee, as it deems necessary or desirable.
(e) No fractional Shares may be issued under the Plan; however,
cash shall be paid in lieu of any fractional Share in settlement of an
Award.
(f) The maximum number of Shares that may be awarded to a
Participant in any calendar year in the form of Options is 50,000 and
the maximum number of Shares that may be awarded to a Participant in
any calendar year in the form of Stock Appreciation Rights is 50,000.
5. ELIGIBILITY. Except as provided below in this Plan Section 5,
participation in the Plan shall be limited to Employees granted an Award by the
Committee. An Award of Non-Statutory Stock Options may be granted to
individuals or entities who are not Employees but who provide services to the
Company or an Affiliate including services provided in the capacity of a
consultant or an advisor, except that a director of the Board who is not also an
Employee shall not be eligible to receive such an Award. The granting of Awards
is solely at the discretion of the Committee.
6. GENERAL TERMS OF AWARDS.
6.1 AMOUNT OF AWARD. Each Agreement shall set forth the number of
Shares of Restricted Stock, Stock or Performance Units subject to such
Agreement, or the number of Shares to which the Option subject to such Agreement
applies or with respect to which payment upon the exercise of the Stock
Appreciation Right subject to such Agreement is to be determined, as the case
may be, together with such other terms and conditions applicable to the Award as
determined by the Committee acting in its sole discretion.
6.2 TERM. Each Agreement, other than those relating solely to Awards
of Shares without restrictions, shall set forth the Term of the Option, Stock
Appreciation Right, Restricted Stock or other Award or the Performance Cycle for
the Performance Units, as the case may be. Acceleration of the expiration of
the applicable Term is permitted, upon such terms and conditions as shall be set
forth in the Agreement, which may, but need not, include without limitation,
acceleration resulting from the occurrence of an Event or in the event of the
Participant's death or retirement. Acceleration of the Performance Cycle of
Performance Units shall be subject to Plan Section 11.2.
7
<PAGE>
6.3 TRANSFERABILITY. During the lifetime of a Participant, only such
Participant (or such Participant's legal representative) may exercise an Option
or Stock Appreciation Right, or receive payment with respect to an Award of
Performance Units or other Award. No Award of Restricted Stock (prior to the
expiration of the restrictions), Options, Stock Appreciation Rights, Performance
Units or other Award (other than an Award of Shares without restrictions) may be
sold, assigned, transferred, exchanged or otherwise encumbered and any attempt
to do so shall be of no effect. Notwithstanding the immediately preceding
sentence, an Agreement may provide that the Award subject to the Agreement shall
be transferable to a Successor in the event of a Participant's death.
6.4 TERMINATION OF EMPLOYMENT. No Option or Stock Appreciation Right
may be exercised by a Participant, all Restricted Stock held by a Participant or
any other Award then subject to restrictions shall be forfeited, and no payment
with respect to Performance Units for which the applicable Performance Cycle has
not been completed shall be made, if the Participant's employment with the
Company and its Affiliates shall be voluntarily terminated or involuntarily
terminated with or without cause prior to the expiration of the Term of the
Option, Stock Appreciation Right, Restricted Stock or other Award, or the
completion of the Performance Cycle, as the case may be, except as, and to the
extent, provided in the Agreement applicable to that Award. An Award may be
exercised by, or paid to, the Successor of a Participant following the death of
such Participant to the extent, and during the period of time, if any, provided
in the applicable Agreement.
6.5 RIGHTS AS SHAREHOLDER. Each Agreement shall provide that a
Participant shall have no rights as a shareholder with respect to any securities
covered by an Award until the date the Participant becomes the holder of record.
7. RESTRICTED STOCK AWARDS.
(a) An Award of Restricted Stock under the Plan shall consist
of Shares subject to restrictions on transfer and conditions of
forfeiture, which restrictions and conditions shall be included in the
applicable Agreement. The Committee may provide for the lapse or
waiver of any such restriction or condition based on such factors or
criteria as the Committee, in its sole discretion, may determine.
(b) Except as otherwise provided in the applicable Agreement,
each Stock certificate issued with respect to an Award of Restricted
Stock shall either be deposited with the Company or its designee,
together with an assignment separate from such certificate, in blank,
signed by the Participant, or bear such legends with respect to the
restricted nature of the Restricted Stock evidenced thereby as shall
be provided for in the applicable Agreement.
(c) The Agreement shall describe the terms and conditions by
which the restrictions and conditions of forfeiture upon awarded
Restricted Stock shall lapse. Upon the lapse of the restrictions and
conditions, Shares free of restrictive legends, if any, relating to
such restrictions shall be issued to the Participant or a Successor.
(d) A Participant with a Restricted Stock Award shall have all
the other rights of a stockholder including, but not limited to, the
right to receive dividends and the right to vote the Shares of
Restricted Stock.
(e) No more than 75,000 of the total number of Shares available
for Awards under the Plan shall be issued during the term of the Plan
as Restricted Stock. This limitation shall be calculated pursuant to
the applicable provisions of Plan Sections 4 and 16.
8. OTHER AWARDS. The Committee may from time to time grant Stock and
other Awards under the Plan including without limitations those Awards pursuant
to which Shares are or may in the future be acquired,
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Awards denominated in Stock units, securities convertible into Stock and phantom
securities. The Committee, in its sole discretion, shall determine the terms
and conditions of such Awards provided that such Awards shall not be
inconsistent with the terms and purposes of this Plan. The Committee may, at
its sole discretion, direct the Company to issue Shares subject to restrictive
legends and/or stop transfer instructions which are consistent with the terms
and conditions of the Award to which such Shares relate.
No more than 25,000 of the total number of Shares available for Awards
under the Plan shall be issued during the term of the Plan in the form of Stock
without restrictions.
9. STOCK OPTIONS.
9.1 TERMS OF ALL OPTIONS.
(a) An Option shall be granted pursuant to an Agreement as
either an Incentive Stock Option or a Non-Statutory Stock Option. The
purchase price of each Share subject to an Option shall be determined
by the Committee and set forth in the Agreement, but shall not be less
than 100% of the Fair Market Value of a Share as of the date the
Option is granted.
(b) The purchase price of the Shares with respect to which an
Option is exercised shall be payable in full at the time of exercise,
provided that to the extent permitted by law, the Agreement may permit
some or all Participants to simultaneously exercise Options and sell
the Shares thereby acquired pursuant to a brokerage or similar
relationship and use the proceeds from such sale as payment of the
purchase price of such Shares. The purchase price may be payable in
cash, in Shares having a Fair Market Value as of the date the Option
is exercised equal to the purchase price of the Shares being purchased
pursuant to the Option, or a combination thereof, as determined by the
Committee and provided in the Agreement but no fractional Shares will
be issued or accepted.
(c) The Committee may provide, in an Agreement or otherwise,
that a Participant who exercises an Option and pays the Option price
in whole or in part with Shares then owned by the Participant will be
entitled to receive another Option covering the same number of shares
tendered and with a price of no less than Fair Market Value on the
date of grant of such additional Option ("Reload Option"). Unless
otherwise provided in the Agreement, a Participant, in order to be
entitled to a Reload Option, must pay with Shares that have been owned
by the Participant for at least the preceding 180 days.
(d) Each Option shall be exercisable in whole or in part on the
terms provided in the Agreement. In no event shall any Option be
exercisable at any time after the expiration of its Term. When an
Option is no longer exercisable, it shall be deemed to have lapsed or
terminated.
9.2 INCENTIVE STOCK OPTIONS. In addition to the other terms and
conditions applicable to all Options:
(i) the aggregate Fair Market Value (determined as of the
date the Option is granted) of the Shares with respect to which
Incentive Stock Options held by an individual first become exercisable
in any calendar year (under this Plan and all other incentive stock
option plans of the Company and its Affiliates) shall not exceed
$100,000 (or such other limit as may be required by the Code) if such
limitation is necessary to qualify the Option as an Incentive Stock
Option and to the extent an Option or Options granted to a Participant
exceed such limit such Option or Options shall be treated as a
Non-Statutory Stock Option;
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(ii) an Incentive Stock Option shall not be exercisable more
than 10 years after the date of grant (or such other limit as may be
required by the Code) if such limitation is necessary to qualify the
Option as an Incentive Stock Option;
(iii) the Agreement covering an Incentive Stock Option shall
contain such other terms and provisions which the Committee determines
necessary to qualify such Option as an Incentive Stock Option; and
(iv) notwithstanding any other provision of this Plan to the
contrary, no Participant may receive an Incentive Stock Option under
the Plan if, at the time the Award is granted, the Participant owns
(after application of the rules contained in Code Section 424(d), or
its successor provision), Shares possessing more than ten (10) percent
of the total combined voting power of all classes of stock of the
Corporation or its subsidiaries, unless (i) the option price for such
Incentive Stock Option is at least 110 percent of the Fair Market
Value of the Shares subject to such Incentive Stock Option on the date
of grant and (ii) such Option is not exercisable after the date five
(5) years from the date such Incentive Stock Option is granted.
10. STOCK APPRECIATION RIGHTS. An Award of a Stock Appreciation Right
shall entitle the Participant, subject to terms and conditions determined by the
Committee, to receive upon exercise of the Stock Appreciation Right all or a
portion of the excess of (i) the Fair Market Value of a specified number of
Shares as of the date of exercise of the Stock Appreciation Right over (ii) a
specified price which shall not be less than 100% of the Fair Market Value of
such Shares as of the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted in connection with part or all of, in addition
to, or completely independent of an Option or any other Award under this Plan.
If issued in connection with a previously or contemporaneously granted Option,
the Committee may impose a condition that exercise of a Stock Appreciation Right
cancels the Option with which it is connected and exercise of the connected
Option cancels the Stock Appreciation Right. Each Stock Appreciation Right may
be exercisable in whole or in part on the terms provided in the Agreement.
Notwithstanding anything to the contrary stated in the Plan, no Stock
Appreciation Right shall be exercisable by a Participant or Successor prior to
six months from the date of grant except in the event of the death or disability
of the Participant. No Stock Appreciation Right shall be exercisable at any
time after the expiration of its Term. When a Stock Appreciation Right is no
longer exercisable, it shall be deemed to have lapsed or terminated. Upon
exercise of a Stock Appreciation Right, payment to the Participant or a
Successor shall be made at such time or times as shall be provided in the
Agreement in the form of cash, Shares or a combination of cash and Shares as
determined by the Committee and provided in the Agreement. The Agreement may
provide for a limitation upon the amount or percentage of the total appreciation
on which payment (whether in cash and/or Shares) may be made in the event of the
exercise of a Stock Appreciation Right.
11. PERFORMANCE UNITS.
11.1 INITIAL AWARD.
(a) An Award of Performance Units under the Plan shall entitle
the Participant or a Successor to future payments of cash, Shares or a
combination of cash and Shares, as determined by the Committee and
provided in the Agreement, based upon the achievement of
pre-established performance targets. Such performance targets may,
but need not, include without limitation targets relating to one or
more of corporate, group, unit, Affiliate or individual performance.
The Agreement may establish that a portion of the total potential of a
Participant's Award will be paid for performance which exceeds the
minimum target but falls below the maximum target applicable to such
Award. The Agreement shall also provide for the timing of such
payment.
(b) Following the conclusion or acceleration of each Performance
Cycle, the Committee shall determine the extent to which (i)
performance targets have been attained, (ii)
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any other terms and conditions with respect to an Award relating to
such Performance Cycle have been satisfied and (iii) payment is due
with respect to an Award of Performance Units.
11.2 ACCELERATION AND ADJUSTMENT. The Agreement may permit an
acceleration of the Performance Cycle and an adjustment of performance targets
and payments with respect to some or all of the Performance Units awarded to a
Participant, upon such terms and conditions as shall be set forth in the
Agreement, upon the occurrence of certain events, which may, but need not
include without limitation an Event, a Fundamental Change, a recapitalization, a
change in the accounting practices of the Company, a change in the Participant's
title or employment responsibilities, the Participant's death or retirement or,
with respect to payments in Shares with respect to Performance Units, a
reclassification, stock dividend, stock split or stock combination as provided
in Plan Section 16. The Agreement also may provide for a limitation on the
value of an Award of Performance Units that a Participant may receive.
12. EFFECTIVE DATE AND DURATION OF THE PLAN.
12.1 EFFECTIVE DATE. The Plan shall become effective as of
January 27, 1994, provided that the Plan is approved by the affirmative vote of
the holders of a majority of the outstanding Shares present or represented and
entitled to vote in person or by proxy at a meeting of the shareholders of the
Company to be held on January 27, 1994 and any and all adjournments thereof.
12.2 DURATION OF THE PLAN. The Plan shall remain in effect until all
Stock subject to it shall be distributed or until all Awards have expired or
lapsed, or the Plan is terminated pursuant to Plan Section 15 or until January
28, 2004 (the "Termination Date") provided, however, Awards made prior to the
Termination Date may be exercised, vested or otherwise effectuated beyond the
Termination Date unless limited in the Agreement or otherwise. No Award of an
Incentive Stock Option shall be made more than 10 years after the Effective Date
(or such other limit as may be required by the Code) if such limitation is
necessary to qualify the Option as an Incentive Stock Option. The date and time
of approval by the Committee of the granting of an Award shall be considered the
date and time at which such Award is made or granted.
13. PLAN DOES NOT AFFECT EMPLOYMENT STATUS.
(a) Status as an eligible Employee shall not be construed as a
commitment that any Award will be made under the Plan to such eligible
Employee or to eligible Employees generally.
(b) Nothing in the Plan or in any Agreement or related documents
shall confer upon any Employee or Participant any right to continue in
the employment of the Company or any Affiliate or constitute any
contract of employment or affect any right which the Company or any
Affiliate may have to change such person's compensation, other
benefits, job responsibilities, or title, or to terminate the
employment of such person with or without cause.
14. TAX WITHHOLDING. The Company shall have the right to withhold from
any cash payment under the Plan to a Participant or other person an amount
sufficient to cover any required withholding taxes. The Company shall have the
right to require a Participant or other person receiving Shares under the Plan
to pay the Company a cash amount sufficient to cover any required withholding
taxes before actual receipt of such Shares. In lieu of all or any part of such
a cash payment from a person receiving Shares under the Plan, the Committee may
permit the individual to elect to cover all or any part of the required
withholdings, and to cover any additional withholdings up to the amount needed
to cover the individual's full FICA and federal, state and local income tax with
respect to income arising from payment of the Award, through a reduction of the
number of Shares delivered or a subsequent return to the Company of Shares held
by the Participant or other person, in each case valued in the same manner as
used in computing the withholding taxes under the applicable laws. Unless
otherwise permitted by the Committee, such elections are subject to the
following limitations if, and to the extent, such limitations are necessary to
comply with Exchange Act Rule 16b-3 or any successor provision:
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(a) TIME OF ELECTION. Except as set forth in Plan Section 14(a)(3)
below, any such election by an Insider may be made only if the conditions
set forth in clauses (1) and (2) below are satisfied:
(1) (A) The election may be made during the period beginning on
the third business day following the date of public release of the
Company's quarterly or annual financial statements and ending on the
twelfth business day following such date of public release, or
(B) The election may be made at least six months prior to
the date the Award is paid to the Participant.
(2) An election by a Participant may not be made within six
months of the date of grant of the Award to which the payment relates;
provided, however, that such restriction does not apply in the event
death or disability of the Participant occurs prior to such election
and during that six-month period.
(3) Notwithstanding the foregoing, a Participant who tenders
previously owned Shares to the Company in payment of the purchase
price of Shares in connection with exercise of an Option may also
tender previously owned Shares to the Company in satisfaction of any
tax withholding obligations in connection with such Option exercise
without regard to the time periods set forth in clauses (1) and (2)
above.
The foregoing restrictions do not apply to any Participant who is not
an Insider at the time of the election.
(b) COMMITTEE APPROVAL. Any such election by a Participant who is an
Insider at the time is irrevocable and is subject to approval by the
Committee. The Committee's approval may be granted in advance but is
subject to revocation by the Committee at any time.
15. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN.
(a) The Board may at any time and from time to time terminate,
suspend or modify the Plan. Except as limited in (b) below, the Committee
may at any time alter or amend any or all Agreements under the Plan to the
extent permitted by law. However, no such action may, without further
approval of the shareholders of the Company, be effective if such approval
is required in order that transactions in Company securities under the Plan
be exempt from the operation of Exchange Act Section 16(b) or to conform to
the requirements of Code Section 422 or their successor provisions and may
not amend the Plan so as to
(i) increase the number of Shares which may be issued under
the Plan, except as provided for in Plan Section 16;
(ii) materially modify the requirements as to eligibility
for participation;
(iii) materially increase the benefits accruing to
Participants under the Plan; or
(iv) extend the duration of the Plan beyond the date
approved by the shareholders.
(b) No termination, suspension, or modification of the Plan will
materially and adversely affect any right acquired by any Participant or
Successor under an Award granted before the date of termination,
suspension, or modification, unless otherwise agreed to by the Participant
in the Agreement or otherwise or required as a matter of law; but it will
be conclusively presumed that any adjustment for changes in capitalization
provided for in Plan Sections 11.2 or 16 does not adversely affect such
rights.
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16. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Subject to any required
action by the Company's shareholders, appropriate adjustments, so as to prevent
enlargement of rights or inappropriate dilution, in the aggregate number and
type of Shares available for Awards under the Plan, in the limitations on the
number of Shares that may be issued to an individual Participant as an Option or
a Stock Appreciation Right in any calendar year or that may be issued in the
form of Restricted Stock or Shares without restrictions, in the number and type
of Shares and amount of cash subject to Awards then outstanding, in the Option
price as to any outstanding Options and, subject to Plan Section 11.2, in
outstanding Performance Units and payments with respect to outstanding
Performance Units may be made by the Committee in its sole discretion to give
effect to adjustments made in the number or type of Shares through a Fundamental
Change (subject to Plan Section 17), recapitalization, reclassification, stock
dividend, stock split, stock combination or other relevant change, provided that
fractional Shares shall be rounded to the nearest whole Share.
17. FUNDAMENTAL CHANGE. In the event of a proposed Fundamental Change,
the Committee may, but shall not be obligated to:
(a) if the Fundamental Change is a merger or consolidation or
statutory share exchange, make appropriate provision for the protection of
the outstanding Options and Stock Appreciation Rights by the substitution
of options, stock appreciation rights and appropriate voting common stock
of the corporation surviving any merger or consolidation or, if
appropriate, the parent corporation of the Company or such surviving
corporation to be issuable upon the exercise of Options or used to
calculate payments upon the exercise of Stock Appreciation Rights, in lieu
of options, stock appreciation rights and capital stock of the Company; or
(b) at least 30 days prior to the occurrence of the Fundamental
Change, declare, and provide written notice to each holder of an Option or
Stock Appreciation Right of the declaration, that each outstanding Option
and Stock Appreciation Right, whether or not then exercisable, shall be
canceled at the time of, or immediately prior to the occurrence of the
Fundamental Change in exchange for payment to each holder of an Option or
Stock Appreciation Right, within ten days after the Fundamental Change, of
cash equal to (i) for each Share covered by the canceled Option, the
amount, if any, by which the Fair Market Value (as hereinafter defined in
this Section) per Share exceeds the exercise price per Share covered by
such Option or (ii) for each Stock Appreciation Right, the price determined
pursuant to Section 10, except that Fair Market Value of the Shares as of
the date of exercise of the Stock Appreciation Right, as used in clause (i)
of Plan Section 10, shall be deemed to mean Fair Market Value for each
Share with respect to which the Stock Appreciation Right is calculated
determined in the manner hereinafter referred to in this Section. At the
time of the declaration provided for in the immediately preceding sentence,
each Stock Appreciation Right that has been outstanding for at least six
months and each Option shall immediately become exercisable in full and
each person holding an Option or a Stock Appreciation Right shall have the
right, during the period preceding the time of cancellation of the Option
or Stock Appreciation Right, to exercise the Option as to all or any part
of the Shares covered thereby or the Stock Appreciation Right in whole or
in part, as the case may be. In the event of a declaration pursuant to
this Plan Section 17(b), each outstanding Option and Stock Appreciation
Right granted pursuant to the Plan that shall not have been exercised prior
to the Fundamental Change shall be canceled at the time of, or immediately
prior to, the Fundamental Change, as provided in the declaration.
Notwithstanding the foregoing, no person holding an Option or a Stock
Appreciation Right shall be entitled to the payment provided for in this
Section 17(b) if such Option or Stock Appreciation Right shall have expired
pursuant to the Agreement. For purposes of this Section only, "Fair Market
Value" per Share shall mean the cash plus the fair market value, as
determined in good faith by the Committee, of the non-cash consideration to
be received per Share by the shareholders of the Company upon the
occurrence of the Fundamental Change, notwithstanding anything to the
contrary provided in the Plan.
18. FORFEITURES. An Agreement may provide that in the event a Participant
has received or been entitled to payment of cash, delivery of Shares, or a
combination thereof pursuant to an Award within six months
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prior to the Participant's termination of employment with the Company and its
Affiliates, the Committee, in its sole discretion, may require the Participant
to return or forfeit the cash and/or Shares received with respect to the Award
(or its economic value as of (i) the date of the exercise of Options or Stock
Appreciation Rights, (ii) the date of, and immediately following, the lapse of
restrictions on Restricted Stock or the receipt of Shares without restrictions,
or (iii) the date on which the right of the Participant to payment with respect
to Performance Units vests, as the case may be) in the event of certain
occurrences specified in the Agreement. The Committee's right to require
forfeiture must be exercised within 90 days after discovery of such an
occurrence but in no event later than 15 months after the Participant's
termination of employment with the Company and its Affiliates. The occurrences
may, but need not, include competition with the Company or any Affiliate,
unauthorized disclosure of material proprietary information of the Company or
any Affiliate, a violation of applicable business ethics policies or a material
violation of the applicable business policies of the Company or any Affiliate or
any other occurrence specified in the Agreement within the period or periods of
time specified in the Agreement.
19. UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan. Neither the Company, its Affiliates, the Committee, nor
the Board of Directors shall be deemed to be a trustee of any amounts to be paid
under the Plan nor shall anything contained in the Plan or any action taken
pursuant to its provisions create or be construed to create a fiduciary
relationship between the Company and/or its Affiliates, and a Participant or
Successor. To the extent any person acquires a right to receive an Award under
the Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company.
20. LIMITS OF LIABILITY.
(a) Any liability of the Company to any Participant with respect to
an Award shall be based solely upon contractual obligations created by the
Plan and the Award Agreement.
(b) Except as may be required by law, neither the Company nor any
member of the Board of Directors or of the Committee, nor any other person
participating in any determination of any question under the Plan, or in
the interpretation, administration or application of the Plan, shall have
any liability to any party for any action taken, or not taken, in good
faith under the Plan.
21. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS. No certificate for
Shares distributable pursuant to this Plan shall be issued and delivered unless
the issuance of such certificate complies with all applicable legal requirements
including, without limitation, compliance with the provisions of applicable
state securities laws, the Securities Act of 1933, as amended and in effect from
time to time or any successor statute, the Exchange Act and the requirements of
the exchanges on which the Company's Shares may, at the time, be listed.
22. DEFERRALS AND SETTLEMENTS. The Committee may require or permit
Participants to elect to defer the issuance of Shares or the settlement of
Awards in cash under such rules and procedures as it may establish under the
Plan. It may also provide that deferred settlements include the payment or
crediting of interest on the deferral amounts.
23. OTHER BENEFIT AND COMPENSATION PROGRAMS. Payments and other benefits
received by a Participant under an Award made pursuant to the Plan shall not be
deemed a part of a Participant's regular, recurring compensation for purposes of
the termination, indemnity or severance pay law of any country and shall not be
included in, nor have any effect on, the determination of benefits under any
other employee benefit plan, contract or similar arrangement provided by the
Company or an Affiliate unless expressly so provided by such other plan,
contract or arrangement, or unless the Committee expressly determines that an
Award or portion of an Award should be included to accurately reflect
competitive compensation practices or to recognize that an Award has been made
in lieu of a portion of competitive cash compensation.
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24. BENEFICIARY UPON PARTICIPANT'S DEATH. To the extent that the transfer
of a Participant's Award at his or her death is permitted under an Agreement, a
Participant's Award shall be transferable at death to the estate or to the
person who acquires the right to succeed to the Award by bequest or inheritance.
25. CHANGE IN CONTROL PAYMENTS.
(a) Notwithstanding the provisions of Plan Section 17 above, if any
Award, either alone or together with other payments in the nature of
compensation to a Participant which are contingent on a change in the
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company or otherwise, would result
in any portion thereof being subject to an excise tax imposed under Code
Section 4999, or any successor provision, or would not be deductible in
whole or in part by the Company, an affiliate of the Company (as defined in
Code Section 1504, or any successor provision), or other person making such
payments as a result of Code Section 280G, or any successor provision, such
Award and/or such other benefits and payments shall be reduced (but not
below zero) to the largest aggregate amount as will result in no portion
thereof being subject to such an excise tax or being not so deductible.
(b) For purposes of Plan Section 25(a), (i) no portion of payments
the receipt or enjoyment of which a Participant shall have effectively
waived in writing prior to the date of distribution of an Award shall be
taken into account; (ii) no portion of such Award, benefits and other
payments shall be taken into account which in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to the
Participant does not constitute a "parachute payment" within the meaning of
Code Section 280G(b)(2), or any successor provision; and (iii) the value of
any non-cash benefit or any deferred payment or benefit included in such
payment shall be determined by the Company's independent auditors in
accordance with the principles of Code Sections 280G(d)(3) and (4) or any
successor provisions;
(c) Any Award not paid as a result of this Plan Section 25 or reduced
to zero as a result of the limitations imposed hereby, shall remain
outstanding in full force and effect in accordance with the other terms and
provisions of this Plan.
26. REQUIREMENTS OF LAW.
(a) To the extent that Federal laws do not otherwise control, the
Plan and all determinations made and actions taken pursuant to the Plan
shall be governed by the laws of Minnesota without regard to its conflicts
of law principals and construed accordingly.
(b) In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not effect the
remaining parts of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
27. TERMINATION OF OTHER PLAN. Effective upon the approval of the Plan by
the Company's shareholders, no further grants of options shall be made under the
Company's 1989 Stock Option Plan ("Prior Plan"). Thereafter, all grants and
awards made under the Prior Plan prior to such approval by the shareholders
shall continue in accordance with the terms of the Prior Plan.
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