As filed with the Securities and Exchange Commission on August 2, 1996
Registration No. 333-________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
NICOLLET PROCESS ENGINEERING, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1528120
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
420 NORTH FIFTH STREET, FORD CENTRE, SUITE 1040, MINNEAPOLIS, MN 55401
(Address of Principal Executive Offices) (Zip Code)
NICOLLET PROCESS ENGINEERING,INC.
1990 STOCK OPTION PLAN
AND
NICOLLET PROCESS ENGINEERING, INC.
1995 AMENDED AND RESTATED STOCK INCENTIVE PLAN
(Full title of the plans)
ROBERT A. PITNER
CHIEF EXECUTIVE OFFICER
NICOLLET PROCESS ENGINEERING, INC.
420 NORTH FIFTH STREET
FORD CENTRE, SUITE 1040
MINNEAPOLIS, MINNESOTA 55401
(Name and address of agent for service)
(612) 339-7958
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
Immediately upon the filing of this Registration Statement
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Offering Registration
To Be Registered Registered(1) Per Share(2) Price(2) Fee
- --------------------------------------------------------------------------------
Common Stock,
no par
value 1,000,000 shares $2.34 $2,340,000 $810.00
================================================================================
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended, this Registration Statement also covers such indeterminate
number of additional shares as may be issuable as a result of
anti-dilution provisions of the employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee and calculated as follows: (i) with respect to options
to purchase shares previously granted under the plans, on the basis of
the weighted average exercise price of such option grants and (ii) with
respect to options to be granted under the plan, on the basis of the
average between the bid and asked prices of the Registrant's Common
Stock on July 30, 1996 on the over-the-counter market, as reported by
the Nasdaq Small-Cap Market.
PART II
INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated by reference in this Registration
Statement: (1) the Company's Prospectus dated March 19, 1996, as filed with the
Commission on March 20, 1996 pursuant to Rule 424(b) under the Securities Act of
1933, as amended (the "Act"); (2) the Company's Form 10-QSB for the quarter
ending May 31, 1996 (File No. 0-27928); (3) all other reports filed by the
Company pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") since August 31, 1995; and (4) the description
of the Company's Common Stock contained in its Registration Statement on Form
8-A, including any amendments or reports filed for the purpose of updating such
description (File No. 0-27928).
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all shares of Common Stock offered pursuant to this
Registration Statement have been sold or that deregisters all shares of Common
Stock then remaining unsold, shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable. The Company's Common Stock to be offered pursuant to
this Registration Statement has been registered under Section 12 of the Exchange
Act as described in Item 3 of this Part II.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Minnesota law and the Company's Bylaws provide that the Company shall,
under certain circumstances and subject to certain limitations, indemnify any
person made or threatened to be made a party to a proceeding by reason of that
person's former or present official capacity with the Company against
judgements, penalties, fines, settlements and reasonable expenses. Any such
person is also entitled, subject to certain limitations, to payment or
reimbursement of reasonable expenses in advance of the final disposition of the
proceeding.
The Company has entered into indemnification agreements with Messrs.
McNally, Pitner, Case, Bugbee and Koontz whereby the Company has agreed to
indemnify and hold harmless the above directors and executive officers from and
against any claims, liabilities, damages or expenses incurred by them in or
arising out of their status, capacities and activities with respect to the
Company to the maximum extent permitted by Minnesota law. The Company believes
that these agreements are necessary to attract and retain qualified persons as
directors and executive officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
No securities are to be reoffered or resold pursuant to this
Registration Statement.
ITEM 8. EXHIBITS.
4.1* Articles of Incorporation of the Company.
4.2* Bylaws of the Company.
4.3* Specimen form of the Company's Common Stock Certificate.
4.4* Warrant for Purchase of Shares of Common Stock of the Company issued
to RTF Consultants dated August 31, 1991.
4.5* Warrant for Purchase of Shares of Common Stock of the Company issued
to Anelise Sawkins dated August 9, 1993.
4.6* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with November 1993 private placement.
4.7* Warrant for Purchase of Shares of Common Stock of the Company issued
to Charlie Phelps dated May 5, 1994.
4.8* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with advertising design services.
4.9* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with January 1995 private placement.
4.10* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with February 1995 private placement
4.11* Warrant for Purchase of Shares of Common Stock of the Company issued
to Tuschner & Company, Inc. dated February 7, 1995.
4.12* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with March 1995 private placement.
4.13* Warrant for Purchase of Shares of Common Stock of the Company issued
to Tuschner & Company dated March 2, 1995.
4.14* Form of Warrant for Purchase of Common Stock of the Company issued in
connection with March 1995 bridge financing.
4.15* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with repayment of March 1995 bridge financing.
4.16* Form of Warrant for Purchase of Shares of Common Stock of the Company
issued in connection with January 1996 bridge financing.
5.1** Opinion and Consent of Oppenheimer Wolff & Donnelly.
23.1 Consent of Oppenheimer Wolff & Donnelly (included in Exhibit 5.1).
23.2** Consent of Ernst & Young LLP.
23.3** Consent of John A. Knutson & Co., PLLP.
24.1 Power of Attorney (included on page 5 of this Registration Statement).
99.1** 1990 Stock Option Plan.
99.2** 1995 Stock Incentive Plan.
____________________
* Incorporated by reference to the exhibits to the Company's Registration
Statement on Form SB-2 (File No. 333-00852C).
** Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represents a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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 Minneapolis, State of Minnesota, on July 30, 1996.
NICOLLET PROCESS ENGINEERING, INC.
By:/s/ Robert A. Pitner
Robert A. Pitner
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert A. Pitner and Lanny I. Kurysh and
each or any one of them, his true and lawful attorneys-in-fact and agents, each
acting alone, with full powers of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, each acting alone, full power and authority
to do and perform each and every act and thing requisite or necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on July 26, 1996
in the capacities indicated.
Signature Title
/s/ Robert A. Pitner President, Chief Executive Officer and Director
Robert A. Pitner (Principal Executive Officer)
/s/ Lanny I. Kurysh Chief Financial and Operations Officer
Lanny I. Kurysh (Principal Financial Officer)
/s/ John Sandberg Controller
John Sandberg (Principal Accounting Officer)
/s/ Pierce A. McNally Chairman of the Board
Pierce A. McNally
/s/ Thomas W. Bugbee Director
Thomas W. Bugbee
/s/ Benton J. Case Director
Benton J. Case
/s/ Richard W. Koontz Director
Richard W. Koontz
INDEX TO EXHIBITS
Exhibit Description Location
4.1 Articles of Incorporation of the Company (1)
4.2 Bylaws of the Company (1)
4.3 Specimen form of the Company's Common Stock Certificate (1)
4.4 Warrant for Purchase of Shares of Common Stock of the Company
issued to RTF Consultants dated August 31, 1991 (1)
4.5 Warrant for Purchase of Shares of Common Stock of the Company
issued to Anelise Sawkins dated August 9, 1993 (1)
4.6 Form of Warrant for Purchase of Shares of Common Stock of the
Company issued in connection with November 1993 private placement (1)
4.7 Warrant for Purchase of Shares of Common Stock of the Company
issued to Charlie Phelps dated May 5, 1994 (1)
4.8 Form of Warrant for Purchase of Shares of Common Stock of the
Company issued in connection with advertising design services (1)
4.9 Form of Warrant for Purchase of Shares of Common Stock of the
Company issued in connection with January 1995 private placement (1)
4.10 Form of Warrant for Purchase of Shares of Common Stock of the
Company issued in connection with February 1995 private placement (1)
4.11 Warrant for Purchase of Shares of Common Stock of the Company
issued to Tuschner & Company, Inc. dated February 7, 1995 (1)
4.12 Form of Warrant for Purchase of Shares of Common Stock of the
Company issued in connection with March 1995 private placement (1)
4.13 Warrant for Purchase of Shares of Common Stock of the Company
issued to Tuschner & Company dated March 2, 1995 (1)
4.14 Form of Warrant for Purchase of Common Stock of the Company
issued in connection with March 1995 bridge financing (1)
4.15 Form of Warrant for Purchase of Shares of Common Stock of
the Company issued in connection with repayment of
March 1995 bridge financing (1)
4.16 Form of Warrant for Purchase of Shares of Common Stock of
the Company issued in connection with January 1996
bridge financing (1)
5.1 Opinion and Consent of Oppenheimer Wolff &
Donnelly Filed electronically
23.1 Consent of Oppenheimer Wolff & Donnelly Included in Exhibit 5.1
23.2 Consent of Ernst & Young LLP Filed electronically
23.3 Consent of John A. Knutson & Co., PLLP Filed electronically
24.1 Power of Attorney Included on page 5 hereof
99.1 1990 Stock Option Plan Filed electronically
99.2 1995 Stock Incentive Plan Filed electronically
____________________
(1) Incorporated by reference to the exhibits to the Company's Registration
Statement on Form SB-2 (File No. 333-00852C).
August 1, 1996 Exhibit 5.1
Nicollet Process Engineering, Inc.
420 North Fifth Street
Ford Centre, Suite 1040
Minneapolis, Minnesota 55401
Re: Registration Statement on Form S-8
1990 Stock Option Plan
1995 Stock Incentive Plan
Ladies and Gentlemen:
We have acted as counsel to Nicollet Process Engineering, Inc., a Minnesota
corporation (the "Company"), in connection with the registration by the Company
of 1,000,000 shares of its Common Stock, no par value (the "Shares"), pursuant
to the Company's Registration Statement on Form S-8 for the Company's 1990 Stock
Option Plan and 1995 Amended and Restated Stock Incentive Plan (collectively,
the "Option Plans"), to be filed with the Securities and Exchange Commission on
August 1, 1996 (the "Registration Statement").
In acting as counsel for the Company and arriving at the opinions expressed
below, we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein.
In connection with our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of natural persons and the conformity to original documents of
all documents submitted to us as certified or photostatic copies.
Based on the foregoing, and subject to the qualifications and limitations set
forth herein, it is our opinion that:
1. The Company has the corporate authority to issue the Shares in the
manner and under the terms set forth in the Registration Statement.
2. The Shares have been duly authorized and, when issued, delivered and
paid for in accordance with the Option Plans referred to in the
Registration Statement, will be validly issued, fully paid and
nonassessable.
We express no opinion with respect to laws other than the laws of the State of
Minnesota and the federal laws of the United States of America, and we assume no
responsibility as to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement as described above. It is not to be
used, circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
OPPENHEIMER WOLFF & DONNELLY
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Nicollet Process Engineering, Inc. 1990 Stock Option Plan
and the Nicollet Process Engineering, Inc. 1995 Amended and Restated Stock
Incentive Plan of our report dated January 5, 1996 with respect to the financial
statements of Nicollet Process Engineering, Inc. included in the Registration
Statement (Form SB-2 No. 333-00852C), filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Minneapolis, Minnesota
August 1, 1996
Exhibit 23.3
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Nicollet Process Engineering, Inc. 1990 Stock Option Plan
and the Nicollet Process Engineering, Inc. 1995 Amended and Restated Stock
Incentive Plan of our report dated December 13, 1994 with respect to the
financial statements of Nicollet Process Engineering, Inc. included in the
Registration Statement (Form SB-2 No. 333-00852C), filed with the Securities and
Exchange Commission.
John A. Knutson & Co.
Certified Public Accountants
Minneapolis, Minnesota
August 1, 1996
NICOLLET PROCESS ENGINEERING, INC.
1990 STOCK OPTION PLAN
Scope and Purpose of Plan
This Nicollet Process Engineering, Inc. 1990 Stock Option Plan
(the "Plan") provides for the granting of
(a) Incentive Options (hereinafter defined) to all
employees of Nicollet Process Engineering, Inc., a Minnesota
corporation (the "Corporation"), or of its affiliates (hereinafter
defined), and
(b) Nonqualified Options (hereinafter defined) and Stock
Appreciation Rights (hereinafter defined) to all employees and
directors of the Corporation or of its Affiliates.
The purpose of the Plan is to provide an incentive for all employees
and directors of the Corporation or its Affiliates to remain in the service of
the Corporation or its Affiliates, to extend to them the opportunity to acquire
a proprietary interest in the Corporation so that they will apply their best
efforts for the benefit of the Corporation, and to aid the Corporation in
attracting able persons to enter the service of the Corporation and its
Affiliates.
SECTION 1. Definitions.
1.01 "Affiliates" means any corporation, other than the Corporation, in
an unbroken chain of corporations beginning with the Corporation if each of the
corporations, other than the last corporation in the unbroken chain, owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
1.02 "Agreement" shall mean the agreement between the Corporation and
the individual to whom Options or SARs are granted.
1.03 "Base Amount" shall mean the amount designated in an Agreement
that establishes the lower limit used for measuring a Holder's right to receive
cash or shares of the Stock on exercise of an SAR.
1.04 "Board of Directors" shall mean the board of directors of the
Corporation.
1.05 "Code" means the Internal Revenue Code of 1986 as amended from
time to time.
1.06 "Director" shall mean a member of the Board of Directors of the
Corporation or any of its affiliates.
1.07 "Eligible Individuals" shall mean in the case of Incentive Options
all employees, which shall be deemed to include officers and directors who are
also employees of the Corporation or of any of its Affiliates, and shall mean in
the case of Nonqualified Options and Stock Appreciation Rights all employees and
directors of the Corporation or any of its affiliates.
1.08 "Fair Market Value" shall mean, if the Stock is traded on one or
more established markets or exchanges, the mean of the opening and closing
prices of the Stock in the primary market or exchange on which the Stock is
traded, and if the Stock is not so traded or the Stock does not trade on the
relevant date, the value determined in good faith by the Board of Directors. For
purposes of valuing Incentive Options, the Fair Market Value of stock shall be
determined without regard to any restriction other than one which, by its terms,
will never lapse.
1.09 "Holder" shall mean an Eligible Individual to whom an Option or
SAR has been granted.
1.10 "Incentive Options" shall mean stock options that satisfy the
requirements of Section 422A of the Code.
1.11 "Nonqualified Options" shall mean stock options which do not
satisfy the requirements of Section 422A of the Code.
1.12 "Options" shall mean either Incentive Options or Nonqualified
Options, or both.
1.13 "Stock" shall mean the Corporation's authorized no par value
common stock together with any other securities with respect to which Options or
SARs granted hereunder may become exercisable.
1.14 "Stock Appreciation Right" or "SAR" shall mean a right to receive
on exercise an amount of cash (or, at the Corporation's option, a number of
shares of the Stock with a Fair Market Value as of the date of exercise) equal
to the difference on the exercise date between the Fair Market Value of the
Stock on such date and the Base Amount.
SECTION 2. Stock and Maximum Number of Shares Subject to the Plan.
2.01 Description of Stock and Maximum Shares Allocated. The Stock which
Options granted hereunder give the holder thereof the right to purchase and the
Stock that may be issued or delivered in payment of SARs may be unissued or
reacquired shares of Stock, as the Board of Directors may, in its sole and
absolute discretion, from time to time determine. Subject to the adjustments
provided for in Paragraph 6.07 hereof, the aggregate number of shares of Stock
to be issued pursuant to the exercise of all Options or SARs granted hereunder
shall not exceed 100,000 shares. For purposes of calculating the number of
shares charged against the maximum number of shares set forth above, in the case
of the exercise of an SAR, the number of whole shares of Stock issued or
delivered with respect to such SAR shall be charged against the maximum number
of shares set forth above.
2.02 Restoration of Unpurchased Shares. If an Option granted hereunder
expires or terminates for any reason during the term of this Plan and prior to
the exercise thereof in full, the shares of Stock subject to but not issued
under such Option shall again be available for Options granted hereunder
subsequent thereto.
SECTION 3. Administration of the Plan.
3.01 Stock Option Committee. The Plan shall be administered by the
Board of Directors or a committee appointed by the Board of Directors (the
"Committee").
3.02 Duration, Removal, Etc. The members of the Committee shall serve
at the pleasure of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from the Committee or to add
members thereto. Vacancies on the Committee, however caused, shall be filled by
action of the Board of Directors.
3.03 Meetings and Actions of the Committee. The Committee shall elect
one of its members as its Chairman and shall hold its meetings at such times and
places as it may determine. All decisions and determinations of the Committee
shall be made by the majority vote or decision of all of its members, whether
present or not; provided, however, that any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting duly called and held. The
Committee may make any rules and regulations for the conduct of its business
that are not inconsistent with the provisions hereof and with the bylaws of the
Corporation as it may deem advisable.
3.04 Powers of the Board of Directors or Committee. Subject to the
express provisions hereof, the Board of Directors or the Committee, if one shall
be appointed, shall have the authority, in its sole and absolute discretion, (a)
to adopt, amend, and rescind administrative and interpretive rules and
regulations relating to the Plan; (b) to determine the terms and provisions of
the respective Agreements (which need not be identical), including provisions
defining or otherwise relating to (i) subject to Section 6 of the Plan, the term
and the period or periods and extent of exercisability of the Options and SARs,
(ii) the extent to which the transferability of shares of Stock issued upon
exercise of Options and SARs is restricted, (iii) the effect of termination of
employment upon the exercisability of the Options and SARS, and (iv) the effect
of approved leaves of absence (consistent with any applicable regulations of the
Internal Revenue Service); (c) subject to Paragraph 6.06, to accelerate the time
of exercisability of any Option or SAR that has been granted; (d) to construe
the respective Option and SAR Agreements and the Plan; and (e) to make all other
determinations necessary or advisable for administering the Plan. The Board of
Directors or the Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Option or SAR Agreement in the
manner and to the extent it shall deem expedient to carry it into effect, and it
shall be the sole and final judge of such expediency. The determinations of the
Board of Directors or the Committee, if there be one, on the matters referred to
in this Paragraph 3.04 shall be final and conclusive.
SECTION 4. Eligibility and Participation.
4.01 Eligible Individuals. Options and SARs may be granted hereunder
only to persons who are Eligible Individuals at the time of the grant thereof.
Notwithstanding any provision contained herein to the contrary, a person shall
not be eligible to receive an Incentive Option hereunder unless he is an
employee of the Corporation or an Affiliate, nor shall a person be eligible to
receive an Incentive Option hereunder if he, at the time such option is granted,
would own (within the meaning of sections 422A and 425 of the Code) stock
possessing more than ten percent (10%) of the total combined voting power or
value of all classes of stock of the Corporation or an Affiliate unless at the
time such Incentive Option is granted, the exercise price per share of Stock is
at least one hundred and ten percent (110%) of the Fair Market Value of each
share of Stock to which the Incentive Option relates and the Incentive Option is
not exercisable after the expiration of five (5) years from the date it is
granted.
4.02 No Right to Option or SAR. The adoption of the Plan shall not be
deemed to give any person a right to be granted an Option or SAR hereunder.
SECTION 5. Grant of Options and SARs.
Subject to the express provisions hereof, the Board of Directors or the
Committee, if one shall be appointed, shall determine which Eligible Individuals
shall be granted Options and SARs hereunder from time to time. The Board of
Directors or the Committee, if one shall be appointed, shall also determine the
number of shares subject to each of such Options, the number of SARs to be
granted, and shall authorize the granting of Options and SARs in accordance with
such determinations. Each Option and SAR granted hereunder shall be evidenced by
an Agreement, executed by the Corporation and the Eligible individual to whom
the Option or SAR is granted, incorporating such terms as the Board of Directors
or the Committee shall deem necessary or desirable. More than one Option or SAR
may be granted hereunder to the same eligible individual and be outstanding
concurrently hereunder. In the event an Eligible Individual is granted both one
or more Incentive Options and one or more Nonqualified Options, such grants
shall be evidenced by separate Agreements, one each for the Incentive Option
grants and one each for the Nonqualified Option grants.
SECTION 6. Terms and Conditions of Options.
All Options and SARs granted hereunder shall comply with, be deemed to
include, and shall be subject to the following terms and conditions:
6.01 Number of Shares and Individual Stock Appreciation Rights. Each
Agreement shall state the number of shares of Stock and SARs to which it
relates.
6.02 Exercise Price and Base Amount. Each Agreement shall state the
exercise price per share, in the case of Options, and the Base Amount per SAR,
in the case of SARs. The exercise price per share of Stock subject to an
Incentive Option shall not be less than the greater of (a) the par value per
share of said Stock or (b) 100% of the Fair Market Value per share of said Stock
on the date of the grant of the Option or the amount specified in Paragraph
4.01, whichever is applicable; and the Base Amount under a SAR granted in tandem
with an Incentive Option shall likewise not be less than the greater of such
amounts.
6.03 Medium, Time of Payment, and Method of Exercise. The exercise
price of an Option shall be payable upon the exercise of the Option in cash, by
certified or cashier's check, or, with the consent of the Board of Directors or
the Committee, with shares of Stock of the Corporation owned by the Holder
immediately prior to such exercise. Exercise of an Option or SAR shall not be
effective until the Corporation has received written notice of exercise. In the
case of an Option, such notice must specify the number of whole shares to be
purchased and be accompanied by payment in full of the aggregate Option price of
the number of shares purchased. In the case of an SAR, the notice must specify
the number of SARs being exercised. The Corporation shall not in any case be
required to sell, issue, or deliver a fractional share with respect to any
Option or SAR.
6.04 Additional Provisions Relating to SARs. The Board of Directors or
the Committee may, in its discretion, grant SARs to Eligible Individuals either
separately or in tandem with, and in direct relation to, Options granted
pursuant to the Plan, including Incentive Options. If granted in tandem, the
exercise of an Option shall cause a correlative reduction in the number of SARs
granted in tandem with such Option. The exercise of an SAR issued in tandem with
a stock option shall cause a correlative reduction in the number of shares which
may be acquired pursuant to the exercise of such Option. When issued in tandem,
the Agreement shall provide for the correlative reduction described in the
preceding sentence.
An SAR granted in tandem with an Incentive Option must have a Base
Amount equal to the exercise price of the Incentive Option. Such SAR may be
exercised only when the underlying Incentive Option is eligible to be exercised.
In addition, such SAR may only be exercised when the Fair Market Value of the
Stock subject to the Incentive Option exceeds the exercise price of the
Incentive Option.
Upon exercise of an SAR or portion thereof, the Holder shall, in the
manner provided in Paragraph 6.05, receive an amount equal to aggregate
difference between the Fair Market Value, as of the date of exercise, of a
number of shares of the Stock equal to the number of SARs exercised and the
aggregate of the Base Amounts with respect to such SARs. Payment of such amount
shall, at the Corporation's option, be made in cash, notes, whole shares of
Stock (valued at Fair Market Value on the date of exercise), or in a combination
of cash, notes, and/or whole shares of Stock. In case the Corporation elects to
deliver only shares of the Stock, payment shall be made in whole shares, rounded
down to the next number of whole shares of Stock.
6.05 Term, Time of Exercise, and Transferability of Options. In
addition to such other terms and conditions as may be included in a particular
Agreement granting an Option or SAR, an Option or SAR shall be exercisable
during a Holder's lifetime only by him or by his guardian or legal
representative. Neither an Option nor an SAR shall be transferrable other than
by will or the laws of descent and distribution. Each Option and SAR shall also
be subject to the following terms and conditions:
(a) Termination of Employment. The provisions of this
Paragraph 6.05(a) shall apply to the extent a Holder's Agreement does
not expressly provide otherwise. If a Holder ceases to be employed by
the Corporation or an Affiliate because the Holder voluntarily
terminates employment with such employer (and does not thereupon become
an employee of the Corporation or one of its Affiliates), the portion,
if any, of an Option or SAR that remains unexercised, including that
portion, if any, that pursuant to the Agreement is not yet exercisable,
on the date of the holder's termination of employment shall terminate
and cease to be exercisable as of such date, If a Holder ceases to be
employed by the Corporation or an Affiliate because any of such
entities terminates the Holder's employment for cause, the portion, if
any, of an Option or SAR that remains unexercised, including that
portion, if any, that pursuant to the Agreement is not yet exercisable,
on the date of the Holder's termination of employment shall terminate
and cease to be exercisable as of such date. A holder's employment
shall be deemed terminated "for cause" if terminated by the Board of
Directors of the Corporation or the board of directors of an Affiliate
because of incompetence, insubordination, dishonesty, other acts
detrimental to the interest of the Corporation or its Affiliates, or
any material breach by the Holder of any employment, nondisclosure,
noncompetition, or other contract with the Corporation or one of its
Affiliates. Whether cause exists shall be determined by such board of
directors in its sole discretion and in good faith. If a Holder ceases
to be employed by the Corporation or an Affiliate because one of such
entities terminates the employment of the Holder but not for cause (and
the Holder does not thereupon become an employee of the Corporation or
one of its Affiliates), the Holder shall have the right for sixty (60)
days after such termination of employment to exercise the Option or SAR
with respect to that portion thereof that has become exercisable
pursuant to Holder's Agreement as of the date of the Holder's
termination of employment.
(b) Disability. The provisions of this Paragraph 6.05(b) shall
apply to the extent a Holder's Agreement does not expressly provide
otherwise. If a Holder ceases to be employed by the Corporation or an
Affiliate by reason of disability (as defined in section 105(d)(4) of
the Code), the Holder shall have the right for one hundred twenty (120)
days after the date of termination of employment with the Corporation
or the Affiliate by reason of disability to exercise an Option or SAR
to the extent such Option or SAR is exercisable on the date of his
termination of employment.
(c) Death. The provisions of this Paragraph 6.05(c) shall
apply to the extent a Holder's Agreement does not expressly provide
otherwise. If a Holder dies while in the employ of the Corporation or
an Affiliate an Option or SAR shall be exercisable by the Holder's
legal representatives, legatees, or distributees for one hundred twenty
(120) days following the date of the Holder's death to the extent such
Option or SAR is exercisable on the holder's date of death.
Notwithstanding any other provision of this Plan, including the
provisions of items (a), (b), and (c) of this Paragraph 6.05, no Incentive
Option, or SAR granted in tandem with an Incentive Option granted hereunder,
shall be exercisable after the expiration of ten (10) years from the date it is
granted, or the period specified in Paragraph 4.01, if applicable. The Board of
Directors or the Committee shall have authority to prescribe in any Agreement
that the Option or SAR evidenced thereby may be exercised in full or in part as
to any number of shares or SARs subject thereto at any time or from time to time
during the term of the Option or SAR, or in such installments at such times
during said term as the Board of Directors or the Committee may prescribe.
Except as provided above and unless otherwise provided in any Agreement, an
Option or SAR may be exercised at any time or from time to time during the term
of the Option or SAR. In the case of an Option, such exercise may be as to any
or all whole (but no fractional) shares which have become purchasable under the
Option.
Within a reasonable time after the Corporation receives written notice
that the Holder has elected to exercise all or a portion of an Option, such
notice to be accompanied by payment in full of the aggregate Option price of the
number of shares purchased, the Corporation shall issue and deliver a
certificate representing the shares acquired in consequence of the exercise and
any other amounts payable in consequence of such exercise. Within a reasonable
time after the Corporation receives written notice that the Holder has elected
to exercise all or a portion of an SAR, the Corporation shall pay the amount due
pursuant to Paragraph 6.04 in the form of cash or notes or some combination
thereof as specified in the Agreement; provided, however, the Corporation may
satisfy such obligation by transferring shares of Stock of equal value to the
Holder. In the event that a Holder exercises both an Incentive Option, or
portion thereof, and a Nonqualified Option, or a portion thereof, separate Stock
certificates shall be issued, one for the Stock subject to the Incentive Option
and one for the Stock subject to the Nonqualified Option. Separate certificates
shall also be issued with respect to any Stock issued or delivered in payment of
an SAR. The value of the amount of the shares of Stock, cash or notes
transferrable due to an exercise of an Option or SAR under this plan shall not
be increased due to the passage of time, except as may be provided in an
Agreement.
Nothing herein or in any Option or SAR granted hereunder shall require
the Corporation to issue any shares upon exercise of any Option or SAR if such
issuance would, in the opinion of counsel for the Corporation, constitute a
violation of the Securities Act of 1933, as amended, or any similar or
superseding statute or statutes, or any other applicable statute or regulation,
as then in effect. At the time of any exercise of an Option or SAR, the
Corporation may, as a condition precedent to the exercise of such Option or SAR,
require from the Holder of the Option or SAR (or in the event of his death, his
legal representatives, legatees, or distributees) such written representations,
if any, concerning his intentions with regard to the retention or disposition of
the shares being acquired by exercise of such Option or in payment of such SAR
and such written covenants and agreements, if any, as to the manner of disposal
of such shares as, in the opinion of counsel to the Corporation, may be
necessary to ensure that any disposition by such Holder (or in the event of his
death, his legal representatives, legatees, or distributees), will not involve a
violation of the Securities Act of 1933, as amended, or any similar or
superseding statute or statutes, or any other applicable state or federal
statute or regulation, as then in effect. Certificates for shares of Stock, when
issued, may have the following legend, or statements of other applicable
restrictions, endorsed thereon, and may not be immediately transferable:
The shares of Stock evidenced by this certificate have been issued to
the registered owner in reliance on written representations that these
shares have been purchased for investment. These shares may not be
sold, transferred, or assigned unless, in the opinion of the
Corporation and its legal counsel, such sale, transfer, or assignment
will not be in violation of the Securities Act of 1933, as amended,
applicable rules and regulations of the Securities and Exchange
Commission, and any applicable state securities laws.
6.06 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. With respect to
an Incentive Option granted under this Plan, the aggregate Fair Market Value of
shares of Stock subject to such Incentive Option and the aggregate Fair Market
Value of shares of Stock or stock of any Affiliate (or a predecessor of the
Corporation or an Affiliate) subject to any other incentive stock option (within
the meaning of Section 422A of the Code) of the Corporation and its Affiliates
(or a predecessor corporation of any such corporation), to the extent such
options become first exercisable in any calendar year, may not (with respect to
any holder) exceed $100,000, determined as of the date the Incentive Option is
granted. For purposes of this Paragraph 6.06, "predecessor corporation" means a
corporation that was a party to a transaction described in Section 425(a) of the
Code (or which would be so described if a substitution or assumption under such
section had been effected) with the Corporation, or a corporation which, at the
time the new incentive stock option (within the meaning of section 422A of the
Code) is granted, is an Affiliate of the Corporation or a predecessor
corporation of any such corporations, or a predecessor corporation of any such
corporations.
6.07 Adjustments Upon Changes in Capitalization. Notwithstanding any
other provision hereof, in the event of any change in the number of outstanding
shares of Stock effected without receipt of consideration therefor by the
Corporation, by reason of a stock dividend, or split, combination, exchange of
shares or other recapitalization, merger, or otherwise, in which the Corporation
is the surviving corporation, the aggregate number and class of the reserved
shares, the number and class of shares subject to each outstanding Option and
the Option price of each outstanding Option, and the number of SARs and the Base
Amount(s) under each outstanding SAR shall be automatically adjusted to
accurately and equitably reflect the effect thereon of such change, provided
that any fractional share resulting from such adjustment may be eliminated. In
the event of a dispute concerning such adjustment, the decision of the Board of
Directors or the Committee shall be conclusive. The number of reserved shares or
the number of shares subject to any outstanding Option shall be automatically
reduced by any fraction included therein which results from any adjustment made
pursuant to this Paragraph 6.07. A dissolution or liquidation of the
Corporation, a merger (other than a merger effecting a reincorporation of the
Corporation in another state) or consolidation in which the Corporation is not
the surviving corporation, or a transaction in which another corporation becomes
the owner of 50% or more of the total combined voting power of all classes of
stock of the Corporation shall cause every Option and SAR then outstanding to
terminate, but the Holders of such then outstanding Options and SARs shall, in
any event, subject to the limitation on the number of shares that may become
first exercisable during any calendar year set forth in Paragraph 6.06, have the
right, immediately prior to such dissolution, liquidation, merger,
consolidation, or transaction, to exercise such Options or SARs, to the extent
not theretofore exercised, without regard to the determination as to the periods
and installments of exercisability made pursuant to Paragraph 6.13 if (and only
if) such Options or SARs have not at that time expired or been terminated. Such
acceleration of exercisability shall not apply to a given Option or SAR if any
surviving or acquiring corporation agrees to assume such Option or SAR in
connection with the merger, consolidation, or transaction or agrees to
substitute a new Option satisfying the requirements of section 425(a) of the
Code or to substitute a new SAR.
6.08 Rights as a Shareholder. A Holder shall have no right as a
shareholder with respect to any shares covered by his Option or payable with
respect to an SAR until a certificate representing such shares is issued to him.
No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash or other property) or distributions or other rights for which the record
date is prior to the date such certificate is issued, except as provided in
Paragraph 6.07 hereof.
6.09 Modification, Extension and Renewal of Options and SARs. Subject
to the terms and conditions of and within the limitations of the Plan, the Board
of Directors or the Committee may modify, extend or renew outstanding Options
and SARs granted under the Plan, or accept the surrender of Options and SARs
outstanding hereunder (to the extent not theretofore exercised) and authorize
the granting of new Options and SARs hereunder in substitution therefor (to the
extent not theretofore exercised). The Board of Directors or the Committee may
not, however, without the consent of the Holder, modify any outstanding Options
or SARs so as to specify a lower exercise price or Base Amount or accept the
surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a lower option price. In addition,
no modification of an Option or SAR granted hereunder shall, without the consent
of the Holder, alter or impair any rights or obligations under any Option or SAR
theretofore granted hereunder to such Holder under the Plan, except as may be
necessary, with respect to Incentive Options, to satisfy the requirements of
section 422A of the Code.
6.10 Furnish Information. Each Holder shall furnish to the Corporation
all information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.
6.11 Obligation to Exercise; Termination of Employment. The granting of
an Option or SAR hereunder shall impose no obligation upon the Holder to
exercise the same or any part thereof. In the event of a Holder's termination of
employment with the Corporation or an Affiliate, the unexercised portion of an
Option or SAR granted hereunder shall terminate in accordance with Paragraph
6.05 hereof.
6.12 Agreement Provisions. The Agreements authorized under the Plan
shall contain such other provisions (including, without limitation, restrictions
or the removal of restrictions upon the exercise of the Option or SAR and the
transfer of shares thereby acquired) as the Board of Directors or the Committee
shall deem advisable. Each such Agreement relating to Incentive Options granted
hereunder, and any SARs granted in tandem therewith, shall contain such
limitations and restrictions upon the exercise of the Incentive Option or SAR to
which it relates as shall be necessary for the Incentive Option to which such
Agreement relates to constitute an incentive stock option, as defined in section
422A of the Code.
SECTION 7. Restrictions on Shares of the Stock Acquired Upon Exercise of an
Option, SAR, or Otherwise.
7.01 Discretion of the Board of Directors or Committee. Each Agreement
may contain or otherwise provide for such restrictions on the transferability of
shares of the Stock acquired pursuant to an Option or SAR granted hereunder or
otherwise as the Board of Directors or the Committee in its sole and absolute
discretion shall deem proper or advisable. Such restrictions on transferability
may include, but need not be limited to, options and rights of first refusal in
favor of the Corporation and shareholders of the Corporation other than the
Holder who is a party to the particular Agreement.
7.02 Remedies and Endorsement.
(a) The Corporation shall be entitled to recover from a holder
reasonable attorneys fees incurred in connection with the enforcement
of the terms and provisions of the Plan and any Agreement whether by an
action to enforce specific performance or for damages for its breach or
otherwise.
(b) Each certificate representing shares issued to a Holder
upon exercise of an Option or SAR granted under the Plan shall, if such
share is subject to any transfer restriction, including a right of
first refusal, provided for under this Plan or an Agreement, bear a
legend that complies with applicable law with respect to the
restrictions on transferability contained in this Section 7:
The shares represented by this certificate are subject to
restrictions on transferability imposed by that certain
instrument entitled "Nicollet Process Engineering, Inc. 1990
Employee Stock Option Plan" dated ___________, 1990, and an
agreement thereunder between Nicollet Process Engineering,
Inc. and __________________ dated ____________________, 1990
which grants to the Corporation an option to purchase such
shares in certain instances. A copy of such plan and agreement
is on file at the principal office of the Corporation, and is
subject to the same right of examination by a shareholder of
the Corporation (in person or by agent, attorney, or
accountant) as are the books and records of the Corporation.
SECTION 8. Term of Plan.
No Options or SARs may be granted hereunder after the date that is ten
(10) years from the earlier of (i) the date the Plan is adopted by the Board of
Directors or (ii) the date the Plan is approved by the shareholders of the
Corporation.
SECTION 9. Amendment of Plan.
The Board of Directors may, insofar as permitted by law, with respect
to any shares at the time not subject to Options or deliverable with respect to
SARs that have been exercised, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever; provided, however, that, without the
approval of the holders of a majority of the outstanding shares of voting stock
of all classes of the Corporation, no such revision or amendment shall (a)
change the number of shares of the Stock or the number of SARs subject to the
Plan, (b) change the designation of the class of employees eligible to receive
Options and SARs, (c) decrease the price at which Incentive Options may be
granted, (d) remove the administration of the Plan from the Board of Directors
or the Committee, (e) render the members of the Board of Directors or the
Committee eligible to receive Options under the Plan while serving as such, or
(f) without the consent of the affected holder, cause the Incentive Options
granted hereunder and outstanding at such time that satisfied the requirements
of section 422A of the Code to no longer satisfy such requirements. Furthermore,
the Plan shall not, without such approval of the shareholders, be amended in any
manner that will cause Incentive Options issued under it to fail to satisfy the
requirements applicable to incentive stock options as defined in section 422A of
the Code.
SECTION 10. General.
10.01 Application of Funds. The proceeds received by the Corporation
from the sale of shares pursuant to Options shall be used for general corporate
purposes.
10.02 Right of the Corporation and Affiliates to Terminate Employment.
Nothing contained in the Plan, or in any Agreement, shall confer upon any Holder
the right to continue in the employ of the Corporation or any Affiliate, or
interfere in any way with the rights of the Corporation or any Affiliate to
terminate his employment any time.
10.03 No Liability for Good Faith Determinations. Neither the members
of the Board of Directors nor any member of the Committee shall be liable for
any act, omission, or determination taken or made in good faith with respect to
the Plan or any Option or SAR granted under it.
10.04 Information Confidential. As partial consideration for the
granting of each Option or SAR hereunder, the holder shall agree with the
Corporation that he will keep confidential all information and knowledge which
he has relating to the manner and amount of his participation in the Plan;
provided, however, that such information may be given in confidence to the
Holder's spouse, attorney, personal tax advisor, or to a financial institution
to the extent that such information is necessary in order to secure a loan. In
the event any breach of this promise comes to the attention of the Board of
Directors or the Committee, it shall take into consideration such breach, in
determining whether to recommend the grant of any future Option or SAR to such
Holder, as a factor militating against the advisability of granting any such
future Option or SAR to such employee.
10.05 Other Benefits. Participation in the Plan shall not preclude the
Holder from eligibility in any other stock option plan of the Corporation or any
Affiliate or any old age benefit, insurance, pension, profit sharing,
retirement, bonus, or other extra compensation plans which the Corporation or
any Affiliate has adopted, or may, at any time, adopt for the benefit of its
employees.
10.06 Execution of Receipts and Releases. Any payment of cash or any
issuance or transfer of shares of Stock to the Holder, or to his legal
representative, heir, legatee, or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Board of Directors or the Committee may require any
Holder, legal representative, heir, legatee, or distributee, as a condition
precedent to such payment, to execute a release and receipt therefor in such
form as it shall determine.
10.07 No Guarantee of Interests. Neither the Board of Directors nor the
Committee nor the Corporation guarantees the Stock of the Corporation from loss
or depreciation.
10.08 Payment of Expenses. All expenses incident to the administration,
termination, or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation or its Affiliates; provided,
however, the Corporation or an Affiliate may recover any and all damages, fees,
expenses, and/or costs arising out of any actions taken by the Corporation to
enforce its right to purchase Stock under Paragraph 7.01 hereof.
10.09 Corporation Records. Records of the Corporation or its Affiliates
regarding the Holder's period of employment, termination of employment and the
reason therefor, leaves of absence, re-employment, and other matters shall be
conclusive for all purposes hereunder, unless determined by the Board of
Directors or the Committee to be incorrect.
10.10 Information. The Corporation and its Affiliates shall, upon
request or as may be specifically required hereunder, furnish or cause to be
furnished, all of the information or documentation which is necessary or
required by the Board of Directors or the Committee to perform its duties and
functions under the Plan.
10.11 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to the Holder or his personal representatives,
heirs, legatees, or distributees for any act of, or failure to act on the part
of, the Board of Directors or the Committee.
10.12 Corporation Action. Any action required of the Corporation shall
be by resolution of its Board or by a person authorized to act by resolution of
the Board of Directors.
10.13 Severability. If any provision of this Plan is held to be illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein.
10.14 Notices. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered on the date on which it is personally delivered, or, whether actually
received or not, on the third business day after it is deposited in the United
States mail, certified or registered, postage prepaid, addressed to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith. The Corporation or a Holder
may change, at any time and from time to time, by written notice to the other,
the address which it or he had theretofore specified for receiving notices.
Until changed in accordance herewith, the Corporation and each Holder shall
specify as its and his address for receiving notices the address set forth in
the Agreement pertaining to the shares to which such notice relates.
10.15 Waiver of Notice. Any person entitled to notice hereunder may
waive such notice.
10.16 Successors. The Plan shall be binding upon the Holder, his heirs,
legatees, and legal representatives, upon the Corporation, its successors, and
assigns, and upon the Board of Directors or the Committee, and its successors.
10.17 Headings. The titles and headings of Sections and Paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
10.18 Governing Law. All questions arising with respect to the
provisions of the Plan as they relate to the internal affairs of the Corporation
shall be determined by application of the laws of the State of Minnesota and all
other questions arising with respect to the provisions of the Plan shall be
determined by application of the laws of the State of Minnesota, except to the
extent Minnesota law is preempted by federal law.
The obligation of the Corporation to sell and deliver Stock hereunder
is subject to applicable laws and to the approval of any governmental authority
required in connection with the authorization, issuance, sale, or delivery of
such Stock.
10.19 Word Usage. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
SECTION 11. Approval of Shareholders.
The Plan shall take effect on the date it is adopted by the Board of
Directors. However, if this Plan is not approved by the holders of a majority of
the outstanding shares of common stock, no par value, of the Corporation, within
the period beginning twelve (12) months before and ending twelve (12) months
after the date the plan is adopted by the Board of Directors, none of the
Options granted hereunder shall constitute Incentive Options.
NICOLLET PROCESS ENGINEERING, INC.
1995 AMENDED AND RESTATED STOCK INCENTIVE PLAN
SECTION 1. PURPOSE OF PLAN. The purpose of the Nicollet Process
Engineering, Inc. 1995 Amended and Restated Stock Incentive Plan (the "Plan") is
to advance the interests of Nicollet Process Engineering, Inc. (the "Company")
and its shareholders by enabling the Company and its Subsidiaries to attract and
retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and by rewarding such individuals who contribute to
the achievement by the Company of its economic objectives.
SECTION 2. DEFINITIONS. The following terms will have the meanings set
forth below, unless the context clearly otherwise requires:
(a) "Board" means the Board of Directors of the Company.
(b) "Broker Exercise Notice" means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.
(c) "Change in Control" means an event described in Section 13(a) of
the Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the group of individuals administering the Plan,
as provided in Section 3 of the Plan.
(f) "Common Stock" means the common stock of the Company, par value
$.01 per share, or the number and kind of shares of stock or other securities
into which such Common Stock may be changed in accordance with Section 4(c) of
the Plan.
(g) "Disability" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code.
(h) "Eligible Recipients" means all employees of the Company or any
Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means, with respect to the Common Stock, the
following:
(i) if the Common Stock is listed or admitted to unlisted
trading privileges on any national securities exchange or is not so
listed or admitted but transactions in the Common Stock are reported on
the Nasdaq National Market, the mean between the reported high and low
sale prices of the Common Stock on such exchange or by the Nasdaq
National Market as of such date (or, if no shares were traded on such
day, as of the next preceding day on which there was such a trade).
(ii) if the Common Stock is not so listed or admitted to
unlisted trading privileges or reported on the Nasdaq National Market,
and bid and asked prices therefor in the over-the-counter market are
reported by the Nasdaq SmallCap Market or the National Quotation
Bureau, Inc. (or any comparable reporting service), the mean of the
closing bid and asked prices as of such date, as so reported by the
Nasdaq SmallCap Market, or, if not so reported thereon, as reported by
the National Quotation Bureau, Inc. (or such comparable reporting
service).
(iii) if the Common Stock is not so listed or admitted to
unlisted trading privileges, or reported on the Nasdaq National Market,
and such bid and asked prices are not so reported, such price as the
Committee determines in good faith in the exercise of its reasonable
discretion. The Committee shall not be required to obtain an appraisal
within six months of the adoption of the Plan. The Committee's
determination as to the current value of the Common Stock shall be
final, conclusive and binding for all purposes and on all persons,
including, without limitation, the Company, the shareholders of the
Company, the Participants and their respective successors-in-interest.
No member of the Board of the Committee shall be liable for any
determination regarding current value of the Common Stock that is made
in good faith.
(k) "Incentive Award" means an Option, Stock Appreciation Right,
Restricted Stock Award, Performance Unit or Stock Bonus granted to an Eligible
Recipient pursuant to the Plan.
(l) "Incentive Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.
(m) "Non-Statutory Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not
qualify as an Incentive Stock Option.
(n) "Option" means an Incentive Stock Option or a Non-Statutory Stock
Option.
(o) "Participant" means an Eligible Recipient who receives one or more
Incentive Awards under the Plan.
(p) "Performance Unit" means a right granted to an Eligible Recipient
pursuant to Section 9 of the Plan to receive a payment from the Company, in the
form of stock, cash or a combination of both, upon the achievement of
established performance or other goals.
(q) "Previously Acquired Shares" means shares of Common Stock that are
already owned by the Participant or, with respect to any Incentive Award, that
are to be issued upon the grant, exercise or vesting of such Incentive Award.
(r) "Restricted Stock Award" means an award of Common Stock granted to
an Eligible Recipient pursuant to Section 8 of the Plan that is subject to the
restrictions on transferability and the risk of forfeiture imposed by the
provisions of such Section 8.
(s) "Retirement" means termination of employment or service pursuant to
and in accordance with the regular (or, if approved by the Board for purposes of
the Plan, early) retirement/pension plan or practice of the Company or
Subsidiary then covering the Participant, provided that if the Participant is
not covered by any such plan or practice, the Participant will be deemed to be
covered by the Company's plan or practice for purposes of this determination.
(t) "Securities Act" means the Securities Act of 1933, as amended.
(u) "Stock Appreciation Right" means a right granted to an Eligible
Recipient pursuant to Section 7 of the Plan to receive a payment from the
Company, in the form of stock, cash or a combination of both, equal to the
difference between the Fair Market Value of one or more shares of Common Stock
and the exercise price of such shares under the terms of such Stock Appreciation
Right.
(v) "Stock Bonus" means an award of Common Stock granted to an Eligible
Recipient pursuant to Section 10 of the Plan.
(w) "Subsidiary" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
(x) "Tax Date" means the date any withholding tax obligation arises
under the Code for a Participant with respect to an Incentive Award.
SECTION 3. PLAN ADMINISTRATION.
(a) The Committee. The Plan will be administered by the Board or by a
committee of the Board consisting of not less than two persons; provided,
however, that from and after the date on which the Company first registers a
class of its equity securities under Section 12 of the Exchange Act, the Plan
will be administered by a committee consisting solely of not less than two
members of the Board who are "disinterested persons" within the meaning of Rule
16b-3 under the Exchange Act (the "Committee"). To the extent consistent with
corporate law, the Committee may delegate to any officers of the Company the
duties, power and authority of the Committee under the Plan pursuant to such
conditions or limitations as the Committee may establish; provided, however,
that only the Committee may exercise such duties, power and authority with
respect to Eligible Recipients who are subject to Section 16 of the Exchange
Act. Each determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will be conclusive and binding
for all purposes and on all persons, and no member of the Committee will be
liable for any action or determination made in good faith with respect to the
Plan or any Incentive Award granted under the Plan.
(b) Authority of the Committee.
(i) In accordance with and subject to the provisions of the
Plan, the Committee will have the authority to determine all provisions
of Incentive Awards as the Committee may deem necessary or desirable
and as consistent with the terms of the Plan, including, without
limitation, the following: (A) the Eligible Recipients to be selected
as Participants; (B) the nature and extent of the Incentive Awards to
be made to each Participant (including the number of shares of Common
Stock to be subject to each Incentive Award, any exercise price, the
manner in which Incentive Awards will vest or become exercisable and
whether Incentive Awards will be granted in tandem with other Incentive
Awards) and the form of written agreement, if any, evidencing such
Incentive Award; (C) the time or times when Incentive Awards will be
granted; (D) the duration of each Incentive Award; and (E) the
restrictions and other conditions to which the payment or vesting of
Incentive Awards may be subject. In addition, the Committee will have
the authority under the Plan in its sole discretion to pay the economic
value of any Incentive Award in the form of cash, Common Stock or any
combination of both.
(ii) The Committee will have the authority under the Plan to
amend or modify the terms of any outstanding Incentive Award in any
manner, including, without limitation, the authority to modify the
number of shares or other terms and conditions of an Incentive Award,
extend the term of an Incentive Award, accelerate the exercisability or
vesting or otherwise terminate any restrictions relating to an
Incentive Award, accept the surrender of any outstanding Incentive
Award or, to the extent not previously exercised or vested, authorize
the grant of new Incentive Awards in substitution for surrendered
Incentive Awards; provided, however that the amended or modified terms
are permitted by the Plan as then in effect and that any Participant
adversely affected by such amended or modified terms has consented to
such amendment or modification. No amendment or modification to an
Incentive Award, however, whether pursuant to this Section 3(b) or any
other provisions of the Plan, will be deemed to be a regrant of such
Incentive Award for purposes of this Plan.
(iii) In the event of (A) any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering,
extraordinary dividend or divestiture (including a spin-off) or any
other change in corporate structure or shares, (B) any purchase,
acquisition, sale or disposition of a significant amount of assets or a
significant business, (C) any change in accounting principles or
practices, or (D) any other similar change, in each case with respect
to the Company or any other entity whose performance is relevant to the
grant or vesting of an Incentive Award, the Committee (or, if the
Company is not the surviving corporation in any such transaction, the
board of directors of the surviving corporation) may, without the
consent of any affected Participant, amend or modify the vesting
criteria of any outstanding Incentive Award that is based in whole or
in part on the financial performance of the Company (or any Subsidiary
or division thereof) or such other entity so as equitably to reflect
such event, with the desired result that the criteria for evaluating
such financial performance of the Company or such other entity will be
substantially the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following such event
as prior to such event; provided, however, that the amended or modified
terms are permitted by the Plan as then in effect.
SECTION 4. SHARES AVAILABLE FOR ISSUANCE.
(a) Maximum Number of Shares Available. Subject to adjustment as
provided in Section 4(c) of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be 400,000 shares
of Common Stock, plus any shares of Common Stock which, as of the date the Plan
is approved by the shareholders of the Company, are reserved for issuance under
the Company's 1990 Stock Option Plan, and which are not thereafter issued or
which have been issued but are subsequently forfeited and which would otherwise
have been available for further issuance under such plan. Notwithstanding any
other provisions of the Plan to the contrary, no Participant in the Plan may be
granted any Options or Stock Appreciation Rights, or any other Incentive Awards
with a value based solely on an increase in the value of the Common Stock after
the date of grant, relating to more than 100,000 shares of Common Stock in the
aggregate in any fiscal year of the Company (subject to adjustment as provided
in Section 4(c) of the Plan); provided, however, that a Participant who is first
appointed or elected as an officer, hired as an employee or retained as a
consultant by the Company or who receives a promotion that results in an
increase in responsibilities or duties may be granted, during the fiscal year of
such appointment, election, hiring, retention or promotion, Options, Stock
Appreciation Rights or such other Incentive Awards relating to up to 150,000
shares of Common Stock (subject to adjustment as provided in Section 4(c) of the
Plan).
(b) Accounting for Incentive Awards. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. Any shares of Common Stock that are
subject to an Incentive Award that lapses, expires, is forfeited or for any
reason is terminated unexercised or unvested and any shares of Common Stock that
are subject to an Incentive Award that is settled or paid in cash or any form
other than shares of Common Stock will automatically again become available for
issuance under the Plan. Any shares of Common Stock that constitute the
forfeited portion of a Restricted Stock Award, however, will not become
available for further issuance under the Plan.
(c) Adjustments to Shares and Incentive Awards. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the Committee
(or, if the Company is not the surviving corporation in any such transaction,
the board of directors of the surviving corporation) will make appropriate
adjustment (which determination will be conclusive) as to the number and kind of
securities available for issuance under the Plan and, in order to prevent
dilution or enlargement of the rights of Participants, the number, kind and,
where applicable, exercise price of securities subject to outstanding Incentive
Awards.
SECTION 5. PARTICIPATION. Participants in the Plan will be those
Eligible Recipients who, in the judgment of the Committee, have contributed, are
contributing or are expected to contribute to the achievement of economic
objectives of the Company or its Subsidiaries. Eligible Recipients may be
granted from time to time one or more Incentive Awards, singly or in combination
or in tandem with other Incentive Awards, as may be determined by the Committee
in its sole discretion. Incentive Awards will be deemed to be granted as of the
date specified in the grant resolution of the Committee, which date will be the
date of any related agreement with the Participant.
SECTION 6. OPTIONS.
(a) Grant. An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion. The Committee may designate whether an Option
is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.
To the extent that any Incentive Stock Option granted under the Plan ceases for
any reason to qualify as an "incentive stock option" for purposes of Section 422
of the Code, such Incentive Stock Option will continue to be outstanding for
purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock
Option.
(b) Exercise Price. The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant, provided that (i) such price will not be less
than 100% of the Fair Market Value of one share of Common Stock on the date of
grant with respect to an Incentive Stock Option (110% of the Fair Market Value
if, at the time the Incentive Stock Option is granted, the Participant owns,
directly or indirectly, more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary corporation of the
Company), and (ii) such price will not be less than 85% of the Fair Market Value
of one share of Common Stock on the date of grant with respect to a
Non-Statutory Stock Option.
(c) Exercisability and Duration. An Option will become exercisable at
such times and in such installments as may be determined by the Committee in its
sole discretion at the time of grant; provided, however, that no Option may be
exercisable after 10 years from its date of grant.
(d) Payment of Exercise Price. The total purchase price of the shares
to be purchased upon exercise of an Option will be paid entirely in cash
(including check, bank draft or money order); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established by
the Committee, may allow such payments to be made, in whole or in part, by
tender of a Broker Exercise Notice, Previously Acquired Shares, a promissory
note (on terms acceptable to the Committee in its sole discretion) or by a
combination of such methods.
(e) Manner of Exercise. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained in the
Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company (Attention: Chief Financial Officer) at its principal
executive office in Minneapolis, Minnesota and by paying in full the total
exercise price for the shares of Common Stock to be purchased in accordance with
Section 6(d) of the Plan.
SECTION 7. STOCK APPRECIATION RIGHTS.
(a) Grant. An Eligible Recipient may be granted one or more Stock
Appreciation Rights under the Plan, and such Stock Appreciation Rights shall be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as will be determined by the Committee in its sole discretion.
(b) Exercise Price. The exercise price of a Stock Appreciation Right
will be determined by the Committee, in its discretion, at the date of grant but
will not be less than 100% of the Fair Market Value of one share of Common Stock
on the date of grant.
(c) Exercisability and Duration. A Stock Appreciation Right will become
exercisable at such time and in such installments as may be determined by the
Committee in its sole discretion at the time of grant; provided, however, that
no Stock Appreciation Right may be exercisable after 10 years from its date of
grant. A Stock Appreciation Right will be exercised by giving notice in the same
manner as for Options, as set forth in Section 6(e) of the Plan.
SECTION 8. RESTRICTED STOCK AWARDS.
(a) Grant. An Eligible Recipient may be granted one or more Restricted
Stock Awards under the Plan, and such Restricted Stock Awards will be subject to
such terms and conditions, consistent with the other provisions of the Plan, as
may be determined by the Committee in its sole discretion. The Committee may
impose such restrictions or conditions, not inconsistent with the provisions of
the Plan, to the vesting of such Restricted Stock Awards as it deems
appropriate, including, without limitation, that the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain period
or that the Participant or the Company (or any Subsidiary or division thereof)
satisfy certain performance goals or criteria.
(b) Rights as a Shareholder; Transferability. Except as provided in
Sections 8(a), 8(c) and 14(c) of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this Section 8 upon
the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.
(c) Dividends and Distributions. Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of
the Restricted Stock Award), any dividends or distributions (including regular
quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will be subject to the same
restrictions as the shares to which such dividends or distributions relate. In
the event the Committee determines not to pay such dividends or distributions
currently, the Committee will determine in its sole discretion whether any
interest will be paid on such dividends or distributions. In addition, the
Committee in its sole discretion may require such dividends and distributions to
be reinvested (and in such case the Participants consent to such reinvestment)
in shares of Common Stock that will be subject to the same restrictions as the
shares to which such dividends or distributions relate.
(d) Enforcement of Restrictions. To enforce the restrictions referred
to in this Section 8, the Committee may place a legend on the stock certificates
referring to such restrictions and may require the Participant, until the
restrictions have lapsed, to keep the stock certificates, together with duly
endorsed stock powers, in the custody of the Company or its transfer agent or to
maintain evidence of stock ownership, together with duly endorsed stock powers,
in a certificateless book-entry stock account with the Company's transfer agent.
SECTION 9. PERFORMANCE UNITS. An Eligible Recipient may be granted one
or more Performance Units under the Plan, and such Performance Units will be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as may be determined by the Committee in its sole discretion. The
Committee may impose such restrictions or conditions, not inconsistent with the
provisions of the Plan, to the vesting of such Performance Units as it deems
appropriate, including, without limitation, that the Participant remain in the
continuous employ or service of the Company or any Subsidiary for a certain
period or that the Participant or the Company (or any Subsidiary or division
thereof) satisfy certain performance goals or criteria. The Committee will have
the sole discretion either to determine the form in which payment of the
economic value of vested Performance Units will be made to the Participant
(i.e., cash, Common Stock or any combination thereof) or to consent to or
disapprove the election by the Participant of the form of such payment.
SECTION 10. STOCK BONUSES. An Eligible Recipient may be granted one or
more Stock Bonuses under the Plan, and such Stock Bonuses will be subject to
such terms and conditions, consistent with the other provisions of the Plan, as
may be determined by the Committee. The Participant will have all voting,
dividend, liquidation and other rights with respect to the shares of Common
Stock issued to a Participant as a Stock Bonus under this Section 10 upon the
Participant becoming the holder of record of such shares; provided, however,
that the Committee may impose such restrictions on the assignment or transfer of
a Stock Bonus as it deems appropriate.
SECTION 11. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.
(a) Termination Due to Death, Disability or Retirement. In the event a
Participant's employment or other service with the Company and all Subsidiaries
is terminated by reason of death, Disability or Retirement:
(i) All outstanding Options and Stock Appreciation Rights then
held by the Participant will become immediately exercisable in full and
will remain exercisable for a period of one year (three months in the
case of Retirement) after such termination (but in no event after the
expiration date of any such Option or Stock Appreciation Right);
(ii) All Restricted Stock Awards then held by the Participant
will become fully vested; and
(iii) All Performance Units and Stock Bonuses then held by the
Participant will vest and/or continue to vest in the manner determined
by the Committee and set forth in the agreement evidencing such
Performance Units or Stock Bonuses.
(b) Termination for Reasons Other than Death, Disability or Retirement.
(i) In the event a Participant's employment or other service
is terminated with the Company and all Subsidiaries for any reason
other than death, Disability or Retirement, or a Participant is in the
employ or service of a Subsidiary and the Subsidiary ceases to be a
Subsidiary of the Company (unless the Participant continues in the
employ or service of the Company or another Subsidiary), all rights of
the Participant under the Plan and any agreements evidencing an
Incentive Award will immediately terminate without notice of any kind,
and no Options or Stock Appreciation Rights then held by the
Participant will thereafter be exercisable, all Restricted Stock Awards
then held by the Participant that have not vested will be terminated
and forfeited, and all Performance Units and Stock Bonuses then held by
the Participant will vest and/or continue to vest in the manner
determined by the Committee and set forth in the agreement evidencing
such Performance Units or Stock Bonuses; provided, however, that if
such termination is due to any reason other than termination by the
Company or any Subsidiary for "cause," all outstanding Options or Stock
Appreciation Rights then held by such Participant will remain
exercisable to the extent exercisable as of such termination for a
period of three months after such termination (but in no event after
the expiration date of any such Option or Stock Appreciation Right).
(ii) For purposes of this Section 11(b), "cause" (as
determined by the Committee) will be as defined in any employment or
other agreement or policy applicable to the Participant or, if no such
agreement or policy exists, will mean (A) dishonesty, fraud,
misrepresentation, embezzlement or deliberate injury or attempted
injury, in each case related to the Company or any Subsidiary, (B) any
unlawful or criminal activity of a serious nature, (C) any intentional
and deliberate breach of a duty or duties that, individually or in the
aggregate, are material in relation to the Participant's overall
duties, or (D) any material breach of any employment, service,
confidentiality or noncompete agreement entered into with the Company
or any Subsidiary.
(c) Modification of Rights Upon Termination. Notwithstanding the other
provisions of this Section 11, upon a Participant's termination of employment or
other service with the Company and all Subsidiaries, the Committee may, in its
sole discretion (which may be exercised at any time on or after the date of
grant, including following such termination), cause Options and Stock
Appreciation Rights (or any part thereof) then held by such Participant to
become or continue to become exercisable and/or remain exercisable following
such termination of employment or service and Restricted Stock Awards,
Performance Units and Stock Bonuses then held by such Participant to vest and/or
continue to vest or become free of transfer restrictions, as the case may be,
following such termination of employment or service, in each case in the manner
determined by the Committee; provided, however, that no Option or Stock
Appreciation Right may remain exercisable beyond its expiration date.
(d) Breach of Confidentiality or Noncompete Agreements. Notwithstanding
anything in the Plan to the contrary, in the event that a Participant materially
breaches the terms of any confidentiality or noncompete agreement entered into
with the Company or any Subsidiary, whether such breach occurs before or after
termination of such Participant's employment or other service with the Company
or any Subsidiary, the Committee in its sole discretion may immediately
terminate all rights of the Participant under the Plan and any agreements
evidencing an Incentive Award then held by the Participant without notice of any
kind.
(e) Date of Termination of Employment or Other Service. Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.
SECTION 12. PAYMENT OF WITHHOLDING TAXES.
(a) General Rules. The Company is entitled to (i) withhold and deduct
from future wages of the Participant (or from other amounts that may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all federal, state and local withholding and employment-related
tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with
respect to, an Incentive Award or a disqualifying disposition of stock received
upon exercise of an Incentive Stock Option, or (ii) require the Participant
promptly to remit the amount of such withholding to the Company before taking
any action, including issuing any shares of Common Stock, with respect to an
Incentive Award.
(b) Special Rules. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 11(a) of the Plan by
electing to tender Previously Acquired Shares, a Broker Exercise Notice or a
promissory note (on terms acceptable to the Committee in its sole discretion),
or by a combination of such methods.
SECTION 13. CHANGE IN CONTROL.
(a) Change in Control. For purposes of this Section 13, a "Change in
Control" of the Company will mean the following:
(i) the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a person or
entity that is not controlled by the Company,
(ii) the approval by the shareholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company;
(iii) a merger or consolidation to which the Company is a
party if the shareholders of the Company immediately prior to effective
date of such merger or consolidation have "beneficial ownership" (as
defined in Rule 13d-3 under the Exchange Act), immediately following
the effective date of such merger or consolidation, of securities of
the surviving corporation representing (A) more than 50%, but not more
than 80%, of the combined voting power of the surviving corporation's
then outstanding securities ordinarily having the right to vote at
elections of directors, unless such merger or consolidation has been
approved in advance by the Incumbent Directors (as defined in Section
13(b) below), or (B) 50% or less of the combined voting power of the
surviving corporation's then outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any approval
by the Incumbent Directors);
(iv) any person becomes after the effective date of the Plan
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of (A) 20% or more, but not 50% or more,
of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of directors, unless
the transaction resulting in such ownership has been approved in
advance by the Incumbent Directors, or (B) 50% or more of the combined
voting power of the Company's outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any approval
by the Incumbent Directors);
(v) the Incumbent Directors cease for any reason to constitute
at least a majority of the Board; or
(vi) any other change in control of the Company of a nature
that would be required to be reported pursuant to Section 13 or 15(d)
of the Exchange Act, whether or not the Company is then subject to such
reporting requirements.
(b) Incumbent Directors. For purposes of this Section 13, "Incumbent
Directors" of the Company will mean any individuals who are members of the Board
on the effective date of the Plan and any individual who subsequently becomes a
member of the Board whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Incumbent
Directors (either by specific vote or by approval of the Company's proxy
statement in which such individual is named as a nominee for director without
objection to such nomination).
(c) Acceleration of Vesting. Without limiting the authority of the
Committee under Section 3(b) of the Plan, if a Change in Control of the Company
occurs, then, if approved by the Committee either in the agreement evidencing an
Incentive Award at the time of grant or at any time after the grant of an
Incentive Award, (a) all outstanding Options and Stock Appreciation Rights will
become immediately exercisable in full and will remain exercisable for the
remainder of their terms, regardless of whether the Participant to whom such
Options or Stock Appreciation Rights have been granted remains in the employ or
service of the Company or any Subsidiary; (b) all outstanding Restricted Stock
Awards will become immediately fully vested and non-forfeitable; and (c) all
outstanding Performance Units and Stock Bonuses then held by the Participant
will vest and/or continue to vest in the manner determined by the Committee and
set forth in the agreement evidencing such Performance Units or Stock Bonuses.
(d) Cash Payment for Options. If a Change in Control of the Company
occurs, then the Committee, if approved by the Committee in its sole discretion
either in an agreement evidencing an Incentive Award at the time of grant or at
any time after the grant of an Incentive Award, and without the consent of any
Participant effected thereby, may determine that some or all Participants
holding outstanding Options will receive, with respect to some or all of the
shares of Common Stock subject to such Options, as of the effective date of any
such Change in Control of the Company, cash in an amount equal to the excess of
the Fair Market Value of such shares immediately prior to the effective date of
such Change in Control of the Company over the exercise price per share of such
Options.
(e) Limitation on Change in Control Payments. Notwithstanding anything
in Section 13(c) or 13(d) of the Plan to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as provided
in Section 13(c) or the payment of cash in exchange for all or part of an
Incentive Award as provided in Section 13(d) (which acceleration or payment
could be deemed a "payment" within the meaning of Section 280G(b)(2) of the
Code), together with any other "payments" which such Participant has the right
to receive from the Company or any corporation that is a member of an
"affiliated group" (as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a member, would constitute
a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the
"payments" to such Participant pursuant to Section 13(c) or 13(d) of the Plan
will be reduced to the largest amount as will result in no portion of such
"payments" being subject to the excise tax imposed by Section 4999 of the Code;
provided, however, that if a Participant is subject to a separate agreement with
the Company or a Subsidiary that expressly addresses the potential application
of Sections 280G or 4999 of the Code (including, without limitation, that
"payments" under such agreement or otherwise will not be reduced or that the
Participant will have the discretion to determine which "payments" will be
reduced), then the limitations of this Section 13(e) will not apply, and any
"payments" to a Participant pursuant to Section 13(c) or 13(d) of the Plan will
be treated as "payments" arising under such separate agreement.
SECTION 14. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS;
TRANSFERABILITY.
(a) Employment or Service. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.
(b) Rights as a Shareholder. As a holder of Incentive Awards (other
than Restricted Stock Awards and Stock Bonuses), a Participant will have no
rights as a shareholder unless and until such Incentive Awards are exercised
for, or paid in the form of, shares of Common Stock and the Participant becomes
the holder of record of such shares. Except as otherwise provided in the Plan,
no adjustment will be made for dividends or distributions with respect to such
Incentive Awards as to which there is a record date preceding the date the
Participant becomes the holder of record of such shares, except as the Committee
may determine in its discretion.
(c) Restrictions on Transfer. Except pursuant to testamentary will or
the laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of any Participant in an Incentive Award prior to the
exercise or vesting of such Incentive Award will be assignable or transferable,
or subjected to any lien, during the lifetime of the Participant, either
voluntarily or involuntarily, directly or indirectly, by operation of law or
otherwise. A Participant will, however, be entitled to designate a beneficiary
to receive an Incentive Award upon such Participant's death, and in the event of
a Participant's death, payment of any amounts due under the Plan will be made
to, and exercise of any Options (to the extent permitted pursuant to Section 11
of the Plan) may be made by, the Participant's legal representatives, heirs and
legatees.
(d) Non-Exclusivity of the Plan. Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.
SECTION 15. SECURITIES LAW AND OTHER RESTRICTIONS. Notwithstanding any
other provision of the Plan or any agreements entered into pursuant to the Plan,
the Company will not be required to issue any shares of Common Stock under this
Plan, and a Participant may not sell, assign, transfer or otherwise dispose of
shares of Common Stock issued pursuant to Incentive Awards granted under the
Plan, unless (i) there is in effect with respect to such shares a registration
statement under the Securities Act and any applicable state securities laws or
an exemption from such registration under the Securities Act and applicable
state securities laws, and (ii) there has been obtained any other consent,
approval or permit from any other regulatory body which the Committee, in its
sole discretion, deems necessary or advisable. The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other restrictions.
SECTION 16. PLAN AMENDMENT, MODIFICATION AND TERMINATION. The Board may
suspend or terminate the Plan or any portion thereof at any time, and may amend
the Plan from time to time in such respects as the Board may deem advisable in
order that Incentive Awards under the Plan will conform to any change in
applicable laws or regulations or in any other respect the Board may deem to be
in the best interests of the Company; provided, however, that no amendments to
the Plan will be effective without approval of the stockholders of the Company
if stockholder approval of the amendment is then required pursuant to Rule 16b-3
under the Exchange Act, Section 422 of the Code or the rules of any stock
exchange or Nasdaq. No termination, suspension or amendment of the Plan may
adversely affect any outstanding Incentive Award without the consent of the
affected Participant; provided, however, that this sentence will not impair the
right of the Committee to take whatever action it deems appropriate under
Sections 4(c) and 13 of the Plan.
SECTION 17. EFFECTIVE DATE AND DURATION OF THE PLAN. The Plan is
effective as of January 1, 1995, the date it was adopted by the Board. The Plan
will terminate at midnight on January 1, 2005, and may be terminated prior to
such time to by Board action, and no Incentive Award will be granted after such
termination. Incentive Awards outstanding upon termination of the Plan may
continue to be exercised, or become free of restrictions, in accordance with
their terms.
SECTION 18. MISCELLANEOUS.
(a) Governing Law. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota.
(b) Successors and Assigns. The Plan will be binding upon and inure to
the benefit of the successors and permitted assigns of the Company and the
Participants.
