Exhibit 10.1
MENTOR CORPORATION
1991 STOCK OPTION PLAN
(as amended through September 17, 2007)
I. Purposes of the
Plan
This
Mentor Corporation 1991 Stock Option Plan (the “ Plan
”) is intended to enable Mentor Corporation (the “
Corporation ”) and its subsidiaries to attract and
retain key employees and non-employee directors and, by giving such
employees and non-employee directors an opportunity to acquire a
proprietary interest in the corporation, to provide such employees
and non-employee directors with a stronger incentive to exert their
maximum effort for the continued success and growth of the
Corporation and its subsidiaries.
II. Administration
of the Plan
The Plan
shall be administered by a committee or committees appointed by,
and consisting of one or more members of, the Board of Directors of
the Corporation (the “ Board ”). The Board may
delegate the responsibility for administration of the Plan with
respect to designated classes of optionees to different committees,
subject to such limitations as the Board deems appropriate. The
composition of any committee responsible for administration of the
Plan with respect to optionees who are subject to trading
restrictions of Section 16(b) of the Securities Exchange Act of
1934 (the “ 1934 Act ”) with respect to
securities of the Corporation shall comply with the applicable
requirements of Rule 16b-3 of the Securities and Exchange
Commission. Members of a committee shall serve for such term as the
Board may determine and shall be subject to removal by the Board at
any time. Any committee appointed by the Board shall have full
authority to administer the Plan within the scope of its delegated
responsibilities, including authority to interpret and construe any
relevant provision of the Plan and to adopt such rules and
regulations as it may deem necessary. Decisions of a committee made
within the discretion delegated to it by the Board shall be final
and binding on all persons who have an interest in the Plan. With
respect to any matter, the term “Committee” shall
hereinafter refer to such committee as shall have been delegated
authority with respect to such matter.
III. Eligibility for
Awards
Options
may be granted under the Plan to such key employees of the
Corporation and its subsidiaries (including officers, whether or
not they are also members of the Board) as the Committee shall from
time to time select. In addition, members of the Board who are not
employees of the Corporation or one of its subsidiaries shall be
eligible to receive options in accordance with, and only in
accordance with, the automatic grant provisions of Section VI
below.
IV. Stock Subject
to the Plan
a.
Class . The stock which is the subject of options granted
under the Plan shall be the Corporation’s authorized but
unissued common stock (“ Common Stock ”). In
connection with the issuance of shares of Common Stock under the
Plan, the Corporation may repurchase shares in the open market or
otherwise.
1
b.
Aggregate Amount
1. The total number of shares of Common Stock issuable under
the Plan shall not exceed 5,000,000* shares plus the number of
shares that would have become available for grant, under the
Corporation’s Restated 1987 Stock Option Plan and Incentive
Stock Option Plan (the “ Prior Plans ”) by
reason of the lapse, expiration or cancellation of options
thereunder prior to exercise in full (provided such shares are not
subject to a subsequent grant under one of the Prior Plans),
subject to adjustment under Section IV(c).
2. If
any outstanding option under the Plan expires or is terminated or
cancelled for any reason (including pursuant to Section IX of
the Plan) before being exercised for the full number of shares of
Common Stock to which it applies, then the Common Stock allocable
to the unexercised portion of such option shall not be charged
against the limitation of Section IV(b)(1) and may again
become the subject of subsequent options granted under the
Plan.
3. Adjustments. In the event any change is made to the Common
Stock subject to the Plan or subject to any outstanding option
granted under the Plan (whether by reason of merger, consolidation,
reorganization, recapitalization, stock dividend, stock split,
combination of shares, exchange of shares, or other change in
corporate or capital structure of the Corporation), then, unless
such change results in the termination of all outstanding options,
the Committee shall make appropriate adjustments to the kind and
maximum number of shares subject to the Plan, the kind and maximum
number of shares for which options are to be granted to each
individual under the Plan, the kind and maximum number of shares
for which options are to be granted to non-employee directors, and
the kind and number of shares and price per share of stock subject
to outstanding options.
4. Individual Limit. No individual will receive grants under
this Plan for more than 600,000* shares (subject to adjustment as
provided in Section IV(c)). Grants that are repriced and/or
canceled and regranted will count against the limit contained in
this Section IV(d).
V. Terms and
Conditions of Options
Stock
options granted under the Plan may be either incentive stock
options (“ Incentive Options ”) qualifying under
Section 422 of the Internal Revenue Code of 1986, as amended
(“ Internal Revenue Code ”), or nonstatutory
options, and shall be appropriately designated. The options shall
be evidenced by instruments in such form as the Committee may from
time to time approve. Such instruments shall conform to the
following terms and conditions:
a.
Option Price . The option price per share shall be the fair
market value of a share of Common Stock on the day the option is
granted.
b.
Number of Shares, Term and Exercise
1. Each option granted under the Plan shall be exercisable on
such date or dates, during such period and for such number of
shares as shall be determined by the Committee and set forth in the
instrument evidencing such option. No option granted under the
Plan, however, shall have an expiration date which is more than
10 years after the date of the option grant. Each option shall
contain such other terms, conditions and restrictions, which may
vary from grant to grant and may be modified by the Committee after
the date of grant, as the Committee shall determine.
2
2
2. After any option granted under the Plan becomes
exercisable, it may be exercised by notice to the Corporation at
any time prior to the termination of such option. Except as
authorized by the Committee in accordance with Section VII, the
option price for the number of shares of Common Stock for which the
option is exercised shall become immediately due and payable upon
exercise.
3. The option price shall be payable in full in cash;
provided, however, that the Committee may, either at the time the
option is granted or at the time it is exercised and subject to
such limitations as it may determine, authorize payment of all or a
portion of the option price in cash and/or one or a combination of
the following alternative forms:
i. a
promissory note authorized pursuant to Section VII; or
ii. full payment in shares of Common Stock valued as of the
exercise date; or
iii. by delivering a properly executed exercise notice
together with irrevocable instructions to a broker to promptly
deliver to the Corporation the amount of sale or loan proceeds to
pay the option price; or
4. Effective September 17, 2007, in the event an
optionee ceases to be an employee of the Corporation of any of its
subsidiaries due to death, his or her options shall become fully
vested and exercisable upon the optionee’s death.
c.
Termination of Employment
The
Committee shall determine and shall set forth in each option
whether the option shall continue to be exercisable, and the terms
and conditions of such exercise, on and after an optionee ceases to
be employed by the Corporation or any of its subsidiaries.
d.
Incentive Options . Options granted under the Plan which are
intended to be Incentive Options shall be subject to the following
additional terms and conditions:
1.
Dollar Limitation . To the extent that the aggregate fair
market value (determined as of the respective date or dates of
grant) of shares with respect to which options that would otherwise
be Incentive Options are exercisable for the first time by any
individual during any calendar year under the Plan (or any other
plan of the Corporation, a parent or subsidiary corporation or
predecessor thereof) exceeds the sum of $100,000 (or such greater
amount as may be permitted under the Internal Revenue Code),
whether by reason of acceleration or otherwise, such options shall
not be treated as Incentive Options. In making such determination,
such options shall be taken into account in the order in which they
were granted.
3
3
2.
10% Shareholder . If any employee to whom an Incentive
Option is to be granted pursuant to the provisions of the Plan is
on the date of grant the owner of stock (determined with
application of the ownership attribution rules of Section 425(d) of
the Internal Revenue Code) possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of his
or her employer corporation or of its parent or subsidiary
corporation (10% Shareholder), then the following special
provisions shall be applicable to the option granted to such
individual:
i. The option price per share of the Common Stock subject to
such Incentive Option shall not be less than one hundred ten
percent (110%) of the fair market value of one share of Common
Stock on the date of grant; and
ii. The option shall not have a term in excess of five
(5) years from the date of grant.
3.
Parent; Subsidiary . For purposes of this Section VI(d)
“parent and subsidiary corporation” and “parent
or subsidiary corporation” shall have the meaning attributed
to those terms under Section 422A(b) of the Internal Revenue
Code.
e.
Withholding
1. The Corporation’s obligation to deliver stock
certificates upon the exercise of any option shall be subject to
the optionee’s satisfaction of all applicable federal, state
and local income and employment tax withholding requirements.
2. In
the event that an optionee is required to pay to the Corporation an
amount with respect to income and employment tax withholding
obligations in connection with exercise of an option, the Committee
may, in its discretion and subject to such limitations and rules as
it may adopt, permit the optionee to satisfy the obligation, in
whole or in part, by delivering shares of Common Stock already held
by the optionee or by making an irrevocable election that a portion
of the total value of the shares of Common Stock subject to the
option be paid in the form of cash in lieu of the issuance of
Common Stock and that such cash payment be applied to the
satisfaction of the withholding obligations.
f.
Repurchase Rights . The Committee may in its discretion
determine that it shall be a term and condition of one or more
options exercised under the Plan that the Corporation (or its
assigns) shall have the right, exercisable upon the
optionee’s termination of employment with the Corporation and
its subsidiaries, to repurchase any or all of the shares of Common
Stock previously acquired by the optionee upon the exercise of such
option. Any such repurchase right shall be exercisable by the
Corporation (or its assigns) upon such terms and conditions
(including the establishment of the appropriate vesting schedule
and other provisions for the expiration of such right in one or
more installments) as the Committee may specify in the instrument
evidencing such right. The Committee shall also have full power and
authority to provide for the automatic termination of the
Corporation’s repurchase rights, in whole or in part, and
thereby accelerate the vesting of any or all of the purchased
shares, upon the occurrence of any Change in Control specified in
Article X.
4
4
g.
Modification of Options . The Committee shall have full
power and authority to modify or waive any or all of the terms,
conditions or restrictions applicable to any outstanding option, to
the extent not inconsistent with the Plan; provided, however, that
no such modification or waiver shall (1) without the consent
of the option holder, adversely affect the holder’s rights
thereunder or (2) affect any outstanding option granted
pursuant to Section VI, except to the extent necessary to
conform to any amendment to Section VI.
VI. Automatic
Option Grants to Directors
a.
Automatic Option Grants . Non-employee members of the Board
shall automatically be granted nonstatutory stock options (“
Automatic Option Gra
| 
