[Amended and restated for purposes of this
filing on Form 8-K]
THE MIDDLETON DOLL COMPANY
2003 STOCK OPTION PLAN
Section 1. Purpose
The
purpose of The Middleton Doll Company 2003 Stock Option Plan (the
“Plan”) is to promote the best interests of The
Middleton Doll Company, a Wisconsin corporation (together with any
successor thereto, the “Company”), its subsidiaries and
shareholders by encouraging and providing for the acquisition of an
equity interest in the Company by officers and key employees and by
enabling the Company and its subsidiaries to attract and retain the
services of officers and key employees upon whose judgment,
interest, skills, and special effort the successful conduct of the
operations of the Company and its subsidiaries is largely
dependent.
Section 2. Effective
Date
The
Plan shall become effective on February 19, 2003, subject to the
approval of the Plan by the shareholders of the Company at the
Company’s 2003 Annual Shareholders Meeting. To the extent
that any stock options are granted under the Plan prior to its
approval by shareholders, the grants shall be contingent on
approval of the Plan by the shareholders of the Company.
Section 3.
Administration
A
committee (the “Committee”) of the Company’s
Board of Directors (the “Board”) shall administer the
Plan. The Committee shall consist of not less than two directors,
each of whom shall qualify as a “non-employee director”
within the meaning of Rule 16b-3 (“Rule 16b-3”) under
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and as an “outside
director” under Section 162(m)(4)(C) of the Internal Revenue
Code of 1986, as amended (the “Code”), or any successor
provisions thereto. If at any time the Committee shall not be in
existence, the Board shall administer the Plan.
Subject
to the terms of the Plan and applicable law, the Committee shall
have full power and authority to (a) interpret and administer the
Plan and any instrument or agreement relating to, or made under,
the Plan; (b) establish, amend, suspend or waive any rules and
regulations related to the Plan and appoint any agents that it
deems appropriate for the proper administration of the Plan; and
(c) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of
the Plan. The Committee’s decisions and determinations under
the Plan need not be uniform and may be made selectively among
participants, whether or not they are similarly situated. A
majority of the members of the Committee shall constitute a quorum
and all determinations of the Committee shall be made by a majority
of its members. The Committee may make any determination under the
Plan without notice or meeting of the Committee by a writing signed
by a majority of the Committee members.
Section 4. Eligibility and
Participation
The
Committee, in its discretion, may designate from time to time
officers and other key employees of the Company and its
subsidiaries to participate in the Plan. The Committee shall
consider such factors as it deems appropriate in selecting
participants and in determining the amount of their respective
benefits. The Committee’s designation of a participant in any
year shall not require the Committee to designate such person to
receive a benefit in any other year.
Section 5. Stock Subject to
Plan
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5.1.
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Number . Subject to adjustment as provided in
Section 5.3 , the total number of shares of Common Stock of
the Company, par value 6 2/3 cents per share (the
“Stock”), which may be issued under the Plan shall be
250,000 shares. The shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued Stock or
treasury Stock. Subject to adjustment as provided in Section
5.3 , no participant shall be granted stock options in any
single fiscal year of the Company for more than 100,000 shares of
Stock. In all cases, determinations under this Section 5
shall be made in a manner that is consistent with the exemption for
performance-based compensation provided by Section 162(m) of the
Code (or any successor provision thereto) and any regulations
promulgated thereunder.
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5.2.
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Unused
Stock: Unexercised Rights . If, after the effective date of the Plan, any
shares of Stock covered by a stock option granted under the Plan,
or to which any stock option relates, are forfeited or if a stock
option otherwise terminates, expires, or is canceled prior to the
delivery of all of the shares of Stock or of other consideration
issuable or payable pursuant to such stock option, then the number
of shares of Stock counted against the number of shares available
under the Plan in connection with the grant of such stock option,
shall again be available for the granting of additional stock
options under the Plan. In the event the exercise price of a stock
option or tax withholding obligations respecting such stock option
are paid in whole or in part through the delivery (or withholding)
of shares of Stock, the shares delivered (or withheld) in payment
of such exercise price or withholding tax obligations may be
subject to new options under this Plan.
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5.3.
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Adjustment
in Capitalization . In
the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Stock, other
securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of Stock or
other securities of the Company, issuance of warrants or other
rights to purchase Stock or other securities of the Company, or
other similar corporate transaction or event affects the Stock such
that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan,
then the Committee may, in such manner as it may deem equitable,
adjust any or all of the (a) number of shares of Stock subject to
the Plan (including the individual limits described in Section
5.1 ) and which thereafter may be made the subject of stock
options under the Plan; (b) the number of shares of Stock subject
to outstanding stock options; and (c) the grant, purchase or
exercise price with respect to any stock option; or, if deemed
appropriate, make provision for a cash payment to the holder of an
outstanding stock option in lieu of any of the foregoing
adjustments; provided, however , that the number of shares
of Stock subject to any stock option shall always be a whole
number.
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Section 6. Term of
Plan
The
Plan shall remain in effect until all shares reserved for issuance
hereunder have been issued, subject to earlier termination by the
Board pursuant to Section 11.1 . However, unless otherwise
expressly provided in the Plan or in an applicable option
agreement, any stock option theretofore granted may extend beyond
such date and, to the extent set forth in the Plan, the authority
of the Committee to amend, alter, adjust, suspend, discontinue or
terminate any such stock option, or to waive any conditions or
restrictions with respect to any such stock option, and the
authority of the Board to amend the Plan, shall extend beyond such
date.
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Section 7. Stock
Options
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7.1.
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Grant of
Options . Options may be
granted to participants at any time and from time to time as shall
be determined by the Committee. Subject to the limits of Section
5.1 and Section 7.2 , the Committee shall have complete
discretion in determining the number, terms and conditions of
options granted to a participant. All options granted shall be
non-qualified stock options.
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7.2.
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Non-qualified Stock Options
. Non-qualified stock options will
be exercisable at purchase prices of not less than One Hundred
percent (100%) of the Fair Market Value of the Stock on the day of
grant. Non-qualified stock options will be exercisable as
determined by the Committee over not more than ten (10) years after
the date of grant and shall terminate at such time as the Committee
shall determine.
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7.3.
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Option
Agreement . Each option
granted under the Plan shall be evidenced by an option agreement
that shall be signed by the participant and an appropriate officer
of the Company. The option agreement shall specify the option
price, the vesting, the duration of the option, the number of
shares of Stock to which the option pertains and such other
provisions as the Committee shall determine (including, without
limitation
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