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Exhibit 4.8
LIGHTBRIDGE, INC.
1996 INCENTIVE AND NON-QUALIFIED
STOCK OPTION PLAN
SECTION 1. PURPOSE
This 1996 Incentive and Non-Qualified Stock Option Plan (the "Plan") is
intended as a performance incentive for officers and employees of Lightbridge,
Inc., a Delaware corporation (the "Company"), or its Subsidiaries (as
hereinafter defined) and for certain other individuals providing services to or
acting as directors of the Company or its Subsidiaries, to enable the persons to
whom options are granted (an "Optionee" or "Optionees") to acquire or increase a
proprietary interest in the Company and its success. The Company intends that
this purpose will be effected by the granting of incentive stock options
("Incentive Options") as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and other stock options ("Non-Qualified Options")
under the Plan. The term "Subsidiaries" means any corporations in which stock
possessing 50% or more of the total combined voting power of all classes of
stock of such corporation or corporations is owned directly or indirectly by the
Company.
SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION
2.1 OPTIONS TO BE GRANTED. Options granted under the Plan may be
either Incentive Options or Non-Qualified Options. If an option is intended to
be an Incentive Option, and if for any reason such option (or any portion
thereof) shall not qualify as an Incentive Option, then, to the extent of such
nonqualification, such option (or portion thereof) shall be regarded as a
Non-Qualified Option appropriately granted under the Plan provided that such
option (or portion thereof) otherwise meets the Plan's requirements relating to
Non-Qualified Options. The Board may, as a condition of grant, require the
Optionee to execute a confidentiality and noncompetition agreement with the
Company.
2.2 ADMINISTRATION. This Plan shall be administered by the Compensation
Committee or any other committee of the Board of Directors of the Company (the
"Board"), consisting of two or more "Outside Directors" (such committee may
hereinafter be referred to as the "Plan Administrator"). As used herein, the
term "Outside Director" means any director who: (i) is not an employee of the
Company or of any "affiliated group" (as such term is defined in Section 1504(a)
of the Code) which includes the Company (an "Affiliate"); (ii) is not a former
employee of the Company or any Affiliate who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
Company's or any Affiliate's taxable year; (iii) has not been an officer of the
Company or any Affiliate; and (iv) does not receive remuneration from the
Company or any Affiliate, either directly or indirectly, in any capacity other
than as a director.
Except as specifically reserved to the Board under the terms of the
Plan, the Plan Administrator shall have full and final authority to operate,
manage and administer the Plan on behalf of the Company. This authority
includes, but is not limited to: (i) the power to grant
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options conditionally or unconditionally; (ii) the power to prescribe the form
or forms of the instruments evidencing options granted under this Plan; (iii)
the power to interpret the Plan; (iv) the power to provide regulations for the
operation of the incentive features of the Plan, and otherwise to prescribe
regulations for interpretation, management and administration of the Plan; (v)
the power to delegate to other persons the responsibility for performing
ministerial acts in furtherance of the Plan's purpose; (vi) the power to make,
in its sole discretion, changes to any outstanding option granted under the
Plan, including the power to reduce the exercise price, to accelerate the
vesting schedule, or to extend the expiration date; and (vii) the power to
engage the services of persons or organizations in furtherance of the Plan's
purpose, including but not limited to banks, insurance companies, brokerage
firms and consultants.
In addition, as to each option, the Plan Administrator shall have full
and final authority, in its sole discretion: (i) to determine the number of
shares subject to each option; (ii) to determine the time or times at which
options will be granted; (iii) to determine the conditions on which options will
be granted or may be exercised; (iv) to determine the option price for the
shares subject to each option, which price shall be subject to the applicable
requirements, if any, of Section 5.1(c) hereof; and (v) to determine the time or
times when each option shall become exercisable and the duration of the exercise
period, which shall not exceed the limitations specified in Section 5.1(a).
No member of the committee serving as Plan Administrator shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted thereunder.
2.3 APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may, from time
to time, appoint members of the committee serving as Plan Administrator in
substitution for, or in addition to, members previously appointed and may fill
vacancies, however caused, in such committee; provided, however, that each such
appointee will be an Outside Director, as described in Section 2.2. The
committee serving as Plan Administrator shall hold its meetings at such times
and places as it shall deem advisable. A majority of its members shall
constitute a quorum, and all actions of such committee shall require the
affirmative vote of a majority of its members. Any action may be taken by a
written instrument signed by all of the members, and any action so taken shall
be as fully effective as if it had been taken by a vote of a majority of the
members at a meeting duly called and held.
2.4 OPTION GRANTS BY AUTHORIZED OFFICER. Notwithstanding the provisions
of Section 2.2, the Plan Administrator or the Board may authorize the Chief
Executive Officer or another executive officer of the Company (the "Authorized
Officer") to grant options ("Authorized Officer Options") to eligible optionees,
as defined in Section 4.1, who are not officers of the Company or members of the
Board. The Plan Administrator or the Board may, in its action naming the
Authorized Officer, specify other limitations or conditions with respect to
Authorized Officer Options, including without limitation a maximum number of
shares that may be subject to each Authorized Officer Option. In furtherance of
the provisions of this Section 2.4, except to the extent otherwise specified by
action of the Plan Administrator or the Board, the Authorized Officer shall, as
to each Authorized Officer Option, have the authority to make the determinations
specified in the third paragraph of Section 2.2.
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SECTION 3. STOCK
3.1 SHARES SUBJECT TO PLAN. The stock subject to the options granted
under the Plan shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share ("Common Stock"), or shares of the Company's
Common Stock held in treasury. The total number of shares that may be issued
pursuant to options granted under the Plan shall not exceed an aggregate of
2,350,000 shares of Common Stock. Such number of shares shall be subject to
adjustment as provided in Section 7 hereof.
3.2 LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding option
under the Plan expires, is cancelled or is otherwise terminated (other than by
exercise), the shares of Common Stock allocable to the unexercised portion of
such option shall be restored to the Plan and shall again become available for
the grant of other options under the Plan.
3.3 LIMITATION ON GRANTS. In no event may any Plan participant be
granted options with respect to more than 500,000 shares of Common Stock in any
fiscal year. The number of shares of Common Stock issuable pursuant to an option
granted to a Plan participant in a fiscal year that is subsequently forfeited,
cancelled or otherwise terminated shall continue to count toward the foregoing
limitation in such fiscal year. In addition, if the exercise price of an option
is subsequently reduced, the transaction shall be deemed a cancellation of the
original option and the grant of a new one so that both transactions shall count
toward the maximum shares issuable in the fiscal year of each respective
transaction.
SECTION 4. ELIGIBILITY
4.1 ELIGIBLE OPTIONEES. Incentive Options may be granted only to
officers and other employees of the Company or its Subsidiaries, including
members of the Board who are also employees of the Company or a Subsidiary.
Non-Qualified Options may be granted to officers or other employees of the
Company or its Subsidiaries, to members of the Board or the board of directors
of any Subsidiary whether or not employees of the Company or such Subsidiary,
and to consultants and other individuals providing services to the Company or
its Subsidiaries.
4.2 LIMITATIONS ON 10% STOCKHOLDERS. No Incentive Option shall be
granted to an individual who, at the time the Incentive Option is granted, owns
(including ownership attributed pursuant to Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or Subsidiary of the Company (a "greater-than-10%
stockholder"), unless such Incentive Option provides that (i) the purchase price
per share shall not be less than 110% of the fair market value of the Common
Stock at the time such Incentive Option is granted, and (ii) that such Incentive
Option shall not be exercisable to any extent after the expiration of five years
from the date on which it is granted.
4.3 LIMITATION ON EXERCISABLE OPTIONS. The aggregate fair market value
(determined at the time the Incentive Option is granted) of the Common Stock
with respect to which Incentive Options are exercisable for the first time by
any person during any calendar year under the Plan and under any other option
plan of the Company (or a parent or subsidiary
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as defined in Section 424 of the Code) shall not exceed $100,000. Any option
granted in excess of the foregoing limitation shall be specifically designated
as being a Non-Qualified Option.
4.4 OPTION GRANTS TO DIRECTORS. As compensation for services to the
Company, each Director of the Company who is not an employee of the Company
(an "Outside Director") and who (a) is a member of the Board immediately
after the closing of the Company's initial public offering and at the time of
such closing holds no outstanding stock option granted to such Director in
his or her capacity as a Director (a "Prior Option") or (b) is elected to the
Board after the closing of the Company's initial public offering shall
automatically be granted, immediately after the closing of the Company's
public offering or upon his or her initial election, as the case may be, a
Non-Qualified Option (an "Initial Option") to purchase 20,000 shares of
Common Stock of the Company, vesting in equal installments on the first three
anniversaries of the date of grant (provided that the Optionee is then a
Director of the Company). In addition, immediately following each annual
meetings of stockholders of the Company or special meeting in lieu thereof,
there shall automatically be granted to each Outside Director reelected at or
remaining in office after such meeting a fully-vested Non-Qualified Option to
purchase 4,000 shares of Common Stock; PROVIDED that no such automatic grant
shall be made to any Outside Director who at the time of such meeting holds
any outstanding Initial Option or Prior Option that is not fully vested,
unless at least two annual meetings of stockholders of the Company or special
meetings in lieu thereof have intervened between the closing of the Company's
initial public offering (or, if later, the date of the initial election of
such Outside Director) and the meeting following which such automatic grant
would occur. Each Non-Qualified Option granted to an Outside Director
pursuant to this Section 4.4 shall expire on the tenth anniversary of the
date of grant. The exercise price of each Non-Qualified Option granted
pursuant to this Section 4.4 shall be equal to the fair market value of the
Common Stock on the date the Non-Qualified Option is granted, such fair
market value to be determined in accordance with the provisions of Section
5.1(c). This Section 4.4 shall not be effective on or after May 21, 1998 so
that Non-Qualified Options shall not automatically be granted to Outside
Directors pursuant to this Section 4.4 thereafter.
SECTION 5. TERMS OF THE OPTION AGREEMENTS
5.1. MANDATORY TERMS. Each option agreement shall contain such
provisions as the Plan Administrator shall from time to time deem appropriate.
Option agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the following
provisions:
(a) EXPIRATION. Notwithstanding any other provision of the Plan or of
any option agreement, each option shall expire on the date specified in the
option agreement, which date shall not be later than the tenth anniversary
of the date on which the option was granted (fifth anniversary in the case
of an Incentive Option granted to a greater-than-10% stockholder).
(b) EXERCISE. Each option shall be exercisable in full or installments
(which need not be equal) and at such times as designated by the Plan
Administrator. To the extent not
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exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
option expires.
(c) PURCHASE PRICE. The purchase price per share of the Common Stock
under each Incentive Option shall be not less than the fair market value of
the Common Stock on the date the option is granted (110% of fair market value
in the case of a greater-than-10% stockholder). The price at which shares may
be purchased pursuant to Non-Qualified Options shall be specified by the Plan
Administrator at the time the option is granted, and may be equal to or
greater than the fair market value of the shares of Common Stock on the date
such Non-Qualified Option is granted, but shall not be less than the par
value of shares of Common Stock. For the purpose of the Plan, the fair market
value of the Common Stock shall be the closing price per share on the date of
grant of the option as reported by a nationally recognized stock exchange, or,
if the Common Stock is not listed on such an exchange, as reported by the
National Association of Securities Dealers Automated Quotation System, Inc.
("Nasdaq"), or, if the Common Stock is not quoted on Nasdaq, the fair market
value as determined by the Plan Administrator.
(d) TRANSFERABILITY OF OPTIONS. Options granted under the Plan and
the rights and privileges conferred thereby may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or by applicable laws of descent and
distribution, and shall not be subject to execution, attachment or similar
process. Upon any attempt so to transfer, assign, pledge, hypothecate or
otherwise dispose of any option under the Plan or any right or privilege
conferred hereby, contrary to the provisions of the Plan, or upon the sale or
levy or any attachment of similar process upon the rights and privileges
conferred hereby, such option shall thereupon terminate and become null and
void.
(e) TERMINATION OF EMPLOYMENT OR DISABILITY OR DEATH OF OPTIONEE.
Except as may be otherwise expressly provided in the terms and conditions of
the option granted to an Optionee:
(i) Options granted hereunder shall terminate on the
earliest to occur of:
(A) the date of expiration thereof;
(B) thirty days after the date of termination of the
Optionee's employment with or performance of services for the Company (other
than as a result of death or permanent and total disability of the Optionee),
including upon the Optionee's retirement; or
(C) twelve months after the date of termination of
the Optionee's employment with or performance of services for the Company as
a result of the death or permanent and total disability of Optionee under the
then established rules of the Company.
(ii) In the event of the termination of an Optionee's
employment with or performance of services for the Company by the Company
(other than as a result of death or permanent and total disability of the
Optionee) or upon the Optionee's retirement, the
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Optionee's option shall be exercisable during the thirty-day post-termination
period described in Paragraph 5.1(e)(i)(B) to the extent that it was
exercisable at the time of such termination of employment or performance of
services. In the event of the termination of the Optionee's employment with
or performance of services. In the event of the termination of the Optionsee's
employment with or performance of services for the Company as a result of the
permanent and total disability of an Optionee, the Optionee's option shall be
exercisable during the twelve-month post-termination period referred to in
Paragraph 5.1(e)(i)(C) to the extent that it was exercisable at the time of
such termination of employment or performance of services for the Company as a
result of the death of the Optionee, the Optionee's executor, administrator
or any person or persons to whom his option may be transferred by will or by
laws of descent and distribution shall have the right at any time during the
twelve-month post-termination period referred to in Paragraph 5.1(e)(i)(C)
to exercise such option, to the extent the Optionee was entitled to exercise
such option at the time of such termination of employment of performance of
services. Should such termination for reason of permanent disability or death
occur after the first anniversary of the date at which the Optionee was first
employed or otherwise began to serve the Company, then at the Board's
discretion, the Option may be exercised for up to the greater of (A) 50% of
all Option shares (and such shares shall be deemed vested) or (B) the number
of shares that had vested as of the date of such death or such retirement.
After the death of the Optionee, his executors, administrators or any person
or persons to whom his Option may be transferred by will or by the laws of
descent and distribution, shall have the right to exercise the Option.
(iii) An employment or consulting relationship between the
Company and the Optionee shall be deemed to exist during any period in which
the Optionee is employeed in any capacity by the Company or by any Subsidiary
or providing services to the Company, as the case may be. Whether authorized
leave of absence or absence on military or government service shall constitute
termination of the employment relationship between the Company and the
Optionee shall be determined by the Plan Administrator at the time thereof.
(f) RIGHTS OF OPTIONESS. No Optionee shall be deemed for any
purpose to be the owner of any shares of Common Stock subject to any option
unless and until (i) the option shall have been exercised with respect to
such shares pursuant to the terms thereof, and (ii) the Company shall have
issued and delivered a certificate representing such shares. Thereupon, the
Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Common Stock.
5.2 CERTAIN OPTIONAL TERMS. The Plan Administrator may in its
discretion provide, upon the grant of any option hereunder, that the Company
shall have an option to repurchase all or any number of shares purchased upon
exercise of such option. The repurchase price per share payable by the
Company shall be such amount or be determined by such formula as is fixed by
the Plan Administrator at the time the option for the shares subject to
repurchase was granted. The Plan Administrator may also provide that the
Company shall have a right of first refusal with respect to the transfer or
proposed transfer of any shares purchased upon exercise of an option granted
hereunder. In the event the Plan Administrator shall grant options subject to
the Company's repurchase rights or rights of first refusal, the certificate
or certificates
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representing the shares purchased pursuant to the exercise of such option
shall carry a legend satisfactory to counsel for the Company referring to
such rights.
SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
6.1. NOTICE OF EXERCISE. Any option granted under the Plan may be
exercised by the Optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the Optionee
then desires to purchase and specifying the address to which the certificates
for such shares are to be mailed, accompanied by payment for such shares.
6.2. MEANS OF PAYMENT AND DELIVERY. Common Stock purchased on exercise
of an option must be paid for as follows: (a) in cash or by check (acceptable
to the Company in accordance with guidelines established for this purpose),
bank draft or money order payable to the order of the Company, or (b) through
the delivery of shares of Common Stock (which in the case of shares acquired
from the Company upon exercise of an option, have been outstanding for at
least six months) having a fair market value on the last business day
preceding the date of exercise equal to the purchase price, or (c) by
delivery of an unconditional and irrevocable undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
(d) if so permitted by the instrument evidencing the option (or in the case
of a Non-Qualified Option, by the Plan Administrator on or after grant of the
option), by delivery of a promissory note of the Optionee to the Company,
payable on such terms as are specified by the Plan Administrator, or (e) by
any combination of the permissible forms of payment; PROVIDED, that if the
Common Stock delivered upon exercise of the option is an original issue of
authorized Common Stock, at least so much of the exercise price as represents
the par value of such Common Stock must be paid other than by the Optionee's
promissory note or personal check. In the event that payment of the option
price is made under (b) above, the Plan Administrator may provide that the
Optionee be granted an additional option covering the numbers of shares
surrendered, at an exercise price equal to the fair market value of a share
of Common Stock on the date of surrender. For the purpose of this Section,
the fair market value of the shares of Common Stock so delivered to the
Company shall be determined in the manner specified in Section 5.1(c) hereof.
As promptly as practicable after receipt of such written notification and
payment, the Company shall deliver to the Optionee certificates for the
number of shares with respect to which such Option has been so exercised,
issued in the Optionee's name; provided, however, that such delivery shall be
deemed effected for all purposes when the Company or a stock transfer agent
of the Company shall have deposited such certificates in the United States
mail, addressed to the Optionee, at the address specified pursuant to Section
6.1.
SECTION 7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
7.1 NO EFFECT OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. The
existence of outstanding options shall not affect in any way the right or
power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
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consolidation of the Company, or any issue of Common Stock, of any issue of
bonds, debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
7.2 STOCK DIVIDENDS RECAPITALIZATIONS, ETC. If at any time after the
effective date of the Plan the Company shall effect a subdivision or
consolidation of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of the
Common Stock outstanding, without receiving compensation therefor in money,
services or property, then: (i) the number, class and per share price of
shares of stock subject to outstanding options hereunder, and the number of
shares as to which automatic formula grants of options are to be made under
Section 4.4 above, shall be appropriately adjusted in such a manner as to
entitle an Optionee to receive upon exercise of an option, for the same
aggregate cash consideration, the same total number and class of shares that
the owner of an equal number of outstanding shares of Common Stock would own
as a result of the event requiring the adjustment; and (ii) the number and
class of shares with respect to which options may be granted under the Plan
shall be adjusted by substituting for the total number of shares of Common
Stock then reserved for issuance under the Plan that number and class of
shares of stock that the owner of an equal number of outstanding shares of
Common Stock would own as the result of the event requiring the
adjustment.
7.3 DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 7
shall be determined by the Plan Administrator and such determinations shall be
conclusive. The Plan Administrator shall have the discretion and power in any
such event to determine and to make effective provision for acceleration of
the time or times at which any option or portion thereof shall become
exercisable. No fractional shares of Common Stock shall be issued under the
Plan on account of any adjustment specified above.
7.4 NO ADJUSTMENT IN CERTAIN CASES. Except as hereinbefore
expressly provided, the issue by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, for cash or
property or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock then
subject to outstanding options.
SECTION 8. EFFECT OF CERTAIN TRANSACTIONS
If the Company is a party to a reorganization or merger with one or
more other corporations, whether or not the Company is the surviving or
resulting corporation, or if the Company consolidates with or into one or more
other corporations, or if the Company is liquidated or sells or otherwise
disposes of substantially all of its assets to another corporation (each
hereinafter referred to as a "Transaction"), in any such event while
unexercised options remain outstanding under the Plan, then: (i) subject to
the provisions of clause (iii) below, after
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the effective date of such Transaction unexercised options shall remain
outstanding and shall be exercisable in shares of Common Stock, or, if
applicable, shares of such stock or other securities, cash or property as the
holders of shares of Common Stock received pursuant to the terms of such
Transaction; (ii) the Plan Administrator may accelerate the time for exercise
of all unexercised and unexpired options to and after a date prior to the
effective date of such Transaction; or (iii) any outstanding options may be
cancelled by the Plan Administrator as of the effective date of such
Transaction, provided that: (x) notice of such cancellation shall be given to
each holder of an option; (y) the Plan Administrator shall have accelerated
the time for exercise of all unexercised and unexpired options that it
proposes to cancel; and (z) each holder of an option shall have the right to
exercise such option in full.
SECTION 9. AMENDMENT OR TERMINATION OF THE PLAN
The Board may terminate the Plan at any time, and may amend the Plan at
any time and from time to time, subject to the limitation that, except as
provided in Sections 7 and 8 hereof, no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable law
and regulations, at an annual or special meeting held within twelve months
before or after the date of adoption of such amendment, in any instance in
which such amendment would: (i) increase the number of shares of Common Stock
as to which options may be granted under the Plan; or (ii) change in
substance the provisions of Section 4 hereof relating to eligibility to
participate in the Plan.
Except as provided in Sections 7 and 8 hereof, rights and obligations
under any option granted before termination or amendment of the Plan shall not
be altered or impaired by such termination or amendment except with the
consent of the Optionee.
SECTION 10. NON-EXCLUSIVITY OF THE PLAN; NON-UNIFORM DETERMINATIONS
Neither the adoption of the Plan by the Board nor the approval of the
Plan by the stockholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including without limitation the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
The Plan Administrator's determinations under the Plan need not be
uniform and may be made by it selectively among persons who receive or are
eligible to receive options under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the Plan
Administrator shall be entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and selective option
agreements, as to (i) the persons to receive options under the Plan, (ii) the
terms and provisions of options, (iii) the exercise by the Plan Administrator
of its discretion in respect of the exercise of options pursuant to the terms
of the Plan, and (iv) the treatment of leaves of absence pursuant to Section
5.1(e) hereof.
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SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW;
WITHHOLDING TAXES
The obligation of the Company to sell and deliver shares of Common Stock
with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by government
agencies as may be deemed necessary or appropriate by the Plan Administrator.
All shares sold under the Plan shall bear appropriate legends. The Company
may, but shall in no event be obligated to, register or qualify any shares
covered by options under applicable federal and state securities laws; and in
the event that any shares are so registered or qualified the Company may
remove any legend on certificates representing such shares. The Company shall
not be obligated to take any other affirmative action in order to cause the
exercise of an option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority. The Plan shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
Whenever under the Plan shares are to be delivered upon exercise of an
option, the Company shall be entitled to require as a condition of delivery
that the Optionee remit an amount sufficient to satisfy all federal, state
and other governmental withholding tax requirements related thereto. An
employee may elect to have such tax withholding obligation satisfied, in
whole or in part, by: (i) authorizing the Company to withhold from shares of
Common Stock to be issued pursuant to the exercise of a Non-Qualified Option
a number of shares with an aggregate fair market value (as defined in Section
5.1(c) hereof determined as of the date the withholding is effected) that
would satisfy the withholding amount due with respect to such exercise; or
(ii) transferring to the Company shares of Common Stock owned by the employee
with an aggregate fair market value (as defined in Section 5.1(c) hereof
determined as of the date the withholding is effected) that would satisfy the
withholding amount due.
SECTION 12. "LOCKUP" AGREEMENT
The Plan Administrator may in its discretion specify upon granting an
option that the Optionee shall agree, for a period of time (not to exceed 180
days) from the effective date of any registration of securities of the
Company, upon request of the Company or the underwriter or underwriters
managing any underwritten offering of the Company's securities, not to sell,
make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any shares issued pursuant to the exercise of such
option, without the prior written consent of the Company or such underwriter
or underwriters, as the case may be.
SECTION 13. EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall become effective upon the closing of the Company's
initial public offering of shares of Common Stock provided that the
stockholders of the Company shall have approved the Plan within twelve months
prior to or following the adoption of the Plan by the Board. No option may be
granted under the Plan after the tenth anniversary of the effective date. The
Plan shall terminate (i) when the total amount of the Stock with respect to
which
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options may be granted shall have been issued upon the exercise of options or
(ii) by action of the Board pursuant to Section 9 hereof, whichever shall
first occur.
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