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BIOSANTE PHARMACEUTICALS, INC.
AMENDED AND RESTATED
1998 STOCK OPTION PLAN
(As amended through June 13, 2000)
1. PURPOSE OF PLAN.
The purpose of the BioSante Pharmaceuticals, Inc. 1998 Stock Option
Plan (the "Plan") is to advance the interests of BioSante Pharmaceuticals,
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
objectives, as the Board of Directors describes them.
2. DEFINITIONS.
The following terms will have the meanings set forth below, unless
the context clearly otherwise requires:
2.1 "ASE" means the Alberta Stock Exchange.
2.2 "ASE REQUIREMENTS" means the by-laws, rules, circulars and
policies of the ASE.
2.3 "BOARD" means the Board of Directors of the Company.
2.4 "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.
2.5 "CHANGE IN CONTROL" means an event described in Section 9.1 of
the Plan.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended.
2.7 "COMMITTEE" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.
2.8 "SUBORDINATE VOTING STOCK" means the subordinate voting stock of
the Company, no par value, or the number and kind of shares of stock or other
securities into which such subordinate voting stock may be changed in
accordance with Section 4.3 of the Plan.
2.9 "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.
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2.10 "ELIGIBLE RECIPIENTS" means all employees of the Company or any
Subsidiary and any non-employee directors, officers, consultants and independent
contractors of the Company or any Subsidiary.
2.11 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
2.12 "FAIR MARKET VALUE" means, with respect to the Subordinate Voting
Stock, as of any date (or, if no shares were traded or quoted on such date, as
of the next preceding date on which there was such a trade or quote) (a) the
mean between the reported high and low sale prices of the Subordinate Voting
Stock if the Subordinate Voting Stock is listed, admitted to unlisted trading
privileges or reported on any foreign or national securities exchange or on the
Nasdaq National Market or an equivalent foreign market on which sale prices are
reported; (b) if the Subordinate Voting Stock is not so listed, admitted to
unlisted trading privileges or reported, the closing bid price as reported by
the Nasdaq SmallCap Market, OTC Bulletin Board or the National Quotation Bureau,
Inc. or other comparable service; or (c) if the Subordinate Voting Stock is not
so listed or reported, such price as the Committee determines in good faith in
the exercise of its reasonable discretion.
2.13 "INCENTIVE STOCK OPTION" means a right to purchase Subordinate
Voting 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.
2.14 "NON-STATUTORY STOCK OPTION" means a right to purchase
Subordinate Voting Stock granted to an Eligible Recipient pursuant to Section
6 of the Plan that does not qualify as an Incentive Stock Option.
2.15 "OPTION" means an Incentive Stock Option or a Non-Statutory
Stock Option.
2.16 "PARTICIPANT" means an Eligible Recipient who receives one or
more Options under the Plan.
2.17 "PREVIOUSLY ACQUIRED SHARES" means shares of Subordinate Voting
Stock or any other shares of capital stock of the Company that are already
owned by the Participant or, with respect to any Option, that are to be
issued upon the exercise of such Option.
2.18 "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.
2.19 "SECURITIES ACT" means the Securities Act of 1933, as
amended.
2.20 "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.
2.21 "TAX DATE" means the date any withholding tax obligation arises
under the Code or other applicable tax statute for a Participant with respect
to an Option.
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3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE. The Plan will be administered by the Board or by
a committee of the Board. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the
Board who are "non-employee directors" within the meaning of Rule 16b-3 under
the Exchange Act and, if the Board so determines in its sole discretion, who
are "outside directors" within the meaning of Section 162(m) of the Code.
Such a committee, if established, will act by majority approval of the
members (but may also take action with the written consent of all of the
members of such committee), and a majority of the members of such a committee
will constitute a quorum. As used in the Plan, "Committee" will refer to the
Board or to such a committee, if established. 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. The Committee may exercise its duties, power and authority under the
Plan in its sole and absolute discretion without the consent of any
Participant or other party, unless the Plan specifically provides otherwise.
Each determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will 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 Committee will
be liable for any action or determination made in good faith with respect to
the Plan or any Option granted under the Plan.
3.2 AUTHORITY OF THE COMMITTEE.
(a) In accordance with and subject to the provisions of the
Plan, the Committee will have the authority to determine all provisions
of Options as the Committee may deem necessary or desirable and as
consistent with the terms of the Plan, including, without limitation,
the following: (i) the Eligible Recipients to be selected as
Participants; (ii) the nature and extent of the Options to be made to
each Participant (including the number of shares of Subordinate Voting
Stock to be subject to each Option, the exercise price and the manner
in which Options will become exercisable) and the form of written
agreement, if any, evidencing such Option; (iii) the time or times when
Options will be granted; (iv) the duration of each Option; and (v) the
restrictions and other conditions to which the Options 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 Option in the form
of cash, shares of Subordinate Voting Stock, shares of any capital
stock of the Company, or any combination of both.
(b) The Committee will have the authority under the Plan to
amend or modify the terms of any outstanding Option in any manner,
including, without limitation, the authority to modify the number of
shares or other terms and conditions of an Option, extend the term of
an Option, accelerate the exercisability or otherwise terminate any
restrictions relating to an Option, accept the surrender of any
outstanding Option or, to the extent not previously exercised or
vested, authorize the grant of new Options in substitution for
surrendered Options; provided, however that the amended or modified
terms are permitted by the Plan as then in effect and that any
Participant adversely
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affected by such amended or modified terms has consented to such
amendment or modification. No amendment or modification to an
Option, however, whether pursuant to this Section 3.2 or any other
provisions of the Plan, will be deemed to be a re-grant of such
Option for purposes of this Plan.
(c) In the event of (i) 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 similar change in corporate structure or shares, (ii) any
purchase, acquisition, sale or disposition of a significant amount of
assets or a significant business, (iii) any change in accounting
principles or practices, or (iv) 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 Option, 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 conditions to
the exercisability of any outstanding Option 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.
4. SHARES AVAILABLE FOR ISSUANCE.
4.1 MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to Section 4.4 below
and adjustment as provided in Section 4.3 of the Plan, the maximum number of
shares of Subordinate Voting Stock that will be available for issuance under
the Plan will be 7,000,000 shares of Subordinate Voting Stock, plus any
shares of Subordinate Voting Stock which, as of the date the Plan is approved
by the shareholders of the Company, are reserved for issuance under the
Company's existing 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.
4.2 ACCOUNTING FOR OPTIONS. Shares of Subordinate Voting Stock that
are issued under the Plan or that are subject to outstanding Options will be
applied to reduce the maximum number of shares of Subordinate Voting Stock
remaining available for issuance under the Plan. Any shares of Subordinate
Voting Stock that are subject to an Option that lapses, expires, is forfeited
or for any reason is terminated unexercised and any shares of Subordinate
Voting Stock that are subject to an Option that is settled or paid in cash or
any form other than shares of Subordinate Voting Stock will automatically
again become available for issuance under the Plan.
4.3 ADJUSTMENTS TO SHARES AND OPTIONS. 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 or other property (including cash) available
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for issuance or payment under the Plan and, in order to prevent dilution or
enlargement of the rights of Participants, the number and kind of securities
or other property (including cash) subject to, and the exercise price of,
outstanding Options.
4.4 ASE REQUIREMENTS. So long as the Subordinate Voting Stock of the
Company is listed on the ASE and the Company has not been exempted from the
ASE Requirements in this regard:
(a) the aggregate number of shares of Subordinate Voting Stock
that may be reserved for issuance pursuant to the Plan and any other
stock option plan, stock purchase plan or for remuneration for any
service performed for or on behalf of the Company shall not exceed 10%
of the outstanding shares of Subordinate Voting Stock, on a non-diluted
basis;
(b) the aggregate number of shares of Subordinate Voting Stock
that may be reserved for issuance pursuant to the Plan and any other
stock option plan, stock purchase plan or for remuneration for any
service performed for or on behalf of the Company to any one party
shall not exceed 5% of the outstanding shares of Subordinate Voting
Stock, on a non-diluted basis;
(c) the aggregate number of shares of Subordinate Voting Stock
that may be reserved for issuance pursuant to the Plan to any party
other than a director, officer, employee or insider shall not exceed 1%
of the outstanding shares of Subordinate Voting Stock of the Company,
on a non-diluted basis per annum; and
(d) the aggregate number of shares of Subordinate Voting Stock
that may be reserved for issuance pursuant to the Plan to all parties
other than directors, officers, employees or insiders shall not exceed
(i) 2.5% of the outstanding shares of Subordinate Voting Stock of the
Company, on a non-diluted basis in any one calendar year, (ii) 10% of
the outstanding shares of Subordinate Voting Stock of the Company, on a
non-diluted basis at any time.
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 objectives as determined by the
Board of the Company or its Subsidiaries. Eligible Recipients may be granted
from time to time one or more Options as may be determined by the Committee
in its sole discretion. Options 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.
6. OPTIONS.
6.1 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
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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.
6.2 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, however, that (a) such
price will not be less than 100% of the Fair Market Value of one share of
Subordinate Voting 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 (b) such
price will not be less than 85% of the Fair Market Value of one share of
Subordinate Voting Stock on the date of grant with respect to a Non-Statutory
Stock Option. Notwithstanding the foregoing, so long as the Subordinate
Voting Stock of the Company is listed on the ASE and the Company has not been
exempted from the ASE Requirements in this regard, the exercise price per
share of an Option shall not be less than the price per share permitted by
the ASE Requirements.
6.3 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
Incentive Stock Option may be exercisable after 10 years from its date of
grant (five years from its date of grant if, (a) 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 or (b) the
Subordinate Voting Stock of the Company is then listed on the ASE and the
Company has not been exempted from the ASE Requirements in this regard).
6.4 PAYMENT OF EXERCISE PRICE. The total purchase price of the
shares to be purchased upon exercise of an Option must 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.
6.5 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 Lincolnshire, Illinois and by paying in full
the total exercise price for the shares of Subordinate Voting Stock to be
purchased in accordance with Section 6.4 of the Plan.
6.6 AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK
OPTIONS. To the extent that the aggregate Fair Market Value (determined as of
the date an Incentive Stock Option is granted) of the shares of Subordinate
Voting Stock with respect to which incentive stock options (within the
meaning of Section 422 of the Code) are exercisable for the first time by a
Participant during any calendar year (under the Plan and any other incentive
stock option plans of the Company or any subsidiary or parent corporation of
the Company (within the meaning of the
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Code)) exceeds $100,000 (or such other amount as may be prescribed by the
Code from time to time), such excess Options will be treated as Non-Statutory
Stock Options. The determination will be made by taking incentive stock
options into account in the order in which they were granted. If such excess
only applies to a portion of an Incentive Stock Option, the Committee, in its
discretion, will designate which shares will be treated as shares to be
acquired upon exercise of an Incentive Stock Option.
7. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.
7.1 TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. Unless
otherwise provided by the Committee in its sole discretion in the agreement
evidencing an Option:
(a) In the event a Participant's employment or other service
with the Company and all Subsidiaries is terminated by reason of death
or Disability, all outstanding Options then held by the Participant
will remain exercisable, to the extent exercisable as of the date of
such termination, for a period of six months after such termination
(but in no event after the expiration date of any such Option).
(b) In the event a Participant's employment or other service
with the Company and all Subsidiaries is terminated by reason of
Retirement, all outstanding Options then held by the Participant will
remain exercisable, to the extent exercisable as of the date of such
termination, for a period of three months after such termination (but
in no event after the expiration date of any such Option).
7.2 TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR RETIREMENT.
(a) Unless otherwise provided by the Committee in its sole
discretion in the agreement evidencing an Option, 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 Option will immediately
terminate without notice of any kind, and no Options then held by the
Participant will thereafter be exercisable; 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 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).
(b) For purposes of this Section 7.2, "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 (i) dishonesty, fraud,
misrepresentation, embezzlement or deliberate injury or attempted
injury, in each case related to the Company or any Subsidiary, (ii) any
unlawful or criminal activity of a serious nature, (iii) 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 (iv) any material breach of any
employment, service, confidentiality or non-compete agreement entered
into with the Company or any Subsidiary.
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7.3 MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the
other provisions of this Section 7, 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 (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; provided, however, that no Option may
remain exercisable beyond its expiration date.
7.4 EXERCISE OF INCENTIVE STOCK OPTIONS FOLLOWING TERMINATION. Any
Incentive Stock Option that remains unexercised more than one year following
termination of employment by reason of Disability or more than three months
following termination for any reason other than death or Disability will
thereafter be deemed to be a Non-Statutory Stock Option.
7.5 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.
8. PAYMENT OF WITHHOLDING TAXES.
8.1 GENERAL RULES. The Company is entitled to (a) 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 foreign, federal, state and local
withholding and employment-related tax requirements attributable to an
Option, including, without limitation, the grant or exercise of an Option or
a disqualifying disposition of stock received upon exercise of an Incentive
Stock Option, or (b) require the Participant promptly to remit the amount of
such withholding to the Company before taking any action, including issuing
any shares of Subordinate Voting Stock, with respect to an Option.
8.2 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 8.1 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.
9. CHANGE IN CONTROL.
9.1 CHANGE IN CONTROL. For purposes of this Section 9, a "Change in
Control" of the Company will mean the following:
(a) 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;
(b) the approval by the shareholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company;
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(c) 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 (i) 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 Continuity Directors (as defined in Section 9.2 below),
or (ii) 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 Continuity Directors);
(d) 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 (i) more than 50%, but less 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 Continuity Directors, or (ii) 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 Continuity Directors);
(e) the Continuity Directors cease for any reason to
constitute at least a majority of the Board; or
(f) 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 requirement.
9.2 CONTINUITY DIRECTORS. For purposes of this Section 9,
"Continuity 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 Continuity 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).
9.3 ACCELERATION OF EXERCISABILITY. Without limiting the authority
of the Committee under Sections 3.2 and 4.3 of the Plan, if a Change in
Control of the Company occurs, then, unless otherwise provided by the
Committee in its sole discretion either in the agreement evidencing an Option
at the time of grant or at any time after the grant of an Option, all
outstanding Options 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 have been granted remains in the employ
or service of the Company or any Subsidiary.
10. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.
10.1 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
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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.
10.2 RIGHTS AS A SHAREHOLDER. As a holder of Options, a Participant
will have no rights as a shareholder unless and until such Options are
exercised for, or paid in the form of, shares of Subordinate Voting 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 Options 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.
10.3 RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will
or the laws of descent and distribution or as otherwise expressly permitted
by the Plan (unless approved by the Committee in its sole discretion and the
ASE, if necessary), no right or interest of any Participant in an Option
prior to the exercise of such Option 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 Option 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 Options (to the extent permitted pursuant to
Section 7 of the Plan) may be made by, the Participant's legal
representatives, heirs and legatees.
10.4 BREACH OF CONFIDENTIALITY OR NON-COMPETE AGREEMENTS.
Notwithstanding anything in the Plan to the contrary, in the event that a
Participant materially breaches the terms of any confidentiality or
non-compete 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 Option then held
by the Participant without notice of any kind.
10.5 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.
11. 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 Subordinate Voting Stock under this Plan, and a Participant may
not sell, assign, transfer or otherwise dispose of shares of Subordinate
Voting Stock issued pursuant to Options granted under the Plan, unless (a)
there is in effect with respect to such shares a registration statement under
the Securities Act and any applicable state or foreign securities laws or an
exemption from such registration under the Securities Act and applicable
state or foreign securities laws, and (b) 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 Subordinate Voting Stock,
as
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may be deemed necessary or advisable by the Company in order to comply with
such securities law or other restrictions.
12. 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 Options 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
shareholders of the Company if shareholder approval of the amendment is then
required pursuant to Section 422 of the Code or the rules of any stock
exchange or Nasdaq or similar regulatory body. No termination, suspension or
amendment of the Plan may adversely affect any outstanding Option 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 3.2, 4.3 and 9 of the Plan.
13. EFFECTIVE DATE AND DURATION OF THE PLAN.
The Plan is effective as of December 8, 1998, the date it was
adopted by the Board. The Plan will terminate at midnight on December 8, 2008
and may be terminated prior to such time to by Board action, and no Option
will be granted after such termination. Options outstanding upon termination
of the Plan may continue to be exercised in accordance with their terms.
14. MISCELLANEOUS.
14.1 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 Wyoming, notwithstanding the
conflicts of laws principles of any jurisdictions.
14.2 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.
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