<PAGE>
As Filed with the Securities and Exchange Commission on April 21, 1998
Registration No. 333-______
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
SCOOP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-0726608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
--------------------
2540 RED HILL AVENUE
SANTA ANA, CALIFORNIA 92705
--------------------
1996 STOCK INCENTIVE PLAN OF SCOOP, INC., AS AMENDED
(Full title of the plan)
--------------------
RAND BLEIMEISTER COPY TO:
CHAIRMAN OF THE BOARD AND WILLIAM J. CERNIUS, ESQ.
CHIEF EXECUTIVE OFFICER LATHAM & WATKINS
2540 RED HILL AVENUE 650 TOWN CENTER DRIVE,
SANTA ANA, CALIFORNIA 92705 TWENTIETH FLOOR
(714) 225-6000 COSTA MESA, CALIFORNIA 92626
(714) 540-1235
(Name and address, including zip code,
and telephone number, including area code,
of agent for service)
--------------------
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock. . . . 1,500,000 $2.03 $3,035,667 $895
- -------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The Proposed Maximum Aggregate Offering Price
is the sum of (i) the product of the number of options previously granted
and outstanding (836,482) and the weighted average of the exercise prices
of the options previously granted and outstanding ($2.82), and (ii) the
product of the remaining options available for future grants under the
plan (663,518) and the average ($1.02) of the high and low prices of the
common stock as reported on the Nasdaq SmallCap Market, on April 17, 1998
(which were $1 3/16 and $27/32, respectively.)
- -------------------------------------------------------------------------------
PROPOSED SALE TO TAKE PLACE AS SOON AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT AS OPTIONS GRANTED UNDER THE OPTION PLAN ARE EXERCISED.
Total Pages [32]
Exhibits Index on Page 6
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information called for in Part I of Form S-8 is not being prepared with
or included in this Form S-8 (by incorporation by reference or otherwise) in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997, filed by Scoop, Inc. (the "Company") with the
Commission.
(b) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on March 24,
1997, File #000-22281, including any subsequently filed amendments and
reports updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date of this Registration Statement and prior to the filing
of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration
Statement and to be a part of it from the respective dates of filing such
documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. NAMED EXPERTS AND COUNSEL
Not applicable.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Delaware General Corporation Law ("DGCL"), the Certificate
of Incorporation of the Company eliminates the liability of Directors to the
Company or to its stockholders for monetary damages for breach of fiduciary duty
as a Director, except to the extent otherwise required by the DGCL.
The Certificate of Incorporation provides that the Company indemnify each
person who was or is made a party to any proceeding by reason of the fact that
such person is or was a Director or Officer of the Company all expense,
liability and loss reasonably incurred or suffered by such person in connection
therewith to the fullest extent authorized by DGCL.
The Company has also entered into indemnification agreements with certain
of its Directors and Officers that require the Company to indemnify such
Directors and Officers to the fullest extent permitted by applicable provisions
of the DGCL, provided that any settlement of a third party against a Director or
Officer is approved by the Company, and subject to limitations for actions
initiated by the Director or Officer, penalties paid by insurance, and
violations of Section 16(b) of the Securities Exchange Act of 1934 and similar
laws.
The inclusion of the above provisions in the Certificate of Incorporation
may have the effect of reducing the likelihood of stockholder derivative suits
against directors and may discourage or deter stockholders or management from
bringing a lawsuit against directors for breach of their duty of care, even
though such an action, if successful, might otherwise have benefitted the
Company and its stockholders.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See Index to Exhibits on page 6.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in this Registration
Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement.
3
<PAGE>
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Ana, State of California, on
this _____ day of April, 1998.
SCOOP, INC.
a Delaware corporation
By:___________________________
Rand Bleimeister
Chief Executive Officer and Chief Financial
Officer
(Principal Executive Officer and Principal
Financial Officer)
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and
appoints Rand Bleimeister as attorney-in-fact and agent, with full powers of
substitution to sign on his or her behalf, individually and in the capacities
stated below, and to file any and all amendments, including post-effective
amendments, to this Registration Statement and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorney-in-fact and agent full power and authority to perform any other
act on behalf of the undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
________________ Chief Executive Officer, Chief _______________, 1998
Rand Bleimeister Financial Officer, and Director
(Principal Executive Officer,
and Principal Financial Officer)
_______________________ Controller (Principal _______________, 1998
Kristy Allan Accounting Officer)
_______________________ Director _______________, 1998
Karl-Magnus S. Karlsson
_______________________ Director _______________, 1998
Michael J. Baum
</TABLE>
5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C>
5.1 Opinion of Latham & Watkins. 7
10.1 The 1996 Stock Incentive Plan of Scoop, Inc., as Amended 8
----
23.1 Consent of Latham & Watkins (included in Exhibit 5.1). 7
23.2 Consent of Deloitte & Touche LLP 9
24.1 Power of Attorney (included on the signature page to this
Registration Statement). 5
</TABLE>
6
<PAGE>
[LETTERHEAD]
EXHIBIT 5.1
April 20, 1998
Board of Directors
Scoop, Inc.
2540 Red Hill Avenue
Suite 100
Santa Ana, California 92705
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
At your request we have examined the Registration Statement on Form
S-8 (the "Registration Statement") to be filed by you with the Securities and
Exchange Commission in connection with the registration under the Securities
Act of 1933, as amended, of 1,500,000 shares (the "Shares") of common stock,
$.01 par value, of Scoop, Inc. (the "Company"), none of which are issued and
outstanding as of the date hereof, but which are issuable upon exercise of
options previously granted under the 1996 Stock Incentive Plan of Scoop, Inc.
(the "Plan"), as amended.
We have examined such matters of fact and questions of law as we have
considered appropriate for purposes of rendering the opinions expressed
below.
We are opining herein as to the effect on the subject transaction
of only the General Corporation Law of the State of Delaware and we assume no
responsibility as to the application to the subject transaction, or the
effect thereon, of any other laws, of the laws of any other jurisdiction or
as to any matters of municipal law or the laws of any other local agencies
within any other state.
Subject to the foregoing and in reliance thereon, we are of the
opinion that, upon the exercise of options granted pursuant to the Plan and
the issuance and sale of the Shares, each in the manner contemplated by the
Registration Statement and each in accordance with the terms of the Plan, and
subject to the Company completing all action and proceedings required on its
part to be taken prior to the issuance of the Shares pursuant to the terms of
the Plan and the Registration Statement, including, without limitation,
collection of required payment for the Shares, the Shares will be legally and
validly issued, fully paid and nonassessable securities of the Company.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Latham & Watkins
7
<PAGE>
EXHIBIT 10.1
THE 1996 STOCK INCENTIVE PLAN
OF
SCOOP, INC.
Scoop, Inc., a California corporation, has adopted The 1996 Stock
Incentive Plan of Scoop, Inc. (the "Plan"), effective April 23, 1996, for the
benefit of its eligible employees, consultants and directors. The Plan
consists of two plans, one for the benefit of key Employees (as such term is
defined below) and consultants and one for the benefit of Independent
Directors (as such term is defined below).
The purposes of this Plan are as follows:
(1) To provide an additional incentive for directors, key
Employees and consultants to further the growth, development and financial
success of the Company by personally benefiting through the ownership of
Company stock and/or rights which recognize such growth, development and
financial success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees and consultants considered essential to the long
range success of the Company by offering them an opportunity to own stock in
the Company and/or rights which will reflect the growth, development and
financial success of the Company.
ARTICLE I
DEFINITIONS
1.1 GENERAL. Wherever the following terms are used in this Plan
they shall have the meanings specified below, unless the context clearly
indicates otherwise.
1.2 AWARD LIMIT. "Award Limit" shall mean 300,000 shares of
Common Stock.
1.3 BOARD. "Board" shall mean the Board of Directors of the
Company.
1.4 CHANGE IN CONTROL. "Change in Control" shall mean a change
in ownership or control of the Company effected through either of the
following transactions:
(a) any person or related group of persons (other than the Company
or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's shareholders
which the Board does not recommend such shareholders to accept; or
(b) there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months (or less) such that a
majority of the Board members (rounded up to the nearest whole number)
ceases, by reason of one or more proxy contests for the election of Board
members, to be comprised of individuals who either (i) have been Board
members continuously
1
<PAGE>
since the beginning of such period or (ii) have been elected or
nominated for election as Board members during such period by at least a
majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.
1.5 CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.6 COMMITTEE. "Committee" shall mean the Compensation Committee
of the Board, or another committee of the Board, appointed as provided in
Section 9.1.
1.7 COMMON STOCK. "Common Stock" shall mean the common stock of
the Company, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any preferred stock and any warrants,
options or other rights to purchase Common Stock. Debt securities of the
Company convertible into Common Stock shall be deemed equity securities of
the Company.
1.8 COMPANY. "Company" shall mean Scoop, Inc., a California
corporation.
1.9 CORPORATE TRANSACTION. "Corporate Transaction" shall mean
any of the following shareholder-approved transactions to which the Company
is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State in which the Company is incorporated, form a
holding company or effect a similar reorganization as to form whereupon
this Plan and all Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions
to clause (a), above; or
(c) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding securities
are transferred or issued to a person or persons different from those who
held such securities immediately prior to such merger.
1.10 DEFERRED STOCK. "Deferred Stock" shall mean Common Stock
awarded under Article VII of this Plan.
1.11 DIRECTOR. "Director" shall mean a member of the Board.
1.12 DIVIDEND EQUIVALENT. "Dividend Equivalent" shall mean a
right to receive the equivalent value (in cash or Common Stock) of dividends
paid on Common Stock, awarded under Article VII of this Plan.
1.13 EMPLOYEE. "Employee" shall mean any officer or other
employee (as defined in accordance with Section 3401(c) of the Code) of the
Company, or of any corporation which is a Subsidiary.
1.14 EXCHANGE ACT. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
2
<PAGE>
1.15 FAIR MARKET VALUE. "Fair Market Value" of a share of Common
Stock as of a given date shall be (i) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares
were not traded on the trading day previous to such date, then on the next
preceding date on which a trade occurred, or (ii) if Common Stock is not
traded on an exchange but is quoted on NASDAQ or a successor quotation
system, the mean between the closing representative bid and asked prices for
the Common Stock on the trading day previous to such date as reported by
NASDAQ or such successor quotation system; or (iii) if Common Stock is not
publicly traded on an exchange and not quoted on NASDAQ or a successor
quotation system, the Fair Market Value of a share of Common Stock as
established by the Committee (or the Board, in the case of Options granted to
Independent Directors) acting in good faith and in accordance with 10
California Code of Regulations ("CCR") 260.140.50.
1.16 GRANTEE. "Grantee" shall mean an Employee or consultant
granted a Performance Award, Dividend Equivalent, Stock Payment or Stock
Appreciation Right, or an award of Deferred Stock, under this Plan.
1.17 INCENTIVE STOCK OPTION. "Incentive Stock Option" shall mean
an option which conforms to the applicable provisions of Section 422 of the
Code and which is designated as an Incentive Stock Option by the Committee.
1.18 INDEPENDENT DIRECTOR. "Independent Director" shall mean a
member of the Board who is not an Employee of the Company.
1.19 NON-QUALIFIED STOCK OPTION. "Non-Qualified Stock Option"
shall mean an Option which is not designated as an Incentive Stock Option by
the Committee.
1.20 OPTION. "Option" shall mean a stock option granted under
Article III of this Plan. An Option granted under this Plan shall, as
determined by the Committee, be either a Non-Qualified Stock Option or an
Incentive Stock Option; PROVIDED, HOWEVER, that Options granted to
Independent Directors and consultants shall be Non-Qualified Stock Options.
1.21 OPTIONEE. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
1.22 PERFORMANCE AWARD. "Performance Award" shall mean a cash
bonus, stock bonus or other performance or incentive award that is paid in
cash, Common Stock or a combination of both, awarded under Article VII of
this Plan.
1.23 PLAN. "Plan" shall mean The 1996 Stock Incentive Plan of
Scoop, Inc.
1.24 QDRO. "QDRO" shall mean a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
1.25 RESTRICTED STOCK. "Restricted Stock" shall mean Common
Stock awarded under Article VI of this Plan.
1.26 RESTRICTED SHAREHOLDER. "Restricted Shareholder" shall mean
an Employee or
3
<PAGE>
consultant granted an award of Restricted Stock under Article VI of this Plan.
1.27 RULE 16(b)-3. "Rule 16(b)-3" shall mean that certain Rule
16(b)-3 under the Exchange Act, as such Rule may be amended from time to time.
1.28 STOCK APPRECIATION RIGHT. "Stock Appreciation Right" shall
mean a stock appreciation right granted under Article VIII of this Plan.
1.29 STOCK PAYMENT. "Stock Payment" shall mean (i) a payment in
the form of shares of Common Stock, or (ii) an option or other right to
purchase shares of Common Stock, as part of a deferred compensation
arrangement, made in lieu of all or any portion of the compensation,
including without limitation, salary, bonuses and commissions, that would
otherwise become payable to a key Employee or consultant in cash, awarded
under Article VII of this Plan.
1.30 SUBSIDIARY. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
1.31 TERMINATION OF CONSULTANCY. "Termination of Consultancy"
shall mean the time when the engagement of an Optionee, Grantee or Restricted
Shareholder as a consultant to the Company or a Subsidiary is terminated for
any reason, with or without cause, including, but not by way of limitation,
by resignation, discharge, death or retirement; but excluding terminations
where there is a simultaneous commencement of employment with the Company or
any Subsidiary. The Committee, in its absolute discretion, shall determine
the effect of all matters and questions relating to Termination of
Consultancy, including, but not by way of limitation, the question of whether
a Termination of Consultancy resulted from a discharge for good cause, and
all questions of whether particular leaves of absence constitute Terminations
of Consultancy. Notwithstanding any other provision of this Plan, the Company
or any Subsidiary has an absolute and unrestricted right to terminate a
consultant's service at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.
1.32 TERMINATION OF DIRECTORSHIP. "Termination of Directorship"
shall mean the time when an Optionee who is an Independent Director ceases to
be a Director for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship with respect to
Independent Directors.
1.33 TERMINATION OF EMPLOYMENT. "Termination of Employment"
shall mean the time when the employee-employer relationship between an
Optionee, Grantee or Restricted Shareholder and the Company or any Subsidiary
is terminated for any reason, with or without cause, including, but not by
way of limitation, a termination by resignation, discharge, death, disability
or retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee, Grantee or Restricted
Shareholder by the Company or any Subsidiary, (ii) at the discretion of the
Committee, terminations which result in a temporary severance of the
employee-employer relationship, and (iii) at the discretion of the Committee,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Subsidiary with the former
employee. The Committee, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a
Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular
4
<PAGE>
leaves of absence constitute Terminations of Employment; PROVIDED, HOWEVER,
that, with respect to Incentive Stock Options, a leave of absence, change in
status from an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment
if, and to the extent that, such leave of absence, change in status or other
change interrupts employment for the purposes of Section 422(a)(2) of the
Code and the then applicable regulations and revenue rulings under said
Section. Notwithstanding any other provision of this Plan, the Company or
any Subsidiary has an absolute and unrestricted right to terminate an
Employee's employment at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 SHARES SUBJECT TO PLAN.
(a) The shares of stock subject to Options, awards of Restricted
Stock, Performance Awards, Dividend Equivalents, awards of Deferred Stock,
Stock Payments or Stock Appreciation Rights shall be Common Stock. The
aggregate number of such shares which may be issued upon exercise of such
options or rights or upon any such awards under the Plan shall not exceed One
Million Five Hundred Thousand (1,500,000); provided, however, that at no time
shall the total number of shares of Common Stock issuable upon exercise of
all outstanding Options, rights or awards under the Plan and the total number
of shares of Common stock called for under any other stock bonus or similar
plan of the Company exceed 30% of the then outstanding shares of Common Stock
(as calculated in accordance with the conditions and exclusions of 10 CCR
260.140.45) unless a higher percentage is approved by at least two-thirds of
the outstanding shares of Common Stock entitled to vote. The shares of
Common Stock issuable upon exercise of such options or rights or upon any
such awards may be either previously authorized but unissued shares or
treasury shares.
(b) The maximum number of shares which may be subject to Options
or Stock Appreciation Rights granted under the Plan to any individual in any
calendar year shall not exceed the Award Limit. To the extent required by
Section 162(m) of the Code, shares subject to Options which are canceled
continue to be counted against the Award Limit and if, after grant of an
Option, the price of shares subject to such Option is reduced, the
transaction is treated as a cancellation of the Option and a grant of a new
Option and both the Option deemed to be canceled and the Option deemed to be
granted are counted against the Award Limit. Furthermore, to the extent
required by Section 162(m) of the Code, if, after grant of a Stock
Appreciation Right, the base amount on which stock appreciation is calculated
is reduced to reflect a reduction in the Fair Market Value of the Company's
Common Stock, the transaction is treated as a cancellation of the Stock
Appreciation Right and a grant of a new Stock Appreciation Right and both the
Stock Appreciation Right deemed to be canceled and the Stock Appreciation
Right deemed to be granted are counted against the Award Limit.
2.2 ADD-BACK OF OPTIONS AND OTHER RIGHTS. If any Option, or
other right to acquire shares of Common Stock under any other award under
this Plan, expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by this Plan, the number
of shares subject to such Option or other right but as to which such Option
or other right was not exercised prior to its expiration, cancellation or
exercise may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options or
other awards which are adjusted pursuant to Section 10.3 and become
exercisable with respect to shares of stock
5
<PAGE>
of another corporation shall be considered cancelled and may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Shares of Common Stock which are delivered by the Optionee or Grantee
or withheld by the Company upon the exercise of any Option or other award
under this Plan, in payment of the exercise price thereof, may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. If any share of Restricted Stock is forfeited by the Grantee or
repurchased by the Company pursuant to Section 6.6 hereof, such share may
again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Notwithstanding the provisions of this Section 2.2, no
shares of Common Stock may again be optioned, granted or awarded if such
action would cause an Incentive Stock Option to fail to qualify as an
incentive stock option under Section 422 of the Code.
ARTICLE III
GRANTING OF OPTIONS
3.1 ELIGIBILITY. Any Employee or consultant selected by the
Committee pursuant to Section 3.4(a)(i) shall be eligible to be granted an
Option. Each Independent Director of the Company shall be eligible to be
granted Options at the times and in the manner set forth in Section 3.4(d).
3.2 DISQUALIFICATION FOR STOCK OWNERSHIP. No person may be
granted an Incentive Stock Option under this Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any then existing Subsidiary or parent corporation (within the
meaning of Section 422 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.
3.3 QUALIFICATION OF INCENTIVE STOCK OPTIONS. No Incentive Stock
Option shall be granted to any person who is not an Employee.
3.4 GRANTING OF OPTIONS
(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:
(i) Determine which Employees are key Employees and select
from among the key Employees or consultants (including Employees or
consultants who have previously received Options or other awards under
this Plan) such of them as in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the number of
shares to be subject to such Options granted to the selected key Employees
or consultants;
(iii) Subject to Section 3.3, determine whether such Options
are to be Incentive Stock Options or Non-Qualified Stock Options and
whether such Options are to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options,
consistent with this Plan; PROVIDED, HOWEVER, that the terms and
conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
include,
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but not be limited to, such terms and conditions as may be necessary to
meet the applicable provisions of Section 162(m) of the Code.
(b) Upon the selection of a key Employee or consultant to be
granted an Option, the Committee shall instruct the Secretary of the Company to
issue the Option and may impose such conditions on the grant of the Option as
it deems appropriate. Without limiting the generality of the preceding
sentence, the Committee may, in its discretion and on such terms as it deems
appropriate, require as a condition on the grant of an Option to an Employee or
consultant that the Employee or consultant surrender for cancellation some or
all of the unexercised Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments or other rights which have been previously granted to him under this
Plan or otherwise. An Option, the grant of which is conditioned upon such
surrender, may have an option price lower (or higher) than the exercise price
of such surrendered Option or other award, may cover the same (or a lesser or
greater) number of shares as such surrendered Option or other award, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option or other award.
(c) Any Incentive Stock Option granted under this Plan may be
modified by the Committee to disqualify such option from treatment as an
"incentive stock option" under Section 422 of the Code.
(d) During the term of the Plan, each person who is an Independent
Director shall be granted (i) on the date he or she becomes an Independent
Director, an Option to purchase 15,000 shares of Common Stock (subject to
adjustment as provided in Section 10.3) and (ii) during the fourth year from
the prior grant on the date of the annual meeting of Shareholders so long as
the Independent Director is reelected to the Board, an Option to purchase
15,000 shares of Common Stock (subject to adjustment as provided in Section
10.3). Members of the Board who are employees of the Company who subsequently
retire from the Company and remain on the Board will not receive an initial
Option grant pursuant to clause (i) of the preceding sentence, but to the
extent that they are otherwise eligible, will receive, after retirement from
employment with the Company, Options as described in clause (ii) of the
preceding sentence. All the foregoing Option grants authorized by this Section
3.4(d) are subject to shareholder approval of the Plan.
ARTICLE IV
TERMS OF OPTIONS
4.1 OPTION AGREEMENT. Each Option shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of Options granted to
Independent Directors) shall determine, consistent with this Plan. Stock
Option Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain
such terms and conditions as may be necessary to meet the applicable provisions
of Section 162(m) of the Code. Stock Option Agreements evidencing Incentive
Stock Options shall contain such terms and conditions as may be necessary to
meet the applicable provisions of Section 422 of the Code.
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4.2 OPTION PRICE. The price per share of the shares subject to
each Option shall be set by the Committee; PROVIDED, HOWEVER, that such price
shall be no less than 85% of the Fair Market Value of a share of Common Stock,
unless otherwise permitted by applicable state law, and (i) in the case of
Incentive Stock Options and Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, such price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on
the date the Option is granted; (ii) in the case of Incentive Stock Options
granted to an individual then owning (within the meaning of 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 Subsidiary or parent corporation thereof (within
the meaning of Section 422 of the Code) such price shall not be less than 110%
of the Fair Market Value of a share of Common Stock on the date the Option is
granted; and (iii) in the case of Options granted to Independent Directors,
such price shall equal 100% of the Fair Market Value of a share of Common Stock
on the date the Option is granted; PROVIDED, HOWEVER, that the price of each
share subject to each Option granted to Independent Directors on the date of
the initial public offering of Common Stock shall equal the initial public
offering price (net of underwriting discounts and commissions) per share of
Common Stock.
4.3 OPTION TERM. The term of an Option shall be set by the
Committee in its discretion; PROVIDED, HOWEVER, that, (i) in the case of
Incentive Stock Options, the term shall not be more than five (5) years from
the date the Incentive Stock Option is granted if the Incentive Stock Option is
granted to an individual then owning (within the meaning of 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 Subsidiary or parent corporation thereof (within
the meaning of Section 422 of the Code); and (ii) no Option shall have a term
more than ten (10) years from the date of grant. Except as limited by
requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend the term of any
outstanding Option in connection with any Termination of Employment or
Termination of Consultancy of the Optionee, or amend any other term or
condition of such Option relating to such a termination.
4.4 OPTION VESTING
(a) The period during which the right to exercise an Option in
whole or in part vests in the Optionee shall be set by the Committee and the
Committee may determine that an Option may not be exercised in whole or in part
for a specified period after it is granted; PROVIDED, HOWEVER, that, unless the
Committee otherwise provides in the terms of the Option or otherwise, no Option
shall be exercisable by any Optionee who is then subject to Section 16 of the
Exchange Act within the period ending six months and one day after the date the
Option is granted; and provided, further, that Options granted to Independent
Directors after the Company's initial registration of Common Stock under
Section 12 of the Exchange Act shall become exercisable in cumulative annual
installments of 25% on each of the first, second, third and fourth
anniversaries of the date of Option grant, without variation or acceleration
hereunder except as provided in Section 10.3(b); and PROVIDED, FURTHER, that
each Option granted to an Employee who is not an Officer or Director shall
become exercisable no later than five years after such Option is granted, and
at least 20% of each such Option shall become exercisable by each anniversary
of the date such Option is granted. At any time after grant of an Option, the
Committee may, in its sole and absolute discretion and subject to whatever
terms and conditions it selects, accelerate the period during which an Option
(except an Option granted to an Independent Director) vests.
(b) No portion of an Option which is unexercisable at Termination
of Employment, Termination of Directorship or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee in the case of Options granted to Employees or
consultants either in the Stock Option Agreement or by action of the Committee
following
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the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of stock
with respect to which "incentive stock options" (within the meaning of Section
422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company and any
Subsidiary) exceeds $100,000, such Options shall be treated as Non-Qualified
Options to the extent required by Section 422 of the Code. The rule set forth
in the preceding sentence shall be applied by taking Options into account in
the order in which they were granted. For purposes of this Section 4.4(c), the
Fair Market Value of stock shall be determined as of the time the Option with
respect to such stock is granted.
(d) Unless Termination of Employment is for good cause, the right
of an Employee to exercise his or her Options in the event of Termination of
Employment, to the extent that the Employee is entitled to exercise his or her
Options on the date of termination, shall be as follows:
(i) At least 6 months from the date of termination if
termination was caused by death or disability.
(ii) At least 30 days from the date of termination if
termination was caused by other than death or disability.
4.5 CONSIDERATION. In consideration of the granting of an Option,
the Optionee shall agree, in the written Stock Option Agreement, to remain in
the employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Stock Option Agreement or by action
of the Committee following grant of the Option) after the Option is granted
(or, in the case of an Independent Director, until the next annual meeting of
shareholders of the Company). Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or
without good cause.
ARTICLE V
EXERCISE OF OPTIONS
5.1 PARTIAL EXERCISE. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee (or the Board, in the case of Options
granted to Independent Directors) may require that, by the terms of the Option,
a partial exercise be with respect to a minimum number of shares.
5.2 MANNER OF EXERCISE. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the
Secretary of the Company or his office:
(a) A written notice complying with the applicable rules
established by the Committee (or the Board, in the case of Options granted to
Independent Directors) stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion;
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(b) Such representations and documents as the Committee (or the
Board, in the case of Options granted to Independent Directors), in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee or Board may,
in its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;
(c) In the event that the Option shall be exercised pursuant to
Section 10.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the
shares with respect to which the Option, or portion thereof, is exercised.
However, the Committee (or the Board, in the case of Options granted to
Independent Directors), may in its discretion (i) allow a delay in payment up
to thirty (30) days from the date the Option, or portion thereof, is exercised;
(ii) allow payment, in whole or in part, through the delivery of shares of
Common Stock owned by the Optionee, duly endorsed for transfer to the Company
with a Fair Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof; (iii) allow payment,
in whole or in part, through the surrender of shares of Common Stock then
issuable upon exercise of the Option having a Fair Market Value on the date of
Option exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; (iv) allow payment, in whole or in part, through the
delivery of property of any kind which constitutes good and valuable
consideration; (v) allow payment, in whole or in part, through the delivery of
a full recourse promissory note bearing interest (at no less than such rate as
shall then preclude the imputation of interest under the Code) and payable upon
such terms as may be prescribed by the Committee or the Board; (vi) allow
payment, in whole or in part, through the delivery of a notice that the
Optionee has placed a market sell order with a broker with respect to shares of
Common Stock then issuable upon exercise of the Option, and that the broker has
been directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the Option exercise price; or (vii) allow
payment through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory
note, the Committee (or the Board, in the case of Options granted to
Independent Directors) may also prescribe the form of such note and the
security to be given for such note. The Option may not be exercised, however,
by delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law.
5.3 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed;
(b) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body which the Committee or Board shall, in its absolute discretion, deem
necessary or advisable;
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee (or Board, in the case of
Options granted to Independent Directors) shall, in its absolute discretion,
determine to be necessary or advisable;
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(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee (or Board, in the case of Options
granted to Independent Directors) may establish from time to time for reasons
of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
5.4 RIGHTS AS SHAREHOLDERS. The holders of Options shall not be,
nor have any of the rights or privileges of, shareholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by
the Company to such holders; PROVIDED, HOWEVER, that the Company shall
provide to Optionees, on an annual basis, such financial and other
information as it provides to its Shareholders.
5.5 OWNERSHIP AND TRANSFER RESTRICTIONS. The Committee (or
Board, in the case of Options granted to Independent Directors), in its
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as
it deems appropriate. Any such restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Committee may require the Employee to give the
Company prompt notice of any disposition of shares of Common Stock acquired
by exercise of an Incentive Stock Option within (i) two years from the date
of granting such Option to such Employee or (ii) one year after the transfer
of such shares to such Employee. The Committee may direct that the
certificates evidencing shares acquired by exercise of an Option refer to
such requirement to give prompt notice of disposition.
5.6 LIMITATIONS ON EXERCISE OF OPTIONS GRANTED TO INDEPENDENT
DIRECTORS. No Option granted to an Independent Director may be exercised to
any extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the
Optionee's death;
(b) the expiration of twelve (12) months from the date of the
Optionee's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the
Optionee's Termination of Directorship for any reason other than such
Optionee's death or his permanent and total disability, unless the Optionee
dies within said three-month period; or
(d) The expiration of ten years from the date the Option was
granted.
ARTICLE VI
AWARD OF RESTRICTED STOCK
6.1 AWARD OF RESTRICTED STOCK
(a) The Committee may from time to time, in its absolute
discretion:
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(i) Select from among the key Employees or consultants
(including Employees or consultants who have previously received other
awards under this Plan) such of them as in its opinion should be awarded
Restricted Stock; and
(ii) Determine the purchase price, if any, and other terms and
conditions applicable to such Restricted Stock, consistent with this Plan.
(b) The Committee shall establish the purchase price, if any, and
form of payment for Restricted Stock; PROVIDED, HOWEVER, that such purchase
price shall be no less than the par value of the Common Stock to be
purchased, unless otherwise permitted by applicable state law. In all cases,
legal consideration shall be required for each issuance of Restricted Stock.
(c) Upon the selection of a key Employee or consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on the
issuance of such Restricted Stock as it deems appropriate.
6.2 RESTRICTED STOCK AGREEMENT. Restricted Stock shall be issued
only pursuant to a written Restricted Stock Agreement, which shall be
executed by the selected key Employee or consultant and an authorized officer
of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan.
6.3 CONSIDERATION. As consideration for the issuance of
Restricted Stock, in addition to payment of any purchase price, the
Restricted Shareholder shall agree, in the written Restricted Stock
Agreement, to remain in the employ of, or to consult for, the Company or any
Subsidiary for a period of at least one year after the Restricted Stock is
issued (or such shorter period as may be fixed in the Restricted Stock
Agreement or by action of the Committee following grant of the Restricted
Stock). Nothing in this Plan or in any Restricted Stock Agreement hereunder
shall confer on any Restricted Shareholder any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Restricted
Shareholder at any time for any reason whatsoever, with or without good cause.
6.4 RIGHTS AS SHAREHOLDERS. Upon delivery of the shares of
Restricted Stock to the escrow holder pursuant to Section 6.7, the Restricted
Shareholder shall have, unless otherwise provided by the Committee, all the
rights of a shareholder with respect to said shares, subject to the
restrictions in his Restricted Stock Agreement, including the right to
receive all dividends and other distributions paid or made with respect to
the shares; PROVIDED, HOWEVER, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Stock shall be subject
to the restrictions set forth in Section 6.5.
6.5 RESTRICTION. All shares of Restricted Stock issued under
this Plan (including any shares received by holders thereof with respect to
shares of Restricted Stock as a result of stock dividends, stock splits or
any other form of recapitalization) shall, in the terms of each individual
Restricted Stock Agreement, be subject to such restrictions as the Committee
shall provide, which restrictions may include, without limitation,
restrictions concerning voting rights and transferability and restrictions
based on duration of employment with the Company, Company performance and
individual performance; PROVIDED, HOWEVER, that, unless the Committee
otherwise provides in the terms of the Restricted Stock Agreement or
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otherwise, no share of Restricted Stock granted to a person subject to
Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date
on which the Restricted Stock was issued, and PROVIDED, FURTHER, that by
action taken after the Restricted Stock is issued, the Committee may, on such
terms and conditions as it may determine to be appropriate, remove any or all
of the restrictions imposed by the terms of the Restricted Stock Agreement.
Restricted Stock may not be sold or encumbered until all restrictions are
terminated or expire. Unless provided otherwise by the Committee, if no
consideration was paid by the Restricted Shareholder upon issuance, a
Restricted Shareholder's rights in unvested Restricted Stock shall lapse upon
Termination of Employment or, if applicable, upon Termination of Consultancy
with the Company.
6.6 REPURCHASE OF RESTRICTED STOCK. The Committee shall provide
in the terms of each individual Restricted Stock Agreement that the Company
shall have the right to repurchase from the Restricted Shareholder the
Restricted Stock then subject to restrictions under the Restricted Stock
Agreement immediately upon a Termination of Employment or, if applicable,
upon a Termination of Consultancy between the Restricted Shareholder and the
Company, at a cash price per share equal to the price paid by the Restricted
Shareholder for such Restricted Stock; PROVIDED, HOWEVER, that provision may
be made that no such right of repurchase shall exist in the event of a
Termination of Employment or Termination of Consultancy without cause, or
following a change in control of the Company or because of the Restricted
Shareholder's retirement, death or disability, or otherwise.
6.7 ESCROW. The Secretary of the Company or such other escrow
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions
imposed under the Restricted Stock Agreement with respect to the shares
evidenced by such certificate expire or shall have been removed.
6.8 LEGEND. In order to enforce the restrictions imposed upon
shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted
Stock that are still subject to restrictions under Restricted Stock
Agreements, which legend or legends shall make appropriate reference to the
conditions imposed thereby.
ARTICLE VII
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
DEFERRED STOCK, STOCK PAYMENTS
7.1 PERFORMANCE AWARDS. Any key Employee or consultant selected
by the Committee may be granted one or more Performance Awards. The value of
such Performance Awards may be linked to the market value, book value, net
profits or other measure of the value of Common Stock or other specific
performance criteria determined appropriate by the Committee, in each case on
a specified date or dates or over any period or periods determined by the
Committee, or may be based upon the appreciation in the market value, book
value, net profits or other measure of the value of a specified number of
shares of Common Stock over a fixed period or periods determined by the
Committee. In making such deter minations, the Committee shall consider
(among such other factors as it deems relevant in light of the specific type
of award) the contributions, responsibil ities and other compensation of the
particular key Employee or consultant.
7.2 DIVIDEND EQUIVALENTS. Any key Employee or consultant
selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend payment
dates, during the period between the date an Option, Stock
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Appreciation Right, Deferred Stock or Performance Award is granted, and the
date such Option, Stock Appreciation Right, Deferred Stock or Performance
Award is exercised, vests or expires, as determined by the Committee. Such
Dividend Equivalents shall be converted to cash or additional shares of
Common Stock by such formula and at such time and subject to such limitations
as may be determined by the Committee. With respect to Dividend Equivalents
granted with respect to Options intended to be qualified performance-based
compensation for purposes of Section 162(m) of the Code, such Dividend
Equivalents shall be payable regardless of whether such Option is exercised.
7.3 STOCK PAYMENTS. Any key Employee or consultant selected by
the Committee may receive Stock Payments in the manner determined from time
to time by the Committee. The number of shares shall be determined by the
Committee and may be based upon the Fair Market Value, book value, net
profits or other measure of the value of Common Stock or other specific
performance criteria determined appropriate by the Committee, determined on
the date such Stock Payment is made or on any date thereafter.
7.4 DEFERRED STOCK. Any key Employee or consultant selected by
the Committee may be granted an award of Deferred Stock in the manner
determined from time to time by the Committee. The number of shares of
Deferred Stock shall be determined by the Committee and may be linked to the
market value, book value, net profits or other measure of the value of Common
Stock or other specific performance criteria determined to be appropriate by
the Committee, in each case on a specified date or dates or over any period
or periods determined by the Committee. Common Stock underlying a Deferred
Stock award will not be issued until the Deferred Stock award has vested,
pursuant to a vesting schedule or performance criteria set by the Committee.
Unless otherwise provided by the Committee, a Grantee of Deferred Stock shall
have no rights as a Company shareholder with respect to such Deferred Stock
until such time as the award has vested and the Common Stock underlying the
award has been issued.
7.5 PERFORMANCE AWARD AGREEMENT, DIVIDEND EQUIVALENT AGREEMENT,
DEFERRED STOCK AGREEMENT, STOCK PAYMENT AGREEMENT. Each Performance Award,
Dividend Equivalent, award of Deferred Stock and/or Stock Payment shall be
evidenced by a written agreement, which shall be executed by the Grantee and
an authorized Officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with this Plan.
7.6 TERM. The term of a Performance Award, Dividend Equivalent,
award of Deferred Stock and/or Stock Payment shall be set by the Committee in
its discretion.
7.7 EXERCISE UPON TERMINATION OF EMPLOYMENT. A Performance
Award, Dividend Equivalent, award of Deferred Stock and/or Stock Payment is
exercisable or payable only while the Grantee is an Employee or consultant;
provided that the Committee may determine that the Performance Award,
Dividend Equivalent, award of Deferred Stock and/or Stock Payment may be
exercised or paid subsequent to Termination of Employment or Termination of
Consultancy without cause, or following a change in control of the Company,
or because of the Grantee's retirement, death or disability, or otherwise.
7.8 PAYMENT ON EXERCISE. Payment of the amount determined under
Section 7.1 or 7.2 above shall be in cash, in Common Stock or a combination
of both, as determined by the Committee. To the extent any payment under
this Article VII is effected in Common Stock, it shall be made subject to
satisfac tion of all provisions of Section 5.3.
7.9 CONSIDERATION. In consideration of the granting of a
Performance Award,
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Dividend Equivalent, award of Deferred Stock and/or Stock Payment, the
Grantee shall agree, in a written agreement, to remain in the employ of, or
to consult for, the Company or any Subsidiary for a period of at least one
year after such Performance Award, Dividend Equivalent, award of Deferred
Stock and/or Stock Payment is granted (or such shorter period as may be fixed
in such agreement or by action of the Committee following such grant).
Nothing in this Plan or in any agreement hereunder shall confer on any
Grantee any right to continue in the employ of, or as a consultant for, the
Company or any Subsidiary or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly
reserved, to discharge any Grantee at any time for any reason whatsoever,
with or without good cause.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 GRANT OF STOCK APPRECIATION RIGHTS. A Stock Appreciation
Right may be granted to any key Employee or consultant selected by the
Committee. A Stock Appreciation Right may be granted (i) in connection and
simultaneously with the grant of an Option, (ii) with respect to a previously
granted Option, or (iii) independent of an Option. A Stock Appreciation
Right shall be subject to such terms and conditions not inconsistent with
this Plan as the Committee shall impose and shall be evidenced by a written
Stock Appreciation Right Agree ment, which shall be executed by the Grantee
and an authorized officer of the Company. The Committee, in its discretion,
may determine whether a Stock Appreciation Right is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the
Code and Stock Appreciation Right Agreements evidencing Stock Appreciation
Rights intended to so qualify shall contain such terms and conditions as may
be necessary to meet the applicable provisions of Section 162(m) of the Code.
Without limiting the generality of the foregoing, the Committee may, in its
discretion and on such terms as it deems appropriate, require as a condition
of the grant of a Stock Appreciation Right to an Employee or consultant that
the Employee or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, or other rights which have been previously granted to him under
this Plan or otherwise. A Stock Appreciation Right, the grant of which is
conditioned upon such surrender, may have an exercise price lower (or higher)
than the exercise price of the surrendered Option or other award, may cover
the same (or a lesser or greater) number of shares as such surrendered Option
or other award, may contain such other terms as the Committee deems
appropriate, and shall be exercisable in accordance with its terms, without
regard to the number of shares, price, exercise period or any other term or
condition of such surrendered Option or other award.
8.2 COUPLED STOCK APPRECIATION RIGHTS
(a) A Coupled Stock Appreciation Right ("CSAR") shall be related
to a particular Option and shall be exercisable only when and to the extent
the related Option is exercisable.
(b) A CSAR may be granted to the Grantee for no more than the
number of shares subject to the simultaneously or previously granted Option
to which it is coupled.
(c) A CSAR shall entitle the Grantee (or other person entitled to
exercise the Option pursuant to this Plan) to surrender to the Company
unexercised a portion of the Option to which the CSAR relates (to the extent
then exercisable pursuant to its terms) and to receive from the Company in
exchange therefor an amount determined by multiplying the difference obtained
by subtracting the Option exercise price from the Fair Market Value of a
share of Common Stock on the date of exercise of the
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CSAR by the number of shares of Common Stock with respect to which the CSAR
shall have been exercised, subject to any limitations the Committee may
impose.
8.3 INDEPENDENT STOCK APPRECIATION RIGHTS
(a) An Independent Stock Appreciation Right ("ISAR") shall be
unrelated to any Option and shall have a term set by the Committee. An ISAR
shall be exercisable in such installments as the Committee may determine. An
ISAR shall cover such number of shares of Common Stock as the Committee may
determine; provided, however, that unless the Committee otherwise provides in
the terms of the ISAR or otherwise, no ISAR granted to a person subject to
Section 16 of the Exchange Act shall be exercisable until at least six months
have elapsed from (but excluding) the date on which the Option was granted.
The exercise price per share of Common Stock subject to each ISAR shall be
set by the Committee. An ISAR is exercisable only while the Grantee is an
Employee or consultant; provided that the Committee may determine that the
ISAR may be exercised subsequent to Termination of Employment or Termination
of Consultancy without cause, or following a change in control of the
Company, or because of the Grantee's retirement, death or disability, or
otherwise.
(b) An ISAR shall entitle the Grantee (or other person entitled
to exercise the ISAR pursuant to this Plan) to exercise all or a specified
portion of the ISAR (to the extent then exercisable pursuant to its terms)
and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR
from the Fair Market Value of a share of Common Stock on the date of exercise
of the ISAR by the number of shares of Common Stock with respect to which the
ISAR shall have been exercised, subject to any limitations the Committee may
impose.
8.4 PAYMENT AND LIMITATIONS ON EXERCISE
(a) Payment of the amount determined under Section 8.2(c) and
8.3(b) above shall be in cash, in Common Stock (based on its Fair Market
Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee. To the extent such
payment is effected in Common Stock it shall be made subject to satisfaction
of all provisions of Section 5.3 above pertaining to Options.
(b) Grantees of Stock Appreciation Rights may be required to
comply with any timing or other restrictions with respect to the settlement
or exercise of a Stock Appreciation Right, including a window-period
limitation, as may be imposed in the discretion of the Board or Committee.
8.5 CONSIDERATION. In consideration of the granting of a Stock
Appreciation Right, the Grantee shall agree, in the written Stock
Appreciation Right Agreement, to remain in the employ of, or to consult for,
the Company or any Subsidiary for a period of at least one year after the
Stock Appreciation Right is granted (or such shorter period as may be fixed
in the Stock Appreciation Right Agreement or by action of the Committee
following grant of the Restricted Stock). Nothing in this Plan or in any
Stock Appreciation Right Agreement hereunder shall confer on any Grantee any
right to continue in the employ of, or as a consultant for, the Company or
any Subsidiary or shall interfere with or restrict in any way the rights of
the Company and any Subsidiary, which are hereby expressly reserved, to
discharge any Grantee at any time for any reason whatsoever, with or without
good cause.
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ARTICLE IX
ADMINISTRATION
9.1 COMPENSATION COMMITTEE. Prior to the Company's initial
registration of Common Stock under Section 12 of the Exchange Act, the
Compensation Committee shall consist of the entire Board. Following such
registration, the Compensation Committee (or another committee or a
subcommittee of the Board assuming the functions of the Committee under this
Plan) shall consist solely of two or more Independent Directors appointed by
and holding office at the pleasure of the Board, each of whom is both a
"non-employee director" as defined by Rule 16(b)-3 and an "outside director"
for purposes of Section 162(m) of the Code. Appointment of Committee members
shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in
the Committee may be filled by the Board.
9.2 DUTIES AND POWERS OF COMMITTEE. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance
with its provisions. The Committee shall have the power to interpret this
Plan and the agreements pursuant to which Options, awards of Restricted Stock
or Deferred Stock, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments are granted or awarded, and to adopt such rules
for the administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
Notwithstanding the foregoing, the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with
respect to Options granted to Independent Directors. Any such grant or award
under this Plan need not be the same with respect to each Optionee, Grantee
or Restricted Shareholder. Any such interpretations and rules with respect
to Incentive Stock Options shall be consistent with the provisions of Section
422 of the Code. In its absolute discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Committee
under this Plan except with respect to matters which under Rule 16(b)-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the Committee.
9.3 MAJORITY RULE; UNANIMOUS WRITTEN CONSENT. The Committee
shall act by a majority of its members in attendance at a meeting at which a
quorum is present or by a memorandum or other written instrument signed by
all members of the Committee.
9.4 COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS.
Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
which members of the Committee incur in connection with the administration of
this Plan shall be borne by the Company. The Committee may, with the
approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Optionees, Grantees, Restricted
Shareholders, the Company and all other interested persons. No members of
the Committee or Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to this Plan,
Options, awards of Restricted Stock or Deferred Stock, Performance Awards,
Stock Appreciation Rights, Dividend Equiva lents or Stock Payments, and all
members of the Committee and the Board shall be fully protected by the
Company in respect of any such action, determination or interpretation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 NOT TRANSFERABLE. Options, Restricted Stock awards, Deferred
Stock awards, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments under this Plan may not be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of
descent and distribution or, to the extent permitted by state law, pursuant
to a QDRO, unless and until such rights or awards have been exercised, or the
shares underlying such rights or awards have been issued, and all
restrictions applicable to such shares have lapsed. No Option, Restricted
Stock award, Deferred Stock award, Performance Award, Stock Appreciation
Right, Dividend Equivalent or Stock Payment or interest or right therein
shall be liable for the debts, contracts or engagements of the Optionee,
Grantee or Restricted Shareholder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy,
attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence or unless approved in writing by the
Committee after consultation with counsel regarding accounting, tax law and
securities law consequences.
During the lifetime of the Optionee or Grantee, only he may
exercise an Option or other right or award (or any portion thereof) granted
to him under the Plan, unless it has been disposed of pursuant to a QDRO.
After the death of the Optionee or Grantee, any exercisable portion of an
Option or other right or award may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Stock Option Agreement
or other agreement, be exercised by his personal representative or by any
person empowered to do so under the deceased Optionee's or Grantee's will or
under the then applicable laws of descent and distribution.
10.2 AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN. Except as
otherwise provided in this Section 10.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from
time to time by the Board or the Committee. However, without approval of the
Company's shareholders given within twelve months before or after the action
by the Board or the Committee, no action of the Board or the Committee may,
except as provided in Section 10.3, increase the limits imposed in Section
2.1 on the maximum number of shares which may be issued under this Plan or
modify the Award Limit, and no action of the Committee may be taken that
would otherwise require shareholder approval as a matter of applicable law,
regulation or rule. No amendment, suspension or termination of this Plan
shall, without the consent of the holder of Options, Restricted Stock awards,
Deferred Stock awards, Performance Awards, Stock Appreciation Rights,
Dividend Equivalents or Stock Payments, alter or impair any rights or
obligations under any Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents
or Stock Payments theretofore granted or awarded, unless the award itself
otherwise expressly so provides. No Options, Restricted Stock, Deferred
Stock, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments may be granted or awarded during any period of suspension or
after termination of this Plan, and in no event may any Option be granted
under this Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted
by the Board; or
(b) The expiration of ten years from the date the Plan is
approved by the
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Company's shareholders under Section 10.4.
10.3 CHANGES IN COMMON STOCK OR ASSETS OF THE COMPANY, ACQUISITION
OR LIQUIDATION OF THE COMPANY AND OTHER CORPORATE EVENTS.
(a) Subject to Section 10.3(d), in the event that the Committee
(or the Board, in the case of Options granted to Independent Directors)
determines that any dividend or other distribution (whether in the form of
cash, Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company (including, but not limited
to, a Corporate Transaction), or exchange of Common Stock or other securities
of the Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate transaction or
event, in the Committee's sole discretion (or in the case of Options granted
to Independent Directors, the Board's sole discretion), affects the Common
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 or with
respect to an Option, Restricted Stock award, Performance Award, Stock
Appreciation Right, Dividend Equivalent, Deferred Stock award or Stock
Payment, then the Committee (or the Board, in the case of Options granted to
Independent Directors) shall, in such manner as it may deem equitable, adjust
any or all of
(i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments may be
granted under the Plan, or which may be granted as Restricted Stock or
Deferred Stock (including, but not limited to, adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which
may be issued and adjustments of the Award Limit),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents, or Stock
Payments, and in the number and kind of shares of outstanding Restricted
Stock or Deferred Stock, and
(iii) the grant or exercise price with respect to any
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent
or Stock Payment.
(b) Subject to Sections 10.3(b)(vii) and 10.3(d), in the event of
any Corporate Transaction or other transaction or event described in Section
10.3(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Committee (or the Board, in the case of Options
granted to Independent Directors) in its discretion is hereby authorized to
take any one or more of the following actions whenever the Committee (or the
Board, in the case of Options granted to Independent Directors) determines
that such action is appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under the
Plan or with respect to any option, right or other award under this Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:
(i) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of the agreement or by action taken prior to the
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occurrence of such transaction or event and either automatically or upon
the optionee's request, for either the purchase of any such Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent, or
Stock Payment, or any Restricted Stock or Deferred Stock for an amount
of cash equal to the amount that could have been attained upon the
exercise of such option, right or award or realization of the optionee's
rights had such option, right or award been currently exercisable or
payable or fully vested or the replacement of such option, right or
award with other rights or property selected by the Committee (or the
Board, in the case of Options granted to Independent Directors) in its
sole discretion;
(ii) In its sole and absolute discretion, the Committee
(or the Board, in the case of Options granted to Independent Directors)
may provide, either by the terms of such Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent, or Stock Payment, or Restricted
Stock or Deferred Stock or by action taken prior to the occurrence of such
transaction or event that it cannot be exercised after such event;
(iii) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee (or the Board,
in the case of Options granted to Independent Directors) may provide,
either by the terms of such Option, Performance Award, Stock Appreciation
Right, Dividend Equivalent, or Stock Payment, or Restricted Stock or
Deferred Stock or by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, such option, right or award shall be exercisable as
to all shares covered thereby, notwithstanding anything to the contrary in
(i) Section 4.4 or (ii) the provisions of such Option, Performance Award,
Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock;
(iv) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee (or the
Board, in the case of Options granted to Independent Directors) may
provide, either by the terms of such Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent, or Stock Payment, or Restricted
Stock or Deferred Stock or by action taken prior to the occurrence of
such transaction or event, that upon such event, such option, right or
award be assumed by the successor or survivor corporation, or a parent
or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and
(v) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee (or the
Board, in the case of Options granted to Independent Directors) may make
adjustments in the number and type of shares of Common Stock (or other
securities or property) subject to outstanding Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents, or Stock
Payments, and in the number and kind of outstanding Restricted Stock or
Deferred Stock and/or in the terms and conditions of (including the
grant or exercise price), and the criteria included in, outstanding
options, rights and awards and options, rights and awards which may be
granted in the future.
(vi) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Committee may provide
either by the terms of a Restricted Stock award or Deferred Stock award
or by action taken prior to the occurrence of such event that, for a
specified period of time prior to such event, the restrictions imposed
under a Restricted Stock Agreement or a Deferred Stock Agreement upon
some or all shares of Restricted Stock or Deferred Stock may
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be terminated, and, in the case of Restricted Stock, some or all shares
of such Restricted Stock may cease to be subject to repurchase under
Section 6.6 or forfeiture under Section 6.5 after such event.
(vii) None of the foregoing discretionary actions taken under
of this Section 10.3(b) shall be permitted with respect to Options granted
under Section 3.4(d) to Independent Directors to the extent that such
discretion would be inconsistent with the applicable exemptive conditions
of Rule 16(b)-3. In the event of a Change in Control or a Corporate
Transaction, to the extent that the Board does not have the ability under
Rule 16(b)-3 to take or to refrain from taking the discretionary actions
set forth in Section 10.3(b)(iii) above, each Option granted to an
Independent Director shall be exercisable as to all shares covered thereby
upon such Change in Control or during the five days immediately preceding
the consummation of such Corporate Transaction and subject to such
consummation, notwithstanding anything to the contrary in Section 4.4 or
the vesting schedule of such Options. In the event of a Corporate
Transaction, to the extent that the Board does not have the ability under
Rule 16(b)-3 to take or to refrain from taking the discretionary actions
set forth in Section 10.3(b)(ii) above, no Option granted to an
Independent Director may be exercised following such Corporate Transaction
unless such Option is, in connection with such Corporate Transaction,
either assumed by the successor or survivor corporation (or parent or
subsidiary thereof) or replaced with a comparable right with respect to
shares of the capital stock of the successor or survivor corporation (or
parent or subsidiary thereof).
(viii) In the event of any Corporate Transaction, each
outstanding Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent, Stock Payment, Restricted Stock, or Deferred Stock award
shall, immediately prior to the effective date of the Corporate
Transaction, automatically become fully exercisable for all of the shares
of Common Stock at the time subject to such rights or fully vested, as
applicable, and may be exercised for any or all of those shares as fully-
vested shares of Common Stock. However, an outstanding right shall not so
accelerate if and to the extent: (i) such right is, in connection with
the Corporate Transaction, either to be assumed by the successor or
survivor corporation (or parent thereof) or to be replaced with a
comparable right with respect to shares of the capital stock of the
successor or survivor corporation (or parent thereof) or (ii) the
acceleration of exercisability of such right is subject to other
limitations imposed by the Plan Administrator at the time of grant. The
determination of comparability of rights under clause (i) above shall be
made by the Plan Administrator, and its determination shall be final,
binding and conclusive. When the Committee considers adjustment issues in
connection with corporate transactions which the Company would like to
account for under the "pooling" method, the Committee shall consult with
the Company's accountants to make certain that any contemplated
adjustments do not interfere with the desired accounting treatment.
(c) Subject to Section 10.3(d) and 10.8, the Committee (or the
Board, in the case of Options granted to Independent Directors) may, in its
discretion, include such further provisions and limitations in any Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent, or Stock
Payment, or Restricted Stock or Deferred Stock agreement or certificate, as it
may deem equitable and in the best interests of the Company.
(d) With respect to Incentive Stock Options and Options and Stock
Appreciation Rights intended to qualify as performance-based compensation under
Section 162(m), no adjustment or action described in this Section 10.3 or in
any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of the
Code or would
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cause such option or stock appreciation right to fail to so qualify under
Section 162(m), as the case may be, or any successor provisions thereto.
Furthermore, no such adjustment or action shall be authorized to the extent
such adjustment or action would result in short-swing profits liability under
Section 16 or violate the exemptive conditions of Rule 16(b)-3 unless the
Committee (or the Board, in the case of Options granted to Independent
Directors) determines that the option or other award is not to comply with
such exemptive conditions. The number of shares of Common Stock subject to
any option, right or award shall always be rounded to the next whole number.
10.4 APPROVAL OF PLAN BY SHAREHOLDERS. This Plan will be submitted
for the approval of the Company's shareholders within twelve months after the
date of the Board's initial adoption of this Plan. Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments may
be granted and Restricted Stock or Deferred Stock may be awarded prior to such
shareholder approval, provided that such Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments shall not be
exercisable and such Restricted Stock or Deferred Stock shall not vest prior to
the time when this Plan is approved by the shareholders, and provided further
that if such approval has not been obtained at the end of said twelve-month
period, all Options, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments previously granted and all Restricted Stock or
Deferred Stock previously awarded under this Plan shall thereupon be canceled
and become null and void. The Company shall take such actions as may be
necessary to satisfy the requirements of Rule 16(b)-3 under the Exchange Act,
or any other comparable rule adopted thereunder then in effect.
10.5 TAX WITHHOLDING. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to each Optionee,
Grantee or Restricted Shareholder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting or exercise
of any Option, Restricted Stock, Deferred Stock, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment. The Committee (or
the Board, in the case of Options granted to Independent Directors) may in its
discretion and in satisfaction of the foregoing requirement allow such
Optionee, Grantee or Restricted Shareholder to elect to have the Company
withhold shares of Common Stock otherwise issuable under such Option or other
award (or allow the return of shares of Common Stock) having a Fair Market
Value equal to the sums required to be withheld.
10.6 LOANS. The Committee may, in its discretion, extend one or
more loans to key Employees in connection with the exercise or receipt of an
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent or
Stock Payment granted under this Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under this Plan. The terms and conditions of any such
loan shall be set by the Committee.
10.7 FORFEITURE PROVISIONS. Pursuant to its general authority to
determine the terms and conditions applicable to awards under the Plan, the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall have the right (to the extent consistent with the applicable
exemptive conditions of Rule 16(b)-3) to provide, in the terms of Options or
other awards made under the Plan, or to require the recipient to agree by
separate written instrument, that (i) any proceeds, gains or other economic
benefit actually or constructively received by the recipient upon any receipt
or exercise of the award, or upon the receipt or resale of any Common Stock
underlying such award, must be paid to the Company, and (ii) the award shall
terminate and any unexercised portion of such award (whether or not vested)
shall be forfeited, if (a) a Termination of Employment, Termination of
Consultancy or Termination of Directorship occurs prior to a specified date, or
within a specified time period following receipt or exercise of the award, or
(b) the recipient at any time, or during a specified time period, engages in
any activity in competition with the Company, or which is inimical, contrary or
harmful to the
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interests of the Company, as further defined by the Committee (or the
Board, as applicable).
10.8 LIMITATIONS APPLICABLE TO SECTION 16 PERSONS AND PERFORMANCE-
BASED COMPENSATION. Notwithstanding any other provision of this Plan, this
Plan, and any Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent or Stock Payment granted, or Restricted Stock or Deferred Stock
awarded, to any individual who is then subject to Section 16 of the Exchange
Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16(b)-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan,
Options, Performance Awards, Stock Appreciation Rights, Dividend Equivalents,
Stock Payments, Restricted Stock and Deferred Stock granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule. Furthermore, notwithstanding any other provision of
this Plan, any Option or Stock Appreciation Right intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the extent
necessary to conform to such requirements.
10.9 EFFECT OF PLAN UPON OPTIONS AND COMPENSATION PLANS. The
adoption of this Plan shall not affect any other compensation or incentive
plans in effect for the Company or any Subsidiary. Nothing in this Plan shall
be construed to limit the right of the Company (i) to establish any other forms
of incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (ii) to grant or assume options or other rights
otherwise than under this Plan in connection with any proper corporate purpose
including but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company firm or association.
10.10 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments under this
Plan and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments granted or Restricted Stock or
Deferred Stock awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all appli
cable legal requirements. To the extent permitted by applicable law, the Plan,
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
10.11 TITLES. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this Plan.
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10.12 GOVERNING LAW. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
California without regard to conflicts of laws thereof.
* * *
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Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Scoop, Inc. on Form S-8 of our report dated March 5, 1998, which includes
an explanatory paragraph regarding substantial doubt about the Company's
ability to continue as a going concern, appearing in the Annual Report on
Form 10-KSB of Scoop, Inc. for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Costa Mesa, California
April 15, 1998
