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EXHIBIT 4.2
LA VISION, INC. 1997 STOCK OPTION PLAN
1. Purpose. The purpose of the 1997 Stock Option Plan (the "Plan") is to
provide a means whereby selected officers, directors, selected eligible
employees of, and consultants to, LA Vision, Inc. and its consolidated
subsidiaries (hereinafter collectively called the "Company") may be given an
opportunity to purchase the Common Stock, no par value, of the Company (the
"Common Stock") .
2. Stock Options. The Plan provides for Incentive Stock Options ("ISOs")
and Nonqualified Stock Options ("NSOs"). ISOs are intended to be qualified stock
options under the Internal Revenue Code of 1986, as amended (the "Code").
Generally, no tax is imposed on the recipient of an ISO at the time the option
is granted or exercised by the optionee. The recipient is taxed on the
difference between the sales price and the exercise price when the shares are
later sold. Under the Plan, ISO shall mean an option described in Section 422 of
the Code. NSOs are not intended to meet the requirements of the Code, and if
they have a readily ascertainable fair market value, the difference between the
fair market value and the exercise price may be taxed as income to the recipient
at the time they are granted. NSO shall mean an option not governed by the rules
of Sections 421 through 424 of the Code. Except as provided in Section 4(b) of
the Plan, no option may be granted alternatively as an ISO and as a NSO.
3. Administration.
(a) The Board of Directors (the "Board"), whose authority shall be
plenary, shall administer the Plan unless and until such time as the Board
delegates administration of the Plan pursuant to subsection 3(c).
(b) The Board, whose determinations shall be conclusive, shall have
the power, subject to and within the limits of the express provisions of the
Plan:
(1) To grant options pursuant to the Plan.
(2) To determine from time to time which of the eligible persons
shall be granted options under the Plan, the number of shares for which each
option shall be granted, the term of each granted option and the time or times
during the term of each option within which all or portions of each option may
be exercised (which at the Board's discretion may be accelerated).
(3) To construe an interpret the Plan and options granted under
it, and to establish, amend, and revoke rules and regulations for its
administration. The Board, in the exercise of this power, shall generally
determine all questions of policy and expediency that may arise and may correct
any defect, omission, or inconsistency in the Plan or in any option agreement in
a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(4) To grant options in exchange for cancellation of options
granted earlier at different exercise prices, provided, however, nothing
contained herein shall empower
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the Board to grant an ISO under conditions or pursuant to terms that are
inconsistent with the requirements of Section 4(b) hereinbelow.
(5) To prescribe the terms and provisions of each option granted
(which need not be identical) and to the form of written instrument that shall
constitute the option agreement.
(6) To amend the Plan as provided in Section 10.
(7) Generally, to exercise each power and to perform such acts
as are deemed necessary or expedient to promote the best interest of the
Company.
(8) To take appropriate action to cause any option granted
hereunder to cease to be an ISO, provided, however, no such action may be taken
by the Board without prior written consent of the affected optionee.
(c) For grants of options to any person eligible under the Plan, the
Board may, by resolution, delegate administration of the Plan (including,
without limitation, the Board's powers under subsection 3(b) hereinabove) to an
existing committee acting under the authority of the Board. The Board shall have
complete discretion to determine the composition, structure, form, term and
operation of any committee established to administer the Plan (the "Committee").
If administration is delegated to a committee, unless the Board otherwise
provides, the Committee, shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, subject, however, to
such constraints, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board at any time may revest in the
Board the administration of the Plan.
4. Shares Subject to Plan and to Options.
(a) Subject to the provisions of Section 9 (relating to adjustments
upon changes in stock), the total number of shares which may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate thirty percent
(30%) of the Company's issued and outstanding Common Sock. If any granted under
the Plan shall for any reason terminate or expire without having been exercised
in full, the stock not purchased under such options shall be available again for
the purposes of the Plan.
(b) The aggregate fair market value of the stock (determined at the
time of the grant of the option) for which any employee may exercise ISOs for
the first time in any calendar year under all plans of the Company shall not
exceed $100,000 or any other maximum aggregate fair market value to be
established in the future under the Code. Should it be determined that any ISO
granted under the Plan inadvertently exceeds such maximum, such ISO grant shall
be deemed to be a grant of a NSO to the extent, but only to the extent, of such
excess.
5. Eligibility. Persons eligible for participation in the Plan (the
"Participants") shall be selected by the Board or the Committee. Directors of
the Company who are not also employees of the Company shall not be eligible for
an ISO. No ISO may be granted to a person who, at the time of the grant, owns
stock possessing more than 10% of the total combined voting
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power of the Company or its parent or any subsidiary unless the option price is
at least 110% of the fair market value of the stock subject to the option and
the term of the option does not exceed five (5) years from the date such ISO is
granted. Any employee may hold more than one option at any time.
6. Terms of Option Agreement. Each option agreement shall be in such
form and shall contain such terms and conditions as the Board or its delegate
from time to time deem appropriate, subject to the following limitations:
(a) The term of any ISO or NSO shall not be greater than five (5)
years from the date it was granted.
(b) the purchase price of each ISO and NSO shall be not less than
the fair market value of the stock subject to the ISO or NSO on the date the ISO
or NSO is granted.
(c) An ISO by its terms shall not be transferable otherwise than by
will or the laws of descent and distribution and may be exercisable during the
lifetime of the option only by the option holder.
(d) [deleted]
(e) [deleted]
(f) Upon the termination of Participant's employment or Board
Membership the right to exercise an option then held shall be limited to the
following:
DEATH OR DISABILITY: If a Participant's employment or Board Membership
is terminated by death or disability, he or his estate, as the case may be,
shall have the right for a period of twelve (12) months following the date of
death or disability to exercise the option to the extent the Participant was
entitled to exercise such option on the date of his death or disability, or to
the extent otherwise specified by the Board, which may so specify, at a time
that is subsequent to the date of his death or disability, provided the actual
date of exercise is in no event after the expiration of the term of the option.
A Participant's estate shall mean his legal representative or any person who
acquires the right to exercise an option by reason of the Participant's death or
disability.
MISCONDUCT: If a Participant is determined by the Board of Directors or
the Committee to have committed an act of theft, embezzlement, fraud,
dishonesty, a breach of fiduciary duty to the Company, or deliberately
disregarded the rules of the Company, or if a Participant makes any unauthorized
disclosure or use of any of the trade secrets or confidential information of the
company, engages in any conduct which constitutes unfair competition with the
Company, induces any customer or employee of the company to breach any contract
with or duty to the Company or induces any principal for whom the Company acts
as agent to terminate such agency relationship, neither the Participant nor the
Participant's estate shall be entitled to exercise any option with respect to
any shares whatsoever, whether prior to or after termination of employment. In
making such determination, the Board shall give the Participant an opportunity
to present to the Board or the Committee evidence on the Participant's behalf.
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OTHER REASONS: If a Participant's employment or Board Membership is
terminated for any reason other than those mentioned above under "Death or
Disability" or "Misconduct," the Participant or the Participant's estate may,
within ninety (90) days following such termination, exercise the option to the
extent such option was exercisable by the Participant on the date of termination
of his employment, or to the extent otherwise specified by the Board, which may
so specify, at a time that is subsequent to the date of the termination of
Participant's employment, provided the date of exercise is in no event after the
expiration of the term of the option.
(g) In the event of sale, dissolution or liquidation of the Company
or a merger or consolidation in which the Company is not the surviving or
resulting corporation, the Board shall have the power to cause the termination
of every option outstanding hereunder, except that the surviving or resulting
corporation may, in its absolute and uncontrolled discretion, tender an option
or options to purchase its shares and otherwise; provided, however, that in all
events the optionee shall have the right immediately prior to such sale,
dissolution, liquidation, merger or consolidation in which the Company is not
the surviving or resulting corporation, to exercise his option and purchase
shares subject thereto to the extent of any unexercised portion of his option,
regardless of any contrary vesting revisions. This right of exercise shall be
conditioned upon the completion of such dissolution or liquidation or merger or
consolidation.
In the event of an offer by any person or entity to all shareholders of
the Company to purchase any or all shares of Common Stock of the Company (or
shares of stock or other securities which shall be substituted for such shares
or to which such shares shall be adjusted as provided in Section 9 hereof), any
Participant under this Plan shall have the right upon receipt of such offer to
exercise his option and purchase shares subject thereto to the extent of any
unexercised or unvested portion of such option.
The grant of an option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(h) Options may also contain such other provisions, which shall not
be inconsistent with any of the foregoing terms, as the Board shall deem
appropriate. No option, however, nor anything contained in the Plan, shall
confer upon any employee any right to continue in the employment of the Company
nor limit in any way the right of the Company to terminate his employment at any
time.
7. Payments.
(a) To the extent the right to purchase shares has vested under a
Participant's stock option agreement, options may be exercised at the time set
forth in the option agreement by delivering payment in full at the option price
for the number of shares being purchased by cash, certified check, official bank
check or the equivalent thereof acceptable to the Company. Such payment shall be
accompanied by written notice to the Secretary of the Company identifying the
option or part thereof being exercised and specifying the number of shares for
which payment is being tendered. The Company shall deliver or cause to be
delivered to the optionee, which
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delivery shall be not less than fifteen (15) days and not more than sixty (60)
days after the giving of such notice, without transfer or issue tax to the
optionee (or other person entitled to exercise the option) at the principal
office of the company, or such other place as shall be mutually acceptable, a
certificate or certificates for such shares dated the date the options were
validly exercised; provided, however, that the time of such delivery may be
postponed by the Company for such period as may be required for it with
reasonable diligence to comply with any requirements of law. If an option covers
incentive and nonstatutory stock options, separate stock certificates shall be
issued; one or more for stock acquired upon exercise of the ISOs and one or more
for the stock acquired upon exercise of the NSOs.
(b) Where in the opinion of counsel to the Company, the Company has
or will have a legal obligation to withhold taxes related to the exercise of any
stock option, such option may not be exercised, in whole or in part, unless such
tax obligation is first satisfied in a manner satisfactory to the Company.
8. Use of Proceeds from Stock. Proceeds from the sale of stock pursuant
to options granted under the Plan shall be used for general corporate purposes.
9. Adjustments of and Changes in the Stock. In the event that the shares
of Common Stock of the Company, as presently constituted, shall be changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split-up, combination
of shares, or otherwise), or if the number of shares of Common Stock of the
Company shall be increased through the payment of a stock dividend,, or a stock
split, then there shall be substituted for or added to each share of Common
Stock of the Company theretofore appropriated or thereafter subject or which may
become subject to an option under the Plan, the number and kind of shares of
stock or other securities into which each outstanding share of Common Stock of
the Company shall be so changed, or for which each such share shall be exchanged
or to which each such share shall be entitled, as the case may be. Outstanding
options shall also be amended as to price and other terms if necessary to
reflect the foregoing events. In the event there shall be any other change in
the number or kind of the outstanding shares of Common Stock of the Company, or
of any stock or other securities into which such Common Stock of the Company, or
of any stock or other securities into which such Common Stock shall have
changed, or for which it shall have been exchanged, then if the Board shall, in
its sole discretion, determine that such change equitably requires an adjustment
in any option theretofore granted or which may be granted under the Plan, such
adjustment shall be made in accordance with such determination. No right to
purchase fractional shares shall result from any adjustment in options pursuant
to this Section 9. In case of any such adjustment, the shares subject to the
option shall be rounded down to the nearest whole share. Notice of any
adjustment shall be given by the Company to each holder of an option which shall
have been so adjusted and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of the Plan.
10. Amendment of the Plan. The Board at any time, and from time to time,
may amend the Plan, subject to the vote or written consent of a majority of the
outstanding shares of the Company entitled to vote, within twelve (12) months
before or after the date of such amendment's adoption, where such amendment
will:
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(a) increase the number of shares reserved for options under the
Plan;
(b) materially increase the benefits accruing to Participants under
the Plan; or
(c) materially modify the requirements of Section 5 as to
eligibility for participation in the Plan.
It is expressly contemplated that the Board may amend the Plan in any
respect necessary to provide the Company's employee Participants with maximum
benefits provided or to be provided under Section 422 of the Code and the
regulations promulgated thereunder. relating to employee incentive stock options
and/or to bring the Plan or options granted under it into compliance therewith.
Rights and obligations under any option granted before any amendment of
the Plan shall not be altered or impaired by amendment of the Plan, except with
the consent, which may be obtained in any manner deemed by the Board to be
appropriate, of the person to whom the option was granted.
11. Termination or Suspension of the Plan. The Board at any time may
suspend or terminate the Plan. The Plan, unless sooner terminated, shall
terminate at the end of four (4) years from the date the Plan is adopted by the
Board or approved by the stockholders of the company, whichever is earlier. An
option may not be granted under the Plan while the Plan is suspended or after it
is terminated.
Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted,
which may be obtained in any manner that the Board deems appropriate.
12. Listing, Qualification or Approval of Stock, Approval of Options.
All options granted under the Plan are subject to the requirement that if at any
time the Board shall determine in its discretion that the listing or
qualification of the shares of stock subject thereto on any securities exchange
or under any applicable law, or the consent or approval by any governmental
regulatory body or the shareholders of the Company, is necessary or desirable as
a condition of or in connection with the issuance of shares under the option,
the option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Board.
13. Binding Effect of Conditions. The conditions and stipulations
hereinabove contained or in any option granted pursuant to the plan Shall be and
constitute a covenant running with all of the shares of the Company owned by the
Participant at any time, directly or indirectly whether the same have been
issued or not, and those shares of the Company owned by the Participant shall
not be sold, assigned or transferred by any persons save and except in
accordance with the terms and conditions herein provided, and the Participant
shall agree to use his best efforts to cause the officers of the Company to
refuse to record on the books of the Company any assignments or transfer made or
attempted to be made except as provided in the Plan and to cause said officers
to refuse to cancel old certificates or to issue or deliver new
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certificates therefore where the purchaser or assignee has acquired certificates
for the stock represented thereby, except strictly in accordance with the
provisions of this Plan.
14. Effective Date of Plan. The Plan shall become effective as
determined by the Board but no options granted under it shall be exercisable
until the Plan has been approved by the vote or written consent of the holders
of a majority of the outstanding shares of the Company entitled to vote.
15. Privileges of Stock ownership; Securities Law Compliance; Notice of
Sale. No optionee shall be entitled to the privileges of stock ownership as to
any shares not actually issued and delivered to the optionee. No shares shall be
purchased upon the exercise of any option unless and until any then applicable
requirements of any regulatory agencies having jurisdiction and of any exchanges
upon which the Common Stock of the Company may be listed shall have been fully
complied with. The Company shall diligently endeavor to comply with all
applicable securities laws before any options are granted under the Plan and
before shares are issued pursuant to the exercise of such options.
16. Indemnification. To the extent permitted by applicable law in effect
from time to time, no member of the Board or the Committee shall be liable for
any action or omission of any other member of the Board or Committee nor for any
act or omission on the member's own part, excepting only the member's own
willful misconduct or gross negligence. The Company shall pay expenses incurred
by, and satisfy a judgment or fine rendered or levied against, a present or
former director or member of the Committee in any action against such person
(whether or not the Company is joined as a party defendant) to impose a
liability or penalty on such person for an act alleged to have been committed by
such person while a director or member of the Committee arising with respect to
the Plan or administration thereof or out of membership on the Committee or by
the Company, or all or any combination of the preceding so long as the director
or Committee member was acting in good faith, within what such director or
Committee member reasonably believed to have been within the scope of his
employment or authority and for a purpose which he reasonably believed to be in
the best interests of the Company or its shareholders. Payments authorized
hereunder include amounts paid and expenses incurred in settling any such
threatened action. This section does not apply to any action instituted or
maintained in the right of the Company by a shareholder or holder of a voting
trust certificate representing shares of the Company. The provisions of this
section shall apply to the estate, executor, administrator, heirs, legatees or
devises of a director or Committee member, and the term "person" as used in this
section shall include the ` estate, executor, administrator, heirs, legatees, or
devices of such person.
17. Miscellaneous. The use of any masculine pronoun or similar term is
intended to be without legal significance as to gender and the use of he or his
shall also mean she and hers.
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