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THE COBALT GROUP, INC.
1995 STOCK OPTION PLAN
1. PURPOSE.
The purpose of the 1995 Stock Option Plan (the "Plan") is to provide a
means by which The Cobalt Group, Inc. (the "Company") may attract, reward and
retain the services or advice of former, current or future employees, officers,
directors, agents and consultants, including members of technical advisory
boards and independent contractors of the Company and to provide added
incentives to them by encouraging stock ownership in the Company.
2. ADMINISTRATION.
2.1 PLAN ADMINISTRATOR. The Plan shall be administered by the Board of
Directors of the Company (the "Board") or a committee or committees (including
subcommittees) appointed by, and consisting or one or more members of, the Board
(the "Plan Administrator"). If and so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the Plan Administrator and the membership of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (i) "outside
directors" as contemplated by Section 162(m) of the Code and (ii) "Non-Employee
directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible Optionees to different committees consisting of
one or more members of the Board, subject to such limitations as the Board or
the Plan Administrator deems appropriate. Committee members shall serve for such
term and the Board may determine, subject to removal by the Board at any time."
2.2 POWERS. Subject to the specific provisions of this Plan, the Plan
Administrator shall have the authority, in its discretion: (a) to grant the
stock options described in Section 5, including Incentive Stock Options and
Non-Qualified Stock Options, and to designate each option granted as an
Incentive Stock Option or a Non-Qualified Stock Option; (b) to determine, in
accordance with Section 5.1(f) of this Plan, the fair market value of the shares
of Common Stock subject to options; (c) to determine the exercise price per
share of options; (d) to determine the Optionees to whom, and the time or times
at which, options shall be granted and the number of shares of Common Stock to
be represented by each option; (e) to interpret this Plan; (f) to prescribe,
amend and rescind rules and regulations relating to this Plan; (g) to determine
the terms and provisions of each option granted (which need not be identical)
and, with the consent of the holder thereof, modify or amend each option; (h) to
reduce the exercise price per
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share of outstanding and unexercised options; (i) to defer, with the consent of
the Optionee, or to accelerate the exercise date of any option; (j) to waive or
modify any term or provision contained in any option applicable to the
underlying shares of Common Stock; (k) to authorize any person to execute on
behalf of the Company any instrument required to effectuate the grant of an
option previously granted by the Plan Administrator; and (l) to make all other
determinations deemed necessary or advisable for the administration of this
Plan. The interpretation and construction by the Plan Administrator of any terms
or provisions of this Plan, any option issued hereunder or of any rule or
regulation promulgated in connection herewith and all actions taken by the Plan
Administrator shall be conclusive and binding on all interested parties. The
Plan Administrator may delegate administrative functions to individuals who are
officers or employees of the Company.
2.3 LIMITED LIABILITY. No member of the Board of Directors or the Plan
Administrator, or officer of the Company shall be liable for any action or
inaction of the entity or body, or another person or, except in circumstances
involving bad faith, of himself or herself. Subject only to compliance with the
explicit provisions hereof, the Board of Directors and Plan Administrator may
act in their absolute discretion in all matters related to this Plan.
2.4 SECURITIES EXCHANGE ACT OF 1934. At any time that the Company has a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), this Plan shall be administered by
the Plan Administrator in accordance with Rule 16b-3 adopted under the Exchange
Act, as such rule may be amended from time to time.
3. STOCK SUBJECT TO THIS PLAN.
Subject to adjustment upon changes in capitalization of the Company as
provided below and in Section 6 hereof, the maximum number of shares of the
Company's common stock ("Common Stock") that shall be made available for sale
under the Plan shall be 4,501,000 shares, plus an annual increase to be added on
the first day of the Company's fiscal year beginning in 2001 equal to the lesser
of (i) 860,000 shares, (ii) 5% of the outstanding shares on such date or (iii) a
lesser amount determined by the Board. If any option granted under this Plan
shall expire, be surrendered, exchanged for another option, cancelled or
terminated for any reason without having been exercised in full, the unpurchased
shares subject thereto shall thereupon again be available for purposes of this
Plan, including for replacement options which may be granted in exchange for
such surrendered, cancelled or terminated options. Shares issued upon exercise
of options granted under this Plan may be subject to such restrictions on
transfer, repurchase rights or other restrictions as may be determined by the
Plan Administrator.
4. ELIGIBILITY. The Plan Administrator may award options to any former,
current or future employee, officer, director, agent or consultant, including
any member of technical
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advisory boards and any independent contractor, of the Company. Any party to
whom an option is granted under this Plan is referred to as an "Optionee."
5. AWARDS.
The Plan Administrator, from time to time, may take the following actions,
separately or in combination, under this Plan: (a) grant Incentive Stock
Options, as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), to any employee of the Company or its subsidiaries, as
provided in Section 5.1 of this Plan; (b) grant options other than Incentive
Stock Options ("Non-Qualified Stock Options"), as provided in Section 5.2 of
this Plan; (c) grant options to officers, employees and others in foreign
jurisdictions, as provided in Section 5.7 of this Plan; and (d) grant options in
certain acquisition transactions, as provided in Section 5.8 of this Plan.
5.1 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be subject to
the following terms and conditions:
(a) Incentive Stock Options may be granted under this Plan only to
employees of the Company or its subsidiaries, including employees who are
directors.
(b) No employee may be granted Incentive Stock Options under this
Plan to the extent that the aggregate fair market value, on the date of grant,
of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by that employee during any calendar year, under
this Plan and under any other incentive stock option plan (within the meaning of
Section 422 of the Code) of the Company or any subsidiary, exceeds $100,000. To
the extent that any option designated as an Incentive Stock Option exceeds the
$100,000 limit, such option shall be treated as a Non-Qualified Stock Option. In
making this determination, options shall be taken into account in the order in
which they were granted, and the fair market value of the shares of Common Stock
shall be determined as of the time that the option with respect to such shares
was granted.
(c) An Incentive Stock Option may be granted under this Plan to an
employee possessing more than 10% of the total combined voting power of all
classes of stock of the Company (as determined pursuant to the attribution rules
contained in Section 424(d) of the Code) only if the exercise price is at least
110% of the fair market value of the Common Stock subject to the option on the
date the option is granted, as described in Section 5.1(f) of this Plan, and
only if the option by its terms is not exercisable after the expiration of five
years from the date it is granted.
(d) Except as provided in Section 5.5 of this Plan, no Incentive
Stock Option granted under this Plan may be exercised unless at the time of such
exercise the Optionee is employed by the Company or any subsidiary of the
Company and the Optionee has been so employed continuously since the date such
option was granted.
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(e) Subject to Sections 5.1(c) and 5.1(d) of this Plan, Incentive
Stock Options granted under this Plan shall continue in effect for the period
fixed by the Plan Administrator, except that no Incentive Stock Option shall be
exercisable after the expiration of 10 years from the date it is granted.
(f) The exercise price shall not be less than 100% of the fair market
value of the shares of Common Stock covered by the Incentive Stock Option at the
date the option is granted. The fair market value of shares shall be the closing
price per share of the Common Stock on the date of grant as reported on a
securities quotation system or stock exchange. If such shares are not so
reported or listed, the Plan Administrator shall determine the fair market value
of the shares of Common Stock in its discretion.
(g) The provisions of clauses (b) and (c) of this Section shall not
apply if either the applicable sections of the Code or the regulations
thereunder are amended so as to change or eliminate such limitations or to
permit appropriate modifications of those requirements by the Plan
Administrator.
5.2 NON-QUALIFIED STOCK OPTIONS. Non-Qualified Stock Options shall be
subject to the following terms and conditions:
(a) The exercise price may be more or less than or equal to the fair
market value of the shares of Common Stock covered by the Non-Qualified Stock
Option on the date the option is granted, and the exercise price may fluctuate
based on criteria determined by the Plan Administrator. The fair market value of
shares of Common Stock covered by a Non-Qualified Stock Option shall be
determined by the Plan Administrator, as described in Section 5.1(f).
(b) Unless otherwise established by the Plan Administrator, any
Non-Qualified Stock Option shall terminate 10 years after the date it is
granted.
5.3 VESTING. To ensure that the Company will achieve the purposes of and
receive the benefits contemplated in this Plan, any option granted to any
Optionee hereunder shall be exercisable according to the following vesting
schedule, except that the Plan Administrator may waive this vesting schedule,
establish a different vesting schedule or provide for no vesting schedule for
such options as it determines:
<TABLE>
<CAPTION>
Period From the Date Portion of Total
the Option is Granted Which is Exercisable
------------------------------------------------------------------
<S> <C>
Less than 12 months None
12th month 25%
13th month through 48th month Monthly vesting of remaining
75% in 36 equal increments
</TABLE>
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5.4 NONTRANSFERABILITY. Each option granted under this Plan and the rights
and privileges conferred hereby may not be transferred, assigned, pledged or
hypothecated in any manner (whether by operation of law or otherwise) other than
by will or by the applicable laws of descent and distribution, shall not be
subject to execution, attachment or similar process and shall be exercisable
during the Optionee's lifetime only by the Optionee. Any purported transfer or
assignment in violation of this provision shall be void.
5.5 TERMINATION OF OPTIONS.
5.5.1 GENERALLY. Unless otherwise determined by the Plan Administrator
or specified in the Optionee's Option Agreement, if the Optionee's employment or
service with the Company terminates for any reason other than for cause,
resignation, retirement, disability or death, and unless by its terms the option
sooner terminates or expires, then the Optionee may exercise, for a three-month
period, that portion of the Optionee's option which was exercisable at the time
of such termination of employment or service (provided the conditions of Section
5.6.4 and any other conditions specified in the Option Agreement shall have been
met by the date of exercise of such option).
5.5.2 FOR CAUSE; RESIGNATION.
(a) If an Optionee is terminated for cause or resigns in lieu of
dismissal, any option granted hereunder shall be deemed to have terminated as of
the time of the first act which led or would have led to the termination for
cause or resignation in lieu of dismissal, and such Optionee shall thereupon
have no right to purchase any shares of Common Stock pursuant to the exercise of
such option, and any such exercise shall be null and void. Termination for
"cause" shall include (i) the violation by the Optionee of any reasonable rule
or policy of the Board of Directors or the Optionee's superiors or the chief
executive officer or the President of the Company that results in damage to the
Company or which, after notice to do so, the Optionee fails to correct within a
reasonable time; (ii) any willful misconduct or gross negligence by the Optionee
in the responsibilities assigned to him or her; (iii) any willful failure to
perform his or her job as required to meet the objectives of the Company; (iv)
any wrongful conduct of an Optionee which has an adverse impact on the Company
or which constitutes a misappropriation of the assets of the Company; (v)
unauthorized disclosure of confidential information; or (vi) the Optionee's
performing services for any other company or person which competes with the
Company while he or she is employed by or provides services to the Company,
without the prior written approval of the chief executive officer of the
Company. "Resignation in lieu of dismissal" shall mean a resignation by an
Optionee of employment with or service to the Company if (i) the Company has
given prior notice to such Optionee of its intent to dismiss the Optionee for
circumstances that constitute cause, or (ii) within two months of the Optionee's
resignation, the chief operating officer or the chief executive officer of the
Company or the Board of Directors determines, which determination shall be final
and binding, that such resignation was related to an act which would have led to
a termination for cause.
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(b) If an Optionee resigns from the Company, the right of the
Optionee to exercise his or her option shall be suspended for a period of two
months from the date of resignation, unless the President or chief executive
officer of the Company or the Board of Directors determines otherwise in
writing. Thereafter, unless there is a determination that the Optionee resigned
in lieu of dismissal, the option may be exercised at any time prior to the
earlier of (i) the expiration date of the option (which shall have been
similarly suspended) or (ii) the expiration of three months after the date of
resignation, for that portion of the Optionee's option which was exercisable at
the time of such resignation (provided the conditions of Section 5.6.4 and any
other conditions specified in the Option Agreement shall have been met at the
date of exercise of such option).
5.5.3 RETIREMENT. Unless otherwise determined by the Plan
Administrator, if an Optionee's employment or service with the Company is
terminated with the Company's approval for reasons of age, the Option may be
exercised at any time prior to the earlier of (a) the expiration date of the
option or (b) the expiration of three months after the date of such termination
of employment or service, for that portion of the Optionee's option which was
exercisable at the time of such termination of employment or service (provided
the conditions of Section 5.6.4 and any other conditions specified in the Option
Agreement shall have been met at the date of exercise of such option).
5.5.4 DISABILITY. Unless otherwise determined by the Plan
Administrator, if an Optionee's employment or relationship with the Company
terminates because of a permanent and total disability (as defined in Section
22(e)(3) of the Code), the option may be exercised at any time prior to the
earlier of (a) expiration date of the option or (b) the expiration of 12 months
after the date of such termination, for up to the full number of shares of
Common Stock covered thereby, including any portion not yet vested (provided the
conditions of Section 5.6.4 and any other conditions specified in the Option
Agreement shall have been met by the date of exercise of such option).
5.5.5 DEATH. Unless otherwise determined by the Plan Administrator, in
the event of the death of an Optionee while employed by or providing service to
the Company, the option may be exercised at any time prior to the earlier of (a)
the expiration date of the option or (b) the expiration of 12 months after the
date of death by the person or persons to whom such Optionee's rights under the
option shall pass by the Optionee's will or by the applicable laws of descent
and distribution, for up to the full number of shares of Common Stock covered
thereby, including any portion not yet vested (provided the conditions of
Section 5.6.4. and any other conditions specified in the Option Agreement shall
have been met by the date of exercise of such option).
5.5.6 EXTENSION OF EXERCISE PERIOD APPLICABLE TO TERMINATION. The
Plan Administrator, at the time of grant or at any time thereafter, may extend
the three-month and 12-month exercise periods to any length of time not longer
than the original expiration date of the option, and may increase the portion of
an option that is
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exercisable, subject to such terms and conditions as the Plan Administrator may
determine; provided, that any extension of the exercise period or other
modification of an Incentive Stock Option shall be subject to the written
agreement and acknowledgement by the Optionee that the extension or modification
disqualifies the option as an Incentive Stock Option.
5.5.7 FAILURE TO EXERCISE OPTION. To the extent that the option of any
deceased Optionee or of any Optionee whose employment or service terminates is
not exercised within the applicable period, all rights to purchase shares of
Common Stock pursuant to such options shall cease and terminate.
5.5.8 LEAVES. For purposes of this Section 5.5, with respect to
Incentive Stock Options, employment shall be deemed to continue while the
Optionee is on military leave, sick leave or other bona fide leave of absence
(as determined by the Plan Administrator) in accordance with the policies of the
Company.
5.6 EXERCISE.
5.6.1 PROCEDURE. Subject to the provisions of Section 5.3 above, each
option may be exercised in whole or in part; provided, however, that no fewer
than 100 shares (or the remaining shares then purchasable under the option, if
less than 100 shares) may be purchased upon any exercise of any option granted
hereunder and that only whole shares will be issued pursuant to the exercise of
any option (the number of 100 shares shall not be changed by any transaction or
action described in Section 6 unless the Plan Administrator determines that such
a change is appropriate). Options shall be exercised by delivery to the
Secretary of the Company or his or her designated agent of notice of the number
of shares with respect to which the option is exercised, together with payment
in full of the exercise price.
5.6.2 PAYMENT. Payment of the option exercise price shall be made in
full at the time the notice of exercise of the option is delivered to the
Secretary of the Company or his or her designated agent and shall be in cash or
bank certified or cashier's check for the shares of Common Stock being
purchased. The Plan Administrator may determine at the time the option is
granted for Incentive Stock Options, or at any time before exercise for
Non-Qualified Stock Options, that additional forms of payment will be permitted,
including without limitation payment through irrevocable instructions to a stock
broker to deliver the amount of sales proceeds necessary to pay the appropriate
exercise price and withholding tax obligations, all in accordance with
applicable governmental regulations.
5.6.3 WITHHOLDING. Prior to the issuance of shares of Common Stock
upon the exercise of an option, the Optionee shall pay to the Company the amount
of any applicable federal, state or local tax withholding obligations. The
Company may withhold any distribution in whole or in part until the Company is
so paid. The Company shall have the right to withhold such amount from any other
amounts due or to become
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due from the Company, as the case may be, to the Optionee, including salary
(subject to applicable law) or to retain and withhold a number of shares having
a market value not less than the amount of such taxes required to be withheld by
the Company to reimburse it for any such taxes and cancel (in whole or in part)
any such shares so withheld.
5.6.4 CONDITIONS PRECEDENT TO EXERCISE. The Plan Administrator may
establish conditions precedent to the exercise of any option, which shall be
described in the relevant Option Agreement.
5.7 FOREIGN QUALIFIED GRANTS. Options under this Plan may be granted
to officers and employees of the Company and other persons described in Section
4 who reside in foreign jurisdictions as the Plan Administrator may determine
from time to time. The Board of Directors may adopt such supplements to the Plan
as are necessary to comply with the applicable laws of such foreign
jurisdictions and to afford Optionees favorable treatment under such laws;
provided, however, that no award shall be granted under any such supplement on
terms which are more beneficial to such Optionees than the terms permitted by
this Plan.
5.8 CORPORATE MERGERS, ACQUISITIONS, ETC. The Plan Administrator may
also grant options under this Plan having terms, conditions and provisions that
vary from those specified in this Plan provided that such options are granted in
substitution for, or in connection with the assumption of, existing options
granted, awarded or issued by another corporation and assumed or otherwise
agreed to be provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation, acquisition of property
or stock, reorganization or liquidation to which the Company is a party.
5.9 HOLDING PERIOD. Unless otherwise determined by the Plan
Administrator, if a person subject to Section 16 of the Exchange Act exercises
an option within six months of the date of grant of the option, the shares of
Common Stock acquired upon exercise of the option may not be sold until six
months after the date of grant of the option.
5.10 OPTION AGREEMENTS. Options granted under this Plan shall be
evidenced by written stock option agreements (the "Option Agreements") which
shall contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and which are consistent with this Plan. All
Option Agreements shall include or incorporate by reference the applicable terms
and conditions contained in this Plan.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
6.1 STOCK SPLITS, CAPITAL STOCK ADJUSTMENTS. The aggregate number and
class of shares for which options may be granted under this Plan, the number and
class of shares covered by each outstanding option and the exercise price per
share thereof (but not the total price), and each such option, shall all be
proportionately adjusted for any
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increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a stock split, stock dividend or consolidation of shares
or any like capital stock adjustment.
6.2 EFFECT OF MERGER, SALE OF ASSETS, LIQUIDATION OR DISSOLUTION.
6.2.1 MERGERS, SALE OF ASSETS, OTHER TRANSACTIONS. In the event of a
merger, consolidation or plan of exchange to which the Company is a party or a
sale of all or substantially all of the Company's assets (each, a
"Transaction"), the Board of Directors, in its sole discretion and to the extent
possible under the structure of the Transaction, shall select one of the
following alternatives for treating outstanding options under this Plan:
(a) Outstanding options shall remain in effect in accordance
with their terms;
(b) Outstanding options shall be converted into options to
purchase stock in the corporation that is the surviving or acquiring corporation
in the Transaction. The amount, type of securities subject thereto and exercise
price of the converted options shall be determined by the Board of Directors of
the Company, taking into account the relative values of the companies involved
in the Transaction and the exchange rate, if any, used in determining shares of
the surviving corporation to be issued to holders of shares of the Company.
Unless otherwise determined by the Board of Directors, the converted options
shall be vested only to the extent that the vesting requirements relating to
options granted hereunder have been satisfied; or
(c) The Board of Directors provides a 30-day period prior to the
consummation of the Transaction during which outstanding options shall be
exercisable to the extent vested and, upon the expiration of such 30-day period,
all unexercised options shall immediately terminate. The Board of Directors, in
its sole discretion, may accelerate the exercisability of options so that they
are exercisable in full during such 30-day period.
6.2.2 LIQUIDATION; DISSOLUTION. In the event of the liquidation or
dissolution of the Company, options shall be treated in accordance with Section
6.2.1(c).
6.3 FRACTIONAL SHARES. In the event of any adjustment in the number of
shares covered by any option, any fractional shares resulting from such
adjustment shall be disregarded and each such option shall cover only the number
of full shares resulting from such adjustment.
6.4 DETERMINATION OF BOARD TO BE FINAL. All adjustments under this Section
6 shall be made by the Board of Directors, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive. Unless an Optionee agrees otherwise, any change or adjustment to an
Incentive Stock Option shall
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be made, if possible, in such a manner so as not to constitute a "modification,"
as defined in Section 424(h) of the Code, and so as not to cause the Optionee's
Incentive Stock Option to fail to continue to qualify as an Incentive Stock
Option.
7. SECURITIES REGULATIONS.
Shares of Common Stock shall not be issued with respect to an option
granted under this Plan unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, any applicable state
securities laws, the Securities Act of 1933, as amended, the Exchange Act, the
rules and regulations promulgated thereunder, applicable laws of foreign
countries and other jurisdictions and the requirements of any quotation service
or stock exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance, including the availability of an exemption from registration for the
issuance and sale of any shares hereunder. The inability of the Company to
obtain, from any regulatory body having jurisdiction, the authority deemed by
the Company's counsel to be necessary for the lawful issuance and sale of any
shares hereunder or the unavailability of an exemption from registration for the
issuance and sale of any shares hereunder shall relieve the Company of any
liability with respect of the nonissuance or sale of such shares as to which
such requisite authority shall not have been obtained.
As a condition to the exercise of an option, the Company may require the
Optionee to represent and warrant at the time of any such exercise that the
shares of Common Stock are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any relevant
provision of the aforementioned laws. The Company may place a stop-transfer
order against any shares of Common Stock on the official stock books and records
of the Company, and a legend may be stamped on stock certificates to the effect
that the shares of Common Stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation. The Plan Administrator may also require such other
action or agreement by the Optionees as may from time to time be necessary to
comply with the federal and state securities laws. THIS PROVISION SHALL NOT
OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THE OPTIONS OR STOCK
THEREUNDER.
Should any of the Company's capital stock of the same class as the Common
Stock subject to options granted hereunder be listed on a national securities
exchange, all shares of Common Stock issued hereunder if not previously listed
on such exchange shall be authorized by that exchange for listing thereon prior
to the issuance thereof.
8. AMENDMENT AND TERMINATION.
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8.1 PLAN. The Board of Directors may at any time suspend, amend or
terminate this Plan, provided that, except as set forth in Section 6, the
approval of the Company's shareholders is necessary within 12 months before or
after the adoption by the Board of Directors of any amendment which will:
(a) increase the number of shares of Common Stock which are to be
reserved for the issuance of options under this Plan;
(b) permit the granting of stock options to a class of persons other
than those presently permitted to receive stock options under this Plan; or
(c) require shareholder approval under applicable law, including
Section 16(b) of the Exchange Act.
8.2 OPTIONS. Subject to the requirements of Section 422 of the Code with
respect to Incentive Stock Options and to the terms and conditions and within
the limitations of this Plan, the Plan Administrator may modify or amend
outstanding options granted under this Plan. The modification or amendment of an
outstanding option shall not, without the consent of the Optionee, impair or
diminish any of his or her rights or any of the obligations of the Company under
such option. Except as otherwise provided in this Plan, no outstanding option
shall be terminated without the consent of the Optionee. Unless the Optionee
agrees otherwise, any changes or adjustments made to outstanding Incentive Stock
Options granted under this Plan shall be made in such a manner so as not to
constitute a "modification," as defined in Section 425(h) of the Code, and so as
not to cause any Incentive Stock Option issued hereunder to fail to continue to
qualify as an Incentive Stock Option as defined in Section 422(b) of the Code.
8.3 AUTOMATIC TERMINATION. Unless sooner terminated by the Board of
Directors, this Plan shall terminate ten years from the date on which this Plan
is adopted by the Board. No option may be granted after such termination or
during any suspension of this Plan. The amendment or termination of this Plan
shall not, without the consent of the Optionee, alter or impair any rights or
obligations under any option theretofore granted under this Plan.
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9. MISCELLANEOUS.
9.1 TIME OF GRANTING OPTIONS. The date of grant of an option shall, for
all purposes, be the date on which the Company completes the required corporate
action relating to the grant of an option; the execution of an Option Agreement
and the conditions to the exercise of an option shall not defer the date of
grant.
9.2 NO STATUS AS SHAREHOLDER. Neither the Optionee nor any party to which
the Optionee's rights and privileges under the option may pass shall be, or have
any of the rights or privileges of, a shareholder of the Company with respect to
any of the shares of Common Stock issuable upon the exercise of any option
granted under this Plan unless and until such option has been exercised and the
issuance (as evidenced by the appropriate entry on the books of the Company or
duly authorized transfer agent of the Company) of the stock certificate
evidencing such shares.
9.3 STATUS AS AN EMPLOYEE. Nothing in this Plan or in any option granted
pursuant to this Plan shall confer upon any Optionee any right to continue in
the employ of the Company, or to interfere in any way with the right of the
Company to terminate his or her employment or other relationship with the
Company at any time.
9.4 RESERVATION OF SHARES. The Company, during the term of this Plan, at
all times will reserve and keep available such number of shares of Common Stock
as shall be sufficient to satisfy the requirements of this Plan.
10. EFFECTIVENESS OF THIS PLAN.
This Plan shall become effective upon adoption by the Board so long as it
is approved by the Company's shareholders any time within 12 months after the
adoption of this Plan. No option granted under this Plan to any officer or
director of the Company shall become exercisable, however, until the Plan is
approved by the shareholders, and any options granted prior to such approval
shall be conditioned upon and are subject to such approval.
Adopted by the Board of Directors on May 18, 1995 and approved by the
Shareholders on May 18, 1995.
Amended by the Board of Directors and approved by the Shareholders in March
1997, September 1998, April 1999 and May 2000.
Amended by the Board on August 31, 2000.
