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Exhibit 99.5
REWARD ENTERPRISES INC.
1999 STOCK OPTION PLAN
This 1999 Stock Option Plan (the "Plan") provides for the
grant of options to acquire shares of common stock, (the "Common
Stock"), of REWARD ENTERPRISES INC., a Nevada corporation (the
"Company"). Stock options granted under this Plan that qualify
under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), are referred to in this Plan as "Incentive Stock
Options." Incentive Stock Options and stock options that do not
qualify under Section 422 of the Code ("Non-Qualified Stock
Options") granted under this Plan are referred to collectively as
"Options."
1. PURPOSES.
The purposes of this Plan are to retain the services of valued
key employees and consultants of the Company and such other persons
as the Plan Administrator shall select in accordance with Section 3
below, to encourage such persons to acquire a greater proprietary
interest in the Company, thereby strengthening their incentive to
achieve the objectives of the shareholders of the Company, and to
serve as an aid and inducement in the hiring of new employees and
to provide an equity incentive to consultants and other persons
selected by the Plan Administrator.
2. ADMINISTRATION.
This Plan shall be administered initially by the Board of
Directors of the Company (the "Board"), except that the Board may,
in its discretion, establish a committee composed of two (2) or
more members of the Board or two (2) or more other persons to
administer the Plan, which committee (the "Committee") may be an
executive, compensation or other committee, including a separate
committee especially created for this purpose. The Committee shall
have the powers and authority vested in the Board hereunder
(including the power and authority to interpret any provision of
the Plan or of any Option). The members of any such Committee
shall serve at the pleasure of the Board. A majority of the
members of the Committee shall constitute a quorum, and all actions
of the Committee shall be taken by a majority of the members
present. Any action may be taken by a written instrument signed by
all of the members of the Committee and any action so taken shall
be fully effective as if it had been taken at a meeting. The Board
or, if applicable, the Committee is referred to herein as the "Plan
Administrator."
If and when the Company becomes subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Plan Administrator will be either the
full Board of Directors or a committee composed of two (2) or more
members of the Board who are "Non-Employee Directors" as defined
under Rule 16b-3 (as amended from time to time) promulgated under
the Exchange Act or any successor rule or regulatory requirement.
In addition, if the Board decides to maintain eligibility for the
benefits of Section 162(m) of
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the Code, the Plan Administrator will be either the full Board of
Directors if each director is an "Outside Director," as defined
under Section 162(m) of the Code (as amended from time to time) and
the regulations (or any successor regulations) promulgated
thereunder ("Section 162(m) of the Code" or the Committee which
will be composed of two (2) or more members of the Board who are
Outside Directors.
Subject to the provisions of this Plan, and with a view to
effecting its purpose, the Plan Administrator shall have sole
authority, in its absolute discretion, to (i) construe and
interpret this Plan; (ii) define the terms used in the Plan;
(iii) prescribe, amend and rescind the rules and regulations
relating to this Plan; (iv) correct any defect, supply any omission
or reconcile any inconsistency in this Plan; (v) grant Options
under this Plan; (vi) determine the individuals to whom Options
shall be granted under this Plan and whether the Option is an
Incentive Stock Option or a Non-Qualified Stock Option;
(vii) determine the time or times at which Options shall be granted
under this Plan; (viii) determine the number of shares of Common
Stock subject to each Option, the exercise price of each Option,
the duration of each Option and the times at which each Option
shall become exercisable; (ix) determine all other terms and
conditions of the Options; and (x) make all other determinations
and interpretations necessary and advisable for the administration
of the Plan. All decisions, determinations and interpretations
made by the Plan Administrator shall be binding and conclusive on
all participants in the Plan and on their legal representatives,
heirs and beneficiaries.
The Board or, if applicable, the Committee may delegate to one
or more executive officers of the Company the authority to grant
Options under this Plan to employees of the Company who, on the
Date of Grant, are not subject to Section 16 of the Exchange Act
with respect to the Common Stock ("Insiders"), and are not "covered
employees" as such term is defined for purposes of Section 162(m)
of the Code ("Covered Employees"), and in connection therewith the
authority to determine: (i) the number of shares of Common Stock
subject to such Options; (ii) the duration of the Option; (iii) the
vesting schedule for determining the times at which such Option
shall become exercisable; and (iv) all other terms and conditions
of such Options. The exercise price for any Option granted by
action of an executive officer or officers pursuant to such
delegation of authority shall not be less than the fair market
value per share of the Common Stock on the Date of Grant. Unless
expressly approved in advance by the Board or the Committee, such
delegation of authority shall not include the authority to
accelerate vesting, extend the period for exercise or otherwise
alter the terms of outstanding Options. The term "Plan
Administrator" when used in any provision of this Plan other than
Sections 2, 5(f), 5(m), and 11 shall be deemed to refer to the
Board or the Committee, as the case may be, and an executive
officer who has been authorized to grant Options pursuant thereto,
insofar as such provisions may be applied to persons that are not
Insiders and not Covered Employees and Options granted to such
persons.
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3. ELIGIBILITY.
Incentive Stock Options may be granted to any individual who,
at the time the Option is granted, is an employee of the Company or
any Related Corporation (as defined below) ("Employees").
Non-Qualified Stock Options may be granted to Employees and to such
other persons other than directors who are not Employees as the
Plan Administrator shall select. Options may be granted in
substitution for outstanding Options of another corporation in
connection with the merger, consolidation, acquisition of property
or stock or other reorganization between such other corporation and
the Company or any subsidiary of the Company. Options also may be
granted in exchange for outstanding Options. No person shall be
eligible to receive in any fiscal year Options to purchase more
than 500,000 shares of Common Stock (subject to adjustment as set
forth in Section 5(m) hereof). Any person to whom an Option is
granted under this Plan is referred to as an "Optionee." Any person
who is the owner of an Option is referred to as a "Holder."
As used in this Plan, the term "Related Corporation" shall
mean any corporation (other than the Company) that is a "Parent
Corporation" of the Company or "Subsidiary Corporation" of the
Company, as those terms are defined in Sections 424(e) and 424(f),
respectively, of the Code (or any successor provisions) and the
regulations thereunder (as amended from time to time).
4. STOCK.
The Plan Administrator is authorized to grant Options to
acquire up to a total of 1,000,000 shares of the Company's
authorized but unissued, or reacquired, Common Stock. The number
of shares with respect to which Options may be granted hereunder is
subject to adjustment as set forth in Section 5(m) hereof. If any
outstanding Option expires or is terminated for any reason, the
shares of Common Stock allocable to the unexercised portion of such
Option may again be subject to an Option granted to the same
Optionee or to a different person eligible under Section 3 of this
Plan.
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted under this Plan shall be evidenced by a
written agreement approved by the Plan Administrator (the
"Agreement"). Agreements may contain such provisions, not
inconsistent with this Plan, as the Plan Administrator in its
discretion may deem advisable. All Options also shall comply with
the following requirements:
(a) Number of Shares and Type of Option.
Each Agreement shall state the number of shares of Common
Stock to which it pertains and whether the Option is intended to be
an Incentive Stock Option or a Non-Qualified Stock Option. In the
absence of action to the contrary by the Plan Administrator in
connection with the grant of an Option, all Options shall be
Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock
with respect to which Incentive
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Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other
Incentive Stock Option plans of the Company, a Related Corporation
or a predecessor corporation) shall not exceed $100,000, or such
other limit as may be prescribed by the Code as it may be amended
from time to time. Any portion of an Option which exceeds the
annual limit shall not be void but rather shall be a Non-Qualified
Stock Option.
(b) Date of Grant.
Each Agreement shall state the date the Plan
Administrator has deemed to be the effective date of the Option for
purposes of this Plan (the "Date of Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common
Stock at which it is exercisable. The exercise price shall be
fixed by the Plan Administrator at whatever price the Plan
Administrator may determine in the exercise of its sole discretion;
provided that the per share exercise price for an Incentive Stock
Option or any Option granted to a "covered employee" as such term
is defined for purposes of Section 162(m) of the Code ("Covered
Employee") shall not be less than the fair market value per share
of the Common Stock at the Date of Grant as determined by the Plan
Administrator in good faith; provided further, that with respect to
Incentive Stock Options granted to greater-than-ten percent (> 10%)
shareholders of the Company (as determined with reference to
Section 424(d) of the Code), the exercise price per share shall not
be less than one hundred ten percent (110%) of the fair market
value per share of the Common Stock at the Date of Grant as
determined by the Plan Administrator in good faith; and, provided
further, that Options granted in substitution for outstanding
options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other
reorganization involving such other corporation and the Company or
any subsidiary of the Company may be granted with an exercise price
equal to the exercise price for the substituted option of the other
corporation, subject to any adjustment consistent with the terms of
the transaction pursuant to which the substitution is to occur.
(d) Duration of Options.
At the time of the grant of the Option, the Plan
Administrator shall designate, subject to paragraph 5(g) below, the
expiration date of the Option, which date shall not be later than
ten (10) years from the Date of Grant in the case of Incentive
Stock Options; provided, that the expiration date of any Incentive
Stock Option granted to a greater-than-ten percent ( > 10%)
shareholder of the Company (as determined with reference to
Section 424(d) of the Code) shall not be later than five (5) years
from the Date of Grant. In the absence of action to the contrary
by the Plan Administrator in connection with the grant of a
particular Option, and except in the case of Incentive Stock
Options as described above, all Options granted under this
Section 5 shall expire ten (10) years from the Date of Grant.
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(e) Vesting Schedule.
No Option shall be exercisable until it has vested. The
vesting schedule for each Option shall be specified by the Plan
Administrator at the time of grant of the Option prior to the
provision of services with respect to which such Option is granted;
provided, that if no vesting schedule is specified at the time of
grant, the Option shall vest according to the following schedule:
Number of Years
Following Date of Grant Percentage of Total
Option Vested
One 25%
Two 50%
Three 75%
Four 100%
The Plan Administrator may specify a vesting schedule for
all or any portion of an Option based on the achievement of
performance objectives established in advance of the commencement
by the Optionee of services related to the achievement of the
performance objectives. Performance objectives shall be expressed
in terms of one or more of the following: return on equity, return
on assets, share price, market share, sales, earnings per share,
costs, net earnings, net worth, inventories, cash and cash
equivalents, gross margin or the Company's performance relative to
its internal business plan. Performance objectives may be in
respect of the performance of the Company as a whole (whether on a
consolidated or unconsolidated basis), a Related Corporation, or a
subdivision, operating unit, product or product line of either of
the foregoing. Performance objectives may be absolute or relative
and may be expressed in terms of a progression or a range. An
Option that is exercisable (in full or in part) upon the
achievement of one or more performance objectives may be exercised
only following written notice to the Optionee and the Company by
the Plan Administrator that the performance objective has been
achieved.
(f) Acceleration of Vesting.
The vesting of one or more outstanding Options may be
accelerated by the Plan Administrator at such times and in such
amounts as it shall determine in its sole discretion. The vesting
of Options also shall be accelerated under the circumstances
described in Section 5(m) below.
(g) Term of Option.
Vested Options shall terminate, to the extent not
previously exercised, upon the occurrence of the first of the
following events: (i) the expiration of the Option, as designated
by the Plan Administrator in accordance with Section 5(d) above;
(ii) the date of an Optionee's termination of employment or
contractual relationship with the Company or any Related
Corporation for cause (as determined in the sole discretion of the
Plan Administrator); (iii) the expiration of
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three (3) months from the date of an Optionee's termination of
employment or contractual relationship with the Company or any
Related Corporation for any reason whatsoever other than cause,
death or Disability (as defined below) unless, in the case of a
Non-Qualified Stock Option, the exercise period is extended by the
Plan Administrator until a date not later than the expiration date
of the Option; or (iv) the expiration of one year from termination
of an Optionee's employment or contractual relationship by reason
of death or Disability (as defined below) unless, in the case of a
Non-Qualified Stock Option, the exercise period is extended by the
Plan Administrator until a date not later than the expiration date
of the Option. Upon the death of an Optionee, any vested Options
held by the Optionee shall be exercisable only by the person or
persons to whom such Optionee's rights under such Option shall pass
by the Optionee's will or by the laws of descent and distribution
of the state or county of the Optionee's domicile at the time of
death and only until such Options terminate as provided above. For
purposes of the Plan, unless otherwise defined in the Agreement,
"Disability" shall mean medically determinable physical or mental
impairment which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months or that can
be expected to result in death. The Plan Administrator shall
determine whether an Optionee has incurred a Disability on the
basis of medical evidence acceptable to the Plan Administrator.
Upon making a determination of Disability, the Plan Administrator
shall, for purposes of the Plan, determine the date of an
Optionee's termination of employment or contractual relationship.
Unless accelerated in accordance with Section 5(f) above,
unvested Options shall terminate immediately upon termination of
employment of the Optionee by the Company for any reason
whatsoever, including death or Disability. For purposes of this
Plan, transfer of employment between or among the Company and/or
any Related Corporation shall not be deemed to constitute a
termination of employment with the Company or any Related
Corporation. For purposes of this subsection, 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). The foregoing notwithstanding, employment
shall not be deemed to continue beyond the first ninety (90) days
of such leave, unless the Optionee's re-employment rights are
guaranteed by statute or by contract.
(h) Exercise of Options.
Options shall be exercisable, in full or in part, at any
time after vesting, until termination. If less than all of the
shares included in the vested portion of any Option are purchased,
the remainder may be purchased at any subsequent time prior to the
expiration of the Option term. No portion of any Option for less
than fifty (50) shares (as adjusted pursuant to Section 5(m) below)
may be exercised; provided, that if the vested portion of any
Option is less than fifty (50) shares, it may be exercised with
respect to all shares for which it is vested. Only whole shares
may be issued pursuant to an Option, and to the extent that an
Option covers less than one (1) share, it is unexercisable.
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Options or portions thereof may be exercised by giving
written notice to the Company, which notice shall specify the
number of shares to be purchased, and be accompanied by payment in
the amount of the aggregate exercise price for the Common Stock so
purchased, which payment shall be in the form specified in
Section 5(i) below. The Company shall not be obligated to issue,
transfer or deliver a certificate of Common Stock to the Holder of
any Option, until provision has been made by the Holder, to the
satisfaction of the Company, for the payment of the aggregate
exercise price for all shares for which the Option shall have been
exercised and for satisfaction of any tax withholding obligations
associated with such exercise. During the lifetime of an Optionee,
Options are exercisable only by the Optionee or in the case of a
Non-Qualified Stock Option, transferee who takes title to such
Option in the manner permitted by subsection 5(k) hereof. It shall
be a condition precedent to the exercise of any Option granted
hereunder that the Holder shall enter into a Stock Transfer
Agreement with the Company.
(i) Payment upon Exercise of Option.
Upon the exercise of any Option, the aggregate exercise
price shall be paid to the Company in cash or by certified or
cashier's check. In addition, the Holder may pay for all or any
portion of the aggregate exercise price by complying with one or
more of the following alternatives:
(1) by delivering to the Company shares of Common Stock
previously held by such Holder, or by the Company
withholding shares of Common Stock otherwise deliverable
pursuant to exercise of the Option, which shares of
Common Stock received or withheld shall have a fair
market value at the date of exercise (as determined by
the Plan Administrator) equal to the aggregate exercise
price to be paid by the Optionee upon such exercise;
(2) by delivering a properly executed exercise notice
together with irrevocable instructions to a broker
promptly to sell or margin a sufficient portion of the
shares and deliver directly to the Company the amount of
sale or margin loan proceeds to pay the exercise price;
or
(3) by complying with any other payment mechanism approved by
the Plan Administrator at the time of exercise.
(j) Rights as a Shareholder.
A Holder shall have no rights as a shareholder with
respect to any shares covered by an Option until such Holder
becomes a record holder of such shares, irrespective of whether
such Holder has given notice of exercise. Subject to the
provisions of Section 5(m) hereof, no rights shall accrue to a
Holder and no adjustments shall be made on account of dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights declared
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on, or created in, the Common Stock for which the record date is
prior to the date the Holder becomes a record holder of the shares
of Common Stock covered by the Option, irrespective of whether such
Holder has given notice of exercise.
(k) Transfer of Option.
Options granted under this Plan and the rights and
privileges conferred by this Plan may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law
or otherwise) other than by will, by applicable laws of descent and
distribution or (except in the case of an Incentive Stock Option)
pursuant to a qualified domestic relations order, and shall not be
subject to execution, attachment or similar process; provided
however, that any Agreement may provide or be amended to provide
that a Non-Qualified Stock Option to which it relates is
transferable without payment of consideration to immediate family
members of the Optionee or to trusts or partnerships or limited
liability companies established exclusively for the benefit of the
Optionee and the Optionee's immediate family members. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option or of any right or privilege conferred by
this Plan contrary to the provisions hereof, or upon the sale, levy
or any attachment or similar process upon the rights and privileges
conferred by this Plan, such Option shall thereupon terminate and
become null and void.
(l) Securities Regulation and Tax Withholding.
[1] Shares shall not be issued with respect to an Option
unless the exercise of such Option and the issuance and
delivery of such shares shall comply with all relevant
provisions of law, including, without limitation,
Section 162(m) of the Code, any applicable state
securities laws, the Securities Act of 1933, as amended,
the Exchange Act, the rules and regulations thereunder
and the requirements of any stock exchange or automated
inter-dealer quotation system of a registered national
securities association upon which such shares may then be
listed, and such issuance 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 such
shares. The inability of the Company to obtain from any
regulatory body the authority deemed by the Company to be
necessary for the lawful issuance and sale of any shares
under this Plan, or the unavailability of an exemption
from registration for the issuance and sale of any shares
under this Plan, shall relieve the Company of any
liability with respect to the non-issuance or sale of
such shares.
As a condition to the exercise of an Option, the Plan
Administrator may require the Holder to represent and
warrant in writing at the time of such exercise that the
shares are being purchased only for investment and
without any then-present intention to sell or distribute
such shares. At
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the option of the Plan Administrator, a stop-transfer
order against such shares may be placed on the stock
books and records of the Company, and a legend indicating
that the stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel is provided
stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the
certificates representing such shares in order to assure
an exemption from registration. The Plan Administrator
also may require such other documentation as may from
time to time be necessary to comply with federal and
state securities laws. THE COMPANY HAS NO OBLIGATION TO
UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK
ISSUABLE UPON THE EXERCISE OF OPTIONS.
[2] The Holder must pay to the Company by certified or
cashier's check, promptly upon exercise of an Option or,
if later, the date that the amount of such obligations
becomes determinable, all applicable federal, state,
local and foreign withholding taxes that the Plan
Administrator, in its discretion, determines to result
upon exercise of an Option or from a transfer or other
disposition of shares of Common Stock acquired upon
exercise of an Option or otherwise related to an Option
or shares of Common Stock acquired in connection with an
Option. Upon approval of the Plan Administrator, a
Holder may satisfy such obligation by complying with one
or more of the following alternatives selected by the
Plan Administrator:
[A] by delivering to the Company shares of Common Stock
previously held by such Holder or by the Company
withholding shares of Common Stock otherwise
deliverable pursuant to the exercise of the Option,
which shares of Common Stock received or withheld
shall have a fair market value at the date of
exercise (as determined by the Plan Administrator)
equal to any withholding tax obligations arising as
a result of such exercise, transfer or other
disposition;
[B] by executing appropriate loan documents approved by
the Plan Administrator by which the Holder borrows
funds from the Company to pay any withholding taxes
due under this Paragraph 2, with such repayment
terms as the Plan Administrator shall select; or
[C] by complying with any other payment mechanism
approved by the Plan Administrator from time to
time.
[3] The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be
delayed, at the discretion of the Plan Administrator,
until the Plan Administrator is satisfied that the
applicable requirements of the federal and state
securities laws and the withholding provisions of the
Code have been met and that the Holder has paid or
otherwise satisfied any withholding tax obligation as
described in (2) above.
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(m) Stock Dividend or Reorganization.
[1] If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or
any successor provision) or any "corporate transaction"
described in the regulations thereunder; (ii) the Company
shall declare a dividend payable in, or shall subdivide
or combine, its Common Stock or (iii) any other event
with substantially the same effect shall occur, the Plan
Administrator shall, subject to applicable law, with
respect to each outstanding Option, proportionately
adjust the number of shares of Common Stock subject to
such Option and/or the exercise price per share so as to
preserve the rights of the Holder substantially
proportionate to the rights of the Holder prior to such
event, and to the extent that such action shall include
an increase or decrease in the number of shares of Common
Stock subject to outstanding Options, the number of
shares available under Section 4 of this Plan shall
automatically be increased or decreased, as the case may
be, proportionately, without further action on the part
of the Plan Administrator, the Company, the Company's
shareholders, or any Holder.
[2] In the event that the presently authorized capital stock
of the Company is changed into the same number of shares
with a different par value, or without par value, the
stock resulting from any such change shall be deemed to
be Common Stock within the meaning of the Plan, and each
Option shall apply to the same number of shares of such
new stock as it applied to old shares immediately prior
to such change.
[3] If the Company shall at any time declare an extraordinary
dividend with respect to the Common Stock, whether
payable in cash or other property, the Plan Administrator
may, subject to applicable law, in the exercise of its
sole discretion and with respect to each outstanding
Option, proportionately adjust the number of shares of
Common Stock subject to such Option and/or adjust the
exercise price per share so as to preserve the rights of
the Holder substantially proportionate to the rights of
the Holder prior to such event, and to the extent that
such action shall include an increase or decrease in the
number of shares of Common Stock subject to outstanding
Options, the number of shares available under Section 4
of this Plan shall automatically be increased or
decreased, as the case may be, proportionately, without
further action on the part of the Plan Administrator, the
Company, the Company's shareholders, or any Holder.
[4] The foregoing adjustments in the shares subject to
Options shall be made by the Plan Administrator, or by
any successor administrator of this Plan, or by the
applicable terms of any assumption or substitution
document.
<PAGE> 50
[5] The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its
capital or business structure, to merge, consolidate or
dissolve, to liquidate or to sell or transfer all or any
part of its business or assets.
6. EFFECTIVE DATE; TERM.
Incentive Stock Options may be granted by the Plan
Administrator from time to time on or after the date on which this
Plan is adopted (the "Effective Date") through the day immediately
preceding the tenth anniversary of the Effective Date. Non-
Qualified Stock Options may be granted by the Plan Administrator on
or after the Effective Date and until this Plan is terminated by
the Board in its sole discretion. Termination of this Plan shall
not terminate any Option granted prior to such termination. Any
Incentive Stock Options granted by the Plan Administrator prior to
the approval of this Plan by the shareholders of the Company in
accordance with Section 422 of the Code shall be granted subject to
ratification of this Plan by the shareholders of the Company within
twelve (12) months before or after the Effective Date. If such
shareholder ratification is sought and not obtained, all Options
granted prior thereto and thereafter shall be considered Non-
Qualified Stock Options and any Options granted to Covered
Employees will not be eligible for the exclusion set forth in
Section 162(m) of the Code with respect to the deductibility by the
Company of certain compensation.
7. NO OBLIGATIONS TO EXERCISE OPTION.
The grant of an Option shall impose no obligation upon the
Optionee to exercise such Option.
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT.
The Plan Administrator will determine whether or not any
Options are to be granted under this Plan in its sole discretion,
and nothing contained in this Plan shall be construed as giving any
person any right to participate under this Plan. The grant of an
Option shall in no way constitute any form of agreement or
understanding binding on the Company or any Related Company,
express or implied, that the Company or any Related Company will
employ or contract with an Optionee for any length of time, nor
shall it interfere in any way with the Company's or, where
applicable, a Related Company's right to terminate Optionee's
employment at any time, which right is hereby reserved.
9. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common
Stock issued upon the exercise of Options shall be used for general
corporate purposes, unless otherwise directed by the Board.
<PAGE> 51
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may
have as members of the Board, members of the Plan Administrator
shall be indemnified by the Company for all reasonable expenses and
liabilities of any type or nature, including attorneys' fees,
incurred in connection with any action, suit or proceeding to which
they or any of them are a party by reason of, or in connection
with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such
settlement is approved by independent legal counsel selected by the
Company), except to the extent that such expenses relate to matters
for which it is adjudged that such Plan Administrator member is
liable for willful misconduct; provided, that within fifteen (15)
days after the institution of any such action, suit or proceeding,
the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the
Company may have the opportunity to make appropriate arrangements
to prosecute or defend the same.
11. AMENDMENT OF PLAN.
The Plan Administrator may, at any time, modify, amend or
terminate this Plan or modify or amend Options granted under this
Plan, including, without limitation, such modifications or
amendments as are necessary to maintain compliance with applicable
statutes, rules or regulations; provided however, no amendment with
respect to an outstanding Option which has the effect of reducing
the benefits afforded to the Holder thereof shall be made over the
objection of such Holder; further provided, that the events
triggering acceleration of vesting of outstanding Options may be
modified, expanded or eliminated without the consent of Holders.
The Plan Administrator may condition the effectiveness of any such
amendment on the receipt of shareholder approval at such time and
in such manner as the Plan Administrator may consider necessary for
the Company to comply with or to avail the Company and/or the
Optionees of the benefits of any securities, tax, market listing or
other administrative or regulatory requirement. Without limiting
the generality of the foregoing, the Plan Administrator may modify
grants to persons who are eligible to receive Options under this
Plan who are foreign nationals or employed outside the United
States to recognize differences in local law, tax policy or custom.
Effective Date: January 01, 1999.
