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EXHIBIT 99.1
INTERNET RESEARCH GROUP (FORMERLY, COLLABORATIVE MARKETING, INC.)
1999 STOCK OPTION PLAN
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COLLABORATIVE MARKETING, INC.
1999 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentives to Employees,
Non-Employee Directors and Consultants of Collaborative Marketing, Inc. ("the
Company") and its Subsidiaries, and to promote the success of the Company's
business. Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options at the discretion of the Committee.
2. Definitions. As used herein, and in any Option granted
hereunder, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Collaborative Marketing, Inc. a
California corporation.
(e) "Committee" shall mean the Committee appointed by the Board
in accordance with paragraph (a) of Section 4 of the Plan. If the Board does
not appoint or ceases to maintain a Committee, the term "Committee" shall refer
to the Board.
(f) "Consultant" shall mean any independent contractor retained
to perform services for the Company or any Subsidiary.
(g) "Continuous Employment" shall mean the absence of any
interruption or termination of service as an Employee or Non-Employee Director
by the Company or any Subsidiary. Continuous Employment shall not be considered
interrupted during any period of sick leave, military leave or any other leave
of absence approved by the Board or in the case of transfers between locations
of the Company or between the Company and any Parent, Subsidiary or successor
of the Company.
(h) "Covered Employee" shall mean any individual whose
compensation is subject to the limitations on tax deductibility provided by
Section 162(m) of the Code and any Treasury Regulations promulgated thereunder
in effect at the close of the taxable year of the Company in which an Option
has been granted to such individual.
(i) "Employee" shall mean any person, including. officers
(whether or not they are directors), employed by the Company or any Subsidiary.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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(k) "Incentive Stock Option" shall mean any option granted under
this Plan and any other option granted to an Employee in accordance with the
provisions of Section 422 of the Code, and the regulations promulgated
thereunder.
(l) "Non-Employee Director" shall mean any director of the
Company or any Subsidiary who (1)15 not employed by the Company or such
Subsidiary; (ii) does not receive compensation, either directly or indirectly,
from the Company or a parent or Subsidiary for services rendered as a
consultant or in any capacity other than as a director, except for an amount
that does not exceed the dollar amount for which disclosure would be required
pursuant to Item 404(a) of Regulation S-K; (iii) does not possess an interest
in any other transaction for which disclosure would be required pursuant to
Item 404(a) of Regulation S-K; and (iv) is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404 (b) of
Regulation S-K.
(m) "Nonstatutory Stock Option" shall mean an option granted
under the Plan that is subject to the provisions of Section 1.83-7 of the
Treasury Regulations promulgated under Section 83 of the Code.
(n) "Option" shall mean a stock option granted pursuant
to the Plan.
(o) "Option Agreement" shall mean a written agreement between
the Company and the Optionee regarding the grant and exercise of Options to
purchase Shares and the terms and conditions thereof as determined by the
Committee pursuant to the Plan.
(p) "Optioned Shares" shall mean the Common Stock subject to an
Option.
(q) "Optionee" shall mean an Employee, Non-Employee Director or
Consultant who receives. an Option.
(r) "Outside Director" shall mean a director of the Company who
qualifies as an outside director as such term is used in Section 162(m) of the
Code and defined in any applicable Treasury Regulations promulgated thereunder.
(s) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined by Section 424(e) of the Code.
(t) "Plan" shall mean this 1999 Stock Option Plan.
(u) "Registration Date" shall mean the effective date of the
first registration statement filed by the Company pursuant to Section 12 of the
Exchange Act with respect to any class of the Company's equity securities.
(v) "Section 162(m) Effective Date" shall mean the first date as
of which the limitations on the tax deductibility of certain compensation
provided by Section 162(m). of the Code and any Treasury Regulations
promulgated thereunder are applicable to Options granted under the Plan.
(w) "Securities Act" shall mean the Securities Act of 1933, as
amended.
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(x) "Share" shall mean a share of the Common Stock of the
Company subject to an Option, as adjusted in accordance with Section 11 of the
Plan.
(y) "Subsidiary" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is One Hundred Eighty Five Thousand (185,000)
Shares of Common Stock. The Shares may be authorized but unissued or reacquired
shares of Common Stock. If an Option expires or becomes unexercisable for any
reason without having been exercised in full, the Shares which were subject to
the Option but as to which the Option was not exercised shall become available
for other Option grants under the Plan, unless the Plan shall have been
terminated.
The Company intends that as long as it is not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act and is not an
investment company registered or required to be registered under the Investment
Company Act of 1940, all offers and sales of Options and Shares issuable upon
exercise of any Option shall be exempt from registration under the provisions
of Section 5 of the Securities Act, and the Plan shall be administered in such
a manner so as to preserve such exemption. The Company intends that the Plan
shall constitute a written compensatory benefit plan within the meaning of Rule
701(b) of 17 CFR Section 230.701 promulgated by the Securities and Exchange
Commission pursuant to such Act or any successor rule. Unless otherwise
specified Options granted under the Plan are intended to be granted in reliance
on Rule 701 whenever applicable.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the Board. The
Board may appoint a Committee consisting of not less than two (2) members of
the Board to administer the Plan. subject to such terms and conditions as the
Board may prescribe. Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time, the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and, thereafter, directly administer the Plan.
Members of the Board or Committee who are either eligible for Options
or have been granted Options may vote on any matters affecting the
administration of the Plan or the grant of Options pursuant to the Plan, except
that no such member shall act upon the granting of an Option to himself, but
any such member may be counted in determining the existence of a quorum at any
meeting of the Board or the Committee during which action is taken with respect
to the granting of an Option to him or her.
The Committee shall meet at such times and places and upon such notice
as the chairperson determines. A majority of the Committee shall constitute a
quorum. Any acts by the Committee may be taken at any meeting at which a quorum
is present and shall be by majority
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vote of those members entitled to vote. Additionally, any acts reduced to
writing or approved in writing by all of the members of the Committee shall be
valid acts of the Committee.
(b) Procedure After Registration Date. Notwithstanding
subsection (a) above, after the date of registration of the Company's Common
Stock on a national securities exchange or the Registration Date, the Plan
shall be administered either by: (i) the full Board; or (ii) a Committee of two
(2) or more directors, each of whom is a Non-Employee Director. After such
date, the Board shall take all action necessary to administer the Plan in
accordance with the then effective provisions of Rule 16b-3 promulgated under
the Exchange Act, provided that any amendment to the Plan required for
compliance with such provisions shall be made consistent with the provisions of
Section 13 of the Plan, and said regulations.
(c) Procedure After Section 162(m) Effective Date.
Notwithstanding subsections (a) and (b) above, after the Section 162(m)
Effective Date the Plan and all Option grants shall be administered and
approved by a Committee comprised solely of two or more Outside Directors.
(d) Powers of the Committee. Subject to the provisions of the
Plan, the Committee shall have the authority: (i) to determine, upon review of
relevant information, the fair market value of the Common Stock; (ii) to
determine the exercise price of Options to be granted, the Employees,
Non-Employee Directors or Consultants to whom and the time or times at which
Options shall be granted, and the number of Shares to be represented by each
Option; (iii) to interpret the Plan; (iv) to prescribe, amend and rescind rules
and regulations relating to the Plan; (v) to determine the terms and provisions
of each Option granted under the Plan (which need not be identical) and, with
the consent of the holder thereof, to modify or amend any Option; (vi) 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
Committee; (vii) defer an exercise date of any Option (with the consent of the
Optionee)1 subject to the provisions of Section 9(a) of the Plan; (viii) to
determine whether Options granted under the Plan will be Incentive Stock
Options or Nonstatutory Stock Options; and (ix) to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
(e) Acceleration of Vesting. In addition to its other powers,
the Board (or the Committee), in its discretion, has the right to accelerate
unvested Options in connection with (i) any tender offer for a majority of the
outstanding shares of Common Stock by any person or entity; (ii) any proposed
sale or conveyance of all or substantially all of the property and assets of
the Company; or (iii) any proposed consolidation or merger of the Company with
or into any other corporation, unless the Company is the surviving corporation.
In the case of such accelerated vesting, the Company shall give written notice
to the holder of any Option that such Option may be exercised even though the
Option or portion thereof would not otherwise have been exercisable had the
foregoing event not occurred. In such event, the Company shall permit the
holder of any Option to exercise during the time period specified in the
Company's notice, which period shall not be less than ten days following the
date of notice. Upon consummation of a tender offer or proposed sale,
conveyance, consolidation or merger to which such notice shall relate, all
rights under said Option which shall not have been so exercised shall
terminate. unless the agreement governing the transaction shall provide
otherwise.
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(f) Effect of Committee's Decision. Ml decisions,
determinations and interpretations of the Committee shall be final and binding
on all potential or actual Optionee, any other holder of an Option or other
equity security of the Company and all other persons.
5. Eligible.
(a) Persons Eligible for Options. Options under the Plan may be
granted only to Employees, Non-Employee Directors or Consultants whom the
Committee, in its sole discretion, may designate from time to time. Incentive
Stock Options may be granted only to Employees. An Employee who has been
granted an Option, if he or she is otherwise eligible, may be granted an
additional Option or Options. However, the aggregate fair market value
(determined in accordance with the provisions of Section 8(a) of the Plan) of
the Shares subject to one or more Incentive Stock Options grants that are
exercisable for the first time by an Optionee during any calendar year (under
all stock option plans of the Company and its Parents and Subsidiaries) shall
not exceed $100,000 (determined as of the grant date). As of the Section 162(m)
Effective Date. Options under the Plan shall be granted to Covered Employees
upon satisfaction of the conditions to such grants provided pursuant to Section
162(m) and any Treasury Regulations promulgated thereunder.
(b) No Right to Continuing Employment. Neither the
establishment nor the operation of the Plan shall confer upon any Optionee or
any other person any right with respect to continuation of employment or other
service with the Company or any Subsidiary nor shall the Plan interfere in any
way with the right of the Optionee or the right of the Company.(or any Parent
or Subsidiary) to terminate such employment or service at any time.
6. Term of Plan. The Plan shall become effective upon its
adoption by the Board or its approval by vote of the holders of the outstanding
shares of the Company entitled to vote on the adoption of the Plan (in
accordance with the provisions of Section 19 hereof), whichever is earlier. It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 13 of the Plan.
7. Term of Option. Unless the Committee determines otherwise,
the term of each Option granted under the Plan shall be ten (10) years from the
date of grant. The term of the Option shall be set forth in the Option
Agreement. No Incentive Stock Option shall be exercisable after the expiration
of ten (10) years from the date such Option is granted, provided that no
Incentive Stock Option granted to any Employee who, at the date such Option is
granted, owns (within the meaning of Section 425(d) of the Code) more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary shall be exercisable after the expiration
of five (5) years from the date such Option is granted.
8. Exercise Price and Consideration.
(a) Exercise Price. Except as provided in subsections (1,) and
(c) below, the exercise price for the Shares to be issued pursuant to any
Option shall be such price as is determined by the Committee, which shall in no
event be less than: (i) in the case of Incentive Stock Options, the fair market
value of such Shares on the date the Option is granted; or (ii) in the case of
Nonstatutory Stock Options, eighty five percent (85%) of such fair market
value; provided that,
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in the case of any Optionee owning stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary of the Company, the exercise price shall be one
hundred ten percent (110%) of fair market value on the date the Option is
granted. Fair market value of the Common Stock shall be determined by the
Committee, using such criteria as it deems relevant; provided, however, that if
there is a public market for the Common Stock, the fair market value per Share
shall be the average of the last reported bid and asked prices of the Common
Stock on the date of grant, as reported in The Wall Street Journal (or, if not
so reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation (NASDAQ) System) or; in the event the Common Stock
is listed on a national securities exchange (within the meaning of Section 6 of
the Exchange Act) or on the NASDAQ National Market System (or any successor
national market system, the fair market value per Share shall be the closing
price on such exchange on the date of grant of the Option, as reported in The
Wall Street Journal.
(b) Ten Percent Shareholders. No Incentive Stock Option shall
be granted to any Employee who. at the date such Option is granted. owns
(within the meaning of Section 424(d) of the Code more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary, unless the exercise price for the Shares to be issued
pursuant to such Option is at least equal to one hundred ten percent (110%) of
the fair market value of such Shares on the grant date determined by the
Committee in the manner set forth in subsection (a) above.
(c) Section 162(m) Limitations. After the Section 162(m)
Effective Date, the Option Price of any Option granted to a Covered Employee
shall be at least equal to the lair market value of the Shares as of the date
of grant as determined in the manner set forth in subsection (a) above.
(d) Consideration. The consideration to be paid for the
Optioned Shares shall be payment in cash or by check unless payment in some
other manner, including by promissory note. other shares of the Company's
Common Stock or such other consideration and method of payment for the issuance
of Optioned Shares as may be permitted under the California General Corporation
Law is authorized by the Committee at the time of the grant of the Option. Any
cash or other property received by the Company from the sale of Shares pursuant
to the Plan shall constitute part of the general assets of the Company.
9. Exercise of Option.
(a) Vesting Period. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Committee arid as shall be permissible under the terms of the Plan, which shall
be specified in the Option Agreement evidencing the Option. Options granted
under the Plan shall vest at a rate of at least twenty percent (20%) per year.
(b) Exercise Procedures. An Option shall be deemed to be
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the option agreement evidencing the Option, and
full payment for the Shares with respect to which the Option is exercised has
been received by the Company. After the Registration Date, in lieu of delivery
of a cash payment for the purchase price of the Shares with respect to which the
Option
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is exercised, the Optionee may deliver to the Company a sell order to a broker
for the Shares being purchased and an agreement to pay (or have the broker remit
payment for) the purchase price for the Shares being purchased on or before the
settlement date for the sale of such shares to the broker.
Pursuant to the terms of the Option Agreement, the Committee may
require that any Option may be exercised only upon the execution of a Stock
Restriction Agreement which gives the Company a right of first refusal in the
Option Shares at the per share price at which the Option Shares are proposed to
be transferred. The right of first refusal shall terminate at such time as a
public market exists for the Company's Common Stock or the Company dissolves or
IS a party to a merger, reorganization, consolidation, exchange of stock or
sale of assets in which it is not the surviving entity. The Stock Restriction
Agreement shall contain such provisions as the Committee may approve in its
sole discretion.
An Option may not be exercised for fractional shares. As soon as
practicable following the exercise of an Option in the manner set forth above,
the Company shall issue or cause its transfer agent to issue stock certificates
representing the Shares purchased. Until the issuance of such stock
certificates (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company)1 no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect
to the Optioned Shares notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other rights for which the record
date is prior to the date of the transfer by the Optionee of the consideration
for the purchase of the Shares, except as provided in Section II of the Plan.
After the Registration Date, the exercise of an Option by any person subject to
short-swing trading liability under Section 16(b) of the Exchange Act shall be
subject to compliance with all applicable requirements of Rule 16b-3
promulgated under the Exchange Act.
(c) Death of Optionee. In the event of the death during the
Option period of an Optionee who is at the time of his death an Employee,
Non-Employee Director or Consultant, and who was in Continuous Employment as
such from the date of the grant of the Option until the date of death, the
Option shall only be exercised, for a period of not more than six (6) months
following the date of death, or for such longer period as the Committee may
fix, by the Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent of the accrued
right to exercise at the time of death, subject to the condition that no Option
shall be exercised after the expiration of the Option period.
(d) Disability of Optionee. In the event of the permanent and
total disability (as defined in Section 22(e)(3) of the Code) during the Option
period of an Optionee who is at the time of such disability an Employee,
Non-Employee Director or Consultant, and who was in Continuous Employment as
such from the date of the grant of the Option until the date of disability) the
Option shall only be exercised within six (6) months following the date of such
permanent and total disability, or for such longer period as the Committee may
fix, but only to the extent of the accrued right to exercise at the time of the
disability, subject to the condition that no Option shall be exercised after
the expiration of the Option period.
(e) Termination of Status as Employee. Non-Employee Director or
Consultant. If an Optionee shall cease to be an Employee, Non-Employee Director
or Consultant for any reason
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other than permanent and total disability or death, the Optionee shall have
the' right, to exercise his or her Option only within thirty (30) days, or such
longer period of time as is determined by the Committee, alter the date he or
she ceases to be an Employee, Non-Employee Director or Consultant, and only to
the extent that he or she was entitled to exercise it at the date of such
termination, subject to the condition that no Option shall be exercisable after
the expiration of the Option period.
(f) Exercise of Option With Stock After Restoration Date. After
the Registration Date, the Committee may permit an Optionee to exercise an
Option by delivering shares of the Company's Common Stock. If the Optionee is
so permitted, the option agreement covering such Option may include provisions
authorizing the Optionee to exercise the Option, in whole or in part, by: (i)
delivering whole shares of the Company's Common Stock previously owned by such
Optionee (whether or not acquired through the prior exercise of a stock
option). having a fair market value equal to the aggregate exercise price for
the Optioned Shares issuable on exercise of the Option; and/or (ii) directing
the Company to withhold from the Shares that would otherwise be issued upon
exercise of the Option that number of whole Shares having a fair market value
equal to the aggregate exercise price for the Optioned Shares Issuable on
exercise of the Option. Shares of the Company's Common Stock so delivered or
withheld shall be valued at their fair market value at the close of the last
business day immediately preceding the date of exercise of the Option, as
determined by the Committee, in accordance with the provisions of Section 8(a)
of the Plan. Any balance of the exercise price shall be paid in cash. Any
shares delivered or withheld in accordance with this provision shall not again
become available for purposes of the Plan and for Options subsequently granted
thereunder.
(g) Tax Withholding. After the Registration Date, when an
Optionee is required to pay to the Company an amount with respect to tax
withholding obligations in connection with the exercise of an Option granted
under the Plan, the Optionee may elect prior to the date the amount of such
withholding tax is determined (the "Tax Date") to make such payment, or such
increased payment as the Optionee elects to make up to the maximum federal,
state and local marginal tax rates, including any related FICA obligation,
applicable to the Optionee and the particular transaction, by: (I) delivering
cash; (ii) delivering part or all of the payment in previously owned shares of
Common Stock (whether or not acquired through the prior exercise of an Option);
and/or (iii) irrevocably directing the Company to withhold from the Shares that
would otherwise be issued upon exercise of the Option that number of whole
Shares having a fair market value equal to the amount of tax required or
elected to be withheld (a "withholding Election"). If an Optionee's Tax Date is
deferred beyond the date of exercise and the Optionee makes a withholding
Election, the Optionee will initially receive the full amount of Optioned
Shares otherwise issuable upon exercise of the Option, but will be
unconditionally obligated to surrender to the Company on the Tax Date the
number of Shares necessary to satisfy his or her minimum withholding
requirements, or such higher payment as he or she may have elected to make,
with adjustments to be made in cash after the Tax Date.
Any withholding of Optioned Shares with respect to taxes arising in
connection with the exercise of an Option by any person subject to short-swing
trading liability under Section 16(b) of the Exchange Act shall satisfy the
requirements of Section 16b-3(e).
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Any adverse consequences incurred by an Optionee with respect to the
use of shares of Common Stock to pay any part of the exercise price or of any
tax in connection with the exercise of an Option, including without limitation
any adverse tax: consequences arising as a result of a disqualifying
disposition within the meaning of Section 422 of the Code shall be the sole
responsibility of the Optionee. Shares withheld in accordance with this
provision shall not again become available for purposes of the Plan and for
Options subsequently granted thereunder.
10. Non-Transferability of Options. An Option may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent and distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of Optioned
Shares covered by each outstanding Option, and the per share exercise price of
each such Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split. reverse stock split, recapitalization, combination, reclassification,
the payment of a stock dividend on the Common Stock or any other increase or
decrease in the number of such shares of Common Stock effected without receipt
of consideration by the Company; provided. however. that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration". Such adjustment shall be made by
the Board. whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the number or class of securities
covered by any Option, as well as the price to be paid therefor, in the event
that the Company effects one or more reorganizations, recapitalizations, rights
offerings, or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.
Unless otherwise determined by the Board, upon the dissolution or
liquidation of the Company the Options granted under the Plan shall terminate
and thereupon become null and void. The Optionee shall be given not less than
ten (10) days notice of such event and the opportunity to exercise each
outstanding Option before such event is effected.
Upon any merger or consolidation, if the Company is not the surviving
corporation, the Options granted under the Plan shall either be assumed by the
new entity or shall terminate in accordance with the provisions of the preceding
paragraph.
12. Time of Granting Options. Unless otherwise specified by the
Committee, the date of grant of an Option under the Plan shall be the date on
which the Committee makes the determination granting such Option. Notice of the
determination shall be given to each Optionee to whom an Option is so granted
within a reasonable time after the date of such grant.
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13. Amendment and Termination of the Plan. The Board may amend
or terminate the Plan from time to time in such respects as the Board may deem
advisable, except that, without approval of the holders of a majority of the
outstanding capital stock no such revision or amendment shall change the number
of Shares subject to the Plan, change the designation of the class of employees
eligible to receive Options or add any material benefit to Optionees under the
Plan. Any such amendment or termination of the Plan shall not affect Options
already granted, and such Options shall remain in lull force and effect as if
the Plan had not been amended or terminated. After the Section 162(m) Effective
Date, the modification or addition of a material term of the Plan (as
determined under Section 162(m) and any applicable Treasury Regulations
promulgated thereunder) shall be approved by the shareholders in the manner
provided in Section 19 of the Plan.
14. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an Option granted under the 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, the
Securities Act, the Exchange Act, the rules and regulations promulgated
thereunder. and the requirements of any 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. As a condition to the exercise of
an Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares 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 of the aforementioned relevant provisions of
law.
15. Reservation of Shares. During the term of this Plan the
Company will at all times reserve and keep available the number of Shares as
shall be sufficient to satisfy the requirements of the Plan. Inability of the
Company to obtain from any regulatory body having jurisdiction and authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder shall relieve the Company of any liability in respect
of the nonissuance or sale of such Shares as to which such requisite authority
shall not have been obtained.
16. Information to Optionee. During the term of any Option
granted under the Plan, the Company shall provide or otherwise make available
to each Optionee a copy of its financial statements at least annually.
17. Option Agreement. Options granted under the Plan shall be
evidenced by Option Agreements.
18. Indemnification of Board (or Committee. if applicable). In
addition to such other rights of indemnification as they may have as directors
or as members of the Committee, the members of the Board (or the Committee, if
applicable) shall be indemnified by the Company against the reasonable
expenses, including attorneys, fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option granted thereunder, arid against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a
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judgment in any such action, suit or proceeding except in relation to matters
as of which it shall be adjudged in such action, suit or proceeding that such
Board (or Committee, if applicable) member is liable for negligence or
misconduct in the performance of his duties; provided that within sixty days
after institution of any such action, suit or proceeding a Board (or Committee,
if applicable) member shall in writing offer the Company the opportunity, at
its own expense, to handle and defend the same.
19. Shareholder Approval. The Plan shall be subject to approval
by the affirmative vote of the holders of a majority of the outstanding capital
stock of the Company entitled to vote within twelve (12) months before or after
the Plan is adopted. Any Option exercised before shareholder approval is
obtained must be rescinded if shareholder approval is not obtained within
twelve (12) months before or after the Plan is adopted. Shares issued upon the
exercise of such Options shall not be counted in determining whether such
approval is obtained. Any amendments to the Plan which require shareholder
approval shall be by the affirmative vote of the holders of a majority of the
outstanding capital stock of the Company entitled to vote.
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