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Exhibit 99.1
AGRANAT SYSTEMS, INC.
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1996 STOCK OPTION PLAN
December 23, 1996
1. Purpose
The purpose of this plan (the "Plan") is to secure for Agranat Systems,
Inc. (the "Company") and its shareholders the benefits arising from capital
stock ownership by key employees of the Company and its parent and subsidiary
corporations who are expected to contribute to the Company's future growth and
success.
2. Type of Options and Administration
(a) Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422A of the
Internal Revenue Code of 1954, as amended (the "Code") or non-statutory options
which are not intended to meet the requirements of Section 422A.
(b) Administration. The Plan will be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board of Directors
may in its sole discretion grant options to purchase shares of the Company's
Common Stock and issue shares upon exercise of such options as provided in the
Plan. The Board shall have authority, subject to the express provisions of the
Plan, to construe the respective option agreements and the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan, to determine the
terms and provisions of the respective option agreements, which need not be
identical, to advance the lapse of any waiting or installment periods and
exercise dates, and to make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of the Plan.
The Board of Directors may further, with the consent of the affected optionee,
affect the cancellation of any or all outstanding options and the grant of new
options in substitution therefor covering the same or different numbers of
shares of Common Stock having an option exercise price per share that may be
higher or lower than the exercise price per share of the cancelled options. The
Board of Directors may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any option agreement in the manner and to
the extent it shall deem expedient to carry the Plan into effect and it shall be
the sole and final judge of such expediency. No director shall be liable for
any action or determination made in good faith. The Board of Directors may, to
the full extent permitted by law, delegate any or all of its powers under the
Plan to a committee (the "Committee") appointed by the Board of Directors, and
if the committee is so appointed all references to the Board of Directors in the
Plan shall mean and relate to such Committee.
3. Eligibility
Options shall be granted only to persons who are, at the time of grant,
officers, key employees, directors of, or consultants to the Company or of any
Parent Corporation or Subsidiary (as defined in Section 19 hereof). No person
shall be granted any Incentive Stock Option under the Plan who, at the time such
option is granted, owns, directly or indirectly, Common Stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of any Parent Corporation or Subsidiary, unless the
requirements of paragraph (b) of Section 11 are satisfied. No consultant or
director, who is not also an officer of key employee of the Company or of any
Parent Corporation, shall be granted an Incentive Stock Option under the Plan,
and the provisions of Section 11 shall not apply with respect to options granted
to any consultant or director who is not also an officer or key employee of the
Company or of any Parent Corporation. A person who has been granted an option
may, if he or she is otherwise eligible, be granted an additional option or
options if the Board of Directors shall so determine.
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4. Stock Subject to Plan
Subject to adjustment as provided in Sections 14 and 15 below, the maximum
number of shares of Common Stock of the Company which may be issued and sold
under the Plan is 34,400 shares. Such shares may be authorized and unissued
shares or may be shares issued and thereafter acquired by the Company. If an
option granted under the Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject to such option
shall again be available for subsequent option grants under the Plan. Stock
issuable upon exercise of an option granted under the Plan may be subject to
such restrictions on transfer, repurchase rights or other restrictions as shall
be determined by the Board of Directors.
5. Forms of Option Agreements
As a condition to the grant of any option under the Plan, each recipient of
an option shall executed an option agreement in such form not inconsistent with
the Plan as shall be specified by the Board of Directors at the time such option
is granted. The Board of Directors may, in its discretion, without limitation,
include provisions in some or all stock option agreements requiring that the
shares of Common Stock acquired upon exercise of options be subject to
restrictions on transfer or be deposited with a voting trustee.
6. Purchase Price
(a) General. The purchase price per share of stock deliverable upon the
exercise of an option shall be determined by the Board of Directors; provided,
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however, that in the case of an Incentive Stock Option, the exercise price shall
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not be less than 100% of the fair market value of such stock, as determined by
the Board of Directors, at the grant of such option, or less than 110% of such
fair market value in the case of options described in paragraph (b) of Section
11. In the case of a non-statutory option, the exercise price shall not be less
than the par value of such stock.
(b) Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company in an amount equal to the exercise price of such options,
or by delivery to the Company of shares of Common Stock of the Company already
owned by the optionee having a fair market value equal in amount to the exercise
price of the options being exercised, or by any combination of such methods of
payment. The fair market value of any shares of the Company's Common Stock
which may be delivered upon exercise of an option shall be determined by the
Board of Directors.
7. Option Period
Each option and all rights thereunder shall be expressed to expire on such
date as the Board of Directors shall determine, but in no event after the
expiration of ten years from the day on which the option is granted (or five
years in the case of options described in paragraph (b) of Section 11) and shall
be subject to earlier termination as provided in the Plan.
8. Exercise of Options
Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option; provided, however, that no option
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granted under the Plan shall have a term in excess of ten years from the date of
grant. To the extent that an option to purchase shares is not exercised by an
optionee when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period.
9. Nontransferability of Options
No option granted under the Plan shall be assignable or transferable by the
person to whom it is granted, either voluntarily or by operation of law, except
by will or the laws of descent and distribution. During the life of the
recipient, the option shall be exercisable only by such person.
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10. Effect of Termination of Employment
No option may be exercised unless, at the time of such exercise, the
optionee is, and has been continuously since the date of grant of his or her
option, employed by one or more of the Company, a Parent Corporation or a
Subsidiary, except that if and to the extent the option agreement or instrument
so provides:
(a) the option may be exercised within the period of three months after
the date the optionee ceases to be an employee of any of the foregoing entities
(or within such lesser period as may be specified in the option agreement or
instrument);
(b) if the optionee dies while in the employ of the Company, a Parent
Corporation or a Subsidiary or within three months after the optionee ceases to
be such an employee, the option may be exercised by the person to whom it is
transferred by will or the laws of descent and distribution within the period of
one year after the date of death (or within such lesser period as may be
specified in the option agreement or instrument); and
(c) if the optionee becomes disabled (within the meaning of Section
105(d)(4) of the Code) while in the employ of the Company, a Parent Corporation
or a Subsidiary, the option may be exercised within the period of one year after
the date the optionee ceases to be an employee of any of the foregoing entities
because of such disability (or within such lesser period as may be specified in
the option agreement or instrument); provided, however, that in no event may any
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option be exercised after the expiration date of the option. For all purposes
of the Plan and any option granted hereunder, "employment" shall be defined in
accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations (or any successor regulations).
11. Incentive Stock Options
Options granted under the Plan which are intended to be Incentive Stock
Options shall be specifically designated as Incentive Stock Options and shall be
subject to the following additional terms and conditions:
(a) Dollar Limitation. Incentive Stock Options granted to any employee
under the Plan (and under any other incentive stock option plans of the Company
or any Parent Corporation or Subsidiary), shall not, in the aggregate become
exercisable for the first time in any one calendar year for shares of Common
Stock with an aggregate fair market value (determined as of the respective date
or dates of grant) of more than $100,000.
(b) 10% Shareholder. If any employee to whom an Incentive Stock Option is
to be granted under the Plan is at the time of the grant of such option the
owner of stock processing more than 10% of the total combined voting power of
all classes of stock of the Company or of any Parent Corporation or any
Subsidiary, then the following special provisions shall be applicable to the
Incentive Stock Option granted to such individual:
(i) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the fair market value of
one share of Common Stock at the time of grant; and
(ii) The option exercise period shall not exceed five years from the
date of grant.
Except as modified by the preceding provisions of this Section 11, all the
provisions of the Plan shall be applicable to Incentive Stock Options granted
hereunder.
12. General Restrictions
(a) Investment Representations. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his or her
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.
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(b) Compliance with Securities Laws. Each option shall be subject to the
requirement that, if at any time counsel to the Company shall determine that the
listing, registration or qualification of the shares subject to such option upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance or purchase of shares thereunder, such
option may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Board of Directors. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
13. Rights as a Shareholder
The holder of an option shall have no rights as a shareholder with respect
to any shares covered by the option until the date of issue of a stock
certificate to him or her for such shares. Except as otherwise expressly
provided for in the Plan, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is
issued.
14. Recapitalization
In the event that the outstanding shares of Common Stock of the Company are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, stock dividend, combination or subdivision, appropriate adjustment
shall be made in the number and kind of shares available under the Plan and
under any options granted under the Plan. Such adjustment to outstanding
options shall be made without change in the total price applicable to the
unexercised portion of such options, and a corresponding adjustment in the
applicable option price per share shall be made. No such adjustment shall be
made which would, within the meaning of any applicable provisions of the Code,
constitute a modification, extension or renewal of any option or a grant of
additional benefits to the holder of an option.
15. Reorganization
In case the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or in case all or substantially
all of the assets or more than 50% of the outstanding voting stock of the
Company is acquired by any corporation, person or entity, or in case of a
reorganization or liquidation of the Company, the Board of Directors of the
Company, or the board of directors of any corporation assuming the obligations
of the Company, shall (or, in the case of an acquisition of more than 50% of the
voting stock of the Company, the Board of Directors of the Company may in its
discretion), as to outstanding options, either (i) make appropriate provision
for the protection of any such outstanding options by the substitution, on an
equitable basis of appropriate stock of the Company, or of the merged,
consolidated or otherwise reorganized corporation which will be issuable in
respect of the shares of Common Stock of the Company, provided that no
additional benefits shall be conferred upon optionees as a result of such
substitution, and the excess of the aggregate fair market value of the shares
subject to the options immediately after such substitution over the purchase
price thereof is not more than the excess of the aggregate fair market value of
the shares subject to such options immediately before such substitution, over
the purchase price thereof, or (ii) upon written notice to the optionees,
provide that all unexercised options must be exercised within a specified number
of days of the date of such notice or they will be terminated. In any such
case, the Board of Directors may, in its discretion, accelerate the exercise
dates of outstanding options.
16. No Special Employment Rights
Nothing contained in the Plan or in any option granted under the Plan shall
confer upon any option holder any right with respect to the continuation of his
or her employment by the Company (or any Parent Corporation or Subsidiary) or
interfere in any way with the right of the Company (or any Parent Corporation or
Subsidiary), subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or decrease
the compensation of the option holder from the rate in existence at the time of
the grant of an option. Whether an authorized leave of absence, or absence in
military or government service, shall constitute termination of employment shall
be determined by the Board of Directors at the time.
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17. Other Employee Benefits
The amount of any compensation deemed to be received by an employee as a
result of the exercise of an option or the sale of shares received upon such
exercise will not constitute "earnings" with respect to which any other employee
benefits of such employee are determined, including without limitation benefits
under any pension, profit sharing, life insurance or salary continuation plan.
18. Forfeiture for Dishonesty
Notwithstanding anything to the contrary in the Plan, if the Board
determines, after full consideration of the facts presented on behalf of both
the Company and the optionee, that the optionee has been engaged in fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the course
of his or her employment by the Company, a Parent Corporation, or a Subsidiary,
that damaged the Company, a Parent Corporation, or a Subsidiary, or has made
unauthorized disclosure of trade secrets or other proprietary information of the
Company, a Parent Corporation, or a Subsidiary or of a third party who has
entrusted such information to the Company, a Parent Corporation, or a
Subsidiary, the optionee shall forfeit all unexercised options and all exercised
options under which the Company has not yet delivered the certificates. The
decision of the Board as to the cause of an optionee's discharge and the damage
done to the Company, a Parent Corporation, or a Subsidiary shall be final,
binding and conclusive. No decision of the Board, however, shall affect in any
manner the finality of the discharge of such optionee by the Company, a Parent
Corporation, or a Subsidiary.
19. Definition of Subsidiary and Parent Corporation
(a) Subsidiary. The term "Subsidiary" as used in the Plan shall mean any
corporation in an unbroken chain of corporations beginning with the Company if
each of the Corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(b) Parent Corporation. The term "Parent Corporation" as used in the Plan
shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company owns stock possessing 50% or more of the combined voting power of all
classes of stock in one of the other corporations in such chain.
20. Amendment of the Plan
The Board of Directors may at any time and from time to time modify or
amend the Plan in any respect, except that without the approval of the
shareholders of the Company, the Board of Directors may not (a) materially
increase the benefits accruing to individuals who participate in the Plan, (b)
materially increase the maximum number of shares which may be issued under the
Plan (except for permissible adjustments provided in the Plan), or (c)
materially modify the requirements as to eligibility for participation in the
Plan. The termination or any modification or amendment of the Plan shall not,
without the consent of any optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the optionee affected,
the Board of Directors may amend outstanding option agreements in a manner not
inconsistent with the Plan. The Board of Directors shall have the right to
amend or modify the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422A of the Code.
21. Withholding
The Company's obligations to deliver shares upon the exercise of any option
granted under the Plan shall be subject to the option holder's satisfaction of
all applicable federal, state and local income and employment tax withholding
requirements.
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22. Effective Date and Duration of the Plan
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, any Incentive
Stock Options previously granted under the Plan shall terminate and no further
Incentive Stock Options shall be granted. Subject to this limitation, options
may be granted under the Plan at any time after the effective date and before
the date fixed for termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with Section 15,
the Plan shall terminate upon the earlier of (i) the close of business on the
day next preceding the tenth anniversary date of its adoption by the Board of
Directors, or (ii) the date on which all shares available for issuance under the
Plan shall have been issued pursuant to the exercise or cancellation of options
granted under the Plan. If the date of termination is determined under (i)
above, then options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instrument evidencing such
options.
Adopted by the Board of Directors
on December 23, 1996
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