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EXHIBIT 4.2
NUTRISYSTEM.COM INC.
2000 EQUITY INCENTIVE PLAN
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1. Purpose. The purpose of the nutrisystem.com inc. 2000 Equity Incentive
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Plan (the "Plan") is to further the growth, development and financial success of
nutrisystem.com inc. (the "Company") by providing additional incentives to those
officers and key employees who are responsible for the management of the
Company's business, which incentives will enable them to participate directly in
the growth of the value of the capital stock of the Company. To accomplish
these purposes, the Plan provides a means whereby key employees and officers may
receive (i) stock options ("Options") to purchase the Company's Common Stock,
$.001 par value (the "Common Stock"), (ii) stock bonuses and (iii) stock
appreciation rights ("SARs").
2. Administration.
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(a) Composition of the Committee. The Plan shall be administered by a
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committee (the "Committee") which shall be appointed by and serve at the
pleasure of the Company's Board of Directors (the "Board") or by the Board in
the absence of the appointment of the Committee. The Committee shall be
comprised of two or more members of the Board, each of whom shall be (i) a "non-
employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and (ii) an "outside
director" within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). Subject to the foregoing, from time to time the
Board may increase or decrease the size of the Committee, appoint additional
members thereof, remove members with or without cause, appoint new members in
substitution therefor, fill vacancies or remove all members of the Committee and
thereafter directly administer the Plan.
(b) Authority of the Committee. The Committee shall have full and
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final authority, in its sole discretion, to interpret the provisions of the Plan
and to decide all questions of fact arising in its application; to determine the
officers and other key employees to whom awards shall be made and the type,
amount, size and terms of each such award; to determine the time when awards
shall be granted and to make all other determinations necessary or advisable for
the administration of the Plan. The Committee shall have the authority to adopt,
amend and rescind such rules, regulations and procedures as, in its opinion, may
be advisable in the administration of the Plan, including, without limitation,
rules, regulations and procedures that: (i) deal with satisfaction of an award
recipient's tax withholding obligations pursuant to Section 13 hereof, (ii)
include arrangements to facilitate an optionee's ability to borrow funds for the
payment of the exercise price of an Option, if applicable, from securities
brokers and dealers and (iii) include arrangements that provide for the payment
of some or all of an Option's exercise price by delivery of previously owned
shares of Common Stock or
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other property and/or by withholding some of the shares of Common Stock being
acquired upon exercise of an Option. All decisions, determinations and
interpretations of the Committee shall be final and binding on all holders of
Options and SARs granted under the Plan.
(c) Authority of the Board. Notwithstanding anything to the contrary set
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forth in the Plan, all authority granted hereunder to the Committee may be
exercised at any time and from time to time by the Board. Unless the context
clearly indicates otherwise, all references herein to the "Committee" shall be
deemed to refer to the Board in the absence of the appointment of the Committee.
All decisions, determinations and interpretations of the Board shall be final
and binding on all holders of Options and SARs granted under the Plan.
3. Stock Subject to the Plan. Subject to Section 16 hereof, the shares of
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Common Stock that may be issued under the Plan shall be 4,100,000 shares,
subject to increase at the end of each fiscal quarter of the Company so that the
number of shares that may be issued pursuant to outstanding Options under the
Plan and Options eligible for grant under the Plan shall be at all times equal
to 14% of the then-outstanding shares of Common Stock. Such shares may be
authorized and unissued shares or shares issued and subsequently reacquired by
the Company.
4. Determination of Fair Market Value. For purposes of the Plan, the fair
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market value of the Company's Common Stock on any date shall mean the closing
price of the Common Stock, as reported in The Wall Street Journal, or if not so
reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation System ("Nasdaq"), or if the price of the Common
Stock is not reported by Nasdaq, the fair market value shall be as determined by
the Committee pursuant to Section 422 of the Code.
5. Eligibility To Receive Awards. Persons eligible to receive awards
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under the Plan shall be limited to those officers and other key employees of the
Company and any subsidiary (as defined in Section 424 of the Code or any
amendment or substitute thereto) who are in positions in which their decisions,
actions and counsel significantly impact upon the profitability and success of
the Company or a subsidiary of the Company; provided, however, that directors of
the Company who are not also officers or employees of the Company shall not be
eligible to participate in the Plan.
6. Date of Grant. The date on which an award shall be deemed to have been
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granted under the Plan shall be the date of the Committee's authorization of the
award or such later date as may be determined by the Committee at the time the
award is authorized. Notice of the determination shall be given to each
individual to whom an award is so granted within a reasonable time after the
date of such grant.
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7. Stock Options.
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(a) Types of Options. Grants of awards under the Plan may be made at
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any time and from time to time by the Committee in the form of Options. Options
granted hereunder may be Options that are intended to qualify as incentive stock
options within the meaning of Section 422 of the Code or any amendment or
substitute thereto ("Incentive Stock Options") or Options that are not intended
to so qualify ("Nonqualified Stock Options").
(b) Option Agreements. Each Option for the purchase of Common Stock
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shall be evidenced by a written option agreement in such form not inconsistent
with the Plan as the Committee shall approve from time to time. The Options
granted hereunder may be evidenced by a single agreement or by multiple
agreements, as determined by the Committee in its sole discretion. Each option
agreement shall contain in substance the following terms and conditions:
(c) Type of Option. Each option agreement shall identify the Options
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represented thereby either as Incentive Stock Options or Nonqualified Stock
Options, as the case may be.
(d) Option Price. Each option agreement shall set forth the purchase
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price of the Common Stock purchasable upon the exercise of the Option evidenced
thereby. Subject to the limitation set forth in Section 7(f)(ii) hereof, the
purchase price of the Common Stock subject to an Incentive Stock Option shall be
not less than 100% of the fair market value of such stock on the date the Option
is granted, as determined by the Committee, but in no event less than the par
value of such stock. The purchase price of the Common Stock subject to a
Nonqualified Stock Option shall be not less than 85% of the fair market value of
such stock on the date the Option is granted, as determined by the Committee.
(e) Exercise Term. Each option agreement shall state the period or
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periods of time within which the Option may be exercised, in whole or in part,
as determined by the Committee, provided that no Option shall be exercisable
after ten years from the date of grant thereof. The Committee shall have the
power to permit an acceleration of previously established exercise terms,
subject to the requirements set forth herein, upon such circumstances and
subject to such terms and conditions as the Committee deems appropriate. Except
as otherwise provided herein, any shares subject to an Option that for any
reason expires or is terminated unexercised as to such shares shall again be
available under the Plan.
(f) Incentive Stock Options. In the case of an Incentive Stock
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Option, each option agreement shall contain such other terms, conditions and
provisions as the Committee determines necessary or desirable in order to
qualify the Option granted thereunder as a tax-favored Option (within the
meaning of Section 422 of the Code or
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any amendment or substitute thereto or regulation thereunder) including without
limitation, each of the following, except that any of these provisions may be
omitted or modified if it is no longer required in order to have an Option
qualify as a tax-favored Option within the meaning of Section 422 of the Code or
any amendment or substitute therefor:
(i) The aggregate fair market value, determined as of the date
the Option is granted, of the Common Stock with respect to which Incentive Stock
Options are first exercisable by any employee during any calendar year under all
plans of the Company shall not exceed $100,000.
(ii) No Incentive Stock Options shall be granted to any
employee if at the time the Option is granted such employee owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its subsidiaries unless at the time such Option is
granted the Option price is at least 110% of the fair market value of the stock
subject to the Option and, by its terms, the Option is not exercisable after the
expiration of five years from the date of grant.
(iii) No Incentive Stock Options shall be exercisable more than
three months, or one year in the case of an employee who dies or becomes
disabled within the meaning of Section 72(m)(7) of the Code or any substitute
therefor, after termination of employment with the Company.
(g) Substitution of Options. Options may be granted under the Plan
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from time to time in substitution for stock options held by employees of other
corporations who are about to become, and who do concurrently with the grant of
such options become, employees of the Company or a subsidiary of the Company as
a result of a merger or consolidation of the employing corporation with the
Company or a subsidiary of the Company, or the acquisition by the Company or a
subsidiary of the Company of the assets of the employing corporation or the
acquisition by the Company or a subsidiary of the Company of stock of the
employing corporation. The terms and conditions of the substitute Options so
granted may vary from the terms and conditions set forth in this Section 7 to
such extent as the Committee at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted.
(h) Exercise and Payment for Shares. Options may be exercised in
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whole or in part, from time to time, by giving written notice of exercise to the
President of the Company, specifying the number of shares to be purchased and
the method of payment. The purchase price of the shares with respect to which an
Option is exercised shall be payable in full with the notice of exercise in
cash, Common Stock at fair market value or a combination thereof, as the
Committee may determine from time to time and subject to such terms and
conditions as may be prescribed by the Committee for such purpose.
Alternatively, an Option holder may exercise his Option pursuant to a cashless
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or "net" exercise. If this method of exercise is elected, the Option holder will
receive a number of shares of Common Stock calculated using the following
formula:
X = Y(A-B)
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A
Where: X = the number of shares to be issued to the Option holder
Y = the total number of shares purchasable under the Option
A = the current fair market value of one share of Common
Stock
B = the Option exercise price
No fractional shares shall be issued upon the "net" exercise of an Option. In
lieu thereof, cash may be paid in an amount equal to the value of the fraction
or, if the Committee so determines, the number of shares may be rounded downward
to the next whole share. The Committee may also, in its discretion and subject
to prior notification to the Company by an optionee, permit an optionee to enter
into an agreement with the Company's transfer agent or a brokerage firm of
national standing whereby the optionee will simultaneously exercise the Option
and sell the shares acquired thereby through the Company's transfer agent or
such a brokerage firm and either the Company's transfer agent or the brokerage
firm executing the sale will remit to the Company from the proceeds of sale the
exercise price of the shares as to which the Option has been exercised.
(i) General Restrictions. Each Option granted under the Plan shall be
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subject to the requirement that if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any state
or federal law, (ii) the consent or approval of any government regulatory body,
(iii) the satisfaction of any tax payment or withholding obligation or (iv) an
agreement by the recipient of an Option with respect to the disposition of
shares of Common Stock is necessary or desirable as a condition of or in
connection with the granting of such Option or the issuance or purchase of
shares of Common Stock thereunder, such Option shall not be consummated in whole
or in part unless such listing, registration, qualification, consent, approval
or agreement shall have been effected or obtained free of any conditions not
acceptable to the Committee.
8. Stock Bonuses. The Committee may award shares of Common Stock under
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the Plan as stock bonuses. Shares awarded as a bonus shall be subject to the
terms, conditions and restrictions determined by the Committee. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with such other restrictions as may be
determined by the Committee. The Committee may require the recipient to sign an
agreement as a condition of the award. The agreement may contain any terms,
conditions, restrictions, representations and warranties required
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by the Committee. The certificates representing the shares awarded shall bear
any legends required by the Committee. Upon the issuance of a stock bonus, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued.
9. Stock Appreciation Rights.
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(a) Grant. The Committee may grant SARs under the Plan subject to
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such rules, terms and conditions as the Committee may prescribe.
(b) Exercise.
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(i) Each SAR granted under the Plan shall entitle the holder,
upon exercise, to receive from the Company in exchange therefor an amount equal
in value to the excess of the fair market value on the date of exercise of one
share of Common Stock of the Company over its fair market value on the date of
grant (or, in the case of a SAR granted in connection with an Option, the excess
of the fair market value of one share of Common Stock of the Company over the
Option price per share under the Option to which the SAR relates) multiplied by
the number of shares covered by the SAR or the Option, or portion thereof, that
is surrendered. No SAR shall be exercisable at a time that the amount determined
under this subparagraph is negative. Payment by the Company upon exercise of a
SAR may be made in Common Stock valued at fair market value, in cash, or partly
in Common Stock and partly in cash, all as determined by the Committee.
(ii) A SAR shall be exercisable only at the time or times
established by the Committee. If a SAR is granted in connection with an Option,
the following rules shall apply: (A) the SAR shall be exercisable only to the
extent and on the same conditions that the related Option could be exercised;
(B) upon exercise of the SAR, the Option or portion thereof to which the SAR
relates shall terminate and (C) upon exercise of the Option, the related SAR or
portion thereof shall terminate.
(iii) The Committee may withdraw any SAR granted under the Plan
at any time and may impose any conditions upon the exercise of a SAR or adopt
rules and regulations from time to time affecting the rights of holders of SARs.
Such rules and regulations may govern the right to exercise SARs granted prior
to adoption or amendment of such rules and regulations as well as SARs granted
thereafter.
(iv) No fractional shares shall be issued upon exercise of a
SAR. In lieu thereof, cash may be paid in an amount equal to the value of the
fraction or, if the Committee so determines, the number of shares may be rounded
downward to the next whole share.
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(v) Upon the exercise of a SAR for shares, the number of
shares reserved for issuance under the Plan shall be reduced by the number of
shares issued, less the number of shares surrendered or withheld to satisfy
withholding obligations. Cash payments of SARs shall not reduce the number of
shares of Common Stock reserved for issuance under the Plan.
10. Rights upon Termination of Service. In the event that the holder of
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an Option or a SAR ceases to be an employee of the Company or any subsidiary of
the Company for any reason other than death, retirement (as hereinafter defined)
or disability (within the meaning of Section 72(m)(7) of the Code or any
substitute therefor), such holder shall have the right to exercise the Option or
SAR during its term within a period of three months after such termination to
the extent that the Option or SAR was exercisable at the time of termination or
within such other period and subject to such terms and conditions as may be
specified by the Committee. In the event that the holder of an Option or SAR
dies, retires or becomes disabled prior to the expiration of his Option or SAR
and without having fully exercised his Option or SAR, the holder or his
successor shall have the right to exercise the Option or SAR during its term
within a period of one year after termination of employment due to death,
retirement or disability to the extent that the Option or SAR was exercisable at
the time of termination or within such other period and subject to such terms
and conditions, as may be specified by the Committee. As used in this Section
10, "retirement" means a termination of employment by reason of an Option or SAR
holder's retirement at or after his earliest permissible retirement date
pursuant to and in accordance with the Company's regular retirement plan or
personnel practices. Notwithstanding the provisions of Section 7(f)(iii)
hereof, if the term of an Incentive Stock Option continues for more than three
months after termination of employment due to retirement or more than one year
after termination of employment due to death or disability, such Option shall
thereupon lose its status as an Incentive Stock Option and shall be treated as a
Nonqualified Stock Option.
11. Rights of a Stockholder. The recipient of any Option or SAR under the
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Plan, unless otherwise provided by the Plan, shall have no rights as a
stockholder unless and until a certificate for shares of Common Stock is issued
and delivered to him.
12. Right to Terminate Employment. Nothing contained in the Plan or in
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any agreement entered into pursuant to the Plan shall confer upon any optionee
the right to continue in the employment of the Company or any subsidiary of the
Company or affect any right that the Company or any subsidiary of the Company
may have to terminate the employment of such optionee.
13. Withholding. The Company shall have the right to require the
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recipient of any Option, stock bonus or SAR to remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax requirements
as a result of the receipt or exercise, as the case may be, of any such Option,
stock bonus or SAR. If the recipient fails to pay the amount demanded, the
Company may withhold that amount from other
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amounts payable by the Company to the recipient, including salary or fees for
services, subject to applicable law. If and to the extent authorized by the
Committee, in its sole discretion, a recipient of shares of Common Stock under
the Plan may make an election, by means of a form of election to be prescribed
by the Committee, to have shares of Common Stock that are so acquired withheld
by the Company or to tender other shares of Common Stock or other securities of
the Company owned by the recipient to the Company at the time of the receipt of
the shares to pay the amount of tax that would otherwise be required by law to
be withheld by the Company as a result of the receipt of the shares. Any such
election shall be irrevocable and shall be subject to termination by the
Committee at any time. Any securities so withheld or tendered will be valued by
the Committee as of the date of exercise.
14. Non-Assignability. No Option or SAR granted under the Plan shall be
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assignable or transferable by the recipient thereof except by will or by the
laws of descent and distribution or by such other means as the Committee may
approve. During the life of the recipient, such Option or SAR shall be
exercisable only by such person or by such person's guardian or legal
representative.
15. Non-Uniform Determinations. The Committee's determinations under the
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Plan, including, without limitation, determinations of the persons to receive
awards, the form, amount and timing of such grants, the terms and provisions of
awards and the agreements evidencing same, need not be uniform and may be made
selectively among persons who receive, or are eligible to receive, awards under
the Plan whether or not such persons are similarly situated.
16. Adjustments.
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(a) Changes in Capitalization. Subject to any required action by the
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stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and SAR and the number of shares of Common Stock that
have been authorized for issuance under the Plan but as to which no awards have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or SAR, as well as the price per share of Common Stock
covered by each such outstanding Option and SAR, 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, stock dividend,
combination or reclassification of the Common Stock or any other increase or
decrease in the number of issued 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
Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no
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adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or a SAR.
(b) Dissolution or Liquidation. In the event of the proposed
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dissolution or liquidation of the Company, all outstanding Options and SARs will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Committee. The Committee may, in the exercise of its
sole discretion in such instances, declare that any Option or SAR shall
terminate as of a date fixed by the Committee and give each Option or SAR holder
the right to exercise his Option or SAR in whole or in part, including any
portion thereof that would not otherwise be exercisable.
(c) Sale or Merger. In the event of a proposed sale of all or
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substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Committee, in the exercise of its sole
discretion, may take such action as it deems desirable, including, but not
limited to: (i) causing an Option or SAR to be assumed or an equivalent option
or SAR to be substituted by such successor corporation or a parent or subsidiary
of such successor corporation, (ii) providing that an Option or SAR holder shall
have the right to exercise his Option or SAR in whole or in part, including any
portion thereof that would not otherwise be exercisable or (iii) declaring that
an Option or SAR shall terminate at a date fixed by the Committee provided that
the Option or SAR holder is given notice and opportunity prior to such date to
exercise that portion of his Option or SAR that is currently exercisable.
17. Amendment. The Committee may terminate or amend the Plan at any time,
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subject to any required stockholder approval or any stockholder approval that
the Committee may deem to be advisable for any reason, such as for the purpose
of obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying any applicable stock exchange listing
requirements. The Committee may not, without the consent of the holder of an
Option or SAR, alter or impair any Option or SAR previously granted under the
Plan, except as specifically authorized herein.
18. Conditions upon Issuance of Shares.
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(a) Compliance with Securities Laws. Shares of Common Stock shall not
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be issued pursuant to the Plan unless such issuance shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder and the requirements of any stock exchange upon which the Common
Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
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(b) Investment Representations. As a condition to the exercise of an
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Option or SAR or the issuance of Common Stock pursuant to the Plan, the Company
may require the person exercising such Option or SAR or receiving shares of
Common Stock to represent and warrant at the time of any such exercise that the
shares of Common Stock are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such representation is required by any of the
aforementioned relevant provisions of law.
19. Reservation of Shares. The Company, during the term of the Plan, will
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at all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is 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 failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.
20. Effect on Other Plans. Participation in the Plan shall not affect an
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employee's eligibility to participate in any other benefit or incentive plan of
the Company or any subsidiary of the Company. Any awards granted pursuant to
the Plan shall not be used in determining the benefits provided under any other
plan of the Company or any subsidiary of the Company unless specifically
provided.
21. Duration of the Plan. The Plan shall remain in effect until all
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Options and SARs granted under the Plan have either been exercised or
terminated, but no Option or SAR shall be granted more than ten years after the
earlier of the date the Plan is adopted by the Board or is approved by the
Company's stockholders.
22. Forfeiture for Dishonesty. Notwithstanding anything to the contrary
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in the Plan, if the Committee finds, by a majority vote, after full
consideration of the facts presented on behalf of both the Company and any award
recipient, that the award recipient has been engaged in fraud, embezzlement,
theft, commission of a felony or dishonest conduct in the course of his
employment or retention by the Company or any subsidiary of the Company that
damaged the Company or any subsidiary of the Company or that the award recipient
has disclosed trade secrets of the Company or any subsidiary of the Company, the
award recipient shall forfeit all unexercised Options and SARs and all exercised
Options and SARs with respect to which the Company has not yet delivered share
certificates or payment, as the case may be. The decision of the Committee in
interpreting and applying the provisions of this Section 22 shall be final. No
decision of the Committee shall affect the finality of the discharge or
termination of such optionee by the Company or any subsidiary of the Company in
any manner.
23. No Prohibition on Corporate Action. No provision of the Plan shall be
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construed to prevent the Company or any officer or director thereof from taking
any corporate action deemed by the Company or such officer or director to be
appropriate
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or in the Company's best interest, whether or not such action could have an
adverse effect on the Plan or any award granted hereunder, and no award
recipient or award recipient's estate, personal representative or beneficiary
shall have any claim against the Company or any officer or director thereof as a
result of the taking of such action.
24. Indemnification. With respect to the administration of the Plan, the
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Company shall indemnify each present and future member of the Committee and the
Board against, and each member of the Committee and the Board shall be entitled
without further action on his part to indemnity from the Company for, all
expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of, any action, suit or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
or the Board, whether or not he continues to be such member at the time of
incurring such expenses; provided, however, that such indemnity shall not
include any expenses incurred by any such member of the Committee or the Board
(i) in respect of matters as to which he shall be finally adjudged in any such
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as such member of the Committee or the
Board or (ii) in respect of any matter in which any settlement is effected for
an amount in excess of the amount approved by the Company on the advice of its
legal counsel; and provided further that no right of indemnification under the
provisions set forth herein shall be available to or enforceable by any such
member of the Committee or the Board unless, within 60 days after institution of
any such action, suit or proceeding, he shall have offered the Company in
writing the opportunity to handle and defend such action at its own expense.
The foregoing right of indemnification shall inure to the benefit of the heirs,
executors and administrators of each such member of the Committee and the Board
and shall be in addition to all other rights to which such member may be
entitled as a matter of law, contract or otherwise.
25. Miscellaneous Provisions.
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(a) Compliance with Plan Provisions. No award recipient or other
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person shall have any right with respect to the Plan, the Common Stock reserved
for issuance under the Plan or any Option or SAR until a written agreement shall
have been executed by the Company and the award recipient and all the terms,
conditions and provisions of the Plan and the award applicable to such award
recipient and each person claiming under or through him have been met.
(b) Approval of Counsel. In the discretion of the Committee, no
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shares of Common Stock, other securities or property of the Company or other
forms of payment shall be issued with respect to any award under the Plan unless
counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable
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federal, state, local and foreign legal, securities exchange and other
applicable requirements.
(c) Compliance with Rule 16b-3. To the extent that Rule 16b-3 under
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the Exchange Act applies to awards granted under the Plan, it is the intention
of the Company that the Plan comply in all respects with the requirements of
Rule 16b-3, that any ambiguities or inconsistencies in construction of the Plan
be interpreted to give effect to such intention and that, if the Plan shall not
so comply, whether on the date of adoption or by reason of any later amendment
to or interpretation of Rule 16b-3, the provisions of the Plan shall be deemed
to be automatically amended so as to bring them into full compliance with such
rule.
(d) Unfunded Plan. The Plan shall be unfunded. The Company shall not
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be required to establish any special or separate fund or to make any other
segregation of assets under the Plan.
(e) Effects of Acceptance of Award. By accepting any Option, stock
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bonus, SAR or other benefit under the Plan, each award recipient and each person
claiming under or through him shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Board or the Committee or its delegates.
(f) Construction. The masculine pronoun shall include the feminine
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and neuter, and the singular shall include the plural, where the context so
indicates.
26. Stockholder Approval. The Company shall submit the Plan to the
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stockholders entitled to vote hereon for approval within twelve months after the
date of adoption by the Board in order to meet the requirements of Section 422
of the Code and the regulations thereunder. The exercise of any Option or SAR
granted under the Plan shall be subject to the approval of the Plan by the
affirmative vote of the holders of a majority of the outstanding shares of the
Common Stock present, or represented, and entitled to vote at a duly convened
meeting of stockholders.
Date of adoption by the Board of Directors: May 12, 2000
Date of approval by the stockholders: June 19, 2000
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