PARADE HOLDINGS, INC.
1999 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
1. PURPOSE
This Incentive and Nonstatutory Stock Option Plan (the "Plan") is intended to
further the growth and financial success of Parade Holdings, Inc. (the
"Corporation") by providing additional incentives to directors, executives and
selected employees of and consultants to the Corporation so that such
participants may acquire or increase their proprietary interest in the
Corporation. The term "Corporation" shall include any parent corporation or
subsidiary corporation of the Corporation as those terms are defined in Section
424(e) and (f) of the Internal Revenue Code of 1986, as amended (the "Code").
Stock options granted under the Plan ("Options") may be either "Incentive Stock
Options", as defined in Code section 422 and any regulations promulgated under
that Section, or "Nonstatutory Options" at the discretion of the Board of
Directors of the Corporation (the "Board") and as reflected in the respective
written stock option agreements granted pursuant to this Plan.
2. ADMINISTRATION
The Plan shall be administered by the Board; provided however, that the Board
may delegate such administration to a committee of not fewer than two members
(the "Committee"), each of whom is a member of the Board and all of whom are
disinterested persons, as contemplated by Rule 16b-3 ("Rule 16b-3") promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act").
Subject to the provisions of the Plan, the Board and/or the Committee shall have
authority to (a) grant, in its discretion, Incentive Stock Options in accordance
with Code section 422 or Nonstatutory Options; (b) determine in good faith the
fair market value of the stock covered by an Option; (c) determine which
eligible persons shall be granted Options, the number of shares to be covered by
the Options and the restrictions, terms and conditions thereof; (d) construe and
interpret the Plan; (e) promulgate, amend and rescind rules and regulations
relating to its administration, and correct defects, omissions and
inconsistencies in the Plan or any Option; (f) consistent with the Plan and with
the consent of the Optionee, as appropriate, amend any outstanding Option or
amend the exercise date or dates; (g) determine the duration and purpose of
leaves of absence which may be granted to Optionees without constituting
termination of their employment for the purpose of the Plan; and (h) make all
other determinations necessary or advisable for the Plan's administration. The
interpretation and construction by the Board of any provisions of the Plan or of
any Option it shall be conclusive and final. No member of the Board or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
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3. ELIGIBILITY
The persons who shall be eligible to receive Options shall be directors,
officers and employees of the Corporation and consultants to the Corporation
("Optionees"). The term consultant shall mean any person, other than an
employee, who is engaged by the Corporation to render services and is
compensated for such services, and any director of the Corporation whether or
not compensated for such services; provided that, if the Corporation registers
any of its securities pursuant to the Exchange Act, the term consultant shall
thereafter not include directors who are not compensated for their services or
are paid only a director fee by the Corporation.
(a) Incentive Stock Options. Incentive Stock Options may only be issued to
employees of the Corporation. Incentive Stock Options may be granted to officers
or directors, provided they are also employees of the Corporation. Payment of a
director's fee shall not be sufficient to constitute employment by the
Corporation. Any grant of option, subsequent to the first registration of any of
the securities of the Corporation under the Securities Act, may at the
discretion of the Board be made subject to certain conditions, including,
without limitation, condition which are intended to avoid the imposition of
liability under Section 16(b) of the 1934 Act. An Optionee may hold more than
one Option.
The Corporation shall not grant an Incentive Stock Option under the Plan to any
employee if the grant would result in the employee holding the right to exercise
for the first time in any one calendar year, under all Incentive Stock Options
granted under the Plan or any other plan maintained by the Corporation, Options
with respect to shares of stock having an aggregate fair market value,
determined as of the date the Option is granted, in excess of $100,000. Should
it be determined that an Incentive Stock Option granted under the Plan exceeds
such maximum for any reason other than a failure in good faith to value the
stock subject to such Option, the excess portion of the Option shall be
considered a Nonstatutory Option. To the extent the employee holds two or more
such Options which become exercisable for the first time in the same calendar
year, the foregoing limitation on the exercisability of such Option as Incentive
Stock Options under the Federal tax laws shall be applied on the basis of the
order in which the Options are granted. If, for any reason, an entire option
does not qualify as an Incentive Stock Option by reason of exceeding such
maximum, that option shall be considered a Nonstatutory Option.
(b) Nonstatutory Option. The provisions of Section 3(a) shall not apply to any
Option designated as a "Nonstatutory Stock Option Agreement" or which sets forth
the intention of the parties that the option be a Nonstatutory Option.
4. STOCK
The stock subject to Options shall be shares of the Corporation's authorized but
unissued or reacquired common stock (the "Stock").
(a) Number of Shares. Subject to adjustment as provided in Paragraph 5(i) of
this Plan, the total number of shares of Stock which may be purchased through
exercise of
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Options granted under this Plan shall not exceed 1,000,000. If any Option shall
for any reason terminate or expire, any shares allocated thereto but remaining
unpurchased upon such expiration or termination shall again be available for the
grant of Options with respect to that Option under the Plan as though no Option
had been granted with respect to such shares. Any shares of Stock issued
pursuant to an Option and repurchased pursuant to the terms of the Option shall
be available for future Options as though not previously covered by an Option.
(b) Reservation of Shares. The Corporation shall reserve and keep available at
all times during the term of the Plan such number of shares as shall be
sufficient to satisfy the requirements of the Plan. If, after reasonable
efforts, which efforts shall not include the registration of the Plan or Options
under the Securities Act, the Corporation is unable to obtain authority from any
applicable regulatory body, which authorization is deemed necessary by legal
counsel for the Corporation for the lawful issuance of shares hereunder, the
Corporation shall be relieved of any liability with respect to its failure to
issue and sell the shares for which such requisite authority was deemed
necessary unless and until the authority is obtained.
(c) Application of Funds. The proceeds received by the Corporation from the sale
of Stock pursuant to the exercise of Options will be used for general corporate
purposes.
(d) No Obligation to Exercise Option. The granting of an Option shall impose no
obligation upon the Optionee to exercise such Option.
(e) Adjustment of Shares. In the event of any change in the outstanding Stock by
reason of a stock split, stock dividend, combination, subdivision or
reclassification of shares, recapitalization, merger, or similar event, the
Board or the Committee may adjust proportionately (a) the number of shares of
Stock reserved under the Plan and available for Incentive Stock Options and
Nonstatutory Options; and (b) the exercise prices related to outstanding
Options. In the event of any other change affecting the Stock or any
distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee, including
adjustments to avoid fractional shares, shall be made to give proper effect to
such event. In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board or the
Committee shall be authorized to issue or assume Options, whether or not in a
transaction to which Code section 424(a) applies, by means of substitution of
new Options for previously issued Options or an assumption of previously issued
Options.
5. TERMS AND CONDITIONS OF OPTIONS
Options granted hereunder shall be evidenced by agreements between the
Corporation and the respective Optionees, in such form and substance as the
Board or Committee shall from time to time approve. Such agreements need not be
identical, and in each case may include such provisions as the Board or
Committee may determine, but all such agreements shall be subject to and limited
by the following terms and conditions:
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(a) Number of Shares. Each Option shall state the number of shares to which it
pertains.
(b) Option Price. Each Option shall state the exercise price, which shall be
determined as follows:
(i) Any Stock Option granted to a person who at the time the Option is granted
owns (or is deemed to own pursuant to Code section 424(d)) stock possessing more
than ten percent (10%) of the total combined voting power or value of all
classes of stock of the Corporation, ("Ten Percent Holder") shall have an
exercise price of no less than one hundred ten percent (110%) of the fair market
value of the common stock as of the date of grant; and
(ii) Incentive Stock Options granted to a person who at the time the Option is
granted is not a Ten Percent Holder shall have an exercise price of no less than
one hundred percent (100%) of the fair market value of the common stock as of
the date of grant.
(iii) Nonstatutory Options granted to a person who at the time the Option is
granted is not a Ten Percent Holder shall have an exercise price of no less than
eighty-five percent (85%) of the fair market value of the common stock as of the
date of grant. For the purposes of this Paragraph 5(b), the fair market value
shall be as determined by the Board, in good faith, which determination shall be
conclusive and binding; provided however, that if there is a public market for
the Stock, the fair market value per share shall be the average of the bid and
asked prices (or the closing price if the stock is listed on the NASDAQ National
Market System) on the date of grant of the Option, or if listed on a stock
exchange, the closing price on such exchange on the date of grant.
(c) Medium and Time of Payment. The Option exercise price shall become
immediately due upon exercise of the Option and shall be paid in cash or check
made payable to the Corporation. Should the Corporation's outstanding common
stock be registered under Section 12(g) of the Exchange Act at the time the
Option is exercised, then the exercise price may also be paid as follows:
(i) in shares of Stock held by the Optionee for the requisite period necessary
to avoid a charge to the Corporation's earnings for financial reporting purposes
and valued at fair market value on the exercise date, or
(ii) through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written instructions (a) to a
Corporation designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such purchase, and (b) to the Corporation to deliver
the
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certificates for the purchased shares directly to such brokerage firm in order
to complete the sale transaction.
At the discretion of the Board, exercisable either at the time of Option grant
or of Option exercise, the exercise price may also be paid (i) by Optionee's
delivery of a promissory note in form and substance satisfactory to the
Corporation and permissible under the Delaware Securities Regulations and
bearing interest at a rate determined by the Board in its sole discretion, but
in no event less than the minimum rate of interest required to avoid the
imputation of compensation income to the Optionee under the Federal tax laws, or
(ii) in such other form of consideration permitted by the Delaware Corporation
Laws as may be acceptable to the Board.
(d) Term and Exercise of Options. Any Option granted to an Employee of the
Corporation shall become exercisable over a period of no longer than 5 years,
and no less than twenty percent (20%) of the shares covered thereby shall become
exercisable annually. No Option shall be exercisable, in whole or in part, prior
to one (1) year from the date it is granted unless the Board shall specifically
determine otherwise, as provided herein. In no event shall any Option be
exercisable after the expiration of 10 years from the date it is granted, and no
Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be
exercisable after the expiration of 5 years from the date of the Option. Unless
otherwise specified by the Board or the Committee in the resolution authorizing
such Option, the date of grant of an Option shall be deemed to be the date upon
which the Board or the Committee authorizes the granting of the Option.
Each Option shall be exercisable to the nearest whole share, in installments or
otherwise, as the respective Option agreements may provide. During the lifetime
of an Optionee, the Option shall be exercisable only by the Optionee and shall
not be assignable or transferable by the Optionee, and no other person shall
acquire any rights therein. To the extent not exercised, installments (if more
than one) shall accumulate, but shall be exercisable, in whole or in part, only
during the period for exercise as stated in the Option agreement, whether or not
other installments are then exercisable.
(e) Termination of Status as Employee, Consultant or Director. If Optionee's
status as an employee shall terminate for any reason other than Optionee's
disability or death, then Optionee (or if the Optionee shall die after such
termination, but prior to exercise, Optionee's personal representative or the
person entitled to succeed to the Option) shall have the right to exercise the
portions of any of Optionee's Incentive Stock Options which were exercisable as
of the date of such termination, in whole or in part, not less than 30 days nor
more than three (3) months after such termination, or, in the event of
"termination for cause" (as that term is defined in Delaware Labor Code and case
law related thereto) or by the terms of the Plan or the Option Agreement or an
employment agreement, the Option shall automatically terminate as of the
termination of employment as to all shares covered by the Option.
With respect to Nonstatutory Options granted to employees, directors or
consultants, the Board may specify such period for exercise, not less than 30
days except that in the case
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of "termination for cause" or removal of a director pursuant to the Delaware
Corporation Laws, the Option shall automatically terminate as of the termination
of employment or services as to shares covered by the Option, following
termination of employment or services as the Board deems reasonable and
appropriate. The Option may be exercised only with respect to installments that
the Optionee could have exercised at the date of termination of employment or
services. Nothing contained herein or in any Option granted pursuant hereto
shall be construed to affect or restrict in any way the right of the Corporation
to terminate the employment or services of an Optionee with or without cause.
(f) Disability of Optionee. If an Optionee is disabled (within the meaning of
Code section 22(e)(3)) at the time of termination, the three (3) month period
set forth in Paragraph 5(e) shall be a period, as determined by the Board and
set forth in the Option, of not less than 6 months nor more than one year.
(g) Death of Optionee. If an Optionee dies while employed by, engaged as a
consultant to or serving as a Director of the Corporation, the portion of the
Optionee's Option which was exercisable at the date of death may be exercised,
in whole or in part, by the estate of the decedent or by a person succeeding to
the right to exercise the Option at any time within (i) a period, as determined
by the Board and set forth in the Option, of not less than three months nor more
than ten year after Optionee's death, which period shall not be more, in the
case of a Nonstatutory Option, than the period for exercise following
termination of employment or services, or (ii) during the remaining term of the
Option, whichever is the lesser. The Option may be so exercised only with
respect to installments exercisable at the time of Optionee's death and not
previously exercised by the Optionee.
(h) Nontransferability of Option. No Option shall be transferable by the
Optionee, except by will or by the laws of descent and distribution.
(i) Recapitalization. Subject to any required action of shareholders, the number
of shares covered by each outstanding Option, and the exercise price per share
set forth in each Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend, or any other
increase or decrease in the number of such shares affected without receipt of
consideration by the Corporation; provided, however, the conversion of any
convertible securities of the Corporation shall not be deemed to have been
effected without receipt of consideration by the Corporation.
In the event a proposed dissolution or liquidation of the Corporation, a merger
or consolidation in which the Corporation is not the surviving entity, or a sale
of all or substantially all of the assets or capital stock of the Corporation
(collectively, a "Reorganization"), unless otherwise provided by the Board, this
Option shall terminate immediately prior to such date as is determined by the
Board, which date shall be no later than the consummation of the Reorganization.
In such event, if the entity which shall be the surviving entity does not tender
to Optionee an offer, having no obligation to do so, to
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substitute for any unexercised Option a stock option or capital stock of the
surviving entity, as applicable, which on an equitable basis shall provide the
Optionee with substantially the same economic benefit as the unexercised Option,
then the Board may grant to the Optionee, in its sole and absolute discretion
and without obligation, the right for a period commencing 30 days prior to and
ending immediately prior to the date determined by the Board pursuant hereto for
termination of the Option or during the remaining term of the Option, whichever
is the lesser, to exercise any unexpired Option or Options without regard to the
installment provisions of Paragraph 5(d) of the Plan; provided, that any such
right granted shall be granted to all Optionees not receiving an offer to
receive substitute options on a consistent basis, and provided further, that any
such exercise shall be subject to the consummation of the Reorganization.
Subject to any required action of stockholders, if the Corporation shall be the
surviving entity in any merger or consolidation, each outstanding Option
thereafter shall pertain to and apply to the securities to which a holder of
shares of Stock equal to the shares subject to the Option would have been
entitled by reason of the merger or consolidation.
In the event of a change in the Stock as presently constituted, which is
limited to a change of all of its authorized shares without par value into the
same number of shares with a par value, the shares resulting from any such
change shall be deemed to be the Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities of
the Corporation, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided in this Paragraph 5(i), the Optionee shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class, and the number or price of shares of
Stock subject to any Option shall not be affected by, and no adjustment shall be
made by reason of, any dissolution, liquidation, merger, consolidation or sale
of assets or capital stock, or any issue by the Corporation of shares of stock
of any class or securities convertible into shares of stock of any class.
The grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Corporation to make any adjustments, reclassifications,
reorganizations or changes in its capital or business structure or to merge,
consolidate, dissolve, or liquidate or to sell or transfer all or any part of
its business or assets.
(j) Rights as a Stockholder. An Optionee shall have no rights as a stockholder
with respect to any shares covered by an Option until the effective date of the
issuance of the shares following exercise of this Option by Optionee. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Paragraph 5(i) of this Plan.
(k) Modification, Acceleration, Extension, and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, the Board may
modify an
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Option, or once an Option is exercisable, accelerate the rate at which it may be
exercised, and may extend or renew outstanding Options granted under the Plan or
accept the surrender of outstanding Options (to the extent not yet exercised)
and authorize the granting of new Options in substitution for such Options,
provided such action is permissible under Code and under the Corporate
Securities Rules of the Delaware Corporations Commissioner. Notwithstanding the
provisions of this Paragraph 5(k), however, no modification of an Option shall,
without the consent of the Optionee, alter to the Optionee's detriment or impair
any rights or obligations under any Option theretofore granted under the Plan.
(l) Exercise Before Exercise Date. At the discretion of the Board, the Option
may, but need not, include a provision whereby the Optionee may elect to
exercise all or any portion of the Option prior to the stated exercise date of
the Option or any installment thereof. Any shares so purchased prior to the
stated exercise date shall be subject to repurchase by the Corporation upon
termination of Optionee's employment as contemplated by Paragraphs 5(n) of this
Plan prior to the exercise date stated in the Option and such other restrictions
and conditions as the Board or Committee may deem advisable.
(m) Reacquisition, Replacement and Reissuance of Options. (a) The Board or the
Committee, with or without the consent of the Optionee, may at any time cause
the Corporation to reacquire and cancel any outstanding and unexercised Option,
or any portion therefor. In such event, the Corporation shall pay to such
Optionee an amount in cash equal to the excess (if any) of (i) the fair market
value of the shares of Stock subject to such Option, or portion thereof, at the
time of reacquisition, over (ii) the option price of such Option, or portion
thereof. The Corporation may withhold from any such payment applicable taxes and
other amounts. The shares of Stock subject to such Option, or portion thereof,
reacquired and canceled in consideration for a cash payment to an Optionee shall
not again be available for option under the Plan. In the event that the exercise
price of such Option, or portion thereof, exceeds the fair market value of the
shares of Stock subject to such Option, or portion thereof, at the time of
reacquisition, such Option may be reacquired and canceled by the Company without
payment therefor. The shares of Stock subject to such Option, or portion
thereof, reacquired and canceled without payment therefor to the Optionee, may
again be subject to an Option under the Plan.
(n) Other Provisions. The Option agreements authorized under this Plan shall
contain such other provisions, including, without limitation, restrictions upon
the exercise of the Options, as the Board or the Committee shall deem advisable.
Shares shall not be issued pursuant to the exercise of an Option, if the
exercise of such Option or the issuance of shares thereunder would violate, in
the opinion of legal counsel for the Corporation, the provisions of any
applicable law or the rules or regulations of any applicable governmental or
administrative agency or body, such as the Code, the Securities Act, the
Exchange Act, the Delaware Securities Rules, and the rules promulgated under the
foregoing or the rules and regulations of any exchange upon which the shares of
the Corporation are listed. Without limiting the generality of the
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foregoing, the exercise of each Option shall be subject to the condition that if
at any time the Corporation shall determine that (i) the satisfaction of
withholding tax or other similar liabilities, or (ii) the listing, registration
or qualification of any shares covered by such exercise upon any securities
exchange or under any state or federal law, or (iii) the consent or approval of
any regulatory body, or (iv) the perfection of any exemption from any such
withholding, listing, registration, qualification, consent or approval is
necessary or desirable in connection with such exercise or the issuance of
shares thereunder, then in any such event, such exercise shall not be effective
unless the withholding, listing registration, qualification, consent, approval
or exemption shall have been effected, obtained or perfected free of any
conditions not acceptable to the Corporation.
(o) Repurchase Agreement. The Board may, in its discretion, require as a
condition to the grant of an Option under this Plan, that an Optionee execute an
agreement with the Corporation, in form and substance satisfactory to the Board
in its discretion ("Repurchase Agreement"), (i) restricting the Optionee's right
to transfer shares purchased under the Option without first offering the shares
to the Corporation or another stockholder of the Corporation upon the same terms
and conditions as provided therein; and (ii) providing that upon termination of
Optionee's employment with the Corporation, for any reason, the Corporation (or
another stockholder of the Corporation, as provided in the Repurchase Agreement)
shall have the right at its discretion (or the discretion of such other
shareholders) to purchase and/or redeem all such shares owned by the Optionee on
the date of termination of his or her employment at a price equal to (A) the
fair value of the shares as of such date of termination, or (B) if such
repurchase right lapses at twenty percent (20%) of the number of shares per
year, the original purchase price of such shares, and upon terms of payment
permissible under the Delaware Securities Rules; provided that in the case of
Options or Stock Awards granted to officers, directors, consultants or
affiliates of the Company, such repurchase provisions may be subject to
additional or greater restrictions as determined by the Board or Committee.
(p) Investment Intent. Unless and until the issuance and sale of the shares
subject to the Plan are registered under the Securities Act or shall be exempt
pursuant to the rules promulgated thereunder, each Option under the Plan shall
provide that the purchases of shares thereunder shall be for investment purposes
and not with a view to, or for resale in connection with, any distribution
thereof. Further, unless the issuance and sale of the stock have been registered
under the Securities Act, each Option shall provide that no shares shall be
purchased upon the exercise of such Option unless and until (i) any then
applicable requirements of state and federal laws and regulatory agencies shall
have been fully complied with to the satisfaction of the Corporation and its
counsel, and (ii) if requested to do so by the Corporation, the person
exercising the Option shall (i) give written assurances as to knowledge and
experience of such person (or a representative employed by such person) in
financial and business matters and the ability of such person (or
representative) to evaluate the merits and risks of exercising the Option, and
(ii) execute and deliver to the Corporation a letter of investment intent and/or
such other form related to applicable exemptions from registration, all in such
form and substance as the Corporation may require. If shares are issued upon
exercise of an Option without
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registration under the Securities Act, subsequent registration of the shares
shall relieve the purchaser of any investment restrictions or representations
made upon the exercise of such Options.
(q) Tax Withholding. The Company shall have the right to deduct applicable taxes
from any Option payment and withhold, at the time of delivery or exercise of
Options or vesting of shares under such Options, an appropriate number of shares
for payment of taxes required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. If Stock is used to satisfy tax withholding, the
Stock shall be valued based on the fair market value of the Stock when the tax
withholding is required to be made.
6. AMENDMENT AND TERMINATION OF PLAN
The Board may, insofar as permitted by law, from time to time, with respect to
any shares at the time not subject to Options, suspend or terminate the Plan or
revise or amend it in any respect whatsoever, except that without the approval
of the shareholders of the Corporation, no such revision or amendment shall (i)
increase the number of shares subject to the Plan, (ii) decrease the price at
which Options may be granted, (iii) materially increase the benefits to
Optionees, or (iv) change the class of persons eligible to receive Options under
the Plan; provided, however, no such action shall alter or impair the rights and
obligations under any Option outstanding as of the date thereof without the
written consent of the Optionee thereunder. No Option may be granted while the
Plan is suspended or after it is terminated, but the rights and obligations
under any Option granted while the Plan is in effect shall not be impaired by
suspension or termination of the Plan.
7. AVAILABILITY OF INFORMATION
During the term of the Plan and any additional period during which an Option
granted pursuant to the Plan shall be exercisable, the Corporation shall make
available, not later than 90 days following the close of each of its fiscal
years, such financial and other information regarding the Corporation as is
required by the bylaws of the Corporation and applicable law to be furnished in
an annual report to the stockholders of the Corporation.
8. NOTICES
All notices, requests, demands, and other communications pursuant to this Plan
shall be in writing and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day following mailing to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid.
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9. INDEMNIFICATION OF BOARD
In addition to such other rights or indemnifications as they may have as
directors or otherwise, and to the extent allowed by applicable law, the members
of the Board and the Committee shall be indemnified by the Corporation against
the reasonable expenses, including attorney fees, actually and necessarily
incurred in connection with the defense of any claim, action, suit or
proceeding, or in connection with any appeal thereof, 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 under the Plan, and against
all amounts paid by them in settlement thereof (provided the settlement is
approved by independent legal counsel selected by the Corporation) or paid by
them in satisfaction of a judgment in any such claim, action, suit or
proceeding, except in any case in relation to matters as to which it shall be
adjudged in such claim, action, suit or proceeding that the Board or Committee
member is liable for negligence or misconduct in the performance of his or her
duties; provided that within seven days after institution of any such action,
suit or Board proceeding the member involved shall offer the Corporation, in
writing, the opportunity, at its own expense, to handle and defend the same.
10. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant to it, to the
extent not otherwise governed by the Code or the securities laws of the United
States, shall be governed by the laws of the State of Delaware and construed
accordingly.
11. EFFECTIVENESS OF PLAN; EXPIRATION
Subject to approval of the Plan by the shareholders of the Corporation prior to
12 months following the date of grant of the first Option hereunder, this Plan
shall be deemed effective as of the date it is adopted by the Board. The Plan
shall expire on the tenth anniversary of such effective date, subject to earlier
termination by the Board pursuant to Section 6, but such expiration shall not
affect the validity of outstanding Options.
The foregoing 1999 Incentive and Nonstatutory Stock Option Plan was duly adopted
and approved by the Board of Directors November 29, 1999 and approved by the
shareholders of the Corporation effective November 29, 1999.
Parade Holdings, Inc.
By: /s/ LOUIS TAUBMAN
-------------------
Louis Taubman,
Secretary
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