EXHIBIT 4.1
ITRACT, INC.
2000 LONG TERM INCENTIVE PLAN
1. Purpose.
The purpose of this plan (the "Plan") is to secure for iTract, Inc.
(the "Company") and its stockholders the benefits arising from capital stock
ownership by employees, officers and directors of, and consultants or advisors
to, the Company and its subsidiary corporations who are expected to contribute
to the Company's future growth and success. Except where the context otherwise
requires, the term "Company" shall include all present and future subsidiaries
of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the "Code"). Those
provisions of the Plan which make express reference to Section 422 shall apply
only to Incentive Stock Options (as that term is defined in the Plan).
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, the "Committee") and may be either
incentive stock options ("Incentive Stock Options") meeting the requirements of
Section 422 of the Code or non-statutory options which are not intended to meet
the requirements of Section 422 of the Code.
(b) Administration. The Plan will be administered by the Board of
Directors or the Committee, whose construction and interpretation of the terms
and provisions of the Plan shall be final and conclusive. The delegation of
powers to the Committee shall be consistent with applicable laws or regulations
(including, without limitation, applicable state law and Rule 16b-3 promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act"), or any successor
rule ("Rule 16b-3")). The Board of Directors or the Committee may in its sole
discretion grant options to purchase, or Restricted Stock Awards (as defined in
Section 10 below) of shares of the Company's Common Stock, $.001 par value per
share ("Common Stock") and issue shares upon exercise of such options as
provided in the Plan. The Board of Directors or the Committee 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, and to make all
other determinations in the judgment of the Board of Directors or the Committee
necessary or desirable for the administration of the Plan. The Board of
Directors or the Committee 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 or person
acting pursuant to authority delegated by the Board of Directors or the
Committee shall be liable for any action or determination under the Plan made in
good faith. Subject to adjustment as provided in Section 15 below, the aggregate
number of shares of Common Stock
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that may be subject to options or Restricted Stock Awards granted to any person
in a calendar year shall not exceed ______ shares (or _____% of the maximum
number of shares which may be issued and sold under the Plan), as set forth in
Section 4 hereof, as such section may be amended from time to time.
(c) Applicability of Rule 16b-3. Those provisions of the Plan which
make express reference to Rule 16b-3 shall apply to the Company only at such
time as the Company's Common Stock is registered under the Exchange Act, subject
to the last sentence of Section 3(b), and then only to such persons as are
required to file reports under Section 16(a) of the Exchange Act (a "Reporting
Person").
3. Eligibility.
(a) General. Options or Restricted Stock Awards may be granted to
persons who are, at the time of grant, employees, officers or directors of, or
consultants or advisors to, the Company, any predecessor of the Company or any
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Code
("Participants") provided, that Incentive Stock Options may only be granted to
individuals who are employees of the Company (within the meaning of Section
3401(c) of the Code). A person who has been granted an option may, if he or she
is otherwise eligible, be granted additional options if the Committee shall so
determine.
(b) Grant of Options to Reporting Persons. The selection of a director
or an officer who is a Reporting Person (as the terms "director" and "officer"
are defined for purposes of Rule 16b-3) as a recipient of an option, the timing
of the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
or (ii) by a committee consisting of two or more directors having full authority
to act in the matter, each of whom shall be a "non-employee director." For the
purposes of the Plan, a director shall be deemed to be a "non-employee director"
only if such person qualifies as a "non-employee director" within the meaning of
Rule 16b-3, as such term is interpreted from time to time.
4. Stock Subject to Plan.
The stock subject to options or Restricted Stock Awards granted under
the Plan shall be shares of authorized but unissued or reacquired Common Stock.
Subject to adjustment as provided in Section 15 below, the maximum number of
shares of Common Stock of the Company which may be issued and sold under the
Plan is ____________ shares. If an option granted under the Plan shall expire,
terminate or is canceled 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.
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5. Forms of Option Agreements.
As a condition to the grant of an option under the Plan, each recipient
of an option shall execute an option agreement in such form not inconsistent
with the Plan as may be approved by the Board of Directors. Such option
agreements may differ among recipients.
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 at the time
of grant of such option; provided, however, that in the case of an Incentive
Stock Option, the exercise price shall not be less than 100% of the Fair Market
Value (as hereinafter defined) of such stock, at the time of grant of such
option, or less than 110% of such Fair Market Value in the case of options
described in Section 11(b). "Fair Market Value" of a share of Common Stock of
the Company as of a specified date for the purposes of the Plan shall mean the
closing price of a share of the Common Stock on the principal securities
exchange (including the Nasdaq National Market) on which such shares are traded
on the day immediately preceding the date as of which Fair Market Value is being
determined, or on the next preceding date on which such shares are traded if no
shares were traded on such immediately preceding day, or if the shares are not
traded on a securities exchange, Fair Market Value shall be deemed to be the
average of the high bid and low asked prices of the shares in the
over-the-counter market on the day immediately preceding the date as of which
Fair Market Value is being determined or on the next preceding date on which
such high bid and low asked prices were recorded. If the shares are not publicly
traded, Fair Market Value of a share of Common Stock (including, in the case of
any repurchase of shares, any distributions with respect thereto which would be
repurchased with the shares) shall be determined in good faith by the Board of
Directors. In no case shall Fair Market Value be determined with regard to
restrictions other than restrictions which, by their terms, will never lapse.
(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 any other means which the Board of Directors determines are
consistent with the purpose of the Plan and with applicable laws and regulations
(including, without limitation, the provisions of Rule 16b-3 and Regulation T
promulgated by the Federal Reserve Board).
7. Option Period.
Subject to earlier termination as provided in the Plan, each option and
all rights thereunder shall expire on such date as determined by the Board of
Directors and set forth in the applicable option agreement, provided, that such
date shall not be later than (10) ten years after the date on which the option
is granted.
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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 option agreement evidencing such option, subject to the provisions
of the Plan. No option granted to a Reporting Person for purposes of the
Exchange Act, however, shall be exercisable during the first six months after
the date of grant. Subject to the requirements in the immediately preceding
sentence, if an option is not at the time of grant immediately exercisable, the
Board of Directors may (i) in the agreement evidencing such option, provide for
the acceleration of the exercise date or dates of the subject option upon the
occurrence of specified events, and/or (ii) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such option.
9. Nontransferability of Options.
No option granted under this Plan shall be assignable or otherwise
transferable by the optionee except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. An option may be exercised during the lifetime of the optionee only
by the optionee. In the event an optionee dies during his employment by the
Company or any of its subsidiaries, or during the three-month period following
the date of termination of such employment, his option shall thereafter be
exercisable, during the period specified in the option agreement, by his
executors or administrators to the full extent to which such option was
exercisable by the optionee at the time of his death during the periods set
forth in Section 10 or 11(d).
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive Stock
Options and except as otherwise determined by the Committee at the date of grant
of an option, and subject to the provisions of the Plan, an optionee may
exercise an option at any time within three (3) months following the termination
of the optionee's employment or other relationship with the Company or within
one (1) year if such termination was due to the death or disability of the
optionee but, except in the case of the optionee's death, in no event later than
the expiration date of the option. If the termination of the optionee's
employment is for cause or is otherwise attributable to a breach by the optionee
of an employment or confidentiality or non-disclosure agreement, the option
shall expire immediately upon such termination. The Board of Directors shall
have the power to determine what constitutes a termination for cause or a breach
of an employment or confidentiality or non-disclosure agreement, whether an
optionee has been terminated for cause or has breached such an agreement, and
the date upon which such termination for cause or breach occurs. Any such
determinations shall be final and conclusive and binding upon the optionee.
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11. Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.
(b) 10% Stockholder. 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 possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), 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.
(c) Dollar Limitation. For so long as the Code shall so provide,
options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, 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, as
of the respective date or dates of grant, of more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive Stock
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 the Company, except that:
(i) an Incentive Stock Option may be exercised within the period
of three months after the date the optionee ceases to be an
employee of the Company (or within such lesser period as may
be specified in the applicable option agreement), provided,
that the agreement with respect to such option may designate a
longer exercise period and that the exercise after such
three-month period shall be treated as the exercise of a
non-statutory option under the Plan;
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(ii) if the optionee dies while in the employ of the Company, or
within three months after the optionee ceases to be such an
employee, the Incentive Stock 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 applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code or any successor provisions
thereto) while in the employ of the Company, the Incentive
Stock Option may be exercised within the period of one year
after the date the optionee ceases to be such an employee
because of such disability (or within such lesser period as
may be specified in the applicable option agreement).
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).
Notwithstanding the foregoing provisions, no Incentive Stock Option may be
exercised after its expiration date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors or the
Committee may, in its sole discretion, include additional provisions in option
agreements covering options granted under the Plan, including without limitation
restrictions on transfer, repurchase rights, rights of first refusal,
commitments to pay cash bonuses, to make, arrange for or guaranty loans or to
transfer other property to optionees upon exercise of options, or such other
provisions as shall be determined by the Board of Directors or the Committee;
provided, that such additional provisions shall not be inconsistent with any
other term or condition of the Plan and such additional provisions shall not
cause any Incentive Stock Option granted under the Plan to fail to qualify as an
Incentive Stock Option within the meaning of Section 422 of the Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in its
sole discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised; provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 (if applicable).
13. General Restrictions.
(a) Investment Representations. The Company may require any person to
whom an option or Restricted Stock Award is granted, as a condition of
exercising such option or award, to give written assurances in substance and
form satisfactory to the Company to the effect that such
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person is acquiring the Common Stock subject to the option or award, 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, or with covenants or representations made by the Company in
connection with any public offering of its Common Stock, including any "lock-up"
or other restriction on transferability.
(b) Compliance With Securities Law. Each option or Restricted Stock
Award 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 or award upon any securities exchange or automated
quotation system or under any state or federal law, or the consent or approval
of any governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with the issuance or purchase of shares
thereunder, such option or award may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition 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, or to satisfy such condition.
14. Rights as a Stockholder.
The holder of an option shall have no rights as a stockholder with
respect to any shares covered by the option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. 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.
15. Adjustment Provisions for Recapitalizations, Reorganizations and
Related Transactions.
(a) Recapitalizations and Related Transactions. If, through or as a
result of any recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased, decreased or exchanged for a different number or
kind of shares or other securities of the Company, or (ii) additional shares or
new or different shares or other non-cash assets are distributed with respect to
such shares of Common Stock or other securities, an appropriate and
proportionate adjustment shall be made in (x) the maximum number and kind of
shares reserved for issuance under or otherwise referred to in the Plan, (y) the
number and kind of shares or other securities subject to any then outstanding
options or Restricted Stock Awards under the Plan, and (z) the price for each
share subject to any then outstanding options or Restricted Stock Awards under
the Plan, without changing the aggregate purchase price as to which such options
or Restricted Stock Awards remain exercisable. Notwithstanding the foregoing, no
adjustment shall be made pursuant to this Section 15 if such adjustment (i)
would cause the Plan to fail to comply with Section 422 of the
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Code or with Rule 16b-3 or (ii) would be considered as the adoption of a new
plan requiring stockholder approval.
(b) Reorganization, Merger and Related Transactions. All outstanding
options under the Plan shall become fully exercisable for a period of sixty (60)
days following the occurrence of any Trigger Event, whether or not such options
are then exercisable under the provisions of the applicable agreements relating
thereto. For purposes of the Plan, a "Trigger Event" is any one of the following
events:
(i) the date on which shares of Common Stock are first purchased
pursuant to a tender offer or exchange offer (other than such
an offer by the Company, any Subsidiary, any employee benefit
plan of the Company or of any Subsidiary or any entity holding
shares or other securities of the Company for or pursuant to
the terms of such plan), whether or not such offer is approved
or opposed by the Company and regardless of the number of
shares purchased pursuant to such offer;
(ii) the date the Company acquires knowledge that any person or
group deemed a person under Section 13(d)-3 of the Exchange
Act (other than the Company, any Subsidiary, any employee
benefit plan of the Company or of any Subsidiary or any entity
holding shares of Common Stock or other securities of the
Company for or pursuant to the terms of any such plan or any
individual or entity or group or affiliate thereof which
acquired its beneficial ownership interest prior to the date
the Plan was adopted by the Board), in a transaction or series
of transactions, has become the beneficial owner, directly or
indirectly (with beneficial ownership determined as provided
in Rule 13d-3, or any successor rule, under the Exchange Act),
of securities of the Company entitling the person or group to
30% or more of all votes (without consideration of the rights
of any class or stock to elect directors by a separate class
vote) to which all stockholders of the Company would be
entitled in the election of the Board of Directors were an
election held on such date;
(iii) the date, during any period of two consecutive years, when
individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election,
or the nomination for election by the stockholders of the
Company, of each new director was approved by a vote of at
least two- thirds of the directors then still in office who
were directors at the beginning of such period; and
(iv) the date of approval by the stockholders of the Company of an
agreement (a "reorganization agreement") providing for:
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(A) The merger of consolidation of the Company with another
corporation where the stockholders of the Company,
immediately prior to the merger or consolidation, do not
beneficially own, immediately after the merger or
consolidation, shares of the corporation issuing cash or
securities in the merger or consolidation entitling such
stockholders to 60% or more of all votes (without
consideration of the rights of any class of stock to
elect directors by a separate class vote) to which all
stockholders of such corporation would be entitled in
the election of directors or where the members of the
Board of Directors of the Company, immediately prior to
the merger or consolidation, do not, immediately after
the merger or consolidation, constitute a majority of
the Board of Directors of the corporation issuing cash
or securities in the merger or consolidation; or
(B) The sale or other disposition of all or substantially
all the assets of the Company.
(c) Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) General. In the event of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a 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, may, in its discretion,
take any one or more of the following actions, as to outstanding options: (i) in
the event of a merger under the terms of which holders of the Common Stock of
the Company will receive upon consummation thereof a cash payment for each share
surrendered in the merger (the "Merger Price"), make or provide for a cash
payment to the optionees equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such outstanding options
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding options in exchange for
the termination of such options, and (ii) in the event the provisions of Section
15 are not applicable, provide that all or any outstanding options shall become
exercisable in full immediately prior to such event and upon written notice to
the optionees, provide that all unexercised options will terminate immediately
prior to the consummation of such transaction unless exercised by the optionee
within a specified period following the date of such notice.
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(b) Substitute Options. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
17. Terms and Conditions of Awards of Restricted Stock.
(a) General Terms. The Committee shall have full and complete authority
and discretion, except as expressly limited by the Plan, to grant awards of
shares of restricted stock ("Restricted Stock Award(s)") and to provide the
terms and conditions (which need not be identical among Participants) thereof.
Restricted Stock Awards shall be evidenced by written agreements in such form as
the Committee from time to time shall approve. In particular, the Committee
shall prescribe the following terms and conditions:
(i) The number of Shares of Restricted Stock to be awarded to each
Participant;
(ii) The restriction period or performance criteria applicable to
each Restricted Stock Award which period or criteria need not
be the same for all Restricted Stock Awards; and
(iii) The payment, if any, to be made by the Participant in
consideration of the Restricted Stock Award. Any Restricted
Stock Award may be made without payment of consideration by
the Participant or may provide for payment of cash or deferred
consideration which is less than the Fair Market Value of the
awarded shares at the date of grant. Any such Restricted Stock
Award may be on the basis that the shares awarded thereby may
be repurchased by the Company at a fixed price or at a price-
established by formula either upon forfeiture of the awarded
shares or in other specified circumstances.
(b) Restrictions. The Shares of Restricted Stock awarded shall be
subject to restrictions as set forth in Section 18.
(c) Certificates. A stock certificate or certificates evidencing the
Shares of Restricted Stock awarded, together with the blank stock powers duly
executed by the recipient, shall be issued in the name of the recipient and
delivered to the Committee or its designee to be held in safekeeping until the
periodic expiration of the restrictions. The certificates issued pursuant to the
Plan shall contain a legend necessary to reflect the restrictions on such Shares
as contained in Section 18.
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(d) Rights as a Stockholder. Subject to the restrictions contained in
Section 18 hereof, the recipient of a Restricted Stock Award pursuant to the
Plan shall have all the rights as a stockholder with respect to the Shares
covered by the Restricted Stock Award including, but not limited to, the right
to vote such Shares, the right to receive cash or stock dividends with respect
thereto and the right to participate in any subdivision or consolidation of
Shares or other capital adjustment, or other increase or decrease in such
Shares, effected without receipt of consideration by the Company. In the event
the recipient receives additional Shares pursuant to any of the foregoing
events, the Shares acquired shall be subject to the terms, conditions and
restrictions contained herein as if such additional Shares were received at the
date of the original Restricted Stock Award.
18. Restrictions on Restricted Stock and Lapse Thereof.
(a) Restrictions. Shares of Restricted Stock awarded shall be subject
to the restrictions that, during the restriction period or prior to the lapse of
the restrictions in accordance with subsection (c) hereof, such Shares:
(i) Shall not be sold, exchanged, transferred, pledged or
otherwise disposed of; and
(ii) Shall be forfeited to the Company if the recipient's
employment is terminated, except as provided in subsection (c)
hereof.
(b) Restriction Period. Restrictions shall lapse at the times or upon
the events determined by the Committee at the time of grant and set forth in the
applicable Restricted Stock Award agreement unless such restrictions are
terminated earlier in accordance with subsection (c) below.
(c) Lapse of Restrictions. The restrictions contained herein shall
lapse upon the occurrence of any of the following events:
(i) The death or total and permanent disability of a recipient
while employed by the Company;
(ii) The occurrence of a Trigger Event; and
(iii) At such times and in such amounts, other than as described in
(i) or (ii) above, including termination by the Company of a
recipient's employment for any reason or the early retirement
of a recipient with the consent of the Company, if the
Committee determines in the exercise of its sole discretion
that the lapse of restrictions at such time with respect to
all or a portion of the Shares awarded is in the best interest
of the Company.
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19. No Special Employment Rights.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
20. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, 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 compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
21. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect; provided, however, that if at any time
the approval of the stockholders of the Company is required under Section 422 of
the Code or any successor provision with respect to Incentive Stock Options, or
under Rule 16b-3, the Board of Directors may not effect such modification or
amendment without such approval; and provided, further, that the provisions of
Section 3(c) hereof shall not be amended more than once every six months, other
than to comport with changes in the Code, the Employer Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
(b) The modification or amendment of the Plan shall not, without the
consent of an 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
(i) 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 422 of the Code and (ii) the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the qualification of the
Plan under Rule 16b-3.
22. Withholding.
(a) The Company shall have the right to deduct from payments of any
kind otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior
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approval of the Company, which may be withheld by the Company in its sole
discretion, the optionee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company to withhold shares of Common Stock otherwise
issuable pursuant to the exercise of an option or (ii) by delivering to the
Company shares of Common Stock already owned by the optionee. The shares so
delivered or withheld shall have a Fair Market Value equal to such withholding
obligation as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section 22(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.
(b) The acceptance of shares of Common Stock upon exercise of an
Incentive Stock Option shall constitute an agreement by the optionee (i) to
notify the Company if any or all of such shares are disposed of by the optionee
within two years from the date the option was granted or within one year from
the date the shares were issued to the optionee pursuant to the exercise of the
option, and (ii) if required by law, to remit to the Company, at the time of and
in the case of any such disposition, an amount sufficient to satisfy the
Company's federal, state and local withholding tax obligations with respect to
such disposition, whether or not, as to both (i) and (ii), the optionee is in
the employ of the Company at the time of such disposition.
(c) Notwithstanding the foregoing, in the case of a Reporting Person
whose options have been granted in accordance with the provisions of Section
3(b) herein, no election to use shares for the payment of withholding taxes
shall be effective unless made in compliance with any applicable requirements of
Rule 16b-3.
23. Cancellation and New Grant of Options, Etc.
The Board of Directors shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
canceled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
24. 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 stockholders. If such stockholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, no options
previously granted under the Plan shall be deemed to be Incentive Stock Options
and no Incentive Stock Options shall be granted thereafter. Amendments to the
Plan not requiring
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stockholder approval shall become effective when adopted by the Board of
Directors; amendments requiring stockholder approval (as provided in Section 21)
shall become effective when adopted by the Board of Directors, but no Incentive
Stock Option granted after the date of such amendment shall become exercisable
(to the extent that such amendment to the Plan was required to enable the
Company to grant such Incentive Stock Option to a particular optionee) unless
and until such amendment shall have been approved by the Company's stockholders.
If such stockholder approval is not obtained within twelve months of the Board's
adoption of such amendment, any Incentive Stock Options granted on or after the
date of such amendment shall terminate to the extent that such amendment to the
Plan was required to enable the Company to grant such option to a particular
optionee. 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
16, the Plan shall terminate upon the earlier of (i) the close of business on
the day next preceding the tenth anniversary of the 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 instruments evidencing
such options.
25. Provision for Foreign Participants.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
26. Governing Law.
The provisions of this Plan shall be governed and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws.
Adopted by the Board of Directors on ____________, 2000.
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