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EXHIBIT 4.3
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC
1998 Stock Option Plan, as amended
1. PURPOSES OF THE PLAN. The purposes of this 1998 Stock Option Plan are:
o to attract and retain the best available personnel for positions
of substantial responsibility,
o to provide additional incentive to Employees, Directors and
Consultants, and
o to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option plans under state corporate and securities laws
and the Code.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means a Committee appointed by the Board in accordance with
Section 4 of the Plan.
(f) "COMMON STOCK" means the common stock, $.01 par value, of the Company.
(g) "COMPANY" means International Remote Imaging Systems, Inc.
(h) "CONSULTANT" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
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(i) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means that the
employment or consulting relationship is not interrupted or terminated by the
Company, any Parent or Subsidiary. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive Stock
Options, any such leave may not exceed ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including certain
Company policies) or statute; or (ii) transfers between locations of the Company
or between the Company, its Parent, its Subsidiaries or its successor.
(j) "DIRECTOR" means a member of the Board.
(k) "DISABILITY" means total and permanent disability as defined in Section
22(e)(3) of the Code.
(l) "EMPLOYEE" means any person, including Officers and Directors employed
by the Company or any Parent or Subsidiary of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(n) "FAIR MARKET VALUE" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange or
a national market system, including without limitation, the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, the Fair Market Value of a Share of Common
Stock shall be the closing sales price for such stock (or the closing bid,
if no sales are reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last
market trading day prior to the day of determination, as reported in the
Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not on
the National Market System thereof) or is regularly quoted by recognized
securities dealers but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid and
low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in the Wall Street journal or such
other source as the Administrator deems reliable;
(iii) In the absence of any established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the
Administrator.
(o) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
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(p) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.
(q) "NOTICE OF GRANT" means a written notice evidencing certain terms and
conditions of an individual Option grant. The Notice of Grant is part of the
Option Agreement.
(r) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(s) "OPTION" means a stock option granted pursuant to the Plan.
(t) "OPTION AGREEMENT" means a written agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(u) "OPTION EXCHANGE PROGRAM" means a program whereby outstanding options
are surrendered in exchange for options with a lower exercise price.
(v) "OPTIONED STOCK" means the Common Stock subject to an Option.
(w) "OPTIONEE" means an Employee, Director or Consultant who holds an
outstanding Option.
(x) "PARENT" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(y) "PLAN" means this 1997 Stock Option Plan.
(z) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
(aa) "SECTION 162(M)" means Section 162(m) of the Code and the regulations
thereunder, as amended.
(bb) "SHARE" means a share of the Common Stock, as adjusted in accordance
with Section 13 of the Plan.
(cc) "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(dd) "TERMINATION EVENT" means (i) any use or disclosure by an Optionee of
confidential information or trade secrets of the Company or any Parent or
Subsidiary in violation of any confidentiality or nondisclosure agreement by
which the Optionee is bound, or (ii) the termination of Optionee's Continuous
Status as an Employee or Consultant for cause as defined pursuant to applicable
law, as a result of a breach of Optionee's employment or consulting agreement,
as a result of theft, fraud or embezzlement, or as a result of any disclosure or
use of confidential information or trade secrets described in part (i) of this
paragraph.
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3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be optioned under the
Plan is One Million Two Hundred Thousand (1,200,000) Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock. However, should the
Company reacquire Shares which were issued pursuant to the exercise of an
Option, such Shares shall not become available for future grant under the Plan.
[AS AMENDED BY THE BOARD OF DIRECTORS AT A MEETING HELD ON MARCH 30, 2000 AND
DULY ADOPTED BY THE STOCKHOLDERS AT THE ANNUAL MEETING OF STOCKHOLDERS HELD ON
MAY 19, 2000.]
If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
(i) MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule 16b-3, the
Plan may be administered by different bodies with respect to Directors,
Officers who are not Directors, and Employees who are neither Directors nor
Officers.
(ii) ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS SUBJECT TO
SECTION 16(b). With respect to Option grants made to Directors or to
Employees who are also Officers or Directors subject to Section 16(b) of
the Exchange Act, the Plan shall be administered by (A) the Board, if the
Board may administer the Plan in compliance with the requirements for
grants under the Plan to be exempt acquisitions under Rule 16b-3, or (B) a
committee designated by the Board to administer the Plan, which committee
shall consist of "Non-Employee Directors" within the meaning of Rule 16b-3.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board
may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
requirements for grants under the Plan to be exempt acquisitions under Rule
16b-3.
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(iii) ADMINISTRATION WITH RESPECT TO COVERED EMPLOYEES SUBJECT TO
SECTION 162(m) OF THE CODE. With respect to Option grants made to Employees
who are also "covered employees" within the meaning of Section 162(m) of
the Code and the regulations thereunder, as amended, the Plan shall be
administered by a committee designated by the Board to administer the Plan,
which committee shall be constituted to satisfy the requirements applicable
to Options intended to qualify as "performance-based compensation" under
Section 162(m). Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and substitute
new members, fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules applicable to Options intended to qualify as
"performance-based compensation" under Section 162(m).
(iv) ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With respect to
Option grants made to Employees or Consultants who are neither Directors
nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a committee designated by the Board, which committee shall be
constituted to satisfy Applicable Laws. Once appointed, such Committee
shall serve in its designated capacity until otherwise directed by the
Board. The Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and substitute
new members, fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;
(ii) to select the Directors, Consultants and Employees to whom
Options may be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be covered
by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
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(vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or the shares of
Common Stock relating thereto based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vii) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by
such Option shall have declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan;
(ix) to prescribe, amend and rescind rules and regulations relating to
the Plan;
(x) to modify or amend each Option (subject to Section 14(c) of the
Plan);
(xi) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously granted by
the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions applicable to Options;
and
(xiv) to make all other determinations deemed necessary or advisable
for administering the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. ELIGIBILITY. Nonstatutory Options may be granted to Directors, Employees
and Consultants. Incentive Stock Options may be granted only to Employees. If
otherwise eligible, an Employee or Consultant who has been granted an Option may
be granted additional Options.
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6. LIMITATIONS.
(a) Each Option shall be designated in the Notice of Grant as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designations, to the extent that the aggregate Fair Market Value of Shares
subject to an Optionee's incentive stock options (whether granted by the
Company, any Parent or Subsidiary) which become exercisable for the first time
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a), incentive stock
options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares shall be determined as of the time of grant.
(b) Neither the Plan nor any Option shall confer upon an Optionee any right
with respect to continuing the Optionee's employment or consulting relationship
with the Company, nor shall they interfere in any way with the Optionee's right
or the Company's right to terminate such employment or consulting relationship
at any time, with or without cause.
(c) No Officer shall be granted in any fiscal year of the Company Options
to purchase more than Three Hundred Thousand (300,000) Shares. The foregoing
limitation set forth in this Section 6(c) is intended to satisfy the
requirements applicable to Options intended to qualify as "performance-based
compensation" (within the meaning of Section 162(m)). In the event the
Administrator determines that such limitation is not required to qualify Options
as performance-based compensation, the Administrator may modify or eliminate
such limitation.
7. TERM OF THE PLAN. The Plan shall become effective upon its adoption by
the Board and shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 14 of the Plan.
8. TERM OF OPTION. The term of each Option shall be stated in the Notice of
Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant or
such shorter term as may be provided in the Notice of Grant.
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9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The price per share exercise price for the Share to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant; or
(B) granted to any other Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the
date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined in the discretion of the Committee, and
may be more or less than the Fair Market Value per Share on the date of
grant.
(b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised. In so doing, the Administrator may specify that an Option may not
be exercised until the completion of a service period.
(c) FORM OF CONSIDERATION. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:
(i) cash;
(ii) a promissory note made by the Optionee in favor of the Company;
(iii) if permitted by the Administrator, in its sole discretion, other
Shares which (A) in the case of Shares acquired upon exercise of an option,
have been owned by the Optionee for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall
be exercised;
(iv) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the Optionee's broker, if
applicable, shall require to effect an exercise of the Option and delivery
to the Company of the sale or loan proceeds required to pay the exercise
price;
(v) any combination of the foregoing methods of payment; or
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(vi) such other consideration and method of payment for the issuance
of Shares to the extent permitted by the Administrator and Applicable Laws.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (1) written
notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, (ii) full payment for the Shares with respect
to which the Option is exercised and (iii) all representations, indemnifications
and documents reasonably requested by the Administrator. Full payment may
consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. Subject to Section 12, the Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) ACCELERATED TERMINATION OF OPTION TERM. Notwithstanding anything to the
contrary contained in the Plan, an Optionee's Options under the Plan shall
terminate and cease to be exercisable immediately upon the occurrence of a
Termination Event with respect to such Optionee.
(c) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. In the event that
an Optionee's Continuous Status as an Employee or Consultant terminates (other
than upon the Optionee's death or Disability or as a result of a Termination
Event), the Optionee may exercise his or her Option, but only within such period
of time as is determined by the Administrator, and only to the extent that the
Optionee was entitled to exercise it at the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Notice
of Grant). In the case of an Incentive Stock Option, the Administrator shall
determine such period of time (in no event to exceed ninety (90) days from the
date of termination) when the Option is granted. If, at the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
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(d) DISABILITY OF OPTIONEE. In the event that an Optionee's Continuous
Status as an Employee or Consultant terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination the Optionee is
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(e) DEATH OF OPTIONEE. In the event of the death of an Optionee, the Option
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the expiration of the term of such Option as
set forth in the Notice of Grant), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by unexercisable portion of the Option
shall immediately revert to the Plan. If, after death, the Optionee's estate or
a person who acquires the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
11. NON-TRANSFERABILITY OF OPTIONS.
(a) NO TRANSFER. An Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee.
(b) DESIGNATION OF BENEFICIARY. An Optionee may file a written designation
of a beneficiary who is to receive any Options that remain unexercised in the
event of the Optionee's death. If an Optionee is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective. Such designation of beneficiary may be changed by
the Optionee at any time by written notice, subject to the above spousal consent
conditions.
(c) EFFECT OF NO DESIGNATION. In the event of the death of the Optionee and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such Optionee's death, the Company shall deliver such options to
the executor or administrator of the estate of the Optionee, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such options to the spouse or to any
one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.
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12. WITHHOLDING TAXES. Upon (i) the disposition by an Optionee of shares of
Common Stock acquired pursuant to the exercise of an Incentive Stock Option
within two years of the granting of such Incentive Stock Option or within one
year after exercise of such Incentive Stock Option, or (ii) the exercise of a
Nonstatutory Stock Option, the Company shall have the right to require such
Optionee to pay the Company the amount of any taxes which the Company may be
required to withhold with respect to such shares of Common Stock.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, if the outstanding shares of Common Stock are
increased, decreased, changed into or exchanged for a different number or kind
of shares of securities of the Company through reorganization, recapitalization,
reclassification, stock combination, stock dividend, stock split, reverse stock
split or other similar transaction, an appropriate and proportionate adjustment
shall be made in the maximum number and kind of shares as to which Options may
be granted under this Plan. A corresponding adjustment changing the number or
kind of shares allocated to unexercised Options which have been granted prior to
any such change, shall likewise be made. Any such adjustment in the outstanding
Options shall be made without change in the aggregate purchase price applicable
to the unexercised portion of the Options but with a corresponding adjustment in
the price for each share or other unit of any security covered by the Option.
Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Option had not been previously
exercised, it will terminate immediately prior to the consummation of such
proposed action. The Administrator may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Optionee the right to exercise his or her Option
as to all or any part of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable.
(c) MERGER OR ASSET SALE. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company or a similar event that the Administrator determines, in its discretion,
would materially alter the structure of the Company or its ownership, the
Administrator, upon 30 days prior written notice to the Option holders, may, in
its discretion, do one or more of the following: (i) shorten the period during
which Options are exercisable (provided they remain exercisable for at least 30
days after the date the notice is given); (ii) accelerate any vesting schedule
to which an Option is subject; (iii) arrange to have the surviving or successor
entity grant replacement options with appropriate adjustments in the number and
kind of securities and option prices; or (iv) cancel Options upon payment to the
Optionees in cash, with respect to each Option to the extent then exercisable
(including any Options as to which the exercise has been accelerated as
contemplated in clause (ii) above), of an amount equal to the excess of the Fair
Market Value of the number of Shares as to which the Option is then exercisable
(at the effective time of the merger, reorganization, sale of other event) over
the aggregate exercise price with respect to such Shares. The Administrator may
also provide for one or more of the foregoing alternatives in any particular
Option Agreement.
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14. DATE OF GRANT. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator;
provided, however, the date of grant of an Option shall be, for all purposes, no
earlier than the date on which the Optionee commences employment with the
Company. Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend, alter or
suspend or terminate the Plan.
(b) SHAREHOLDER APPROVAL. The Company shall obtain shareholder approval of
the Plan and any amendment if and to the extent necessary under Applicable Law
or the rules of any exchange or quotation system on which the Common Stock is
then listed or quoted. The Company may voluntarily obtain shareholder approval
of the Plan and any amendment if and to the extent the Board determines such
approval is desirable, including, without limitation, to qualify for special
treatment of option grants under Rule 16b-3 of the Exchange Act, Section 422 of
the Code or Section 162(m) of the Code.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of an Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
16. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the exercise
of an Option unless the exercise of such Option and the issuance and delivery of
such Shares 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, Applicable Laws, the requirements of any
stock exchange or quotation system upon which the Shares may then be listed or
quoted, and any other requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery, and shall be further subject to
the approval of counsel for the Company with respect to such compliance. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by Applicable Law, the Plan and options
granted hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
(b) INVESTMENT REPRESENTATION. As a condition to the exercise of an Option,
the Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell, transfer or
distribute such Shares.
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17. LIABILITY OF COMPANY.
(a) INABILITY TO OBTAIN AUTHORITY. 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.
(b) GRANTS EXCEEDING ALLOTTED SHARES. If the Optioned Stock covered by an
Option exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional shareholder approval, such Option shall
be void with respect to such excess Optioned Stock, unless shareholder approval
of an amendment sufficiently increasing the number of Shares subject to the Plan
is timely obtained in accordance with Section 14(b) of the Plan.
(c) RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Company shall pay all
amounts payable hereunder only to the Optionee or beneficiaries entitled thereto
pursuant to the Plan. The Company shall not be liable for the debts, contracts
or engagements of any Optionee or his or her beneficiaries, and rights to Shares
or cash payments under the Plan may not be taken in execution by attachment or
garnishment, or by any other legal or equitable proceeding while in the hands of
the Company.
18. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. GOVERNING LAW. The Plan shall be governed by, and construed in
accordance with the laws of the State of Delaware (without giving effect to
conflicts of law principles).
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