<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 10-K/A
(Mark One)
[X] AMENDMENT NUMBER ONE TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _____to _____
Commission File Number: 1-07149
INTERNET LAW LIBRARY, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 82-0277987
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4301 WINDFERN ROAD, SUITE 200, HOUSTON, TEXAS, 77041
(Address of principal executive offices including zip code)
(281) 600-6000
(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class)
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
The aggregate market value of the voting stock held by non-affiliates of
Registrant as of October 20, 1999 was $23,477,708 (based on the closing price of
$3.25 per share on October 20, 1999 as reported on the over-the-counter Bulletin
Board).
As of October 20, 1999, 23,621,409 shares of Registrant's Common Stock were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None
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<PAGE>
Internet Law Library, Inc.f/k/a Planet Resources, Inc., a Delaware
corporation (the "Company"), is filing this Amendment No. 1 on Form 10-K/A (this
"Amendment") to the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1999 (the "Original Report") in order to provide the information
required by Part III of the Form 10-K (Items 10, 11, 12 and 13), which
information was omitted from the Original Report as provided in General
Instruction G(3) of the instructions to Form 10-K. This Amendment speaks as of
the original date of filing of the Original Report.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Pursuant to an Agreement and Plan of Reorganization, dated March 25, 1999,
as amended (the "Merger Agreement"), among the Company, National Law Library,
Inc., a Texas corporation ("National Law"), and the stockholders of National
Law, effective as of March 30, 1999, each share of National Law common stock was
exchanged for one share of the Company's unregistered common stock. In
contemplation of this transaction, the Company's original stockholders agreed to
a one-for-two reverse stock split, which resulted in 2,000,000 shares of the
Company's common stock being outstanding immediately prior to the merger. As a
result of these transactions, former National Law stockholders currently hold
18,000,000 shares of the Company's unregistered common stock and the Company's
original stockholders currently hold 2,000,000 shares of the Company's common
stock. Under the terms of the Merger Agreement, the majority of the Company's
original board of directors resigned and were replaced with the following
designees of the Company's new stockholders: Hunter M.A. Carr, Kelley V. Kirker
and Jonathan C. Gilchrist. Mr. Gilchrist served as a director until his
resignation on June 15, 1999. The transactions contemplated by the Merger
Agreement are collectively referred to herein as the "National Law Transaction."
Except for the National Law Transaction, no arrangement or understanding
exists between any director or executive officer or any other person pursuant to
which any director or executive officer was selected as a director or executive
officer of the Company.
All directors are elected at each annual meeting of the Company's
stockholders for a term of one year and hold office until their successors are
elected and qualified. All executive officers are elected annually by, and
serve at the discretion of, the Company's Board of Directors.
The following table sets forth certain information concerning the executive
officers and directors of the Company.
<TABLE>
<CAPTION>
Name Age Position With the Company
- -------------------------- ---------- -------------------------------------------------------------------------
<S> <C> <C>
Hunter M.A. Carr 51 Chairman of the Board of Directors, President and Chief Executive
Officer
Joe H. Reynolds 77 General Counsel and Director
Kelley V. Kirker 40 Director
Jack I. Tompkins 53 Director
Malcolm F. McNeill 52 Chief Financial Officer
Robert Sarlay 54 Vice President - Special Programs and Shareholder Relations
Carol Ann Wilson 57 Secretary
</TABLE>
HUNTER M.A. CARR has been the President, Chief Executive Officer and
Chairman of the Board of Directors of the Company since March 30, 1999. Mr.
Carr is the founder of National Law, and has served as Chairman and President
since it's founding in November 1998. From April 1994 until July 1999, Mr. Carr
served as Chairman and Chief Executive Officer of IT/IS inc. ("IT/IS"), a
company in which he is the sole stockholder. In July 1999, Mr. Carr resigned as
Chief Executive Officer of IT/IS, but he continues to serve as its Chairman and
he remains its sole stockholder. In August 1999, Mr. Carr was elected to the
board of iExalt Inc., a public company offering Internet access to Christian
products, information and ministry.
JOE H. REYNOLDS has been a director of the Company since August 1999,
and has been the General Counsel of the Company since July 1999. Since 1996,
Mr. Reynolds has served as Of Counsel for the law firm of Schwartz, Junell,
Campbell & Oathout, LLP, a Houston, Texas firm. From 1992 until 1996, Mr.
Reynolds was Of Counsel with the Houston law firm of Andrews & Kurth. Mr.
Reynolds is an experienced litigator, and he is presently representing the
Company as attorney of record in the matter of Loislaw.com Inc., v. IT IS, Inc.,
Internet Law Library, Inc. and National Law Library, Inc. (Refer to Item 3.
LEGAL PROCEEDINGS).
KELLEY V. KIRKER has been a director of the Company since March 30,
1999, and served as a vice president of the Company from June 15, 1999, until
July 13, 1999. Mr. Kirker has also served as a director of National Law since
July 1, 1999. On October 1, 1999, Mr. Kirker was appointed Chief Executive
Officer of IT/IS. Prior to that, since April 1994, Mr. Kirker has served as
President and Chief Operating Officer of IT/IS. From 1987 until 1994, Mr.
Kirker was employed by MLSI, Inc., a company engaged in litigation support
service and owned by Mr. Carr. Prior to 1987, Mr. Kirker was employed for
approximately five years in the computer information service area of Texaco,
Inc.
JACK I. TOMPKINS has been a director of the Company since August 1999.
Mr. Tompkins is currently the Chairman and Chief Executive Officer of iExalt
Inc., positions he assumed in September 1999. From April 1999 until September
1999, he was Executive Vice President and Chief Financial Officer of Crescent
Real Estate Equities Company, a real estate investment trust traded on the New
York Stock Exchange. Prior to that, Mr. Tompkins served as Chairman of
Automotive Realty Trust Company of America from its inception in 1997 until the
company's sale in January 1999. From 1988 to 1996, he served at Enron Corp. as
Chief Financial Officer and Senior Vice President, and Chief Information,
Administrative & Accounting Officer. Mr. Tompkins began his career at Arthur
Young & Company and later joined Arthur Andersen LLP where he was elected to the
partnership in 1981. Mr. Tompkins is a Certified Public Accountant.
MALCOLM F. MCNEILL has been the Chief Financial Officer of the Company
since September 1, 1999. Prior to that, since November 1994, Mr. McNeill
provided financial consulting services as a sole proprietor to public and
privately owned companies in the Houston area. Prior to 1994, he served in
various financial and management positions with companies engaged in natural gas
transportation, independent power development, and oil and gas exploration and
production. Earlier, Mr. McNeill served for nearly seven years on the audit
staff of Price Waterhouse LLP, and he is a Certified Public Accountant.
ROBERT SARLAY has been the Vice President - Special Programs and
Shareholder Relations of the Company since July 1999. Prior to that, from
October 1998 until July 1999, he was the Manager of Marketing for IT/IS and
provided marketing and shareholder services on a contract basis to National Law
and the Company. From August 1997 to October 1998, Mr. Sarlay was the
owner/operator of three restaurants in the Houston area. From 1993 to 1997, he
served as the President of Advanced Care Centers of America, LLC, and an
operator of nursing home facilities in the State of Texas. From 1991 to 1993,
Mr. Sarlay was the Vice President Commercial Division of Asset Partners, Inc.,
and an operator of commercial office buildings in the Houston area. Prior to
1991, Mr. Sarlay served as an operations and executive officer of various
companies engaged in long-term care, medical management, apartment development
and management, and convenience store operations.
CAROL ANN WILSON has been the Corporate Secretary of the Company since
June 1999, and since July 1999, has served as Corporate Secretary and Vice
President - Content for National Law. From September 1995 to April 1999, Ms.
Wilson served as the legal secretary and personal assistant to the senior
partner of John M. O'Quinn, P.C. From 1993 to 1995, she worked as the legal
secretary for Mr. Reynolds at Andrews & Kurth. Since 1991, Ms. Wilson has been
an active member and speaker in various state and national legal secretarial and
paralegal organizations. She is the author of Plain Language Pleadings
(Prentice Hall 1996), and has been published in national trade journals and
other publications.
SIGNIFICANT EMPLOYEES
The following sets forth certain information regarding significant
employees who are not executive officers but who make or are expected to make
significant contributions to the business of the Company.
CHARLES F. DUNBAR has been the Vice President - Sales of National Law
since July 1999. Previously, from April 1999 to June 30, 1999, Mr. Dunbar was an
employee of IT/IS providing contract sales and marketing services to National
Law. From April 1995 to April 1999, he was the Chief Executive Officer and
President of Image Vault, a sales and marketing consulting firm based in
Houston, Texas. From 1990 to 1995, Mr. Dunbar served as Vice President of Sales
for MLSI, Inc., an earlier company owned by Mr. Carr, and then IT/IS. Prior to
1990, Mr. Dunbar owned and operated a landscape and construction services
company.
KARA A. KIRKER has been the Chief Financial Officer and Treasurer of
National Law since October 1, 1999. Prior to that date, Ms. Kirker provided such
services to National Law on a contract basis as an officer of IT/IS. From
January 1994 until National Law's inception in November 1998, Ms. Kirker served
as the Controller and Treasurer of IT/IS, in which positions she continues to
serve. From 1981 to 1994, Ms. Kirker was employed by Stone & Webster Oil
Company, Inc. in the revenue accounting area and as Assistant Treasurer.
FAMILY RELATIONSHIPS
Kara A. Kirker is a niece by marriage of Hunter M.A. Carr. Kelley V.
Kirker is married to Kara A. Kirker.
1
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act), requires that the Company's executive officers and directors,
and beneficial owners of more than 10% of any class of equity security
registered pursuant to the Exchange Act, make certain filings with the
Securities and Exchange Commission (the "SEC"). The Company believes, based
solely on a review of the copies of such reports furnished to the Company during
the fiscal year that ended on June 30, 1999, that all Section 16(a) filing
requirements applicable to its directors, officers and 10% beneficial owners
were satisfied by each such person, except for the following:
<TABLE>
<CAPTION>
Number of
Name of Person Title Late Report Transactions
- ---------------- ------- ------------- -------------
<S> <C> <C> <C>
Hunter M.A. Carr Chairman of the Board, Form 4 1
Chief Executive Officer, Form 4 3
and President
Jack I. Tompkins Director Form 4 1
Form 4 1
</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
Each of Messrs. Carr, Sarlay, and Dunbar, and Ms. Wilson and Ms. Kirker is
currently an officer of the Company or National Law, and was, until July 1,
1999, an employee of IT/IS, Inc., a Texas corporation wholly owned by Mr. Carr
("IT/IS"). Effective beginning in March 1999, National Law and IT/IS operate
under a management and financial services agreement (the "Management Agreement")
under which IT/IS provides accounting, staffing, and procurement services and
office space to National Law. Under the agreement, the Company paid IT/IS for
staffing services at 125% of cost. Pursuant to a personal services contract
between National Law and Mr. Carr (the "Personal Services Contract") covering
executive services, marketing and business development, public relation and
general management, which became effective in November 1998, Mr. Carr received
$55,400 for services performed during the fiscal year ended June 30, 1999.
The Company did not grant any stock appreciation rights in its fiscal year
ended June 30, 1999.
2
<PAGE>
The following table summarizes the compensation paid by the Company
directly to A.W. Dugan, who served as the Company's chief executive officer
until March 30, 1999, and either directly to or indirectly under the Personal
Services Contract for services performed by Mr. Carr, who served as the
Company's chief executive officer commencing March 30, 1999. Messrs. Dugan and
Carr are collectively referred to herein as the "Named Executive Officers". No
other employee of the Company or any of its subsidiaries received an annual
salary and bonus exceeding $100,000 during the fiscal year ended June 30, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards Payouts
--------------------------------------------- -------------------------- -------
All
Other Restricted Securities other
Name and annual stock underlying LTIP compen-
principal position Year Salary Bonus compensation(1) awards options payouts sation
- ------------------ ---- ------ ----- --------------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hunter M.A. Carr 1999 $-0- $-0- $55,400 $-0- -0- $-0- $-0-
Chairman of the 1998 -0- -0- -0- -0- -0- -0- -0-
Board, President and 1997 -0- -0- -0- -0- -0- -0- -0-
Chief Executive
Officer
A.W. Dugan 1999 $-0- $-0- $ -0- $-0- -0- $-0- $-0-
Former Chairman of 1998 -0- -0- -0- -0- -0- -0- -0-
the Board and 1997 -0- -0- -0- -0- -0- -0- -0-
President
</TABLE>
- ---------------
(1) As discussed in Items 10 and 13 of this report, Mr. Carr was compensated
solely pursuant to the Personal Services Contract during the fiscal year
ended June 30, 1999.
The following table sets forth the grants of stock options made during the
fiscal year ended June 30, 1999 to Mr. Carr. No stock options were granted to
Mr. Dugan during this fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Individual Grants
------------------------------------------------------------
Percent of
Number of total options
securities granted to
underlying employees Exercise or
options in fiscal base price Expiration
Name granted (1) year (2) ($/share) date Grant date value(3)
- ---- ----------- -------- --------- ---------- -----------------------
Hunter M.A. Carr 1,250,000 100% $3.00 4/11/09 $1,210,991
</TABLE>
(1) All such options vested on April 12, 1999, the date of grant.
(2) Excludes 1,000,000 granted to a director during fiscal year 1999.
(3) The Company has used the Black-Scholes option valuation model to determine
the option value on date of grant. Using the Black-Scholes model, the
Company has assumed an expected volatility factor of 287%, a six percent
risk-free rate of return, a dividend yield of zero, and a term for
exercising the option of 10 years. The actual value, if any, a person may
realize will depend on the excess of the stock price over the exercise price
on the date the option is exercised. Stock appreciation gains do not
represent the Company's estimate or projection of the future price of the
Company's common stock.
3
<PAGE>
The following table sets forth information concerning the number and value
of securities underlying unexercised options held on June 30, 1999. No Named
Executive Officer exercised stock options during the fiscal year ended June 30,
1999.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of securities underlying Value of unexercised in-the-money options
unexercised options at fiscal year end at fiscal year-end (1)
--------------------------------------- ------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Hunter M.A. Carr 1,250,000 -- $ -- $ --
A.W. Dugan -- -- -- --
</TABLE>
(1) Based on the difference between the option exercise price and the closing
sale price of $1.875 of the Company's common stock as reported on the over-
the-counter Bulletin Board on June 30, 1999, the last trading day of the
Company's 1999 fiscal year multiplied by the number of shares underlying
the options.
COMPENSATION OF DIRECTORS
The Company has not compensated its directors pursuant to any standard
arrangements; however, the Company is considering various director compensation
plans for the future. On March 26, 1999, the Company's majority stockholders and
its Board of Directors adopted the 1999 Director Option Plan (the "Director
Option Plan") pursuant to which outside directors of the Company are granted
options for the purchase of the Company's common stock. Under the Director
Option Plan, each outside director is automatically granted options to purchase
15,000 shares of common stock on the date he or she becomes a director.
Thereafter, each outside director who serves for six months or longer is awarded
options to purchase an additional 1,000 shares of common stock at the Company's
annual meeting of stockholders. These options have a term of ten years, and
carry an exercise price of 100% of the fair market value of the Company's common
stock on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following officers and employees of the Company or its subsidiaries
participated in deliberations of the Company's board of directors concerning
executive officer compensation during the fiscal year ended June 30, 1999:
Hunter M.A. Carr
Kelley V. Kirker
4
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of October 20, 1999,
regarding the beneficial ownership of the Company's common stock (i) by each
person or group known by management of the Company to own more than 5% of the
outstanding shares of common stock of the Company, (ii) by each Named Executive
Officer, (iii) by each director and (iv) by all directors and executive officers
as a group.
The mailing address for each person identified below is c/o Internet Law
Library, Inc., 4301 Windfern Road, Suite 2000, Houston, Texas, 77041.
Shares Beneficially Percentage of
Name Owned (1) Outstanding Shares (2)
- ---- ------------------- ----------------------
Hunter M.A. Carr.................... 15,527,500 (3) 62.4%
A.W. Dugan.......................... 1,280,091 (4) 5.6%
Joe H. Reynolds..................... 15,000 *
Kelley V. Kirker.................... 200,000 (5) *
Jack I. Tompkins.................... 2,905,000 (6) 11.8%
All executive officers and directors
as a group (7 persons)............. 20,087,591 (7) 77.6%
_________________________
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities. Except as indicated by footnote and subject to community
property law where applicable, the Company believes, based on information
furnished by such persons, that the persons named in the table above have
sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them.
(2) Percentage of beneficial ownership is based on 23,621,409 shares of common
stock outstanding as of October 20, 1999. In computing an individual's
beneficial ownership, the number of shares of common stock subject to
options held by that individual that are exercisable as of or within 60
days of October 20, 1999, are deemed outstanding. Such shares, however, are
not deemed outstanding for the purpose of computing the beneficial
ownership of any other person.
(3) Includes options to purchase 1,250,000 common shares that are currently
exercisable, 600,000 shares held by a limited partnership of which Mr.
Carr is the general partner, for the benefit of Mr. Carr's children, and
50,000 shares held by a church of which Mr. Carr is a member.
(4) Includes 120,000 shares held by Anglo Exploration Corp. and 200,000 shares
held by Houston Resources Corp., each of which is controlled by Mr. Dugan.
(5) Includes 100,000 shares held by Mr. Kirker's spouse, as to which Mr. Kirker
disclaims beneficial ownership.
(6) Includes options to purchase 1,000,000 common shares that are currently
exercisable.
(7) Includes options to purchase 2,250,000 common shares that are currently
exercisable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Hunter M.A. Carr, the Chairman of the Board of Directors, Chief Executive
Officer and President of the Company, is also the sole stockholder of IT/IS.
IT/IS and Mr. Carr provided a variety of services to National Law prior to the
National Law Transaction and continued to provide the same services through June
30, 1999. Set forth below is a summary of the agreements between National Law,
IT/IS and Mr. Carr.
In December 1998, National Law and IT/IS entered into a continuing service
agreement under which IT/IS provides database content to National Law. Under the
terms of this agreement, IT/IS provides National Law with
5
<PAGE>
data files containing case law and statutes that are in the public domain
together with coding and proprietary editing services covering these data files.
National Law is charged $.65 per 1,000 characters for those data files that
satisfy certain prescribed quality control requirements. Under the agreement,
National Law is obligated for a three-year period to provide IT/IS with minimum
orders for data files containing an aggregate of 750 million characters per
month. However, pricing under this agreement is to reflect market prices for
comparable work, and National Law may select another vendor should IT/IS's
prices not be competitive. During the period from National Law's inception on
November 30, 1998, to June 30, 1999, ("Period from Inception to June 30, 1999"),
National Law incurred charges totaling approximately $691,500 for data files
containing case law, and, at June 30, 1999, National Law owed $115,700 to IT/IS
under this agreement.
Effective in March 1999, National Law and IT/IS operate under the
Management Agreement pursuant to which IT/IS provides accounting, staffing, and
procurement services and office space to National Law. Under the Management
Agreement, accounting services are charged at the rate of $85 per hour, staffing
services are charged at 125% of cost, office supplies, equipment and telephone
services are charged at 120% of cost and office space rental is based on 120% of
cost. In addition, IT/IS is entitled to charge a $3,600 monthly management fee
under the agreement. During the Period from Inception to June 30, 1999, National
Law incurred charges totaling approximately $298,831, and, at June 30, 1999,
National Law owed IT/IS $97,800 under the agreement.
Effective in December 1998, National Law entered into an agreement with
IT/IS to receive software development and consulting services for its database
and retrieval. As of June 30, 1999, no work had been performed or billed to
National Law under this agreement.
Effective in November 1998, National Law and Mr. Carr entered into the
Personal Service Contract. During the Period from Inception to June 30, 1999,
National Law incurred total charges of $55,400 under this agreement. The
agreement was terminated on July 1, 1999, when Mr. Carr became a salaried
officer of the Company.
Since November 1998, National Law has received co-location and rackspace
for its Internet servers from an affiliated company in which Mr. Carr is a
member of the board of directors and a major stockholder. Under this three-year
letter agreement, National Law makes monthly payments of $3,000. During the
Period from Inception to ended June 30, 1999, National Law was billed charges of
$24,000 under this agreement, and at June 30, 1999, had recorded a payable of
$12,000 to this affiliated company. The parties to this agreement are
negotiating a new monthly rate, a portion of which may be allocated to months
earlier than June 1999.
Prior to the National Law Transaction, the Company paid approximately
$70,000 for accounting and management services and rent to a company controlled
by A.W. Dugan, who was the then Chairman of the Board of Directors and President
and a significant stockholder of the Company.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following documents are being filed as part of this Report:
(a)(3) The following exhibits are filed as part of this report as required
by Item 601 of Regulation S-K
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.1 Planet Resources, Inc. 1999 Stock Option Plan.
10.2 Planet Resources, Inc. Employee Stock Purchase Plan.
10.3 New Planet Resources, Inc. Stock Incentive Plan.
10.4 Planet Resources, Inc. 1999 Director Option Plan
6
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
INTERNET LAW LIBRARY, INC.
By: /s/ HUNTER M.A. CARR
-----------------------------------
Hunter M.A. Carr
Chairman of the Board of Directors,
President and Chief Executive Officer
Date: October 28, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Hunter M.A. Carr Chairman of the Board of Directors,
- ---------------------- President and Chief Executive Officer
Hunter M. A. Carr (Principal Executive Officer) October 28, 1999
* Director, Vice President
- ----------------------- and General Counsel October 28, 1999
Joe H. Reynolds
* Director October 28, 1999
- -----------------------
Kelley Kirker
/s/ Malcolm McNeill Chief Financial Officer (Principal
- ----------------------- Financial Officer and Accounting
Malcolm McNeill Officer) October 28, 1999
* Director October 28, 1999
- -----------------------
Jack I. Tompkins
* By: /s/ Hunter M.A. Carr
------------------------
Hunter M.A. Carr
Attorney-in-Fact
7
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.1 Planet Resources, Inc. 1999 Stock Option Plan.
10.2 Planet Resources, Inc. Employee Stock Purchase Plan.
10.3 New Planet Resources, Inc. Stock Incentive Plan.
10.4 Planet Resources, Inc. 1999 Director Option Plan.
8
<PAGE>
EXHIBIT 10.1
PLANET RESOURCES, INC.
1999 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
This Stock Option Plan (the "Plan") is intended as an incentive to key
employees of Planet Resources, Inc. (the "Company"). Its purposes are to retain
employees with a high degree of training, experience and ability, to attract new
employees whose services are considered unusually valuable, to encourage the
sense of proprietorship of such persons and to stimulate the active interest of
such persons in the development and financial success of the Company.
2. ADMINISTRATION OF THE PLAN
(a) Stock Option Committee. The Board of Directors shall appoint and
maintain a Stock Option Committee (the "Committee") which shall consist of at
least two (2) members of the Board of Directors, none of whom is an officer or
employee of the Company, who shall serve at the pleasure of the Board. The
Committee may from time to time grant incentive stock options and non-qualified
stock options ("Stock Options") under the Plan to the persons described in
Section 3 hereof. No member of such Committee shall be eligible to receive
Stock Options under this Plan during his or her tenure on the Committee.
Members of the Committee shall be subject to any additional restrictions
necessary to satisfy the disinterested administration of the Plan as required in
Rule 16b-3 under the United States Securities Exchange Act of 1934 (the "Act")
as it may be amended from time to time.
(b) Powers of Committee. The Committee shall have full power and authority
to interpret the provisions of the Plan and supervise its administration. All
decisions and selections made by the Committee pursuant to the provisions of the
Plan shall be made by a majority of its members. Any decision reduced to
writing and signed by a majority of the members shall be fully effective as if
adopted by a majority at a meeting duly held. The Committee shall have full and
final authority to determine (i) the persons to whom Stock Options hereunder
shall be granted, (ii) the number of shares to be covered by each Stock Option
except that no optionee may be granted Stock Options for more than 300,000
Shares during the life of the Plan, and (iii) whether such Stock Option shall be
designated an "incentive stock option" or a "non-qualified stock option."
(c) Limitation of Committee Member Liability. No member of the Committee
shall be liable for anything done or omitted to be done by him or by her or any
other member of the Committee in connection with the Plan, except for his or her
own willful misconduct or as expressly provided by statute.
(d) Forfeiture of Options For Detrimental Activity. If the exercise period
of an outstanding Stock Option is continued following a holder's termination of
employment due to retirement as provided in Section 5(e)(ii)(C), the Committee
shall have the authority in its discretion to cause such Stock Option to be
forfeited in the event that such holder engages in "detrimental activity" as
described in Section 5(e)(ii)(C).
3. GRANTS OF STOCK OPTIONS
(a) Eligibility. The persons eligible for participation in the Plan as
recipients of Stock Options shall include only employees of the Company or its
subsidiary corporations as defined in Section 424(f) of the Internal Revenue
Code of 1986, as amended from time to time (the "Code") and hereinafter referred
to as "subsidiaries", who are executive, administrative, professional or
technical personnel who have responsibilities affecting the management,
direction, development and financial success of the Company or its subsidiaries.
An employee may receive more than one grant of Stock Options at the Committee's
discretion including simultaneous grants of different forms of Stock Options.
(b) Committee Determines Terms and Conditions of Options. The Committee in
granting Stock Options hereunder shall have discretion to determine the terms
and conditions upon which such Stock Options may be exercisable, including a
designation of Stock Options as "incentive stock options" under Section 422 of
the Code,
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and shall so designate at the time of any grant if the Stock Option is to be an
incentive stock option. Each grant of a Stock Option shall be confirmed by an
Agreement consistent with this Plan which shall be executed by the Company and
by the person to whom such Stock Option is granted. The Committee shall have the
right to determine the period of time, if any, during which the recipient must
remain in the employment of the Company or a subsidiary as a condition to the
exercise of any Stock Option. Any Stock Option may provide that the
exercisablity thereof, or of any installment or portion thereof, is subject to
the satisfaction of any other terms and conditions as the Committee may
determine, such as, but not limited to, the market price of the Shares,
satisfaction of goals for the employee or performance of the Company.
(c) Employment Includes Employment with Subsidiaries. For purposes of this
Plan, employment with the Company shall include employment with any subsidiary
of the Company, and the Stock Options granted under this Plan shall not be
affected by an employee's transfer of employment from the Company to a
subsidiary, from a subsidiary to the Company or between subsidiaries.
(d) Method of Exercise. Subject to the provisions of this Plan, an
optionee may exercise Stock Options, in whole or in part, at any time when the
Stock Option is exercisable by written notice of exercise to the Company on a
form provided by the Committee specifying the number of Shares subject to the
Stock Option to be purchased. Except where waived by the Committee, such notice
shall be accompanied by payment in full of the purchase price by cash or check
or such other form of payment as the Company may accept. If approved by the
Committee, payment in full or in part may also be made (i) by delivering Shares
already owned by the optionee (which Shares shall have been owned by the
optionee for not less than 6 months if the optionee is subject to Section 16 of
the Act) having a total Fair Market Value on the date of such delivery equal to
the purchase price; (ii) by the execution and delivery of a note or other
evidence of indebtedness (and any security agreement thereunder) satisfactory to
the Committee; (iii) by authorizing the Company to retain Shares which would
otherwise be issuable upon exercise of the Stock Option having a total Fair
Market Value on the date of delivery equal to the purchase price; (iv) by the
delivery of cash or the extension of credit by a broker-dealer to whom the
optionee has submitted a notice of exercise or otherwise indicated an intent to
exercise a Stock Option (in accordance with applicable regulations of the board
of governors of the Federal Reserve System, and any other requirement of law, a
so-called "cashless" exercise); (v) by certifying ownership of Shares to the
satisfaction of the Committee for later delivery to the Company as specified by
the Committee; or (vi) by any combination of the foregoing.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 8 hereof, there shall be
subject to the Plan 300,000 shares of Common Stock, par value $0.001 per share,
of the Company (the "Shares"). The Shares subject to the Plan shall consist of
authorized and unissued Shares or previously issued Shares reacquired and held
by the Company or any subsidiary. Should any Stock Option expire or be
terminated prior to its exercise in full and prior to the termination of the
Plan, the Shares theretofore subject to such Stock Option shall be available for
further grants under the Plan. Until termination of the Plan, the Company
and/or one or more subsidiaries shall at all times make available a sufficient
number of Shares to meet the requirements of the Plan. After termination of the
Plan, the number of Shares reserved for purposes of the Plan from time to time
shall be only such number of Shares as are issuable under then outstanding Stock
Options.
5. TERMS OF STOCK OPTIONS
(a) Incentive Stock Options. Stock Options granted under this Plan which
are designated as incentive stock options may be granted with respect to any
numbers of Shares, subject to the limitation that the aggregate "Fair Market
Value" of such Shares (determined in accordance with Section 5(b) of the Plan at
the time the Stock Option is granted) with respect to which such Stock 2 Options
are exercisable for the first time by an employee during any one calendar year
(under all such plans of the Company and any subsidiary of the Company) shall
not exceed $100,000. To the extent that the aggregate Fair Market Value of
Shares with respect to which incentive stock options (determined without regard
to this subsection) are exercisable for the first time by any employee during
any calendar year (under all plans of the employer corporation and its parent
and subsidiary corporations) exceeds $100,000, such Stock Options shall be
treated as Stock Options which are not incentive stock options.
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(b) Purchase Price For Shares Subject to Stock Options. The purchase price
of each Share subject to a Stock Option shall be determined by the Committee
prior to granting a Stock Option. The Committee shall set the purchase price
for each Share at such price as the Committee in its sole discretion shall
determine. If such Stock Option is an incentive stock option, the purchase
price shall be not less than the fair market value (the "Fair Market Value") of
each Share on the date the Stock Option is granted, or where granted to an
individual who owns or who is deemed to own stock possessing more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company, not less than one hundred ten percent (110%) of such Fair Market Value
per Share. The Fair Market Value of a Share on a particular date shall be
deemed to be (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 shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the date of grant, as reported in
The Wall Street Journal or such other source as the Committee deems reliable;
(ii) if the Common Stock is quoted on the NASDAQ System (but not on the National
Market System thereof) or regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the bid and 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 Committee deems reliable, or
(iii) in the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in accordance with a formula fixed in
good faith by the Committee.
(c) Installments
(i) Exercisable in Installments. Each Stock Option granted hereunder
shall be exercisable in one or more installments (annual or other) on such
date or dates as the Committee may in its sole discretion determine, and
the terms of such exercise shall be set forth in the Stock Option Agreement
covering the grant of the Stock Option, provided that no Stock Option may
be exercised after the expiration of ten (10) years from the date such
Stock Option is granted.
(ii) Installments are Cumulative. Except as provided in paragraph (e)
below, the right to purchase Shares pursuant to a Stock Option shall be
cumulative so that when the right to purchase any Shares has accrued such
Shares or any part thereof may be purchased at any time thereafter until
the expiration or termination of the Stock Option.
(d) Amendment of Options. At any time at or after the granting of any
Stock Option, the Committee shall have the right to amend any provision thereof,
including, without limitation, to change the exercise price and the installment
exercise dates, subject, however, to any applicable limitations concerning
options designated as incentive stock options and to any limitations provided by
the Act, by Rule 16b-3 and by any other rule issued under the Act; provided,
however, that no Stock Option shall be amended to increase the exercise price,
extend the date on which such Stock Option or any installment thereof shall
become exercisable or shorten the term of the Stock Option without the consent
of the optionee.
(e) Termination
(i) Termination of Employment.
(A) If the optionee's employment with the Company is terminated
with the consent of the Company and provided such employment is not
terminated for cause (of which the 3 Committee shall be the sole
judge), the Committee may permit such Stock Option to be exercised by
such optionee at any time during the period of three (3) months after
such termination, provided that such Stock Option may be exercised
before expiration and within such three-month period only to the
extent it was exercisable on the date of such termination.
(B) In the event an optionee dies while in the employ of the
Company or dies after termination of employment but prior to the
exercise in full of any Stock Option which was exercisable on the date
of such termination, such Stock Option may be exercised before
expiration
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by the optionee's personal representative during the period of twelve
(12) months after the date of death to the extent exercisable by the
optionee at the date of death.
(C) If the optionee's employment with the Company is terminated
without the consent of the Company for any reason other than the death
of the optionee, or if the optionee's employment with the Company is
terminated for cause, his rights under any then outstanding Stock
Option shall terminate immediately. The Committee shall be the sole
judge of whether the optionee's employment is terminated without the
consent of the Company or for cause.
(ii) Termination at Retirement.
(A) If the optionee's employment with the Company is terminated
due to retirement in the Committee's sole discretion, such Stock
Option shall be exercisable by such optionee at any time during the
period of sixty (60) months after such termination or the remainder of
the option period, whichever is less, provided that such Stock Option
may be exercisable after such termination and before expiration only
to the extent that it is exercisable on the date of such termination.
(B) In the event an optionee dies during such extended exercise
period, such Stock Option may be exercised by the optionee's personal
representative during the period of twelve (12) months after the date
of death to the extent exercisable by the optionee at the date of
death and to the extent the Stock Option does not expire within such
twelve (12) months.
(C) Notwithstanding the foregoing, if at any time after
termination due to retirement the optionee engages in "detrimental
activity" (as hereinafter defined), the Committee in its discretion
may cause the optionee's right to exercise such Stock Option to be
forfeited. Such forfeiture may occur at any time subsequent to the
date that is three (3) months after the optionee's termination of
employment and prior to the exercise of such Stock Option. If an
allegation of detrimental activity by an optionee is made to the
Committee, the exercisability of the optionee's Stock Options will be
suspended for up to two months to permit the investigation of such
allegation. For purposes of this Section 5(c)(v), "detrimental
activity" means activity that is determined by the Committee in its
sole and absolute discretion to be detrimental to the interests of the
Company or any of its subsidiaries, including but not limited to
situations where such optionee: (1) divulges trade secrets of the
company, proprietary data or other confidential information relating
to the Company or to the business of the Company and any subsidiaries,
(2) enters into employment with a competitor under circumstances
suggesting that such optionee will be using unique or special
knowledge gained as a Company employee to compete with the Company,
(3) is convicted by a court of competent jurisdiction of any felony or
a crime involving moral turpitude, (4) uses information obtained
during the course of his or her prior employment for his or her own
purposes, such as for the solicitation of business, (5) is determined
to have engaged (whether or not prior to termination due to
retirement) in either gross misconduct or criminal activity harmful to
the Company, or (6) takes any action that harms the business
interests, reputation, or goodwill of the Company and/or its
subsidiaries.
(iii) Ten Year Term Limitation on Options. Notwithstanding the other
provisions of this paragraph (e), in no event may a Stock Option be
exercised after the expiration of ten (10) years from the date such Stock
Option is granted.
(f) Restrictions on Transfer of Shares. At the time of the grant of a
Stock Option, the Committee may determine that the Shares covered by such Stock
Option shall be restricted as to transferability. If so restricted, such Shares
shall not be sold, transferred or disposed of in any manner, and such Shares
shall not be pledged or otherwise hypothecated until the restriction expires by
its terms. The circumstances under which any such restriction shall expire
shall be determined by the Committee and shall be set forth in the Stock Option
Agreement covering the grant of the Stock Option to purchase such Shares.
6. ASSIGNABILITY OF STOCK OPTIONS
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Stock Options granted under the Plan shall not be assignable or otherwise
transferable by the recipient except by will or the laws of descent and
distribution, subject to the provisions of Section 5(e). Otherwise, Stock
Options granted under this Plan shall be exercisable during the lifetime of the
recipient (except as otherwise provided in the Plan or the applicable Agreement
for Stock Options other than incentive stock options) only by the recipient for
his or her individual account, and no purported assignment or transfer of such
Stock Options thereunder, whether voluntary or involuntary, by operation of law
or otherwise, shall vest in the purported assignee or transferee any interest or
right therein whatsoever but immediately upon any such purported assignment or
transfer, or any attempt to make the same, such Stock Options thereunder shall
terminate and become of no further effect.
7. TAXES
The Committee may make such provisions and rules as it may deem appropriate
for the withholding of taxes in connection with any Stock Options granted under
the Plan. An optionee, in the discretion of the Committee, may elect to satisfy
all or any portion of the United States tax required to be withheld by the
Company in connection with the exercise of such Stock Option by electing to have
the Company withhold a number of Shares having a Fair Market Value on the date
of exercise equal to or less than the amount required to be withheld. An
optionee's election pursuant to the preceding sentence must be made on or before
the date of exercise and must be irrevocable.
8. REORGANIZATIONS AND RECAPITALIZATION OF THE COMPANY
(a) Plan Does Not Limit Company Actions. The existence of this Plan and
Stock Options granted hereunder shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any or all adjustments,
recapitalization, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Shares or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
(b) No Adjustment for Future Issuances of Shares. Except as hereinafter
provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to Stock Options granted hereunder.
(c) Antidilution For Certain Capital Adjustments. The Shares with respect
to which Stock Options may be granted hereunder are shares of the Common Stock
of the Company as presently constituted, but if, and whenever, prior to the
delivery by the Company or a subsidiary of all of the Shares which are subject
to the Stock Options or rights granted hereunder, the Company shall effect a
subdivision or consolidation of shares or other capital readjustments, the
payment of a stock dividend or other increase or reduction of the number of
shares of the Common Stock outstanding without receiving compensation therefor
in money, services or property, the number of Shares subject to the Plan shall
be proportionately adjusted and the number of Shares with respect to which Stock
Options granted hereunder may thereafter be exercised shall:
(i) in the event of an increase in the number of outstanding Shares,
be proportionately increased, and the cash consideration (if any) payable
per Share shall be proportionately reduced; and
(ii) in the event of a reduction in the number of outstanding Shares,
be proportionately reduced, and the cash consideration (if any) payable per
Share shall be proportionately increased.
(d) Mergers and Consolidations. If the Company merges with one or more
corporations, or consolidates with one or more corporations and the Company
shall be the surviving corporation, thereafter, upon any exercise of Stock
Options granted hereunder, the recipient shall, at no additional cost (other
than the option price, if any) be entitled to receive (subject to any required
action by stockholders) in lieu of the number of Shares as
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to which such Stock Options shall then be exercisable the number and class of
shares of stock or other securities to which the recipient would have been
entitled pursuant to the terms of the agreement of merger or consolidation, if
immediately prior to such merger or consolidation the recipient had been the
holder of record of the number of shares of Common Stock of the Company equal to
the number of Shares as to which such Stock Options shall be exercisable. Upon
any reorganization, merger or consolidation where the Company is not the
surviving corporation or upon liquidation or dissolution of the Company, all
outstanding Stock Options shall, unless provisions are made in connection with
such reorganization, merger or consolidation for the assumption of such Stock
Options, be canceled by the Company as of the effective date of any such
reorganization, merger or consolidation, or of any dissolution or liquidation of
the Company, by giving notice to each holder thereof or his or her personal
representative of its intention to do so and by permitting the exercise during
the thirty-day period next preceding such effective date of all Stock Options
which are outstanding as of such date, whether or not otherwise exercisable.
9. PLAN TERM
The Plan shall be effective January 28, 1999. No Stock Options shall be
granted pursuant to this Plan after ____________.
10. STOCK APPRECIATION RIGHTS
(a) General. The Committee shall have authority to grant Stock
Appreciation Rights under the Plan at any time or from time to time. Subject to
the employee's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement, a Stock
Appreciation Right shall entitle the employee to surrender to the Company the
Stock Appreciation Right and to be paid therefor in Shares, cash or a
combination thereof as herein provided, the amount described in Section
10(c)(ii) below.
(b) Grant. Stock Appreciation Rights may be granted in conjunction with
all or part of any Stock Option granted under the Plan and the exercise of such
a Stock Appreciation Right shall require the cancellation of a corresponding
portion of the Stock Option (and the exercise of a Stock Option shall result in
a corresponding cancellation of the Stock Appreciation Right). In the case of a
Stock Option other than an incentive stock option, such rights may be granted
either at or after the time of grant of such Stock Option. In the case of an
incentive stock option, such rights may be granted only at the time of grant of
such Stock Option. A Stock Appreciation Right may also be granted on a stand
alone basis. The grant of a Stock Appreciation Right shall occur as of the date
the Committee determines. Each Stock Appreciation Right granted under the Plan
shall be evidenced by an Agreement, which shall embody the terms and conditions
of such Stock Appreciation Right and which shall be subject to the terms and
conditions set forth in the Plan.
(c) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
(i) Period and Exercise. The term of a Stock Appreciation Right
shall be established by the Committee. If granted in conjunction with a
Stock Option, the Stock Appreciation Right shall have a term which is the
same as the period for the Stock Option and shall be exercisable only at
such 6 time or times and to the extent the related Stock Options would be
exercisable. A Stock Appreciation Right which is granted on a stand alone
basis shall be for such period and shall be exercisable at such times and
to the extent provided in an Agreement. Stock Appreciation Rights shall be
exercised by the employee's giving written notice of exercise on a form
provided by the Committee (if available) to the Company specifying the
portion of the Stock Appreciation Right to be exercised.
(ii) Amount. Upon the exercise of a Stock Appreciation Right, an
employee shall be entitled to receive an amount in cash, Shares or both as
determined by the Committee or as otherwise permitted in an Agreement equal
in value to the excess of the Fair Market Value per Share over the price
per Share of Common Stock specified in the related Agreement multiplied by
the number of Shares in respect of which the Stock Appreciation Right is
exercised. In the case of a Stock Appreciation Right granted on a stand-
alone basis, the Agreement shall specify the value to be used in lieu of
the price per Share. The aggregate Fair Market Value per Share shall be
determined as of the date of exercise of such Stock Appreciation Right.
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(iii) Special Rules. In the case of Stock Appreciation Rights relating
to Stock Options held by employees who are actually or potentially subject
to Section 16(b) of the Act
(A) The Committee may require that such Stock Appreciation
Rights be exercised only in accordance with the applicable "window
period" provisions of Rule 16b-3;
(B) The Committee may provide that the amount to be paid upon
exercise of such Stock Appreciation Rights (other than those relating
to incentive stock options) during a Rule 16b-3 "window period" shall
be based on the highest mean sales price of the Shares on the
principal exchange on which the Shares are traded, NASDAQ or other
relevant market for determining value on any day during such "window
period"; and
(C) No Stock Appreciation Right shall be exercisable during the
first six months of its term, except that this limitation shall not
apply in the event of death of the employee prior to the expiration of
the six-month period.
(iv) Non-transferability of Stock Appreciation Rights. Stock
Appreciation Rights shall be transferable only when and to the extent that
a Stock Option would be transferable under the Plan unless otherwise
provided in an Agreement.
(v) Termination. A Stock Appreciation Right shall terminate at such
time as a Stock Option would terminate under the Plan, unless otherwise
provided in an Agreement.
(vi) Effect on Shares Under the Plan. To the extent required by Rule
16b-3, upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall be
deemed to have been exercised for the purpose of the limitation set forth
in Section 4 on the number of Shares to be issued under the Plan, but only
to the extent of the number of Shares covered by the Stock Appreciation
Right at the time of exercise based on the value of the Stock Appreciation
Right at such time.
(vii) Incentive Stock Option. A Stock Appreciation Right granted in
tandem with an incentive stock option shall not be exercisable unless the
Fair Market Value of the Shares on the date of exercise exceeds the
exercise price. In no event shall any amount paid pursuant to the Stock
Appreciation Right exceed the difference between the Fair Market Value on
the date of exercise and the exercise price.
11. AMENDMENT OR TERMINATION
The Board of Directors may amend, alter or discontinue the Plan at any time
insofar as permitted by law, but no amendment or alteration shall be made
without the approval of the stockholders:
(a) if and to the extent such amendment is required to be approved by
stockholders to continue the exemption provided for in Rule 16b-3 (or any
successor provision) under the Act; or
(b) if and to the extent such amendment requires stockholder approval
under Section 422 of the Code (or any successor provision).
No amendment of the Plan shall alter or impair any of the rights or
obligations of any person, without his consent, under any option or right
theretofore granted under the Plan.
12. GOVERNMENT REGULATIONS
Notwithstanding any of the provisions hereof, or of any Stock Option
granted hereunder, the obligation of the Company or any subsidiary to sell and
deliver Shares under such Stock Option or to make cash payments in respect
thereto shall be subject to all applicable laws, rules and regulations and to
such approvals by any governmental agencies or national securities exchanges as
may be required, and the recipient shall agrees that he
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will not exercise or convert any Stock Option granted hereunder, and that the
Company or any subsidiary will not be obligated to issue any Shares or make any
payments under any such Stock Option if the exercise thereof or if the issuance
of such Shares or if the payment made shall constitute a violation by the
recipient or the Company or any subsidiary of any provision of any applicable
law or regulation of any governmental authority.
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EXHIBIT 10.2
PLANET RESOURCES, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1
PURPOSE
1.1 Purpose. The purpose of the Planet Resources, Inc. Employee Stock
Purchase Plan (the "Plan") is to provide eligible employees of Planet Resources,
Inc. (the "Company") who wish to become shareholders of the Company an
opportunity to purchase common stock ($.001 par value) of the Company ("Stock").
The Board of Directors of the Company believes that employee participation in
the ownership of the Company will be to the mutual benefit of both the employees
and the Company. The Plan is intended to qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The provisions of the Plan shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
ARTICLE 2
DEFINITIONS
2.1 Board. Board shall mean the Board of Directors of the Company or a
committee appointed by the Board of Directors of the Company to administer the
Plan. The Board shall have complete discretion to interpret and construe any
and all provisions of the Plan, to adopt rules and regulations for administering
the Plan and to make all other determinations deemed necessary or advisable for
the administering of the Plan. The Board's determination of the foregoing
matters shall be conclusive.
2.2 Compensation. Compensation shall mean regular straight-time earnings
or salary, excluding payments for overtime, shift premium, bonuses and other
special payments, commissions or incentive payments. 2.3 Employee. Employee
shall mean any person who is customarily employed on a full-time or part-time
basis by the Company and is regularly scheduled to work more than 20 hours per
week.
2.4 Plan Administrator. Plan Administrator shall mean the person
designated by the Board to receive notices and supervise the operation of the
Plan. In the absence of a designation of a Plan Administrator by the Board, the
Treasurer of the Company shall be the Plan Administrator.
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
3.1 Initial Eligibility. Any employee who shall have completed six
consecutive months of employment and shall be employed by the Company on the
date his participation in the Plan is to become effective shall be eligible to
participate in Offerings under the Plan which commence on or after such six
month period has concluded.
3.2 Leave of Absence. For purposes of participation in the Plan, a person
on leave of absence shall be deemed to be an employee for the first 90 days of
such leave of absence and such employee's employment shall be deemed to have
terminated at the close of business on the 90th day of such leave of absence
unless such employee shall have returned to regular full-time or part-time
employment (as applicable) prior to the close of business on such 90th day.
Termination by the Company of any employee's leave of absence, other than
termination of such leave of absence by return to full-time or part-time
employment (as applicable) shall terminate an employee's employment for all
purposes of the Plan and shall terminate such employee's participation in the
Plan and right to exercise any option.
3.3 Restrictions on Participation. Notwithstanding any provisions of the
Plan to the contrary, no employee shall be granted any rights to purchase shares
under the Plan:
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(a) If, immediately after such grant, such employee would own Stock,
and/or hold outstanding options to acquire Stock, possessing 5 percent or
more of the total combined voting power or value of all classes of stock of
the Company (for the purposes of this paragraph, the rules of Section
424(d) of the Code shall apply in determining Stock ownership); or
(b) Which would permit such employee's rights to purchase Stock under
all employee stock purchase plans of the Company to accrue at a rate which
exceeds $25,000 in fair market value of the Stock (determined at the time
such rights are granted) for each calendar year in which such rights are
outstanding.
3.4 Restrictions on Grants. No more than 100,000 shares of Stock may be
sold pursuant to options granted under the Plan. If for any reason any option
under the Plan terminates in whole or in part, shares of Stock subject to such
terminated options may be again subject to an option under the Plan.
3.5 Commencement of Participation. An eligible employee may become a
participant with respect to a particular Offering (defined below) by completing
an authorization for a payroll deduction on the form provided by the Company and
filing it with the personnel office on or before the Offering Commencement Date
(defined below). Payroll deductions for a participant shall commence on the
applicable Offering Commencement Date when his authorization for a payroll
deduction becomes effective and shall end on the Offering Termination Date,
unless sooner terminated by the participant as provided in Article 7.
ARTICLE 4
OFFERINGS
4.1 Offerings. From time to time, but not more frequently than once
during any six month period, the Board may fix a date ("Offering Commencement
Date"), on which the Company will make an offer ("Offering"), to all employees
then eligible to participate, of options to purchase Stock. Each Offering
Commencement Date shall be at least 60 days after the date on which the Board
makes the employees aware of the Offering. The Offering Termination Date shall
be the date which is six months after the Offering Commencement Date.
ARTICLE 5
GRANTING OF OPTIONS
5.1 Number of Shares of Option Stock. On each Offering Commencement Date,
each participating employee shall be deemed to have been granted an option to
purchase a maximum number of shares of Stock determined as follows:
(a) The percentage of the employee's Compensation which he has elected
to have withheld, but in no event exceeding five percent of Compensation;
multiplied by
(b) The employee's Compensation during the period of the Offering;
divided by
(c) 85 percent of the market value of the Stock on the applicable
Offering Commencement Date, determined as provided in Section 5.2 below.
5.2 Option Price. The option price of Stock under this Plan shall be the
lower of:
(a) 85 percent of the market value of the Stock on the Offering
Commencement Date; or
(b) 85 percent of the market value of the Stock on the Offering
Termination Date. The market value of the Stock shall be its closing price
on the applicable date, or the nearest prior business day on which trading
occurred, on National Association of Securities Dealers, Inc. Automated
Quotation System (NASDAQ). If the Stock is not admitted to trading on
NASDAQ on the Offering Commencement Date or the Offering Termination Date,
then the market value on such dates shall be 85 percent of the fair market
value of the Stock as determined by the Board.
<PAGE>
ARTICLE 6
EXERCISE OF OPTIONS
6.1 Automatic Exercise. Unless a participant gives written notice to the
Company as provided herein, his option for the purchase of Stock with payroll
deductions made during any Offering will be deemed to have been exercised
automatically on the Offering Termination Date applicable to such Offering, for
the purchase of the number of full shares of Stock which the accumulated payroll
deductions in his account at that time will purchase at the applicable option
price (but not in excess of the number of shares of Stock for which options have
been granted to the employee pursuant to Section 5.1) and any excess in his
account at that time will be returned to him.
6.2 Withdrawal of Account. By written notice to the Plan Administrator,
at any time prior to the Offering Termination Date applicable to any Offering, a
participant may elect to withdraw all accumulated payroll deductions in his
account at such time.
6.3 Fractional Shares. Fractional shares of Stock will not be issued
under the Plan and any accumulated payroll deductions which would have been used
to purchase fractional shares will be returned to any employee promptly
following the termination of an Offering, without interest.
6.4 Transferability of Options. During a participant's lifetime, options
held by such participant shall be exercisable only by that participant.
6.5 Delivery of Stock. As promptly as practicable after the Offering
Termination Date of each Offering, the Company will deliver to each participant,
as appropriate, the stock purchased upon exercise of his option.
ARTICLE 7
WITHDRAWAL
7.1 In General. A participant may withdraw payroll deductions credited to
his account under the Plan at any time by giving written notice to the Plan
Administrator. All of the employee's payroll deductions credited to his account
will be paid to him promptly after receipt of his notice of withdrawal, and no
further payroll deductions will be made from his pay during such Offering.
7.2 Effect on Subsequent Participant. A participant's withdrawal from any
Offering will not have any effect upon his eligibility to participate in any
succeeding Offering or in any similar plan which may hereafter be adopted by the
Company.
7.3 Termination of Employment. Upon termination of the participant's
employment for any reason, including retirement but excluding death while in the
employ of the Company, the payroll deductions credited to his account will be
returned to him.
7.4 Death. Upon termination of the participant's employment because of
his death, his beneficiary (as defined in Section ) shall have the right to
elect by written notice given to the Plan Administrator prior to the earlier of
the Offering Termination Date or the expiration of a period of 60 days
commencing with the date of the death of the participant, either:
(a) To withdraw all of the payroll deductions credited to the
participant's account under the Plan; or
(b) To exercise the participant's option for the purchase of Stock on
the Offering Termination Date next following the date of the participant's
death for the purchase of the number of full shares of Stock which the
accumulated payroll deductions in the participant's account at the date of
the participant's death will purchase at the applicable option price, and
any excess in such account will be returned to the beneficiary.
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In the event that no such written notice of election shall be duly received
by the Plan Administrator, the beneficiary shall automatically be deemed to have
elected, pursuant to subsection (b), to exercise the participant's option.
7.5 Leave of Absence. A participant on leave of absence shall, subject to
the election made by such participant pursuant to Section 3.5, continue to be a
participant in the Plan so long as such participant is on continuous leave of
absence. A participant who has been on leave of absence for more than 90 days
and who therefore is not an employee for the purpose of the Plan shall not be
entitled to participate in any Offering commencing after the 90th day of such
leave of absence. Notwithstanding any other provisions of the Plan, unless a
participant on leave of absence returns to regular full time or part time
employment with the Company at the earlier of: the termination of such leave of
absence; or three months from the 90th day of such leave of absence, such
participant's participation in the Plan shall terminate on whichever of such
dates occurs first.
ARTICLE 8
INTEREST
8.1 Payment of Interest. No interest will be paid or allowed on any money
paid into the Plan or credited to the account of any participant employee;
except that interest shall be paid on any and all money which is distributed to
an employee or his beneficiary pursuant to Sections 6.1 and 7.4(a). Such
distributions shall bear simple interest during the period from the date of
withholding to the date of return at the regular passbook savings account rates
per annum in effect at Summit Bank during the applicable offering period or, if
such rates are not published or otherwise available for such purpose, at the
regular passbook savings account rates per annum in effect during such period at
another major commercial bank in Philadelphia, Pennsylvania selected by the
Board. Where the amount returned represents an excess amount in an employee's
account after such account has been applied to the purchase of stock, the
employee's withholding account shall be deemed to have been applied first toward
purchase of stock under the Plan, so that interest shall be paid only on the
last withholdings during the period which result in the excess amount.
ARTICLE 9
STOCK
9.1 Maximum Shares. The maximum number of shares which shall be issued
under the Plan, subject to adjustment upon changes in capitalization of the
Company as provided in Section 10.4, shall be 100,000 shares for all Offerings.
The maximum number of shares of Stock which shall be issued in each Offering
shall be determined by the Board at the time the Offering is made. If the total
number of shares for which options are exercised on any Offering Termination
Date in accordance with Section 6.1 exceeds the maximum number of shares for the
applicable offering, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in as nearly a uniform manner as shall
be practicable and as it shall determine to be equitable, and the balance of
payroll deductions credited to the account of each participant under the Plan
shall be returned to him as promptly as possible.
9.2 Participant's Interest in Option Stock. The participant will have no
interest in Stock covered by his option until such option has been exercised on
the Offering Termination Date.
9.3 Registration of Stock. Stock to be delivered to a participant under
the Plan will be registered in the name of the participant, or, if the
participant so directs by written notice to the Plan Administrator prior to the
Offering Termination Date applicable thereto, in the names of the participant
and one such other person as may be designated by the participant, as joint
tenants with rights of survivorship or as tenants by the entireties, to the
extent permitted by applicable law.
ARTICLE 10
MISCELLANEOUS
10.1 Designation of Beneficiary. A participant may file a written
designation of a beneficiary who is to receive any Stock and/or cash under the
Plan. Such designation of beneficiary may be changed by the participant at any
time by written notice to the Plan Administrator. Upon the death of a
participant and upon receipt by the
<PAGE>
Company of proof of identity and existence at the participant's death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such Stock 4 and/or cash to such beneficiary. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such Stock and/or cash to the personal representative of the estate of
the participant, or if no such personal representative has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver such
Stock and/or cash to the spouse or, if none, per stirpes to the descendants of
the participant. No beneficiary shall, prior to the death of the participant by
whom he has been designated, acquire any interest in the Stock or cash credited
to the participant under the Plan.
10.2 Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive Stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section.
10.3 Use of Funds. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.
10.4 Adjustment Upon Changes in Capitalization.
(a) If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed into, or
been exchanged for a different number or kind of shares or securities of
the Company through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the Board in the
number and/or kind of shares which are subject to purchase under
outstanding options and on the option exercise price or prices applicable
to such outstanding options. In addition, in any such event, the number
and/or kind of shares which may be offered in the Offerings described in
Article 4 hereof shall also be proportionately adjusted. No adjustments
shall be made for stock dividends.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or upon a sale of substantially all of the property or stock
of the Company to another corporation, the holder of each option then
outstanding under the Plan will thereafter be entitled to receive at the
next Offering Termination Date upon the exercise of such option for each
share as to which such option shall be exercised, as nearly as reasonably
may be determined, the cash, securities and/or property which a holder of
one share of the Stock was entitled to receive upon and at the time of such
transaction. The Board shall take such steps in connection with the
transactions as the Board shall deem necessary to assure that the
provisions of this Section 10.4 shall thereafter be applicable, as nearly
as reasonably may be determined, in relation to the cash, securities and/or
property as to which the holder of such option might thereafter be entitled
to receive.
10.5 Amendment and Termination. The Board shall have complete power and
authority to terminate or amend the Plan; provided, however, that the Board
shall not, without the approval of the stockholders of the Company (i) increase
the maximum number of shares which may be issued under any Offering (except
pursuant to Section ); (ii) amend the requirements as to the class of employees
eligible to purchase stock under the Plan. No termination, modification, or
amendment of the Plan may, without the consent of an employee then having an
option under the Plan to purchase stock, adversely affect the rights of such
employee under such option.
10.6 Effective Date. The Plan shall become effective as of January 28,
1999, subject to approval by the holders of the majority of the Stock.
10.7 No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in 5 any employee or class of
employees any right with respect to continuation of employment by the Company,
and it shall not be deemed to
<PAGE>
interfere in any way with the Company's right to terminate, or otherwise modify,
an employee's employment at any time.
10.8 Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
employee participating in the Plan, including, without limitation, such
employee's estate and the personal representatives thereof, heirs and legatees,
and any receiver, trustee in bankruptcy or representative of creditors of such
employee.
<PAGE>
EXHIBIT 10.3
NEW PLANET RESOURCES, INC.
STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this Stock Incentive Plan (the "Plan") is to advance the
interests of New Planet Resources, Inc. (the "Company") and its
stockholders by providing deferred stock incentives in addition to current
compensation to certain key executives and certain directors of the Company
and of its subsidiaries who contribute significantly to the long-term
performance and growth of the Company and such subsidiaries. As used in
this Plan, subsidiary includes parent of the Company and any subsidiary of
the Company within the meaning of Sections 425(e) and (f) of the Internal
Revenue Code of 1986, as amended ("Code"), respectively.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company
(the "Board of Directors") or a committee of the Board of Directors duly
authorized and given authority by the Board of Directors to administer the
Plan (the Board of Directors or such duly authorized committee hereinafter
referred to as the "Board"), as such is from time to time constituted.
The Board shall have all the powers vested in it by the terms of the Plan,
such powers to include exclusive authority (within the limitation described
herein) to select the employees to be granted Awards under the Plan, to
determine the type, size and terms of the Awards to be made to each
employee selected, to determine the time when Awards will be granted, and
to prescribe the form of the instruments evidencing Awards made under the
Plan. The Board shall be authorized to interpret the Plan and the Awards
granted under the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations
which it believes necessary or advisable for the administration of the
Plan. The Board may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any Award in the Manner and to the
extent the Board deems desirable to carry it into effect. Any decision of
the Board in the administration of the Plan, as described herein, shall be
final and conclusive. The Board may act only by a majority of its members
in office, except that the members thereof may authorize any one or more of
their number of any officer of the Company to execute and deliver documents
on behalf of the Board. No member of the Board shall be able for anything
done or omitted to be done by him or by any other member of the Board in
connection with the Plan, except for his own willful misconduct or as
expressly provided by statute.
3. PARTICIPATION
Subject to the provisions of the Plan, the Board shall have exclusive power
to select the directors and officers and other key employees of the Company
and its subsidiaries participating in the Plan to be granted Awards under
the Plan.
4. AWARDS UNDER THE PLAN
(a) TYPE OF AWARDS. Awards under the Plan may be of three types: (i)
"Non-qualified Stock Options" or "Incentive Stock Options," (ii)
"Stock Appreciation Rights" attached to Stock Options, or (iii)
"Restricted Stock." Stock Options are rights to purchase shares of
Common Stock of the Company having a par value of $.001 per share (the
"Common Stock"). Stock Appreciation Rights are rights to receive,
without payment to the Company, cash and/or shares of Common Stock in
lieu of the purchase of shares of Common Stock under the Stock Option
to which the Stock Appreciation Rights are subject to the terms,
conditions and restrictions specified in Paragraph 5. Restricted
Stock is a share of Common Stock which is subject to the repurchase
option and the other terms, conditions and restrictions described in
Paragraph 6.
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(b) MAXIMUM NUMBER OF SHARES THAT MAY BE ISSUED. There may be issued
under the Plan (as Restricted Stock or pursuant to the exercise of
Stock Options or Stock Appreciation Rights) an aggregate of not more
than 2,500,000 shares of Common Stock, subject to adjustment as
provided in Paragraph 7. In addition to Common Stock actually so
issued, there shall be deemed to have been issued pursuant to the Plan
(and therefore no longer available in connection with Awards) a number
of shares equal to the aggregate of the number of shares of Common
Stock under option in respect of which Stock Appreciation Rights
granted pursuant to subparagraph 5(f) shall have been exercised minus
the number of shares of Common Stock, if any, issued upon exercise of
such Stock Appreciation Rights. Common Stock issued pursuant to the
Plan may be either authorized but unissued shares or reacquired
shares, or both. If any Common Stock issued as Restricted Stock shall
be repurchased pursuant to the option described in Paragraph 6 below,
or if any Common Stock issued under the Plan shall be reacquired
pursuant to restrictions imposed at the time of issuance, such shares
may again be issued under the Plan.
(c) RIGHTS WITH RESPECT TO COMMON STOCK
(i) An employee to whom an Award of Restricted Stock has been made
shall have, after issuance to him of a certificate for the
number of shares of Common Stock awarded and prior to the
expiration of the Restricted Period or the earlier repurchase of
such shares of Common Stock as herein provided, ownership of
such shares of Common Stock, including the right to vote the
same and to receive dividends thereon, subject however, to the
options, restrictions and limitations imposed thereon pursuant
to the Plan.
(ii) An employee to whom an Award of Stock Option or Stock
Appreciation Rights is made (and any person succeeding to such
an employee's rights pursuant to the Plan) shall have no rights
as a stockholder with respect to any shares of Common Stock
issuable pursuant to any such Stock Option or Stock Appreciation
Rights until the date of the issuance of a stock certificate to
him for such shares. Except as provided in Paragraph 8, no
adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash,
securities or other property) for which the record date is prior
to the date such stock certificate is issued.
(d) EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS: EXPIRATION OF
RESTRICTIONS APPLICABLE TO RESTRICTED STOCK. Options and Stock
Appreciation Rights shall be subject to such terms and conditions upon
exercisability as the Board may determine consistent with the
provisions of this Plan. Repurchase and other restrictions applicable
to Restricted Stock shall be such as are determined in the discretion
of the Board consistent with the provisions of the Plan. The Board
may determine to permit any Option granted hereunder to be exercisable
immediately upon the date of grant or any time thereafter. The Board
may determine to permit any Stock Appreciation Right granted hereunder
to be exercisable not less than six months after the initial award of
the Option containing, or the amendment or supplementation of any
existing Option Agreement adding the Stock Appreciation Right;
provided, however, that this limitation shall not apply in the event
of death or disability. The Board may determine that there shall be
no restrictions applicable to Restricted Stock awarded under the Plan.
5. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Board may grant Stock Options (to which may but need not be attached
Stock Appreciation Rights as specified in subparagraph 5(f). Each Stock
Option (referred to herein as an "Option") granted under the Plan shall be
evidenced by an instrument in such form as the Board shall prescribe from
time to time in accordance with the Plan and shall comply with the
following terms and conditions (and with such other terms and conditions,
including but not limited to restrictions upon the Option or the shares of
Common Stock issuable upon exercise thereof, as the Board, in its
discretion, shall establish):
(a) The Option price shall be determined by the Board at the time the
Option is granted and shag not be less than the par value of such
shares of Common stock.
(b) The Board will determine the number of shares of Common Stock to be
subject to each Option. The number of shares of Common Stock subject
to an outstanding Option will be reduced on a share for share basis to
the extent that shares of Common Stock under such Option are used to
calculate the cash and/or shares of Common Stock received pursuant to
exercise of a Stock Appreciation Right attached to such Option.
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<PAGE>
(c) The Option shall not be transferable by the optionee otherwise than
will or the laws of descent and distribution, and shall be exercisable
during his lifetime only to him.
(d) The Board will determine the conditions and terms governing the
exercise of granted Options; provided, however that no Option shall be
exercisable:
(i) after the expiration of ten years from the date it is granted
and may be exercised during the period prior to its expiration
only at such time or times as the Board may establish;
(ii) unless payment in United States dollars by cash or check is made
for the shares being acquired thereby in frill at the time of
exercise, or at the option of the holder of such Option, in
Common Stock theretofore owned by such holder (or any
combination of cash and Common Stock).
For purposes of determining the amount, if any, of the purchase price
satisfied by payment of Common Stock under clause (ii) above, such
Common Stock shall be valued at its fair market value on the date of
exercise. Fair market value means the fair market value of one share
of Common Stock on the date in question, which is deemed to be the
mean between the highest and lowest sales prices per share of Common
Stock on any national stock exchange upon which Common Stock is
listed, or if Common Stock is not listed on any national stock
exchange, the mean between the highest closing bid and lowest closing
asked prices for Common Stock as reported by the National Association
of Securities Dealers NASDAQ System, or if not reported by such
system, the mean between the closing bid and asked prices as quoted by
such quotation source as shall be designated by the Board on that
date. If there shall have been no sale on the date in question, fair
market value shall be determined by reference the last preceding date
on which such a sale or sales were so reported. Any Common Stock
delivered in satisfaction of all or a portion of the purchase price
shall be appropriately endorsed for transfer and assigned to the
Company. The Board may, in its discretion and to the extent permitted
by the laws of the State of Delaware determine to permit the holder of
an Option to satisfy the purchase price of the shares as to which an
Option is exercised by delivery of the Option holder's promissory
note, such note to be subject to such terms and conditions as the
Board may determine. The Board may, in its discretion and to the
extent permitted by the laws of the State of Delaware, determine to
cause the Company to lend to be holder of an Option, funds on such
terms and conditions as the Board may determine to be appropriate,
sufficient for the holder of an Option to pay the purchase price of
the shares as to which an Option is to be exercised.
(e) If any person to whom an Option has been granted shall die holding an
Option which has not been fully exercised, his executors,
administrators, heirs or distributees, as the case may be, may, at any
time within one year after the date of such death (but in no event
after the Option has expired under the provisions of subparagraph
5(d)(i) hereon, exercise the Option with respect to any shares as to
which the decedent could have exercised the Option at the time of his
death.
(f) If the Board, in its discretion, so determines, there may be attached
to the Option a Stock Appreciation Right which shall be subject to
such terms and conditions, not inconsistent with the Plan, as the
Board shall impose, including the following.
(i) A Stock Appreciation Right may be exercised only to the extent
that the option to which it is attached is at the time
exercisable. However, if the option to which the Stock
Appreciation Right is attached is exercisable and if the
optionee is at the relevant time an officer or director of the
Company who is required to file reports pursuant to Section
16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act") ("Covered Participant") the Stock Appreciation
Right may, subject to the approval of the Board, be exercised
under such terms and conditions as may be specified by the
Board;
(ii) A Stock Appreciation Right shall entitle the optionee (or any
person entitled to act under the provisions of subparagraph 5(e)
hereon to surrender unexercised the Option to which the Stock
Appreciation Right is attached (or any portion of such Option)
to the Company and to receive from the Company in exchange
therefor that number of shares of Common Stock having an
aggregate value equal to (or, in the discretion of the Board,
less than) the excess of the value of one share over the option
price per share times the number of shares subject to the
option, or portion thereof, which is so surrendered. The Company
shall be entitled to elect to settle its obligation arising out
of the exercise of a Stock
3
<PAGE>
Appreciation Right, by the payment of cash equal to the
aggregate value of the shares it would otherwise be obligated to
deliver or partly by the payment of cash and partly by the
delivery of shares of Common Stock. Any such election shall be
made within 15 business days after the receipt by the Board of
written notice of the exercise of the Stock Appreciation Right.
The value of a share of Common Stock for this purpose shall be
the fair market value thereon on the last business day next
preceding the date of the election to exercise the Stock
Appreciation Right;
(iii) No fractional shares shall be delivered under this
subparagraph 5(f) but in lieu thereof a cash adjustment
shall be made.
(g) The Option agreement evidencing any incentive stock option granted
under this Plan shall provide that if the optionee makes a
disposition, within the meaning of Section 425(c) of the code and the
regulations promulgated thereunder, of any share or shares of Common
Stock issued to him pursuant to his exercise of an Option granted
under this Plan within the two-year period commencing on the day after
the date of the granting of such Option or within a one-year period
commencing on the day after the date of transfer of the share or
shares to him pursuant to the exercise of such Option, he shall,
within ten days of such disposition, notify the Company thereof and
immediately deliver to the Company any amount of federal income tax
withholding required by law.
6. RESTRICTED STOCK
Each Award of Restricted Stock under the Plan shall be evidenced by an
instrument in such form as the Board shall prescribe form time to time in
accordance with the Plan and shall comply with the following terms and
conditions (and with such other terms and conditions as the Board, in its
discretion, shall establish):
(a) The Board shall determine the number of shares of Common Stock to be
issued to a participant pursuant to the Award.
(b) Shares of Common Stock issued to a participant in accordance with the
Award may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of descent and
distribution, for such period as the Board shall determine, from the
date on which the Award is granted (the "Restricted Period"). The
Company will have the option to repurchase the shares subject to the
Award at such price as the Board shall have fixed, in its sole
discretion, when the Award was made, which option will be exercisable
at such times and upon the occurrence of such events as the Board
shall establish when the Award is granted or if, on or prior to the
expiration of the Restricted Period or the earlier lapse of the
Option, the participant has not paid to the Company an amount equal to
any Federal, State or local income or other taxes which the Company
determines is required to be withheld in respect of such shares. Such
option shall be exercisable on such terms, in such manner and during
such period as shall be determined by the Board when the Award is
made. Certificates for shares of Common Stock issued pursuant to
Restricted Stock Awards shall bear an appropriate legend referring to
the foregoing Option and other restrictions and to the fact that the
shares are partly paid. Any attempt to dispose of any such shares of
Common Stock in contravention of the foregoing Option and other
restrictions shall be null and void and without effect. If shares of
Common Stock issued pursuant to a Restricted Stock Award shall be
repurchased pursuant to the Option described above, the participant,
or in the event of his death, his personal representative, shall
forthwith deliver to the Secretary of the Company the certificates for
the shares of Common Stock awarded to the participant, accompanied by
such instruments of transfer, if any, as may reasonably be required by
the Secretary of the Company. If the Option described above is not
exercised by the company during such period as is specified by the
Board when the Award is made, such Option and the restrictions imposed
pursuant to the first sentence of this subparagraph 6(b) shall
terminate and be of no further force and effect.
7. STOCK DIVIDENDS, STOCK SPLITS, REORGANIZATIONS AND CERTAIN OTHER
CORPORATION TRANSACTIONS
(a) EXERCISE OR CORPORATE POWERS. The existence of outstanding awards of
Options, Stock Appreciation Rights or Restricted Stock shall not
effect in any way the right or power of the
4
<PAGE>
Company or its stockholders to make or authorize any or all
adjustments, recapitalization, reorganization or other changes in the
Company's capital structure or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures
preferred or prior preference stocks ahead of or affecting the
Company's shares of Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act
or proceeding whether of a similar character or otherwise.
(b) RECAPITALIZATION OF THE COMPANY. If, while there are Options, Stock
Appreciation Rights or Restricted Stock outstanding, the Company shall
effect any subdivision or consolidation of shares of Common Stock or
other capital readjustment, the payment of a stock dividend, stock
split, combination of shares or recapitalization or other increase or
reduction in the number of shares of Common Stock outstanding, without
receiving compensation therefor in money, services or property, then
the number of shares of Common Stock available under the Plan and the
number of Options, Stock Appreciation Rights or Restricted Stock which
may thereafter be exercised shall (i) in the event of an increase in
the number of shares outstanding, be proportionately increased and the
fair market value of the Options, Stock Appreciation Rights or
Restricted Stock awarded as of the date of the award shall be
proportionately reduced; and (ii) in the event of a reduction in the
number of shares outstanding, be proportionately reduced, and the fair
market value of the Options, Stock Appreciation Rights or Restricted
Stock awarded as of the date of the Award shall be proportionately
increased.
(c) REORGANIZATION OF THE COMPANY. If the Company is reorganized, or
merged or consolidated or a party to a plan of exchange with another
corporation pursuant to which reorganization, member, consolidation or
plan of exchange stockholders of the Company receive any shares of
Common Stock or other securities, or if the Company shall distribute
securities of another corporation to its stockholders, each
Participant shall be entitled to receive in lieu of the number of
unexercised Options, Stock Appreciation Rights at the date of award,
to which such holder would have been entitled pursuant to the terms of
the agreement of merger of consolidation, if immediately prior to such
merger or consolidation such holder had been the holder of record of a
number of shares of Common Stock equal to the number of the
unexercised Options or Stock Appreciation Rights previously awarded to
him, and Restricted Stock shall be treated the same as unrestricted
outstanding shares of Common Stock; provided, that, anything herein
contained to the contrary notwithstanding, upon the dissolution or
liquidation of the Company or upon any merger or consolidation of the
Company where it is not the surviving corporation, each Participant
shall be entitled to a benefit as though he had become fully vested in
all Options, Stock Appreciation Rights and Restricted Stock previously
awarded to him and then outstanding under this Plan, and had
terminated employment with the Company immediately prior to or
concurrently with such dissolution or liquidation or merger or
consolidation.
(d) ISSUE OF COMMON STOCK BY THE COMPANY. Except as hereinabove expressly
provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or
property, or for labor or services, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon any
conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number of, or
fair market value of, any Options or Stock Appreciation Rights then
outstanding under previous awards but holders of Restricted Stock
shall be treated the same as the holders of outstanding unrestricted
shares of Common Stock.
(e) CHANGE IN CONTROL. The Board may, in its sole discretion, provide
that an Option or Stock Appreciation Right shall become fully
exercisable or that a share of Restricted Stock shall be free of any
restrictions upon a Change in Control of the Company (as defined in
the next sentence). "Change in Control" of the Company shall be
conclusively deemed to have occurred if (and only if) any of the
following shall have taken place: (i) a change in control is reported
by the Company in response to either Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act or Item 1 of Form 8-
K promulgated under the Exchange Act; (ii) any "person" (as such term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing forty percent or more of the combined voting power of the
company's then outstanding securities; or (iii) following the election
or removal of directors, a majority of the Board of Directors consists
of individuals who were not members of the Board of Directors two
years before such election or removal, unless the election of each
director who was not a director at the beginning of such two-year
period has been approved in advance by directors representing at least
a majority of the directors then in office who were directors at the
beginning of the two-year period.
5
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8. DESIGNATION OF BENEFICIARY BY PARTICIPANT
A participant may name a beneficiary to receive any payment to which he may
be entitled in respect of Awards under the Plan in the event of his death,
on a form to be provided by the Board. A participant may change his
beneficiary from time to time in the same manner. If no designated
beneficiary is living on the date on which any amount becomes payable to a
participant's beneficiary, such payment will be made to the participant's
executors or administrators, and the term "beneficiary" as used in the Plan
shall include such person or persons.
9. TAXES
(a) The Company may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in
connection with any Options or Stock Appreciation Rights or Restricted
Stock granted under this Plan.
(b) Notwithstanding the terms of subparagraph 9(a), any participant may
pay all or any portion of the taxes required or allowed to be withheld
by the Company if paid to him in connection with the exercise of an
Option, Stock Appreciation Right or vesting of any Award of Restricted
Stock by electing to have the Company withhold shares of Common Stock,
or by delivering previously owned shares of Common Stock, having a
fair market value, determined in accordance with subparagraph 5(d),
equal to the amount required to be withheld or paid. A Participant
must take the foregoing election on or before the date that the amount
of tax to be withheld is determined ("Tax Date"). Such elections are
irrevocable and subject to disapproval by the Board. Elections by
Covered Participants are subject to the following additional
restrictions: (i) such election may not be made within six months of
the grant of the Award, provided that this limitation shall not apply
in the event of death or disability, and (ii) such election must be
made either six months or more prior to the Tax Date or in a Window
Period (as defined herein). Where the Tax Date in respect of an Award
is deferred until after exercise or expiration of restrictions and the
Covered Participant elects share withholding, the full amount of
shares of Common Stock will be issued or transferred to him upon
exercise of the Option or exercise of the Stock Appreciation Right or
expiration of restrictions of the Restricted Stock, as the case may
be, but the Covered Participant shall be unconditionally obligated to
tender back to the Company the number of shares necessary to discharge
the Company's withholding obligation or his estimated tax obligation
on the Tax Date. As used herein, Window Period means the period
commencing on the third business day following the Company's release
of a quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
10. MISCELLANEOUS PROVISIONS
(a) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to
be retained in the employ of the Company or any subsidiary.
(b) A participant's rights and interest under the Plan may not be assigned
or transferred in whole or in part either directly or by operation of
law or otherwise (except in the event of a participant's death),
including but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner and not such
right or interest of any participant in the Plan shall be subject to
any obligation or liability of such participant.
(c) No shares of Common Stock shall be issued hereunder unless counsel for
the Company shall be satisfied that such issuance will be in
compliance with applicable federal and state securities laws.
(d) The expenses of the Plan shall be home by the Company.
(e) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund to make any other segregation
of assets to assure the payment of any Award under the Plan and
payment of Awards shall be subordinate to the claims of the Company's
general creditors.
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By accepting any Award or other benefit under the Plan, each participant
and each person claiming under or through him shall be conclusively deemed
to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the Board.
11. AMENDMENT OR DISCONTINUANCE
The Plan may be amended at any time and from time to time by the Board of
Directors but no amendment which increases the aggregate number of shares
of Common Stock which may be issued pursuant to the Plan shall be effective
unless and until the same is approved by the stockholders of the, Company.
No amendment of the Plan shall adversely affect any right of any
participant with respect to any Award theretofore granted without such
participant's written consent.
12. TERMINATION
This Plan shall terminate upon the earlier of the following dates or events
to occur:
(a) upon the adoption of a resolution of the Board of Directors
terminating the Plan; or
(b) ten years from the date hereof
No termination of the Plan shall alter or impair any of the rights or
obligations of any person, without his consent, under any Award theretofore
granted under the Plan.
13. STOCKHOLDER ADOPTION
The Plan shall be submitted to the stockholders of the Company for their
approval and adoption on or before March 26, 1999. The Plan shall not be
effective and any Award made hereunder shall be void and of no effect if
the Plan is not so approved. The stockholders shall be deemed to have
approved the Plan only if it is approved at a meeting of the stockholders
duly held on or before that date by vote or by written consent in the
manner required by the laws of the State of Delaware.
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EXHIBIT 10.4
PLANET RESOURCES, INC.
1999 DIRECTOR OPTION PLAN
1. PURPOSES OF THE PLAN.
The purposes of the 1999 Director Option Plan are to attract and retain the
best available personnel for service as Outside Directors of the company, to
provide additional incentive to the Outside Directors of the Company to serve as
Directors, and to encourage their continued service on the Board. All options
granted hereunder shall be "non-statutory stock options."
2. DEFINITIONS.
As used herein, the following definitions shall apply:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" means the Common Stock of the Company.
(d) "Company" means Planet Resources, Inc., a Delaware corporation.
(e) "Continuous Status as a Director" means the absence of any
interruption or termination of service as a Director.
(f) "Director" means a member of the Board.
(g) "Employee" means any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company and the retention of a director as a
consultant shall not be sufficient in and of itself to constitute "employment"
by the Company.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "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 were reported) as quoted
on such system or exchange (or the exchange with the greatest volume
of trading in Common Stock) on the date of grant, as reported in The
Wall Street Journal or such other source as the board deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, the
Fair Market Value of a Share of Common Stock shall be the mean between
the bid and 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 Board deems reliable, or;
<PAGE>
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in accordance
with a formula fixed in good faith by the Board.
(j) "Option" means a stock option granted pursuant to the Plan.
(k) "Optioned Stock" means the Common Stock subject to an Option.
(l) "Optionee" means an Outside Director who receives an Option.
(m) "Outside Director" means a Director who is not an Employee.
(n) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(o) "Plan" means this 1999 Director Option Plan.
(p) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(q) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Internal Revenue Code of
1986.
3. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 10 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under the Plan is 200,000 Shares
(the "Pool") of Common Stock. The Shares may be authorized but unissued, or
reacquired Common Stock. If an Option should expire or become unexercisable for
any reason without having been exercised in full, the unpurchased Shares which
were subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.
4. ADMINISTRATION OF AND GRANTS OF OPTIONS UNDER THE PLAN.
(a) Procedure for Grants. The provisions set forth in this Section 4(a)
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder. All grants of Options to Outside Directors
under the Plan shall be automatic and non-discretionary and shall be made
strictly in accordance with the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to
be covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an Option
to purchase 15,000 Shares (the "First Option") on the date on which the
later of the following events occurs:
(A) the effective date of this Plan, as determined in accordance
with Section 6 hereof, or
(B) the date on which such person first becomes a Director,
whether through election by the stockholders of the Company or
appointment by the Board to fill a vacancy.
(iii) After the First Option has been granted to an Outside Director,
such Outside Director shall thereafter be automatically granted an Option
to purchase 1,000 Shares (a "Subsequent Option") each year on the date of
the annual meeting of stockholders of the Company, if on such date, he
shall have served on the Board for at least six (6) months.
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(iv) Notwithstanding the provisions of subsections (ii) and (iii)
hereof, any exercise of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 16 hereof shall
be conditioned upon obtaining such stockholders approval of the Plan in
accordance with Section 16 hereof.
(v) The terms of a First Option granted hereunder shall be as
follows:
(A) the terms of the First Option shall be ten (10) years.
(B) the First Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth in
Section 8 hereof.
(C) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option.
(D) the First Option shall become exercisable in installments
cumulatively as follows: on the date which is the six (6) month
anniversary of the date of grant, for the greater of 1/8th of the
Shares subject to the First Option, or 1/48th of the Shares subject to
the First Option times the number of full months that the Outside
Director had served in such capacity as of such six (6) month
anniversary; and thereafter at the rate of 1/48th of the Shares
subject to the First Option on each monthly anniversary of the date of
grant.
(vi) The terms of a Subsequent Option granted hereunder shall be as
follows:
(A) the terms of the Subsequent Option shall be ten (10) years.
(B) the Subsequent Options shall be exercisable only while the
Outside Director remains a Director of the Company, except as set
forth in Section 8 hereof.
(C) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option.
(D) the Subsequent Option shall become exercisable as to 100%
percent of the Shares subject to the Subsequent Option on the first
anniversary of its date of grant.
(vii) In the event that any Option granted under the Plan would cause
the number of Shares subject to outstanding Options plus the number of
Shares previously purchased under Options to exceed the Pool, then the
remaining Shares available for Option grant shall be granted under Options
to the Outside Directors on a pro rata basis. No further grants shall be
made until such time, if any, as additional Shares become available for
grant under the Plan through action of the stockholders to increase the
number of Shares which may be issued under the Plan or through cancellation
or expiration of Options previously granted hereunder.
5. ELIGIBILITY.
Options may be granted only to Outside Directors. All Options shall be
automatically granted in accordance with the terms set forth in Section 4
hereof. An Outside Director who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options in accordance
with such provisions. The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
of the Company may have to terminate his or her directorship at any time.
6. TERM OF PLAN.
<PAGE>
The Plan shall become effective upon the earlier to occur of its adoption
by the Board or its approval by the stockholders of the Company as described in
Section 16 of the Plan. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 11 of the Plan.
7. FORM OF CONSIDERATION.
The consideration to be paid for the Shares to be issued upon exercise of
an Option, including the method of payment, shall consist of (i) cash, (ii)
check, (ii) other shares which (x) in the case of Shares acquired upon exercise
of an Option, have been owned by the Optionee for more than six (6) months on
the date of surrender, and (y) 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 Company and the 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, or
(v) any combination of the foregoing methods of payment.
8. EXERCISE OF OPTION.
(a) Procedure for Exercise; Rights as a Stockholder. Any option granted
hereunder shall be exercisable at such times as are set forth in Section 4
hereof; provided, however, that no Options shall be exercisable until
stockholder approval of the Plan in accordance with Section 16 hereof has been
obtained. An Option may not be exercised for a fraction of a Share. An Option
shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Option by the person
entitled to exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company. Full payment may
consist of any consideration and method of payment allowable under Section 7 of
the Plan. Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. A share certificate for the
number of Shares so acquired shall be issued to the Optionee as soon as
practicable after exercise of the Option. 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 10 of the Plan. Exercise of
an Option in any manner shall result in a decrease in the number of Shares which
thereafter may be 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) Rule 16b-3. Options granted to Outside Directors must comply with the
applicable provisions of Rule 16b-3 promulgated under the Exchange Act or any
successor thereto and shall contain such additional conditions or restrictions
as may be required thereunder to quality for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
(c) Termination of Continuous Status as Director. In the event an
Optionee's Continuous Status as a Director terminates [other than upon the
Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code)], the Optionee may exercise his or her Option, but only
within three (3) months from the date of such termination, and 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 its ten (10) year
term). To the extent that the Optionee does not exercise such Option (to the
extent otherwise so entitled) within the time specified herein, the Option shall
terminate.
(d) Disability of Optionee. In the event Optionee's Continuous Status as a
Director terminates as a result of total and permanent disability (as defined in
Section 22(e)(3) of the Code), the Optionee may exercise his or her Option, but
only within twelve (12) months from the date of such termination, and 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 its ten (10) year
term). To the extent that the Optionee was not entitled to exercise an Option at
the date of termination, or if he or she does not exercise such Option (to the
extent otherwise so entitled) within the time specified herein, the Option shall
terminate.
<PAGE>
(e) Death of Optionee. In the event Optionee's death, the Optionee's estate
or a person who acquired the right to exercise the Option by bequest or
inheritance may exercise the Option, but only within twelve (12) months
following the date of death, and only to the extent that the Optionee was
entitled to exercise it at the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option at the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
9. NON-TRANSFERABILITY OF OPTIONS.
The 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.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET SALE
OR CHANGE OF CONTROL.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding
Option and the number of Shares which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Option has not been previously
exercised, it will terminate immediately prior to the consummation of such
proposed action.
(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, each outstanding Option shall be assumed or an equivalent option shall
be substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation does not
agree to assume the Option or to substitute an equivalent option, each
outstanding Option shall become fully vested and exercisable, including as to
Shares as which it would not otherwise be exercisable, unless the Board, in its
discretion, determines otherwise. If an Option becomes fully vested and
exercisable in the event of a merger or sale of assets, the Board shall notify
the Optionee that the Option shall be fully exercisable for a period of thirty
(30) days from the date of such notice, and the Option will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall
be considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase, for each Share of Option Stock subject to
the Option immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chose by the holders of a majority of the outstanding
Shares).
11. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. Except as set forth in Section 4, the Board
may at any time amend, alter, suspend, or discontinue the Plan, but no
amendment, alteration, suspension, or discontinuation shall be made which would
impair the rights of any Optionee under any grant theretofore made, without his
or her consent. In addition, to the extent necessary and desirable to comply
with Rule 16b-3 under the Exchange Act (or any other
<PAGE>
applicable law or regulation), the Company shall obtain stockholder approval of
any Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or termination
of the Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated.
12. TIME OF GRANTING OPTIONS.
The date of grant of an Option shall, for all purposes, be the date
determined in accordance with Section 4 hereof. Notice of the determination
shall be given to each Outside Director to whom an Option is so granted within a
reasonable time after the date of such grant.
13. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued pursuant to the exercise of Option unless the
exercise of such Option and the issuance and delivery of such Shares pursuant
thereto 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, state securities laws, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance. 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 or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
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.
14. 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.
15. OPTION AGREEMENT.
Options shall be evidenced by written option agreements in such form as the
Board shall approve.
16. STOCKHOLDER APPROVAL.
Continuation of the Plan shall be subject to approval by the stockholders
of the Company at or prior to the first annual meeting of stockholders held
subsequent to the granting of an Option hereunder. Such stockholder approval
shall be obtained in the degree and manner required under applicable state and
federal law.