UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
__X__ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended
December 31, 1997
or
_____ Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number 0-13111
ANALYTICAL SURVEYS, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0846389
(State of incorporation) (IRS Employer Identification No.)
1935 Jamboree Drive
Colorado Springs, Colorado 80920
(Address of principal executive offices) (Zip Code)
(719) 264-5550
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past (12) months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
ninety (90) days.
Yes __X__ No_____
The number of shares of common stock outstanding as of
February 11, 1998 was 6,172,092.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
The Form 10-Q filing of the registrant for the quarter ended December 31,
1997 included the incorrect form of the Amended and Restated Analytical
Surveys, Inc. 1997 Stock Option Plan. The attached Amended and Restated
Analytical Surveys, Inc. 1997 Stock Option Plan is substituted for
the previously filed exhibit.
(a) Exhibits
10 Amended and Restated Analytical Surveys, Inc. 1997 Stock Option Plan
SIGNATURES
Pursuant to the requirements 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.
Analytical Surveys, Inc.
(Registrant)
Date February 25, 1997 /s/ Sidney V. Corder
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Sidney V, Corder, President
and Chief Executive Officer
Date February 25, 1997 /s/ Scott C. Benger
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Scott C. Benger, Secretary/Treasurer
(principal financial officer and
principal accounting officer)
Date February 25, 1997 /s/ Brian J. Yates
---------------------------------------
Brian J. Yates, Controller
ANALYTICAL SURVEYS, INC.
AMENDED AND RESTATED 1997 INCENTIVE STOCK OPTION PLAN
SECTION 1
INTRODUCTION
1.1 Establishment. Analytical Surveys, Inc. a Colorado corporation,
hereby establishes the Analytical Surveys, Inc. 1997 Incentive Stock Option Plan
(the "Plan") for certain key employees of Analytical Surveys, Inc. and its
Affiliated Corporations (collectively, the "Company").
1.2 Purposes. The purposes of the Plan are to provide certain key
management employees with added incentives to continue in the service of the
Company and to create in such employees a more direct interest in the future
success of the operations of the Company by relating incentive compensation to
increases in stockholder value, so that the income of the key management
employees is more closely aligned with the income of the Company's stockholders.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set
forth below:
(a) "Affiliated Corporation" means any corporation or other
entity (including, but not limited to, a partnership) which is affiliated with
the Issuer through stock ownership or otherwise and is treated as a common
employer under the provisions of Code Sections 414(b) and (c).
(b) "Approved Transaction" means any transaction in which the
Board (or, if approval of the Board is not required as a matter of law, the
stockholders of the Issuer) shall approve (i) any consolidation or merger of the
Issuer, or binding share exchange, pursuant to which shares of Stock would be
changed or converted into or exchanged for cash, securities or other property,
other than any such transaction in which the holders of the Stock immediately
prior to such transaction have the same proportionate ownership of the common
stock of, and voting power with respect to, the surviving corporation
immediately after such transaction, (ii) any merger, consolidation or binding
share exchange to which the Issuer is a party as a result of which the persons
who are holders of the Stock immediately prior thereto have less than a majority
of the combined voting power of the outstanding capital stock of the Issuer
ordinarily (and apart from the rights accruing under special circumstances)
having the right to vote in the election of directors immediately following such
merger, consolidation or binding share exchange, (iii) the adoption of any plan
or proposal for the liquidation or dissolution of the Issuer, or (iv) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Issuer, but not
a pledge of assets in the context of a bona fide loan.
<PAGE>
(c) "Board" means the Board of Directors of the Issuer.
(d) "Code" means the Internal Revenue Code of 1986, as it may
be amended from time to time.
(e) "Disabled" or "Disability" means a disability for which
the Option Holder is entitled to disability payments under the Option Holder's
Employment Agreement. For purposes of this Plan, such Disability will be deemed
to have commenced on the first date on which the Option Holder is absent from
work with the Company due to such Disability.
(f) "Effective Date" means the effective date of the Plan,
which will July 2, 1997.
(g) "Eligible Employees" means Scott Benger, David Coates,
Sidney Corder, John J. Dillon III, William M. Howell, Steve Jenkins, Mark
Klimiuk, David Lewis, Jeffrey A. Meyerrose, Robert J. Montgomery, William
Nantell and Randal J. Sage. No other employee of the Company will be considered
an Eligible Employee for purposes of this Plan.
(h) "Employment Agreement" means the employment contract or
employment agreement between the Eligible Employee and the Company, as it may be
amended and in effect at the time such contract or agreement is subject to
reference under this Plan. If no such contract or agreement is in effect at the
time of reference under this Plan, "Employment Agreement" will mean the
Employment Agreement most recently in effect prior to the time of reference
under this Plan.
(i) "Fair Market Value" means the officially quoted closing
price of the Stock on the NASDAQ National Market System on a particular date. If
there are no Stock transactions on such date, the Fair Market Value shall be
determined as of the immediately preceding date on which there were Stock
transactions. If no such prices are reported on the NASDAQ National Market
System, then Fair Market Value shall mean the average of the high and low sale
prices for the Stock (or if no sales prices are reported, the average of the
high and low bid prices) as reported by the principal regional stock exchange,
or if not so reported, as reported by NASDAQ or a quotation system of general
circulation to brokers and dealers. If the Stock is not publicly traded, the
Fair Market Value of the Stock on any date shall be determined in good faith by
the Incentive Plan Committee after such consultation with outside legal,
accounting and other experts as the Incentive Plan Committee may deem advisable.
(j) "Incentive Plan Committee" means a committee consisting of
all of the members of the Board.
(k) "Issuer" means Analytical Surveys, Inc.
(l) "Option" means a right to purchase Stock at a stated price
for a specified period of time. All Options granted under this Plan well be
non-statutory stock options which are not intended to qualify as incentive stock
options under Code Section 422.
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(m) "Option Price" means the price at which shares of Stock
subject to an Option may be purchased, determined in accordance with section
6.2(b).
(n) "Option Holder" means each Eligible Employee who is granted
Options under the Plan.
(o) "Plan Year" means each 12-month period beginning January 1
and ending the following December 31, except that for the first year of the Plan
the Plan Year shall begin on the Effective Date and extend to the first December
31 following the Effective Date.
(p) "Share" or "Shares" means a share or shares of Stock.
(q) "Stock" means the common stock of the Issuer.
2.2 Gender and Number. Except where otherwise indicated by the
context, the masculine gender also shall include the feminine gender, and the
definition of any term herein in the singular also shall include the plural.
SECTION 3
PLAN ADMINISTRATION
The Plan shall be administered by the Incentive Plan Committee. In
accordance with the provisions of the Plan, the Incentive Plan Committee may
from time to time adopt such rules and regulations for carrying out the purposes
of the Plan as it may deem proper and in the best interests of the Company. The
Incentive Plan Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any agreement entered into
hereunder in the manner and to the extent it shall deem expedient and it shall
be the sole and final judge of such expediency. No member of the Incentive Plan
Committee shall be liable for any action or determination made in good faith,
and all members of the Committee shall, in addition to their rights as
directors, be fully protected by the Company with respect to any such action,
determination or interpretation. The determinations, interpretations, and other
actions of the Incentive Plan Committee pursuant to the provisions of the Plan
shall be binding and conclusive for all purposes and on all persons.
SECTION 4
ADJUSTMENTS TO STOCK SUBJECT TO THE PLAN
4.1 Adjustments for Stock Split, Stock Dividend, Etc. If the Company
shall at any time increase or decrease the number of its outstanding Shares of
Stock, or change in any way the rights and privileges of such Shares by means of
the payment of a stock dividend or any other distribution upon such Shares
payable in Stock, or through a stock split, subdivision, consolidation,
combination, reclassification or recapitalization involving the Stock, then in
relation to the Stock that is affected
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<PAGE>
by one or more of the above events, the numbers, rights and privileges of the
following shall be increased, decreased or changed in like manner as if such
Shares had been issued and outstanding, fully paid and nonassessable at the time
of such occurrence: (i) the shares of Stock as to which Options may be granted
under the Plan; and (ii) the Shares of Stock then included in each outstanding
Option granted hereunder.
4.2 General Adjustment Rules. If any adjustment or substitution
provided for in this Section 4 shall result in the creation of a fractional
Share under any Option, the Company shall, in lieu of issuing such fractional
Share, pay to the Option Holder a cash sum in an amount equal to the product of
such fraction multiplied by the Fair Market Value of a Share on the date the
fractional Share otherwise would have been issued.
4.3 Determination by Incentive Plan Committee, Etc. Adjustments under
this Section 4 shall be made by the Incentive Plan Committee, whose
determinations with regard thereto shall be final and binding upon all parties.
SECTION 5
STOCK OPTIONS
5.1 Grant of Options. Subject to Section 5.2(g), the Eligible
Employees hereby are granted Options as follows:
<TABLE>
<S> <C>
Jeff Armstrong 10,000 Shares
Scott Benger 20,000 Shares
David Coates 10,000 Shares
Sidney Corder 20,000 Shares
John J. Dillon III 21,750 Shares
William M. Howell 40,730 Shares
Steve Jenkins 10,000 Shares
Mark Klimiuk 10,000 Shares
David Lewis 10,000 Shares
Jeffrey A. Meyerrose 35,480 Shares
Robert J. Montgomery 57,730 Shares
William Nantell 10,000 Shares
Randal J. Sage 89,310 Shares
</TABLE>
5.2 Provisions Applicable to Options. Each Option granted under the
Plan shall be subject to all of the terms and conditions of this Plan, including
the following:
(a) Price. The price at which each Share covered by an Option
may be purchased shall be $13.75 per Share.
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<PAGE>
(b) Date of Grant. Each Option shall be considered as having
been granted on July 2, 1997 (the "Grant Date").
(c) Duration of Options. Each Option must be exercised within
ten (10) years from the Grant Date (the "Option Period").
(d) Vesting of Options. Subject to the exercise and termination
provisions set forth in Section 5.2(e) and Section 5.2(g) below, the Options
will vest in accordance with the following schedule:
<TABLE>
<CAPTION>
Vesting Date Percentage of Original Options Vested
------------ -------------------------------------
<S> <C>
Six months from Grant Date 25%
One year from Grant Date 50%
Two years from Grant Date 75%
Three years from Grant Date 100%
</TABLE>
(e) Exercise and Termination of Options. Notwithstanding any
other provision of this Plan, and subject to Section 5.2(g), an Option will be
subject to the exercise and termination provisions set forth below:
(i) Option Holder's Voluntary Termination of Employment.
If the employment of the Option Holder is terminated voluntarily by the Option
Holder within the Option Period for any reason (other than for cause, as
determined under the Option Holder's Employment Agreement), all Options held by
the Option Holder, whether or not vested, thereafter shall be terminated and
shall be void for all purposes.
(ii) Option Holder's Termination of Own Employment For
Cause. If the employment of the Option Holder is terminated by the Option Holder
within the Option Period for cause, as determined under the Option Holder's
Employment Agreement, all Options held by the Option Holder shall become
immediately 100% vested as of such termination of employment, and the Options
shall be exercisable for a period of ninety (90) days after such termination of
employment. Upon the expiration of the 90-day exercise period, all unexercised
Options held by the Option Holder thereafter shall be terminated and shall be
void for all purposes.
(iii) Option Holder's Death. If the Option Holder dies
while employed by the Company (or if the Option Holder dies after termination of
employment but during any exercise period set forth in paragraphs (ii), (iv),
(v), (vi), or (vii)), and such death occurs within the Option Period, all
unvested Options held by the Option Holder at his death thereafter shall be
terminated and shall be void for all purposes. All Options vested as of the
Option Holder's death may be exercised by the person so entitled to exercise
such Option for a period of 180 days after such death. Upon the expiration of
the 180-day exercise period, all unexercised Options thereafter shall be
terminated and shall be void for all purposes.
-5-
<PAGE>
(iv) Option Holder's Disability. If the Option Holder
becomes Disabled while employed by the Company and within the Option Period, all
unvested Options held by the Option Holder at his Disability will continue to
vest in accordance with paragraph (i) for a period of 36 months from the date of
such Disability; provided that the Option Holder survives for the 36- month
Disability vesting period. All Options vested as of the Option Holder's
Disability, and all Options which become vested during the 36-month period
following such Disability, may be exercised by the Option Holder during the 36-
month period following the Disability. Upon the expiration of the 36-month
exercise period, all unexercised Options thereafter shall be terminated and
shall be void for all purposes.
(v) Option Holder's Retirement After Age 65. If the
Option Holder retires after attaining age 65 while employed by the Company and
within the Option Period, all unvested Options held by the Option Holder at his
retirement will continue to vest in accordance with Section 5.2(d) for a period
of 36 months from the date of such retirement; provided that the Option Holder
survives for the 36-month retirement vesting period. All Options vested as of
the Option Holder's retirement, and all Options which become vested during the
36-month period following such retirement, may be exercised by the Option Holder
during the 36-month period following the retirement. Upon the expiration of the
36-month exercise period, all unexercised Options thereafter shall be terminated
and shall be void for all purposes.
(vi) Termination of Option Holder's Employment by
Company Without Cause. If the Company terminates the employment of the Option
Holder within the Option Period for any reason other than for cause (as
determined under the Option Holder's Employment Agreement), all unvested Options
held by the Option Holder at the date of such termination of employment shall
become immediately 100% vested as of such termination of employment, and the
Options shall be exercisable for a period of ninety (90) days after such
termination of employment. Upon the expiration of the 90-day exercise period,
all unexercised Options held by the Option Holder thereafter shall be terminated
and shall be void for all purposes.
(vii) Termination of Option Holder's Employment by
Company For Cause. If the Company terminates the employment of the Option Holder
within the Option Period for cause, as determined under the Option Holder's
Employment Agreement, all unvested Options thereafter shall be terminated and
shall be void for all purposes. All Options vested as of the Option Holder's
termination of employment may be exercised by the Option Holder for a period of
15 days after such termination of employment. Upon the expiration of the 15-day
exercise period, all unexercised Options thereafter shall be terminated and
shall be void for all purposes.
(viii) Vesting and Exercise Upon Occurrence of Approved
Transaction. In the event of an Approved Transaction, then all outstanding
Options shall become 100% vested at the date determined by the Incentive Plan
Committee, which date shall be at least thirty (30) days prior to the occurrence
of the Approved Transaction. Such vested Options shall be exercisable for a
period of thirty (30) days after such vesting date. Upon the expiration of the
30-day exercise period, all unexercised Options held by the Option Holder
thereafter shall be terminated and shall be void
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<PAGE>
for all purposes. Notwithstanding the above, if any agreement or plan relating
to the Approved Transaction provides for the assumption, exchange, or conversion
of the Options for options for securities in the surviving corporation, all
Options outstanding under this Plan shall be subject to such assumption,
exchange, or conversion, and no accelerated vesting or exercisability shall
apply to such Options.
(f) Manner of Exercise of Option.
(i) An Option may be exercised by delivery to the
Corporate Secretary of the Company of written notice specifying the particular
Option (or portion thereof) which is being exercised, the number of Shares with
respect to which such Option is exercised and including payment of the Option
Price. Such notice shall be in a form satisfactory to the Incentive Plan
Committee. The exercise of the Option shall be deemed effective upon receipt of
such notice by the Corporate Secretary and payment to the Company of the Option
Price. The purchase of such Stock shall take place at the principal offices of
the Company upon delivery of such notice, at which time the purchase price of
the Stock shall be paid in full by any of the methods or any combination of the
methods set forth in (ii) below. A properly executed certificate or certificates
representing the Stock shall be issued by the Company and delivered to the
Option Holder.
(ii) The exercise price shall be paid by any of the
following methods or any combination of the following methods:
(A) in cash;
(B) by cashier's check payable to the order of the
Company;
(C) by delivery to the Company of certificates
representing the number of Shares then owned by the Option Holder, the Fair
Market Value of which equals the purchase price of the Stock purchased pursuant
to the Option, properly endorsed for transfer to the Company. The Fair Market
Value of any Shares delivered in payment of the purchase price upon exercise of
the Option shall be the Fair Market Value as of the exercise date and the
exercise date shall be the day of the delivery of the certificates for the Stock
used as payment of the Option Price; or
(D) by delivery to the Company of a properly
executed notice of exercise together with irrevocable instructions to a broker
to deliver to the Company promptly the amount of the proceeds of the sale of all
or a portion of the Stock or of a loan from the broker to the Option Holder
necessary to pay the exercise price.
(g) The options granted to Scott Benger and Sidney Corder
pursuant to Section 5.1 are contingent upon and subject to approval by the
shareholders of the Company and may not be exercised unless and until such
shareholder approval is obtained. If such shareholder approval
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<PAGE>
is not obtained by July 2, 1998, all such options automatically shall be
terminated and shall be void for all purposes.
5.3 Stockholder Privileges. Prior to the exercise of the Option and
the transfer of Shares to the Option Holder, an Option Holder shall have no
rights as a stockholder with respect to any Shares subject to any Option granted
to such person under this Plan, and until the Option Holder becomes the holder
of record of such Stock, no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date preceding the
date such Option Holder becomes the holder of record of such Stock, except as
provided in Section 4.
SECTION 6
GENERAL PROVISIONS
6.1 Employment. Nothing contained in the Plan or in any Option shall
confer upon any Eligible Employee any right with respect to the continuation of
his or her employment by the Company, or interfere in any way with the right of
the Company, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or decrease
the compensation of such Employee from the rate in existence at the time of the
grant of an Option. Whether an authorized leave of absence, or absence in
military or government service, shall constitute a termination of employment
shall be determined by the Incentive Plan Committee at the time.
6.2 Nontransferability. No right or interest of any Option Holder in
an Option granted pursuant to the Plan shall be assignable or transferable
during the lifetime of the Option Holder, either voluntarily or involuntarily,
or be subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event or an Option Holder's death, an Option Holder's rights
and interests in Options shall, to the extent provided in Section 5 be
transferable by testamentary will or the laws of decent and distribution. In the
opinion of the Incentive Plan Committee, if an Option Holder is disabled from
caring for his affairs because of mental condition, physical condition or age,
such Option Holder's Options shall be exercised by such person's guardian,
conservator or other legal personal representative upon furnishing the Incentive
Plan Committee with evidence satisfactory to the Incentive Plan Committee of
such status.
6.3 Compliance with Securities Laws. Each Option shall be subject to
the requirement that, if at any time counsel to the Company shall determine that
the listing, registration or qualification of the Shares subject to such Option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with, the issuance or purchase of Shares thereunder, such
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Incentive Plan
-8-
<PAGE>
Committee. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration or qualification.
6.4 Other Employee Benefits. The amount of any compensation deemed to
be received by an Option Holder as a result of the exercise of an Option shall
not constitute "earnings" with respect to which any other employee benefits of
such Option Holder are determined, including without limitation benefits under
any pension, profit sharing, life insurance or salary continuation plan.
6.5 Nonexclusivity of Plan. The adoption of the Plan by the Board
shall not be construed as creating any limitations on the power or authority of
the Board to adopt such other or additional incentive or other compensation
arrangements of whatever nature as the Board may deem necessary or desirable or
preclude or limit the continuation of any other plan, practice or arrangement
for the payment of compensation or fringe benefits to employees generally, or to
any class or group of employees, which the Company now has lawfully put into
effect, including, without limitation, any retirement, pension, savings and
stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.
6.6 Plan Amendment, Modification, and Termination. The Board may at
any time terminate, and from time-to-time may amend or modify, the Plan;
provided, however, that no amendment, modification or termination of the Plan
shall in any manner adversely affect any Options theretofore granted under the
Plan, without the consent of the Option Holder holding such Options.
6.7 Duration of Plan. The Plan shall fully cease and expire at
midnight on the date that is ten years from the Effective Date of the Plan.
Options outstanding at the time of the Plan termination may continue to be
exercised in accordance with their terms.
6.8 Withholding Requirement. The Company's obligations to deliver
Shares upon the exercise of an Option shall be subject to the Option Holder's
satisfaction of all applicable federal, state and local income and other tax
withholding requirements. At the time an Option is exercised by the Option
Holder, the Committee, in its sole discretion, may permit the Option Holder to
pay all such amounts of tax withholding, or any part thereof, by transferring to
the Company, or directing the Company to withhold from Shares otherwise issuable
to such Option Holder, Shares having a value equal to the amount required to be
withheld or such lesser amount as may be determined by the Committee at such
time. The value of Shares to be withheld shall be based on the Fair Market Value
of the Stock on the date that the amount of tax to be withheld is to be
determined.
SECTION 7
REQUIREMENTS OF LAW
7.1 Requirements of Law. The issuance of Stock and the payment of
cash pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
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<PAGE>
7.2 Federal Securities Law Requirements. With respect to persons
subject to Section 16 of the 1934 Act, transactions under this Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successors under
the 1934 Act. To the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee.
7.3 Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the State of Colorado.
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<PAGE>
IN WITNESS THEREOF, the Company and the Option Holders hereby agree to
the provisions set forth herein, and have signed their names as of the dates set
forth below.
ANALYTICAL SURVEYS, INC.
By:
------------------------------------
Title:
---------------------------------
Date:
----------------------------------
OPTION HOLDERS:
---------------------------------------
Jeff Armstrong
Date:
----------------------------------
---------------------------------------
Scott Benger
Date:
----------------------------------
---------------------------------------
David Coates
Date:
----------------------------------
---------------------------------------
Sidney Corder
Date:
----------------------------------
---------------------------------------
John J. Dillon III
Date:
----------------------------------
---------------------------------------
William M. Howell
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<PAGE>
Date:
----------------------------------
---------------------------------------
Steve Jenkins
Date:
----------------------------------
---------------------------------------
Mark Klimiuk
Date:
----------------------------------
---------------------------------------
David Lewis
Date:
----------------------------------
---------------------------------------
Jeffrey A. Meyerrose
Date:
----------------------------------
---------------------------------------
Robert J. Montgomery
Date:
----------------------------------
---------------------------------------
William Nantell
Date:
-----------------------------------
---------------------------------------
Randal J. Sage
Date:
-----------------------------------
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<PAGE>
AMENDMENT TO AND
SUPPLEMENT OF
ANALYTICAL SURVEYS, INC.
AMENDED AND RESTATED 1997 STOCK OPTION PLAN
SECTION 8
INTRODUCTION
Analytical Surveys, Inc., a Colorado corporation, hereby amends and
supplements the Analytical Surveys, Inc. 1997 Stock Option Plan (the "Plan") by
adding to it the provisions set forth below, which provisions will apply to the
granting of options other than the options granted to certain employees as of
July 2, 1997. This portion of the Plan is for the benefit of certain selected
officers, employees, directors, consultants and advisors of Analytical Surveys,
Inc. (the "Company") and any Affiliated Corporations, and is intended as an
inducement to designated persons responsible for the conduct and management of
the Company's business or who are involved in endeavors significant to its
success to acquire a proprietary interest in the Company, to gain an added
incentive to advance the interests of the Company and to remain affiliated with
the Company. This portion of the Plan is intended to have no effect on the
options granted on July 2, 1997, and the terms of this portion of the Plan will
govern the grant of all options under this Plan after July 2, 1997.
SECTION 9
DEFINITIONS
9.1 Definitions. The following terms shall have the meanings set
forth below:
(a) "Affiliated Corporation" means any corporation or other
entity (including, but not limited to, a partnership or a limited liability
company) which is affiliated with Analytical Surveys, Inc. through stock
ownership or otherwise so as to be treated as a common employer under the
provisions of Code Sections 414(b) and (c).
(b) "Board" means the Board of Directors of Analytical Surveys,
Inc.
(c) "Code" means the Internal Revenue Code of 1986, as it may
be amended from time to time.
(d) "Compensation Committee" means one or more of the committees
described below. Members of the Compensation Committee shall serve at the
pleasure of the Board and may resign at any time upon written notice to the
Board.
(i) Generally: If paragraphs (ii) and (iii) below are not
applicable, the "Compensation Committee" shall consist of one or more members of
the Board and/or such other
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<PAGE>
person or persons as may be appointed from time to time by the Board, or the
entire Board if no such Committee has been appointed.
(ii) For Reporting Persons: With respect to the grant or
administration of any Options granted under the Plan to Eligible Employees who
are subject to the reporting requirements under Section 16(a) of the 1934 Act,
unless the Board determines otherwise, the Compensation Committee shall be
constituted so as to comply with Rule 16b-3 promulgated under the 1934 Act and
shall consist of (A) two non-employee directors (as defined in Rule 16b-3) or
(B) the entire Board ("16b-3 Committee"); provided that if a 16b-3 Committee is
-------------
not required for such grant or grants to meet the exemption requirements under
Rule 16b-3, then this sentence shall not be applicable.
(iii) For Compliance with Code Section 162(m): With respect
to the grant or administration of any Options granted under the Plan to an
Eligible Employee subject to Code Section 162(m) and for which the Board
determines, in its discretion, that compliance with Code Section 162(m) is
necessary or desirable, the Compensation Committee shall be constituted so as to
comply with Code Section 162(m) and the Treasury Regulations thereunder and
shall consist of two or more outside directors and no other person; provided
--------
that if a 162(m) Committee is not required for such grant or grants to meet the
- - ----
conditions of Code Section 162(m), then this sentence shall not be applicable.
(e) "Disability" means a physical or mental condition which,
in the judgment of the Company, based on medical reports or other evidence
satisfactory to the Company, permanently prevents an employee from
satisfactorily performing his or her usual duties for the Company or the duties
of such other position or job which the Company makes available to him or her
and for which such employee is qualified by reason of his or her training,
education, or experience.
(f) "Effective Date" means the effective date of the Plan, which
will be _______, 1998.
(g) "Eligible Employee" means full-time key employees
(including, without limitation, officers and directors who also are employees)
of the Company or any Affiliated Corporation, consultants performing services
for the Company or any Affiliated Corporation, and Outside Directors of the
Company or any Affiliated Corporation, whose judgment, initiative and efforts
are, or are expected to be, important to the successful conduct of the Company's
business.
(h) "Fair Market Value" means the officially quoted closing
price of the Stock on the New York Stock Exchange or any other national exchange
(a "National Exchange") on a particular date. If there are no Stock transactions
on such date, the value will be determined as of the immediately preceding date
on which there were Stock transactions. If no such prices are reported on a
National Exchange, then Fair Market Value means the officially quoted closing
price of the Stock on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System on a particular date. If there are no
Stock transactions on such date, the Fair
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Market Value will be determined as of the immediately preceding date on which
there were Stock transactions. If no such prices are reported on NASDAQ, then
Fair Market Value means the average of the high and low sale prices for the
Stock (or if no sales prices are reported, the average of the high and low bid
prices) as reported by the principal regional stock exchange, or if not so
reported, as reported by NASDAQ or a quotation system of general circulation to
brokers and dealers.
(i) "ISO" means an incentive stock option issued under Code
Section 422.
(j) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(k) "NSO" means a non-statutory (or nonqualified) option that
is not intended to qualify as an incentive stock option under Code Section 422.
(l) "Option" means a right to purchase Stock at a stated price
for a specified period of time.
(m) "Option Holder" means an Eligible Employee who has been
designated by the Compensation Committee from time to time during the term of
the Plan to receive one or more Options under the Plan.
(n) "Option Price" means the price at which Shares of Stock
subject to an Option may be purchased, determined in accordance with Section
5.2(b).
(o) "Optioned Shares" means the Shares subject to an Option.
(p) "Outside Director" means those members of the Board of
Directors and members of the board of directors of any Affiliated Corporation
who are not officers or employees of the Company or any Affiliated Corporation.
(q) "Plan Year" means the 12-month period from October 1 to
September 30 each year, except that the first Plan Year will commence on the
Effective Date and will end on the next following September 30.
(r) "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act
or any successor rule.
(s) "Share" or "Shares" means a share or shares of Stock.
(t) "Stock" means the common stock of the Company.
9.2 Gender and Number. Except where otherwise indicated by the
context, the masculine gender also shall include the feminine gender, and the
definition of any term herein in the singular also shall include the plural.
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SECTION 10
PLAN ADMINISTRATION
10.1 Compensation Committee; Powers. The Plan shall be administered by
the Compensation Committee. In accordance with the provisions of the Plan, the
Compensation Committee shall have full power and authority, in its sole
discretion, to administer the Plan, including authority to interpret and
construe any provision of the Plan and any Option granted hereunder, to select
the Eligible Employees to whom Options will be granted, the type (i.e., ISO or
----
NSO) and amount of each Option, and any other terms and conditions of each
Option as the Compensation Committee may deem necessary or desirable and
consistent with the terms of the Plan. The Compensation Committee shall have
full power and authority to determine the form or forms of the agreements with
Option Holders, which shall evidence the particular provisions, terms,
conditions, rights and duties of the Company and the Option Holders with respect
to Options granted pursuant to the Plan, which provisions need not be identical
except as may be provided herein. The Compensation Committee in granting an
Option may provide for the granting or issuance of additional, replacement or
alternative Options upon the occurrence of specified events, including the
exercise of the original Option. The Board may reserve to itself any of the
authority granted to a committee or committees as set forth herein, and it may
perform and discharge all of the functions and responsibilities of any such
committee at any time that a duly constituted committee is not appointed and
serving.
10.2 Actions of Compensation Committee. The Compensation Committee may
from time to time adopt such rules and regulations for administering the Plan as
it may deem necessary in order to comply with the requirements of the Code or in
order to conform to any regulation or to any change in law or regulation
applicable thereto, or as it may otherwise deem proper and in the best interests
of the Company. The Compensation Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any agreement entered
into hereunder in the manner and to the extent it shall deem expedient and it
shall be the sole and final judge of such expediency. No member of the
Compensation Committee shall be liable for any action, interpretation or
determination made in good faith (including determinations of Fair Market
Value), and all members of the Compensation Committee shall, in addition to
their rights as directors, be fully protected by the Company with respect to any
such action, interpretation or determination. All actions taken and all
interpretations and determinations made by the Compensation Committee pursuant
to the provisions of the Plan shall be final, binding and conclusive for all
purposes and on Option Holders, the Company and all other persons. Any
determination reduced in writing and signed by all of the members shall be fully
effective as if it had been made by a majority vote at a meeting duly called and
held.
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SECTION 11
STOCK RESERVED FOR THE PLAN
11.1 Number of Shares. Subject to the provisions of Section 4.3 below,
the number of shares which are authorized for issuance under the Plan is
500,000, any or all of which may be issued as Incentive Stock Options. Shares
which may be issued upon the exercise of Options shall be applied to reduce the
maximum number of Shares remaining available under the Plan. The Shares reserved
for issuance under the Plan may be either authorized and unissued or held in the
treasury of the Company. The Shares reserved for issuance under the Plan may be
either authorized and unissued or held in the treasury of the Company.
11.2 Unused and Forfeited Stock. Any Shares that are subject to an
Option under this Plan which are not used because the terms and conditions of
the Option are not met, including any Shares that are subject to an Option which
expires or is terminated for any reason, any Shares which are used for full or
partial payment of the purchase price of Shares with respect to which an Option
is exercised and any Shares retained by the Company pursuant to Section 5.2(f)
or Section 10 automatically shall again become available for use under the Plan.
11.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company
shall at any time increase or decrease the number of its outstanding Shares of
Stock, or change in any way the rights and privileges of such Shares by means of
the payment of a stock dividend or any other distribution upon such Shares
payable in Stock, or through a stock split, subdivision, consolidation,
combination, reclassification, recapitalization, reverse stock split, or other
change in corporate structure affecting the Stock, then in relation to the Stock
that is affected by such events, such that an adjustment (whether such
adjustment is an increase or a decrease) is required in order to preserve the
benefits or potential benefits intended to be made available under this Plan,
then the Compensation Committee shall, in its sole discretion and in such manner
as the Compensation Committee may deem equitable and appropriate, make such
adjustments to any or all of (i) the number and kind of Shares which thereafter
may be made subject to Options under the Plan, (ii) the number and kind of
Shares subject to outstanding Options, and (iii) the purchase or Option Price
with respect to any of the foregoing.
11.4 General Adjustment Rules. If any adjustment or substitution
provided for in this Section 4 shall result in the creation of a fractional
Share under any Option, the Company, in its discretion, may, in lieu of issuing
such fractional Share, pay to the Option Holder a cash sum in an amount equal to
the product of such fraction multiplied by the Fair Market Value of a Share on
the date the fractional Share otherwise would have been issued.
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SECTION 12
STOCK OPTIONS
12.1 Grant of Options.
(a) Generally. An Eligible Employee may be granted one or more
Options. The Compensation Committee, in its sole discretion, shall designate
whether an Option is to be considered an ISO or an NSO. The Compensation
Committee may grant both an ISO and an NSO to the same Eligible Employee at the
same time or at different times. ISOs and NSOs, whether granted at the same or
different times, shall be deemed to have been awarded in separate grants, shall
be clearly identified, and in no event shall the exercise of one Option affect
the right to exercise any other Option or affect the number of Shares for which
any other Option may be exercised.
(b) Grants to Outside Directors. With respect to Outside
Directors who are Eligible Employees, unless otherwise determined by the
Committee, each such Outside Director shall be granted NSOs representing 9,000
Shares for each Plan Year for the term of the Plan.
12.2 Option Agreements. Each Option granted under the Plan shall be
evidenced by a written stock option agreement which shall be entered into by the
Company and the Option Holder, and which shall contain the following terms and
conditions, as well as such other terms and conditions not inconsistent
therewith, as the Compensation Committee may consider appropriate in each case.
In the event of any inconsistency between the provisions of the Plan and any
such agreement entered into hereunder, the provisions of the Plan shall govern.
Any such agreement may be supplemented or amended from time to time as approved
by the Compensation Committee as contemplated herein.
(a) Number of Shares. Each stock option agreement shall state
that it covers a specified number of Shares, as determined by the Compensation
Committee.
(b) Price. The price at which each Optioned Share may be
purchased shall be determined by the Compensation Committee and set forth in the
stock option agreement. An Option which is an NSO may be granted at any price
equal to or less than Fair Market Value, in the sole discretion of the
Compensation Committee. An Option which is an ISO shall be granted at Fair
Market Value; provided, however, that an ISO which is granted to an Eligible
Employee who then owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company must be at least 110% of the
Fair Market Value of the Stock subject to the ISO on the date the Option is
granted.
(c) Duration of Options. Each stock option agreement shall
state the period of time, determined by the Compensation Committee, within which
the Option may be exercised by the Option Holder (the "Option Period"). The
Option Period must expire, in all cases, not more than ten years from the date
an Option is granted; provided, however, that an ISO which is granted to an
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Eligible Employee who then owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company must expire not
more than five years from the date the Option is granted. Notwithstanding any
other provision of the Plan, any Option Holder who is subject to Section 16 of
the 1934 Act may not exercise any portion of an Option during the first six
months following the grant of such Option, except that this limitation shall not
apply in the event of the Option Holder's death or disability during such
six-month period.
(d) Termination of Employment, Death, Disability, Etc. Except
as otherwise determined by the Compensation Committee, each stock option
agreement shall provide as follows with respect to the exercise of the Option
upon termination of the employment (or services) or the death of the Option
Holder:
(i) Death or Disability: If the Option Holder dies, or
if the Option Holder becomes Disabled during the Option Period while still
employed (or, in the case of a consultant or advisor, while the Option Holder is
performing services), or within the three-month period referred to in (iii)
below, the Option may be exercised by those entitled to do so under the Option
Holder's will or by the laws of descent and distribution within twelve months
following the Option Holder's death or Disability, but not thereafter. In any
such case, the Option may be exercised only as to the Shares as to which the
Option had become exercisable on or before the date of the Option Holder's death
or Disability.
(ii) Termination for Cause: If the employment of the
Option Holder is terminated within the Option Period for Cause, as determined
under any written employment agreement between the Option Holder and the
Company, the Option (whether or not vested and whether or not then exercisable)
thereafter shall be void for all purposes.
(iii) Other Termination: If the employment of the Option
Holder by the Company is terminated (which for this purpose means that the
Option Holder is no longer employed by the Company or by an Affiliated
Corporation and which, in the case of a consultant or advisor or an Outside
Director, means that the Option Holder is no longer performing services for the
Company or an Affiliated Corporation) within the Option Period for any reason
other than Cause, Disability or the Option Holder's death the Option may be
exercised by the Option Holder within three months following the date of such
termination (provided that such exercise must occur within the Option Period),
but not thereafter. In any such case, the Option may be exercised only as to the
Shares as to which the Option had become exercisable on or before the date of
termination of employment or termination of services.
(e) Transferability. Each stock option agreement shall provide
that the Option granted therein is not transferable by the Option Holder except
by will or pursuant to the laws of descent and distribution or pursuant to a
qualified domestic relations order (QDRO), and that such Option is exercisable
during the Option Holder's lifetime only by him or her, or in the event of
Disability or incapacity, by his or her guardian or legal representative. With
the consent of the Compensation Committee, a transfer of an NSO (whether or not
vested) by the Option Holder to a
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family trust or a family partnership, corporation, limited liability company, or
similar family entity, as part of the Option Holder's estate planning will not
be treated as a transfer under this Section. Any NSO so transferred will remain
subject to the restrictions in this Plan.
(f) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the
method for exercising the Option granted therein shall be by delivery to the
Company of written notice specifying the particular Option (or portion thereof)
which is being exercised, the number of Shares with respect to which such Option
is exercised and including payment of the Option Price. Such notice shall be in
a form satisfactory to the Compensation Committee. An Option for the purchase of
Shares granted hereunder may be exercised either in whole at any time, or from
time to time. The exercise of the Option shall be deemed effective upon receipt
of such notice by the Company and payment to the Company of the Option Price.
The purchase of such Stock shall take place at the principal offices of the
Company upon delivery of such notice, at which time the purchase price of the
Stock shall be paid in full by any of the methods or any combination of the
methods set forth in (ii) below and permitted under the appropriate stock option
agreement. A properly executed certificate or certificates representing the
Stock shall be issued by the Company and delivered to the Option Holder.
(ii) The method or methods of payment of the Option
Price for the Shares to be purchased upon exercise of an Option shall be
determined by the Compensation Committee and may consist of any one or more of
the following methods:
(A) in cash;
(B) by cashier's check, certified check, or
any other similar instrument acceptable to the Company and payable to the order
of the Company;
(C) authorization from the Company to retain
from the total number of Shares as to which the Option is exercised that number
of Shares having a Fair Market Value on the date of exercise equal to the Option
Price for the total number of Shares as to which the Option is exercised;
(D) delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale or loan proceeds required to pay the Option
Price;
(E) by delivery to the Company of certificates
representing the number of Shares then owned by the Option Holder, the Fair
Market Value of which equals the Option Price of the Stock purchased pursuant to
the Option, properly endorsed for transfer to the Company; provided however,
that Shares used for this purpose must have been held by the Option Holder for
such minimum period of time as may be established from time to time by the
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Compensation Committee. The Fair Market Value of any Shares delivered in payment
of the purchase price upon exercise of the Option shall be the Fair Market Value
as of the exercise date and the exercise date shall be the day of the delivery
of the Certificates for the Stock used as payment of the Option Price.
(g) Date of Grant. An Option shall be considered as having
been granted on the date specified as the effective date of the grant in the
grant resolution of the Board or Compensation Committee.
12.3 Stockholder Privileges. Prior to the exercise of the Option
and the transfer of Shares to the Option Holder, an Option Holder shall have no
rights as a stockholder with respect to any Shares subject to any Option granted
to such person under this Plan, and until the Option Holder becomes the holder
of record of such Stock, no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date preceding the
date such Option Holder becomes the holder of record of such Stock, except as
provided in Section 4.
SECTION 13
CHANGE IN CONTROL
13.1 Change in Control. In the event of a change in control of the
Company, as defined in Section 6.2, at the discretion of the Compensation
Committee and only as expressly provided in the applicable stock option
agreement, each outstanding Option shall become exercisable in full in respect
of the aggregate number of Shares covered thereby, upon the occurrence of the
events described in clause (a) and (b) of Section 6.2 or immediately prior to
the consummation of the events described in clause (c) of Section 6.2. In
addition, the Compensation Committee, in its sole discretion, without obtaining
stockholder approval, to the extent permitted in Section 9, may take any or all
of the following actions: (a) grant a cash bonus award to any Option Holder in
an amount necessary to pay the Option Price of all or any portion of the Options
then held by such Option Holder; (b) pay cash to any or all Option Holders in
exchange for the cancellation of their outstanding Options in an amount equal to
the difference between the Option Price of such Options and the greater of the
tender offer, merger, or other transaction price for the underlying Stock or the
Fair Market Value of the Stock on the date of the cancellation of the Options;
and (c) make any other adjustments or amendments to the outstanding Options.
Notwithstanding the foregoing, unless otherwise provided in the applicable stock
option agreement, the Compensation Committee may, in its discretion, determine
that any or all outstanding Options granted pursuant to the Plan will not vest
or become exercisable on an accelerated basis in connection with an event
described in Section 6.2 and/or will not terminate if not exercised prior to
consummation of such event, if the Board or the surviving or acquiring
corporation, as the case may be, shall have taken, or made effective provision
for the taking of, such action as in the opinion of the Compensation Committee
is equitable and appropriate to substitute a new Option for such Option or to
assume such Option in order to make such new or assumed Option, as nearly as may
be practicable, equivalent to the old Option (before giving effect to any
acceleration of the vesting or exercisability thereof), taking into
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account, to the extent applicable, the kind and amount of securities, cash or
other assets into or for which the Stock may be changed, converted or exchanged
in connection with such event.
13.2 Definition. A "change in control" shall be deemed to have
occurred if any of the following occur:
(a) Any "person" (as such term is used in Sections 13(d) and
14(d) of the 1934 Act, other than a principal shareholder or any "affiliate" or
family member of such person ("family member" means a spouse, ancestor, sibling
or descendant, any spouse of such person, and any trust for the primary benefit
of any one or more of such persons), acquires or becomes a "beneficial owner"
(as defined in Rule 13d-3 or any successor rule under the 1934 Act), directly or
indirectly, of securities of Employer representing 50% or more of any class of
capital stock that is empowered to vote with respect to the election of
directors of the Company ("Voting Securities"), except that the following will
not constitute a Change in Control pursuant to this Section:
(i) any acquisition of beneficial ownership by the
Company or a subsidiary of the Company; or
(ii) any acquisition of beneficial ownership by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or one or more of its subsidiaries.
(b) A reorganization, merger or consolidation of Company or a
statutory exchange of outstanding Voting Securities of the Company where a
change in beneficial ownership of Voting Securities of the Company occurs of a
magnitude equal to that described in paragraph (a) (but specifically excluding a
merger or consolidation with a subsidiary of the Company, or the creation of a
holding company structure where no material change in beneficial ownership
occurs, or any such transaction where only the state of incorporation of the
Company changes).
(c) A complete liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company (in one or a
series of transactions), in either case if approval of the stockholders of the
Company is required for such a transaction.
A Change in Control will not be deemed to occur if (x) the acquisition of
beneficial ownership of the 50% or greater interest referred to in paragraph (a)
is by any Option Holder or by a group, acting in concert, that includes any
Option Holder or (y) if a majority of the then combined voting power of the then
outstanding Voting Securities (or voting equity interests) of the surviving
corporation or of any corporation (or other entity) acquiring all or
substantially all of the assets of the Company will, immediately after a
reorganization, merger, consolidation, statutory share exchange or disposition
of assets referred to in paragraph (b) or (c), be beneficially owned, directly
or indirectly, by any Option Holder or by a group, acting in concert, that
includes any Option Holder.
13.3 Golden Parachute Payments. If the provisions of this Section
would result in the receipt by any Option Holder of a payment within the meaning
of Code Section 280G and the
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regulations thereunder and if the receipt of such payment would result in the
denial of any deduction under Section 280G or imposition of any excise tax under
Code Section 4999, then the amount of such payment will be reduced to the extent
required, in the opinion of independent tax counsel, to prevent the application
of such Code Sections; provided, however, that the Compensation Committee, in
its sole discretion, may authorize the payment of all or any portion of the
amount of such reduction to the Option Holder. In such event, the Company will
have no obligation or liability with respect to the Option Holder for the amount
of any excise tax imposed on the Option Holder under Code Section 4999.
SECTION 14
RIGHTS OF EMPLOYEES AND OPTION HOLDERS
14.1 Employment. Nothing contained in the Plan or in any Option
shall confer upon any Eligible Employee any right with respect to the
continuation of his or her employment by the Company (or, in the case of an
Outside Director, advisor or consultant, to the continuation of the performance
of services for the Company), or interfere in any way with the right of the
Company, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or services or to increase or
decrease the compensation of such Eligible Employee from the rate in existence
at the time of the grant of an Option. Whether an authorized leave of absence,
or absence in military or government service, shall constitute a termination of
employment or a termination of services shall be determined by the Compensation
Committee at the time.
14.2 Nontransferability. No right or interest of any Option Holder
in an Option granted pursuant to the Plan shall be assignable or transferable
during the lifetime of the Option Holder, either voluntarily or involuntarily,
or be subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy, except pursuant to a qualified domestic relations order. In the
event of an Option Holder's death, an Option Holder's rights and interests in
Options shall, to the extent provided in Section 5, be transferable by
testamentary will or the laws of decent and distribution. In the opinion of the
Compensation Committee, if an Option Holder is disabled from caring for his
affairs because of mental condition, physical condition or age, such Option
Holder's Options shall be exercised by such person's guardian, conservator or
other legal personal representative upon furnishing the Compensation Committee
with evidence satisfactory to the Compensation Committee of such status.
SECTION 15
MISCELLANEOUS PROVISIONS
15.1 Investment Representations. The Company may require any Option
Holder, as a condition of exercising such Option or receiving Stock under the
Option, to give written assurances, in the substance and form satisfactory to
the Company and its counsel, to the effect that such person is acquiring the
Stock subject to the Option for his own account for investment and not with any
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present intention of selling or otherwise distributing the same, and to such
other effects as the Company deems necessary or appropriate in order to comply
with federal and applicable state securities laws. Legends evidencing such
restrictions may be placed on the certificates evidencing the Stock.
15.2 Compliance with Securities Laws. Each Option shall be subject
to the requirement that, if at any time counsel to the Company shall determine
that the listing, registration or qualification of the Shares subject to such
Option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, is necessary as a
condition of, or in connection with, the issuance or purchase of Shares
thereunder, such Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Compensation Committee.
Nothing herein shall be deemed to require the Company to apply for or to obtain
such listing, registration or qualification.
15.3 Other Employee Benefits: The amount of any compensation deemed
to be received by an Option Holder as a result of the exercise of an Option
shall not constitute "earnings" with respect to which any other employee
benefits of such Option Holder are determined, including without limitation
benefits under any pension, profit sharing, life insurance or salary
continuation plan.
15.4 Nonexclusivity of Plan: The adoption of the Plan by the Board
shall not be construed as creating any limitations on the power or authority of
the Board to adopt such other or additional incentive or other compensation
arrangements of whatever nature as the Board may deem necessary or desirable or
preclude or limit the continuation of any other plan, practice or arrangement
for the payment of compensation or fringe benefits to employees generally, or to
any class or group of employees, which the Company or any Affiliated Corporation
now has lawfully put into effect, including, without limitation, any retirement,
pension, savings and stock purchase plan, insurance, death and disability
benefits and executive short-term incentive plans.
15.5 Requirements of Law. The issuance of Stock and the payment of
cash pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
15.6 Federal Securities Law Requirements. With respect to Eligible
Employees subject to Section 16 of the 1934 Act, transactions under this Plan
are intended to comply with applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the Plan or action
by the Compensation Committee results in a failure of such transaction to so
comply, it shall be deemed null and void with respect to such Eligible
Employee(s), to the extent permitted by law and deemed advisable by the
Compensation Committee.
15.7 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado.
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SECTION 16
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time-to-time may amend or
modify, the Plan; provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
stockholders if stockholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that stockholder approval otherwise is necessary
or desirable.
No amendment, modification or termination of the Plan shall in any
manner adversely affect any Options theretofore granted under the Plan without
the consent of the Option Holder holding such Options.
SECTION 17
WITHHOLDING
17.1 Withholding Requirement. The Company's obligations to deliver
Shares upon the exercise of an Option shall be subject to the Option Holder's
satisfaction of all applicable federal, state and local income and other tax
withholding requirements.
17.2 Satisfaction of Withholding Obligations. Upon timely exercise
of the Option, the Company in its sole discretion may (a) withhold the issuance
of the Stock until the Option Holder provides the Company with cash equal to the
amount of federal, state and local income taxes and related taxes, if any, which
the Company is required to withhold and pay in connection with the exercise of
the Option (the "Withholding Obligation"), (b) withhold an amount in cash equal
to the Withholding Obligation with respect to the issuance of the shares to
Option Holder from future compensation of the Option Holder; provided that if
Option Holder's employment or services terminate under Section 5, any portion of
the Withholding Obligation remaining in connection with the grant of this Option
shall be payable and paid by the Option Holder to the Company in cash no later
than the date of termination, or (c) permit the Option Holder to satisfy the
Withholding Obligation, or any part thereof, by transferring Stock to the
Company, or by having Stock withheld from the Stock otherwise issuable upon
exercise of this Option, with a Fair Market Value on the date that the amount of
tax is to be withheld equal to the Withholding Obligation.
SECTION 18
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the
Board, and no Option shall be granted after such termination. If not sooner
terminated under the preceding sentence, the Plan shall fully cease and expire
at midnight on the date that is ten years from the Effective Date of the
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Plan. Options outstanding at the time of the Plan termination may continue to be
exercised in accordance with their terms.
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