EXHIBIT 10.9
SANDATA, INC.
2000 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The Sandata, Inc. 2000 Stock Option Plan (the
"Plan") is intended to advance the interests of Sandata, Inc. (the "Company") by
inducing individuals or entities of outstanding ability and potential to join
and remain with, or provide consulting or advisory services to, the Company, by
encouraging and enabling eligible employees, non-employee Directors, consultants
and advisors to acquire proprietary interests in the Company, and by providing
the participating employees, non-employee Directors, consultants and advisors
with an additional incentive to promote the success of the Company. This is
accomplished by providing for the granting of "Options," which term as used
herein includes both "Incentive Stock Options" and "Nonstatutory Stock Options,"
as later defined, to employees, non-employee Directors, consultants and
advisors.
2. ADMINISTRATION. The Plan shall be administered by the Board of Directors
of the Company (the "Board of Directors") or by a committee (the "Committee")
consisting of at least one (1) person chosen by the Board of Directors. Except
as herein specifically provided, the interpretation and construction by the
Board of Directors or the Committee of any provision of the Plan or of any
Option granted under it shall be final and conclusive. The receipt of Options by
Directors, or any members of the Committee, shall not preclude their vote on any
matters in connection with the administration or interpretation of the Plan.
3. SHARES SUBJECT TO THE PLAN. The stock subject to Options granted under
the Plan shall be shares of the Company's common stock, par value $.001 per
share (the "Common Stock"), whether authorized but unissued or held in the
Company's treasury, or shares purchased from stockholders expressly for use
under the Plan. The maximum number of shares of Common Stock which may be issued
pursuant to Options granted under the Plan shall not exceed in the aggregate one
million five hundred thousand (1,500,000) shares, subject to adjustment in
accordance with the provisions of Section 14 hereof. The Company shall at all
times while the Plan is in force reserve such number of shares of Common Stock
as will be sufficient to satisfy the requirements of all outstanding Options
granted under the Plan. In the event any Option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available for Options under
the Plan. In the event shares of Common Stock are delivered to, or withheld by,
the Company pursuant to Sections 13(b)(ii) or 23 hereof, only the net number of
shares issued, i.e., net of the shares so delivered or withheld, shall be
considered to have been issued pursuant to the Plan.
4. PARTICIPATION. The class of individuals that shall be eligible to
receive Options under the Plan shall be (a) with respect to Incentive Stock
Options described in Section 6 hereof, all employees of either the Company or
any parent or subsidiary corporation of the Company, and (b) with respect to
Nonstatutory Stock Options described in Section 7 hereof, all employees and
non-employee Directors of, or consultants and advisors to, either the Company or
any parent or subsidiary corporation of the Company; provided, however, that
Nonstatutory Stock Options shall not be granted to any such consultant or
advisor unless (i) the consultant or advisor is a natural person (or an entity
wholly-owned by the consultant or advisor), (ii) bona fide services have been or
are to be rendered by such consultant or advisor and (iii) such services are not
in connection with the offer or sale of securities in a capital raising
transaction and do not directly or indirectly promote or maintain a market for
the Company's securities. The Board of Directors or the Committee, in its sole
discretion, but subject to the provisions of the Plan, shall determine the
employees and non-employee Directors of, and the consultants and advisors to,
the Company and its parent and subsidiary corporations to whom Options shall be
granted, and the number of shares to be covered by each Option, taking into
account the nature of the employment or services rendered by the individuals or
entities being considered, their annual compensation, their present and
potential contributions to the success of the Company, and such other factors as
the Board of Directors or the Committee may deem relevant. For purposes hereof,
a non-employee to whom an offer of employment has been extended shall be
considered an employee, provided that the Options granted to such individual
shall not be exercisable, in whole or in part, for a period of at least one year
from the date of grant and in the event the individual does not commence
employment with the company, the Options granted shall be considered null and
void.
5. STOCK OPTION AGREEMENT. Each Option granted under the Plan shall be
authorized by the Board of Directors or the Committee, and shall be evidenced by
a Stock Option Agreement which shall be executed by the Company and by the
individual to whom such Option is granted. The Stock Option Agreement shall
specify the number of shares of Common Stock as to which any Option is granted,
the period during which the Option is exercisable, and the option price per
share thereof, and such other terms and provisions as the Board of Directors or
the Committee may deem necessary or appropriate.
6. INCENTIVE STOCK OPTIONS. The Board of Directors or the Committee may
grant Options under the Plan which are intended to meet the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), with
respect to "incentive stock options," and which are subject to the following
terms and conditions and any other terms and conditions as may at any time be
required by Section 422 of the Code (referred to herein as an "Incentive Stock
Option"):
(a) No Incentive Stock Option shall be granted to individuals other
than employees of the Company or of a parent or subsidiary corporation of
the Company.
(b) Each Incentive Stock Option under the Plan must be granted prior
to September 1 , 2010, which is within ten (10) years from the date the
Plan was adopted by the Board of Directors.
(c) The option price of the shares subject to any Incentive Stock
Option shall not be less than the fair market value (as defined in
subsection (f) of this Section 6) of the Common Stock at the time such
Incentive Stock Option is granted; provided, however, if an Incentive Stock
Option is granted to an individual who owns, at the time the Incentive
Stock Option is granted, more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of a parent or
subsidiary corporation of the Company (a "10% Stockholder"), the option
price of the shares subject to the Incentive Stock Option shall be at least
one hundred ten percent (110%) of the fair market value of the Common Stock
on the date upon which such Incentive Stock Option is granted.
(d) No Incentive Stock Option granted under the Plan shall be
exercisable after the expiration of ten (10) years from the date of its
grant. However, if an Incentive Stock Option is granted to a 10%
Stockholder, such Incentive Stock Option shall not be exercisable after the
expiration of five (5) years from the date of its grant. Every Incentive
Stock Option granted under the Plan shall be subject to earlier termination
as expressly provided in Section 12 hereof.
(e) For purposes of determining stock ownership under this Section 6,
the attribution rules of Section 424(d) of the Code shall apply.
(f) For purposes of the Plan, fair market value shall be determined by
the Board of Directors or the Committee. If the Common Stock is listed on a
national securities exchange or The Nasdaq Stock Market ("Nasdaq") or
traded on the Over-the-Counter market, fair market value shall be the
closing selling price or, if not available, the closing bid price or, if
not available, the high bid price of the Common Stock quoted on such
exchange or Nasdaq, or on the Over-the-Counter market, as reported by the
exchange, Nasdaq or the National Association of Securities Dealers OTC
Electronic Bulletin Board, or if the Common Stock is not so reported, then
by the Pink Sheets, LLC, as the case may be, on the day immediately
preceding the day on which the Option is granted (or, if granted after the
close of business for trading, then on the day on which the Option is
granted), or, if there is no selling or bid price on that day, the closing
selling price, closing bid price or high bid price, as the case may be, on
the most recent day which precedes that day and for which such prices are
available. If there is no selling or bid price for the ninety (90) day
period preceding the date of grant of an Option hereunder, fair market
value shall be determined in good faith by the Board of Directors or the
Committee.
7. NONSTATUTORY STOCK OPTIONS. The Board of Directors or the Committee may
grant Options under the Plan which are not intended to meet the requirements of
Section 422 of the Code, as well as Options which are intended to meet the
requirements of Section 422 of the Code but the terms of which provide that they
will not be treated as Incentive Stock Options (referred to herein as a
"Nonstatutory Stock Option"). Nonstatutory Stock Options shall be subject to the
following terms and conditions:
(a) A Nonstatutory Stock Option may be granted to any individual or
entity eligible to receive an Option under the Plan pursuant to clause (b)
of Section 4 hereof.
(b) The option price of the shares subject to a Nonstatutory Stock
Option shall be determined by the Board of Directors or the Committee, in
its sole discretion, at the time of the grant of the Nonstatutory Stock
Option.
(c) A Nonstatutory Stock Option granted under the Plan may be of such
duration as shall be determined by the Board of Directors or the Committee
(subject to earlier termination as expressly provided in Section 12
hereof).
8. RELOAD FEATURE. The Board of Directors or the Committee may grant
Options with a reload feature. A reload feature shall only apply when the option
price is paid by delivery of Common Stock (as set forth in Section 13(b)(ii)).
The Stock Option Agreement for the Options containing the reload feature shall
provide that the Option holder shall receive, contemporaneously with the payment
of the option price in shares of Common Stock, a reload stock option (the
"Reload Option") to purchase that number of shares of Common Stock equal to the
sum of (i) the number of shares of Common Stock used to exercise the Option, and
(ii) with respect to Non-Statutory Stock Options, the number of shares of Common
Stock used to satisfy any tax withholding requirement incident to the exercise
of such Non-Statutory Stock Option. The terms of the Plan applicable to the
Option shall be equally applicable to the Reload Option with the following
exceptions: (i) the option price per share of Common Stock deliverable upon the
exercise of the Reload Option, (A) in the case of a Reload Option which is an
Incentive Stock Option being granted to a 10% Stockholder, shall be one hundred
ten percent (110%) of the fair market value of a share of Common Stock on the
date of grant of the Reload Option and (B) in the case of a Reload Option which
is an Incentive Stock Option being granted to a person other than a 10%
Stockholder or is a Non-Statutory Stock Option, shall be the fair market value
of a share of Common Stock on the date of grant of the Reload Option; and (ii)
the term of the Reload Option shall be equal to the remaining option term of the
Option (including a Reload Option) which gave rise to the Reload Option. The
Reload Option shall be evidenced by an appropriate amendment to the Stock Option
Agreement for the Option which gave rise to the Reload Option. In the event the
exercise price of an Option containing a reload feature is paid by check and not
in shares of Common Stock, the reload feature shall have no application with
respect to such exercise.
9. RIGHTS OF OPTION HOLDERS. The holder of an Option granted under the Plan
shall have none of the rights of a stockholder with respect to the stock covered
by his Option until such stock shall be transferred to him upon the exercise of
his Option.
10. ALTERNATE STOCK APPRECIATION RIGHTS.
(a) Concurrently with, or subsequent to, the award of any Option to
purchase one or more shares of Common Stock, the Board of Directors or the
Committee may, in its sole discretion, subject to the provisions of the
Plan and such other terms and conditions as the Board of Directors or the
Committee may prescribe, award to the optionee with respect to each share
of Common Stock covered by an Option ("Related Option"), a related
alternate stock appreciation right ("SAR"), permitting the optionee to be
paid the appreciation on the Related Option in lieu of exercising the
Related Option. An SAR granted with respect to an Incentive Stock Option
must be granted together with the Related Option. An SAR granted with
respect to a Non-Statutory Stock Option may be granted together with, or
subsequent to, the grant of such Related Option.
(b) Each SAR granted under the Plan shall be authorized by the Board
of Directors or the Committee, and shall be evidenced by an SAR Agreement
which shall be executed by the Company and by the individual or entity to
whom such SAR is granted. The SAR Agreement shall specify the period during
which the SAR is exercisable, and such other terms and provisions not
inconsistent with the Plan.
(c) An SAR may be exercised only if and to the extent that its Related
Option is eligible to be exercised on the date of exercise of the SAR. To
the extent that a holder of an SAR has a current right to exercise, the SAR
may be exercised from time to time by delivery by the holder thereof to the
Company at its principal office (attention: Secretary) of a written notice
of the number of shares with respect to which it is being exercised. Such
notice shall be accompanied by the agreements evidencing the SAR and the
Related Option. In the event the SAR shall not be exercised in full, the
Secretary of the Company shall endorse or cause to be endorsed on the SAR
Agreement and the Related Option Agreement the number of shares which have
been exercised thereunder and the number of shares that remain exercisable
under the SAR and the Related Option and return such SAR and Related Option
to the holder thereof.
(d) The amount of payment to which an optionee shall be entitled upon
the exercise of each SAR shall be equal to one hundred percent (100%) of
the amount, if any, by which the fair market value of a share of Common
Stock on the exercise date exceeds the exercise price per share of the
Related Option; provided, however, the Company may, in its sole discretion,
withhold from any such cash payment any amount necessary to satisfy the
Company's obligation for withholding taxes with respect to such payment.
(e) The amount payable by the Company to an optionee upon exercise of
a SAR may, in the sole determination of the Company, be paid in shares of
Common Stock, cash or a combination thereof, as set forth in the SAR
Agreement. In the case of a payment in shares, the number of shares of
Common Stock to be paid to an optionee upon such optionee's exercise of an
SAR shall be determined by dividing the amount of payment determined
pursuant to Section 10(d) hereof by the fair market value of a share of
Common Stock on the exercise date of such SAR. For purposes of the Plan,
the exercise date of an SAR shall be the date the Company receives written
notification from the optionee of the exercise of the SAR in accordance
with the provisions of Section 10(c) hereof. As soon as practicable after
exercise, the Company shall either deliver to the optionee the amount of
cash due such optionee or a certificate or certificates for such shares of
Common Stock. All such shares shall be issued with the rights and
restrictions specified herein.
(f) SARs shall terminate or expire upon the same conditions and in the
same manner as the Related Options, and as set forth in Section 12 hereof.
(g) The exercise of any SAR shall cancel and terminate the right to
purchase an equal number of shares covered by the Related Option. (h) Upon
the exercise or termination of any Related Option, the SAR with respect to
such Related Option shall terminate to the extent of the number of shares
of Common Stock as to which the Related Option was exercised or terminated.
(i) An SAR granted pursuant to the Plan shall be transferable to the
same extent as the Related Option. (j) All references in this Plan to
"Options" shall be deemed to include "SARs" where applicable.
11. TRANSFERABILITY.
(a) No Option granted under the Plan shall be transferable by the
individual or entity to whom it was granted other than by will or the laws
of descent and distribution, and, during the lifetime of an individual,
shall not be exercisable by any other person, but only by him.
(b) Notwithstanding Section 11(a) above, a Nonstatutory Stock Option
granted under the Plan may be transferred in whole or in part during an
optionee's lifetime, upon the approval of the Board of Directors or the
Committee, to an optionee's "family members" (as such term is defined in
Rule 701(c)(3) of the Securities Act of 1933, as amended, and General
Instruction A(1)(a)(5) to Form S-8) through a gift or domestic relation
order. The transferred portion of a Nonstatutory Stock Option may only be
exercised by the person or entity who acquires a proprietary interest in
such option pursuant to the transfer. The terms applicable to the
transferred portion shall be the same as those in effect for the Option
immediately prior to such transfer and shall be set forth in such documents
issued to the transferee as the Board of Directors or the Committee may
deem appropriate. As used in this Plan the terms "optionee" and "holder of
an Option" shall refer to the grantee of the Option and not any transferee
thereof.
12. TERMINATION OF EMPLOYMENT OR DEATH.
(a) Unless otherwise provided in the Stock Option Agreement, if the
employment of an employee by, or the services of a non-employee Director
for, or consultant or advisor to, the Company or a parent or subsidiary
corporation of the Company shall be terminated for cause or voluntarily by
the employee, non-employee Director, consultant or advisor, then his Option
shall expire forthwith. Unless otherwise provided in the Stock Option
Agreement, and except as provided in subsections (b) and (c) of this
Section 12, if such employment or services shall terminate for any other
reason, then such Option may be exercised at any time within three (3)
months after such termination, subject to the provisions of subsection (d)
of this Section 12. For purposes hereof, "cause" shall include, without
limitation, the termination of the optionee's employment or consulting or
advisory relationship by the Company because of (i) conviction of, or a
plea of nolo contendere to, a felony, or another serious crime which
results or is likely to result in material injury to the Company; (ii)
breach of fiduciary duty involving personal profit; (iii) continued and
habitual neglect to perform material stated duties; or (iv) material breach
of any provision of any employment, consulting or advisory agreement
between the optionee and the Company or any parent or subsidiary thereof.
For purposes of the Plan, the retirement of an individual either pursuant
to a pension or retirement plan adopted by the Company or at the normal
retirement date prescribed from time to time by the Company shall be deemed
to be termination of such individual's employment other than voluntarily or
for cause. For purposes of this subsection (a), an employee, non-employee
Director, consultant or advisor who leaves the employ or services of the
Company to become an employee or non-employee Director of, or a consultant
or advisor to, a parent or subsidiary corporation of the Company or a
corporation (or subsidiary or parent corporation of the corporation) which
has assumed the Option of the Company as a result of a corporate
reorganization or like event shall not be considered to have terminated his
employment or services.
(b) Unless otherwise provided in the Stock Option Agreement, if the
holder of an Option under the Plan dies (i) while employed by, or while
serving as a non-employee Director for or a consultant or advisor to, the
Company or a parent or subsidiary corporation of the Company, or (ii)
within three (3) months after the termination of his employment or services
other than voluntarily or for cause, then such Option may, subject to the
provisions of subsection (d) of this Section 12, be exercised by the estate
of the employee or non-employee Director, consultant or advisor, or by a
person who acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of such employee or non-employee
Director, consultant or advisor, at any time within one (1) year after such
death.
(c) Unless otherwise provided in the Stock Option Agreement, if the
holder of an Option under the Plan ceases employment or services because of
permanent and total disability (within the meaning of Section 22(e)(3) of
the Code) while employed by, or while serving as a non-employee Director
for or consultant or advisor to, the Company or a parent or subsidiary
corporation of the Company, then such Option may, subject to the provisions
of subsection (d) of this Section 12, be exercised at any time within one
(1) year after his termination of employment, termination of Directorship
or termination of consulting or advisory services, as the case may be, due
to the disability.
(d) An Option may not be exercised pursuant to this Section 12 except
to the extent that the holder was entitled to exercise the Option at the
time of termination of employment, termination of Directorship, termination
of consulting or advisory services, or death, and in any event may not be
exercised after the expiration of the Option.
(e) For purposes of this Section 12, the employment relationship of an
employee of the Company or of a parent or subsidiary corporation of the
Company will be treated as continuing intact while he is on military or
sick leave or other bona fide leave of absence (such as temporary
employment by the Government) if such leave does not exceed ninety (90)
days, or, if longer, so long as his right to reemployment is guaranteed
either by statute or by contract.
13. EXERCISE OF OPTIONS.
(a) Unless otherwise provided in the Stock Option Agreement, any
Option granted under the Plan shall be exercisable in whole at any time, or
in part from time to time, prior to expiration. The Board of Directors or
the Committee, in its absolute discretion, may provide in any Stock Option
Agreement that the exercise of any Options granted under the Plan shall be
subject (i) to such condition or conditions as it may impose, including,
but not limited to, a condition that the holder thereof remain in the
employ or service of, or continue to provide consulting or advisory
services to, the Company or a parent or subsidiary corporation of the
Company for such period or periods from the date of grant of the Option as
the Board of Directors or the Committee, in its absolute discretion, shall
determine; and (ii) to such limitations as it may impose, including, but
not limited to, a limitation that the aggregate fair market value
(determined at the time the Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time
by any employee during any calendar year (under all plans of the Company
and its parent and subsidiary corporations) shall not exceed one hundred
thousand dollars ($100,000). In addition, in the event that under any Stock
Option Agreement the aggregate fair market value (determined at the time
the Option is granted) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any employee during any
calendar year (under all plans of the Company and its parent and subsidiary
corporations) exceeds one hundred thousand dollars ($100,000), the Board of
Directors or the Committee may, when shares are transferred upon exercise
of such Options, designate those shares which shall be treated as
transferred upon exercise of an Incentive Stock Option and those shares
which shall be treated as transferred upon exercise of a Nonstatutory Stock
Option.
(b) An Option granted under the Plan shall be exercised by the
delivery by the holder thereof to the Company at its principal office
(attention of the Secretary) of written notice of the number of shares with
respect to which the Option is being exercised. Such notice shall be
accompanied, or followed within ten (10) days of delivery thereof, by
payment of the full option price of such shares, and payment of such option
price shall be made by the holder's delivery of (i) his check payable to
the order of the Company, or (ii) previously acquired Common Stock, the
fair market value of which shall be determined as of the date of exercise
(provided that the shares delivered pursuant hereto are acceptable to the
Board of Directors or the Committee in its sole discretion) or (iii) if
provided for in the Stock Option Agreement, his check payable to the order
of the Company in an amount at least equal to the par value of the Common
Stock being acquired, together with a promissory note, in form and upon
such terms as are acceptable to the Board or the Committee, made payable to
the order of the Company in an amount equal to the balance of the exercise
price, or (iv) by the holder's delivery of any combination of the foregoing
(i), (ii) and (iii).
14. ADJUSTMENT UPON CHANGE IN CAPITALIZATION.
(a) In the event that the outstanding Common Stock is hereafter
changed by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares,
reverse split, stock dividend or the like, an appropriate adjustment shall
be made by the Board of Directors or the Committee in the aggregate number
of shares available under the Plan, in the number of shares and option
price per share subject to outstanding Options, and in any limitation on
exerciseability referred to in Section 13(a)(ii) hereof which is set forth
in outstanding Incentive Stock Options. If the Company shall be
reorganized, consolidated, or merged with another corporation, the holder
of an Option shall be entitled to receive upon the exercise of his Option
the same number and kind of shares of stock or the same amount of property,
cash or securities as he would have been entitled to receive upon the
happening of any such corporate event as if he had been, immediately prior
to such event, the holder of the number of shares covered by his Option;
provided, however, that in such event the Board of Directors or the
Committee shall have the discretionary power to take any action necessary
or appropriate to prevent any Incentive Stock Option granted hereunder
which is intended to be an "incentive stock option" from being disqualified
as such under the then existing provisions of the Code or any law
amendatory thereof or supplemental thereto; and provided, further, however,
that in such event the Board of Directors or the Committee shall have the
discretionary power to take any action necessary or appropriate to prevent
such adjustment from being deemed or considered as the adoption of a new
plan requiring shareholder approval under Section 422 of the Code and the
regulations promulgated thereunder.
(b) Notwithstanding Section 14(a) above, if the Company shall be
reorganized, consolidated or merged with another corporation, the Board of
Directors or the Committee may, in its sole discretion, upon written notice
to the holder of an Option, provide that the Option must be exercised
within 20 days of the date of such notice or it will be terminated. For
purposes of this Section 14(b), the Board of Directors or the Committee
may, in its discretion, advance the lapse of vesting periods, waiting
periods and exercise dates.
(c) Any adjustment in the number of shares shall apply proportionately
to only the unexercised portion of the Option granted hereunder. If
fractions of a share would result from any such adjustment, the adjustment
shall be revised to the next lower whole number of shares.
15. FURTHER CONDITIONS OF EXERCISE.
(a) Unless prior to the exercise of the Option the shares issuable
upon such exercise have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, the notice
of exercise shall be accompanied by a representation or agreement of the
person or estate exercising the Option to the Company to the effect that
such shares are being acquired for investment purposes and not with a view
to the distribution thereof, and such other documentation as may be
required by the Company, unless in the opinion of counsel to the Company
such representation, agreement or documentation is not necessary to comply
with such Act.
(b) The Company shall not be obligated to deliver any Common Stock
until it has been listed on each securities exchange on which the Common
Stock may then be listed or until there has been qualification under or
compliance with such federal or state laws, rules or regulations as the
Company may deem applicable. The Company shall use reasonable efforts to
obtain such listing, qualification and compliance.
16. EFFECTIVENESS OF THE PLAN. The Plan was adopted by the Board of
Directors on September 1, 2000. The Plan shall be subject to approval on or
before September 1, 2001, which is within one (1) year of adoption of the Plan
by the Board of Directors, by the affirmative vote of the holders of a majority
of the votes of the outstanding shares of capital stock of the Company present
in person or represented by proxy at a meeting of stockholders and entitled to
vote thereon (or in the case of action by written consent in lieu of a meeting
of stockholders, the number of votes required by applicable law to act in lieu
of a meeting) ("Stockholder Approval"). In the event such Stockholder Approval
is withheld or otherwise not received on or before the latter date, the Plan
and, unless otherwise provided in the Stock Option Agreement, all Options that
may have been granted hereunder shall become null and void.
17. TERMINATION, MODIFICATION AND AMENDMENT.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate on September 1, 2010, which is within ten (10) years from the
date of its adoption by the Board of Directors, or sooner as hereinafter
provided, and no Option shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified, or amended
if Stockholder Approval of the termination, modification or amendment is
obtained.
(c) The Board of Directors may at any time, on or before the
termination date referred to in Section 17(a) hereof, without Stockholder
Approval, terminate the Plan, or from time to time make such modifications
or amendments to the Plan as it may deem advisable; provided, however, that
the Board of Directors shall not, without Stockholder Approval, (i)
increase (except as otherwise provided by Section 14 hereof) the maximum
number of shares as to which Incentive Stock Options may be granted
hereunder, change the designation of the employees or class of employees
eligible to receive Incentive Stock Options, or make any other change which
would prevent any Incentive Stock Option granted hereunder which is
intended to be an "incentive stock option" from qualifying as such under
the then existing provisions of the Code or any law amendatory thereof or
supplemental thereto or (ii) make any other modifications or amendments
that require Stockholder Approval pursuant to applicable law, regulation or
exchange requirements. In the event Stockholder Approval is not received
within one (1) year of adoption by the Board of Directors of the change
provided for in (i) or (ii) above, then, unless otherwise provided in the
Stock Option Agreement (but subject to applicable law), the change and all
Options and SARs that may have been granted pursuant thereto shall be null
and void.
(d) No termination, modification, or amendment of the Plan may,
without the consent of the individual or entity to whom any Option shall
have been granted, adversely affect the rights conferred by such Option.
18. NOT A CONTRACT OF EMPLOYMENT. Nothing contained in the Plan or in any
Stock Option Agreement executed pursuant hereto shall be deemed to confer upon
any individual or entity to whom an Option is or may be granted hereunder any
right to remain in the employ or service of the Company or a parent or
subsidiary corporation of the Company or any entitlement to any remuneration or
other benefit pursuant to any consulting or advisory arrangement.
19. USE OF PROCEEDS. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.
20. INDEMNIFICATION OF BOARD OF DIRECTORS OR COMMITTEE. In addition to such
other rights of indemnification as they may have, the members of the Board of
Directors or the Committee, as the case may be, shall be indemnified by the
Company to the extent permitted under applicable law against all costs and
expenses reasonably incurred by them in connection with any action, suit, or
proceeding to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any rights
granted thereunder and against all amounts paid by them in settlement thereof or
paid by them in satisfaction of a judgment of any such action, suit or
proceeding, except a judgment based upon a finding of bad faith. Upon the
institution of any such action, suit, or proceeding, the member or members of
the Board of Directors or the Committee, as the case may be, shall notify the
Company in writing, giving the Company an opportunity at its own cost to defend
the same before such member or members undertake to defend the same on his or
their own behalf.
21. CAPTIONS. The use of captions in the Plan is for convenience. The
captions are not intended to provide substantive rights.
22. DISQUALIFYING DISPOSITIONS. If Common Stock acquired upon exercise of
an Incentive Stock Option granted under the Plan is disposed of within two years
following the date of grant of the Incentive Stock Option or one year following
the issuance of the Common Stock to the optionee, or is otherwise disposed of in
a manner that results in the optionee being required to recognize ordinary
income, rather than capital gain, from the disposition (a "Disqualifying
Disposition"), the holder of the Common Stock shall, immediately prior to such
Disqualifying Disposition, notify the Company in writing of the date and terms
of such Disqualifying Disposition and provide such other information regarding
the Disqualifying Disposition as the Company may reasonably require.
23. WITHHOLDING TAXES.
(a) Whenever under the Plan shares of Common Stock are to be delivered
by an optionee upon exercise of a Nonstatutory Stock Option, the Company
shall be entitled to require as a condition of delivery that the optionee
remit or, in appropriate cases, agree to remit when due, an amount
sufficient to satisfy all current or estimated future Federal, state and
local income tax withholding requirements, including, without limitation,
the employee's portion of any employment tax requirements relating thereto.
At the time of a Disqualifying Disposition, the optionee shall remit to the
Company in cash the amount of any applicable Federal, state and local
income tax withholding and the employee's portion of any employment taxes.
(b) The Board of Directors or the Committee may, in its discretion,
provide any or all holders of Nonstatutory Stock Options with the right to
use shares of Common Stock in satisfaction of all or part of the
withholding taxes to which such holders may become subject in connection
with the exercise of their Options. Such right may be provided to any such
holder in either or both of the following formats:
(i) Stock Withholding: The election to have the Company withhold,
from the shares of Common Stock otherwise issuable upon the exercise
of such Nonstatutory Stock Option, a portion of those shares with an
aggregate fair market value equal to the percentage of the withholding
taxes (not to exceed one hundred percent (100%)) designated by the
holder.
(ii) Stock Delivery: The election to deliver to the Company, at
the time the Nonstatutory Stock Option is exercised, one or more
shares of Common Stock previously acquired by such holder (other than
in connection with the option exercise triggering the withholding
taxes) with an aggregate fair market value equal to the percentage of
the withholding taxes (not to exceed one hundred percent (100%))
designated by the holder.
24. OTHER PROVISIONS. Each Option granted under the Plan may contain such
other terms and conditions not inconsistent with the Plan as may be determined
by the Board or the Committee, in its sole discretion. Notwithstanding the
foregoing, each Incentive Stock Option granted under the Plan shall include
those terms and conditions which are necessary to qualify the Incentive Stock
Option as an "incentive stock option" within the meaning of Section 422 of the
Code and the regulations thereunder and shall not include any terms and
conditions which are inconsistent therewith.
25. DEFINITIONS. For purposes of the Plan, the terms "parent corporation"
and "subsidiary corporation" shall have the meanings set forth in Sections
424(e) and 424(f) of the Code, respectively, and the masculine shall include the
feminine and the neuter as the context requires.
26. GOVERNING LAW. The Plan shall be governed by, and all questions arising
hereunder shall be determined in accordance with, the laws of the State of
Delaware.
