<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1996
REGISTRATION NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ADVANCED DIGITAL INFORMATION CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
WASHINGTON 91-1618616
<S> <C>
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
10201 WILLOWS ROAD
REDMOND, WASHINGTON 98052
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
ADVANCED DIGITAL INFORMATION CORPORATION 1996 TRANSITION PLAN
ADVANCED DIGITAL INFORMATION CORPORATION 1996 STOCK OPTION PLAN
(FULL TITLES OF THE PLANS)
--------------------------
PETER H. VAN OPPEN
CHIEF EXECUTIVE OFFICER
ADVANCED DIGITAL INFORMATION CORPORATION
10201 WILLOWS ROAD
REDMOND, WASHINGTON 98052
(206) 881-8004
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------------
COPY TO:
LINDA A. SCHOEMAKER
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
(206) 583-8888
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE(1) PRICE(1)
<S> <C> <C> <C> <C>
Common Stock, no par 1,101,092
value(2) shares (3) $11.375 $12,524,922 $3,795
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the amount of the registration fee. The price per share is estimated to
be $11.375 based on the average of the high ($11.75) and low ($11.00)
sales prices for the Common Stock on October 25, 1996, as reported by
the Nasdaq National Market.
(2) Including associated Preferred Stock Purchase Rights.
(3) Includes 625,000 shares issuable pursuant to the 1996 Stock Option Plan
and 476,092 shares issuable pursuant to the 1996 Transition Plan
(together, the "Plans") together with an indeterminate number of
additional shares which may be necessary to adjust the number of shares
reserved for issuance pursuant to the Plans as the result of any future
stock split, stock dividend or similar adjustment of the outstanding
Common Stock of the Company.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Registration Statement on Form 10 filed
with the Securities and Exchange Commission (the "Commission") on July 30, 1996
(as amended, the "Form 10"), which contains audited financial statements for the
most recent year for which such statements have been filed;
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the Form 10; and
(c) The description of the Registrant's Common Stock contained
in the Form 10, including any amendments or reports filed for the purpose of
updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters the securities covered hereby then
remaining unsold shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 10 of the Registrant's Restated Bylaws provides for
indemnification of the Registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its shareholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct, self-dealing
or illegal corporate loans or distributions, or any transaction from which the
director personally receives a benefit in money, property or services to which
the director is not legally entitled. Article 11 of the Registrant's Restated
Articles of Incorporation contains provisions implementing, to the fullest
extent permitted by Washington law, such limitations on a director's liability
to the Registrant and its shareholders.
The Registrant has entered into an Indemnification Agreement with each
of the its executive officers and directors in which the Registrant agrees to
hold harmless and indemnify the officer or director to the full extent permitted
by Washington law. In addition, the Registrant agrees to indemnify the officer
or director against any and all losses, claims, damages, liabilities or expenses
incurred in connection with any actual, pending or threatened action, suit,
claim or proceeding, whether civil, criminal, administrative or investigative
and whether formal or informal, in which the officer or director is, was or
becomes involved by reason of the fact that the officer or director is or was a
director, officer, employee or agent of the Registrant, or that being or having
been such a director, officer, employee or agent, such director is or was
serving at the request of the Registrant as a director, officer, employee,
trustee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to an employee benefit
plan, whether the basis of such proceeding is alleged action (or inaction) by
the officer or director in an official capacity as a director, officer,
employee, trustee or agent or in any other capacity while serving as a director,
officer, employee, trustee or agent. The officer or director is not indemnified
for any action, suit, claim or proceeding instituted by or at the direction of
the officer or director unless such action, suit, claim or proceeding is or was
authorized by the Registrant's Board of Directors or unless the action is to
enforce the provisions of the Indemnification Agreement.
No indemnity pursuant to the Indemnification Agreements may be provided
by the Registrant on account of any suit in which a final, unappealable judgment
is rendered against an officer or director for an accounting of profits made
from the purchase or sale by the officer or director of securities of the
Registrant in violation of the provisions of
II-1
<PAGE> 3
Section 16(b) of the Exchange Act, or for damages that have been paid directly
to the officer or director by an insurance carrier under a policy of directors'
and officers' liability insurance maintained by the Registrant.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common Stock being registered
23.1 Consent of Price Waterhouse LLP (see page II-5)
23.2 Consent of KPMG Peat Marwick LLP (see page II-6)
23.3 Consent of Perkins Coie (included in opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1996 Stock Option Plan
99.2 1996 Transition Plan (incorporated by reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form 10 (reg. no. 000-21103) filed on July 30, 1996, as
amended)
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 4
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Redmond, State of Washington, on the 29th day of
October, 1996.
ADVANCED DIGITAL INFORMATION CORPORATION, INC.
By: /s/ Peter H. van Oppen
_____________________________
Peter H. van Oppen
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
and appoints Peter H. van Oppen and Charles H. Stonecipher, and each of them,
with full power of substitution and full power to act without the other, as his
true and lawful attorney-in-fact and agent to act in his name, place and stead
and to execute in the name and on behalf of each person, individually and in
each capacity stated below, and to file, any and all amendments to this
Registration Statement, including any and all post-effective amendments with the
Securities and Exchange Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 29th day of October, 1996.
<TABLE>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Peter H. van Oppen Chief Executive Officer and Chairman of the Board of
___________________________________
Peter H. van Oppen Directors
(Principal Executive Officer)
/s/ Charles H. Stonecipher Chief Operating Officer
___________________________________
Charles H. Stonecipher (Principal Financial and Accounting Officer)
/s/ Christopher T. Bayley Director
___________________________________
Christopher T. Bayley
/s/ Walter P. Kistler Director
___________________________________
Walter P. Kistler
/s/ Russell F. McNeill Director
___________________________________
Russell F. McNeill
/s/ John W. Stanton Director
___________________________________
John W. Stanton
/s/ Walter F. Walker Director
___________________________________
Walter F. Walker
</TABLE>
II-4
<PAGE> 6
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 19, 1996 appearing in the
Advanced Digital Information Corporation Registration Statement on Form 10.
PRICE WATERHOUSE LLP
Seattle, Washington
October 28, 1996
II-5
<PAGE> 7
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Advanced Digital Information Corporation
We consent to the use of our report incorporated herein by reference relating to
the statements of income, stockholders' equity and cash flows of Advanced
Digital Information Corporation for the year ended September 30, 1993.
KPMG PEAT MARWICK LLP
Seattle, Washington
October 29, 1996
II-6
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common Stock being registered
23.1 Consent of Price Waterhouse LLP (see page II-5)
23.2 Consent of KPMG Peat Marwick LLP (see page II-6)
23.3 Consent of Perkins Coie (included in Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1996 Stock Option Plan
99.2 1996 Transition Plan (incorporated by reference to Exhibit 10.4 to the
Registrant's Registration Statement on Form 10 (reg. no. 000-21103) filed on July
30, 1996, as amended)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[Perkins Coie Letterhead]
October 29, 1996
Advanced Digital Information Corporation
10201 Willows Road
Redmond, WA 98052
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen and Ladies:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to 1,101,092 shares of Common
Stock, no par value per share (the "Shares"), 476,092 which may be issued under
the Advanced Digital Information Corporation 1996 Transition Plan and 625,000 of
which may be issued under the Advanced Digital Information Corporation 1996
Stock Option Plan (together, the "Plans"). We have examined the Registration
Statement and such documents and records of the Company and other documents as
we have deemed necessary for the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that may be issued upon the exercise of stock options granted or to be
granted pursuant to the Plans have been duly authorized and that, upon the due
execution by the Company and the registration by its registrars of the Shares
and the sale thereof by the Company in accordance with the terms of the
applicable Plan, and the receipt of the consideration therefor in accordance
with the terms of the applicable Plan, the Shares will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
:syh
<PAGE> 1
EXHIBIT 99.1
ADVANCED DIGITAL INFORMATION CORPORATION
1996 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Advanced Digital Information Corporation 1996 Stock
Option Plan (the "Plan") is to enhance the long-term shareholder value of
Advanced Digital Information Corporation, a Washington corporation (the
"Company"), by offering opportunities to employees, directors, officers,
consultants, agents, advisors and independent contractors of the Company and its
Subsidiaries (as defined in Section 2) to participate in the Company's growth
and success, and to encourage them to remain in the service of the Company and
its Subsidiaries and to acquire and maintain stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 AWARD
"Award" means an award or grant made to a Participant pursuant to the
Plan, including awards or grants of Incentive Stock Options and Nonqualified
Stock Options or any combination thereof.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 COMMON STOCK
"Common Stock" means the common stock, no par value, of the Company.
<PAGE> 2
2.6 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company
in which the Company is not the continuing or surviving corporation, or pursuant
to which shares of the Common Stock are converted into cash, securities or other
property, if following such merger or consolidation the holders of the Company's
outstanding voting securities immediately prior to such merger or consolidation
own less than 66-2/3% of the outstanding voting securities of the surviving
corporation;
(b) Consummation of any sale, lease, exchange or other
transfer in one transaction or a series of related transactions of all or
substantially all of the Company's assets other than a transfer of the Company's
assets to a majority-owned subsidiary corporation (as the term "subsidiary
corporation" is defined in Section 8.3) of the Company;
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company; or
(d) Acquisition by a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date of adoption of the
Plan) of the Exchange Act of a majority or more of the Company's outstanding
voting securities (whether directly or indirectly, beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) pursuant to the Exchange Act.
2.7 DISABILITY
"Disability" means "disability" as that term is defined for purposes of
Section 22(e)(3) of the Code.
2.8 ELIGIBLE DIRECTOR
"Eligible Director" means a member of the Board who is not also an
employee of the Company or any "parent corporation" or "subsidiary corporation"
(as those terms are defined in Section 8.3) of the Company.
2.9 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 FAIR MARKET VALUE
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and the low selling price for the Common Stock
as reported by the Nasdaq National Market for a single trading day or (b) if the
Common Stock is listed on the New York Stock Exchange or the
<PAGE> 3
American Stock Exchange, the closing selling price for the Common Stock as such
price is officially quoted in the composite tape of transactions on such
exchange for a single trading day. If there is no such reported price for the
Common Stock for the date in question, then such price on the last preceding
date for which such price exists shall be determinative of Fair Market Value.
2.11 GOOD REASON
"Good Reason" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice by the Holder:
(a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction in the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the Holder's
reasonable judgment, are materially inconsistent with such status, title,
position or responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in connection
with the termination of the Holder's employment for Cause, for Disability or as
a result of his or her death, or by the Holder other than for Good Reason;
(b) a reduction in the Holder's annual base salary;
(c) the Successor Corporation's requiring the Holder (without
the Holder's consent) to be based at any place outside a 35-mile radius of his
or her place of employment prior to a Corporate Transaction, except for
reasonably required travel on the Successor Corporation's business that is not
materially greater than such travel requirements prior to the Corporate
Transaction;
(d) the Successor Corporation's failure to (i) continue in
effect any material compensation or benefit plan (or the substantial equivalent
thereof) in which the Holder was participating at the time of a Corporate
Transaction, including, but not limited to, the Plan, or (ii) provide the Holder
with compensation and benefits substantially equivalent (in terms of benefit
levels and/or reward opportunities) to those provided for under each material
employee benefit plan, program and practice as in effect immediately prior to
the Corporate Transaction;
(e) any material breach by the Successor Corporation of its
obligations to the Holder under the Plan or any substantially equivalent plan of
the Successor Corporation; or
(f) any purported termination of the Holder's employment or
service for Cause by the Successor Corporation that does not comply with the
terms of the Plan or any substantially equivalent plan of the Successor
Corporation.
2.12 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted, or the date an Option is automatically
granted pursuant to Section 9.
<PAGE> 4
2.13 HOLDER
"Holder" means the Participant to whom an Award is granted or, for a
Holder who has died, the personal representative of the Holder's estate, the
person(s) to whom the Holder's rights under the Award have passed by will or by
the applicable laws of descent and distribution or the beneficiary designated
pursuant to Section 10.
2.14 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.15 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
2.16 OPTION
"Option" means the right to purchase Common Stock granted under Section
7.
2.17 PARTICIPANT
"Participant" means an individual who is a Holder of an Award or, as
the context may require, any employee, director, officer, consultant, agent,
advisor or independent contractor of the Company or a Subsidiary who has been
designated by the Plan Administrator as eligible to participate in the Plan.
2.18 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.19 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.20 SUBSIDIARY
"Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.
2.21 SUCCESSOR CORPORATION
"Successor Corporation" has the meaning set forth under Section 12.2.
<PAGE> 5
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board. If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall
consider in selecting the Plan Administrator and the membership of any committee
acting as Plan Administrator of the Plan with respect to any persons subject or
likely to become subject to Section 16 under the Exchange Act the provisions
regarding (a) "outside directors" as contemplated by Section 162(m) of the Code
and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange
Act. The Board may delegate the responsibility for administering the Plan with
respect to designated classes of eligible Participants to different committees,
subject to such limitations as the Board deems appropriate. Committee members
shall serve for such term as the Board may determine, subject to removal by the
Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 12.1, a
maximum of 625,000 shares of Common Stock shall be available for issuance under
the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares.
4.2 LIMITATIONS
Subject to adjustment from time to time as provided in Section 12.1,
not more than 100,000 shares of Common Stock may be made subject to Awards under
the Plan to any individual Participant in the aggregate in any one fiscal year
of the Company, such limitation to be applied in a manner consistent with the
requirements of, and only to the extent required for compliance with, the
exclusion from the limitation on deductibility of compensation under Section
162(m) of the Code.
<PAGE> 6
4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for in shares), shall again be available
for issuance in connection with future grants of Awards under the Plan;
provided, however, that any such shares shall be counted in accordance with the
requirements of Section 162(m) of the Code.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
key employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects; provided, however, that Eligible Directors shall be
eligible to receive Awards only under Section 9. Awards may also be made to
consultants, agents, advisors and independent contractors who provide services
to the Company and its Subsidiaries.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be made under the Plan.
Such Awards may consist of Incentive Stock Options and/or Nonqualified Stock
Options. Awards may be granted singly or in combination.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding such
Awards shall be deemed to be Participants and Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
<PAGE> 7
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan
Administrator or, if not so established, shall be five years from the Grant
Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:
<TABLE>
<CAPTION>
Period of Holder's Continuous Employment or
Service With the Company or Its Subsidiaries Percent of Total Option
From the Option Grant Date That Is Exercisable
-------------------------- -------------------
<S> <C>
After 1 year 25%
After 2 years 50%
After 3 years 75%
After 4 years 100%
</TABLE>
To the extent that the right to purchase shares has accrued thereunder,
an Option may be exercised from time to time by written notice to the Company,
in accordance with procedures established by the Plan Administrator, setting
forth the number of shares with respect to which the Option is being exercised
and accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time (or the lesser number of remaining
shares covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or check, or, unless the Plan Administrator at any time
determines otherwise, a combination of cash and/or check and one or both of the
following alternative forms: (a) tendering (either actually or, if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, by attestation) Common Stock already owned by the Holder for at least six
months (or any shorter period
<PAGE> 8
necessary to avoid a charge to the Company's earnings for financial reporting
purposes) having a Fair Market Value on the day prior to the exercise date equal
to the aggregate Option exercise price; or (b) if and so long as the Common
Stock is registered under Section 12(b) or 12(g) of the Exchange Act, delivery
of a properly executed exercise notice, together with irrevocable instructions,
to (i) a brokerage firm designated by the Company to deliver promptly to the
Company the aggregate amount of sale or loan proceeds to pay the Option exercise
price and any withholding tax obligations that may arise in connection with the
exercise and (ii) the Company to deliver the certificates for such purchased
shares directly to such brokerage firm, all in accordance with the regulations
of the Federal Reserve Board. In addition, the exercise price for shares
purchased under an Option may be paid either singly or in combination with one
or more of the alternative forms of payment authorized by this Section 7.5, by
(y) a promissory note delivered pursuant to Section 10 or (z) such other
consideration as the Plan Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.
In case of termination of the Holder's employment or services other
than by reason of death or Cause, the Option shall be exercisable, to the extent
of the number of shares purchasable by the Holder at the date of such
termination, only within three months after the date the Holder ceases to be an
employee, director, officer, consultant, agent, advisor or independent
contractor of the Company or a Subsidiary if termination of the Holder's
employment or services is for any reason other than Disability and only within
one year after the date of such termination by reason of Disability, but in no
event later than the remaining term of the Option. Any Option exercisable at the
time of the Holder's death may be exercised, at any time or from time to time
within one year after the date of death, but in no event later than the
remaining term of the Option, to the extent of the number of shares purchasable
by the Holder at the date of the Holder's death, by the personal representative
of the Holder's estate, the person(s) to whom the Holder's rights under the
Award have passed by will or the applicable laws of descent and distribution or
the beneficiary designated pursuant to Section 11. Any portion of an Option that
is not exercisable on the date of termination of the Holder's employment or
services shall terminate on such date, unless the Plan Administrator determines
otherwise. In case of termination of the Holder's employment or services for
Cause, the Option shall automatically terminate upon first notification to the
Holder of such termination, unless the Plan Administrator determines otherwise.
If a Holder's employment or services with the Company are suspended pending an
investigation of whether the Holder shall be terminated for Cause, all the
Holder's rights under any Option likewise shall be suspended during the period
of investigation.
A transfer of employment or services between or among the Company and
its Subsidiaries shall not be considered a termination of employment or
services. The effect of a
<PAGE> 9
Company-approved leave of absence on the terms and conditions of an option shall
be determined by the Plan Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the Participant holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
8.2 10% SHAREHOLDERS
If a Participant owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option tax treatment, an Option
designated as an Incentive Stock Option must be exercised within three months
after termination of employment for reasons other than death, except that, in
the case of termination of employment due to total disability, such Option must
be exercised within one year after such termination. Employment shall not be
deemed to continue beyond the first 90 days of a leave of absence unless the
Participant's reemployment rights are guaranteed by statute or contract. For
purposes of this Section 8.5, "total disability" shall mean a mental or physical
impairment of the Participant which is expected to result in death or which has
lasted or is expected to last for a continuous period of 12 months
<PAGE> 10
or more and which causes the Participant to be unable, in the opinion of the
Company and two independent physicians, to perform his or her duties for the
Company and to be engaged in any substantial gainful activity. Total disability
shall be deemed to have occurred on the first day after the Company and the two
independent physicians have furnished their opinion of total disability to the
Plan Administrator.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold the shares
issued upon the exercise of an Incentive Stock Option for two years after the
Grant Date of the Incentive Stock Option and one year from the date of exercise.
A Participant may be subject to the alternative minimum tax at the time of
exercise of an Incentive Stock Option. The Plan Administrator may require a
Participant to give the Company prompt notice of any disposition of shares
acquired by the exercise of an Incentive Stock Option prior to the expiration of
such holding periods.
8.7 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 10 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
SECTION 9. AWARDS OF OPTIONS TO NONEMPLOYEE DIRECTORS
Notwithstanding any other provision of the Plan to the contrary, grants
to Eligible Directors shall be made only pursuant to the terms and conditions
set forth below.
9.1 ANNUAL GRANTS
Commencing with the Company's 1997 Annual Meeting of Shareholders, each
Eligible Director shall automatically receive a grant of an Option to purchase
1,000 shares of Common Stock immediately following each year's Annual Meeting of
Shareholders ("Annual Grants"). Annual Grants shall vest and become exercisable
upon the optionee's continued service as a director until the next Annual
Meeting of Shareholders after the Grant Date.
9.2 INITIAL GRANTS
Each Eligible Director shall automatically receive a grant of an Option
to purchase 5,500 shares of Common Stock immediately following his or her
initial election or appointment to the Board ("Initial Grants"). Initial Grants
shall vest and become exercisable as follows: Options for 1,375 shares shall
become exercisable on and after one year after the Grant Date, and Options for
an additional 1,375 shares shall become exercisable on and after each of the
three succeeding anniversaries of the Grant Date.
<PAGE> 11
9.3 NONQUALIFIED STOCK OPTIONS; TERM OF OPTIONS
Options granted to an Eligible Director under the Plan shall constitute
Nonqualified Stock Options. The term of each Option granted under this Section 9
shall be five years from the Grant Date.
9.4 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option granted under
this Section 9 shall be the Fair Market Value of the Common Stock on the Grant
Date.
9.5 POST-TERMINATION EXERCISES
In case of termination of the Holder's services other than by reason of
death or Cause, the Option shall be exercisable, to the extent of the number of
shares purchasable by the Holder at the date of such termination, only within
three months after the date the Holder ceases to be a director of the Company if
such termination is for reasons other than Disability and only within one year
if such termination is by reason of Disability, but in no event later than the
remaining term of the Option. Any Option exercisable at the time of the Holder's
death may be exercised, to the extent of the number of shares purchasable by the
Holder at the date of the Holder's death, by the personal representative of the
Holder's estate entitled thereto at any time or from time to time within one
year after the date of death, but in no event later than the remaining term of
the Option. In case of termination of the Holder's services for Cause, the
Option shall automatically terminate upon first notification to the Holder of
such termination. If a Holder's services with the Company are suspended pending
an investigation of whether the Holder shall be terminated for Cause, all the
Holder's rights under any Option likewise shall be suspended during the period
of investigation.
9.6 CORPORATE TRANSACTION
In the event of a Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested, except that such acceleration will not occur if, in the
opinion of the Company's accountants, it would render unavailable "pooling of
interests" accounting for a Corporate Transaction that would otherwise qualify
for such accounting treatment. All such Awards not exercised prior to that time
shall terminate and cease to remain outstanding immediately following the
consummation of the Corporate Transaction.
9.7 AVAILABILITY OF SHARES
The Options provided for in this Section 9 are subject to the
availability of shares under the Plan. If at the date of any grant under this
Section 9 there are insufficient shares of Common Stock available to satisfy the
grants in whole, then the shares available shall be divided by the number of
Eligible Directors then entitled to a grant and each such Eligible Director
shall be granted an Option for that number of shares.
<PAGE> 12
9.8 OTHER TERMS APPLICABLE
Except as otherwise provided in this Section 9, Options granted to
Eligible Directors shall be subject to the terms and conditions of the Plan
applicable to other Participants.
SECTION 10. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist a Holder (including a Holder who is an officer or director of
the Company) in acquiring shares of Common Stock pursuant to an Award granted
under the Plan, the Plan Administrator, in its sole discretion, may authorize,
either at the Grant Date or at any time before the acquisition of Common Stock
pursuant to the Award, (a) the extension of a loan to the Holder by the Company,
(b) the payment by the Holder of the purchase price, if any, of the Common Stock
in installments, or (c) the guarantee by the Company of a loan obtained by the
Holder from a third party. The terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of repayment, will be subject
to the Plan Administrator's discretion. Loans, installment payments and loan
guarantees may be granted with or without security. The maximum credit available
is the purchase price, if any, of the Common Stock acquired, plus the maximum
federal and state income and employment tax liability that may be incurred in
connection with the acquisition.
SECTION 11. ASSIGNABILITY
No Award granted under the Plan may be pledged, assigned or transferred
by the Holder other than by will or by the laws of descent and distribution, and
during the Holder's lifetime, such Awards may be exercised only by the Holder.
Notwithstanding the foregoing, and to the extent permitted by Section 422 of the
Code, the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercisability and may permit a Holder of such Awards
to designate a beneficiary who may exercise the Award or receive compensation
under the Award after the Holder's death; provided, however, that any Award so
assigned or transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the Award.
SECTION 12. ADJUSTMENTS
12.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
class of securities subject to the Plan as set forth in Section 4.1, (ii) the
number and class of securities that may be made subject to Awards to any
individual Participant as
<PAGE> 13
set forth in Sections 4.2, 9.1, 9.2 and 9.3 and (iii) the number and class of
securities subject to any outstanding Award and the per share price of such
securities, without any change in the aggregate price to be paid therefor. The
determination by the Plan Administrator as to the terms of any of the foregoing
adjustments shall be conclusive and binding.
12.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the
Award, in the event of a Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested, except that such acceleration will not occur if, in the
opinion of the Company's accountants, it would render unavailable "pooling of
interests" accounting for a Corporate Transaction that would otherwise qualify
for such accounting treatment. Except for Options granted pursuant to Section 9,
such Award shall not so accelerate, if and to the extent (a) such Award is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof (the "Successor Corporation") or to be replaced
with a comparable award for the purchase of shares of the capital stock of the
Successor Corporation or, (b) such Award is to be replaced with a cash incentive
program of the Successor Corporation that preserves the spread existing at the
time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such Award. The
determination of Award comparability under clause (a) above shall be made by the
Plan Administrator, and its determination shall be conclusive and binding. All
such Awards shall terminate and cease to remain outstanding immediately
following the consummation of the Corporate Transaction, except to the extent
such Awards (other than Options granted pursuant to Section 9) are assumed by
the Successor Corporation. Any such Awards that are assumed or replaced in the
Corporate Transaction and do not otherwise accelerate at that time shall be
accelerated in the event the Holder's employment or services should subsequently
terminate within two years following such Corporate Transaction, unless such
employment or services are terminated by the Successor Corporation for Cause or
by the Holder voluntarily without Good Reason. Notwithstanding the foregoing, no
Incentive Stock Option shall become exercisable pursuant to this Section 12.2
without the Holder's consent, if the result would be to cause such Option not to
be treated as an Incentive Stock Option (whether by reason of the annual dollar
limitation described in Section 8.1 or otherwise).
12.3 FURTHER ADJUSTMENT OF AWARDS
Subject to the preceding Section 12.2, the Plan Administrator shall
have the discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation or change in control of the Company,
as defined by the Plan Administrator, to take such further action as it
determines to be necessary or advisable, and fair and equitable to Participants,
with respect to Awards (other than Options granted pursuant to Section 9). Such
authorized action may include (but shall not be limited to) establishing,
amending or waiving the type, terms, conditions or duration of, or restrictions
on, Awards so as to provide for earlier, later, extended or additional time for
exercise, alternate forms and amounts of payments and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such actions
<PAGE> 14
before or after granting Awards to which the action relates and before or after
any public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation or change in control that is the reason for such
action.
12.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
SECTION 13. WITHHOLDING
The Company may require the Holder to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant or exercise of any Award. In such instances, subject to the Plan and
applicable law and unless the Plan Administrator determines otherwise, the
Holder may satisfy withholding obligations, in whole or in part, by paying cash,
by electing to have the Company withhold shares of Common Stock or by
transferring shares of Common Stock to the Company, in such amounts as are
equivalent to the Fair Market Value of the withholding obligation. The Company
shall have the right to withhold from any shares of Common Stock issuable
pursuant to an Award or from any cash amounts otherwise due or to become due
from the Company to the Participant an amount equal to such taxes. The Company
may also deduct from any Award any other amounts due from the Participant to the
Company or a Subsidiary.
SECTION 14. AMENDMENT AND TERMINATION OF PLAN
14.1 AMENDMENT OF PLAN
The Plan may be amended by the shareholders of the Company. The Board
may also amend the Plan in such respects as it shall deem advisable; however, to
the extent required for compliance with Section 422 of the Code or any
applicable law or regulation, shareholder approval will be required for any
amendment that will (a) increase the aggregate number of shares as to which
Awards may be granted, (b) modify the class of employees eligible to receive
Awards, or (c) otherwise require shareholder approval under any applicable law
or regulation.
14.2 TERMINATION OF PLAN
The Company's shareholders or the Board may suspend or terminate the
Plan at any time. The Plan will have no fixed expiration date; provided,
however, that no Incentive Stock Options may be granted more than 10 years after
the earlier of the Plan's adoption by the Board or approval by the shareholders.
14.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the consent
of the Holder of any Award under the Plan, impair or diminish any rights or
obligations under any Award theretofore granted under the Plan.
<PAGE> 15
Any change or adjustment to an outstanding Incentive Stock Option shall
not, without the consent of the Holder, be made in a manner so as to constitute
a "modification" that would cause such Incentive Stock Option to fail to
continue to qualify as an Incentive Stock Option.
SECTION 15. GENERAL
15.1 AWARD AGREEMENTS
Awards granted under the Plan shall be evidenced by a written agreement
which shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and which are not inconsistent with the
Plan.
15.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
None of the Plan, participation in the Plan as a Participant or any
action of the Plan Administrator taken under the Plan shall be construed as
giving any Participant or employee of the Company any right to be retained in
the employ of the Company or limit the Company's right to terminate the
employment or services of the Participant.
15.3 REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
15.4 NO RIGHTS AS A SHAREHOLDER
No Award shall entitle the Holder to any dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Award, free of all applicable
restrictions.
15.5 COMPLIANCE WITH LAWS AND REGULATIONS
Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit or condition
the use of any provision of the Plan to Participants who are officers or
directors subject to Section 16 of the Exchange Act without so
<PAGE> 16
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant to the Plan
shall, to the extent permitted by law, be construed as an "incentive stock
option" within the meaning of Section 422 of the Code.
15.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.
15.7 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 16. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the
Board, so long as it is approved by the Company's shareholders at any time
within 12 months of such adoption.
