As filed with the Securities and Exchange Commission on June 17, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MonsterDaata.com, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-2732163
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
115 Stevens Avenue, Valhalla, NY 10595
(914) 747-9100
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)
MONSTERDAATA.COM, INC. 1999 STOCK OPTION PLAN
(Full title of the Plan)
James Garfinkel
MonsterDaata.com, Inc.
115 Stevens Avenue
Valhalla, NY 10595
(914) 747-9100
(Name and Address, including Zip Code, and Telephone Number, including Area
Code, of Agent for Service)
Copies to:
Todd M. Roberts, Esq.
Roberts, Sheridan & Kotel,
A Professional Corporation
Tower 49
12 East 49th Street, 30th Floor
New York, NY 10017
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ -------- ---
Common Stock, $.01 par value 1,750,000 $1.00 $1,750,000 $486.50
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the MonsterDaata.com, Inc. 1999 Stock Option
Plan by reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the Registrant's receipt of consideration
which results in an increase in the number of the outstanding shares of
Registrant's Common Stock.
(2) Estimated solely for purpose of calculating the registration fee pursuant to
Rules 457(c) and 457(h)(1) under the Securities Act of 1933, as amended.
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
MonsterDaata.com, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1998, filed with the SEC on March 23, 1999;
(b) (1) The Registrant's Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1997, filed with the SEC on March 23, 1999;
(2) The Registrant's Quarterly Report on Form 10-QSB for the fiscal
quarter ended December 31, 1997, filed with the SEC on March 23, 1999;
(3) The Registrant's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1998, filed with the SEC on March 23, 1999;
(4) The Registrant's Quarterly Report on Form 10-QSB for the fiscal
quarter ended June 30, 1998, filed with the SEC on March 23, 1999;
(5) The Registrant's Quarterly Report on Form 10-QSB for the fiscal
quarter ended December 31, 1998, filed with the SEC on March 23, 1999;
(6) The Registrant's Current Report on Form 8-K filed with the SEC on
March 23, 1999;
(7) The Registrant's Current Report on Form 8-K filed with the SEC on
March 23, 1999;
(8) The Registrant's Current Report on Form 8-K filed with the SEC on
March 31, 1999;
(9) The Registrant's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1999, filed with the SEC on May 17, 1999;
(10) The Registrant's Current Report on Form 8-K filed with the SEC on
April 16, 1999
(11) The Registrant's Amendment No. 1 to Current Report on Form 8-K/A
filed with the SEC on June 15, 1999;
(12) The Registrant's Current Report on Form 8-K filed with the SEC on
June 16, 1999.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") after the
date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered
hereby have been sold or which de-registers all securities then remaining
unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
<PAGE>
Item 4. Description of Securities
The Registrant is authorized to issue up to 50,000,000 shares of Common Stock,
par value $0.01 per share, and 10,000,000 shares of Preferred Stock, par value,
$0.01 per share. As of June 15, 1997 7,024,733 shares of Common Stock and no
shares of Preferred Stock were issued and outstanding.
Common Stock
Holders of Common Stock have the right to cast only one vote for each share of
Common Stock held in all matters as to which the vote or consent of stockholders
is required or taken. There are no cumulative voting rights. Accordingly, the
holders of a majority of the shares of Common Stock voting for the election of
directors can elect all the directors if they choose to do so, subject to any
voting rights of holders of preferred stock to elect directors. There are no
pre-emptive rights for Common Stock, and there are no redemption or sinking fund
provisions applicable to Common Stock.
Stockholders holding a majority of the voting power of the capital stock issued
and outstanding and entitled to vote, represented in person or by proxy, are
necessary to constitute a quorum at any meeting of stockholders, and the vote by
the holders of a majority of such outstanding shares is required to effect
certain fundamental corporate changes such as liquidation, merger or amendment
of the Certificate of Incorporation.
Holders of Common Stock are entitled to receive such dividends as and if
declared by the Registrant's board subject to the rights of holders of any
outstanding preferred stock. In the event of the liquidation, dissolution or
winding up of the Registrant's affairs, all of the tangible and intangible
assets of the Registrant remaining after the payment of all debts and other
liabilities, shall be distributed, pro rata, among the holders of Common Stock.
All outstanding shares of Common Stock are fully paid and non-assessable.
Warrants
The Registrant has outstanding a warrant to purchase 500,000 shares of Common
Stock at an exercise price of $3.00 per share. The warrant expires on March 31,
2004, and is not exercisable until March 31, 2000. The warrant holder is
entitled to an adjustment in the kind and number of shares of stock receivable
upon exercise of the warrant upon certain events, including: reclassification of
Common Stock; capital reorganization; stock dividend or other change in
outstanding shares of Common Stock; certain consolidations or mergers; and
certain sales of the Registrant's property. The exercise price and the number of
shares issuable upon exercise of the warrant, however, shall remain unchanged in
the event the Registrant completes a "reverse split" of its shares into a
smaller number of outstanding shares.
The warrant holder may not exercise any portion of the warrant which would give
it a beneficial ownership of 5.0% or more of the outstanding shares of Common
Stock at the time of such exercise without at least 61 days prior written notice
to the Registrant. The warrant may only be transferred (i) if the transfer gives
the transferee or transferor the right to purchase at least 5,000 shares of
Common Stock and (ii) in compliance with applicable federal and state securities
laws by the transferor and transferee.
Preferred Stock
The Registrant may issue shares of preferred stock from time to time in one or
more series as determined by its board of directors. The Registrant's board is
authorized to establish the designation, powers, preferences, voting rights and
other rights of each series of preferred stock. The Registrant's board of
directors could, without shareholder approval, issue preferred stock with voting
and other rights that could adversely affect the voting power of the holders of
Common Stock and which could have certain antitakeover effects.
<PAGE>
The number of authorized shares of any series of preferred stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by resolution adopted by our board of directors.
Although the Registrant currently does not have any fixed plans to designate any
series of preferred stock or to issue any shares of preferred stock, there can
be no assurance that the Registrant will not do so in the future. As a result,
the Registrant could authorize the issuance of a series of preferred stock which
would grant to holders preferred rights to the assets of the Registrant upon
liquidation, the right to receive dividend coupons before dividends would be
declared to holders of Common Stock, and the right to the redemption of such
shares, together with a premium, prior to the redemption of Common Stock. The
current stockholders of the Registrant have no redemption rights. In addition,
the Board of Directors could issue large blocks of voting stock to fend off
unwanted tender offers or hostile takeovers without further stockholder
approval.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reasons of the
fact that such person is or was a director, officer, employee or agent of such
corporation or is or was serving at the request if such corporation as a
director, officer, employee of agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, providing that such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation may indemnify directors, officer, employees and
other agents of such corporation in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the person to be indemnified has been
adjudged to be liable to the corporation. Where a director, officer, employee or
agent of the corporation is successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to above or in defense of any claim,
issue or matter therein, the corporation must indemnify such person against the
expenses (including attorneys' fees) which he or she actually and reasonably
incurred in connection therewith.
The Registrant's By-laws contain provisions that provide for
indemnification on an after-tax basis of all direct or indirect stockholders,
officers and directors of the Corporation and any other person designated by the
Board of Directors to the fullest extent permitted by law.
Item 7. Exemption from Registration Claimed
Not applicable.
<PAGE>
Item 8. Exhibits
Exhibit
No. Description
--- -----------
5.1 Opinion of Roberts, Sheridan & Kotel as to the validity of the
Common Stock being registered
23.1 Consent of Marcum & Kliegman, LLP
23.2 Consent of Thomas Monahan, C.P.A.
23.3 Consent of Roberts, Sheridan & Kotel (included in their opinion
filed as Exhibit 5.1)
24.1 Power of Attorney (included in the signature page of this
Registration Statement).
99.1 MonsterDaata.com, Inc. 1999 Stock Option Plan
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 of 1933, as amended (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 clauses
(1)(i) and (1)(ii) shall not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference into 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; and
(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
Registrant's 1999 Stock Option Plan.
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 Section 15(d) of the
Exchange Act that is incorporated by reference into 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.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnification provisions summarized in Item 6 or otherwise,
the Registrant has been advised that, in the opinion of the SEC, 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, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or 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
<PAGE>
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 New York, State of New York on this 17th day of June, 1999.
MONSTERDAATA.COM, INC.
By: /s/ Mitchell Deutsch
-------------------------------------
Mitchell Deutsch
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of MonsterDaata.com, Inc., a
Delaware corporation, do hereby constitute and appoint James Garfinkel the
lawful attorney-in-fact and agent with full power and authority to do any and
all acts and things and to execute any and all instruments which said attorney
and agent determines may be necessary or advisable or required to enable said
corporation to comply with the Securities Act and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments and supplements
to this Registration Statement, and to any and all instruments or documents
filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms that said attorney and agent shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney
as of the date indicated.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
Signature Title Date
----- ----
/s/ Mitchell Deutsch Chief Executive Officer and President, June 17, 1999
- --------------------- Director (Principal Executive Officer)
Mitchell Deutsch
/s/ James Garfinkel Chief Financial Officer, Vice-President, June 17, 1999
- --------------------- Secretary and Treasurer, Director
James Garfinkel (Principal Financial and Accounting
Officer)
<PAGE>
/s/ Thomas Ingegneri Director June 17, 1999
- ---------------------
Thomas Ingegneri
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
MONSTERDAATA.COM, INC.
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
--- -----------
5.1 Opinion of Roberts, Sheridan & Kotel as to the validity of the
Common Stock being registered
23.1 Consent of Marcum & Kliegman, LLP
23.2 Consent of Thomas Monahan, C.P.A.
23.3 Consent of Roberts, Sheridan & Kotel (included in their opinion
filed as Exhibit 5.1)
24.1 Power of Attorney (included in the signature page of this
Registration Statement).
99.1 MonsterDaata.com, Inc. 1999 Stock Option Plan
Exhibit 5.1
June 17, 1999
MonsterDaata.com, Inc.
115 Stevens Avenue
Valhalla, NY 10595
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") of 1,750,000 shares (the "Securities") of Common Stock, par value
$0.01 per share, of MonsterDaata.com, Inc., a Delaware corporation (the
"Company"), we, as your special counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion. Upon the
basis of such examination, we advise you that, in our opinion, when and so long
as (i) the Registration Statement on Form S-8 relating to the Securities (the
"Registration Statement") has become effective under the Act, (ii) the
Securities have been duly issued and sold in conformity with the provisions of
the Registration Statement and the MonsterDaata.com, Inc. 1999 Stock Option Plan
(including the separate option agreements referenced therein) and (iii) the
exercise price provided for in such separate option agreements has been received
by the Company, the Securities will be validly issued, fully paid and
non-assessable.
The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours
/s/ Roberts, Sheridan & Kotel,
A Professional Corporation
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
I consent to the incorporation by reference in this Registration Statement of
MonsterDaata.com, Inc. on Form S-8 of (i) my report, dated March 8, 1999,
appearing in the Annual Report on Form 10-KSB for the year ended September 30,
1998 filed with the SEC on March 23, 1999 and (ii) my report, dated March 8,
1999, appearing in the Annual Report on Form 10-KSB for the year ended September
30, 1997 filed with the SEC on March 23, 1999.
/s/ Thomas Monahan, C.P.A.
--------------------------
Thomas Monahan, C.P.A.
New York, New York
June 17, 1999
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of
MonsterDaata.com, Inc. on Form S-8 of our independent auditors' report, dated
May 28, 1999, appearing in the Current Report on Form 8-K/A filed with the SEC
on June 15, 1999.
/s/ Marcum & Kliegman, LLP
--------------------------
Marcum & Kliegman, LLP
New York, New York
June 17, 1999
Exhibit 99.1
MONSTERDAATA.COM, INC.
1999 STOCK OPTION PLAN
1. ESTABLISHMENT, PURPOSE AND TERM OF THE PLAN.
1.1 Establishment. The MonsterDaata.com, Inc. 1999 Stock Option Plan (the
"Plan") is hereby established effective as of June 15, 1999 (the "Effective
Date").
1.2 Purpose. The purpose of the Plan is to advance the interests of
MonsterDaata.com, Inc. (the "Company"), a Delaware corporation, and its
shareholders by providing an incentive to recruit, retain and reward persons
performing services for the Company and by motivating such persons to contribute
to the growth and profitability of the Company.
1.3 Term of Plan. The Plan shall continue in effect until the earlier of
its termination by the Board or the date on which all of the shares of Common
Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the agreements
evidencing Options granted under the Plan have lapsed. However, all Options
shall be granted, if at all, within 10 years from the earlier of the date the
Plan is adopted by the Board or the date the Plan is duly approved by the
shareholders of the Company. Notwithstanding the foregoing, if the maximum
number of shares of Common Stock issuable pursuant to the Plan as provided in
Section 3.1 has been increased at any time, all Options shall be granted, if at
all, no later than the last day preceding the 10th anniversary of the earlier of
(a) the date on which the latest such increase in the maximum number of shares
of Common Stock issuable under the Plan was approved by the shareholders of the
Company or (b) the date such amendment was adopted by the Board.
2. DEFINITIONS AND CONSTRUCTION. Whenever used herein, the following terms shall
have their respective meaning set forth below:
(a) "Administrator" means the Compensation Committee and/or any other duly
appointed committee of the Board.
(b) "Affiliate" means an entity (including a partnership or limited
liability company) in which the Company, directly or indirectly through any
subsidiary, owns an equity interest, but which entity is not a Subsidiary.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Compensation Committee" means the committee, duly appointed by the
Board, composed of at least two disinterested Directors who shall not be (i)
employees of the Company, (ii) former employees of the Company still receiving
consideration for past services, (iii) former officers of the Company or (iv)
receiving remuneration from the Company in any capacity other than as a Director
of the Company. If there is no Compensation Committee appointed by the Board (or
if the Board shall terminate an existing Compensation Committee), then the
Compensation Committee for purposes of the Plan shall be the entire Board.
<PAGE>
(g) "Consultant" means any person, including a Director, who is engaged by
the Company or any Parent, Subsidiary or Affiliate to render services to or for
the benefit of the Company and is compensated for such services.
(h) "Director" means a member of the Board.
(i) "Disability" means the inability of the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration of
12 months or more.
(j) "Employee" means any person treated as an employee (including officers
and directors who are treated as employees) in the records of the Company and
who is subject to the control and direction of the Company with regard to both
the work to be performed and the manner and method of performance. The payment
of a director's fee by the Company to a Director shall not be sufficient to
constitute "employment" of the Director by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(l) "Expiration Date" means the date on which the Options expire under the
Plan in accordance with Section 6.2 hereof.
(m) "Fair Market Value" means, as of any date, the fair market value of
Common Stock determined as follows:
(i) If the Common Stock is at the time listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value shall be deemed
equal to the average of the closing selling price per share of Common Stock for
the last five trading days for which such quotation exists before the date of
determination, as such prices are reported in "The Wall Street Journal" or such
other source as the Compensation Committee deems reliable.
(ii) If the Common Stock is at the time traded on the NASDAQ System
(but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer, but selling prices are not reported, the Fair
Market Value shall be the average of the mean between the bid and asked prices
for the Common Stock for the last five days for which such quotation exists
before the date of determination; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(n) "Incentive Option" means an option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code, as designated in the
applicable written option agreement.
(o) "NASD" means the National Association of Securities Dealers, Inc.
(p) "Option" means an Incentive Option or a Nonstatutory Option.
(q) "Nonstatutory Option" means an option not intended to qualify as an
Incentive Option, as designated in the applicable written option agreement.
(r) "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, provided each corporation in the
unbroken chain (other than the Company) owns, at the time of the determination,
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
<PAGE>
(s) "Participants" mean Employees or Consultants of the Company eligible
to participate in the Plan.
(t) "Reporting Person" means an officer, director, or greater than ten
percent shareholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3.
(u) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, as
the same may be amended from time to time, or any successor provision.
(v) "Service" means the absence of any interruption or termination of
service as an Employee or Consultant. Service shall not be considered
interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Administrator, provided that such leave is for
a period of not more than 90 days, unless reemployment upon the expiration of
such leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) transfers between
locations of the Company or between the Company, its Subsidiaries or their
respective successors. For purposes of this Plan, a change in status from an
Employee to a Consultant or from a Consultant to an Employee will not constitute
an interruption of Service as an Employee or Consultant.
(w) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 8 of the Plan.
(x) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
(y) "Taxes" shall mean the Federal, state and local income and employment
tax liabilities incurred by the holder of Nonstatutory Options or unvested
shares of Common Stock in connection with the exercise of those options.
3. STOCK SUBJECT TO THE PLAN.
3.1 Maximum Number of Shares Issuable. Subject to adjustment as provided
in the provisions of Section 8, the maximum aggregate number of Shares that may
be issued under the Plan shall be 1,750,000 shares of Common Stock. The Shares
may be authorized, but unissued, or reacquired Common Stock or combination
thereof. If an outstanding Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares that were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. In addition, any Shares which are
retained by the Company upon exercise of an Option in order to satisfy the
exercise or purchase price for such Option, or any withholding taxes due with
respect to such exercise, shall be treated as not issued and shall continue to
be available under the Plan.
4. ADMINISTRATION.
4.1. Administration. The Plan shall be administered by the Administrator.
All questions of interpretation of the Plan or of any Option shall be determined
by the Administrator, and such determinations shall be final and binding upon
all persons having an interest in the Plan or such Option. Any officer of the
Company shall have the authority to act on behalf of the Company with respect to
any matter, right, obligation, determination or election which is the
responsibility of or which is allocated to the Company herein, provided
<PAGE>
the officer has apparent authority with respect to such matter, right,
obligation, determination or election or has otherwise been provided with the
actual authority by resolution of the Board.
4.2. Powers of the Administrator. In addition to any other powers set
forth in the Plan and subject to the provisions of the Plan, the Administrator
shall have the full and final power and authority, in its sole discretion:
(a) to determine the persons to whom, and the time or times at
which, Options shall be granted and the number of Shares to be subject to each
Option.
(b) to designate Options as Incentive Options or Nonstatutory
Options;
(c) to determine the Fair Market Value of Shares or other property;
(d) to determine the terms, conditions and restrictions applicable
to each Option (which need not be identical) and any Shares acquired upon the
exercise thereof, including, without limitation, (i) the exercise price of the
Option, (ii) the method of payment for Shares purchased upon the exercise of the
Option, (iii) the method for satisfaction of any tax withholding obligation
arising in connection with the Option of such Shares, including by the
withholding or delivery of Shares, (iv) the timing, terms and conditions of the
exercisability of the Option or the vesting of any Shares acquired upon the
exercise thereof, (v) the time of the expiration of the Option, (vi) the effect
of the Participant's termination of employment or service with the Company on
any of the foregoing, and (vii) all other terms, conditions and restrictions
applicable to the Option or such Shares not inconsistent with the terms of the
Plan;
(e) to approve one or more forms of Option agreements;
(f) to amend, modify, extend, or renew, or grant a new Option in
substitution for any Option or to waive any restrictions or conditions
applicable to any Option or any Shares acquired upon the exercise thereof;
(g) to amend the exercisability of any Option or the vesting of any
Shares acquired upon the exercise thereof, including with respect to the period
following a Participant's termination of employment or Service with the Company;
(h) to prescribe, amend or rescind rules, guidelines and policies
relating to the Plan, or to adopt supplements to, or alternative versions of,
the Plan, including, without limitation, as the Administrator deems necessary or
desirable to comply with the laws of, or to accommodate the tax policy or custom
of, foreign jurisdictions whose citizens may be granted Options;
(i) to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option agreement and to make all other
determinations and take such other actions with respect to the Plan or any
Option as the Administrator may deem advisable to the extent consistent with the
Plan and applicable law;
(j) to interpret the Plan; and
(k) to make all determinations deemed necessary or advisable for the
administration of the Plan.
4.3 Disinterested Administration. With respect to participation by
Reporting Persons in the Plan, at any time that any class of equity security of
the Company is registered pursuant to Section 12 of the Exchange
<PAGE>
Act, the Plan shall be administered in compliance with the "disinterested
administration" requirements of Rule 16b-3.
4.4 Indemnification and Reimbursement. Service as a member of the
Compensation Committee or any other duly appointed committee shall constitute
service as a Board member, and such members shall accordingly be entitled to
full indemnification and reimbursement as Board members for their service as
members of the Compensation Committee or any other duly appointed committee. No
Compensation Committee or other duly appointed committee member shall be liable
for any act or omission made in good faith with respect to the Plan or any
Option grants under the Plan.
4.5 Finality of Decisions. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Participants and any other holders of any Options.
5. ELIGIBILITY AND OPTION LIMITATIONS.
5.1 Persons Eligible for Options. The Participants eligible to participate
in the Plan are Employees, Consultants, and Directors of the Company. For
purposes of the foregoing sentence, "Employees" shall include prospective
Employees to whom Options are granted in connection with written offers of
employment with the Company, and "Consultants" shall include prospective
Consultants to whom Options are granted in connection with written offers of
engagement with the Company. Incentive Options may be granted only to Employees,
provided that Employees of an Affiliate shall not be eligible to receive
Incentive Options. An Employee, Consultant or Director who has been granted an
Option may, if he or she is otherwise eligible, be granted an additional Option
or Options.
5.2 Type of Option. Each Option shall be designated in the written Option
agreement as either an Incentive Option or a Nonstatutory Option.
5.3 Option Grant Restrictions. Any person who is not an Employee on the
effective date of the grant of an Option to such person may be granted only a
Nonstatutory Option. An Incentive Option granted to a prospective Employee upon
the condition that such person becomes an Employee shall be deemed granted
effective on the date such person commences Service with the Company, with an
exercise price determined as of such date in accordance with Section 6.1.
5.4 Fair Market Value Limitation. To the extent that the aggregate Fair
Market Value of stock with respect to which Options designated as Incentive
Options are exercisable by a Participant for the first time during any calendar
year (under all stock option plans of the Company, including the Plan) exceeds
One Hundred Thousand Dollars ($100,000), the portion of such Options which
exceeds such amount shall be treated as Nonstatutory Options. For purposes of
this Section 5.4, Options designated as Incentive Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted. If the Code is amended to provide for a different limitation from
that set forth in this Section 5.4, such different limitation shall be deemed
incorporated herein effective as of the date and with respect to such Options as
required or permitted by such amendment to the Code. If an Option is treated as
an Incentive Option in part and as a Nonstatutory Option in part by reason of
the limitation set forth in this Section 5.4, the Participant may designate
which portion of such Option the Participant is exercising and may request that
separate certificates representing each such portion be issued upon the exercise
of the Option. In the absence of such designation, the Participant shall be
deemed to have exercised the Incentive Option portion of the Option first.
<PAGE>
6. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by written Option
agreements specifying the number of Shares covered thereby, in such form as the
Board shall from time to time establish. Option Agreements may incorporate all
or any of the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:
6.1 Exercise Price. The exercise price for each Option shall be
established in the sole discretion of the Compensation Committee; provided,
however, that (a) the exercise price per share for an Incentive Option shall be
not less than the Fair Market Value of a Share on the effective date of grant of
the Option, (b) the exercise price per share for a Nonstatutory Option shall be
not less than 85% of the Fair Market Value of a Share on the effective date of
grant of the Option, and (c) no Option granted to a Reporting Person shall have
an exercise price per share less than 110% of the Fair Market Value of a Share
on the effective date of grant of the Option. Notwithstanding the foregoing, an
Option (whether an Incentive Option or a Nonstatutory Option) may be granted
with an exercise price lower than the minimum exercise price set forth above if
such Option is granted pursuant to an assumption or substitution for another
Option in a manner qualifying under the provisions of Section 424(a) of the
Code.
6.2 Exercise Period. Options shall be exercisable at such time or times,
or upon such event or events, and subject to such terms, conditions, performance
criteria, and restrictions as shall be determined by the Administrator and set
forth in the Option agreement evidencing such Option; provided, however, that
(a) no Option shall be exercisable after the expiration of 10 years after the
effective date of grant of such Option, (b) no Incentive Option granted to a
Reporting Person shall be exercisable after the expiration of 5 years after the
effective date of grant of such Option, and (c) no Option granted to a
prospective Employee or prospective Consultant may become exercisable prior to
the date on which such person commences service with the Company.
6.3 Payment of Exercise Price.
(a) Forms of Consideration Authorized. Except as otherwise provided
below, payment of the exercise price for the number of Shares being purchased
pursuant to any Option shall be made (i) in cash, by check, or cash equivalent,
(ii) by tender to the Company of shares of Common Stock owned by the Participant
having a Fair Market Value (as determined by the Administrator without regard to
any restrictions on transferability applicable to such stock by reason of
federal or state securities laws or agreements with an underwriter for the
Company) not less than the exercise price, (iii) by the assignment of the
proceeds of a sale or loan with respect to some or all of the Shares being
acquired upon the exercise of the Option (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System) (a
"Cashless Exercise"), (iv) by the Participant's promissory note in a form
approved by the Administrator, (v) by such other consideration as may be
approved by the Administrator from time to time to the extent permitted by
applicable law, or (vi) by any combination thereof. The Board may at any time or
from time to time, by adoption of or by amendment to the standard forms of
Option agreement described in Section 4.2(e), or by other means, grant Options
which do not permit all of the foregoing forms of consideration to be used in
payment of the exercise price or which otherwise restrict one or more forms of
consideration.
(b) Tender of Stock. Notwithstanding the foregoing, an Option may
not be exercised by tender to the Company of shares of Common Stock to the
extent such tender of Common Stock would constitute a violation of the
provisions of any law, regulation or agreement restricting the redemption of the
Company's stock. Unless otherwise provided by the Board, an Option may not be
exercised by tender to the Company of shares of Common Stock unless such shares
either have been owned by the Participant for more than 6 months or were not
acquired, directly or indirectly, from the Company.
<PAGE>
(c) Cashless Exercise. The Company reserves, at any and all times,
the right, in the Company's sole and absolute discretion, to establish, decline
to approve or terminate any program or procedures for the exercise of Options by
means of a Cashless Exercise.
(d) Payment by Promissory Note. No promissory note shall be
permitted if the exercise of an Option using a promissory note would be a
violation of any law. Any permitted promissory note shall be on such terms as
the Administrator shall determine at the time the Option is granted. The
Administrator shall have the authority to permit or require the Participant to
secure any promissory note used to exercise an Option with the shares of Common
Stock acquired upon the exercise of the Option or with other collateral
acceptable to the Company. If the Company at any time is subject to the
regulations promulgated by the Board of Governors of the Federal Reserve System
or any other governmental entity affecting the extension of credit in connection
with the Company's securities, any promissory note shall comply with such
applicable regulations, and the Participant shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations.
6.4 Tax Withholding.
(a) At the discretion of the Administrator, Participants may satisfy
withholding obligations as provided in this paragraph. When a Participant incurs
federal, state, local and foreign taxes, if any, required by law to be withheld
tax liability in connection with an Option, which tax liability is subject to
tax withholding under applicable tax laws, and the Participant is obligated to
pay the Company an amount required to be withheld under applicable tax laws, the
Participant may satisfy the withholding tax obligation by one or some
combination of the following methods: (i) by cash payment, or (ii) out of
Participant's current compensation, (iii) if permitted by the Administrator, in
its discretion, by surrendering to the Company shares of Common Stock that (A)
in the case of shares previously acquired from the Company, which have been
owned by the Participant for more than six months on the date of surrender, and
(B) have a Fair Market Value on the date of surrender equal to or less than
Participant's marginal tax rate times the ordinary income recognized, or (iv) by
electing to have the Company withhold from the shares of Common Stock to be
issued upon exercise of the Option, if any, that number of shares having a Fair
Market Value equal to the amount required to be withheld. For this purpose, the
Fair Market Value of the shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined (the "Tax Date").
(b) Any surrender by a Reporting Person of previously owned shares of
Common Stock to satisfy tax withholding obligations arising upon exercise of
this Option must comply with the applicable provisions of Rule 16b-3.
(c) All elections by an Participant to have shares of Common Stock
withheld to satisfy tax withholding obligations shall be made in writing in a
form acceptable to the Administrator and shall be subject to the following
restrictions:
(i) the election must be made on or prior to the applicable Tax
Date;
(ii) once made, the election shall be irrevocable as to the
particular shares of Common Stock of the Option as to which the election
is made; and
(iii) all elections shall be subject to the consent or disapproval
of the Administrator.
(d) In the event the election to have shares of Common Stock withheld is
made by a Participant and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the Participant
shall receive the full number of Shares with respect to which the Option is
exercised but such Participant shall be unconditionally obligated to tender back
to the Company the proper number of shares of Common Stock on the Tax Date.
<PAGE>
6.5. Limitation on Grants to Employees. Subject to adjustment as provided
in Section 8 of this Plan, the maximum number of Shares which may be subject to
Options granted to any one Employee under this Plan for any fiscal year of the
Company shall be 500,000.
7. EXERCISE OF OPTIONS.
7.1. Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, and reflected in the written Option agreement,
which may include vesting requirements and/or performance criteria with respect
to the Company and/or the Participant. An Option may not be exercised for a
fraction of a Share. An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and the
Company has received full payment for the Shares with respect to which the
Option is exercised. Full payment may, as authorized by the Administrator,
consist of any consideration and method of payment allowable under Section 6.3
of the Plan. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) of
the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
optioned Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) appropriate stock certificate promptly upon
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 8 of the Plan.
7.2. Effect of Exercise. Exercise of an Option in any manner shall result
in a decrease in the number of Shares that thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.
8.1. Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Option, and the number of Shares that have been authorized for issuance under
the Plan but as to which no Options have yet been granted or that have been
returned to the Plan upon cancellation or expiration of an Option, the maximum
number of Shares for which Options may be granted to any Employee under Section
6.5 of the Plan and the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination, recapitalization or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.
8.2. Corporate Transactions. In the event of the proposed dissolution or
liquidation of the Company, all Options will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Administrator. The Administrator may, in the exercise of its sole discretion in
such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Participant the right to exercise his or her
Option as to all or any part of the Optioned Shares, including Shares as to
which the Option would not otherwise be exercisable. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
<PAGE>
assumption or substitution, that the Participant shall have the right to
exercise the Option as to some or all of the Optioned Shares, including Shares
as to which the Option would not otherwise be exercisable. If the Administrator
makes an Option exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Participant
that the Option shall be exercisable for a period of 30 days from the date of
such notice, and the Option will terminate upon the expiration of such period.
9. TERMINATION OF SERVICE. Unless otherwise provided in an individual Option
agreement between the Participant and the Company, the following provisions
shall govern the exercise of any vested Options under the Plan held by the
Participant at the time the Participant ceases to remain in Service:
9.1. Death. Should the Participant die while such Options are outstanding,
then the personal representative of the Participant's estate or the person or
persons to whom such Options are transferred pursuant to the Participant's will
or in accordance with the laws of descent and distribution shall have the right
to exercise such Options; provided that such right shall lapse and such Options
shall cease to be outstanding upon the earlier of (i) the expiration of the
one-year period measured from the date of the Participant's death or (ii) the
Expiration Date.
9.2. Disability. Should the Participant cease to remain in Service by
reason of Disability while such Options are outstanding, then the Participant
shall have a period of one year (commencing with the date of such cessation of
Service) during which to exercise such Options; provided that in no event shall
such Options be exercisable at any time after the Expiration Date.
9.3. Termination. Should the Participant cease to remain in Service for
any reason (other than death, Disability or termination for cause pursuant to
the terms of any employment or other agreement with the Company) while such
Options are outstanding, then the Participant shall, subject to the discretion
of the Administrator, have a period of 30 days (commencing with the date of such
cessation of Service) during which to exercise such Options; provided that in no
event shall such Options be exercisable at any time after the Expiration Date.
9.4. Termination for Cause. Should the Participant be terminated for cause
pursuant to the terms of any employment or other agreement with the Company
while such Options are outstanding, then as of the date of such termination, the
Participant shall not be entitled to exercise any such Options.
9.5. Limitations on Exercisability. During the limited period, if any, of
post-Service exercisability under this Section 9, an Option may not be exercised
in the aggregate for more than the number of vested Option Shares for which the
Option has vested and is exercisable at the time of the Participant's cessation
of Service. Upon the expiration of such limited exercise period or (if earlier)
upon the Expiration Date, all Options shall terminate and cease to be
outstanding for any vested Option Shares for which the Option has not been
exercised. To the extent the Participant is not vested in the Option Shares at
the time of the Participant's cessation of Service, such Option shall
immediately terminate and cease to be outstanding with respect to those Shares.
9.6. Extension of Exercise Period. The Administrator shall have complete
discretion, exercisable either at the time an Option is granted or at any time
while the Option remains outstanding, to:
(a) extend the period of time for which the Option is to remain
exercisable following the Participant's cessation of Service from the limited
exercise period otherwise in effect for that Option to such greater period of
time as the Administrator shall deem appropriate, but in no event beyond the
expiration of the option term, and/or
(b) permit the Option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
Shares for which such Option is exercisable at the time of the
<PAGE>
Participant's cessation of Service, but also with respect to one or more
additional installments in which the Participant would have vested had the
Participant continued in Service.
9.7. Rule 16b-3. Options granted to Reporting Persons shall comply with
Rule 16b-3 and shall contain such additional conditions or restrictions as may
be required thereunder to qualify for the maximum exemption for Plan
transactions.
9.8. Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Participant at the time that such offer is made.
10. LIMITED TRANSFERABILITY OF OPTIONS.
10.1. Assignability and Transfers. During the lifetime of the Employee,
Incentive Options shall be exercisable only by the Employee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Employee's death. However, a Nonstatutory Option may,
in connection with the Participant's estate plan, be assigned in whole or in
part during the Participant's lifetime to one or more members of the
Participant's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the Option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the Option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Administrator may
deem appropriate.
10.2. Compliance. In accordance with the United States securities laws,
any Participant who has received material, non-public information from an issuer
such as the Company, directly or indirectly, is under certain circumstances
prohibited from purchasing or selling the securities of such issuer or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities, and that violation of such prohibition may involve severe civil and
criminal penalties. Without prejudice to the foregoing, each Participant may be
required, in its individual agreement governing the terms and conditions of the
Options granted by the Company to the Participant (which shall be entered into
following the grant of such Options by the Compensation Committee), to
acknowledge that it will comply with the Company's policies regarding insider
trading, including, without limitation, any policies related to blackout periods
or window periods, with respect to the Shares issuable upon exercise of the
Options.
10.3. Constructive Sales. In addition, the Participant shall not directly
or indirectly, through related parties or otherwise trade, offer, pledge, sell,
contract to sell, "short" or "short against the box" (as those terms are
generally understood in the securities markets), or otherwise directly or
indirectly (through derivative instruments or otherwise) dispose of or hedge,
any securities of the Company issuable upon exercise of such Participant's
Options (prior to the time that an exercise of such Participant's Options has
occurred and the Optionee has received the applicable Shares pursuant to such
exercise). The foregoing provision may, at the discretion of the Board, be
reflected in the individual agreements governing the terms and conditions of the
Options granted by the Company to the Participants (which shall be entered into
following the grant of such Options by the Compensation Committee).
11. AMENDMENT AND TERMINATION OF THE PLAN.
11.1. Amendment and Termination. The Board may amend or terminate the Plan
from time to time in such respects as the Board may deem advisable; provided
that the following revisions or amendments shall require approval of the
shareholders of the Company in the manner described in Section 16 of the Plan:
(i) any increase in the number of Shares subject to the Plan, other than
an adjustment under Section 8 of the Plan;
(ii) any change in the designation of the class of persons eligible to be
granted Options; or
<PAGE>
(iii) any change in the limitation on grants to Employees as described in
Section 5.1 of the Plan or other changes which would require shareholder
approval to qualify Options granted hereunder as performance-based compensation
under Section 162(m) of the Code.
11.2. Shareholder Approval. If any amendment requiring shareholder
approval under Section 11.1 of the Plan is made subsequent to the first
registration of any class of equity securities by the Company under Section 12
of the Exchange Act, such shareholder approval shall be solicited as described
in Section 16 of the Plan.
11.3. Effect of Amendment or Termination. Any amendment or termination of
the Plan shall not affect Options already granted and such Options shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Participant and the Company, which
agreement must be in writing and signed by the Participant and the Company.
12. USE OF PROCEEDS. Any cash proceeds received by the Company from the sale of
Shares under the Plan shall be used for general corporate purposes.
13. REGULATORY APPROVALS.
13.1. Implementation. The implementation of the Plan, the granting of any
Option under the Plan and the issuance of any Shares upon the exercise of any
granted Option shall be subject to the Company's procurement of all approvals
and permits required by regulatory authorities having jurisdiction over the
Plan, the Options granted under it and the Shares issued pursuant to it.
13.2. Delivery of Shares. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
including the filing and effectiveness of the Form S-8 registration statement
for the Shares issuable under the Plan and the requirements of any stock
exchange listing the Shares, NASDAQ and/or the NASD, if applicable. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by law.
14. NO EMPLOYMENT/SERVICE RIGHTS. Nothing in the Plan shall confer upon the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Company (or
any Parent or Subsidiary employing or retaining such person) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
such person's Service at any time for any reason, with or without cause.
15. RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
16. SHAREHOLDER APPROVAL.
16.1. Continuance of the Plan. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such
<PAGE>
shareholder approval shall be obtained in the manner and to the degree required
under applicable federal and state law and the rules of any stock exchange
listing the Shares, NASDAQ and/or the NASD, if applicable.
16.2. Registration of Equity Securities. In the event that the Company
registers any class of equity securities pursuant to Section 12 of the Exchange
Act, any required approval of the shareholders of the Company obtained after
such registration shall be solicited substantially in accordance with Section
14(a) of the Exchange Act and the rules and regulations promulgated thereunder.
