Exhibit 99
SENSORY SCIENCE CORPORATION
1993 EMPLOYEE STOCK OPTION PLAN
1. PURPOSE
The purpose of the Sensory Science Corporation 1993 Employee Stock Option
Plan (the "Plan") is to provide a means through which Sensory Science
Corporation, a Delaware corporation (the "Company"), may attract able persons as
employees and to provide a means whereby those key employees upon whom the
responsibilities for the successful administration and management of the Company
rest, and whose present and potential contributions to the success of the
Company are of importance, can acquire and maintain stock ownership, thereby
strengthening their commitment to the success of the Company and their desire to
remain in its employ.
2. DEFINITIONS
For purposes of the Plan, the following terms shall have the meanings set
forth herein:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(c) "Committee" means the Committee of the Board, referred to in Section 4
appointed to administer the Plan.
(d) "Company" means Go-Video, Inc. and any successor thereto.
(e) "Covered Employee" means an employee who is a "Covered Employee"
within the meaning of Section 162(n) of the Code.
(f) "Date of Grant" means the date on which the granting of an Option is
authorized by the Committee or such later date as may be specified by
the Committee in such authorization.
(g) "Employee" means any person regularly employed by the Company or a
Subsidiary who satisfies all of the requirements of Section 5.
(h) "Fair Market Value" means the closing bid price for the Stock on the
American Stock Exchange ("ASE"), as reported in the WALL STREET
JOURNAL for the date that Fair Market Value is to be determined, or if
no such bids were made on such date, the closing bid price for the
Stock on the ASE as reported in the WALL STREET JOURNAL for the
immediately succeeding date on which such bids were made.
(i) "Incentive Stock Option" means an Option satisfying the requirements
of Section 422 of the Code.
(j) "Nonqualified Stock Option" means an Option that does not satisfy the
requirements of Section 422 of the Code.
(k) "Normal Termination" means termination of employment:
(i) On account of permanent and total disability; or
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(ii) With written approval of the Company, given in the context of its
recognition that any Option granted under a shareholder-approved
stock option plan which has not been exercised by the terminating
employee but is then exercisable by him, will not be caused to
lapse by such termination.
(l) "Option" means the right granted under Section 6 of the Plan to
purchase Stock.
(m) "Participant" means an employee who has been granted an Option
pursuant to Section 6.
(n) "Plan" means the Sensory Science Corporation 1993 Employee Stock
Option Plan, as the same may be amended from time to time.
(o) "Stock" means the Common Stock of the Company as defined in the
Company's Articles of Incorporation or such other stock that is
substituted therefor as provided in Section 8 of the Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN
(a) Subject to the provisions of Section 3(c) and Section 6 of the Plan,
the aggregate number of shares of Stock that may be issued,
transferred or exercised pursuant to Options granted under the Plan
shall not exceed One Million Six Hundred Fifty Thousand (1,650,000)
shares, and the maximum number of shares of stock with respect to one
or more options that may be granted to any Covered Employee during the
Company's fiscal year is 500,000.
(b) The shares to be delivered under the Plan may be made available from
(i) authorized but unissued shares of Stock, (ii) Stock held in the
treasury of the Company or (iii) previously issued and outstanding
shares of Stock reacquired by the Company, including shares purchased
on the open market.
(c) To the extent that an Option lapses or the rights of a Participant
thereto terminate, any shares of Stock subject to such Option shall
again be available for the grant of an Option.
4. ADMINISTRATION
(a) The Plan shall be administered by a Committee that is appointed by,
and shall serve at the discretion of, the Board. The Committee shall
consist of at least two (2) individuals who are members of the Board
who are "disinterested persons" (i) non-employee directors, as such
term is defined in Rule 16b-3 promulgated under Section 16 of the
Securities Exchange Act of 1934 (the "1934 Act") or any successor
provision, except as may be otherwise permitted under Section 16 of
the 1934 Act and the regulations and rules promulgated thereunder, and
(ii) outside directors under Section 162(n) of the Code.
(b) A majority of the Committee shall constitute a quorum. The acts of a
majority of the members present at any meeting at which a quorum is
present or acts approved in writing by a majority of the Committee
shall be deemed the acts of the Committee. Each member of the
Committee is entitled to, in good faith, rely or act upon any report
or other information furnished to that member by any officer or other
employee of the Company or any Subsidiary, the Company's independent
certified public accountants, or any executive compensation consultant
or other professional retained by the company to assist in the
administration of the Plan.
(c) Subject to the provisions of the Plan, the Committee shall have
exclusive power and discretion to: (i) select the individuals or
entities to participate in the Plan; (ii) determine the Options to be
granted; (iii) determine the time or times when Options will be
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granted; (iv) determine the conditions to which the grant of Options
may be subject; (v) prescribe the form or forms evidencing Options;
and (vi) except in the case of Incentive Stock Options, extend the
post-employment period in which an Option can be exercised up to the
balance of the normal term of the Option.
(d) The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations
and to make all such determinations relating to the Plan as it may
deem necessary or advisable for the administration of the Plan. The
Committee's interpretation of the Plan or any Options granted pursuant
thereto and all decisions and determinations by the Committee with
respect to the Plan shall be final, binding, and conclusive on all
parties unless otherwise determined by the Board.
5. ELIGIBILITY
Officers and key employees of the Company (including officers or employees
who also serve as directors of the Company) who, in the opinion of the
Committee, have contributed or will contribute to the continued growth and
development and financial success of the Company shall be eligible to be granted
Options.
6. STOCK OPTIONS
One or more Options may be granted to an Employee. Each Option so granted
shall be subject to the following conditions:
(a) The per share exercise price of any Option shall be set by the grant,
but in no instance shall it be less than Fair Market Value on the Date
of Grant; provided that if a Participant owns stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, its parent corporation or any
subsidiary corporation at the time an Incentive Stock Option is
granted, the per share exercise price of that Incentive Stock Option
must be at least one hundred ten percent (110%) of the Fair Market
Value of the Stock subject to that Option.
(b) Each Option under the Plan may be exercised, in whole or in part, at
any time during the period specified in the written instrument
reflecting the grant of the Option which shall not be earlier than the
period beginning six (6) months after the later of (i) its Date of
Grant or (ii) the effective date of the Plan (see Section 11), and
ending on the date which is ten (10) years after its Date of Grant
(five (5) years after its Date of Grant in the case of an Incentive
Stock Option granted to a Participant who owns stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, its parent corporation or any
subsidiary corporations at the time the Incentive Stock Option is
granted). At least six (6) months must elapse between a Participant's
receipt of an Option and the disposition of the Stock obtained upon
the exercise of such Option. Notwithstanding the foregoing, if the
Participant terminates employment any outstanding Options shall lapse
upon such termination provided that if the Participant's termination
is determined to be (i) a Normal Termination, the Options shall lapse
three (3) months after the Participant's termination or (ii) on
account of "normal retirement" or "early retirement" as determined by
the Committee, the Options shall lapse one (1) year after the
Participant's retirement (three (3) months after the Participant's
retirement in the case of an Incentive Stock Option), unless they
expire earlier by their terms. Notwithstanding the foregoing, except
in the case of an Incentive Stock Option, the Committee may, in its
sole discretion, extend the period in which a Participant who
terminates employment may exercise any outstanding Options to the
extent that the Participant was entitled to exercise the Options at
the date of such termination.
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(c) Options shall be evidenced by a written instrument that shall not
include any terms and conditions which are inconsistent with the
provisions of the Plan.
(d) Options may be exercised by written notice to the Company, accompanied
by payment in full in cash or by check, in shares of Stock having a
Fair Market Value equal to the exercise price provided that such
shares shall have been held for at least six (6) months as of the date
of exercise, by delivery to the Company of a promissory note with such
collateral as the Committee, in its discretion, determines to be
sufficient, or in a combination of the foregoing. As an alternative,
the Committee may, in its discretion, assist Participants in paying
the exercise price of Options by (i) causing the Company to extend a
loan to a Participant or to guarantee a loan obtained by the
Participant from a third party; or (ii) authorizing payment of the
Option exercise price in installments over such period and subject to
such terms and conditions as the Committee shall determine.
(e) Notwithstanding the foregoing, if the Participant dies during the
Option period, as determined pursuant to Section 6(b), the Option
shall lapse unless it is exercised within the later to occur of (i)
the Option period or (ii) twelve (12) months after the Participant's
death by the Participant's legal representative or representatives, by
the person or persons entitled to do so under the Participant's last
will and testament, or, if the Participant shall fail to make
testamentary disposition of such Option or shall die intestate, by the
person or persons entitled to receive said Option under the applicable
laws of descent and distribution.
(f) No fractional shares of stock shall be issued and the Committee shall
determine whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding up or
rounding down.
(g) Notwithstanding any provision of this Plan, in the event of a public
tender for all or any portion of the Stock of the Company or in the
event that a proposal to merge, consolidate, or otherwise combine with
another company is submitted for shareholder approval, the Committee
may in its sole discretion declare previously granted Options to be
immediately exercisable.
(h) In the case of an Incentive Stock Option, the aggregate Fair Market
Value (determined as of the time such Option is granted) of all shares
of Stock with respect to which Incentive Stock Options are first
exercisable by any Participant in any calendar year may not exceed
$100,000 (or such other individual grant limit as may be in effect
under the Code on the Date of Grant).
7. GENERAL PROVISIONS
(a) Nothing in the Plan or in any instrument executed pursuant to the Plan
shall confer upon any Participant any right to employment with the
Company. Nothing in the Plan or any instrument executed pursuant to
the Plan is intended to limit in any way, the compensation to be paid
or the benefits to be provided by the Company to any Participant.
(b) Neither a Participant nor any other person claiming under or through
such Participant shall have any right, title or interest in any shares
of Stock allocated or reserved under the Plan or subject to any Option
except as to such shares of Stock, if any, that have been issued or
transferred to such Participant or other person claiming under or
through the Participant.
(c) No Option may be exercised by any person other than the Participant or
his or her guardian or legal representative during the Participant's
lifetime. No Option or any other right under the Plan, contingent or
otherwise, shall be transferable, assignable or subject to any
encumbrance, pledge or charge of any nature, other than by will or the
laws of descent and distribution.
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(d) The grant of Options and the obligation of the Company to issue or
transfer Stock as a result of the exercise of an Option under the Plan
shall be subject to the requirements of all applicable laws, rules and
regulations and to such approval by government agencies and/or the
securities exchanges on which the Stock is listed as may be required
or deemed advisable by the Company. As a condition precedent to the
grant of any Option or the issuance or transfer of shares pursuant to
the exercise of any Option, the Company may require the Participant to
take any reasonable action to meet such requirements or to obtain such
approvals. The Company shall be under no obligation to register under
the Securities Act of 1933, as amended (the "Securities Act"), any of
the shares of Stock issued or transferred as a result of the Plan. The
Company shall have the right to restrict the transferability of shares
of Stock issued or transferred under the Plan in such manner as it
deems necessary or appropriate to insure the availability of any
exemption from registration under the Securities Act that may be
available.
(e) The Committee and each member thereof shall be indemnified and held
harmless by the Company against any and all loss, cost, liability or
expense that may be imposed upon or reasonably incurred by it or any
member thereof in connection with or resulting from any claim, action,
suit or proceeding as a result of any action or failure to act under
the Plan.
8. CHANGES IN CAPITAL STRUCTURE
In the event a stock dividend is declared upon the Stock, the shares of
Stock then subject to each Option (and the number of shares reserved for
issuance pursuant thereto) shall be increased proportionately without any change
in the aggregate purchase price therefor. In the event the Stock shall be
changed into or exchanged for a different number or class of shares of Stock of
the Company or of another corporation, whether through reorganization,
recapitalization, stock split, combination of shares, merger or consolidation,
there shall be substituted for each such share of Stock then subject to each
Option (and for each share of Stock then reserved for issuance pursuant thereto)
the number and class of shares of Stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to each Option.
Subject to any required action by the stockholders, if the Company shall
be the surviving or resulting corporation in any merger or consolidation, any
Option granted hereunder shall pertain to and apply to the securities or rights
to which a holder of the number of shares of Stock subject to the Option would
have been entitled; but a dissolution or liquidation of the Company or a merger
or consolidation in which the Company is not the surviving or resulting
corporation, shall, in the sole discretion of the Committee:
(a) Cause every Option outstanding hereunder to terminate, except that
the surviving or resulting corporation, may, in its discretion,
tender an option or options to purchase its shares or exercise such
rights on terms and conditions (both as to the number of shares and
rights) and otherwise which shall substantially preserve the rights
and benefits of any Option then outstanding hereunder; or
(b) Give each Participant the right to exercise Options prior to the
occurrence of the event otherwise terminating the Options over such
period as the Committee, in its sole and absolute discretion, shall
determine.
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9. AMENDMENT
Subject to the approval of the Board, the Committee may, at any time, or
from time to time, amend, modify, terminate or suspend and, if suspended,
reinstate, the Plan in whole or in part, provided that the Committee may not
cancel, reduce or otherwise alter a Participant's Options without the
Participant's written consent, and provided further that, without additional
shareholder approval, the Committee shall not:
(a) Increase the maximum number of shares which may be issued on exercise
of Options;
(b) Change the minimum Option price;
(c) Extend the maximum Option term;
(d) Extend the termination date of the Plan; or
(e) Change the class of employees eligible to participate in the Plan.
10. TERMINATION OF THE PLAN
The Plan will terminate upon the earlier of the following dates or events
to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan,
or
(b) the date ten (10) years after the effective date of the Plan.
The termination of the Plan will not affect the validity of any Option
outstanding on the date of termination.
II. EFFECTIVE DATE OF THE PLAN
The Plan will take effect on the date of adoption by the Board, subject to
and conditioned upon subsequent approval of the Plan by the shareholders of the
Company. The Plan and the grant of Options thereunder will be void and of no
force and effect if foregoing condition is not satisfied.
